March 24, 2016 / 7:40 PM / in 2 years

GE's Immelt hopes move to Boston fuels staff 'paranoia'

BOSTON, March 24 (Reuters) - General Electric Co Chief Executive Jeff Immelt hopes the conglomerate’s headquarters move to Boston inspires a sense of staff “paranoia” over losing out to upstart rivals with better technology, he said on Thursday.

In a lunch meeting with fellow Boston-based CEOs, Immelt said the maker of products ranging from jet engines to washing machines picked Boston as its new home because of its more than 50 colleges and universities, including the Massachusetts Institute of Technology and Harvard University.

“This move for GE is all about the next 40 years. What do we want the company to look like, how do we want the company to be challenged?” said Immelt. He has substantially restructured the company over his almost 15 years at the top, selling off businesses, including plastics and much of its finance operations, and refocusing its core manufacturing businesses on higher-tech products.

GE said on Thursday it had selected a 2.5 acre (1 hectare) plot of land along the Fort Point Channel, in Boston’s Seaport District, to serve as its new headquarters. It will initially house some 1,000 white-collar staff.

“I want them to be completely paranoid about the world that we’re in. Are we moving fast enough, can we do better, who’s smarter than we are?” Immelt told the Boston College Chief Executives’ Club. “I want some 29-year-old Ph.D. student at MIT to punch me right in the nose and say ‘all of GE’s technologies are wrong and you’re about to lose.’”

The city and state governments offered GE $145 million in incentives, including breaks on property taxes and new spending on infrastructure, including replacing an aging bridge near its new headquarters site.

GE will move headquarters employees from its current home in Fairfield, Connecticut, to a temporary site in Boston this summer. A full move into the permanent facility is planned for 2018.

GE is buying the land for its new home from Procter & Gamble Co, whose Gillette unit is based in Boston.

GE engaged in a long search for a new home. It considered cities including New York and Providence, Rhode Island, following a dispute with Connecticut over rising taxes.

Immelt noted that he expected the company would slowly grow its footprint in Massachusetts, where it already has a jet engine manufacturing operation in Lynn.

“I would think more GE divisions would think this is a good place to be,” he said. (Reporting by Scott Malone; Editing by Dan Grebler)

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