Possible GE Departure Called A ‘Glaring Black Eye’ For State

HARTFORD — An exit by General Electric Co. from its Fairfield headquarters would be a psychological blow to Connecticut’s business reputation rather than a hit to the state’s economy, say several business advocates and others who are bracing for a decision expected any day.

The industrial conglomerate that makes wind power turbines, locomotives, jet engines, medical devices and other equipment said in June it would consider moving its headquarters to another state in response to higher taxes being considered by the General Assembly. Chief Executive Jeff Immelt waded into the budget debate at the Capitol, telling employees that GE would consider “another state with a more pro-business environment.” The company’s taxes were increased five times since 2011, while support for the company’s strategies “has been uneven,” he said.

GE had said it would announce a decision by the end of December, but has put off an announcement until later this month, perhaps in the next few days.

Peter Gioia, an economist for the Connecticut Business and Industry Association, said most GE employees will probably not be affected by the corporate move and the effect “may be muted.”

GE has more than 5,700 employees in Connecticut, including 800 at its Fairfield headquarters as of June, according to the company. The company also operates in Stamford, Norwalk and Plainville.

Still, Gioia said, “the absolute, intense psychological impact” of a move could not be minimized.

“If it happens, It’s a glaring black eye for economic development,” he said. “There’s no denying it.”

Fred Carstensen, a business professor at the University of Connecticut, said a GE move would be “very, very damaging.”

“It will underline for every business looking to come to Connecticut the problematic environment,” he said.

Don Klepper-Smith, an economist who was an adviser to then-Republican Gov. M. Jodi Rell, said the impact could be more than psychological. He said the loss of 800 headquarters jobs could lead to the loss of 1,400 other jobs, such as manufacturing work dependent on GE.

A departure by GE would undermine business confidence in the state, sending a message that even a corporate giant — GE’s revenue of nearly $93 billion in the first nine months of 2015 was more than four times the size of the state budget — is no match for the power of the legislature and Gov. Dannel P. Malloy, he said.

“If GE can’t get fair tax treatment in the state, what hope is there for small businesses in Glastonbury or East Lyme?” Klepper-Smith asked.

State Sen. Len Fasano, the Senate’s Republican leader, said state officials were treating GE with “disrespect” that smaller businesses notice.

“If you don’t show respect for GE, you’re not going to show respect for my business,” he said.

Sen. Bob Duff, D-Norwalk and Senate majority leader, said Connecticut has addressed the business tax issues that drew complaints from business executives and lobbyists. And the state remains an attractive place to do business with an educated workforce and strong export markets, he said.

In addition, he said, if GE moves its headquarters, it “will still have a presence and footprint in the state.”

Bryan Atherton, owner of Atherton and Associates, a Shelton broker for industrial and office properties in Fairfield and New Haven counties, said that if GE leaves Fairfield, its 160,000-square foot headquarters on the market would further depress commercial real estate prices. The market already is weak because of high taxes and other costs and low population growth, he said.

“That additional office space is not going be healthy at all,” he said.