Gov. Lamont found he had little ability to keep HQ from moving
Six weeks before he was sworn in as governor, Democrat Ned Lamont pledged to watch over United Technologies Corp. “like a hawk” after the state’s largest private employer announced it was breaking off some of its divisions.
“I want Carrier here, I want Otis here — I surely want UTC here,” Lamont said in November. “And I’m going to make darn sure they know they’ve got a governor that, the door’s open. We’ll do everything we can to make sure this is a place they can call home.”
But soon, UTC will call Massachusetts home. The iconic Connecticut company announced Sunday that it is merging with military contractor Raytheon.
UTC will maintain a major presence in Connecticut, where the company employs about19,000 people across the state, and received up to $400 million in tax credits in exchange for investments in its
manufacturing facilities.
But the corporate offices and approximately one hundred wellpaying jobs are relocating from UTC’s Farmington campus to Boston. These executives will sell their homes and move on from Connecticut, adding to a growing chorus that not enough is being done to preserve and create jobs in the state.
On Monday, Lamont was not available to answers questions about the deal, a spokeswoman said. He was not at the state Capitol on Monday.
Economic development commissioner David Lehman, the governor’s designee to handle press inquiries, said the departure of UTC headquarters will sting.
“I do think certainly you’d rather have the headquarters than not have the headquarters,” said Lehman, a former partner at Goldman Sachs. “It’s about 100 jobs, they’re good paying jobs. And there’s philanthropies and other associations that benefit from those types of folks in the state.”
But, Lehman added, “I think we really need to be mindful of the bigger picture here, which is that aerospace and defense are a key strength of the state and a significant amount of manufacturing … will continue to happen here.”
Lamont, a former cable television entrepreneur who had never held a major political office before he was elected governor last year, repeatedly touted his business acumen on the campaign trail.
Stay up to date on Connecticut politics. Subscribe to the Capitol Watch newsletter here Yet in some ways, the UTC-Raytheon merger showcases the limits of gubernatorial power.
“It is not typically in these situations for parties like the state to be brought in well in advance and have a discussion about headquarters,” Lehman said. “My experience with mergers is there are three things…that need to be negotiated: [the location of ] headquarters, who the CEO is and the name of the combined company … those are all points that are negotiated.”
Fallout from the merger quickly became a political issue at the state Capitol, where Republicans in the legislature blamed Lamont and his fellow Democrats in the legislature. Vin Candelora, a Republican from North Branford, sought to tie UTC’s decision to move its headquarters to unfunded pension liabilities and other polices that he says hinder economic growth.
“This deal is cooked but I hope we have a governor that is now going to open up his eyes and stop talking in soundbites and start really looking at how these proposals impact the state,” Candelora said.
Senate President Pro Tem Martin Looney of New Haven rejected that narrative. He said UTC’s corporate move is further evidence of the struggle Connecticut faces in trying to compete with major league cities such as Boston and New York.
“It’s unfair in some ways to compare the attractions of Boston to what we have in Connecticut,” Looney said. “It’s like asking why, if you have two athletes of equal athleticism…the 6-foot 9-inch player regularly out rebounds the 6-foot player. It’s a matter of size.”
Unlike the departure of General Electric’s corporate headquarters from Connecticut in 2017, UTC Chairman and CEO Greg Hayes did not cite the state’s economic policies or fiscal climate as reasons for the decision to relocate. In fact, in a call with investors Monday morning he reaffirmed the company’s intention to maintain a robust presence in Connecticut.
Lamont and his advisers have been frequent consultation with Hayes and other top UTC officials, Lehman said. “I’ve had regular dialogue with UTC, and I know the governor and other parts of the administration have as well,” he said.
But the Lamont administration did not get official word that a merger was in the works until Sunday afternoon. “I think I may have found out right before the announcement and the governor had a call with Greg Hayes later that evening,” Lehman said.
“This was a merger that was negotiated between companies and ultimately they decided to have a headquarters in Boston,” Lehman added. “I’m not sure how that negotiating happened … if there was horse trading that ultimately led to that.”