United Technologies Corp., the planned buyer of Rockwell Collins Inc., said Wednesday it projects to add 35,000 U.S. jobs as part of a five-year expansion initiative.
UTC, based in Farmington, Conn., also plans to spend more than $6 billion on capital investments and $9 billion on research and development.
The company has set up www.utcinvestingintheusa.com for more details.
The expansion would represent a 17.5 percent increase in UTC's global workforce to 235,000, and a 52 percent jump in its U.S. workforce from 67,000 to 102,000.
Although the majority of the jobs would go to operations in Connecticut, Florida and Georgia, there are plans to expand its North Carolina workforce by about 1,500 to 4,000, the company said.
More than 40,000 work for the UTC Aerospace Systems division, which is based in Charlotte.
The new jobs would be in addition to the 30,000 UTC would gain from the Rockwell deal, which is projected to close as early as July. Rockwell is based in Cedar Rapids, Iowa.
Rockwell had at last count about 1,600 employees at the Winston-Salem operations it acquired in April 2017 from B/E Aerospace Inc.
Half of the workforce expansion will involve production and maintenance roles, while the other half will be professional and managerial positions, such as engineering and technology development.
"Over the past three years, we have created more jobs in the U.S. than in the rest of the world combined," Greg Hayes, UTC's chairman and chief executive, said in a statement.
"Our investments reflect our core belief that, similar to U.S. economic goals, United Technologies' continued success will be dependent on a highly skilled workforce, world-class manufacturing facilities, and workforce education programs."
UTC said the initiative is "generally in-line with prior investment levels ... that include investing heavily in digital technology and spaces that expand our capacity and enable us to further innovate for growth."
Although the company said some hires will be generated from employee retirements and turnover, it said "several thousand positions are expected to be net-new jobs that do not exist today." It projects the expansion will affect UTC operations in every state.
Shareholder push may not deter expansion
The initiative comes at an intriguing time for UTC as it pursues final U.S. and global regulatory approvals on its $30 billion purchase of Rockwell that includes absorbing $7 billion in Rockwell debt.
A restructuring confirmed Feb. 2 by Rockwell includes shifting some local seat production to the Philippines, lowering the local workforce over time by about 100 employees.
Rockwell would be integrated to create Collins Aerospace Systems. Rockwell’s top executive, Kelly Ortberg, will serve as Collins Aerospace’s chief executive.
On Feb. 23, the companies said a combined Collins Aerospace would keep its aircraft interiors operations in Winston-Salem.
The company faces significant pressure from at least two activist shareholder groups to consider splitting the company into three to four parts.
UTC has four main operating segments: Climate, Controls and Security; Pratt & Whitney aviation equipment; UTC Aerospace Systems; and Otis elevators.
UTC confirmed May 4 it had received a correspondence from Third Point, a New York-based hedge fund founded by activist Daniel Loeb.
Multiple media reports said Loeb called for UTC to split the company into three pieces. Loeb’s firm said in the letter it took “a significant stake” in UTC in late 2017.
“While UTC disagrees with several of the assertions contained in the Third Point letter, the company is always open to the input of shareholders,” UTC said.
“Our board will conduct a full review of the UTC portfolio. We expect this review to be completed in 2018 and will provide an update to the investment community as soon as practicable.”
Last week, UTC received a similar request from billionaire hedge-fund investor Bill Ackman, who is most known locally for his ill-fated $1 billion short bet against Herbalife Nutrition Ltd.
Pershing Square, Ackman’s hedge-fund group, recently bought 1.94 million UTC shares, about 0.2 percent of the company’s 800.06 million outstanding shares.
Hayes has said the company's board of directors and management are reviewing options. UTC plans to make an announcement following the completion of buying Rockwell and potentially after a certain phase of integration.
"Regardless of whether there are portfolio changes or not, we feel confident that the five-year investment level and hiring plans we are communicating today will be needed by UTC’s businesses to meet their customers’ needs," the company said Wednesday.
Aerospace, commercial building units focus of expansion
The investments will add production capacity in UTC's aerospace and commercial building industries, "which are benefiting from the mega trends of rapid urbanization, a growing middle class and the growth of commercial air travel."
UTC said it invests in more than 30 workforce training programs that include apprenticeships, community college and high school partnerships and digital certificate programs.
The company previously announced plans to add: 260 jobs in Foley, Ala., as part of a UTC Aerospace Systems expansion; 600 jobs at its Pratt & Whitney's AutoAir facility in Lansing, Mich.; 500 jobs at its Pratt & Whitney's facility in Columbus, Ga.; and 250 jobs at its Digital Accelerator in Brooklyn, N.Y.
UTC also has committed to a $115 million UTC Center for Intelligent Buildings in Palm Beach Gardens, Fla., that will have 500 employees and serve as center for the Climate, Controls & Security business;
On Monday, UTC announced plans to sell its Taylor Co. unit for $1 billion to Middleby Corp. of Elgin, Ill.
Taylor is a global manufacturer of beverage and food equipment, including soft-serve ice cream dispensing equipment, frozen drink machines and automated double‐sided grills. It is part of UTC’s Climate, Controls & Security division.