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Business

by Fairfield County Business Journal
by FCBJ

Connecticut Republicans say UTC-Raytheon merger bad for the state

Political fallout from the surprise announcement that United Technologies Corp. and Raytheon Co. plan to merge – with UTC moving its headquarters from Farmington to the Boston area as a result – are continuing to reverberate.

Although only about 100 of UTC’s 19,000 Connecticut employees are expected to make the Massachusetts move, state Republicans insisted that the announcement – which will create a new entity, Raytheon Technologies Corp. – was similar to when General Electric left Fairfield for Boston in 2016, during then-Gov. Dannel Malloy’s tenure.

Republican Senate Minority Leader Len Fasano, who repeatedly butted heads with Malloy and with his Democratic gubernatorial successor Ned Lamont over a number of issues, said the UTC-Raytheon merger is “as big as losing GE.”

Republican state Sen. Tony Hwang, whose district includes parts of Fairfield, Westport, Weston, Easton and Newtown, also said the new deal is “reminiscent” of the GE move.  “It’s a gut punch – a tremendous loss,” he said. “It’s another public relations black eye for our state and for Connecticut’s reputation as a difficult place to run a business.

“UTC is synonymous with Connecticut,” he continued.  “This jarring announcement from arguably our best-known, highest-profile business has got to serve as an overdue wake-up call to the governor and to the Democrat-controlled state legislature.

“UTC’s announcement will have a negative impact on ancillary businesses in Connecticut as well, not to mention the negative philanthropic impact this will have in our communities,” Hwang said. “We saw this happen after GE’s announcement three and half years ago. We’ve got to change course. We’ve got to make stability and predictability our priorities. And we have got to stop punishing businesses of all sizes in our state.”

On the national level, U.S. Rep. Jahana Hayes, a Democrat, said she was “encouraged that the vast majority of the UTC workforce will stay in Connecticut, but (I) plan to keep a close eye on this deal and be in contact with the company and state and local leaders to ensure that UTC maintains its commitments to the state. UTC’s Connecticut employees built this company through their hard work and standard of excellence. These employees have invested years into the company and I expect that they will see that same investment returned by leadership regardless of the corporate name on their paychecks.”

Both U.S. Senators from Connecticut, Democrats Richard Blumenthal and Chris Murphy, raised concerns about the deal’s impact. Blumenthal said he is “troubled by the possible impact on cost and competition of defense products, which may significantly affect American taxpayers,” while Murphy said he had “serious concerns” about the merger’s impact both on the state and the country.

“I intend to work closely with state government officials, the Department of Justice, and the Department of Defense to ensure this merger does not violate the agreement UTC signed with the state,” Murphy said. “I remain increasingly concerned about the rapid consolidating within the defense and aerospace industry and the impact on competition. Our nation depends on a diverse and competitive industrial base, and I intend to review this process closely in the months ahead.”

The latter concern is apparently shared by President Donald Trump, who in a June 10 phone interview with CNBC said he was “a little concerned” about the UTC-Raytheon merger possibly having a chilling effect on competition.