Improving Economy Lifts Pratt’s Business
By STEPHEN SINGER, AP Business Writer
HARTFORD, Conn. (AP) _ Jet engine maker Pratt & Whitney spent much of last year fighting to shut two engine repair shops in Connecticut due to fierce competition and the recession. Now the economy is recovering, a marquee product is being introduced and a competitor has been eliminated for a military fighter jet engine.
As a result, business is booming for the subsidiary of United Technologies Corp.
In the last five weeks, three significant deals have been announced: an order for 300 of Pratt & Whitney’s next-generation engines from Indian budget airline IndiGo, 30 engines for Lufthansa and 60 engines for Airbus planes purchased by International Lease Finance Corp., a subsidiary of American International Group.
“The backlog keeps getting bigger,” Pratt & Whitney President David Hess told reporters last month.
United Technologies has spent $1 billion over 20 years to develop its geared turbofan jet engine. The East Hartford-based Pratt & Whitney, which says the engine generates fewer carbon emissions, cuts airlines’ fuel costs and produces less noise than other airplane engines, “hung the future” on its product, said Matt Collins, an analyst at Edward Jones..
“They’ve proven they can win the orders for the geared turbofan and now they need to deliver,” he said.
Pratt & Whitney also was the beneficiary of a decision by Congress last month to halt production of an alternate engine developed by General Electric Co. As a result, Pratt & Whitney is the sole manufacturer of the Pentagon’s F-35 Joint Strike Fighter jet engine.
Projected revenue will double by 2020 and employment in Connecticut is expected to hold steady, Hess said. Revenue was $12.9 billion in 2010 at Pratt & Whitney, the No. 3 jet engine maker after GE and Rolls Royce.
The situation is a far cry from September 2009 when Pratt & Whitney, citing a downturn in the aerospace industry, announced plans to move jobs to Columbus, Ga., Singapore and Japan.
Gov. Dannel P. Malloy cited Pratt & Whitney’s improving trends as an example of good times to come in Connecticut, which is struggling to cut a looming state budget deficit of $3.3 billion and 9 percent unemployment.
“Some of our companies are starting to do extremely well,” the governor told a Realtors group recently. “If you follow United Technologies for instance, they’re having an unbelievable run in the last 60 days in the Pratt & Whitney division.”
Wayne McCarthy, president of the Machinists local in Cheshire, one of two engine repair plants to be shut later this year, said workers will be kept busy doing preliminary work involving testing and data collection on the engines.
He said the decision in February by the U.S. Air force to award a $35 billion contract to build giant airborne refueling tankers to Boeing Co., which will benefit Pratt & Whitney, “was never counted on” last year when Pratt & Whitney and the Machinists were fighting over the company’s demand to shut the two engine repair plants, he said.
The union successfully blocked Pratt & Whitney in federal court and the two sides agreed to a labor agreement in
December allowing the company to shut the plants while providing retirement incentives and transfers to ease hundreds of job cuts. Pratt & Whitney has scaled back operations in Connecticut since the 1960s when more than 20,000 workers were employed. It now employs 11,000 in Connecticut, fewer than one-third of its global work force.
McCarthy said the number of jobs at Cheshire is down sharply to 340 from 670 in July 2009 just before the company announced its intention to shut the plants. However, he is optimistic that the new orders will lead to job growth at Pratt & Whitney plants in East Hartford and Middletown, where workers from Cheshire could transfer after their plant closes.
“From the standpoint in Cheshire, anyone who wants a job will have a job,” McCarthy said. “We’re very optimistic we’ll reach that goal.”
(Copyright 2011 by The Associated Press. All Rights Reserved.)