In the first major political accomplishment by Donald Trump, yesterday the Trump team announced that he had reached a deal with Carrier to keep its air conditioning plant in Indiana, and prevent an outsourcing of some 1000 jobs to Mexico. Understandably, Trump wasted no time to deliver the good news to his Twitter followers.
I will be going to Indiana on Thursday to make a major announcement concerning Carrier A.C. staying in Indianapolis. Great deal for workers!— Donald J. Trump (@realDonaldTrump) November 30, 2016
Big day on Thursday for Indiana and the great workers of that wonderful state.We will keep our companies and jobs in the U.S. Thanks Carrier— Donald J. Trump (@realDonaldTrump) November 30, 2016
However, shortly after the deal, questions emerged as to what the motive behind Carrier's decision may have been. Was Carrier pressured into doing a deal that was not in the best interest of shareholders of its parent, United Technologies? Was strongarming involved? Did Trump make a major concession as part of a political deal or did Carrier simply bend over backwards to appease the President-elect?
We now know the answer: moments ago the company issued a statement in revealed that that real motive for the change in tactic was that "the incentives offered by the state were an important consideration" and quickly added that "this agreement in no way diminishes our belief in the benefits of free trade and that the forces of globalization will continue to require solutions for the long-term competitiveness of the U.S. and of American workers moving forward."
What happens next? As some have suggested, it is a distinct possibility that this outcome may in fact backfire, and in order to extract the same "state incentives", US companies will proceed to announce comparable outsourcing arrangements in hopes that the Trump administration will approach them next in order to avoid the replacement of US workers with Mexcians, or other foreign nationals. It remains to be seen how the Trump administration will respond to such pressure from domestic corporations who may end up using their US workers as leverage to extract more concessions. .
Below is the full Carrier statement Regarding Indianapolis Operations
30 November 2016
Carrier has had very productive conversations in recent days with President-elect Trump and Vice President-elect Pence.
We have negotiated an agreement with the incoming administration that we believe benefits our workers, the state of Indiana and our company.
We are announcing today that Carrier will continue to manufacture gas furnaces in Indianapolis, in addition to retaining engineering and headquarters staff, preserving more than 1,000 jobs.
Carrier will also designate its Indianapolis manufacturing facility as a Center of Excellence for gas furnace production, with a commitment to making significant investments to continue to maintain a world-class furnace factory.
Today's announcement is possible because the incoming Trump-Pence administration has emphasized to us its commitment to support the business community and create an improved, more competitive U.S. business climate. The incentives offered by the state were an important consideration.
This agreement in no way diminishes our belief in the benefits of free trade and that the forces of globalization will continue to require solutions for the long-term competitiveness of the U.S. and of American workers moving forward.