Pratt & Whitney chooses North Carolina for new factory, but reports big loss

After jettisoning hundreds of Pratt & Whitney jobs in Connecticut — then announcing a major expansion in North Carolina — Raytheon Technologies disclosed Thursday the financial impact of the pandemic on its jet engine subsidiary in the third quarter: a $615 million loss on operations.

Pratt & Whitney is based in East Hartford with a major engine assembly and maintenance plant in Middletown. Waltham, Mass.-based Raytheon acquired the manufacturer last April in its takeover of United Technologies that had its headquarters in Farmington, with the combined company now run by former UTC CEO Greg Hayes.

In a Tuesday conference call, Hayes indicated Raytheon could slash between 10 percent and 15 percent of its facility space as a result of what he anticipates will be a prolonged period of office staff working remotely. That would be on top of a 10 percent reduction in office space as a result of overlap from the UTC portfolio.

Last week, Raytheon announced it would build a new Pratt & Whitney manufacturing plant in Asheville, N.C. at a cost of $650 million, adding 800 jobs there and with a $7.4 billion impact for the state’s economy when factoring in the ripple effect of spending and salaries. North Carolina extended incentives that could total more than $15 million to sway Raytheon’s decision.

Pratt & Whitney’s sibling Raytheon division Collins Aerospace has its headquarters in Charlotte, N.C., about two hours east of Asheville. Collins Aerospace sells myriad systems for aircraft, from flight decks to landing gear.

The new Pratt & Whitney plant will make airfoils for turbines inside engines. A spokesperson with the Connecticut Department of Economic and Community Development could not be reached immediately Tuesday to say whether Connecticut offered any incentives to land the planned facility. Six years ago, former Gov. Dannel P. Lamont extended some $500 million in perks for Pratt & Whitney to expand its Connecticut presence.

During a Tuesday conference call, Hayes said the company is focused on moving work to lower-cost areas, and cited at $175 million the savings Raytheon will realize by building the Pratt & Whitney facility in North Carolina. Raytheon is in the process of cutting 15,000 jobs across Pratt & Whitney and Collins Aerospace, along with terminating contracts with some 4,000 external workers.

Two weeks ago, Raytheon confirmed layoffs in its Connecticut operations that city officials in East Hartford and Middletown indicated amounted to 450 Pratt & Whitney jobs. At last report, the company had just over 11,000 Connecticut workers.

Between July and September, Pratt & Whitney revenue plummeted 34 percent from the third quarter to below $3.5 billion, Raytheon reported Tuesday, as airlines put on hold the purchase of new jets during the COVID-19 pandemic. Raytheon has been able to offset with military orders some of the impact of the commercial aviation slowdown on Pratt & Whitney and its Collins Aerospace.

Raytheon remained profitable in the third quarter with earnings of $264 million, with Collins Aerospace generating an operating profit of $526 million despite matching Pratt & Whitney’s revenue decline.