Harkins: Sikorsky staying in Stratford as spin-off being considered
Stratford Mayor John Harkins said he’s received assurance by Sikorsky Aircraft officials that the company will stay in Stratford, though the idea of a possible spin-off from its parent corporation has caused some concern.
The board of directors at United Technologies Corp. met last week to “review strategic alternatives” for Sikorsky, which is the town’s largest employer. One of the options on the table is to make the aircraft manufacturer a stand-alone public company through a spin-off.
“Sikorsky Aircraft has a long, storied history in our community. Regardless of any potential changes in the ownership structure now being considered, my administration has been assured by Sikorsky leadership that the company will remain in Stratford,” Harkins said in a statement issued Thursday. “I look forward to continuing our close relationship with Sikorsky for decades to come.”
Gregory Hayes, president and chief operating officer for UTC, said in a statement on the UTC website that the corporation is “exploring strategic options for Sikorsky to determine the best way to enhance its long-term success and create improved long-term value for UTC’s customers and shareholders.”
Hayes said UTC is evaluating “whether Sikorsky’s unique business as a rotorcraft [manufacturer] with a predominately military customer base is best positioned as a stand-alone company, and whether a separation would allow United Technologies to better focus on providing high-technology systems and services to the aerospace and building industries.”
Paul Jackson, a Sikorsky spokesman, said Sikorsky’s direct customer relationship with the end-user makes the company different from others in UTC. “Sikorsky integrates systems and provides the final product to the customer. The rest of UTC businesses are systems providers,” he said. “Sikorsky looks at investments and business strategies differently, often over a much longer time period and with different financial return expectations than other UTC businesses. These differences have led UTC to review whether Sikorsky is better positioned as a stand-alone company.”
The review process should conclude before the end of the year, Jackson said, but no specific timetable has been set for a decision. And while the study is to determined how — and not where — Sikorsky will operate, “we fully anticipate continuation of a major presence in Stratford and Connecticut,” he said.
Jackson added that there is no assurance the review will lead to a spin-off or any other transaction.
Harkins said Friday that a spin-off would likely create more jobs because Sikorsky would need to replace its support from UTC. Sikorsky invested $6.7 million on infrastructure in 2014 and has invested $2.9 million so far this year, the mayor said.
Sikorsky has about 8,000 employees throughout Connecticut working in four facilities. Approximately 6,200 employees work in Stratford. Globally, Sikorsky employs approximately 15,300 people.
United Technologies reached an agreement with state officials last year guaranteeing that Sikorsky would stay in the state for five years. As part of the deal, UTC committed to investing $500 million in Connecticut, including in construction of a new Pratt & Whitney Aircraft headquarters in East Hartford. State lawmakers authorized up to $400 million in tax credits for UTC in exchange for the investment.
Jackson said last week’s announcement does not have any impact on the UTC-state agreement.
“Irrespective of the outcome of the strategic review, UTC fully intends to meet all of its commitments related to the [Connecticut] Aerospace Reinvestment Act,” he said.
According to land records in Stratford Town Hall, Sikorsky Aircraft sits on 254.3 acres of land. The fair market value for the property is $119,890,700.
Devin Puglia, director of media relations for Gov. Dannel Malloy, said Malloy “has been in communication with UTC executives and has conveyed that, as they are considering their options, it is in their best interest to keep Sikorsky located in Connecticut.”
Local state lawmakers have expressed their concerns about the future of Sikorsky in Stratford.
Rep. Laura Hoydick said the UTC announcement is “a surprise, particularly as it comes less than a year after regional legislators joined in a bipartisan effort to pass the Aerospace Reinvestment Act which made significant investments in UTC and Sikorsky.” Hoydick said she would watch what happens and pay particular attention to seeing “that UTC stays within the framework of the Reinvestment Act, and to what impact, if any, this has on the many jobs Sikorsky provides to area residents.”
Sen. Kevin Kelly said he’s cautiously hopeful, but said there are many questions that need to be answered.
“If Sikorsky were to separate from UTC and become a stand-alone company, I hope they would continue in their long history of innovation and advancement, and I hope they would remain loyal to the community that has always welcomed them and enabled the company to flourish,” Kelly said in a statement. “Stratford is Sikorsky’s home, and Sikorsky is an integral part of the town we call home. I hope this relationship will persevere. We need to preserve these jobs for the thousands of people who rely on them.”