Massachusetts state officials are pleased that another high tech company is being lured away from Connecticut, and will set up headquarters in the Bay State. Raytheon Technologies Corp. — formed from the proposed merger of Waltham-based Raytheon and Connecticut-based United Technologies — would be headquartered in Greater Boston, the companies said.
"One of the things that made this whole thing work was the reputation of the people of Massachusetts," Gov. Charlie Baker said Monday. "Their work ethic, their creativity, their imagination and frankly the tremendous pool of really talented STEM students and people who currently work in those fields," he added.
The governor did have a conversation with Raytheon executives over the weekend, but said his office did not take part in discussions between Raytheon and United Technologies, and so did not attempt to lure the headquarters to Massachusetts.
It's just the latest business blow for Connecticut and win for Massachusetts in recent years.
In 2016, General Electric pulled up stakes from its longtime home in Connecticut, and moved its headquarters to Boston. More recently, MassMutual shut down an office in Enfield, Connecticut, while expanding in Massachusetts.
Connecticut Gov. Ned Lamont says nearly all of United Technologies' 19,000 employees there will remain in the state, while about 100 top executives and other workers will move to the new headquarters near Boston.
During a conference call with investors, United Technologies CEO Greg Hayes downplayed the significance of the headquarters move. "Raytheon Technologies, as we'll be called, will be headquartered in the Greater Boston metro area," Hayes said. "Now we want to emphasize, particularly for the benefit of United Technologies employees, this does not mean that we're exiting operations from Connecticut and moving to Boston. In fact, Raytheon Technologies will maintain a strong presence in Connecticut for years to come."
But Mark Gallagher, of the Massachusetts High Technology Council, says companies are increasingly sensitive to some of the tax pressure that they're feeling in states like Connecticut.
"And I think conversely Massachusetts has worked really hard over the last couple of decades to shed the 'Taxachusetts' moniker that did not help us attract business a couple decades ago," Gallagher said. "Based on some good policy-making decisions, we've ended up in a place where the tax burden here is ... pretty squarely in the middle."
Gallagher says Connecticut's tax policies have shifted over the past few decades, and believes they have become more burdensome for businesses. But he said favorable tax policy isn't the only reason why companies relocate here. He says the quality of life, along with a strong talent pool, are also attractive to businesses. He says Massachusetts has to seize on those advantages to keep the momentum going.
"Avoid self-inflicted wounds, and really part of our biggest challenge is avoiding complacency and really managing the growth we have so that we leverage it and don't choke on it," Gallagher said. He cautions that approving a constitutional amendment that would impose a higher tax on income above $1 million is an example of what would be a self-inflicted wound.
The merger must still be approved by shareholders and the federal government. The deal is expected to be finalized during the first half of 2020. It's expected the new company will have a value of over $100 billion.
This story includes reporting from the Associated Press.