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Pratt & Whitney announced on September 21 that the company plans to move forward with the closure of two plants in Connecticut, including one in Cheshire, over the next 18 months, resulting in a loss of 1,000 jobs.
In response, the Machinists Union filed a lawsuit in U.S. District court on Sept. 22 in an effort to stop the plans, claiming the company had its mind made up from the beginning and did not put forth its best efforts to save jobs. James Parent, the chief negotiator with the Union, said the Union “lived up to our end of the bargain” but believed the company did not act in good faith.
“Their minds were made up and they just walked us through the steps,” Parent said. “They claimed it was a consideration but now, as we look back, we really see this as just a sham. They had no intent on changing their decision to close the plants like they led the Union and the state to believe.”
Parent said the court filing seeks an injunction to stop Pratt & Whitney from moving work outside of Connecticut. As a result of the two closures, work would be moved to existing plants in Columbus, Ga., Japan, and Singapore.
The official announcement on the closures comes after nearly two months of negotiations between the company, Machinists Union, and the state. According to Pratt & Whitney, a subsidiary of United Technologies, the Connecticut Airfoil Repair Operations facility in East Hartford will be shut down in the second quarter of 2010, while the Cheshire Engine Center will close in early 2011. Layoffs are expected to occur in phases, starting in early 2010, according to a company press release.
The decision was made a week after the meet and confer process, a 52-day negotiation window, ended. The process was set by union guidelines to last 45 days, but a weeklong extension was granted in an effort to further review the offers. In a statement released Monday afternoon, the company said it was “unsuccessful in identifying a reasonable alternative” to keeping the two facilities open.
“This was an extremely difficult decision,” the release read. “We share the Union and the state’s commitment to keeping good jobs in Connecticut. The best way to protect the jobs that remain is to ensure we are competitive in a rapidly changing industry and challenging global economy.”
The state offered Pratt & Whitney $100 million in incentives over a five-year period and the union offered its own concession worth $81 million. A letter dated Sept. 21 from R. A. Warters, Vice President, Industrial Relations with Pratt & Whitney, to Parent, states that the Union rejected an offer of $48.8 million in concessions, an offer which Warters claims would have allowed the company to preserve the jobs. The company states it needed to achieve $53.8 million in recurring savings, which would have occurred with the company’s proposal and an additional $5 million in savings from the state.
Instead, according to Warters, the Union countered with a “final proposal” of $34.3 million in total savings. According to the letter, Pratt & Whitney reviewed the offer and believed it would only generate $25.8 million in savings which, even coupled with $5 million from the state, would not be enough to save the plants from closing. Parent had said last week that the Union’s offers would be made public regardless of the decision Pratt & Whitney made.
On Tuesday, Parent explained that the Union offered $81 million in concessions that were made up in areas that he described as hard and soft money. He said the offer included $52 million in savings in hard money and $29.2 million in soft money. For example, Parent said, concessions from workers and opening up the Collective Bargaining Agreement were part of the offer. There were a number of cuts offered, but the larger savings were in the $5 to $10 million range. He said Cheshire employees were willing to take a 10 percent pay cut, with an estimated savings of $7 million a year, and East Hartford employees also would take a 10 percent decrease to save $8.3 million. The Union agreed to not accept a 3.5 percent pay increase that was scheduled to take effect in December, at a cost savings of $11 million. Also, Parent said employees are paid to attend fundraisers or charitable events, and the Union was willing to reduce that by 30 percent, for a savings of $13 million. There were also offers to reduce overtime by 20 percent and eliminate employee awards. He said the company looked at those numbers and believed the entire package would result in a savings of $25.8 million.
“I don’t understand how they devalued our contract proposal. We feel what we had on the table, along with the state of Connecticut, was more than adequate,” Parent said. “That just proves to us that the company had its decision to close the plants made up all along, before we even started the meet and confer process.”
Pratt & Whitney said, however, that it “made every effort and explored all options” to keep the plants open, but the economic realities made it impossible.
“Unfortunately, the reality we are facing is a dramatic and sustained drop in volume, a shifting customer base, and a declining aerospace market,” the company said. “We would like to extend our appreciation to the employees of these two facilities. This decision is in no way a reflection of their skills, dedication, and professionalism.”
The town stands to lose a total of $136,000 in tax revenue as a result of the closure – $40,000 in personal property taxes and $96,000 in Payment In Lieu of Taxes (PILOT) money for manufacturing exemptions from the state.
Congressman Chris Murphy (D-5) held a town hall meeting last month with the union members to hear their concerns firsthand. Murphy expressed concern of shipping the work overseas, and said earlier this week that Pratt & Whitney made a “bad decision” in closing the facilities.
“Pratt has short-term profit blinders on that are causing them to rush toward a decision at the expense of the long-term health of the company,” Murphy said. “This is a bad decision, made indefensible given the fact that the Governor, the Congressional delegation, and the Union pulled out every stop to keep these jobs in the hands of a workforce that is second to none in skill and dedication.”
Connecticut Secretary of the State Susan Bysiewicz said that, while 1,000 jobs at Pratt & Whitney would be lost, the effects of the closure will be more far reaching, with an estimated 3,000 to 6,000 jobs lost as a result of the company’s decision. According to Bysiewicz, small manufactures and suppliers who provide parts for those plants will struggle as a result of the shutdowns.
“This is a sad day for the Connecticut economy and for all the families in our state who have poured years of experience into manufacturing and repairing the finest jet engines in the world. This is the wrong direction for our economy to be taking,” Bysiewicz said. “This shortsighted plan deals a blow to Connecticut’s manufacturing base and the defense sector, and could put our military and civilian air travelers at risk by shifting the production of essential national security components overseas.”
Gov. M. Jodi Rell said the company’s decision was based solely on money and no consideration was given to the employees or their families.
“I am bitterly disappointed by the decision made today by UTC and I am devastated for the workers and their families. This was a bottom-line business decision that I believe put profits over people – coldly and regrettably,” Rell said. “We made a generous and creative offer to keep these jobs in Connecticut and we will be willing to reconsider our offer if the company is willing to reconsider its decision.”