GE’s Immelt not worried about local policy matters

Unconcerned about noncompete legislation, millionaire's tax


AIMING TO TRANSFORM BOSTON into the hub of the “industrial Internet,” the CEO of General Electric expressed a come-what-may attitude on Monday about two policy proposals in the pipeline.

Speaking before a crowd of business and government heavyweights at 60 State Street, Jeff Immelt said Boston’s “ecosystem” of ideas and entrepreneurs drove the company to move its headquarters here from Connecticut and said he was unconcerned about proposed changes to the law around non-compete agreements and taxation on the highest earners.

The fast-paced startup community, which GE hopes to “feed” off and the more established business community are at odds over legislative proposals to either scale-back or eliminate employment clauses limiting staffers’ ability to jump from one company to a competitor.

“I think if you really have to worry so much about compete/non-compete agreements, you’re going to ultimately not be very competitive,” Immelt said. “We follow the laws of what we’re in. Whatever happens happens. Sometimes we use them, sometimes we don’t.”

House Speaker Robert DeLeo this year endorsed legislation to restrict the use of non-competes and the Senate advanced a measure to restrict them last session.

On a separate issue, a constitutional convention of the state Legislature on Wednesday could take up a citizen’s petition aiming to add a 4 percent surtax on incomes over $1 million – which would need to go before voters in 2018 before becoming law.

Immelt said the fate of the nearly $2 billion tax proposal would not have a bearing on whether he or other GE executives live in the Bay State.

“None of us earn that, no,” Immelt joked, before professing a lack of concern about a tax question that opponents say would drive high earners from the state and drive up costs for small businesses. He said, “I think whatever happens happens, and will impact us just like it impacts everybody else. Really, I think, believe it or not, most days what we think about is how we can sell more jet engines and gas turbines and we let the rest of the chips fall where they may.”

While Immelt joined Gov. Charlie Baker and Boston Mayor Marty Walsh on the thirty-third floor of the office tower, a small band of protesters railed against what they said were public giveaways to the international company . The protesters rallied on a street corner while a fluke April snowstorm pelted them horizontally.

Cole Harrison, executive director of Massachusetts Peace Action, said his group and others do not object to GE moving to Boston, but they object to elected officials giving the company “handouts” to move here.

“We have concerns about the state and the city giving GE extensive subsidies or incentives to move to Boston at a time when both state and city government have crying unmet needs of the people,” said Harrison, who in an email claimed the high-tech manufacturing company was receiving more than $250 million in tax breaks and public services to move from Fairfield, Connecticut. to Boston. “We reject it as a misallocation of resources.”

Ahead of the public discussion and news conference on Monday, GE announced that its foundation would contribute $25 million to Boston Public Schools, $15 million to train health workers at community health centers around the area, and $10 million to provide employment access for underserved populations in metro Boston.

Walsh said that, without GE, the buildings it plans to redevelop in the Fort Point area of South Boston would have “sat there,” and the schools wouldn’t have received $25 million. Baker said the “vast majority” of the city and state’s investment for GE is in “platform and infrastructure.”

Baker, who teamed up with Walsh and others to woo the company to Boston in competition with other suitor cities, said, “In many of the deals that I know they were offered way, way, way, way, way beyond that in terms of what other people were willing to put on the table.”

City and state officials have said the package of financial incentives for GE was worth more than $145 million, with $120 million coming from the state in grants and programs and the city offering up to $25 million in property tax relief over 20 years.

Immelt said the move would create 4,000 new construction and permanent jobs as General Electric plans to spend $100 million on physical space as the company refurbishes two old factories and builds another facility. He predicted that after the company is established in Boston it will have “injected” more than $1 billion into the local economy.

“I respect the question and I empathize with the people that are outside, particularly today. They have to be dedicated,” said Immelt, who predicted the move would result in improvements across a swath of metrics from the city’s education system to tax revenues. “I think they took a bet on the GE team. My colleagues and myself are going to be dedicated to prove them right,” he said.

Meet the Author
Taking a broad view toward the future, Immelt said 25 years ago California’s Silicon Valley and Seattle “won the consumer Internet.”

“There’s no reason why Boston couldn’t have played to win in that period of time. The next 20 years are going to be about the industrial internet. It’s your time to win. That’s why we’re here,” Immelt said.