BOSTON (AP) - When General Electric announced in January 2016 that it was moving its headquarters from Connecticut to Boston, it was hailed as a major coup not just for the city but for Gov. Charlie Baker, in office just a year.
The Republican governor had teamed with Democratic Boston Mayor Marty Walsh to lure the company to the city’s booming Seaport District. Walsh likened it to winning Powerball. On Beacon Hill, a cheer went up in the Massachusetts House of Representatives when Democratic Speaker Robert DeLeo announced GE’s decision.
That coup is looking a bit shakier now.
On Monday, the company ousted its CEO, took a $23 billion charge and said it would fall short of profit forecasts this year - all signs that the industrial conglomerate, which traces its roots to Thomas Edison and the invention of the light bulb, is struggling in a rapidly evolving economy.
Baker said he wasn’t worried.
“The company’s still worth about $100 billion. It still has a huge footprint here in Massachusetts in health care and in green technology and in clean energy, and those industries are in very good shape,” Baker told reporters Monday. “The headlines don’t concern me.”
At the same time, Baker said the deal he and Walsh struck to entice GE was structured in such a way to safeguard taxpayers.
As part of the deal, the state offered incentives of up to $120 million through grants and other programs. The city of Boston offered $25 million in property tax relief. The deal also included $1 million in grants for workforce training, commitment to existing local transportation improvements in the Seaport District, and assistance for eligible employees looking to buy homes in Boston.
Baker, who is facing a re-election challenge from Democrat Jay Gonzalez, noted that the work involves basic improvements to publicly owned property leased by GE.
“We’re basically investing in a public asset and they have the ability to lease that asset, but that asset belongs to the public,” Baker said. “We did not write a big check to GE based on job projections or anything like that.”
Since announcing the move, the company has forged ahead with plans for a Boston headquarters.
In late August, the company gave the media a tour of its efforts to merge two buildings, which once held a candy factory, into one 95,400-square-foot structure. Construction should be completed by mid-2019. The company is also planning to build a new 12-story building as part of the complex.
GE vice president Ann Klee said at the time that the company’s commitment to Boston hasn’t changed.
“As GE is evolving, this is a great place for us, and will be for decades to come,” Klee said.
There have been recent cautionary tales of states placing big bets on private companies.
Former Democratic Gov. Deval Patrick had heralded solar panel maker Evergreen Solar Inc. as key to the state’s renewable energy sector. In 2007, the company benefited from $58 million in state aid, including about $45 million in direct aid. Two years later, the company began to show signs of trouble, announcing it was moving some jobs to China.
By 2011, the company closed its plant in Massachusetts and laid off 800 workers. Patrick later said the state “just about broke even” on the deal.
In 2010, former Red Sox pitcher Curt Schilling struck a deal to move his 38 Studios video game company from Massachusetts to Providence, Rhode Island, in exchange for a $75 million loan guarantee by Rhode Island.
Less than two years after the move, 38 Studios ran out of money and went bankrupt. The state has recouped more than $50 million in lawsuits.
General Electric, of course, is a far bigger fish than either Evergreen Solar or 38 Studios.
“Like I said, the company’s still worth about $100 billion and has a big footprint in a whole bunch of spaces that matter a lot here,” Baker said
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