GE to Scale Back Boston Headquarters, Return $87 Million of Incentives
14 Febrero 2019 - 4:41PM
Noticias Dow Jones
By Thomas Gryta
General Electric Co. is scaling back its planned Boston
headquarters, including selling the property and dropping plans to
add hundreds of jobs, because the shrinking conglomerate no longer
needs the facilities.
The company reached an agreement with Massachusetts to return
$87 million of incentives and jointly sell the waterfront site. GE
plans to lease back some of the buildings to house its senior
executives and about 250 employees, down from initial plans to add
about 800 staff.
GE moved to Boston from Fairfield, Conn., in 2016 after
considering 40 other locations in a high-profile decision. The $200
million project included renovating two existing brick buildings
and constructing a new glass office tower. In 2017, the company put
on hold plans for the office tower as its financial condition
deteriorated.
"While changes in the company's portfolio and operating model
will lead to a smaller corporate headquarters, we are fully
committed to Boston," said Ann Klee, vice president of Boston
development and operations at the company. The Boston Globe earlier
reported on the news.
In the last 18 months, GE has cut its dividend to a penny a
quarter and sold businesses to raise cash to help reduce its more
than $100 million in debt. New Chief Executive Larry Culp aims to
shrink GE's headquarters operations and push those costs and
responsibilities down to the individual business units. The
strategy is to give unit leaders more accountability for spending
and profits, while reducing the number of employees in overhead
functions.
Massachusetts owns the brick buildings, which were once home of
candy maker Necco and under renovation, and GE owns the property
where the new tower was planned. The plans and permits for the new
building will be transferred with a sale, the company said. Any
profit from the sale will be split by the government and GE.
GE broke ground on the building site in 2017 with much fanfare
in a ceremony that included former CEO Jeff Immelt, Gov. Charlie
Baker and Mayor Marty Walsh. The plan was to house 800 employees,
including 600 "digital industrial product managers, designers and
developers," the company said in its announcement.
When Mr. Immelt retired in 2017, GE delayed the construction of
the glass tower as the company started to restructure its business
and scale back its digital operations.
The conglomerate moved its headquarters to Boston three years
ago, uprooting itself from more than 40 years in the woods of
Connecticut, in order to be in a more urban setting where it could
recruit the workers needed to develop its technology
operations.
At the time, the company said the move would have no material
financial impact because of the package of incentives and the sale
of its Connecticut site along with 30 Rockefeller Plaza in New
York. The 126-year-old company has previously been based in upstate
New York, as well as Midtown Manhattan. It moved to Connecticut in
1974.
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
February 14, 2019 17:26 ET (22:26 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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