Connecticut’s Proposed $75 Million Tax Incentive Deal with Sikorsky Brought to General Assembly. It Could Bring Thousands of Jobs.

April 20, 2022
The Lamont administration on Thursday pitched its tax incentive deal with helicopter manufacturer Sikorsky Aircraft to receptive state lawmakers required to sign off on the deal.

The Lamont administration on Thursday pitched its tax incentive deal with helicopter manufacturer Sikorsky Aircraft to receptive state lawmakers required to sign off on the deal.

“I think it’s a really big deal for Connecticut,” said state Rep. Sean Scanlon, House chairman of the Finance, Revenue and Bonding Committee. “Obviously, we are the maker of the helicopters that defend our country and to keep that happening here in Connecticut and sustain the jobs as they have I think is incredibly important to the state.”

Economic Development Commissioner David Lehman told the committee that the $75 million tax incentive deal has “significant upside.”

“We want to make sure Connecticut is the incumbent and that Stratford is the base for those helicopters, not just for the next 20 years, but for the next 50 years,” he said.

Gov. Ned Lamont announced March 28 the 20-year agreement with Sikorsky, a subsidiary of aviation and defense giant Lockheed Martin Corp. The incentives in sales tax and other incentives is contingent on Sikorsky winning a federal contract for at least one new line of helicopters.

The agreement calls on Sikorsky to establish between 7,250 and 7,750 jobs over the next 20 years. And it increases the manufacturer’s spending on its 240 suppliers to $470 million through 2042. It represents an increase from $300 million to $410 million agreed to in a 2016 deal with Connecticut, Lehman said.

And Sikorsky is committing $70 million to $84 million a year in capital spending at Stratford over the next decade, he said.

Sikorsky will produce its 5,000th Black Hawk this year, George Mitchell, vice president of operations at the helicopter manufacturer, told the committee in a video meeting. The helicopter, which was a mainstay in U.S. wars in Afghanistan and Iraq, is still in high demand, he said. But in the 2030s and beyond, Sikorsky will replace the Black Hawk with the Defiant and Raider aircrafts, he said.

The Defiant, a troop transport and medevac aircraft, and Raider, a scout attack armed helicopter, are the “future of our company,” Mitchell said.

The U.S. Army is transforming into a multi-domain force and will modernize its helicopter fleet, Sikorsky said.

If the so-called “assistance agreement” with Connecticut is not approved, costs for Sikorsky will rise and affect the manufacturer’s competitiveness, said Robert Head, vice president of government affairs at Lockheed Martin.

State Rep. Lezlye Zupkus, R-Prospect, asked about continued congressional funding of Pentagon programs. She said Connecticut has “bragging rights” for Sikorsky based in Connecticut.

Head said defense spending is rising in response to Russia’s invasion of Ukraine and attempts by China to establish hegemony in Asia.

“The outlook for now the time being is better than it was two years ago,” he said.

Lockheed Martin and Gov. Dannel P. Malloy negotiated a $220 million package of investments in 2016 committing the manufacturer to will build CH-53K King Stallion helicopters, a heavy-lift helicopter, until at least 2032.

Mitchell said Sikorsky will produce its third 53K production heavy lift helicopter in the next week in Connecticut and “very shortly we’ll see that helicopter flying around in our neighborhoods here in Connecticut.” Two more will be built in 2022.

Gov. Ned Lamont celebrated the deal as an “earn as you go” agreement. His administration worked with Democratic and Republican legislative leaders, he said and said it’s “time to ratify this and go forward.”

Several manufacturers appeared with the governor. Brittany Isherwood, president of Burke Aerospace in Farmington, said the deal could help her company become a supplier for Sikorsky.

Brian Montanari, president and chief executive officer of Habco, an engine and airframe tooling company in Glastonbury, said the Sikorsky-Connecticut agreement, if approved by the legislature, would give a significant boost to the manufacturer’s supply chain.

Stephen Singer can be reached at [email protected].

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