Malloy to make major economic development announcement this morning

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Late yesterday, Governor Malloy’s press operation released a media advisory that “On Wednesday morning, Governor Dannel P. Malloy will hold a news conference in North Haven to announce the details of a new international company that will be establishing its headquarters in Connecticut and creating hundreds of jobs in the state.”

Using scarce tax dollars (the state is facing a major budget deficit), Connecticut’s governor, like governors all across the nation, will provide another company with an “incentive” to create or retain jobs here instead of someplace else.

When government provides financial support for people it is called welfare, when it does it for corporations, it is called an “economic development” policy. Whatever you do, don’t call it corporate welfare.  They don’t like that term.

Meanwhile, only hours before, the Hartford Courant published a story entitled “Loss of 75 Hamilton Sundstrand Employees Is Much Larger Than Numbers Suggest”

According to the Courant, “The move of 75 Hamilton Sundstrand employees from Windsor Locks to Charlotte — as Hamilton merges with Goodrich Corp. — is a more substantial economic loss to Connecticut than the simple numbers imply.

Heading to North Carolina are the vast majority of Hamilton’s executives and senior managers — with an average salary of $290,000 for the group as a whole, according to documents supplied by Charlotte’s economic development office.

That means that of the $64 million annual payroll that will be paid in Charlotte after the headquarters of United Technologies Corp.‘s Aerospace Systems division is established there, nearly $22 million is moving from Connecticut. Charlotte is now headquarters of Goodrich, which UTC is buying in a $16.5 billion transaction.

Because the salaries are so high, the loss of these 75 jobs is in many ways similar to losing 400 typical wage jobs, said Fred Carstensen, a University of Connecticut economist and director of the Connecticut Center of Economic Analysis. And when you consider that some of these employees have well-paid spouses, the loss could be even greater.”

Apparently UTC informed North Carolina’s economic development officials that the state was competing with Virginia, Florida and South Carolina for the jobs.  In the end, North Carolina came up with $21 million to close the deal.

There was no mention of whether Connecticut was provided an opportunity to give UTC even more money in an attempt to convince them to stay in their “home state.”

When these issues come up, business leaders falsely suggest that corporate taxes are higher in Connecticut.

The high cost of labor has also consistently been cited by corporate executives as a primary reason to avoid doing business in Connecticut.

In fact, only two years ago, UTC’s chief financial officer told a group of Wall Street investment analysts that UTC was looking to move jobs out of Connecticut saying that “anyplace outside of Connecticut is low-cost.”

However, as the Courant notes, the average wage in Mecklenburg County is 51,792, compared to an average wage of $52,920 in Metro Hartford…

Meanwhile, the Courant story notes that “in addition to the managers transferring to Charlotte, 214 Hamilton manufacturing jobs are slated to move out of Connecticut to Poland, Russia, Arizona, Singapore and Puerto Rico. Those jobs pay about $65,000 annually, not including overtime.”

And to those who say “Connecticut didn’t do enough” to help poor UTC, remember that every year, significant public funds go to pay for the Connecticut’s research and development tax credit programs including the property tax exemption for manufacturers.  One of the prime beneficiaries of these expenditures — you got it — UTC – The United Technologies Corporation.

Check  back later to learn how much we’re giving this “new international company” to pass through our great state.

  • Buygoldandprosper

    Is it coincidence that defense contractors are pulling out of Connecticut,now that Sen. Joe Leiberman (D-Israel) is leaving Washington?
    Who will clean up the Norden site in Norwalk? I have heard that the pollutants make it Fairfield’s Chernobyl.
    Back to UTX…they are the nations 38th largest polluter and a serial law-breaker when it comes to rules and regulations on illegal bidding. Can anyone say F404 engine bids? After YEARS of declaring innocence they admitted they were wrong but  one wonders,of the $7.9 BILLION in defense contracts they received in 2011, they bid them all legally. 
    Mr. Chenevert was paid $7.88 MILLION last year and has 376,788 shares in the company. Time to cut back on his overtime,I suppose.
    As for the move south of a division…other than their full set of teeth,they should fit right in down there where rules and regulations are designed to keep the population enslaved and corporations can pretty much do what they like.

  • Buygoldandprosper

    Well. A nice collection of companies but very little can be quickly found about the revenues,etc. AT LEAST $25 million will be “invested” by Connecticut taxpayers for maybe 200 jobs. That is $125,000 per job?
    One of the divisions is DSG RELOCATABLE BUILDING. No douth they are booming as many companies seem to be relocating these days.
    First Five Jive strikes again!
    Dan-the-Job-Creator is paddling upstream and losing the race badly.
    Money does not buy love,Dan.

  • Linda174

    Malloy enjoys promoting himself…he is very skilled at tooting his own horn. After that, there isn’t much there. I wish he would just stay in his newly renovated, highly secured mansion until we can get rid of him.

  • Buygoldandprosper

    One more note…
    The building that housed AZUCAR restaurant in Hartford was auctioned off to a lone bidder (Liberty Bank) for $211K.
    Realty Holdings (Sal Pirrotta) was the owner and had received at least $375K in loans from HARTFORD COMMUNITY LOAN FUND.
    The HCLF is funded,in part, by the State of Connecticut Department of Community and Economic Development.
    My point?  Be VERY CAREFUL of “investments” by the state. They have buried their spending at all levels with a myriad of deceptive practices that are used to deflect blame. 
    Dan is getting to be an expert at spending taxpayer money and buying votes for his next election.
    The difference between Azucar and any number of FirstFiveJive “investments”? Nothing but the amount of risk to the taxpayers.

  • Buygoldandprosper

    10 year 19.1 MILLION dollar loand at 2%.
    $5M up front if 208 jobs created in two years. $4.1M is 200 more jobs created in the next two years and if all 408 jobs are created,the loan is forgiven.
    Or something like that…
    Mr. Weeks,the Australian,was quoted elsewhere saying:
      “We are choosing to do that here in Connecticut and there’s a very good reason for that, it’s because you have a great deal of wealth in your education system here and the smarts to see it through,” he said.”

    He must have the results from the CMT’s already!!

    • jonpelto

      No THAT is very funny…. Off to see if I can find that quote.

      Thank goodness for those CMT scores (and $20 million dollars).