With annual sales in excess of $50 billion a year, the gigantic Lockheed Martin Corporation purchased Sikorsky Aircraft from United Technologies Corporation last year. Then, just last month, the mega-defense contractor announced that it would be laying off at least 150 workers at the Sikorsky Aircraft plant in order to ensure that it would, “remain competitive in the marketplace.”
Now comes word that Governor Dannel Malloy and the corporate behemoth have reached a reached a “tentative deal” in which Connecticut taxpayers will give Lockheed Martin more than $220 million dollars in return for the defense contractor’s commitment to keep Sikorsky headquartered in Connecticut and create up to 550 jobs over the next 16 years. The company is also promising to increase total payments to Connecticut-based subcontractors between now and 2032.
While Malloy has been a huge fan of using corporate welfare to buy the loyalty of successful corporations, this particular deal will be one of the largest in Malloy’s career.
While details are a bit scarce, it appears that of the $220 million being given to Lockheed Martin, Connecticut will borrow about two-thirds of the money and reduce the company’s tax liabilities by the remainder.
Considering taxpayers will then be liable for the principal and interest associated with the borrowing scheme, the total cost to taxpayers will exceed a quarter of a billion dollars meaning the subsidy from Connecticut taxpayers to Lockheed Martin will be in the range of $500,000 to $600,000 per promised job.
The CT Mirror is reporting that the Connecticut deal includes the following elements;
- The company would earn grants of up to $8.57 million annually over the term of the agreement by meeting benchmarks such in jobs, payroll spending, use of in-state suppliers and spending on machinery, equipment, and other long term investments.
- Sales and use taxes would 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.
Due to the size of the deal, a special session of the Connecticut General Assembly will be needed to approve the project, a session that has apparently been set for September 28, 2016,
You can read more about this developing story at:
Connecticut Offers Stratford-Based Sikorsky Incentives To Stay (CT Newsjunkie)