GE CEO on $50m contribution: We will “roll our shirtsleeves up and work with local people”
General Electric Co. pledged Monday to make $50 million worth of philanthropic contributions to Boston and other Massachusetts cities during the next five years as the industrial giant prepares to move its global headquarters here from Connecticut.
Boston public schools would be the biggest beneficiary: $25 million over the five years. The money, among other benefits, would give students experience in manufacturing technology and provide assistance to science and math teachers.
The company also pledged $15 million to the city’s community health centers for training in leadership skills, the use of technology, and increased access to specialty care.
And GE is setting aside $10 million for manufacturing-oriented training opportunities for small-business owners and students outside metro Boston, starting with Lynn and Fall River.
The donations would make GE among the city’s leading corporate philanthropists and may also help blunt criticism of the tens of millions in public subsidies city and state officials offered to woo the company from Fairfield, Conn.
Just days after announcing the location of its new corporate headquarters in Fort Point, General Electric hosted an event in a downtown office building Monday afternoon with several hundred business and civic leaders to preview its move to Boston. And after an upbeat video touting his company’s “revolutionary” move to the cradle of the American Revolution, GE chief executive Jeffrey Immelt shared the stage for 45 minutes with Governor Charlie Baker and Mayor Martin J. Walsh.
Outside, several dozen protesters marched in the snow to criticize the aid package that state and city officials gave GE to help lure it to Boston. Critics note that expenditure came as Boston schools are struggling with $32 million in budget cuts, while the MBTA is raising fares and reducing service.
In an interview before the event, Immelt acknowledged the criticism but said the benefits from GE’s presence would more than outweigh the costs of the incentives.
“I’m convinced it’s a good investment for the city and the state, and it’s up to us to prove that,’’ Immelt said.
And Immelt also promised his employees would work with local officials to make GE’s contributions felt: “What we really want to do is roll our shirtsleeves up and work with local people in terms of the best way to fit it with Boston.”
The company is planning to buy a roughly 2.5-acre property near Summer Street that is part of Procter & Gamble’s Gillette campus, where GE will construct a building and renovate two others to serve as its headquarters. The state has offered $120 million in grants to help prepare the site, while Boston will give $25 million in property tax relief. GE is expected to pay more than $1 million a year, on average, in property taxes, over the 20-year term of the deal with Boston.
At the event Monday, Walsh made no apologies for the city’s help to GE, pointing out that the location of the new headquarters currently generates relatively little in taxes.
“Property tax revenue will be significantly greater than it is now on that site,” Walsh said. “It’s a long-lasting positive for our city.”
The mayor also noted the targeted nature of GE’s donations, saying they would in particular help low-income residents. “This city is number one in a lot of things. We’re also number one in income inequality,” Walsh said. “The investment they announced today is going to go along way” toward addressing that.
Walsh expects one of chief recipients of GE’s involvement would be the city’s long-struggling vocational school, Madison Park High School, which is at risk of a state takeover after being declared underperforming in December.
“With GE’s help, we’re going to reinvent vocational education for the 21st century,” he said.
Baker also argued that key industries in the region — health care, robotics, and clean energy, for example — would benefit from GE’s business expertise and investments.
“They have the potential to be a major player in ... all kinds of stuff,” Baker said.
But for the protesters who gathered outside in a swirling spring snowstorm, GE’s controversial record in lowering its tax bills at the federal and local levels hardly makes it a worthy recipient of public subsidies.
“I think it’s outrageous that we would give millions of dollars of tax cuts to an extremely abusive transnational corporation while our MBTA, our schools, and our public services are vastly underfunded,” said Ari Rubenstein, a Boston resident with the group, Corporate Accountability International.
GE’s donations would come from its philanthropic arm, the GE Foundation, which reported giving away nearly $110 million in 2014. Its Boston donations, said one local civic leader, would make it a leading corporate player in the city.
“This instantly makes GE a major corporate giver in our community,” said Paul Grogan, president of The Boston Foundation.
Bill Walczak, chief executive of the South End Community Health Center, said the $15 million in health care donations should have a notable impact.
“I’m very pleased that GE has decided to not just contribute to organizations that already have a lot of money,’’ said Walczak, who noted that some local centers use medical records software made by GE. “GE may be looking at the fact that community health centers are a major source of new ideas regarding [how] America gets healthy.”
Immelt said the donations in Boston would include grants and gifts of equipment and training. The donations are in keeping with GE’s charitable practices in other cities and mirror the company’s business strengths.
“We know education, we know health care, we know manufacturing,” Immelt said. “The idea is to open up so that in addition to our financial resources, we can have people that volunteer their time, we can have our own employees give hands-on capability and experience.”
GE plans to employ about 800 people in its new headquarters when it opens in 2018; about 200 will be in corporate leadership positions, and the remainder digital product managers, designers, and developers. The company will start moving executives to temporary offices in Boston this summer.