Carrier to cut jobs Trump ‘saved’
CARRIER, the company President Donald Trump pledged to keep on American soil, informed the state of Indiana this week that it will soon begin cutting 632 workers from an Indianapolis factory. The manufacturing jobs will move to Monterrey, Mexico, where the minimum wage is $3.90.
That was never supposed to happen, according to Trump’s campaign promises. He told Indiana residents at a rally last year there was a “100 percent chance” he would save the jobs at the heating and air conditioning manufacturer.
About 1,400 positions were on the chopping block, per company estimates. Over the last year, Trump has claimed he could maintain at least 1,100 of those jobs in the US But on Monday, the company gave official notice to Indiana officials that it would start laying off workers at the factory on July 20 and keep slashing staff until approximately 800 employees remain.
“This action follows a thorough evaluation of our manufacturing operations,” wrote Steven Morris, a Carrier manager in Indianapolis, in a memo to Indiana’s department of workforce development, “and is intended to address the challenges the business faces in a rapidly changing industry”.
The dismissals, he added, are “expected to be permanent”.
Trump’s saga with Carrier began last spring, when he declared to an Indianapolis crowd he would stop the firm from moving in search of cheap labour.
“Here’s what’s going to happen,” Trump said at the Indiana rally last April. “They’re going to call me and they are going to say ‘Mr President, Carrier has decided to stay in Indiana’.”
He kept going. “One hundred percent,” Trump said. “It’s not like we have an 80 percent chance of keeping them or a 95 percent. 100 percent.”
After the election, Trump took credit for rescuing the Carrier jobs, tweeting on Thanksgiving that he had called the company’s leadership to cut a deal.
United Technologies, Carrier’s parent company, agreed to spare some of the positions in exchange for $7 million in state tax credits. (If the company outsourced any of those jobs over the next 10 years, it would have to pay back the money, according to the IEDC.)
A celebratory Trump visited the factory in December and announced that, thanks to his negotiating, more than 1,100 of the jobs would stay in the heartland.
“Carrier stepped it up, and now they’re keeping over 1,100 people,” Trump told an audience of cheering factory workers.
He said those numbers could go even higher, noting that United Technologies had agreed to invest roughly $16 million into updating the plant.
“And by the way, that number is going to go up substantially as they expand this area, this plant,” Trump said. “The 1,100 is going to be a minimum number.”
But later that month, Greg Hayes, chief executive of United Technologies, admitted that the $16 million investment would go towards automation.
“What that ultimately means is there will be fewer jobs,” he told CNBC’s Jim Cramer.
Chuck Jones, president of the United Steelworkers 1999, which represents Carrier employees in Indianapolis, then provided further evidence that Trump had inflated the number of jobs that would remain in Indianapolis. Only 800 Carrier employees would be able to keep their jobs – 770 factory workers plus 30 or so more employees, counting supervisors, according to the union count.
The full extent of the layoffs emerged on Monday with Carrier’s announcement of 632 job losses. The company did not specify how many jobs, exactly, would stay in Indianapolis, but United Technologies told the Post in December that number was close to 800.
Michael Strain, director of economic policy studies at the right-leaning American Enterprise Institute, said Trump’s deal with Carrier offered a partial solution to a broader problem.
“I wouldn’t even call it a deal,” Strain said. “It seemed to be that Carrier was responding to political pressure and did so in a way that allowed them to make it through a political moment.”