The Register Citizen (Torrington, CT)
Electric Boat looks to the long term
Up to $83M in state aid will help bring 1,900 jobs to Connecticut
On the heels of a $5 billion contract last year to develop a new ballistic missile submarine for the U.S. Navy, General Dynamics is investing $850 million in its Electric Boat operations in eastern Connecticut with up to $83 million in assistance from the state.
General Dynamics plans to add nearly 1,900 workers in Groton and New London over the next 17 years to push its total employment there to more than 13,000 people. Electric Boat also has a large plant on Narragansett Bay in North Kingstown, R.I.
Electric Boat plans to ramp up production to three new vessels a year by 2021, requiring a new dry dock in Groton for the construction of the new Columbia class of ballistic missile subs. The Navy wants a dozen Columbia subs to replace aging Ohio-class missile boats. Electric Boat one of two U.S. submarine manufacturers, along with the Newport News Shipbuilding yard in Virginia, owned by Huntington Ingalls Industries.
Falls Church, Va.-based General Dynamics supports a network of some 700 Connecticut suppliers and vendors in addition to its own workforce — including more than three dozen in the southwestern corner of the state. The company has pledged to increase spending on that network by $250 million. In 2016, Gov. Dannel P. Malloy negotiated a similar pledge of support for local suppliers in a $220 million incentive package with Sikorsky Aircraft parent Lockheed Martin, which had considered moving Sikorsky operations elsewhere after acquiring the helicopter maker the year before from United Technologies.
With one Virginia-class attack submarine under construction in Groton, the Department of Defense wants $7.4 billion for construction of two more as part of a proposed budget for the 2019 fiscal year, as well as $3.7 billion for a Columbia-class ballistic missile sub. In the first quarter of 2018, General Dynamics earned $799 million on revenue of more than $7.5 billion, up 5 percent and 12 percent, respectively, from a year ago.
“We began material purchases early this year to support construction on the first ship for Columbia (ahead of) full construction in 2020,” said General Dynamics CEO Phebe Novakovic, speaking last week on a conference call. “As we move from our engineering and detailed design into the early phases of construction ... our (profit) margins are going to bop around.”
General Dynamics is among the four largest U.S. defense contractors, behind only Lockheed Martin, Boeing and Raytheon. Jeffrey Geiger has led Electric Boat since 2013 and previously worked at the General Dynamicsowned Bath Iron Works destroyer plant in Maine. General Dynamics makes a wide variety items for the military, from the Abrams battle tank to cybersecurity systems.
Under the First Five incentive program created by Malloy, General Dynamics will receive a $35 million loan that will be forgiven if it fulfills its hiring and spending goals. The company will also get $20 million in sales tax exemptions on new construction and equipment at the Electric Boat campus in Groton and New London, as well as an $8 million grant for training programs at area community colleges, technical high schools and via the Eastern Workforce Investment Board.
The state pledged $20 million to dredge the Thames River in readiness for the new dry dock.