Bait and switch: Trump’s Carrier deal

Trump at CarrierBy Don McIntosh

“You’re going to pay a damn tax when you leave this country.” That’s what presidential candidate Donald Trump said about the Carrier firm at an April 2016 rally — after Carrier announced plans to close its Indianapolis factory and move production to Mexico.

Union manufacturing workers have waited a very long time to hear those words from a presidential candidate. More than 5 million U.S. manufacturing jobs have been lost since NAFTA’s passage. The 1,400 Carrier workers, members of  United Steelworkers Local 1999, were to be next.

Trump, like most other Americans, learned of the planned closure after Carrier employee LaKeisha Austin posted a video of a Feb. 10 plant meeting on Facebook.

“The best way to stay competitive,” says a Carrier exec to a room full of factory workers in the video, “is to move production from our facility in Indianapolis to Monterrey, Mexico.” In the video, the workers erupt, yelling and angry. The man in the suit tells them to quiet down. “Yeah, f**k you!” one man can be heard yelling back.

The video went viral, getting over 5 million views. And the very day LaKeisha Austin posted it, Indiana Trump supporter Jack Crenshaw told visitors to her Facebook feed that they should contact Trump about the closure.

Two months later, Trump was at the Indiana State Fairgrounds for a campaign rally. If he were president, Trump said, he’d call up the head of Carrier and threaten to tax the hell out of products coming back to the United States from off-shored factories. Other politicians want to give incentives. Not Trump.

“There have to be consequences when they leave,” Trump declared.

Trump’s tough talk about trade policy undoubtedly contributed to his 57 percent win in Indiana. In Ohio and Wisconsin, up to half the voters in union households voted for Trump, the billionaire who had pledged to “rip up” America’s failed trade agreements.

After the election, Carrier employees wondered if Trump would remember them. Trump saw one of them say so on the news.

Then, in a Thanksgiving Day tweet, Trump announced he was in talks with Carrier. He tweeted that he’d be returning to Indianapolis to make an announcement. Then he tweeted a sneak peek of the announcement:

chuck jones
United Steelworkers Local 1999 president Chuck Jones.

United Steelworkers Local 1999 President Chuck Jones hadn’t voted for Trump, but he praised the president-elect for intervening.

Then Jones, and the rest of the world, learned the details of the deal. So much for Mr. Tough Guy. Gone were the threats to “tax the hell out of” goods from runaway factories. Trump’s deal with Carrier would involve $7 million in state tax breaks and training grants — the same “incentive” approach he had derided politicians for in April.

Visiting Carrier’s Indianapolis plant to make his official job-saving announcement Dec. 1, Trump made no mention of the $7 million state subsidy. But he heaped praise on the CEO of Carrier’s parent company,  United Technologies, in front of about 150 company supervisors and production workers. He attributed the company’s change of heart to two other factors: A Trump plan to lower corporate income tax rate from 35 percent to 15 percent, and a Trump plan to get rid of regulations. Trump got a lot of details wrong. He said he’d never promised to save the Carrier jobs [he had; you can watch it on his own video feed.] Several times he said Carrier had announced the planned closure a year and a half ago. [It was nine months ago.] And, even though he’d just walked through the factory and had negotiated a commitment to keep it open, he seemed to think the factory makes air conditioners. [Carrier makes air conditioners, but its Indianapolis factory makes furnaces.] But for Jones, the Steelworkers local president, the biggest thing Trump got wrong was the headline: that he had saved 1,100 jobs at the Carrier plant. The truth didn’t come out until the following day: Carrier informed employees Dec. 2 that it still plans to send the factory’s fan coil assembly line to Monterrey — and lay off 600 of the 1,400 union employees at its Indianapolis factory.

The news found its way to the Washington Post, and on Dec. 7, Jones was interviewed on CNN by Erin Burnett. On the show, Jones made it clear he appreciated the 800 Carrier jobs, including 730 of his members, that Trump had saved. But he criticized Trump for claiming his deal with Carrier had saved 1,100 jobs: To get to 1,100, Trump had to count 300 engineering and management jobs that were never slated to go to Mexico, Jones said.

“I think he’s done a lot of negotiations, and I have likewise, and if you’re dealing with people’s livelihoods, you sure as the world ought to know what the numbers are,” Jones told Burnett.

A few minutes after Jones appeared on CNN, Trump attacked him on Twitter:

An hour and fifteen minutes later, Trump had more to say:

Burnett brought Jones back on CNN to respond: “That wasn’t very damn nice,” Jones said. “That must mean I’m doing a good job. Because these people are making a decent wage at Carrier, and I feel like I’m somewhat involved in making that happen, whereas he does everything he can to keep the unions out of his hotels and casinos in this country, depriving them of making a living wage. … I appreciate Mr. Trump getting involved and saving as many people’s livelihood as he did. I just wish he’d had the numbers right and been upfront.”

On Twitter and in the press, Trump’s attack on a private citizen sparked outrage. Here was the soon-to-be president of the United States — a man who used Chinese steel in his own  buildings — trash talking a local union president who had fought to get severance packages for workers about to lose their livelihoods to Mexico.

Carrier, in its February announcement, said the closure had nothing to do with the quality of the work. It was because they could save $65 million a year by paying Mexican workers $6 an hour. And there’s nothing the union can do about that through collective bargaining.

Back when Trump was a candidate, he said he’d threaten Carrier execs with 35 percent tariffs. Now that he’s president-elect, he attacked the union president while praising Carrier’s CEO — and offering subsidies, tax cuts, and the elimination of regulations — all for a company that’s still shipping 600 jobs to Mexico.

U.S. Sen. Bernie Sanders of Vermont said Trump set a bad precedent: “He has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives,” Sanders wrote in an op-ed in The Washington Post.

Meanwhile, in Mexico, one official said he wasn’t worried. Francisco Gonzalez, CEO of a government-run trust fund that promotes foreign investment in Mexico, told the newspaper El Universal that if Trump’s plan is to provide companies like Carrier with incentives as a way to deter them from sending jobs abroad, “then we’re not really worried, because tax incentives are a one-time kind of thing.”

Be the first to comment

Leave a Reply

Your email address will not be published.