Connecticut Gov. Dannel Malloy (D) last week announced a partnership with General Dynamics [GD] Electric Boat (EB) wherein the company will invest $852 million in its Groton shipyard and hire thousands more workers over 17 years to prepare to build the Columbia-class ballistic missile submarines (SSBNs)..
The GD EB investment will focus on “significantly expanding” its Groton facility by building a new third dry dock and a manufacturing superstructure to house the construction of the Columbia-class submarines, the governor’s office said.
Over the next 17 years GD said it will make the $852 million in capital investments; increase its workforce by almost 1,900 people, to increase the workforce to over 13,000; and more than double its $250 million annual spending on hundreds of Connecticut in-state suppliers due to increased submarine demand.
The government’s office said as part of the investment agreement the Connecticut Department of Economic and Community Development (DECD) will provide incentives to the company. This includes a $35 million loan for machinery and equipment through the governor’s First Five Plus Program that includes loan forgiveness based on supply chain and employment. It also includes up to $20 million from Connecticut Innovations in sales and use tax exemptions for capital and new construction on the Electric Boat campus.
DECD will also provide the company with an $8 million grant that can only be spent on third-party workforce development initiatives through community colleges, technical high schools, and in-state organizations to benefit the company and its supply chain.
Connecticut will also provide a further $20 million for dredging, needed to allow submarines to be launched form the new planned dry dock and manufacturing superstructure.
“This investment provides crucial support for the workforce development and facility expansion that will help Electric Boat grow, increase its economic contribution to the region, and continue to deliver the world’s most capable submarines to the U.S. Navy,” Jeffrey Geiger, GD’s President of EB, said in a statement.
“It will also improve our competitive position, help us to secure additional work in the future, and solidify the region’s title of Submarine Capital of the World, he added.
DECD Commissioner Catherine Smith noted the agreement “will ensure that Electric Boat is capable of meeting its submarine building demands over the next several years while significantly increasing its workforce.”
“Our state’s partnership with General Dynamics Electric Boat will ensure that thousands of good-paying manufacturing jobs continue to grow for years to come. This isn’t just a good deal for southeastern Connecticut, it’s a good deal for residents across the state, where over 700 supply chain companies with locations in over 100 towns will see increased demand from the best submarine maker in the world,” Malloy said in a statement.
Relatedly, last Thursday Electric Boat and the Rhode Island governor’s office announced the company will accelerate hiring 1,300 employees in the state as part of a $792 million capital investment plan by the company to expand its Quonset Business Park facility manufacturing space by 1.3 million square feet.
The governor’s office said this is the second-largest Project Labor Agreement in the state’s history and is connected to the U.S. Navy’s demand for Virginia-class attack submarines and the Columbia-class.
In exchange, Rhode Island is providing a $14 million investment to improve and modernize the Quonset Business Park, $ 2 million in Rebuild R.I. tax credits, and up to $18 million in sales tax exemptions. GD EB also said it will participate in the Supply R.I. initiative, that commits the state’s largest employers to do more business with local contractors and vendors. Electric Boat is the 12th employer to sign up for the program.
"This new development will create new opportunities for thousands of Rhode Island families - people who will get great jobs building submarines and tradesmen who have good work building this new facility,” Gov. Gina Raimondo (D) said in a statement.
“We at Electric Boat are looking out toward a bright future with the potential opportunity for substantial new work and accompanying growth. This investment makes it very clear to our U.S. Navy customer that Rhode Island is ready, willing and able to support our efforts to build a great submarine fleet,” Geiger added.