General Electric Co.’s decision to locate a global shared services center at The Banks hinged on talent over tax breaks.
Clif Morehead, GE’s regional manager for state government relations, said the decision to operate in Cincinnati reflects confidence in being able to attract new – and in many cases younger – workers to the region.
Speaking to an audience of real estate professionals in Downtown Cincinnati Tuesday, Morehead said it also reflects expectations that Cincinnati workers can create value by helping the Connecticut-based multinational corporation become more efficient.
Knowing the types of disciplines it needed to run the facility, GE hired a firm to help it analyze the talent availability in the region and learn what it would take to attract people to Cincinnati. He said so far, Cincinnati has been a good place for the company’s first U.S. operation of this type.
Morehead said there are good universities to attract graduates from in Greater Cincinnati and Northern Kentucky, but also those within 150 miles such as University of Kentucky, Indiana University and others. He also admitted GE has poached talent from other Cincinnati firms.
“I don’t care what you give me in incentives. I don’t care how beautiful your building is. I don’t care whether Cincinnati architectural gods bless the building or not. If I can’t find the talent, it doesn’t matter,” said Morehead, who is based in Evendale.
Construction continued Tuesday on General Electric’sBuy Photo
Construction continued Tuesday on General Electric’s U.S. Global Operations Center at The Banks in downtown Cincinnati. (Photo: The Enquirer/Cameron Knight)
After launching the operation at the Atrium Two building in Downtown Cincinnati last year, GE’s shared services center now employs 100 people in roles such as finance, sourcing, information technology, compliance and export control. That number could grow up to 2,000 when construction wraps up in the third quarter of 2016 on GE’s new office building at Second and Race streets.
GE has several business units – such as Evendale-based GE Aviation – that require similar support functions such as finance. The idea is to not take every finance person who may be working at GE Energy in Atlanta and move them to Cincinnati. Morehead said the operation is designed to take some of those employees and figure out ways to simplify common operations and work on projects that could benefit individual business units and potentially the entire corporation.
GE has big ties to the Buckeye State, but it wasn’t a slam dunk for the center to end up in Ohio. More than 15,000 GE employees work in Ohio, which Morehead said was more than any other state in the country, and a $5 billion supplier spend in the state.
“The reach of GE in this state is significant,” he said.
Morehead said GE evaluated sites around the country, but there was a strong desire to operate in the central United States. Also important was being close to existing GE operations, especially those that serve as headquarters for a business unit.
GE worked for months with site selectors and eventually obtained the richest tax incentive deal in state history to locate in Southwest Ohio and eventually The Banks.
“GE will benefit by a vibrant downtown at this site and frankly Cincinnati (and) the whole region benefits from that,” Morehead said. “Pick any state in the union: When your largest cities are successful and vibrant, it tends to spill out.
“We obviously want to see other companies kind of follow our lead and bring business down there. We want to see business continue to thrive in that area so The Banks becomes a destination.”
Morehead spoke to more than 100 people attending a CREW Greater Cincinnati luncheon at the Horseshoe Casino Cincinnati. The organization is a chapter of the Commercial Real Estate Women Network.
TIMELINE SO FAR
April 2014: General Electric announces it will locate its U.S. global operations center in Southwest Ohio
July 2014: GE opens its temporary offices in Downtown Cincinnati at the Atrium Two building
August 2014: Construction begins on the company’s office building at The Banks in Downtown Cincinnati
November 2014: GE celebrates first migration of work from other operations to its Cincinnati shared services center
December 2014: GE welcomes its 100th employee in Downtown Cincinnati