GE's Big City Move Part Of Larger Tech Trend
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In your home, you might have a GE appliance, maybe a stove or a washer. Well, on Friday, General Electric announced the sale of its appliance business to the Chinese manufacturer Haier Group. That's part of GE's recent shift to selling services and sophisticated goods like jet engines and power turbines instead of household goods. And that transition was reflected in GE's decision this week to move from suburban Connecticut to Boston. From member station WBUR in Boston, Curt Nickisch explains.
CURT NICKISCH, BYLINE: To understand why General Electric would abandon its sprawling Fairfield, Conn., campus listen in on a conversation involving a small firm. Like GE, this 30-person startup wants office space on Boston's waterfront.
GREG HOFFMEISTER: ...Showers on four.
UNIDENTIFIED MAN: No.
HOFFMEISTER: Anything in the building as far as...
NICKISCH: When it gets down to the nitty-gritty details, they're discussing showers. Greg Hoffmeister is one of the real estate brokers.
HOFFMEISTER: Because a lot of people are biking to work and, you know, they want to have that or go running at lunch, so having a shower is pretty important.
NICKISCH: Today's knowledge workers want bike racks and subway stops, not country clubs and parking garages.
(SOUNDBITE OF PINGPONG BALL BOUNCING)
NICKISCH: At the Boston startup EverTrue, a couple dozen employees have gathered for sales training and pingpong. Not one is over 30 except for Chief Operating Officer Elisabeth Bentel Carpenter. She says her young colleagues don't want to spend their time commuting like she did when she was their age.
ELISABETH BENTEL CARPENTER: They'll leave at reasonable hours that they can go do things that are important to them, whether it's having dinner with friends, going to the gym, what have you. They tend to get back online later on at night because we have a lot or work to do as well. They're just really, really ambitious, young go-getters.
NICKISCH: It's these young go-getters who General Electric wants to have in its neighborhood and working for the company. In its announcement, CEO Jeff Immelt cited Massachusetts's record spending on research and development.
Marty Walsh is Boston's mayor.
MARTY WALSH: GE recognizes the innovation in our city, the educational institutions in our city, the diversity of our city, the people in our city. We're excited about this.
NICKISCH: Another key to luring GE was the 15-minute drive from the waterfront to Logan International Airport. Boston's economic development chief, John Barros, says that's critical for a company with 300,000 workers in nearly 200 countries.
JOHN BARROS: We added in the proposal everything from access to the airport and different things like hangars for GE. For a corporation like GE, you have to discuss things like helipads.
NICKISCH: Those selling points turned out to be more important than tax breaks. The city and state incentive package totals $140 million, about one tenth of 1 percent of GE's annual sales.
Labor market economist Enrico Moretti at UC Berkeley says GE's move is reversing an old trend. Companies left troubled cities in the '70s and '80s for manicured suburban office parks. Now they're moving back into revitalized urban centers.
ENRICO MORETTI: We see similar dynamics at play in Silicon Valley. But we see the same trends in other cities from Seattle to Austin to Raleigh-Durham.
NICKISCH: If corporate managers haven't noticed yet, they will now. General Electric has been able to stay an industrial giant for more than a century by changing with the times.
For NPR News, I'm Curt Nickisch in Boston. Transcript provided by NPR, Copyright NPR.