Conn. and the changing world of corporate address changes
There’s only one Sikorsky. As the state’s largest manufacturer, keeping the company happy is in every politician’s best interest, which is why Gov. Ned Lamont was glad to sign an agreement earlier this year to keep the helicopter maker in Connecticut for years to come.
The company has its headquarters in Stratford, but that’s not what matters most. It’s the 7,000 people the company employs locally, plus thousands more at suppliers around the state, that can’t be replaced. Headquarters are nice, but can change as easily as refiling some paperwork.
Not that you’d know that from reactions they cause. Some six years later, the departure of General Electric’s headquarters from its longtime Fairfield home is still held up as a sign of everything wrong with Connecticut, even as most everything critics said about the company at the time turned out to be wrong.
The biggest misconception was in the economic impact. In the end, it was a few hundred jobs that left backwoods Fairfield County for bustling Boston, as most of the local positions moved down the highway to Norwalk. GE’s status as bellwether for the national economy is long in the past, and the company as it was known for most of its tenure doesn’t exist anymore, but it was still viewed as a crushing blow to our state.
The story has been told many times by now, but GE didn’t leave because of taxes. GE left because, as its then-CEO said, he was tired of seeing deer on company property and instead wanted “some 29-year-old Ph.D. student at MIT to punch me right in the nose and say ‘all of GE’s technologies are wrong and you’re about to lose.’” Hard to believe it didn’t work out for them.
As we still dissect that company’s departure, much was made of the recent arrival in Stamford of Philip Morris International, not to be confused with Philip Morris USA, a subsidiary of Altria, which sells cigarettes in the United States. PMI, as it likes to be known, sells cigarettes overseas, though to hear its executives, who met recently with the Hearst Connecticut editorial board, it’s looking to scale down that part of its business.
PMI is focusing on nicotine delivered in forms other than through burning tobacco, and it says the amount of money it has poured into this effort puts it far beyond the realm of any PR push. That may be true, but it also has a PR problem bigger than any company this side of Purdue Pharma, and in any case still makes a lot of money selling cigarettes.
Regardless, PMI is making Stamford its home, which is not to say it’s moving all its workers here. There will be a few hundred, maybe, out of thousands who work at other locations worldwide. That’s true for many big-name companies that make their home in Connecticut, nearly all of them in the corridor between Greenwich and Norwalk.
And that’s fine. There’s no use minimizing hundreds of jobs, especially of the highpaying variety that corporate relocations bring to town. But it’s not on its own the basis for a sustainable economy. People need jobs below the level of executive vice president, too. That’s why a company like Sikorsky, which supports thousands of jobs in the state, is so valuable.
Then there’s Subway, which might be a bigger part of most people’s lives than any other company based here, what with its tens of thousands of locations worldwide, including one (likely) just down the street from where you’re sitting. Subway had its first store in Bridgeport and has long been based in Milford, but surprised some people recently by announcing it was moving its headquarters to … Shelton?
Nothing against Shelton, of course, but it did seem a little
odd to uproot for the purposes of moving 15 minutes away in the same state. But that good news for Connecticut came with a note of caution as the company announced that Miami will be its “dual headquarters,” which means its CEO lives there and doesn’t feel like flying up here all the time. As long as most of the jobs stay here, Connecticut will not complain.
But that’s why headquarters announcements are so dicey. A few hundred jobs from a new corporate headquarters will draw a visit from the mayor, governor and maybe a U.S. senator or two. But it might not have a lasting impact.
To his credit, the governor seems to get this, and despite the splashy announcements about PMI and others has moved away from incentive plans for companies to change their address and not much else. Yes, there’s always a danger that a hedge fund could pick up stakes for Georgia in the absence of an offer from Connecticut to stay, but the price isn’t necessarily worth it. The state ends up writing big checks to people who need it least.
Like everything else, corporate relocation decisions are not going to be as simple as they once might have been. A company choosing between Florida and Connecticut could have more than taxes or other costs to consider, but its ability to recruit workers to a state that wants to police their sex lives. If companies aren’t prepared for that, they need to be.
And Connecticut needs to ensure it offers a landing spot for those who want a better choice.