SOUTHINGTON, CT — Robert Leduc, president of Pratt & Whitney, told hundreds of business leaders that what keeps him up at night is “people.”
“That’s what we think we need in order to remain competitive,” Leduc said Friday at the Connecticut Business and Industry Association’s 2019 Economic Update at the Aqua Turf Club.
The jet engine company, which has a backlog of about 8,000 commercial engines, has hired 15,000 people globally since 2015, including about 5,000 in Connecticut, but close to 30 percent of Pratt’s workers are scheduled to retire in the next 10 years.
For its operations in Connecticut that means about 6,000 retirements are expected to happen in the next 10 years, and they will be looking to hire about 8,000 people.
At the same time, “there is fundamentally a lack of skilled people,” Leduc said to replace those skilled workers.
He said they have great relationships with Goodwin College and Asnuntuck Community College, which have manufacturing programs, but those schools are graduating 12 to 16 students.
“We are grateful for these programs, but the issue is the numbers that come out of these programs are nowhere able to fill the need that’s going to exist here,” Leduc said.
He said there are disparate attempts at teaching kids STEM in elementary, middle, and high schools.
“We don’t see a common approach to STEM in the school system,” Leduc said. “So what we believe is we need a common STEM approach across the state.”
He said they need a much bigger “pool of people” to meet the hiring demands of Pratt & Whitney.
“The numbers are staggering,” Leduc said. “The cost today is prohibitive. So we believe we have to cast this net for STEM and we have to do it early.”
At the same time the skill set that’s required to be on the manufacturing floor today is not the skill set that’s going to be needed 10 years from now, Leduc said.
He said in the past where they needed machinists, the machining is now automatic and they need workers who understand “statistical process control, they need to understand software, they need to understand how to troubleshoot software, they need to know robotic.”
He said automation will play some role, but that role is minuscule in comparison to the actual need for a trained workforce.
He said they do hire unskilled workers based on aptitude and attitude, but it takes nine months to train those workers, instead of the 90 days it takes for skilled workers.
But the company also purchased $1 billion in goods from 92 Connecticut-based suppliers last year, who are also experiencing the same problems with the workforce.
“We’re in a global marketplace, we do not set price,” Leduc said. “The market sets the price we can only set our costs, so we look at every element of cost.”
He said the reason they are in Connecticut, which is an expensive state in which to do business, is that Connecticut is “top 10 in terms of productivity, top five in terms of school systems, and Connecticut is top four in terms of innovation — those are things most states would cut their arm off for to have.”
He said the General Assembly has done a “fairly good job” of trying to contain tax increases for businesses, but “we know the challenges are tough in Connecticut. We need to maintain that drumbeat.”
Leduc added, “We need to keep the tax burden on businesses no worse than it is today.”
Department of Economic and Community Development Commissioner David Lehman and Department of Administrative Services Commissioner Josh Geballe were in attendance to note Leduc’s remarks.
Five years ago this month, the state allowed United Technologies Corp., the parent company of Pratt & Whitney, to use $400 million in unused tax credits to offset their tax liability.
Leduc said it was a good investment.
As a result of that investment, UTC built a 425,000-square-foot global headquarters and a $180 million world-class engineering building in East Hartford. Leduc said that has helped them retain engineering talent.
He held it up as a model of “what industry and state partnerships should be.”