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Two Companies Based in CT, Pratt & Whitney and GE, Jockey for a Lucrative Defense Contract

One of Connecticut’s biggest companies is waging a two-front war right now, and its opponent in one battle is an ally in the other.

Pratt & Whitney is bracing for the serious threat of a strike when its current agreement with the International Association of Machinists (IAM) runs out Dec. 5. Pratt wants to eliminate a contract provision that blocked the company’s attempt earlier this year to close its Cheshire plant and shift 1,000 jobs out of Connecticut. The union thinks that idea sucks. Both sides are preparing for the worst.

Yet the IAM also happens to be a devoted sidekick in Pratt’s other conflict, a desperate lobbying brawl with downstate defense-industry rival General Electric over who gets to build jet engines for the new F-35 joint strike fighter.

If Pratt gains sole possession of what could eventually be a $100 billion federal honey pot, it would keep thousands of jobs in Connecticut for decades to come. “It would really mean some job security here in Connecticut,” says James Parent, chief negotiator for IAM District 26.

This state’s congressional delegation has been slaving away on Pratt’s behalf for years, but Congress continues allocating money to keep GE’s alternative-engine program alive.

GE and its engine partner Rolls-Royce are spending millions on ads and lobbyists to win a permanent piece of that sweet federal pie, which would mean jobs at its factories in states like Ohio and Massachusetts. Pratt and its corporate parent UTC have responded in kind.

The Obama administration, like the Bush administration before it, says having two companies producing the F-35 engines is simply too costly when the federal deficit is running in the trillions. Pratt’s allies insist having one engine supplier has become the norm for fighter aircraft contracts.

On the other hand, GE’s allies claim abandoning the alternative engine would mean wasting the hundreds of millions already spent on the program. They also warn reliance on a single type of Pratt engine could be a disaster if problems develop.

And no one knows for sure what will happen if this week’s voting gives Republicans control of the U.S. House or Senate.

The labor conflict between Pratt and the machinists union is focused on a clause in the existing agreement known as “Letter 22.” The language requires the company to “make every reasonable effort” to keep union jobs in Connecticut and to bargain in good faith when moving positions out of state. It was apparently an outgrowth of a 1993 negotiation in which the union agreed to wage concessions to save jobs and the clause came in real handy not long ago.

About a year ago, Pratt announced it was going to shutter its Cheshire plant and a smaller facility in East Hartford to cut about 1,000 jobs in this state. The union went to court claiming the company failed to meet the requirements of Letter 22 and a judge agreed.

Last month, Pratt’s parent corporation announced plans to chop an additional 2,000 jobs world-wide as part of a cost-cutting effort that has already reduced UTC’s overall workforce by 1,300 in 2010.

The “restructuring” seems to be working, since UTC’s profits were up by 20 percent in the first quarter of this year and by 14 percent in the second quarter compared to 2009. According to its July SEC filing, UTC is looking to bring in $54 billion in 2010, an increase of about 2 percent over the prior year.

“Pratt & Whitney has been a very profitable company and it still is,” says Parent, who adds that’s a good thing for the company’s workers heading into contract negotiations. “The outlook for them looks pretty good based on some of the contracts they expect to get.”

(For “pretty good,” you can read freakin’ “mega-glorious” if that F-35 engine deal, which has been called “the contract of the century,” comes through the way Pratt wants.)

All that good news hasn’t stopped Pratt from announcing at the start of negotiations that the machinists union can’t possibly hope to keep Letter 22 in the new agreement. The Hartford Courant reported Pratt executives declared in their opening statement that the clause “is not something the company can live with going forward.

”Both sides have issued a blackout on talking about the negotiations with the media. All Parent would say is that the union hasn’t yet received any formal proposals on this issue from Pratt but that removing that key clause “is not one of our union proposals.”

“This could take all kinds of turns,” Parent adds.

All Pratt spokesman Brian Kidder would do when asked about Letter 22 is repeat the company’s initial statement about the talks: “Ensuring the long-term health and competitiveness of Pratt & Whitney is the best way to maintain good, high-paying jobs and also a bright future for our employees, their families and the state of Connecticut. As in the past, we are committed to bargaining in good faith and doing what is right for our employees and our company.”

Meanwhile, Pratt, the union, UTC and Connecticut’s congressional delegation are scrapping like hell to block GE’s bid on the F-35 engine contract.

“It’s been a vocal and very emotional debate,” says GE spokesman Rick Kennedy.

Kennedy says GE is getting “significant support” from both Democrats and Republicans for going ahead with the second F-35 engine program. He says “there is no clear sign” about what would happen if the Republicans took back control of the U.S. House or Senate.

Pratt spokeswoman Stephanie Duvall says her company has been “receiving heavy support” from U.S. Sen. Joe Lieberman and U.S. Rep. John Larson in the congressional wrangling over the F-35 engine contract.

GE’s been buying ads in states across the nation where they have engine-related plants in and around Washington, D.C.’s Beltway region. So has Pratt. According to a report by the Center for Public Integrity, 13 different lobbying firms plus the in-house lobbyists for the companies involved are now schmoozing and wheedling members of Congress.

If a bunch of newbies get elected, the scrambling is going to get even more frantic as the two sides attempt to line up support for the big defense budget vote that’s got to come in the next few months.

“We’ve been doing a lot,” Duvall acknowledges. “This is the biggest fighter program ever. … Nothing has ever been developed quite like this before.”

Kennedy sums it up this way: “Welcome to the Great Engine War.”

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