For a state desperate to shed a reputation that it’s not business-friendly, the news that United Technologies Corp. would no longer make its headquarters in Connecticut could not have come at a worse time.
UTC is the largest private employer in Connecticut, with some 13,000 jobs. Many of its components are household names themselves — Pratt & Whitney, Otis Elevator, Carrier and, until 2015, Sikorsky Aircraft. With its home in the Hartford suburbs, UTC defines high-value manufacturing, with products including jet engines, heating and ventilation apparatus, and security systems.
Now, following the high-profile departure of General Electric to Boston three years ago, UTC is itself headed to Massachusetts following a merger with fellow industrial giant Raytheon. The combined company will be based outside of Boston, taking a small number of high-paying headquarters jobs but leaving in place most of its workers.
On Tuesday, the Lamont administration announced UTC would in fact add to its local workforce, with 1,000 new hires planned at Pratt & Whitney in Connecticut over the next few years, as well as a promise that Otis would remain in Connecticut after it is spun off from the new mega-company.
That’s good news. It doesn’t change the fact that losing UTC’s headquarters is a serious blow.
It follows not only GE out the door, but also other corporate giants including liquor producer Diageo, which traded its Norwalk address for one in New York City, and Aetna, whose own move to New York was only scuttled when the insurance company was acquired by CVS.
Worse news is that there isn’t all that much that can be done about this trend.
Republicans disagree, of course, saying that moves like UTC’s back up their doomsaying as to the state’s tax and regulatory policy, with the likely reintroduction of highway tolls, in this view, only adding to the burdens driving mega-corporations to more welcoming climes.
But one look at the companies’ new destinations ought to disabuse anyone of that notion. New York City and Boston are high-cost, high-tax cities that are not going to save money for their new arrivals but will make them more appealing to potential hires. Connecticut can cut costs all it wants — and to Republicans’ point, it could stand to cut some expenses — but it won’t matter much unless the state can make itself as appealing as the competition.
That’s a long-term project, and one that state leaders seem to recognize is essential. A suburban headquarters simply doesn’t have the cachet it once had, leaving suburban Connecticut at a severe disadvantage.
Closely related is the issue of corporate subsidies, of which UTC was a recipient as part of former Gov. Dannel P. Malloy’s First Five program to the tune of some $400 million in tax breaks.
In the end, that amount of money meant nothing in UTC’s decision-making. It’s a lesson that needs to break through as the state pursues a new economic strategy — if a location isn’t appealing enough on its own, no amount of subsidies is going to change that.