The governor of Connecticut has offered $100 million worth of incentives to jet engine manufacturer Pratt & Whitney, a United Technologies Corporation (UTX) company, to prevent the possible loss of 1,000 jobs.

The five-year plan includes lifting a cap on tax credits for the parent company, providing training assistance and establishing a job retention tax credit. It also includes investments in machinery and equipment and the building of an Engineering Center for Excellence for engineers at Pratt & Whitney and other aerospace companies.

The state has joined hands with the International Association of Machinists, which represents 3,700 workers and has been negotiating with Pratt & Whitney for weeks in an attempt to retain existing jobs. The Machinists offered $63 million in annual cost reduction, including reduced overtime, to help save jobs.

Pratt & Whitney has been affected by the steep decline in the commercial airline industry. It has announced that it may close its Cheshire engine repair plant and shift work from its East Hartford operation. Jobs could be shifted to plants in Columbus, Georgia, Singapore and Japan.

United Technologies had earlier announced that it needs to eliminate 11,600 jobs, or 5 percent of its global work force, in 2009 to cut costs. The company employs about 26,000 workers in Connecticut, with 11,000 of those working at Pratt & Whitney.

United Technologies Corporation provides high technology products and services to the building systems and aerospace industries worldwide. Pratt & Whitney, Hamilton Sundstrand and Sikorsky (collectively referred to as the aerospace businesses) primarily serve commercial and government customers in both the original equipment and aftermarket parts and services markets of the aerospace industry; Hamilton Sundstrand and Pratt & Whitney also serve customers in certain industrial markets. Major competitors include Boeing Company (BA) and General Electric Company (GE).

We currently have a Neutral recommendation on UTX.
Read the full analyst report on “UTX”
Read the full analyst report on “BA”
Read the full analyst report on “GE”
Zacks Investment Research