Hoosiers anxiously await today’s announcement by President-elect Donald Trump in Indianapolis about the incoming administration’s job-saving deal with furnace and air-conditioner manufacturer Carrier.
The plan for what happens afterward will be even more important.
Carrier Corp. produces heating, cooling and ventilation systems. Its parent company, Connecticut-based United Technologies, is also a defense contractor to the U.S. government. Ten percent of UT’s $56 billion annual revenue comes through its federal contracts, according to the Indianapolis Business Journal.
In February, Carrier stunned Indiana by announcing the company would move operations at its Indianapolis plant, which employs 1,400 people, to Mexico. Efforts by state officials — including Sen. Joe Donnelly, Gov. Mike Pence (now Trump’s vice president-elect) and Indianapolis Mayor Joe Hogsett — failed to persuade Carrier to keep production at the factory on Indy’s west side.
Then on Thanksgiving, Trump tweeted that he and Carrier officials were talking. On Tuesday, the company tweeted word that it had “reached a deal with President-elect Trump & VP-elect Pence to keep close to 1,000 jobs in Indy. More details soon.” Trump then stated he, Pence and the company would reveal the deal formally today.
Saving any Hoosier jobs is unequivocally good news. And, this step illuminates a central theme of Trump’s presidential campaign in which he railed about U.S. companies shifting operations to Mexico, China and other foreign countries. Troubling questions remain, though, some which may or may not be answered at today’s announcement.
Perhaps the most central question is, what will the new administration do about countless other U.S. manufacturers — those that didn’t garner the spotlight as a 2016 campaign topic — planning to move operations outside the country to earn greater profits by paying cheaper wages to workers in other nations? Indiana is home to some glaring examples.
United Technologies also operates a plant in Huntington that produces parts for heating, cooling and refrigeration. When Carrier announced its move from Indy to Monterrey, Mexico, in February, the parent company also said the Huntington operation would also move to Mexico by 2018. Another 700 Hoosiers would lose jobs, UT stated. The Fortune 500 company’s Twitter statement, and those by Trump, did not specifically mention the Huntington situation.
Another west-side Indianapolis manufacturer, Rexnord Corp., announced on Nov. 14 that operations at its bearings-producing plant would move to Mexico. Three-hundred Indiana workers will lose jobs.
Rexnord, Carrier and UT would save millions in labor costs by going south of the border. Wages for their Indiana workers, who are represented by the United Steelworkers union, top out at $25 and $26 per hour.
The details of Trump’s Carrier deal, which was apparently reached without input from the unions, will be watched closely by other workers from around the state and country.
It would be unrealistic to anticipate the president-elect swooping in like Spider-Man to rescue workers at Mexico-bound plants. The Carrier deal, by itself, cannot change the economic forces luring U.S. companies to cheapen their labor costs by shifting to nations where workers are paid a fraction of their American counterparts’ wages, or to automate production. High tariffs on U.S. businesses moving abroad, especially those that also contract with the U.S. government, were threatened by Trump during the campaign. Economists warn such tariffs can also cost jobs.
The problems are complex. Today’s announcement should elicit cheers for jobs saved and scrutiny for the path ahead.