Despite Federal Promises, Employee Cuts on the Way
President Donald Trump held up the Carrier Corporation plant in Indiana as a shining example of his negotiation skills, promising to keep at least 1,100 jobs in the state. But now, numbers show that as many as 632 jobs will be slashed, bringing the total number of factory workers down to roughly 800.
Carrier, a heating and air conditioning company, had an estimated 1,400 jobs ready to be slashed before Trump promised “100%” that he would save jobs should he win the election. Fast-forward to Trump’s victory, Carrier announced that it would keep jobs in the state in return for a $7.0 million tax credit.
Trump then took credit for saving hundreds of jobs from being outsourced. New information is now coming in, showing that of the original 1,400 jobs that were at risk, only 800 of those will remain, while engineers and headquarter staff—jobs that were never set to be cut in the first place—are being counted in that “1000+ saved jobs” number.
Trump then touted the $16.0 million that would be invested by United Technologies Corporation (NYSE:UTX), Carrier’s parent company, back in the plant as another win for Indiana workers.
But in an interview with CNBC, United Technologies CEO Greg Hayes revealed that the money is going towards automation and will likely end up costing the plant more jobs, not adding them.
Officials are maintaining that the numbers are consistent with the agreed upon amount of job cuts that Trump and Carrier came to, but many union representatives and critics see this as a misrepresentation of the facts due to the higher-than-advertised cuts to factory workers.
And Carrier’s woes are exemplary of a larger trend in Indiana manufacturing jobs, where blue-collar work once dominated. Over 50 years ago, about a third of Indiana workers had jobs in manufacturing. Nowadays, that number has dwindled to around 10%.
Another plant, the ball bearing manufacturer Rexnord Corp (NYSE:RXN), sits about a mile away from the Carrier facility and will always be shedding jobs. Rexnord will dismiss the last 100 of its 300 employees in Indianapolis this summer, completing its production shift to Mexico.
As globalisation makes it easier than ever to take advantage of competitive wages in foreign countries, Trump must find novel ways to combat this or risk failing on one of his primary campaign promises to revitalize blue-collar work in the U.S.
“Trump said he would save jobs at Carrier. The layoffs start July 20,” The Washington Post, May 24, 2017.