Carrier gets a sweet deal from President-elect Trump and VP-elect Pence to keep jobs in Indiana.
In the end, UTC agreed to retain approximately 800 manufacturing jobs at the Indiana plant that had been slated to move to Mexico, as well as another 300 engineering and headquarters jobs. In return, the company will get roughly $700,000 a year for a period of years in state tax incentives.But Indiana is still losing more jobs than it is gaining. It will keep 1,100 jobs and lose 1,300.
Some 1,300 jobs will still go to Mexico, which includes 600 Carrier employees, plus 700 workers from UTEC Controls in Huntington, Ind. The company has plans in place to offer displaced workers employment and relocation in UTC’s aerospace business, or to provide funding for reeducation.Apparently Carrier isn't new to this game. They've already gotten lots of tax breaks. But, with Trump's campaign posturing, they were able to get more.
This is congruent from what we know about the sort of tax breaks Indiana and Indianapolis has already offered the firm. Back in 2011, the city gave the company a six-year property tax abatement, which allowed them to forgo paying $1.2 million in taxes, according to the Indianapolis Star. The company has also taken advantage of funds the state allocates for job retraining, and had reached a deal with Indiana to return several hundred thousand dollars for contributions it made to the company’s retraining programs as a part of the state’s Skills Enhancement Fund.Though most small businesses would jump through hoops to get a $63,600* subsidy per employee for years, it may be small potatoes for Carrier's parent company. The real problem is the stick of a Trump administration taking away United Technology's military contract business if the company doesn't make Trump look good on this.
Furthermore, there is reason to believe that this deal isn’t just about the tax breaks. The New York Times points out that United Technologies may very well be more concerned with angering the President than it is with saving the small amount of money relative to its overall revenue that the Mexico-relocation would provide. “While Carrier will forfeit some $65 million a year in savings the move was supposed to generate, that’s a small price to pay to avoid the public relations damage from moving the jobs as well as a possible threat to United Technologies’ far-larger military contracting business,” according to the Times.Isn't this exactly the sort of carrot/stick strategy Republicans and conservatives would have praised had it been the Obama administration "urging" energy companies to support policies combating climate change (né global warming)?
Good life in the swelling swamp.
*This is for jobs paying $20 to $25 per hour. That's $800 to $1,000 per 40 hour week; $41,600 to $52,000 per year before withholding. So, depending on fringe benefits these are likely "free" employees.
Even with that, however, once the layoffs were to begin in mid-2017, most of the workers would have had a hard time finding jobs that paid anywhere near the $20 to $25 an hour that veteran line workers earn.Most anyone could run a profitable business with free labor. Nice!