The juxtaposition of facts is just too rich to ignore.
United Technologies Corp. executives were taking a victory lap after beating Wall Street expectations with a 17 percent gain in first-quarter profits, to just over $1 billion. Sales were up 11 percent and earnings expectations were upgraded a nickel per share. There was a more than $4 billion in the kitty and rumors of acquisitions are rampant.
“It’s a great start to the year,” said CFO Greg Hayes in an epic understatement.
And it is — if you’re inside the company or own a piece of the juggernaut.
But things aren’t as wonderful for those on the outside dealing with the carnage of UTC’s anywhere-but-Connecticut strategy. Consider:
• While executives at UTC’s Pratt & Whitney unit were toasting a 15.2 percent profit margin, Cheshire officials are getting impatient as they wait for the Legislature to finally approve an enterprise zone deal that could, maybe, some day make it easier to find a new tenant for a soon-to-be-vacant manufacturing plant. Pratt is moving that work out of state.
• Over at Hamilton Sundstrand, the profit margin weighed in at 16.9 percent. But 214 workers got pink slips and word is that another 100 or so will follow in the next 18 months. Their work is headed to Singapore and Poland, markets where aerospace clients are eager for Hamilton Sundstrand’s precision parts. And skilled labor costs about a sixth of what it costs in Windsor Locks.
• Politicians wring their hands and wondered what could have been done to save the jobs. Back at the Capitol, committees work to sand the corners on Governor Malloy’s plan to lure/bribe five companies willing to create 200 new jobs each.
As screenwriters often say, you just can’t make this stuff up.
There are plenty of heroes and villains here.
UTC has done exactly what it said it would do to maintain its competitive advantage. The moves weren’t done quickly or in the dead of night. There is nothing Connecticut could have done to compete with Polish wages, nor should it try. But there likely was a price point at which some combination of union concessions and state incentives could have kept hundreds of older workers on the job until “normal” retirement. And that would have been better for everyone.
There’s not much to be learned from an autopsy. The jobs were lost to the convergence of the global economy, Connecticut’s hostile business climate, and a generation of labor and political leaders who haven’t noticed we’ve entered a new century. Those jobs aren’t coming back but perhaps there’s still time to save some that are still here.
We’re spending a lot of time and treasure looking for a magic bullet. Governor Malloy’s “First Five” idea is a desperation play that deserves close scrutiny to assure any deal really has merit. How many enterprise zones, expedited permits and tax credits does it take before we recognize that pencils don’t come sharp enough to compensate for an environment that’s routinely hostile to business?
To really improve the situation, stop the endless flow of mandates, regulations, social engineering and tax hikes. Then, maybe Catherine Smith can make something positive happen as the new boss at the Department of Economic Development.
We’re rooting for Smith. She’s vulnerable because she has neither government-process experience nor direct economic development experience. But she certainly understands what it takes to make a smart business investment. Her challenge would seem to be in convincing the rest of state government to get out of her way.
Now more than ever Connecticut needs a new economic development policy that actually can deliver jobs. As a state, we can’t stand any more success stories like the one UTC wrote last week.
