The race for General Electric Co.’s headquarters has been receiving a lot of press in recent weeks, and why wouldn’t it? GE is, after all, one of the 15 or so most profitable companies in the United States. It would be a big, shiny, blue and white feather in the cap of whatever state manages to lure it from frigid Connecticut and its increasing business taxes. Georgia, after attracting companies like Mercedes Benz, Porsche, Caterpillar, a sizable chunk of the film industry, and more, has been a presumed frontrunner from the day that GE’s discomfort became public. Multiple Atlanta developers, including CBRE Global Investors, Tishman Speyer, and Wakefield Beasley have all put together proposals for headquarters in Atlanta area locations such as Atlantic Station, Buckhead, and Midtown. But the race certainly isn’t over – multiple states are lining up to make their pitches to the multi-national conglomerate.
Cincinnati, New York City, Tampa, and perhaps most threateningly Dallas have all been hard at work putting together their own bids for GE, with tax breaks and incentives and work forces and weather, (well, for some of them) that makes this pitch the most difficult of Governor Nathan Deal’s accomplished tenure.
And while politics, (and the tax rates that derive from them) are a key reason that GE is moving in the first place, it may be a different side of that same coin that determines where the company winds up. The Religious Freedom Bills passed in states like Indiana have already stirred up political drama with unhappy businesses, and here in Georgia politicos on both sides are gearing up for another fight in the 2016 legislative session. But don’t worry Josh McKoon, you’re off the hook for this one – General Electric isn’t basing their decision on the RFRA. In this case it is the Export-Import Bank, and more specifically the adamant opposition to it from several high profile Texas lawmakers, that has allegedly eliminated Dallas from contention as a potential relocation spot.
The Ex-Im Bank is a government cooperation which finances and insures foreign purchases of United States goods for customers unable or unwilling to accept credit risk. This is especially important to companies such as GE who do much of their business overseas, because the Ex-Im bank plays a major role in helping American companies sell their goods abroad. The bank has been the center of some political controversy as of late, with Congress allowing its charter to expire earlier this year, followed by the Senate voting to reinstate it, sending the bill back to the lower house. Expect the debate to heat up as Congress returns to Washington D.C. from its Summer recess, as it must decide whether to restore its charter before the end of 2015.
As you might expect, there’s all sorts of drama surrounding this turn of events. The National Association of Manufacturers is suspending fundraisers, the U.S. Chamber of Commerce is unhappy, and major companies who need the bank to do business overseas, most notably Boeing, Caterpillar, and General Electric, are of course having their lobbyists raise hell in the nation’s capital.
The problem for Dallas lies in a pair of Texas lawmakers, Rep. Jeb Hensarling and Sen. Ted Cruz, who have been among the most outspoken of Ex-Im Bank detractors. Cruz, in particular, was harsh in his attacks on Senate Majority Leader Mitch McConnell after a bill to reauthorize its charter passed through the Senate in July. Late last week reports broke that GE would not be relocating to Dallas based on this opposition to its favorite Federal agency. While those reports are still unconfirmed, they are certainly food for thought here in Atlanta, for whom Dallas is likely the biggest competition in this contest.
Georgia might not be off scott-free though. Said Dallas Mayor Mike Rawlings when addressing the reports, “if they are really basing their decision on the fact that members of the state’s congressional delegation are opposed to one small federal agency, then they are going to have to bypass pretty much every state, including Georgia.”
Uh oh.
Here in the Peach State, freshman Senator David Perdue, keeping in with the anti-establishment mentality, (but possibly against his businessman roots) voted against the bank’s re-authorization in July. Senator Johnny Isakson voted for re-authorization, one of 67 yea’s against 26 nay’s, (and 7 abstentions). The bill is not expected to receive as much support in a Republican dominated House of Representatives, so expect the topic to be one of the hottest in the fall and winter of 2015. Expect, too, to see GE keep a close eye on which states’ lawmakers appear to have their best interests in mind as they decide where to move their headquarters, possibly as soon as late this year.