The relocation will bring about 800 jobs to Boston. GE blamed a Connecticut budget deal that raised corporate taxes and what company officials described as an inhospitable business climate.
Chicago was supposedly in the top tier of candidates. I fail to see how.
The Chicago Tribune reports State Pension Crisis Hurt Chicago’s Chances for GE Headquarters, Sources Say.
Chicago was a finalist to score General Electric’s corporate headquarters — and 800 jobs — but the state’s pension crisis and the condition of Chicago’s public schools helped remove it from the running, sources close to the selection process told the Tribune on Wednesday.
GE’s selection of its next headquarters city comes the same week that Chicago received a consolation prize of sorts from the company. GE Healthcare said it would move its corporate headquarters and an unspecified number of jobs to Chicago, from the United Kingdom.
Mayoral spokesman Grant Klinzman said “The $18 billion arm of GE joins the long list of companies that have relocated their headquarters to Chicago in the last six months, including Kraft Heinz, Oscar Mayer, ConAgra and Motorola Solutions.”
[Klinzman failed to mention how many businesses have left Illinois or what kind of sweetheart deals the state had to offer to woo those businesses it did attract.]
Decades of underfunding mean the city’s four public pension funds have around $20 billion in unfunded obligations, while Chicago Public Schools is in financial meltdown, with a $480 million hole in its budget for the current school year and a rock-bottom credit rating.
Political gridlock in Springfield isn’t helping. Nor is the $111 billion of state pension debt.
“It seemed too big of a risk,” the source said of the problems. “That played into the decision to take Chicago off the short list and top tier” of around five finalists.
Too Big of a Risk
Typically, these kinds of decisions are made in advance. Corporations go through the motions and pretend various cities and states are in the running, hoping to extract every last ounce of concessions.
GE accurately cited Chicago schools, pensions, corporate tax rates, financial meltdowns, budget holes, and a rock-bottom state debt rating.
Too many risks? You bet. So what is mayor Emmanuel and the Illinois legislature going to do about it?
Mike “Mish” Shedlock