New GE operations center: ‘This is equivalent to winning a Fortune 500 headquarters’


KEY STORY DEVELOPMENTS

  • General Electric Company plans to open a U.S. Global Operations Center in the Cincinnati-area, which was announced Thursday
  • The center will be GE's fifth to open worldwide, and the only one to open in the U.S.
  • GE is opening the service centers to consolidate back-office functions such as finance and information technology
  • The future Cincinnati services center will bring 1,400 new jobs to Ohio, hailed as Ohio's single largest announcement for new jobs in at least a decade
  • Total employment at the Cincinnati center will reach 1,500 to 2,000 positions
  • Some jobs will be transferred from other GE locations in the U.S. and in Ohio, and some will be new hires. But 1,400 jobs, new and transferred from elsewhere in the U.S., will be new-to-Ohio
  • A final location within the Cincinnati market has yet to be decided — local communities in the running are expected to present tax incentive packages
  • Meanwhile, GE said it will open a temporary services center in downtown Cincinnati by July 1 that will employ up to 700
  • Mason, in Warren County, is on the short list of locations for the permanent site, the Mason mayor confirmed
  • GE, with global headquarters in Connecticut, says it has more employees in Ohio, nearly 16,000, than any other state

The General Electric Company on Thursday made Ohio’s single largest jobs announcement since before the recession.

General Electric announced it will open a new global operations center in greater Cincinnati that will bring 1,400 new jobs to Ohio. It’s the biggest new jobs commitment since JPMorgan Chase & Co. announced in 2009 it would add 1,150 new jobs in Columbus, according to JobsOhio, the statewide nonprofit development agency.

“This is the largest economic development project in Ohio in a decade,” said Matt Davis, interim executive director of REDI Cincinnati, the private agency that leads the Cincinnati region’s business attraction activities. REDI Cincinnati is the JobsOhio liaison for the region.

“When you think about all the ups and downs in the Ohio economy” the past 10 years, “to now be able to put ourselves in a position to compete and win a project of this magnitude, it really speaks to where Ohio has come in a short amount of time,” Davis said.

Fairfield, Conn.-based General Electric said it plans to open its fifth and only U.S. Global Operations Center in Greater Cincinnati.

Hiring could begin in the second half of 2014 for a temporary shared services center to open downtown during construction on the final facility site. Up to 700 workers could be employed at the temporary space, also according to JobsOhio. The final location for the center to be permanently housed within the region has yet to be announced.

The jobs are being described as white-collar jobs paying “well over” $50,000 a year, according to JobsOhio.

“This is equivalent to winning a Fortune 500 headquarters in terms of size, payroll and impact on the state and local community,” said Matt Englehart, JobsOhio spokesman.

General Electric, which makes jet engines, washing machines, light bulbs and CT scanners is creating shared service sites where it can consolidate back-office functions such as finance and information technology in one place. Other centers are in Hungary, China, Saudi Arabia and Mexico, said Joe Allen, general manager of U.S. Global Services for GE. The move is meant to simplify the sprawling conglomerate’s business operations.

The new service center will create 1,400 new jobs to Ohio. Some of the jobs will be positions transferred from other GE locations nationwide, and consolidated to Cincinnati. The share of jobs to be transferred to Cincinnati, and the share of jobs for which the company will be hiring was not disclosed.

Some jobs will also be transferred from other sites in Ohio, bringing total employment at the center when it opens in 2017 to the range of 1,500 to 2,000, according to GE.

“When you look at Ohio and what we’ve been able to do with a partnership with the state, we have close to 16,000 employees in the state. About 9,000 of those are in southwest Ohio,” Allen said.

“It made sense for us to be in Ohio, and with the relationships we have with the state, it also made sense for us to be in the Greater Cincinnati area,” Allen said.

A Cincinnati market location is a definite go, but leaders have not decided at this point the exact location within the market to build it. The final decision is expected within 90 days, Allen said.

Ongoing talks are with Cincinnati, Hamilton County and “neighboring counties,” Allen said.

“We are always looking for the most cost competitive package to help us as well,” Allen said.

Mason Mayor David Nichols confirmed the Warren County city is on the short list for the new consolidated services center.

“What we’ve done in the past is we combine the business community, we combine the school system, we’ve got plenty of good available of land, plenty of access to the interstate,” Nichols said. “We’re going to do our best to get it.”

Cincinnati’s central location to support other U.S. operations, and close proximity to different businesses of General Electric were key factors in the region landing the project, company officials said.

GE’s aviation division is based in the northern Cincinnati suburb of Evendale. Subsidiary GE Appliances is based in Louisville, Ky. And GE Lighting is based in Cleveland.

GE Capital has an office in Kettering.

In fact, GE has more employees in Ohio than any other state, including the corporation’s world headquarters in Connecticut, according to the company.

Construction on the Cincinnati-area shared services center is expected to start later this year, with plans for the center to be fully up and running by 2017.

In the meantime, GE will open a temporary shared services center on East Fourth Street in downtown Cincinnati on July 1.

Securing a short-term location with a quick turnaround, ready to house up to 700 employees, was critical to Ohio winning the project, said Thomas Seward, project manager for JobsOhio.

“Toward the end of 2013, they reached out to us and engaged with us for the project,” Seward said. “One of the first hurdles that was really won, that really was kind of critical in this project, was the short-term real estate need.”

This project helps and continues to enhance their presence in the state,” Seward said.

GE, which also offers financial services, employs some 307,000 people globally, with annual revenues of $146 billion.

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