Trump's Carrier Deal Flops As 600 Will Be Laid Off Next Month

by
The Carrier deal is turning out to be more of a fail as hundreds brace themselves for unemployment next month. Where's the master dealmaker?

President Donald Trump and Vice President Mike Pence walking through the Carrier plant in Indiana

There was much to do about President Donald Trump's "deal" to save American jobs at the Carrier manufacturing plant in Indianapolis, Indiana.

Even when it was first announced, to any with a more nuanced eye, the results looked rickety, but now the entire thing looks like it could be a colossal flop.

According to CNBC, more than 600 employees are preparing to be laid off next month despite assurances from the president that he saved their jobs.

Trump had promised that 1,100 workers would remain employed out of the 1,400 Carrier originally planned to lay off after closing the plant and exploiting cheaper labor Mexico.

"And by the way, that number is going to go up very substantially as they expand this area," he said to an enthusiastic crowd in December 2016. "So the 1,100 is going to be a minimum number."

The devil is always in the details though.

CNBC notes that Carrier, as part of the deal, must employ a minimum of 1,069 people in Indiana over the next 10 years if they are to receive $7 million worth of tax breaks. However, only 730 of those jobs are actual factory jobs, which were supposed to be the point of Trump's deal. The remaining 339 jobs require engineering and technical professionals and were never at risk to be axed.

Furthermore, United Technologies Corps, the parent company of Carrier, promised to invest $16 million in the plant as part of the deal, but there were no specifications as to how that money was to be invested. So, Carrier plans to channel that hefty sum toward automation efforts. The employees who are able to stay at Carrier for the time being can only watch as they are made obsolete.

"To me this was just political, to make it a victory within Trump's campaign, in his eyes that he did something great," said T. J. Bray, a Carrier employee who will remain employed for the time being due to his having worked for the company for 15 years. "I'm very grateful that I get to keep my job, and many others, but I'm still disappointed that we're losing a lot."

Trump campaigned on promises of being tough on big companies seeking to ship jobs overseas, but paying a company to stick around isn't a solution that the government would want to become reliant on. What if companies start demanding these incentives?

"If companies know they can do it and get money that's laying around on tables, money that's there for the taking, that hurts the tax base," explained Greg LeRoy, executive director of the nonprofit Good Jobs First, to CNBC.

LeRoy said states and local governments are shelling out approximately $70 billion annually to keep companies in the United States when that money would be a boon for the nation's education system, infrastructure, "and all the things that really do grow the economy over the long run, because they benefit all employers, not just those few that can game the system."

Many people voted for Trump because he claimed that he could bring back jobs and that he would not tolerate manipulation by companies only out for the bottom dollar. Yet his first attempt did nothing but lose Americans jobs and give the White House a story to spin.

Carbonated.TV
View Comments

Recommended For You