In Connecticut, The Human Cost Of Going Global

You don't have to look far to see just how the changes at United Technologies Corp. have shaken the economy of Connecticut. Once the state's largest employer, UTC provided more than 51,000 jobs in 1990. Today, jobs have fallen to fewer than 32,000--a 38% drop.

The victims are everywhere. Unemployed factory workers at Pratt & Whitney jet engines. Engineers who took early retirement at Sikorsky Aircraft helicopters. Middle managers laid off from Hamilton Standard, which makes environmental controls and propellers.

EMPTY STORES. Then there are people like Frank Porto. Porto owns the Aircraft Package Store in North Haven, directly across the street from a Pratt factory. On a recent Friday afternoon, the liquor store was empty. "It used to be really bustling at this hour," says Porto.

All along Washington Avenue, the main drag of North Haven, the story is the same: abandoned storefronts, "for lease" signs. And it isn't just UTC that has wielded the knife. Throughout the state, one company after another has pared its payroll--Xerox, U.S. Surgical, Electric Boat, Aetna, Travelers, and others.

In part, Connecticut shows how the promise of globalization--that new markets overseas would ultimately boost the U.S. economy--is an empty one for some. "While you can make a strong case that we are net beneficiaries as a country from free trade,

oftentimes the gainers and losers are different people," says Shawmut Bank economist Nicholas Perna.

Altogether, Connecticut has lost about 200,000 jobs since the peak of employment in early 1989. While some industries, especially pharmaceutical research, have been adding jobs, the only significant new source of employment has been the Native American-owned Foxwoods casino complex in Ledyard, Conn. But salaries average about half the $13 to $15 an hour earned in defense factories.

BOASTING. Those who survive at UTC are under increasing pressure to improve productivity. "One of the things we old-time machinists wonder about is that the people running the company now are the bean-counters," says James Flanagan, president of Flanagan Brothers, a sheet-metal shop that supplies Pratt. Indeed, the whole relationship between UTC and the community of workers, suppliers, and politicians seems under siege. A 1994 survey of employee morale at Pratt found that while 78% of those surveyed had pride in their work, fewer than half said they felt strong loyalty to the company. "We tore up the social contract here," acknowledges Pratt President Karl J. Krapek.

What's more, unionists see United Technologies boasting to Wall Street that its earnings have improved--yet continuing to shift work to lower-cost locales. "Right now, the only reason they are having more layoffs is for the greed," says Andrew Romegialli, labor representative at District 91 of the International Association of Machinists. Greed or survival: It's a matter of perspective. But as U.S. companies move abroad, the shouting over lost jobs and wages will only grow louder.

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE