General Electric, conducting perhaps one of the most high-profile headquarters searches in modern U.S. business history, plans to make its call on a new home by the end of the year, the Wall Street Journal reported online Thursday.
Georgia is among numerous states that have expressed interest in landing GE. The industrial conglomerate’s CEO, Jeffrey Immelt, first expressed interest in potentially leaving Connecticut earlier this year over Connecticut lawmakers’ plans to raise taxes to plug a budget hole.
GE’s search could be nothing more than a ploy to get Connecticut lawmakers to blink, but other states have spared little time getting in touch with the Fortune 500 maker of locomotives and jet engines.
New York, Ohio and Texas are among the other states reportedly wooing GE.
Integral Group ‘s rendering of GE at the former General Motors plant in Doraville.
And Atlanta area developers have been so eager to land GE, some drew up fancy renderings showing what a GE HQ might look like at their sites.
The global conglomerate has significant ties in Georgia, including more than 5,000 workers in several GE divisions. GE Energy Management and GE Power Generation Services are based in Georgia. John Rice, a vice chairman and chief of global operations, has a condo in Buckhead.
The Journal, citing unnamed people, said the company is scrutinizing voting records of states’ congressional members over national issues, including the controversial Export-Import Bank, which GE uses to help finance transactions of equipment with overseas buyers.
Reports the Journal:
GE's considerations expand beyond local issues and tax rates. It is looking at the voting records of each state's lawmakers on national policy issues, such as the fight to reauthorize the Export-Import Bank, according to a person close to GE. The company considers the bank vital to its exports of heavy machinery.
GE never considered a bid by the city of Cincinnati—where GE is currently shifting hundreds of back-office jobs, and which is also the hometown of Chief Executive Jeff Immelt—because of opposition from some Ohio politicians to reauthorizing the Ex-Im Bank, the person said. The same holds true for Dallas, where the bank faces opposition, the person said.
Authorization for the Ex-Im Bank, which helps U.S. companies finance sales of their goods to buyers overseas, expired this summer.
The Ex-Im Bank is an intriguing issue. Many in the Texas delegation dislike the bank, and a Bloomberg report recentedly said the Lone Star State was out; though CNBC pundit Larry Kudlow predicted Texas will win the headquarters.
But many Georgia lawmakers also are not fond of the Ex-Im Bank, and neither is Atlanta-based Delta Air Lines, which sees the bank as giving foreign carriers unfair advantages in purchasing aircraft.
Thursday’s Journal piece also had this interesting nugget:
One of the changes in the Connecticut budget that GE took issue with was a cap on the amount of prior-year tax losses companies could use to offset their taxes, according to people familiar with the matter and emails from the company's lobbyists obtained under the Freedom of Information Act.
The change was frustrating to GE because it came as the company is in the midst of selling off most of GE Capital and planned to use the built-up losses to offset any gains from the sales, one of these people said.
The potential loss of GE won't cost Connecticut much in corporate income tax. People familiar with the matter said the company likely pays the state's minimum for corporations: just $250 a year. That amount doesn't include much larger payments, like the company's property taxes on its Fairfield office campus, the millions paid each year in personal income taxes by the company's employees and substantial gifts to state charities and nonprofits.
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