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UTC's Trash-Talking Offers A Chance For Dialogue

Dan Haar

March 19, 2010

In the seven days since United Technologies Corp. lobbed a stink bomb at Connecticut from the comfort of the St. Regis hotel in midtown Manhattan, there's been a lot of chatter about what it all means.

This is good and healthy — the chatter, that is.

So, the state's largest private employer, maker of Connecticut's signature products, declared that it needs to move more of its work to lower-cost places. In case any of the Wall Street analysts in the audience were confused, Gregory Hayes, the UTC chief financial officer, added, "Anyplace outside of Connecticut is low-cost."

We are duly trashed as a state, and we are better for it. The bosses who employ 26,000 well-paid people in Connecticut have advanced the time-honored Yankee tradition of mouthing off in a public forum with the hope of gaining an advantage.

It might backfire if people view the UTC brass as a bunch of whiners, and it might work for UTC if the state responds by figuring out how to lower business costs, or — jackpot — offers UTC a package of greenmail to stay put.

Either way, good for UTC for getting its message out. This was a planned assault, not a set of off-the-cuff remarks.

And good for UTC for handing the state a solid picture — thousands of jobs disappearing — around which we can argue about squishy stuff like the corporate earnings tax, energy policy and labor law.

We are doing exactly that, with more intensity since the Hayes Hazing of March 12. Politicians, unions and economic development types have weighed in with their own views of UTC's remarks. They divide into three basic camps: Those who say it's no cause for panic but is a reminder that we need to take stock of our strengths and weaknesses; those who say UTC is right and we need wholesale changes, chiefly lower business taxes; and those who say UTC is wrongly lashing out at a state that has nurtured it into one of the world's most powerful companies.

"It's a wake-up call," said Bonnie Stewart, vice president of government affairs for the Connecticut Business and Industry Association. "It's an opportunity for the state to respond."

Stewart and the CBIA are famously in that second camp, pushing for a better climate for business, although what that means is not as simple as CBIA believes it is.

U.S. Rep. John B. Larson, firmly in the camp of people not inclined to panic and give away the store, immediately declared that he'll keep fighting for jet fighter and tanker contracts — the better to keep Pratt & Whitney workers working.

On Thursday, Larson had a meeting with Pratt President David Hess, scheduled before the New York remarks. Hess assured the Democrat from East Hartford that the comments were in no way meant as a threat that the company is pulling up stakes.

Larson issued an upbeat statement that Pratt is committed to the state. No one had ever suggested that the company was leaving outright, but the point is, this is stuff to be taken seriously. And openness gives the state a chance to react.

"You're startled when you hear something like that. You're jolted," Larson said later Thursday, "and I'm glad for the opportunity to set the record straight with them."

Unions, likewise, are glad for the chance to point out that UTC remains highly profitable, and that the Connecticut workforce is enormously productive. They are trying to stop Pratt from eliminating 1,000 local overhaul and repair jobs, and moving the work to lower-cost places.

We have a long tradition of self-criticism in economic policy, and UTC has done this trick before in different ways. In 1997, then-CEO George David declared that Connecticut was no place to add traditional manufacturing jobs. This time, CEO Louis Chênevert downplayed the threat of an exodus in an interview with The Courant, but amplified the warning to keep costs down.

Years from now, we will look back on this episode as a crucial moment. Regardless of what happens now, when it comes to Connecticut's storied legacy in advanced widget-making, a public airing of issues is better than back-room fist-pounding or, worse, quiet seething.

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