Washington – United Technologies Corportion’s decision to shed Sikorsky Aircraft sent tremors through the Connecticut congressional delegation, but there’s new optimism that whatever changes the company faces, it will stay in Connecticut.
“I think the physical infrastructure and human capital is unique,” said Sen. Chris Murphy, D-Conn.
When United Technologies confirmed on Monday it had decided to spin off or sell Sikorsky, Murphy tweeted “my focus remains on ensuring Sikorsky helicopters are made in CT, no matter who owns the company.”
But Murphy can only press the government to block Sikorsky’s sale to a foreign company — European Airbus Helicopters is eyeing Sikorsky — because so much of Sikorsky’s business is with the Pentagon, and a national security argument can be made.
But there are plenty of U.S.-based companies interested in Sikorsky, among them Lockheed Martin, Boeing and Textron’s Bell Helicopters.
Sen. Richard Blumenthal, D-Conn., said UTC executives “are very optimistic about the bids they’ve received.”
He said he could not disclose the companies who have made those bids, but is confident of their commitment to keep Sikorsky in Connecticut.
The UTC board is expected to meet in the next few days to review the offers it has received.
A significant hurdle to a sale of Sikorsky is that the company’s value has appreciated since it became a part of UTC in 1929, and a sale could come with a big tax bill — as high as $3 billion in some reports.
Blumenthal said UTC is discussing “a variety of corporate structures that could be used” to lighten the tax load.
Loren Thompson, a defense analyst with the Lexington Institute, said there’s a good possibility Silorsky would be spun off as its own company for two years to eliminate the tax bill, then sold.
“At that point, an acquisition is much easier,” Thompson said.
He also said, “There is no way anybody is going to move Sikorsky from Connecticut.”
“There is no way they could replace the workforce or the supply chain,” he said.
Forbes has speculated Sikorsky could be sold to Bell Helicopters through a “Reverse Morris Trust,” which is a way a parent company can spin off a subsidiary and merge it with another company in a tax-free fashion.
Blumenthal said a merger with another company could bring capital support and new investment in the Sikorsky plant in Stratford.
“There’s a lot of reason for hope and cautious optimism,” he said.