State Officials Offer Lockheed Martin Incentives To Expand In Stratford, Connecticut
According to Governor Dannel P. Malloy's office, the company also pledge to keep Sikorsky headquarters in Connecticut, and increase investments with in-state suppliers. Sikorsky, which has been in Connecticut for more than 85 years, was purchased by Lockheed Martin from United Technologies in November 2015.
Under the deal, Sikorsky will build nearly 200 CH-53K King Stallion Helicopters in Connecticut for the United States Navy until at least 2032, the Governor’s Office said. However, the agreement will require state legislative approval via special session in the coming weeks. It will also require an affirmative vote by the local union.
"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. I thank our partners for their support and look forward to completing this deal. 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."
According to state officials over the term of the agreement, Lockheed Martin will:
Keep the Sikorsky headquarters in the state and maintain Connecticut as a primary production facility for its government based helicopter business;
Retain and grow its full time employment in Connecticut to more than 8,000 by the end of year 14;
Nearly double its spending of $350 million per year with local Connecticut suppliers throughout the state; 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 the following 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 category; growing jobs; payroll spending; utilizing in-state suppliers; and deploying capital for machinery, equipment, and other long term investments.
Sales and use taxes will 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, the Governor’s Office said.
"This is a significant deal with wide-reaching ramifications. 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," Governor Malloy said.
"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. These companies are in every corner of our state. Today, we are supporting the small- and medium-sized businesses that are the backbone of our state and local economy. This is something that we all should celebrate,” he added.
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