Log In


Reset Password
  • MENU
    Editorials
    Saturday, May 18, 2024

    Deals of necessity to keep defense-industry jobs

    Gov. Dannel P. Malloy has done a good job of helping secure defense manufacturing in Connecticut, and for that he deserves credit.

    It is easy enough to criticize a series of deals his administration has made to keep defense industries from moving all or parts of their operations to other states.

    These deals are corporate welfare, made more grating because the corporations seeking tax breaks and other incentives make their money off taxes to begin with — building weapons paid for by all of us.

    One can also complain that Connecticut would not have to make such deals if it had a friendlier business climate, including lower energy costs, taxes and less regulatory burden.

    However, the painful reality is that Connecticut must compete in the environment that exists. It is competing with other states willing to offer their own versions of corporate welfare to steal our jobs. And while the goal should be to improve the business climate in the state, it is not going to happen quickly. So for now, Connecticut’s incentives may have to be a bit sweeter.

    On Wednesday, Malloy announced that Sikorsky Aircraft had agreed to stay put in Stratford. Since purchased by Lockheed Martin last year, a corporation that has facilities nationwide, there has been plenty of speculation that Sikorsky would relocate.

    Malloy dangled a package estimated at $220 million through 2032. Connecticut is providing $8.6 million in business grants and $5.7 million in sales tax exemptions annually.

    In return, Sikorsky will build its next generation of military helicopters here, the heavy lift CH-53K King Stallion that will be used primarily by the Marines. It is scheduled to deliver by 2020 the first of an anticipated 200 Stallions.

    It was a critical point. Production of the workhorse Black Hawk helicopters is ending after 30 years, with only repair and refurbishment work to continue. If there was a time for Sikorsky to relocate and retool elsewhere, this would have been it.

    As part of the deal, Lockheed agreed to locate much of the supply-chain manufacturing in Connecticut. Malloy said the helicopter manufacturer now buys $400 million to $450 million annually from Connecticut suppliers. That will ramp up by another $350 million over several years, Malloy said.

    Now 8,000, employment at the Stratford plan will drop below 7,000 during the transition to a new production line, then build back up to 8,000, according to company officials. Employment could grow if Sikorsky secures contracts to sell the King Stallions to other allies, a strong possibility.

    The General Assembly will return for a special session Wednesday to act on the proposed deal. It is shaping up as a rubber stamp. We’d prefer at least some rudimentary hearing to probe into the deal’s particulars. That seems unlikely.

    It’s not a good idea to open the special session to other measures, as the Republicans are proposing, saying they want to push a pro-business package. With an election a few weeks away, such an attempt will just invite political games. Better to stick to the business at hand.

    When he spoke to The Day, Malloy said, “I feel pretty good, I just built a stool.”

    The stool, he said, is the state’s defense industry and its three supporting legs are Sikorsky, Electric Boat and Pratt & Whitney in East Hartford.

    In 2014, Malloy’s administration negotiated a deal with Pratt & Whitney that will allow it to use up to $400 million in state tax credits. In return it agreed to invest $500 million into its aerospace design and manufacturing operations in Connecticut.

    Also that year, the state Department of Economic and Community Development provided a $10 million loan to EB to purchase and upgrade facilities in Groton and New London.

    It is hard to imagine the Connecticut economy without that stool standing.

    Comment threads are monitored for 48 hours after publication and then closed.