Carrier Agrees To Keep Some Jobs In Indiana At Taxpayer Expense

Fortune: Trump Offered Carrier Massive Corporate Tax Cuts And $700,000 Per Year From Indiana Government To Keep Less Than Half Of Factory Jobs In U.S. According to details first reported by Fortune magazine editor Alan Murray, the deal to keep Indiana-based air conditioning manufacturer Carrier operational in the state included the promise of $700,000 per year in “state tax incentives” and a corporate tax windfall from the incoming Trump administration in excess of $65 million per year for parent company United Technologies (UTC). The taxpayer-funded subsidies negotiated by CEO Greg Hayes will preserve 1,100 jobs in Indiana as the plant moves 1,300 jobs to Mexico as originally planned. From the November 30 article:

[United Technologies CEO Greg] Hayes explained that the jobs were lower-wage and had high turnover, and the move was necessary to keep the plant competitive, according to the source. He said the plan would save the company $65 million a year.

President-elect Trump replied that those savings would be dwarfed by the savings UTC would enjoy from corporate tax-rate reductions he planned to put in place. During the recent campaign, Trump threatened to slap tariffs on Carrier imports from Mexico.

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In the end, UTC agreed to retain approximately 800 manufacturing jobs at the Indiana plant that had been slated to move to Mexico, as well as another 300 engineering and headquarters jobs. In return, the company will get roughly $700,000 a year for a period of years in state tax incentives.

Some 1,300 jobs will still go to Mexico, which includes 600 Carrier employees, plus 700 workers from UTEC Controls in Huntington, Ind. The company has plans in place to offer displaced workers employment and relocation in UTC’s aerospace business, or to provide funding for reeducation. [Fortune, 11/30/16]

Politico: United Technologies Was Protecting Lucrative Federal Contracts, Not Air Conditioning Jobs. According to reporting from Politico, a board member of the Indiana Economic Development Corp. (IEDC), which will be tasked with providing the $700,000 in reported annual tax breaks to Carrier, believes UTC’s decision to keep some jobs in the United States is driven by the prospect that the company “could lose a portion of its roughly $6.7 billion in federal contracts” under a Trump administration. From the November 30 article:

But John Mutz, a former Indiana lieutenant governor who sits on the agency’s 12-member board, told POLITICO that Carrier turned down a previous offer from IEDC before the election. He said he thinks the choice is driven by concerns from Carrier’s parent company, United Technologies, that it could lose a portion of its roughly $6.7 billion in federal contracts.

“This deal is no different than other deals that we put together at the IEDC to retain jobs, but the fact is that the difference is that United Technologies depends on the federal government for lots of business,” Mutz said. [Politico, 11/30/16]

WSJ: Indiana Officials Commit To $7 Million Over Ten Years “To Keep 1,000 Jobs In The State.” According to reporting from The Wall Street Journal, Indiana officials have committed to providing UTC with the $700,000 in annual tax breaks every year for the next decade “to keep about 1,000 jobs in the state.” According to the Journal, the tax incentive covers 800 workers at a Carrier furnace plant in Indianapolis as well as 300 other positions that were never actually being moved to Mexico. [The Wall Street Journal, 12/1/16]

Broadcast And Cable News Shows Praise Trump Anyway For Keeping A Major “Campaign Promise”

NBC’s Chuck Todd: Taxpayer-Funded Subsidies For Carrier An “Unadulterated Win” For Trump. NBC News political director and MSNBC host Chuck Todd claimed that the deal to keep roughly half of Carrier and UTC’s jobs in Indiana at taxpayer expense was an “unadulterated win” for Trump even if this kind of “transactional governing” may not be “a sustainable strategy.” From the November 30 edition of MSNBC’s MTP Daily:

CHUCK TODD (HOST): Donald Trump will be in Indiana tomorrow to announce a deal with the air conditioner company Carrier that will keep close to 1,000, perhaps even more than 1,000, according to Carrier -- more than 1,000 jobs in Indiana rather than move them to Mexico. Obviously, a big win for the incoming administration and the incoming president, and for Trump supporters, and for the thousand or so Rust Belt residents who aren’t about to be put out of work. There are still going to be some that are, but of course the devil may be in the details.

United Technologies, which owns Carrier, makes billions in revenue from the federal government. The Pentagon is their largest customer. We don't know exactly what was agreed upon, and you know, we’ve got to wait for that. But what did Donald Trump promise, did he overpromise? What might be the unintended consequences of this deal? As the University of Michigan’s Justin Wolfers tweeted, “Every savvy CEO will now threaten to ship jobs to Mexico, and demand a payment to stay.” The point is, it may not be a sustainable economic strategy, but politically this is a win for Trump. Unadulterated win. Promise made, promise kept. Got to give him credit for that. We just have to be on the lookout for the long-term consequences of this type of transactional governing. [MSNBC, MTP Daily, 11/30/16]

CBS Evening News: “The President-Elect Is Making Good On A Campaign Promise To Keep Jobs From Leaving The Country.” During the November 30 edition of CBS Evening News, guest anchor Anthony Mason claimed that “the president-elect is making good on a campaign promise to keep jobs from leaving the country” while introducing a segment on Carrier. During the segment, correspondent Dean Reynolds noted that Carrier “will not be moving as much manpower to Mexico” thanks to “generous incentives … estimated in the millions of dollars” from American taxpayers. [CBS, CBS Evening News, 11/30/16]

MSNBC’s Joe Scarborough: Carrier Deal Is “Highly Symbolic” For Trump. MSNBC host and Trump apologist Joe Scarborough lamented that “many in the press” would refuse “to say anything positive” about the Carrier deal, which he argued was “highly symbolic” for the incoming president. Scarborough agreed with guest Harold Ford Jr.’s claim that the Carrier deal, which included millions of dollars in taxpayer handouts, is clearly “positive” despite both complaining about unsustainable government spending and the national debt. [MSNBC, Morning Joe, 12/1/16]

CNN’s Rebecca Berg: Carrier Decision Is “A Huge Symbolic Coup” For Trump. CNN analyst and RealClearNews reporter Rebecca Berg claimed the Carrier decision amounts to “a huge symbolic coup for Donald Trump” and said it “gets his administration off on the right foot” even though salvaging 1,000 jobs at taxpayer expense does not address “underlying economic problems.” From the December 1 edition of CNN’s New Day:

ERROL ​LOUIS: Governor Mike Pence might have done what many governors have done for many years now, even as the country has lost 5 million manufacturing jobs, which is to try and buy them back -- to try to give them incentives to slow the pace, to change the pace. ​​Let's keep in mind, this is a thousand jobs that were saved, but a thousand are also going. It was my understanding of the math -- 2,000 were going to leave;1,000 are going to stay. ​​There is a question about the sustainability of that. And, again, who is actually paying for this?

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REBECCA BERG: Even if it's not necessarily, at this point, addressing the underlying economic problems here, it's a huge symbolic coup for Donald Trump. I mean, Carrier was part of his stump speech on the campaign trail and to be able to go out there to Indiana, and speak directly to these workers, and say, “I am the reason your jobs are still here.​​” I mean, there's no way that is a bad thing for Donald Trump.​​ And the fact that he was able to do this before he is even sworn in as president, it gets his administration off on the right foot. [CNN, New Day, 12/1/16]

Fox’s Melissa Francis: “Lazy And Stupid” Obama Administration Could Never Have Negotiated This Deal. Fox Business contributor Melissa Francis claimed that the Obama administration “was both too lazy and too dumb to do things like this,” and she argued that the deal supposedly struck by Trump “makes economic sense.” From the December 1 edition of Fox News’ America’s Newsroom:

MELISSA FRANCIS: Let me be very blunt: [The Obama administration has] been lazy and stupid with these deals. You can structure a deal so that it makes economic sense to keep these jobs here. Yeah, you're paying the labor way more, but that labor is more skilled, you're saving on transportation, you can save on taxes, you can make it make sense. But you have to sit down and look at the deal. The Obama administration was both too lazy and too dumb to do things like this. This is exactly what Trump's going to do going forward, and it makes economic sense, that's what's important and best for our country overall. [Fox News, America’s Newsroom, 12/1/16]

Fox’s Steve Doocy: “Christmas Came Early” For Carrier Employees Thanks To Trump And Pence. Fox & Friends co-host Steve Doocy framed Carrier’s decision to keep less than half of its workforce in Indiana as a major win for Trump, claiming “Christmas came early” for roughly 1,000 employees thanks to Trump and Vice President-elect Mike Pence. Later in the segment, co-host Ainsley Earhardt said the Ford Motor Co.is now planning to keep an assembly line open in Kentucky, but, as Fox News has already reported, Ford was never planning to close that plant. From the December 1 edition of Fox News’ Fox & Friends:

STEVE DOOCY (CO-HOST): Christmas came early for a thousand Carrier employees out in the great state of Indiana when it was revealed that Donald Trump and Mike Pence have saved a thousand of their jobs.

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AINSLEY EARHARDT (CO-HOST): You talk about Ford -- Lincoln is going to stay, the Lincoln division is going to stay in Kentucky. [Fox News, Fox & Friends, 12/1/16; Fox News, Shepard Smith Reporting, 11/18/16]