Indiana Agrees To $7 million Tax Break To Keep Carrier Jobs In State

by
Reuters
Indiana state officials have agreed to give United Technologies Corp (UTX.N) $7 million worth of tax breaks over 10 years to encourage the company to keep about 1,100 jobs at its Carrier unit in Indianapolis, Carrier said on Thursday.

President-elect Donald Trump has claimed credit for keeping well-paid manufacturing jobs in the country, but the deal is less than a complete victory for the Republican who campaigned on "putting America first."

In the election campaign, Trump vowed to impose hefty tariffs if Carrier did not reverse course on shifting jobs to Mexico. The deal means Carrier will still send an estimated 1,300 jobs there.

Carrier said the state had offered Carrier $7 million package "contingent upon factors including employment, job retention and capital investment."

United Technologies chief executive Gregory Hayes said at an event that the company will invest more than $16 million over two years to keep its Indianapolis plant in the state.

Some other details of the deal in Vice President-elect and Indiana Governor Mike Pence's state were unclear but it has already been criticized on the left and right.

Trump and Pence were celebrating the 1,000 jobs deal at an event in Indianapolis on Thursday, but employers elsewhere in Indiana are laying off five times as many workers because of foreign competition.

Trump "did just what he said he would do," Pence said, recounting his push to convince Carrier to remain in Indiana. "He made the case for America."

Leftist Senator Bernie Sanders of Vermont, who lost the Democratic presidential primary to Hillary Clinton, wrote in a Washington Post op-ed that "it is not good enough to save some of these jobs. Trump made a promise that he would save all of these jobs, and we cannot rest until an ironclad contract is signed to ensure that all of these workers are able to continue working in Indiana."

Republican Representative Justin Amish of Michigan tweeted: "Not the president(elect)'s job. We live in a constitutional republic, not an autocracy. Business-specific meddling shouldn't be normalized."

The Wall Street Journal said United Technologies still plans to cut 600 jobs at the Indianapolis plant that employs 1,400. Reuters reported earlier this week that United Technologies would still would proceed with plans to close its Huntington, Indiana United Technologies Electronic Controls plant that employs 700.

Trump also faces pressure to prevent other job cuts. There are several other factories in Indiana that closing and Senator Joe Donnelly, a Indiana Democrat, urged him to take action to prevent other job losses. The United States has shed about 5 million manufacturing jobs since 2000. Indiana alone has lost about 150,000 factory jobs since 2000 to about 500,000.

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