Movement is good. If you’re not moving, you’re stagnating.
This is the philosophy at General Electric (GE), which yesterday announced it’s relocating headquarters from Fairfield, Conn. to Boston. Boston’s pols and pundits giddily cheered the move and took credit where they could.
For its size – number 8 on the 2015 Fortune 500 – GE is remarkably agile and never sits still. In September, it consolidated four software units into GE Digital and based the unit near Silicon Valley to project itself as much of a software company as one of the world’s most foremost manufacturers of big stuff like jet engines, locomotives, power plant turbines and appliances.
Earlier in 2015, it added the moniker “The GE Store” to its Global Research organization comprised 3,600 scientists and engineers. “Their skills and expertise are applied wherever they’re needed,” said GE Chief Technology Officer Mark Little in a public letter last March. The idea is to show no GE innovation or idea is captive to a specific unit or business. What’s more, GE said last Fall that its software that exploits the so-called “Industrial Internet” generated $5 billion in revenues in 2015 and showed the company is leveraging its technology not just for its own use.
Indeed, GE is a company on the move. The Boston Globe’s GE timeline ticked off GE’s many innovations and achievements over its long history dating back to Edison and no doubt, GE is impressive. But let’s not overlook the warts that could heavily populate a more detailed and recent timeline.
Boston officials uncorked the champagne this week, but 300 workers in nearby Avon at a GE Oil & Gas valve plant learned in November that their jobs were moving to Florida. GE in 2014 said it would ship 500 jobs in its gas turbine business overseas. In 1987, GE shuttered its transformer plant in Pittsfield, Mass. and in 2007 sold its plastics business there to a Saudi company, leaving the GE company town a shell of its former self.
Granted, some of these moves could be economically justified, but it’s a cautionary tale that GE will play hardball every time.
Who can forget GE dumping PCBs into the Hudson River and unloading contaminated fill into Pittsfield’s back yards? That’s something even the greediest Wall Street firms can’t do.
And GE famously pays no corporate income taxes to the federal government although it is hardly alone with that dubious distinction. One could argue that Bernie Sanders is polling well thanks to companies like GE.
One exception to movement is GE’s share price, which has stagnated for years even though that key metric has seemingly driven so many of its decisions over the years.
Like everyone in the Boston area, I applaud GE’s move here, but let’s admit that the company’s actions are indicative of everything that’s right and wrong with large multinational corporations.
“Boston was selected after a careful evaluation of the business ecosystem, talent, long-term costs, quality of life for employees, connections with the world and proximity to other important company assets,” according to GE CEO Jeff Immelt’s statement about the move.
The reality is that GE is all about the bottom line and we’d be kidding ourselves if we did not ascribe the primary motive for the headquarters move to oppressive taxation in Connecticut and large financial concessions here. Of course, some good things will fall out of GE’s presence here, but only time will tell if the deal is worth what Massachusetts taxpayers will pay.
For better or worse, GE is perpetually in motion. Look out below.