banner
Business

As Trump claims to have saved Carrier jobs, details are hazy

Posted November 30
Updated 5:55 a.m. Thursday

President-elect Donald Trump, center, eats dinner with Mitt Romney, right, and Trump Chief of Staff Reince Priebus at Jean-Georges restaurant, Tuesday, Nov. 29, 2016, in New York. (AP Photo/Evan Vucci)

— In persuading Carrier to keep hundreds of jobs in Indiana, President-elect Donald Trump is claiming victory on behalf of factory workers whose positions were bound for Mexico. But the scant details that have emerged so far raise doubts about the extent of the victory.

By enabling Carrier's Indianapolis plant to stay open, the deal spares about 800 union workers whose jobs were going to be outsourced to Mexico, according to federal officials who were briefed by the heating and air conditioning company. This suggests that hundreds will still lose their jobs at the factory, where roughly 1,400 workers were slated to be laid off.

Also, neither Trump nor Carrier has yet to say what the workers might have to give up or precisely what threats or incentives were used to get the manufacturer to change its mind.

"There's excitement with most people, but there's a lot of skepticism and worry because we don't know the details," said TJ Bray, 32, who has worked for Carrier for 14 years and installs insulation in furnaces.

"There's a few that are worried. And there's still a few that don't even believe this is real. They think it's a play, a set-up or a scam."

Sen. Joe Donnelly, an Indiana Democrat, said he, too, has lingering questions about what the announcement could mean for the workers.

"Who is going to be retained? What is the structure there will be for the retention? What is going to be put in place?" Donnelly said. "Are these the same jobs at the same wage? I would sure like to know as soon as I can."

Fuller answers could emerge Thursday, when Trump and Vice President-elect Mike Pence, who is ending his tenure as Indiana governor, are to appear with Carrier officials in Indiana.

On the campaign trail, Trump threatened to impose sharp tariffs on any company that shifted its factories to Mexico. And his advisers have since promoted lower corporate tax rates as a means of keeping jobs in the U.S.

Trump may have had some leverage because United Technologies, Carrier's parent company, also owns Pratt & Whitney, a big supplier of fighter jet engines that relies in part on U.S. military contracts.

Carrier said in a statement that more than 1,000 jobs were saved, though that figure includes headquarters and engineering staff that were likely to stay in Indiana.

The company attributed its decision to the incoming Trump administration and financial incentives provided by Indiana, which is something of a reversal, since earlier offers from the state had failed to sway Carrier from decamping to Mexico.

"Today's announcement is possible because the incoming Trump-Pence administration has emphasized to us its commitment to support the business community and create an improved, more competitive U.S. business climate," the company said.

In February, United Technologies said it would close its Carrier air conditioning and heating plant in Indianapolis and move its manufacturing to Mexico. The plant's workers would have been laid off over three years starting in 2017.

Whatever deal Trump struck with Carrier does not appear to have salvaged jobs at a separate branch of United Technologies in Huntington, Indiana, that makes microprocessor-based controls for the heating, air conditioning and refrigeration industries. That branch will move manufacturing operations to a new plant in Mexico, costing the city 700 jobs by 2018.

Huntington Mayor Brooks Fetters suggested that local officials lack the political clout to preserve those jobs.

"At a local level, there was not much that anybody was going to do to make global, publicly traded companies make a decision other than what they made for the benefit of their shareholders," Fetters said.

Donnelly said he worries about other factory job losses threatening his state. Bearing maker Rexnord, which has a factory near the Carrier plant in Indianapolis, plans to lay off about 350 workers. And electronics manufacturer CTS plans to eliminate more than 200 jobs at its Elkhart plant, he said.

Union leaders who represent the Carrier workers were not involved in the negotiations that the Trump team had with their employer.

Chuck Jones, president of United Steelworkers Local 1999, which represents Carrier workers, said of Tuesday's news: "I'm optimistic, but I don't know what the situation is. I guess it's a good sign. ... You would think they would keep us in the loop. But we know nothing."

Trump's deal with Carrier may be a public relations success for the incoming president. It also suggests that he has unveiled a new presidential economic approach: actively choosing individual corporate winners and losers — or at least winners.

To critics who see other Indiana factories on the verge of closing, deals like the one at Carrier are unlikely to stem the job losses caused by automation and cheap foreign competition.

The prospect that the White House might directly intervene is also a concern to some economists. The incentives needed to keep jobs from moving often come at the public's expense. They note that Trump's activism might encourage companies to threaten to move jobs overseas in hopes of receiving tax breaks or contracts with the government.

"It sets up a race to the bottom," said Diane Lim, chief economist at the nonprofit Committee for Economic Development.

Carrier's parent company indicated that moving production to Mexico would save the company $65 million annually. Because of pressures like that, states routinely give manufacturers incentives, and "economists who recoil at the thought of this are living in a dream world," said Scott Paul, president of the American Alliance for Manufacturing.

For Trump, a challenge will be trying to duplicate the Carrier feat many times over to retain and increase the nation's 12.3 million manufacturing jobs.

Since the start of 2015, the Labor Department has issued over 1,600 approvals for layoffs or plant closings as a result of shifts of production overseas or competition from imports, the American Alliance of Manufacturing noted.

But other forces, such as consumer demand and the value of the dollar, also determine whether assembly lines keep humming.

Payroll services provider ADP said Wednesday that manufacturers shed 10,000 jobs in November. U.S. manufacturers have struggled in the past year as a stronger dollar has cut into exports and domestic businesses have spent less on machinery and other equipment.

White House spokesman Josh Earnest said Wednesday that Trump would have to replicate the Carrier deal 804 times to meet President Barack Obama's record. He said that Obama created 805,000 jobs in manufacturing and that the figure is much higher if existing jobs that have been protected are included.

Trump acknowledged the extent of the problem on the campaign trail this year.

"So many hundreds and hundreds of companies are doing this," he said. "We have to stop our jobs from being stolen from us. We have to stop our companies from leaving the United States."

Carrier wasn't the only company Trump assailed during the campaign. He pledged to give up Oreos after Nabisco's parent, Mondelez International, said it would replace nine production lines in Chicago with four in Mexico. He criticized Ford after the company said it planned to invest $2.5 billion in engine and transmission plants in Mexico.

___

Boak and Pace reported from Washington, Slodysko from Indianapolis. AP writers Christopher S. Rugaber in Washington and Tom Davies in Indianapolis also contributed to this report.

17 Comments

Please with your WRAL.com account to comment on this story. You also will need a Facebook account to comment.

Oldest First
View all
  • Alfred Barnes Dec 1, 4:40 a.m.
    user avatar

    View quoted thread


    Seriously? How many more people are on public assistance, out of the work force? He doubled the national debt in 8 years. The list of Obama's failures are too numerous to mention, however, you're right, it's not his fault, it started with Reagan and got progressively worse with each succeeding POTUS. You should lay off the kool aid, and stop believing your own propaganda.

  • Alfred Barnes Dec 1, 4:34 a.m.
    user avatar

    View quoted thread


    Trump is always going to portray himself in the best light, that's just who he is. I suppose you'll have to get used to thinking for yourself, instead of being spoon fed.

  • Alfred Barnes Dec 1, 4:32 a.m.
    user avatar

    View quoted thread


    As opposed to the serial lies of the BLS, I suppose.

  • Alfred Barnes Dec 1, 4:31 a.m.
    user avatar

    View quoted thread


    Oh, is that what you do?

  • Alfred Barnes Dec 1, 4:30 a.m.
    user avatar

    View quoted thread


    So can you, in fact, why don't you?

  • Alfred Barnes Dec 1, 4:30 a.m.
    user avatar

    View quoted thread



    Who cares?

  • Pete Muller Dec 1, 12:13 a.m.
    user avatar

    Mr. Donovan. Seriously, Obama didn't do anything for working people? Where were you 8 years ago? Under the Obama administration 15 million jobs were created after the near collapse of the economic world. Without Obama, there wouldn't be a Ford Motor Corp anymore, neither Chrysler, nor General Motors. You should switch your TV channel from time to time.

  • Mare Procellis Nov 30, 11:58 p.m.
    user avatar

    View quoted thread


    That's rich. What are the unemployment figures these days? Housing starts?
    Truth is, Obama did what dem presidents do- get us out of a republican recession, only to have some supply side gopper put us in the economic toilet again.
    Since Trump is a proven serial liar, why should we believe anything he says?

  • Paul Donovan Nov 30, 10:09 p.m.
    user avatar

    Typical liberal MSM reporting. Obama was never able to help the working people in this country and here is a guy that is not even President yet working with Carrier and Ford ot save American jobs. Most probably based on a promise of following through on his promises of reduced taxes and regulation. The libs heads are exploding

  • Ken Ackerman Nov 30, 10:03 p.m.
    user avatar

    View quoted thread


    I'm not sure if it's intentional or not but because of his behavior in the past, we have no way to gauge the truth of anything he says.

More...