STRATFORD, Conn. -- The state of Connecticut has reached an agreement with aerospace giant Lockheed Martin to keep its Sikorsky Aircraft headquarters in Connecticut at least until 2032, Gov. Dannel P. Malloy announced Tuesday.
In exchange, the state will provide financial incentives of up to $220 million over the term of the agreement, the governor said.
The agreement will “strengthen one of three critical components of Connecticut’s defense industry section” and “shore up” the state’s “standing as a leader in fields of aerospace technology and manufacturing,” Malloy said.
“This is a significant deal with wide-reaching ramifications. It ensures that great manufacturing jobs – thousands of them – will remain in Connecticut, and that Sikorsky’s extraordinary record will continue to flourish for years and years to come right here at home,” he said. “If we don’t do this deal, we risk losing thousands of good-paying jobs.”
Under the deal, Sikorsky will build nearly 200 CH-53K King Stallion Helicopters -- which is on its way to becoming the world’s premier heavy lift helicopter -- in Connecticut for the U.S. Navy until at least 2032.
According to Malloy, Lockheed Martin been weighing a number of other states for production of the CH-53K.
"King Stallion commitment cements Sikorsky in Stratford," U.S. Sen. Chris Murphy said via Twitter. "This deal is more significant than the numbers or words in the agreement."
The deal isn’t just about Sikorsky and the state’s new relationship with Lockheed Martin, Malloy said.
The governor called small and medium-size supply chain companies “the backbone” of the state and local economy.
“This is something that we all should celebrate,” he said.
“This deal represents a significant first step in the three-way partnership among Sikorsky, the state and Teamsters Local 1150,” said Sikorsky President Dan Schultz Tuesday.
“It is important for the company’s ability to meet our customer requirements, for our employment stability amid continuing and difficult financial pressures on our industry,” he added.
Malloy said the move, which is subject to both legislative and union approval, will keep or grow 8,000 jobs at Sikorsky, which is based in Stratford on the Shelton border.
The legislature must act by Friday, Oct. 7, in order for Lockheed Martin to meet U.S. Department of Defense production requirements.
Lockheed Martin has also agreed to increase investments in in-state suppliers, Malloy said.
This means, the governor said, that the company will nearly double its spending of $350 million per year with local Connecticut suppliers throughout the state.
It has also agreed to increase its capital spending for machinery and equipment by 22 percent, Malloy said Tuesday.
Sikorsky, which has been in Connecticut for more than 85 years, was purchased by Lockheed Martin from United Technologies Corp. last November.
The incentives include, Malloy said, grants of up to $8.57 million annually over the life of agreement by meeting certain benchmarks, such as retaining at least the minimum level of each category, growing jobs, payroll spending, utilizing in-state suppliers, deploying capital for machinery and equipment, and other long term investments.
Malloy said that sales and use taxes will be exempted up to $5.7 million per year over the term of the agreement.
If Lockheed Martin exceeds the target level employment by 100 to 550 jobs in any given year of the agreement, it will be eligible for a performance incentive grant of up to $1.9 million, for a total of up to $20 million, the governor said.
Lt. Gov. Nancy Wyman said the historic agreement “will secure thousands of jobs in the years ahead – both at Sikorsky and also at their many supply chain partners throughout Connecticut.”
“While we’ll need to move quickly with our partners in the General Assembly, it’s important that they vote on this deal. It’s part of our shared commitment to grow Connecticut jobs and strengthen our economy,” Wyman said.
Malloy, legislative leaders, and executives from Lockheed Martin and Sikorsky will hold a press conference Wednesday to discuss the agreement.