HARTFORD, CT — News that United Technologies Company would merge with Raytheon to form a new company called Raytheon Technologies Corporation has politicians and economists alike wondering what it means for Connecticut.
Is it GE deja vu?
The merger, which was announced Sunday night, means another corporate headquarters will be leaving Connecticut, but it’s not expected to impact employment since UTC’s 19,000 employees will continue to work in East Hartford and Middletown. An estimated 100 employees will move from Connecticut to the headquarters in Waltham, Mass.
“The combination of United Technologies and Raytheon will define the future of aerospace and defense,” said Greg Hayes, United Technologies Chairman and CEO. “Our two companies have iconic brands that share a long history of innovation, customer focus and proven execution. By joining forces, we will have unsurpassed technology and expanded R&D capabilities that will allow us to invest through business cycles and address our customers’ highest priorities.”
Gov. Ned Lamont expressed disappointment in the decision to move the headquarters.
“I’ve spoken directly with Greg Hayes and made it clear that Connecticut will always be open should things change, as they often do,” Lamont said. “This serves as reminder that we live in an increasingly competitive economy, domestically and internationally. As such, it’s critical we invest in education, workforce development, and our transportation infrastructure to stay competitive.”
The merger combines one of the largest defense manufacturers, Raytheon, with one of the largest aerospace manufacturers, UTC, at a time when the Pentagon is putting more pressure on contractors to cut costs.
“This huge potential merger raises very sweeping and serious questions and doubts about its impact on the Connecticut workforce and economy, as well as our national security and defense,” said U.S. Sen. Richard Blumenthal, who is a member of the Senate Armed Services Committee. “I will demand answers immediately and publicly.”
He said he is “troubled by the possible impact on cost and competition of defense product, which may significantly affect American taxpayers.”
U.S. Rep. John Larson said he’s confident UTC will maintain its manufacturing base in Connecticut.
“UTC’s manufacturing base is not only strong, but it will remain in Connecticut,” Larson said. “As we await more information, our number one concern is UTC employees. We will be reaching out to them, as they are understandably anxious about what effects this will have on the workforce, and will do anything we can to support them.”
Senate Republican Leader Len Fasano, R-North Haven, wasn’t as confident.
“We’ve seen this movie before,” Fasano said.
He said GE left because Connecticut refused to acknowledge the amount of debt it had on the books and refused to ask state employees to help them reduce the cost of state government. Instead, taxes went up and GE announced its departure.
He said Lamont made similar promises, but “at the end of the day he did none of that.”
He said losing another headquarters to Massachusetts is like a TV station losing a major sponsor.
He said the reason they’re moving the headquarters might have nothing to do with Connecticut’s state budget or policies, but “I’m sure when they make a decision they make them based upon past and future practice and they are watching Connecticut government repeat itself.”
The stakes are high, according to economist Don Klepper-Smith.
“Any merger of this magnitude has to result in some efficiencies and job consolidations,” Klepper-Smith said. “The end result is always going to be a leaner operation with an eye towards increased productivity and profitability.”
Each Connecticut manufacturing job creates another 1.5 jobs elsewhere in the economy and each dollar spent creates another $1.06 in indirect economic benefits, according to the Bureau of Economic Analysis.
U.S. Rep. Joe Courtney said he still has questions about the merger.
“These firms focus on delivering very different products, and the possibility of job reductions in Connecticut’s manufacturing sector because of this merger seems to be quite low.,” Courtney said. “There are some unique questions surrounding this union – like the movement of UTC’s corporate headquarters to Massachusetts, the home of the junior partner in the transaction – and like any other merger it needs to be looked at in totality to ensure that it doesn’t threaten competition in the market. I look forward to hearing more from UTC leadership in the coming days to learn more about the details of the agreement, and the way forward.”