WHEN: MONDAY, DECEMBER 5

WHERE: CNBC'S "MAD MONEY W/ JIM CRAMER"

Following is the unofficial transcript of a CNBC interview with United Technologies Chairman & CEO Greg Hayes tonight on "Mad Money." Video of the full interview will be available on CNBC.com.

All references must be sourced to CNBC's "Mad Money w/ Jim Cramer."

The full interview with United Technologies Chairman & CEO Greg Hayes will air on CNBC's "Mad Money" on Monday at 6 pm EST.

JIM CRAMER: Greg, I'm surrounded by incredible equipment. What is being made here and how important is it to United Technologies?

GREG HAYES: So, Jim, you're standing in the Middletown-- Connecticut, final assembly facility for Pratt Whitney. What you see around you here today are the final assembly line for the-- gear turbo fan engine for the A320 product line. The engines at the—

JIM CRAMER: A320 being air bus.

GREG HAYES: The air bus.

JIM CRAMER: Foreign companies—

GREG HAYES: A3-- A319, A320—

JIM CRAMER: Right.

GREG HAYES: --A321 models.

JIM CRAMER: Okay. Now why would I choose this geared turbo fan over somebody else's engine?

GREG HAYES: Well, if you see the size of the fan-- 81 inch diameter fan. That particular engine is about 16% more efficient than the last generation of engines that we were building with E2500. Let me put that in context. 16%. So we've got about 8,000 engines in backlog today. Over the next—

JIM CRAMER: Quarter - for 8,000 of these.

GREG HAYES: Of these. So—

JIM CRAMER: Okay.

GREG HAYES: --of those 8,000 engines, in the next ten years we'll save the airlines 11 billion gallons of fuel. 11 billion. At $1.40 gallon, which is I think jet a today, you're talking $15 billion of savings to the airline. That's-- the biggest benefit.

JIM CRAMER: Okay.

GREG HAYES: But on top of that you've also got-- so the technology allows us to reduce the particulate emissions. So we're gonna take emissions down about 50%. That takes essentially two million cars off the road for ten years by using our engines. The other piece of the pie-- the third piece office is the noise.

JIM CRAMER: Right.

GREG HAYES: This is about 75% quieter than the engine that it's gonna replace. So if you're LaGuardia and you're over the flight path today about 500,000 people wouldn't hear this plane coming in-- that they hear the planes today. That's why that-- we have 8,000 orders for this engine.

JIM CRAMER: All right, how hard is it to make?

GREG HAYES: It's hard. Right? Think about this engine. We've spent about $10 billion developing the technology around these engines. It starts with the gear. And we have a star gear system which allowed us to do something we've never been able to do before, which is to spin the fan in the front at a third of the speed of the turbo machinery in back.

JIM CRAMER: Okay.

GREG HAYES: Okay? That is the key to this entire architecture. It's called-- that's why we call it the geared turbo fan. By spinning the fan at about 8,000 rpms and the turbo machinery at 24,000 rpms you optimize the turbo machinery, and you also optimize the bypass. So the other beautiful thing about this engine-- see, it's a lot bigger than the—

JIM CRAMER: Right.

GREG HAYES: --engines it's replacing. The 81 inch fan. It's got about a 12 to one bypass, which means most of the thrust is coming from the fan and not from the thrust of the turbo machinery.

JIM CRAMER: All right, is that--what's caused what you're-- executive has said is teething problems in trying to get the backlog-- under control, don't wanna lose any orders to the other guys?

GREG HAYES: No. So, look, we have had a number of teething issues. We've talked about that during the course of the year. Today we've got ten airlines using-- are operating this-- this engine. We've got about 50,000 flight hours-- and we-- 99.88% dispatch reliability. And so while there remain some things that we're learning as we get more and more hours on the engines-- I would tell you those are nuisance faults as compared to the overall design. The beautiful thing is the gear works. And I think that was the thing that people always were concerned about is can you really put a gear on the front of a large-- turbo-- turbine fan engine? And the fact is we've been able to do it.

JIM CRAMER: All right, where does this fit into the vast--divisions that you have at United-- at United Technologies? Whether it be climate security, whether it be OTIS—

GREG HAYES: Right.

JIM CRAMER: These are huge, important-- and of course Carrier.

GREG HAYES: Right. So we've got four big businesses, right? Each one of them-- I would say global in scale. Pratt Whitney's about $15 billion in revenue today. Because of the geared turbo fan by 2020, four years from now, we'll be about $21 billion in sales as we ramp up production here. You compare that to our climate business with Carrier, it's about $17 billion. We've got the OTIS elevator business of course you know, which is about $12 billion. And then we've got our aerospace systems business. And if you think about this big engine almost all of the components that go around, the things that make the engine work, the FADEC-- the full authority digital electronic control-- those are made by aerospace systems business. That's about a $15 billion business as well. So think about $30 billion in aerospace, $30 billion in the buildings systems.

JIM CRAMER: All right, so look, I- you know, obviously this is a key part of the United Technologies story. So is Carrier. I know that you've been in a tough spot of late. I look at you as a guy who wants to make as much money for shareholders as possible. You are committed to doing that. You came up from the CFO ranks. You go to a board. The board wants to represent shareholders. The main thing that you and I would talk about is how much you can save and what kind of revenue. We look at these great engines. We know these are great sales. What happens when the government gets involved? Could you walk us through your side of what happened when President-elect Trump called?

GREG HAYES: Well, it's no secret. I got a call from-- President-elect Trump a couple of weeks ago.

JIM CRAMER: Right before Thanksgiving?

GREG HAYES: Yeah, about a week before Thanksgiving.

JIM CRAMER: Okay.

GREG HAYES: And he simply said, "Look, Greg-- I need you to relook at the decision to close the Indianapolis factory of Carrier." He said, "We're gonna do a lot of things in this country that's gonna make it a lot more conducive to manufacturing. We're gonna take the tax rate down. We're gonna reduce all this burdensome regulation. When all that happens you're gonna be printing money, but I need you to relook at your decision to close to factory in Indiana."

JIM CRAMER: All right, now you have an obligation to your company. To relook at it means that you had done something that was cons-- that actually-- Greg, hundreds of American manufacturers have done. Ever since NAFTA it's been the right thing to do. We all accept the fact that I would-- I would be critical of you for not doing it because I care about the shareholders. How do you justify it? I mean, you tell Mr. President-elect, look, that's not what I do. I make good stuff and try to get the best cost.

GREG HAYES: So I had that discussion. And I had it with--Vice President Pence specifically a couple of times. 'Cause we talked about the fact that most of the supply chain on the-- HVAC side has already moved to Mexico. We've got about a million manufacturing square feet in Mexico already. And so this is just kind of a natural evolution to close a couple of our facilities in Indiana and move those down to Mexico. These are commodity products at the end of the day. Unlike the engines that you see here—

JIM CRAMER: Right.

GREG HAYES: --right, where you've got a workforce here highly skilled-- highly, highly skilled; highly trained. I think the average employee here on the shop floor has got about 26 years of experience. Right? Very difficult to do. But these are the kind of jobs that we can do in America because they require high skill and high value add. The assembly lines in Indiana-- I mean, great people. Great, great people. But theskillset to do those jobs very different than what it takes to assemble a jet engine.

JIM CRAMER: Okay, but what can-- there's no give without a get. We all know this. I mean, you-- he'd like you to rethink it, but at the same time you're-- everybody's gonna get those benefits that you talk about.

GREG HAYES: Absolutely.

JIM CRAMER: What specifically do United Technologies-- we heard about this $700,000 incentive, but that's obviously much less-- $700,000 a year-- much less than you would've saved.

GREG HAYES: So-- there was a cost as we thought about keeping the Indiana plant open. At the same time-- and I'll tell you this because you and I-- we know each other, but I was born at night but not last night. I also know that about 10% of our revenue comes from the U.S. government. And I know that a better regulatory environment, a lower tax rate can eventually help UTC of the long run. And so we weighed all of things in making the decision with the board—

JIM CRAMER: But you weigh-- not the President-elect did not say—

GREG HAYES: No, I—

JIM CRAMER: --"Hey, by the way, Greg, have you seen how many engines that we bought from you?"

GREG HAYES: Yeah, well, the—

JIM CRAMER: It did not come up?

GREG HAYES: No, it-- it did not come up.

JIM CRAMER: Okay.

GREG HAYES: Nor-- nor was there any I would say deal. There was no quid pro quo to him to say, "Look, I'm not gonna tax you-- if you don't do this." He simply said, "Take a hard look at it." (BEEP) We worked with Governor Pence. And I think we came up with-- a relatively good solution for everybody. We keep the plant open, we keep 1,100 people employed in Indianapolis. We still get to do the preponderance of the restructuring, which we were going to do anyways. So it's-- I would say no deal, but at the end of the deal a good deal for UTC.

JIM CRAMER: How about for the United States?

GREG HAYES: So, look, I think if we can see a renaissance in manufacturing in the U.S. that's a good deal for the U.S., but it's gotta be a renaissance, right? And it's gotta come from more thoughtful regulation and a more competitive tax rate. And I think those are the things that they're focused on. I know Paul Ryan is. German Brady in Ways and Means-- they're on the right track to do those things.

JIM CRAMER: But you make the best engines in the world. You are a true globalist. You have factories everywhere. Suddenly it sounds like that you're being asked to be an American first who has to put other interests at heart-- not just the shareholders. That was not the previous way that business was done in this country.

GREG HAYES: Well, Jim, I- think it's more than just shareholders. You have to think of the stakeholders. Right? All of the stakeholders as you have in a corporation. Be it the communities, be it the employees, be it the share owners. And you have to make a trade. At the same time I would tell you the genie of globalization is not going back in the bottle. Right? Free trade is still essential to the growth of this country. This country was founded on two principles, right? Immigration and free trade.

JIM CRAMER: Right.

GREG HAYES: And that is what made America great over time. Because we had the ability to develop and innovate in the U.S. and take those products and sell them around the world. Just like I sell OTIS elevators around the world.

JIM CRAMER: Right. Did-- do you-- are you put at a competitive disadvantage? I mean, all the other guys may have moved their gas furnaces to Mexico. Suddenly you do have-- I mean, what is-- what's good about Mexico? What's good about going there? And obviously what's good about staying here?

GREG HAYES: So what's good about Mexico? We have a very talented workforce in Mexico. Wages are obviously significantly lower. About 80% lower on average. But absenteeism runs about 1%. Turnover runs about 2%. Very, very dedicated workforce.

JIM CRAMER: Versus America?

GREG HAYES: Much higher.

JIM CRAMER: Much higher.

GREG HAYES: Much higher. And I think that's just part of these-- the jobs, again, are not jobs on assembly line that people really find all that attractive over the long term. Now I've got some very long service employees who do a wonderful job for us. And we like the fact that they're dedicated to UTC, but I would tell you the key here, Jim, is not to be trained for the job today. Our focus is how do you train people for the jobs of tomorrow? I've talked about our employee scholar program. The fact that—

JIM CRAMER: You're the second biggest after the government according to—

GREG HAYES: Right. So we've had-- we got 45—

JIM CRAMER: For scholarships.

GREG HAYES: --45,000 people have been through our employee scholar program. 38,000 degrees. We've spent $1.2 billion over the last 20 years educating our workers. We've got 7,000 people currently enrolled in this program. And the whole idea improve your own marketability. Improve your own skills. Because the skills that you have today are not the skills that are gonna get you through tomorrow.

JIM CRAMER: At the same time it's not-- sometimes I feel like it's bad luck, Greg. I remember when you guys-- and you were quoted-- when you guys moved that factory from Nogales, Mexico, to Florence, South Carolina.

GREG HAYES: Right.

JIM CRAMER: The big OTIS factory. You felt that that was a good thing, but there was $60 million costs that first year. It's not as easy to reshore.

GREG HAYES: Well, look, it-- any time you do-- undertake a major restructuring-- closing a plant—

JIM CRAMER: Right.

GREG HAYES: --whether the plant's in Mexico, whether the plant's in China, or whether the plant's in Indianapolis, it is expensive and it's high risk. And so we did. We spent about $60 million extra to move the plant from Nogales to Florence. Today it's one of our most efficient plants, and the entire OTIS network is in Florence, South Carolina. Great workforce, great productivity, and great products coming out of there.

JIM CRAMER: Okay. Look-- now-- when we talk about something like in Indiana, I mean, what happens? Trump calls. Then you work out the deals with Pence. He gives you some incentives but it's nothing that-- that really makes up for it, but you have a new view because you can't just be a globalist.

GREG HAYES: Well, look, you have to recognize the reality of the day, right? I always tell you at UTC we reserve the right to get smarter. And when the facts change we have to be able to adapt. And I think that's exactly what I would say we did here. We understood that the facts have changed. Something we didn't expect.

JIM CRAMER: Right.

GREG HAYES: But we have to be adaptable.

JIM CRAMER: But if you-- come up with a not competitive-- okay-- not competitive, whatever. You-- not competitive engines. You will lose to others.

GREG HAYES: Right. Well, and again, if you think about what we talked about last week we're gonna make up $16 million investment in that factory in Indianapolis to automate to drive the cost down so that we can continue to be competitive. Now is it as cheap as moving to Mexico with lower cost labor? No. But we will make that plant competitive just because we'll make the capital investments there.

JIM CRAMER: Right.

GREG HAYES: But what that ultimately means is there will be fewer jobs.

JIM CRAMER: I was going to ask you. I mean, to me I don't see a million people working here. But this is-- but the engineers are nearby. Right? You could not make this in Mexico-- these cannot be made. You need those great American engineers to do it.

GREG HAYES: Look, we invented this engine here in Connecticut, right, just up the road in East Hartford where we have 6,000 engineers. There's another 1,100 engineers-- you can't see them in the plant. And there's 1,400 mechanics that work on these lines every day. Right? Having the closeness and the proximity to the engineering talent with the shop floor is critical. It's the same reason we're setting up our overhaul and repair facility for the engines in Columbus, Georgia. We didn't want-- we--could've put it someplace like Mexico, we could've put it someplace like China, but we elected to put it in the U.S. because, again, you need to have that engineering talent to support the overhaul process to see what you need to learn as these engines age.

JIM CRAMER: And these engines as I understand it they're a great starter. The-- actual maintenance business is a fabulous business for United Technologies.

GREG HAYES: Well, that's why we're in the business of selling jet engines. As--you know every time you sell a jet engine you send a check to the customer-- of a million or so dollars.

JIM CRAMER: People don't know that, Greg. You've told me that, but the fact is that you wanna be in the long-term. You have 8,000 orders. You get those orders. It's-- almost a razor-- razor-blade model.

GREG HAYES: These are really expensive razor blades. Or razors rather. I mean, seriously, this-- but it's a business where you have to take a very long view.

JIM CRAMER: Right.

GREG HAYES: Right? This is-- this-- these engines will be in production for the next 30 years. They'll be on the aircraft for the next 40 or 45 years. And so if you think about it you give away the engine up front of you get paid a small piece, two thirds of the price of the engine, the cost of the engine, but then you make it up because you are gonna overhaul the engine three, four, or five times. I was at the airport yesterday. I saw an old-- MD80 taking off with JT8Ds that were built 40 years ago. I love those engines. Right? I mean, it's the same thing. You w-- you know, we'll sell spare parts on these engines for years and years. And that's why we're in the business. But that's why there's so few people in the business, because the barriers to entry are huge.

JIM CRAMER: At the same time-- I mean, it sounds-- when you moved OTIS to Florence, again, you wanted the engineers next to the OTIS elevators.

GREG HAYES: Right.

JIM CRAMER: That has been your philosophy. When you have highly complex things you build them here with engineers.

GREG HAYES: Right.

JIM CRAMER: That's how it works.

GREG HAYES: That's-- you need to have the engineering talent because as you think-- we talked about it. These engines don't go together all these easily at first.

JIM CRAMER: Right.

GREG HAYES: And there's a lot of learning. There's a lot of things that have to be changed as you go through the process of learning out. You know, today it takes us about 17 days to assemble an engine here.

JIM CRAMER: Okay.

GREG HAYES: In another year it'll be 10 days. Right? Eventually we'll get that probably in half from even there.

JIM CRAMER: Will you get to the 200 that you were hoping?

GREG HAYES: Well, this year we talked about 150.

JIM CRAMER: Well-- but you-- we have an outside hope that you can beat that.

GREG HAYES: Well, let me tell you. We're-- we'll actually ship more engines than that.

JIM CRAMER: Okay.

GREG HAYES: But what we won't ship is fan blades. And we've talked about that as well.

JIM CRAMER: Right.

GREG HAYES: So we'll ship well in excess of 150 engines to air bus. You can see them. None of these engines of course have fan blades. Those all get shipped directly from our plant in Lansing, Michigan, to Toulouse where they're assembled onto the engine.

JIM CRAMER: All right, how good is the world for your different product lines? And how valuable will that money be repatriated both to shareholders and to engineering and to American manufacturing money?

GREG HAYES: Just think about this. If tax reform is-- the key for UTC-- because it-- we've got today $27 billion of permanently reinvested earnings overseas.

JIM CRAMER: $27—

GREG HAYES: $27 billion. $6 billion of that's sitting in cash that I—

JIM CRAMER: And you wanna bring here?

GREG HAYES: --that I could bring back tomorrow and invest here. Whether it's paying dividends, buying back stock, or investing in the next technology engine.

JIM CRAMER: Right. Doing more research and development in America.

GREG HAYES: More research. We're already spending $2.5 billion a year on R&D even with the burden of not having access to the cash. So you can imagine-- again, there could-- really could be a renaissance in manufacturing in the U.S. if we get a competitive tax rate.

JIM CRAMER: Right. So-- of the things that you're most proud of, I mean, you build the best stuff, you're an American in a globalist environment, but you're also now thinking larger. I mean, you're still a globalist. I mean, if I asked you are you a globalist—'

GREG HAYES: Absolutely.

JIM CRAMER: But-- you are now more concerned at-- in this regime it's-- you get a call from the President-elect. Do you think some of this is 'cause United Technologies is just a very well-known company? Or is it the luck of the draw that someone had-- a camera up and saw the executive say, "Listen, we're moving this factory"? Which is it?

GREG HAYES: Well I think there's a little bit of bad luck involved if you will-- if I have to really be honest with you, Jim. The fact is-- when we made the announcement in Indiana and we were trying to be as humane as possible talking-- giving the employees a three year lead time on the announcement. Unfortunately and not unexpectedly, you know, someone took issue with it. They didn't like the fact that we're moving the jobs to Mexico. Everybody's seen the YouTube—

JIM CRAMER: Right.

GREG HAYES: --three minutes. It's unfortunate. And I think, you know, that just-- happened to get in front of Mr. Trump.

JIM CRAMER: Right.

GREG HAYES: And he saw that. And he picked up on that as a campaign issue.

JIM CRAMER: And Indiana was—

GREG HAYES: And Indiana. And, you know, he's picked up-- you know, he's used the message not just in Indiana—

JIM CRAMER: Right.

GREG HAYES: --but through the whole Rust Belt. And if you think about, you know, the election of Trump I mean it is because of the Midwest and the Rust Belt went with Trump.

JIM CRAMER: Right. I mean, Hillary had won and that plant might've gone. Yes. Okay, with this kind of inspiration and discussion, and bargain, and art of the deal can United Technologies lead the renaissance? Are you in a position to lead the manufacturing renaissance?

GREG HAYES: Well, absolutely. We're doing huge innovation, right? We're not talking just about these engines, right? Whether you're talking about the next generation of elevators that we're working on, the next generation of aerospace systems that we're working on, power electronics-- what we're doing in the Carrier business in terms of some of the 3,000 ton coolers that we're working. I mean, there is truly going to be huge growth in manufacturing here in the U.S. But a big piece will-- end up getting exported. Think--about it this way. Of UTC's U.S. sales, which are about 30% of our total sales. $10 billion get directly exported today. Almost all of that aerospace-- that supports 40,000 jobs here in the U.S. 40,000. Now if you think about Pratt Whitney, they're gonna add about 8,000 manufacturing jobs in the U.S. in the next ten years. Right? Those are good paying—

JIM CRAMER: That's real—

GREG HAYES: Those are real—

JIM CRAMER: Those are the jobs that—

GREG HAYES: --jobs.

JIM CRAMER: --we want in this country.

GREG HAYES: Which pale in comparison to the 800 jobs we were able to save in Indiana.

JIM CRAMER: That's.

GREG HAYES: These are very, very high paying jobs; high technology jobs. And I think again our challenge is where do we get the people to do that? And part of that is their-- our obligation to train people--

JIM CRAMER: Right.

GREG HAYES: --for the next generation.

JIM CRAMER: But you provide more scholarships than any other company. That's really important.

GREG HAYES: It's about life-long learning, Jim.

JIM CRAMER: Exactly. I wanna thank Greg Hayes, Chairman and CEO of United Technologies. Greg, thank you so much for your time.

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