Donald Trump has scored a public relations win as he took the credit for persuading Carrier Corporation not to outsource jobs to Mexico.
In February, United Technologies, parent company of Carrier Corporation, a furnace and air conditioner maker, announced the closure of a plant in Indianapolis with the loss of 1,400 jobs, along with a factory in the northeastern Indiana city of Huntington with a further 700 casualties. Carrier told Indiana officials that it would save $65m a year by shifting production to a 645,000-sq foot factory under construction in Mexico, where wages are much cheaper. Carrier rejected a tax incentive package from the state. Enter Republican candidate Donald Trump, who had sued Carrier over a malfunctioning air-cooling system at the Trump International Hotel in New York in 2007. On Twitter he condemned the company and said such closures would not happen if he was president. Trump turned Carrier into a punchbag during his election campaign crusade against globalisation, trade deals and outsourcing to Mexico, promising to restore manufacturing and ‘put America first’ in his appeal to blue collar workers in the midwest. Since 2000, Indiana has lost 150,000 manufacturing jobs; 5m disappeared nationally over the same period. But Carrier and the United Steelworkers local union reached a severance package deal for the Indianapolis plant workers, including reimbursement for education and technical training. Trump stunned the world with his election win. On November 24, he tweeted: “I am working hard, even on Thanksgiving Day, trying to get Carrier to stay in the U.S. Making progress - will know soon!” Then, on 29 November, Carrier said it had reached an agreement with Trump. Carrier will keep 1,100 jobs at the Indianapolis plant, although that includes 300 positions that never were scheduled to leave the country. But it still plans to send 1,300 jobs to Mexico and shutdown the factory in Huntington, Indiana. Officially, Carrier changed its plan because Indiana agreed to give the company $7m in tax incentives over 10 years, while the company has agreed to invest $16m in the state. But there was also speculation that parent company United Technologies had been threatened with the loss of defense contracts. A Washington Post report suggested not, however, quoting defense analysts as saying Trump could not legally steer contracts or punish the company through the Pentagon’s highly regulated acquisition system. Senator Bernie Sanders, of Vermont, who lost the Democratic nominating race to Hillary Clinton but won in Indiana, wrote scathingly in an op-ed for the Washington Post: “Trump has endangered the jobs of workers who were previously safe in the United States. Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives.”
(Source: The Guardian, London, 3 December 2017)