The state of Connecticut and United Technologies Corp. (UTC) have reached an agreement that represents a long-term commitment to Connecticut by the aerospace conglomerate.
The agreement, which requires new state legislation to take effect, includes a commitment by UTC to keep its Sikorsky corporate headquarters in Connecticut for a minimum of five years.
Sikorsky, the helicopter manufacturer, is based in Stratford and one of the region’s largest employers. Sikorsky recent announced it would lay off 600 workers, with about half of those expected to be at the Stratford plant.
Other parts of the agreement
Specifically, under the agreement, UTC also would:
— Construct a new Pratt & Whitney corporate headquarters, which it will keep in Connecticut for a minimum of 15 years.
— Construct a new Pratt & Whitney worldwide engineering center of excellence in Connecticut.
— Create a customer training center at UTC Aerospace Systems (UTAS) in Windsor Locks.
— Build new labs and infrastructure at United Technologies Research Center (UTRC).
— Invest in new research projects and capital investments at Pratt & Whitney, Sikorsky, UTAS and UTRC.
Could impact 75,000 jobs in state
Gov. Dannel P. Malloy and United Technologies Chairman and CEO Louis Chênevert announced the agreement today. UTC has agreed to invest up to $500 million to upgrade and expand its aerospace research, development and manufacturing facilities during the next five years.
During the same time period, UTC expects to invest up to $4 billion in research and other capital expenditures in the state.
The agreement is expected to have an impact on more than 75,000 jobs in Connecticut, according to a press release from Malloy’s office.
CT is an aerospace industry leader
“Connecticut has long led the world when it comes to the aerospace industry,” Malloy said. “With the agreement we are announcing today, we will ensure that we remain a leader for years to come.
“This is a once-in-a-generation opportunity, one that will make sure we are keeping and creating good-paying jobs with good benefits — not just in the UTC companies, but also in the hundreds of aerospace supply chain companies throughout the state and the region,” he said.
Chênevert said UTC’s aerospace businesses, particularly Sikorsky and Pratt & Whitney, “have long and proud histories of innovation in Connecticut. This agreement secures the future of aerospace in Connecticut.”
Tax credits and tax reductions
The agreement, which requires future state legislation, does not involve any borrowing or payments by the state of Connecticut, and is expected to create nearly 1,500 construction and other related jobs throughout the initial capital expansion, according to the governor’s release.
Construction on the projects is expected to begin this year and continue through 2018.
If enacted, the legislation would allow exchange of approximately $20 million per year of previously earned but unused tax credits to finance the construction, up to a maximum of $400 million.
The exchanged credits will be offset with tax reductions over a 14-year period, with the final amount based on the company’s level of jobs, wages and investments.
If UTC fails to meet any of its obligations under the agreement, the benefits to the company would be either significantly reduced or eliminated.