NewsPublic Affairs / December 2, 2016

Economists, Workers Await Ripple Effects Of Carrier Deal

Economists, Workers Await Ripple Effects Of Carrier DealCarrier workers celebrated when President-elect Donald Trump announced a deal to save their jobs, but others are still wondering about big-picture implications.2016-12-02T00:00:00-05:00
Original story from   IPBS-RJC

Article origination IPBS-RJC
Economists, Workers Await Ripple Effects Of Carrier Deal

President-elect Donald Trump visits the Carrier plant on Indianapolis's west side.

Drew Daudelin/WFYI

Workers celebrated at Indianapolis’s Carrier factory Thursday when President-elect Donald Trump and Vice President-elect and Indiana Gov. Mike Pence announced a deal to save more than 1,000 of their jobs.

Dawnn Kinnard is a second-generation Carrier worker whose father still works there too, after 44 years.

After listening to Trump speak, she says she was heartbroken when she first found out they’d lose their jobs.

“Today I’m elated, really just to get my dad to be able to retire when he wants to retire,” Kinnard says.

Carrier announced earlier this year that it would move most of its Indiana operations to Mexico, cutting 2,100 American jobs in the process.

Kinnard was a Trump supporter before the election, and she says she’s just grateful he followed through on a campaign promise.

“Because he didn’t have to,” she says. “He could have just said that and walked away. But he really did follow through.”

When Trump addressed the Carrier workers, he said he never meant to literally promise he’d save their jobs. On the campaign trail, Trump did say several times that if he was elected, Carrier would not be allowed to leave, or would face penalties.

“But that was a euphemism,” he says. “I was talking about Carrier, like, all other companies from here on in.”

Then, just a week or so ago, he says he heard a Carrier worker on the TV news, saying he felt Trump had made that promise.

“And I could understand it,” he said. “I actually said, I didn’t make it. When they played that, I said, I did make it, but I didn’t mean it quite that way.”

So Trump says he called Greg Hayes, the CEO of Carrier’s parent company, United Technologies.

“I said, Greg, you’ve got to help us out here,” Trump says. “We’ve got to sit down, we’ve got to do something. Because, I said, we just can’t let it happen.”

In the end, Trump says the company promised to keep more than 1,100 people in Indianapolis. That number may include some office workers whose jobs were never on the chopping block – no exact figure has been released yet.

The state is offering Carrier $7 million in conditional tax breaks to preserve those jobs. Carrier has also promised to invest $16 million in improving and is expanding its Indianapolis factory.

Details of how much all that will cost state taxpayers are still scarce, too.

Indiana University economist Tim Slaper says, if nothing else changes, the state should not lose money on the deal.

But he is concerned about it was forged. As Slaper puts it, Trump and Pence twisted Carrier’s arm for political reasons, not economic ones.

“It distorts the market when decisions are being made not on a profit-and-loss [basis or] hard cold analysis of ‘it makes better economic sense to do plan A than plan B,’” Slaper says.

And, in the big picture, the market is complicated. For example: Other countries send more of their manufacturing jobs to Indiana than any other Midwest state, and that number is going up.

So Slaper hopes that – rather than setting a precedent where companies demand the same treatment as Carrier, or where Trump always intervenes in their decisions – this deal, combined with tax and trade reforms Trump has promised, will prompt companies not to leave in the first place.

Though Trump is not in office yet, some Indiana workers are already banking on that impact.

Tim Mathis works at Indianapolis’s Rexnord, which also announced recently it will send nearly 300 jobs to Mexico. Mathis says he hopes Trump will keep following through on his promises.

“We’re tickled to death that President-elect Trump was potentially able to save Carrier’s jobs,” Mathis says. “But we also want our jobs, and all the other jobs that are being sent out of this country. We want our jobs to stay as well.”

It just remains to be seen if or how Trump can make it happen.

WFYI’s Drew Daudelin and WFIU’s Barbara Brosher contributed reporting to this story.

 

 

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