Carrier gets tax breaks, but it's still sending 1,300 jobs to Mexico

Reuters
Dec 1, 2016

Updated at 4:33 p.m.

WASHINGTON • Indiana state officials have agreed to give United Technologies Corp. $7 million worth of tax breaks to encourage the company to keep at least 1,069 jobs at its Carrier unit in Indianapolis, Carrier and the state said on Thursday.

President-elect Donald Trump has claimed credit for keeping well-paid manufacturing jobs in the country, but the deal is less than a complete victory for the Republican who campaigned on "putting America first."

In the election campaign, Trump vowed to impose hefty tariffs if Carrier did not reverse course on shifting jobs to Mexico. The deal means Carrier will still send an estimated 1,300 jobs there.

United Technologies chief executive Gregory Hayes said at an event that the company will invest more than $16 million over two years to keep its Indianapolis plant in the state.

The Indiana Economic Development Corp. said it has offered Carrier $5 million in conditional tax credits based on a plan to retain 1,069 jobs with an average wage of $30.91 per hour, spokeswoman Abby Gras said.

She declined to say how many of those jobs are at the plant or at the company's headquarters, but the Wall Street Journal reported the deal would save about 800 of the 1,400 jobs at the plant and about 300 at the headquarters.

Indiana is also offering $1 million in training grants to support workforce development and $1 million in tax credits, Gras said. The agreement has not been finalized yet.

Some other details of the deal in Vice President-elect and Indiana Governor Mike Pence's state were unclear but it has already been criticized on the left and right.

Trump and Pence celebrated the 1,000 jobs deal at an event in Indianapolis on Thursday, but employers elsewhere in Indiana are laying off five times as many workers because of foreign competition.

Trump "did just what he said he would do," Pence said, recounting his push to convince Carrier to remain in Indiana. "He made the case for America."

Neither Trump nor Pence made any reference to United Technologies' planned job cuts in Indiana.

U.S. Sen. Bernie Sanders of Vermont, who lost the Democratic presidential primary to Hillary Clinton, wrote in a Washington Post op-ed that "it is not good enough to save some of these jobs. Trump made a promise that he would save all of these jobs, and we cannot rest until an ironclad contract is signed to ensure that all of these workers are able to continue working in Indiana."

Republican Representative Justin Amish of Michigan tweeted: "Not the president(elect)'s job. We live in a constitutional republic, not an autocracy. Business-specific meddling shouldn't be normalized."

Reuters reported earlier this week that United Technologies would still would proceed with plans to close its Huntington, Ind., United Technologies Electronic Controls plant that employs 700.

Trump also faces pressure to prevent other job cuts. There are several other factories in Indiana that closing and Senator Joe Donnelly, a Indiana Democrat, urged him to take action to prevent other job losses. The United States has shed about 5 million manufacturing jobs since 2000. Indiana alone has lost about 150,000 factory jobs since 2000 to about 500,000.

The company's actually getting fucked from this deal, and the state is benefiting.

I don't see this is a viable tactic to keep jobs in the country, and it fails to address the underlying cause of inversions or outsourcing.

Quote from: Kupo & the Two G-strings on December 05, 2016, 02:39:16 PM

They stood to lose some of their billions in federal contracts by leaving, which was a major factor for their staying here, at least if Trump had put that on the table.

I'm very confused about what you think would have been a fair outcome. You and I have both expressed that the tax break is a drop in the bucket. Whether this was merely an attempt to stay in good graces with Trump for defense contracts is uncorroborated. The fact that they got "less taxes" is irrelevant; they're getting a net loss. And "fewer regulations"? What are you even referring to?

It's also pretty speculative that this incredibly minor deal could have been used to leverage $6B in contracts. But let me ask you this: if it was, how does that smack of crony capitalism any less than this deal? Because the government would have saved a measly ~$3M?