|”I’m frustrated because these folks have been in touch with my folks, and with me, and never mentioned what this plan is.” — Deval Patrick, Governor of Massachusetts.|
Patrick says Fidelity left him in dark on jobs move
‘Deeply frustrated’ over lack of notice
Governor Deval Patrick, who has been traveling for nearly two weeks on an international trade mission intended to create jobs, said yesterday that he was blindsided by Fidelity’s decision to ship more than 1,000 jobs out of Massachusetts, but that there is nothing he can do to stop it.
In a brief telephone call from England, the governor said he had recently met in his office with Abigail Johnson, the billionaire president of one of Fidelity’s divisions and the daughter of its chief executive, who is part of a group of business executives who advise Patrick. The governor said his aides are also in regular contact with the company’s senior executives, none of whom ever told him they were planning to move jobs out of the firm’s Marlborough campus, to offices just over the border in Rhode Island and New Hampshire.
He said he found out about the decision Monday when the company’s government affairs official called the State House and spoke to his chief of staff, Mo Cowan.
Cowan then called the governor in London and informed him of the move, which the company made public Tuesday.
Fidelity’s announcement cast a pall over the governor’s trade mission, which has taken him to Israel and England for a series of business meetings and discussions but has not produced any concrete deals.
Patrick said he was “obviously disappointed and deeply frustrated’’ about the decision to move jobs out of Massachusetts because Fidelity — whose revenues rose by 7 percent to $12.3 billion in 2010 — has benefited from a tax break that the state granted to mutual fund companies in 1996. At the time, the deal was estimated to save Fidelity about $20 million a year.
“Massachusetts has been good to Fidelity, just as Fidelity has been good to Massachusetts, and I don’t think I’m alone in this frustration,’’ he said. “Their leadership was in my office frequently, and is in regular touch . . . and yet they gave us little notice of this decision and no opportunity to compete for these jobs.’’
He added that the company had not told him why it is moving jobs out of Massachusetts.
“I learned that this decision was in the works for months, and they were just executing a plan,’’ he said. “I’m frustrated because these folks have been in touch with my folks, and with me, and never mentioned what this plan is.’’
He testily rejected a question about whether he was distracted overseas from his duties at home.
“Oh, please don’t go there,’’ he said. “What do you think I’m doing over here, other than working for jobs?’’ he said before promptly ending the phone call.
A Fidelity spokeswoman, Anne Crowley, defended the firm’s decision to inform the governor on Monday, a day before the company told its employees, and suggested there was nothing Patrick could have done to persuade the company to keep the jobs in Massachusetts.
The decision to move jobs out of state was “part of a larger strategy,’’ she said, intended to help the company cope with the economic downturn and consolidate its offices after cutting its global workforce to 37,000 from 46,500 in 2007.
The firm will have about 7,300 workers left in Massachusetts after this latest reduction, just over half of the 13,000 it had in 2006.
“We were not looking for the state to give us anything, so we feel we gave advance notice to the governor of this state, and to our other elected officials in this state,’’ she said. “We felt this was the best way for our business to manage our real estate and our workforce throughout New England.’’
Rhode Island has also extended benefits to Fidelity. Under an agreement struck 15 years ago, the state helped finance the building of Fidelity’s campus in Smithfield and, among other things, agreed to slightly reduce the amount of debt payments for every employee Fidelity added.
Patrick, who left for Israel on March 6 and returns to Boston late tonight, spent yesterday in meetings with members of the British Parliament and government ministers. He was also received on the floor of the House of Commons, and observed a session of Prime Minister’s Questions, during which the country’s leaders grill one another in public.
Patrick’s aides agreed to make him available briefly for questions about Fidelity late in the day.
During the three-minute call, he declined to say whether he believes the tax break that benefits Fidelity should be reexamined.
But state Senate leaders said yesterday they would hold a hearing on March 29 to probe the tax break and Fidelity’s slashing of its state workforce.
Mark C. Montigny, a New Bedford Democrat who chairs the Senate Committee on Post Audit and Oversight, said he hoped to hear directly from Johnson or her father, Edward C. “Ned’’ Johnson III, the company’s chairman and chief executive.
“I believe that one or both of the Johnsons should come and defend the company, defend the policy, and how they spent taxpayer money,’’ Montigny said. “When a company takes advantage of a taxpayer initiative, they have the responsibility to hold up their side of the bargain.’’
Senate President Therese Murray said she also hoped to hear from executives of Fidelity, which has been based in Boston since its founding in 1946.
“It is very disappointing to be blindsided by a homegrown company that has benefited greatly from its long relationship with the Commonwealth,’’ she said in a statement.
Crowley declined to say whether the company would send a representative to the hearing.
“No one has invited us to testify,’’ she said. “I’m sure if we get an invitation we will review it at that time.’’
Todd Wallack of the Globe staff contributed to this report. Michael Levenson can be reached at firstname.lastname@example.org.