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

  • ASSOCIATED PRESS

    Carrier and President-elect Donald Trump reached an agreement to keep nearly 1,000 jobs in Indiana.

WASHINGTON >> 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.

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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.

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  • He needs to build the wall to keep the corporations from leaving instead of keeping the illegals out. These are the very corporations that are going to receive major tax cuts thanks to the Chump and republican majority of congress.

  • as if Trump is the only politician that took credit for stuff that was partially true. just a few examples with Obama: If you look worldwide, “the number of terrorist incidents have not substantially increased” Oct 2016 [false], “the steel industry is producing as much steel in the United States as it ever was” Jul 2016 [false],”during my administration we boosted U.S. exports to Canada and Mexico by about 50 percent. That supports about 2.8 million American jobs.” Jul 2016 [false] … blah, blah. they all lie, tell half truths, etc. SA please find more newsworthy articles.

  • During the campaign, Trump assailed “stupid” politicians for using tax abatement to keep companies from moving. He said he would threaten companies with heavy tariffs instead. The Carrier deal was a tax abatement deal from the State of Indiana, where Pence is still Governor, not from the Federal government. Carrier is a tiny side business in the portfolio of United Technologies, a giant military contractor; they will be paid back for giving Trump this phony “win” that he had little to do with.

  • I love the fact President-Elect Trump continues to refuse to grant the American media on-camera interviews.

    I just LOVE it! Media outlets live and die based on the number of on-camera interviews they can score. Trump knows this and is denying the media their ability to make a profit.

    • Trump has over 36 m followers among tweeters (16.4) , facebook (15.7) and instagram (4.2).Not counting his children. He is growing on Tweeter at the rate of 3.6 M per month and is currently ranked #83 in the world among 330 m active tweeters. The Washington Post has 500,000 subscribers. The NY Times is a failing rag. Who needs the press? POETUS Trump communicates directly to his core. Bawaha. The liberal bias is fast becoming irrelevant. The SA is a joke. Trump will rewrite the manner, mode and style of commnicating directly to the American citizenry without the press being involved. Eat crow! #MAGA.

  • To those who wonder why Google, Apple and other American mega-companies keep most of their money/cash in international tax havens….try and ask yourself if maybe, maybe the US Government is overtaxing businesses? It’s the same with the government forcing fast food companies to raise their minimum wage to unsustainable levels. The companies will simply fire all human employees and use robots, instead.

  • Liberal media can put a negative spin on everything. Just that Trump is attempting to keep manufacturing jobs in America is a huge step forward and far more that the current administration did for eight years. Get ready liberals. Change is coming and America WILL be Great Again!!!!

  • this newspaper is so biased its amazing. an article for the democrats is always positive, articles for republicans always has a negative tilt. Would be nice just to get facts all the time and not skew it towards the writers or editors opinions.

  • It’s wonderful that Mr. Trump’s version of income redistribution (taking my money to pay Carrier workers) doesn’t seem to upset Trump supporters. Trump has not explained what his “deal” was, and now the State of Indiana has reported their part of the deal to keep these 800 jobs (not 1000 jobs as Mr, Trump reported) is going to cost the taxpayers of Indiana $700,000 a year – at least.

    So income redistribution is OK for a man who does not pay federal taxes and has no skin in the game? Brilliant!

    Who is going to decide which companies get paid off? Mr. Trump is going to pay them off (with the money coming from other people, of course) individually?

    • Klastri you are absolutely correct. The Chump continues his charade and the gullible Chumpsters are in awe. The Chumpsters are also the people who believe that professional wrestling is for real.

  • As the press continues their battle against Trump, they wonder why he has held no press conferences. Why don’t they back off and let give him a fair chance to govern rather than publishing these tabloid news articles.

  • In his campaign, here’s how Trump campaigned against the sort of deal that he and Pence just made with Carrier: “Remember, they’d give the low-interest loans. ‘Here’s a low-interest loan if you stay in Pennsylvania, here’s a zero-interest loan, you don’t have to pay. Here’s a this, here’s a tax abatement of any kind you want, we’ll help your employees.’ It doesn’t work, folks. That’s not what they need. They have money. They want to go out, they want to move to another country and because our politicians are so dumb, they want to sell their product to us and not have any retribution, not have any consequence. So all of that’s over.”

    Now Trump, using Indiana taxpayers’ money, has made exactly the sort of deal that he railed against in his campaign, granting huge tax abatements to a military-industrial giant that has paid an effective corporate tax rate of only 10% over the past fifteen years while it sheltered $30 billion in profits in offshore tax shelters.

    Like professional sports owners who threaten to move to another city if they don’t get a new, taxpayer-funded stadium, United Technologies played Trump like a chump.

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