Trade Fury From Factory Closing
icans, like more affordable goods, and led to a more advanced economy. But a chronic trade deficit and an overvalued dollar have caused factory jobs to dry up, contributing to a deep divide between the political and economic elite and the rest of the nation.
Consider the case of Ms. Shanklin-Hawkins. She applauds Mr. Trump’s message on trade, but plans to vote for Senator Bernie Sanders of Vermont, who similarly blasts free trade, but from the left. The two candidates may be political opposites, but when it comes to the downside of globalization, the two men are speaking to her with one voice.
Many Carrier workers say they applauded a leading presidential candidate acknowledging how much economic ground they’ve lost — and promising to do something about it. Mr. Trump has repudiated decades of Republican support for free trade, calling for tariffs on Mexican-made goods.
Opposition to trade deals has galvanized supporters of Mr. Sanders. And it has forced his rival, Hillary Clinton, to distance herself from trade agreements she once supported, like the proposed 12- nation Trans-Pacific Partnership and the North American Free Trade Agreement.
Mark Weddle, 55, started work at Carrier 24 years ago and earns $21 an hour running a machine that makes heat exchangers. When it comes to Carrier, “we’ve all worked our butts off,” he said. “And now they’re going to throw us under the bus? If Trump will kick Carrier’s ass, then I’ll vote for him.”
That’s pretty much what Mr. Trump has threatened to do. At rally after rally, he vows to impose a 35 percent tax on Carrier products from Mexico.
The relentless loss of American manufacturing jobs, however, goes back nearly half a century, driven largely by forces beyond the control of any president. The advances of technology, the diffusion of industrial expertise around the world, the availability of cheap labor and the rise of China in manufacturing would have disrupted the nation’s industrial heartland even without new trade deals.
Nor are tariffs likely to bring jobs back, said David Autor, a professor of economics at the Massachusetts Institute of Technology.
“When I learned about the impact of trade agreements, the theory was that workers would be ‘released’ into the labor market and hired back at slightly lower salaries,” Mr. Autor said. “That’s not what happened.”
Indianapolis is far better off than many other industrial cities. It has made the transition to an economy powered by services like health care and banking. The city’s unemployment rate is 4.6 percent, below the national average of 4.9 percent.
But many of the new jobs don’t pay nearly as well as Carrier does. Next to the 49-yearold Carrier plant is an Amazon warehouse that opened in 2011, but salaries there average just over $15 an hour. Carrier workers typically earn $20 an hour or more.
Indiana politicians, who granted Carrier tax breaks and other incentives, are furious at the company and want their money back. ”
Carrier has said it will return public money in cases where the company has not kept its commitments to invest. But that’s small change for United Technologies, with sales of $56 billion annually.
The first layoffs won’t begin until 2017, and the final shuttering of the factory isn’t expected until 2019. In addition, United Technologies has offered to cover the cost of at least four years of schooling for workers.
Recently in New York City, United Technologies hosted its investor day, in which management tells analysts and shareholders why their stock is a good buy. Carrier’s message: Moving jobs south of the border is a major part of its strategy to increase profits.
Over all, United Technologies earned nearly $7.6 billion last year, and $2.9 billion of that came from the division that includes Carrier. Margins in the unit have steadily expanded.
But that’s not good enough, said Howard Rubel, a senior analyst at the investment bank Jefferies. “The stock hasn’t done well.”
United Technologies’ board cut the bonus of its chief executive, Gregory J. Hayes, by nearly half for 2015. Still, with compensation of $5.7 million, he made more than Carrier’s workers could earn in several lifetimes.
In Indiana, smaller bonuses for top executives are the last thing state Representative Karlee Macer wants to hear. Her district includes the Carrier plant, and manufacturing jobs aren’t like other positions available to Americans who lack a college degree, she said. They pay more. “Is everybody who is not a white- collar worker supposed to earn $12 an hour?” she asked.