Carrier Corporation will be laying off 215 employees at its facility located in Indianapolis. The facility will continue to keep its doors open, with a total employee headcount of roughly 1,100.
This round of job cuts will impact employees working on the fan coil manufacturing production lines. The jobs will be relocated to a facility owned by Carrier in Mexico.
When employees were made aware of the coming changes within the business, approximately 60 impacted employees decided to take advantage of the company’s Employee Scholar program. This would result in the employees obtaining an education and being reimbursed for any related expenses. Once the impacted employees are removed from the payroll system, they will receive a one-time payment, severance pay, and six months of medical insurance.
— Tony Cook (@indystartony) January 10, 2018
Are These Carrier Layoffs a Surprise?
This Carrier layoffs announcement shouldn’t be a surprise. Back in 2016, an announcement was made to close and move production to Mexico. At the time, there were roughly 1,600 employees at the factory plant.
This was the same Carrier factory plant that was in the news due to criticism from then-presidential candidate Donald Trump. He wanted Carrier to keep the jobs in America in order to benefit the country’s economy. Of course, Carrier is a business and its No. 1 focus is improving the top and bottom line of its financial statements. Words from a presidential candidate were not going to change the minds of the senior managers; actions would.
A few weeks later, Donald Trump won the presidency and visited the plant in Indianapolis to announce a tax-incentive benefit. This made the management team change their mind of relocating to Mexico. However, the agreement would only help save roughly 800 production jobs.
Since only 800 jobs were saved because of President Trump, Carrier looked at the rest of the employees to determine what could be done in order to make the business more efficient. In July of 2017, Carrier made the decision to lay off 340 employees. This round of job cuts did not include the jobs President Trump saved.
In the future, there is a possibility of seeing more jobs cuts because of tax breaks being received from the state of Indiana. The tax incentives include $7.0 million in state tax breaks and grants over the next decade. On the other end of this deal, Carrier is planning to spend $16.0 million to make the plant automated. This would then require further employees at the plant.
Carrier is a subsidiary of United Technologies Corporation (NYSE:UTX), which is also planning on relocating jobs to Mexico. The plant is located in Indiana and has approximately 700 production workers. Unless President Trump sets out to help UTX as he did Carrier, there is a high probability of seeing the jobs relocate.
“Carrier laying off 215 employees,” The Hill, January 10, 2018.
“New layoffs at Indiana Carrier factory year after Trump deal,” Houston Chronicle, January 10, 2018.