General Electric chooses New Orleans for 300-job tech office
Appliance giant General Electric plans to open a corporate office in New Orleans that will provide software development and information technology support to the company's financial services arm, GE officials, along with state, regional and local leaders, said Friday. The GE Technology Center, a part of GE Capital, will result in about 300 jobs in computer engineering, software development and other information technology-related fields that pay annual salaries of between $60,000 and $100,000.
GE chose New Orleans over about one dozen other cities, including finalist Indianapolis.
"We were not without people who wanted us to locate this technology center in their city and state," said Brackett Denniston, senior vice president and general counsel of GE. "This place is what's best in America. We saw it in this competition."
Gov. Bobby Jindal said the announcement will mark an "inflection point" in the economic development history of New Orleans and Louisiana.
"These are the types of jobs we want our children and grandchildren to aspire to," said Jindal.
Jindal and others said what excited them most about the GE announcement was the types of jobs it will create. Louisiana has been heavily recruiting jobs in knowledge-based industries such as information technology, recently expanding, for instance, its digital media tax credit program to include software development. That incentive program has been credited with the decision of video game firms Electronic Arts and Gameloft to move portions of their operations to Louisiana.
Earlier this month, a company that buys ailing software firms and rehabilitates them announced that it was moving to New Orleans and bringing two of those rehabbed firms with it.
"Today's announcement is an affirmation of everything that is good about what we are trying to do," said Mayor Mitch Landrieu, who began pressing GE to invest in the city back in 2010. "This is a game-changer for the city of New Orleans and the state of Louisiana."
GE plans to begin hiring in the second quarter of this year. The company has not yet found an office, but has committed to locating within New Orleans city limits and will require about 50,000 square feet of office space, likely in the Central Business District.
The Technology Center is expected to be fully staffed by the end of 2015, with the company adding about 100 jobs per year in 2013, 2014 and 2015. At the end of 2015, the center will have a total payroll of more than $28 million before benefits.
In addition to the 300 direct jobs, the GE project will result in 301 indirect jobs, Jindal said.
GE's project qualified for the Louisiana Digital Media and Software Incentive, which provides a tax credit of 25 percent of production expenditures for digital productions in Louisiana and a 35 percent tax credit for payroll expenditures for Louisiana residents, but the company declined to take it.
The state offered GE a variety of incentive package options and the company, instead, settled on a $10.7 million grant for relocation costs, workforce training and other expenses, Jindal said.
Should GE expand its current plan or launch another digital or software project in the state, it would again qualify for the digital media tax credit.
The GE deal also includes a requirement that the state dedicate $5 million over 10 years, or $500,000 per year, to developing technology-centered curriculum at institutions of higher education around Louisiana.
The education aspect was a major sticking point for GE, which during negotiations expressed concern about Louisiana's ability to supply workers now and into the future. About 80 percent of the local GE workforce is expected to have five years of experience or more in their field, Secretary of Economic Development Stephen Moret said.
"I perceived that to be the most significant issue they dwelled on a bit," Moret said. "It was not a question of quality, but of density."
While the school program is the long-term answer to GE's concern, in the short term the state plans to host recruitment efforts around Louisiana first and then in cities like Atlanta, Dallas and Austin, Texas, where many former Louisiana residents now live.
The state used its recruitment of Gameloft as proof that it could produce the workers GE needs. In that case, Louisiana launched an aggressive campaign on social media platforms to find workers for the video game developer.
Conversations between GE and local leaders began in earnest in August 2010 when Landrieu was introduced to GE's Chairman and Chief Executive Officer Jeffrey Immelt by Ochsner CEO Patrick Quinlan. Ochsner is a major client of GE, which makes medical devices.
"Like I did with everybody, I took the opportunity to say 'Look Jeff, we're looking to build a great American city. ... Would you think about doing something more," Landrieu said. Landrieu said he didn't have the technology center in mind when he made the plea, but he thought that the large company could find something to do in New Orleans from aerospace to health care.
Denniston said Landrieu "planted the seed in (Immelt's) ear" during that visit.
Later that year, Michael Hecht, president of regional economic development agency GNO Inc., also was introduced to Immelt by people at Ochsner.
Both met with Immelt separately in 2011, Landrieu in March and Hecht in May.
Through the course of those conversations, Louisiana emerged as a possible home for GE's first technology center.
What followed was heavy lifting from the state office of economic development, which negotiated incentives and worked to allay workforce concerns.
The Louisiana congressional delegation, specifically Sen. David Vitter and Rep. Steve Scalise, also lobbied the company on Louisiana's behalf.
"What you ended up having was a team that went from the city, to the region, to the state, to the federal level that was not totally coordinated, but that delivered a central message," Hecht said.
Together with business owners, they "made a persuasive case," Denniston said.
"What we heard uniformly is people were thrilled to do business here," Denniston said. "This is one of America's signature cities and one of America's signature states and we wanted to be part of that renaissance. But more than that, it was a good business decision."
Jaquetta White can be reached at email@example.com or 504.826.3494.
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