STRATFORD, Conn. — Members of Teamsters Local 1150 got their first peek at a plan to keep Sikorsky Aircraft headquarters in Stratford Wednesday, a proposal that could go before a special session of the state legislature as early as Sept. 28.
Asked if Sikorsky would leave the state if the plan does not go through, Gov. Dannel Malloy said the plan’s failure is not an option.
“It’s gonna go through,” he told those gathered at a press conference outside the massive Main Street plant. “Let’s leave it at that.”
On Tuesday, Malloy announced the state has reached an agreement with aerospace giant Lockheed Martin to keep its Sikorsky Aircraft headquarters in Connecticut at least until 2032.
In exchange, the state will provide financial incentives of up to $220 million over the term of the agreement, the governor said.
Calling Sikorsky President Dan Schultz “my new best friend,” Malloy said he was well aware that competition is fierce in the aerospace industry.
Schultz told reporters Lockheed Martin did a comprehensive search to see what would make sense for Sikorsky’s future, particularly the manufacture of the CH-53K King Stallion, considered the best heavy lift helicopter in the world. Company leaders decided to stay put, given the details of the proposal, which make staying financially sound.
“We in Connecticut are equally fierce fighters,” Malloy said.
Neither Malloy nor Schultz revealed what the union might need to contribute or concede in the deal, which was revealed to members Wednesday.
Malloy said keeping Sikorsky in Connecticut is crucial to the state’s economy and will mean thousands of jobs will stay and be created in the state, which he said stands to take a $2.3 hit billion to its economy if Sikorsky were to leave.
“We must act now,” he said. “Residents are counting on us.”
Under the deal, Sikorsky will build nearly 200 “53Ks” in Connecticut for the U.S. Navy until at least 2032.
In turn, it will buy parts from other small- and medium-sized “supply chain” businesses across the state, further bolstering Connecticut’s economy, Malloy said.
Schultz said he looks at the proposal as a three-legged stool, with commitments from Lockheed, the state and Teamsters 1150 all required.
“On top of that sits the 53K,” he said, adding “Sikorsky’s future is bright.”
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 grants of up to $8.57 million annually over the life of agreement by meeting certain benchmarks. Those include 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, said Catherine Smith, commissioner of the Connecticut Department of Economic and Community Development.
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.
“I think this is a win-win situation,” Smith said.