Governor Dannel P. Malloy and defense titan Lockheed Martin have reached an agreement to retain and grow jobs at Lockheed subsidiary Sikorsky Aircraft through 2032, keeping Sikorsky”™s headquarters in Stratford and promising to increase investments in in-state suppliers.
Under the agreement, Sikorsky will build some 200 CH-53K King Stallion Helicopters in Connecticut for the U.S. Navy until at least 2032. Lockheed Martin had been considering several states for production of the CH-53K.
The pact, which needs state legislative approval via special session and the Teamsters in the coming weeks, requires Lockheed ”“ which acquired Sikorsky from United Technologies Corp. last November ”“ to retain and grow its full-time Connecticut employment to more than 8,000 by the end of 2030; nearly double its spending of $350 million per year with local Connecticut suppliers throughout the state; and increase its capital spending for machinery and equipment by 22 percent.
In exchange, the state will provide financial incentives totaling up to $220 million over the term of the agreement in several ways. The company will earn grants of up to $8.57 million on an annual basis over the term of the agreement by meeting certain benchmarks, such as retaining at least the minimum level of each of the following categories: growing jobs; payroll spending; utilizing in-state suppliers; and deploying capital for machinery, equipment, and other long term investments.
In addition, sales and use taxes will be exempted up to $5.7 million per year over the term of the agreement and, if Lockheed 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 news comes at a particularly opportune time for Stratford, as Sikorsky announced in late August that it would be laying off 109 Connecticut workers.
“This is a significant deal with wide-reaching ramifications,” Malloy declared. “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. If we don”™t do this deal, we risk losing thousands of good-paying jobs.
“This isn”™t just about Sikorsky and our new relationship with Lockheed Martin ”“ it”™s also about the supply chain companies and their employees that will benefit from the CH53K being built by Sikorsky,” he continued. “These companies are in every corner of our state.”
“This deal represents a significant first step in the three-way partnership among Sikorsky, the state and Teamsters Local 1150,” Sikorsky President Dan Schultz said. “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, and for our future. Assuming the state”™s proposal is approved by the legislature and the union agreement is ratified, Sikorsky will be able to transition the CH-53K production work to Connecticut.”
The legislature must act by Oct. 7 in order for Lockheed Martin to meet U.S. Department of Defense production requirements. Malloy”™s office said the administration will undertake intensive outreach to all members of the General Assembly to brief them on the agreement and plans to hold numerous meetings throughout the state to ensure any and all questions are answered prior to a legislative vote.
