Friday, March 12, 2010

UTC, Slip Sliding Away

The lede graph in a Hartford Courant story detailing a meeting held with Wall Street Journal analysts and leaders of United Technologies was not encouraging:

"’Anyplace outside of Connecticut is low-cost,’ United Technologies Corp.'s chief financial officer, Gregory Hayes, told Wall Street analysts -- paraphrasing previous remarks by another UTC executive, Jeff Pino, the president of Sikorsky Aircraft. ‘Even if work has to stay in the U.S., there are opportunities to reduce cost by moving out of those high-cost locations,’ Hayes said.”

UTC executives hosted the analysts at a meeting at the St. Regis Hotel in Manhattan devoted to the company’s business prospects in 2010.

Both the conversation with Wall Street analysts and UTC’s previous contacts with administration officials in Connecticut indicate the company may plan to shift jobs from Connecticut to lower cost facilities in both foreign ouptposts – India, Poland, China, Turkey, Istanbul, Singapore, Japan – and out of state facilities where labor costs are less, taxes are lower and state regulations less punishing.

Of UTC’s 205,000 global employees, 26,000 work in Connecticut, the majority of them at Pratt & Whitney, Sikorsky and Hamilton Sundstrand. Employees at Pratt & Whitney have diminished over the past two decades from 15,000 to 3,700, and the company, presently locked in a litigatory struggle with union workers backed by Attorney General Richard Blumenthal, plans to reduce its Connecticut work force even more.

State unionized workers supported by Blumenthal, who claimed in a recent debate with Democratic opponent Merrick Alpert that his suits increase business activity in the state, won pyrrhic victory recently when a court ruled that Pratt could not move jobs from Connecticut because a provision in a union contract that will soon elapse required the company to make strenuous efforts at negociations.

Healy said Democrats in the Legislature, in conjunction with union supporters have priced Connecticut out competition and that it is only a matter of time before UTC all but abandons the state, unless a radical change occurs in Hartford.

“The record is clear, anti-business legislation has its effects,” said Healy. “Democrats still don’t understand that businesses and available capital create jobs but that cannot occur if there are too many mandates and too many taxes.”

Legislative Democrats have not laid out a plan to cut the current deficit of $500 million for this fiscal year, but its leaders did support a bill that would require companies like UTC to provide seven sick days – another government cost that would add millions to the bottom line to hundreds of businesses.

“Democrats are divorced from reality,” said Healy. “Democrats continue to destroy what’s left of our economy through laws that will put everyone on permanent leave.”

1 comment:

David said...

I've been telling my associates and friends that business will leave CT as high cost when it can for years. Although the UTC defence businesses were somewhat isolated from many cost concerns, spreading the political influence to more defense friendly congressmen did the same thing.

It would be eye opening to have a journalist (do we have them anymore) do a piece showing the movement of major businesses out of state in the last 10 years.

Now that Finance has been dethroned as a replacement and is subject to millionaire taxes, we will tax ourselves to buy the rope that hangs us.