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Community Corner

Made in Connecticut: State Pushes for More Manufacturing Jobs

Does the state have the right business climate and is government helping?

The world’s largest armory once sat alongside the Connecticut River and produced 1,000 arms a day.

Today Sam Colt’s factory town is destined to become a national historic site celebrating past productivity. And so the elegant brick building, topped with a cobalt onion dome, cast a shadow over the Capitol during last week’s Connecticut’s Manufacturing and Technology Day.

The nearly 40 exhibitors gathered under the Rotunda reminded legislators the state needs manufacturing jobs. Yet, many businesses and legislators said the state lacks a coherent business plan.

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“I don’t think it has one at all. It’s sad and pathetic,” said state Sen. L. Scott Frantz, a Republican who represents New Canaan, Stamford, and Greenwich in the 25th Senate District.

That worries Katherine A. Saint, President of the Bridgeport-based Schwerdtle Stamp Co. The 132-year-old company employs 24 people from several places including Greenwich, Fairfield, Shelton and Naugatuck.

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“I liked well enough his experience in Stamford,” Saint said of Gov. Dannel P. Malloy. “He was always fighting for jobs. He campaigned for ‘jobs, jobs, jobs’. But now it seems he is talking but he isn’t listening.”

But the combined forces of a recession, Malloy’s proposed budget, and the Senate’s vote to pass the nation’s first mandated paid sick leave pose great challenges, Saint said.

For example the proposed budget will raise the top income tax rate to 6.5 percent. That affects companies like Schwerdtle, which are classified as sub-S corporations because they file their income through personal income tax.

These measures make it hard to reinvest or to hire new employees, Saint said. 

“We’re not here because we like doing business in Connecticut,” Saint said. “We’re here because it’s a highly skilled workforce and we have loyal, wonderful people here. So I’ve got to make do.”

Connecticut has lost more than 1,000 firms in the past 20 years. The number of manufacturing jobs declined from 300,000 to about 170,00, said Pete Gioia, a vice president and economist for the Connecticut Business and Industry Association, CBIA

 “Our biggest problem, and it’s a terrible problem, is that the long-term trend is dreadful,” said state Sen. Joe Markley, a Republican representing Cheshire, Southington, Waterbury, and Wolcott in the 16th Senate District.

Markley cited Pratt and Whitney Aircraft’s decision to leave the state as an example of this trend. 

Still, Gioia said Connecticut’s manufacturing hasn’t been entirely gutted.

Connecticut has 4,826 manufacturing establishments according to the US Census Bureau. Its top five exporting areas are transportation equipment, industrial machinery, fabricated metal, electronic equipment chemicals and food products according to national association of manufacturers.

True Sturm, Ruger, the firearms company, only maintains corporate headquarters in Southport remains in the state. And the Norwich-based Smith and Wesson left long ago as did the New Haven-based Winchester Repeating Arms Company.

But other manufacturers remain including Fairfield-based Bigelow Tea; Groton-based General Dynamics/Electric Boat; West Haven’s The Lighting Quotient; and South Norwalk’s Penmar Industries Inc.

Manufacturing is vital to the state’s economic health because each new manufacturing job creates between 1.9 and 4 other new jobs, according to CBIA.

“Who creates the jobs? Everybody knows that small business creates jobs,” Saint said. “You want stability? It’s the little guys like us who do it. We’re the last ones to lay people off. If you want long term jobs you need to stimulate small business.”

According to the state Department of Labor April saw 7,900 new jobs. Of these, 3,800 are in health services followed by 3,700 in trade, transportation, and utilities. Leisure and hospitality accounts for 2,200 jobs; construction and financial for 1,100.

General Dynamics/Electric Boat expects to hire at least 400 engineers in the coming year, said Robert A. Hamilton, Director of Communications. The new hires will occupy property that Pfizer recently vacated.

However, keeping these jobs here isn’t easy.

It’s a multifaceted problem where taxes tell only part of the story, Gioia said. Many prospective companies don’t like the state’s high health care costs and or energy costs. Others worry about the paid sick leave legislation.

However, state Sen. Edwin Gomes, a Democrat who represents Bridgeport and Stratford in the 23rd Senate District, called the matter a public health issue during a debate.

“Number one it’s the overall cost of doing business here and I’m not sure the politicians on the whole get it,” Gioia said. “Connecticut is an extremely costly place to do business. A much more comprehensive effort is needed to deal with the totality of doing business here.”

Ernst & Young LLP recently ranked Connecticut as 13th worst in the country for state and local tax competitiveness.

And so businesses continue to decamp. Pfizer’s recently announced 1,100 layoffs from it Groton campus. Hamilton Sundstrand of Windsor Locks sent more than 200 union workers packing.

Frantz, who sits on the Commerce Committee, said everything from “onerous” regulations to high income and corporate taxes mean one thing: “Connecticut really is not open for business.”

During his inaugural speech Gov. Dannell P. Malloy proclaimed the state open for business and introduced his “First Five” initiative that would give tax credits to the first five businesses that create 200 new full-time jobs in next two years.

To that end businesses and lawmakers support a Manufacturing Reinvestment Account, MRA. Similar to individual retirement accounts, IRA, an MRA would allow manufacturers to contribute annually into an account. The funds could then be reinvested in machinery, facilities and job training.

But Markley said targeting specific industries and luring them here with tax breaks won’t work.

“I think you want to create a good base for all jobs. For that reason I don’t like this First Five. Let’s give them [credits] to business across the board,” Markley said.

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