Malloy, UTC Executive Find Common Ground
The United Technologies Corporation executive who uttered the words “anywhere outside of Connecticut is low-cost,” shared the stage with Gov. Dannel P. Malloy Tuesday evening for a key issues forum sponsored by the Courant and Fox 61.
Gregory Hayes, UTC’s chief financial officer, admitted Tuesday that “singling out Connecticut may have been a little bit unfair, but it was still the truth.”
To add a little more context to that now famous comment he said they were talking about how two-thirds of the states were uncompetitive from a cost of doing business standpoint at that investors meeting last March.
“Connecticut is a high-cost place to do business,” Hayes told an audience of a few hundred at the University of Hartford Tuesday. He said the reaction to his comments last March surprised him because “it’s like saying the sky is blue,” then suddenly people step back and realize “the sky is blue.”
He tempered his comments by saying Connecticut is the right place to do business if it’s the right kind of business. The right kind of business or the businesses the state is friendly to are the high value, high skill manufacturing United Technologies does, he said. Widget makers trying to compete in a global marketplace may not find that Connecticut is a good place to do business, he added.
Malloy didn’t seem to take offense to any of Hayes’ remarks. In fact, he agreed Connecticut has ignored businesses large and small for a long time.
But Malloy’s made it clear there’s a new administration in charge and under his leadership the state will consolidate its Economic Development agencies under one roof, and instead of hiring people for political reasons and putting them in charge of some of the most important agencies he’s going to find qualified individuals to help him lead those efforts.
And he’s going to go out and sell the state himself.
“I called two employers today with a total of about 7,000 employees in the state,” Malloy said. He said he also wants to call employers who have left the state and invite them back.
“I think we’re at a point in Hartford where we can start to invite call centers back and have them compete on an economic basis,” Malloy said. He said he’s also reaching out to parts of the insurance industry which have relocated to other parts of the northeast.
After the forum Hayes said he agreed with the tone Malloy has set for the state with his first budget proposal which increases taxes $1.5 billion and cuts spending in the first year by $1.76 billion. Most of the spending cuts in the first year come from the $1 billion in unidentified state employee concessions and savings.
“I think he’s said the right words and set the right tone for Connecticut,” Hayes said after the forum at the University of Hartford. “I think right now the challenge is putting all that into the actual legislation.”
But Hayes remains cautious. He said Connecticut has a population of 3.4 million people, the same number it had 20 years ago, however, its state budget has grown from $7 billion to $20 billion or about 300 percent.
“Obviously we have to get state spending in line with the realities of the economy,” Hayes concluded.
Before he was pulled away by a UTC spokesman who whined that Hayes has been answering questions all night, Hayes said he thinks Malloy’s proposal to streamline 30 percent of the state’s agencies is a step in the right direction.
Earlier in the evening Hayes opined the state shouldn’t waste this economic crisis and should use it as an opportunity to change the way it funds its pensions and “put people in state government on the same footing as those in private enterprise.” He advocated for changing the state plan from a defined benefit plan to a defined contribution plan, which is more like the 401K plans offered to workers in the private sector.
Malloy, who is meeting with leaders from the State Bargaining Agent Coalition Wednesday for their first talk about the $2 billion in concessions he has to get in order to balance the budget without massive layoffs, quipped “that’s what a table is for.”
Malloy has said state employees’ wages and benefits are “unsustainable” at their current levels, which is one of the reason he has opened up negotiations with the 13 bargaining groups to talk about how to achieve $2 billion in savings over two years.
He said when he was mayor of Stamford the population increased 10 percent and after his 14 year tenure the city government staff was 8.4 percent smaller.
“We made the city safer, more responsive, increased services, and do it with fewer people. Now how do you do that? You use technology. You test for results. You have results based accounting, you test your own assumptions on a daily basis, on a regular basis,” Malloy said.
Susan Coleman, professor of finance in the University of Hartford’s Barney School of Business, also participated in the forum, which was moderated by the Courant’s Tom Condon.