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The Day, New London, Conn., Anthony Cronin Column: Pratt Layoffs a Setback for Recovery
Sunday, September 27, 2009 3:54 PM


(Source: The Day)trackingBy Anthony Cronin, The Day, New London, Conn.

Sep. 27--This past week's announcement that Pratt & Whitney will eliminate 1,000 jobs at its Cheshire and East Hartford plants wasn't good news for Connecticut, which is still searching for any hints of an economic rebound.

It was certainly unsettling, as well, that those jobs involving complicated repair work with the jet engine maker would be moving to Georgia and to Singapore and Japan in what the company said was a cost-saving move. It should be noted that Pratt union officials, along with state officials, are vigorously opposing the layoffs, and the union has filed suit to block the plan.

Pratt & Whitney, one of this state's premier manufacturers, is owned by the Hartford-based United Technologies Corp. For decades, it was the dominant employer in the Hartford area and beyond, and its East Hartford plant once sprawled over a large chunk of that industrial town.

Granted, Pratt & Whitney still employs some 35,000 around the globe and about 11,000 in Connecticut. But its latest news of job losses is part of a continued decline in this state's once-dominant manufacturing base.

Pratt & Whitney is still among Connecticut's largest manufacturers. At one time, it had as many as 20,000-plus workers at its Connecticut operations. Now, with about 11,000 employed in Connecticut, it's almost the same size (in terms of jobs) as another prime defense contractor, the Electric Boat shipyard in Groton, which has an employment base of some 10,800.

This decline in manufacturing jobs is troubling to many, from the governor to labor economists and manufacturers' trade groups.

Peter Gioia, a vice president and economist with the Connecticut Business & Industry Association, says the job losses at Pratt & Whitney, while not a total surprise, aren't good for the economy.

"The huge challenge for Connecticut," he says, "is whether or not the types of work we do here can be done in other places (at less cost)."

"Obviously, when (manufacturing) work becomes commoditized, then it becomes much more of a challenging environment to work here in Connecticut," he says.

Gioia says those manufacturers who are able to introduce new products can command premiums in their pricing. "You can run in a higher cost area (like Connecticut) with premium products."

Gioia worries not only about the loss of 1,000 jobs by 2011 at the Pratt facilities in Cheshire and East Hartford, but also about the loss of employment among some of the subcontractors who supplied work to those two facilities. "There are going to be other businesses that are subs to Pratt that will be affected."

He says Connecticut's manufacturing base continues to contract because companies such as Pratt & Whitney are globally based manufacturers. "There are often strategic and marketing decisions to make some products in other locations," he says. "That is a principal reason for the dispersed work (within a firm's global footprint)."

But, Gioia says, the second reason for the loss of manufacturing work are Connecticut's higher costs to manufacture, as well as regulatory concerns, higher energy costs and the like. "Manufacturers are not just competing with Massachusetts, New York and Rhode Island," he says. "They're competing globally, which makes the (cost factors here) a much more difficult calculation."

Connecticut, while a service-job dominated state today, was once a powerful manufacturing hub. In the 1950s, manufacturing jobs (typically higher paying than service-related employment) represented about half the work force. Across the country, the figure was closer to 40 percent.

But today, Gioia estimates the manufacturing-driven part of the work force is nearly 11 percent of the overall employment base of some 1.6 million.

"We're still manufacturing intensive," says the corporate economist, "because the U.S. average is around 9.5 percent, but we're nowhere near where we used to be."

Anthony Cronin is The Day's business editor.

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Copyright (c) 2009, The Day, New London, Conn.

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