He made the company a punchbag during his anti-globalisation election crusade, and now takes credit for saving jobs. But how did it happen, and who really won? Photograph Evan Vucci/AP
David Smith – The Guardian: Saturday, December 3, 2016: Donald Trump scored an early public relations win this week as he took the credit for persuading a US firm not to outsource jobs to Mexico. But the case – and its implications – are more complex than they first appeared.
How did an air conditioner manufacturer become a big political story?
In February, United Technologies, parent company of Carrier Corporation, a furnace and air conditioner maker, announced the closure of a plant in Indianapolis with the loss of 1,400 jobs, along with a factory in the northeastern Indiana city of Huntington with a further 700 casualties. A video of angry workers being informed about the decision soon went viral.
Carrier told Indiana officials that it would save $65m a year by shifting production to a 645,000-sq foot factory under construction outside Monterrey, Mexico, where wages are much cheaper. Carrier rejected a tax incentive package from the state.
Enter Republican candidate Donald Trump, who sued Carrier over a malfunctioning air-cooling system at the Trump International Hotel in New York in 2007. On Twitter he condemned the company and said such closures would not happen if he was president. Indiana governor Mike Pence blamed federal regulations as a factor, but Democratic senator Joe Donnelly blamed the action on the company seeking to cut labour costs.
Why didn’t the issue go away?
Trump turned Carrier into a punchbag during his election campaign crusade against globalisation, trade deals and outsourcing to Mexico, promising to restore manufacturing and “put America first” in his appeal to blue collar workers in the midwest. Since 2000, Indiana has lost 150,000 manufacturing jobs; 5m disappeared nationally over the same period.
In April, Trump was cheered at an Indianapolis campaign rally when he said he would impose a stiff import tariff on goods made by American manufacturers that moved jobs offshore. He essentially clinched the Republican nomination by winning the Indiana primary election on 3 May.
But Carrier and the United Steelworkers Local 1999 union reached a severance package deal for the Indianapolis plant workers, including reimbursement for education and technical training. Job cuts were scheduled over three years starting in 2017.
Trump stunned the world with his 8 November election win. On 24 November, Thanksgiving Day, he tweeted: “I am working hard, even on Thanksgiving, trying to get Carrier A.C. Company to stay in the U.S. (Indiana). MAKING PROGRESS – Will know soon!”