President-elect Donald Trump has reached an agreement with United Technologies (UTC) to keep 1,000 Carrier jobs in the state of Indiana, according to CNBC. Both Trump's transition and Carrier have confirmed that a deal has indeed been struck.
The company had planned on moving thousands of jobs to Mexico, to the chagrin of workers and labor groups. On Thanksgiving Day, Trump said via Twitter that he was “working hard” to “get Carrier A.C. company to stay in the U.S. (Indiana).” After days of negotiation with Carrier, he seems to have succeeded in keeping his campaign promise.
Manufacturing jobs have been increasingly exported to foreign countries, including China and Mexico over the last few decades. Hundreds of thousands of blue collar workers have been laid off as a result. American manufacturers say, however, that in order to stay competitive in the global economy they need to keep costs low. The most efficient way to do that is to hire cheap foreign labor. Carrier Corp was looking to follow this formula to keep profit margins in the green.
“The jobs at Carrier Corp. are on the way to Mexico because the company concluded that it could not stay competitive and reward its shareholders unless it took advantage of lower production costs south of the border,” reports CNBC. “Things are as simple as that…”
But Trump (or Mike Pence, who is still the governor of Indiana) managed to work his magic and convince Carrier’s parent company, UTC, to keep 1,000 jobs in Indiana where manufacturing jobs have been hemorrhaging for decades.
Promising a combination of tax relief and regulation easing, Trump made an offer UTC couldn’t refuse. Left-wing economic populists like Bernie Sanders pushed Trump to make Carrier stay in the United States, suggesting that it was something the Trumpian right and labor left could agree on. Rather than incentivizing the conglomerate, Sanders and his allies were looking to use UTC’s multi-billionaire business relationship with the Pentagon as leverage. While Trump had promised to deploy similarly coercive tactics, such as high tariffs and penalties on companies that ship jobs abroad, he ultimately took a free market approach to the problem.
During the presidential campaign, Trump called out Carrier by name and used the air conditioning company as an example of the worker unfriendly economic environment the United States has become.
“From the earliest days of his campaign, Donald J. Trump made keeping manufacturing jobs in the United States his signature economic issue, and the decision by Carrier, the big air-conditioner company, to move 2,000 of them from Indiana to Mexico was a tailor-made talking point for him on the stump,” explains The New York Times.
Championing a populist economic message, Trump vowed to keep more jobs here in the United States. While technology will likely continue replacing manufacturing jobs at a much faster rate than foreign labor ever could, the billionaire businessman’s Carrier deal is a symbolic victory for the “America first” Trump movement.
Without a doubt, it’s a good way to start a presidency. However, there’s only so much the federal government can do to alleviate the economic hardship of the Rust Belt, America’s manufacturing heartland. The steamboat of globalization and technological innovation cannot be tamed, let alone reversed. In short, there won’t be a manufacturing renaissance. That’s a pipe dream.
Nonetheless, it looks like Trump came through this time around.
Trump and future vice-president/current Indiana governor. Mike Pence plan on holding a event at the Carrier plant in Indiana on Thursday.