Donald Trump’s Carrier deal is an empty PR stunt — and a bad precedent that incentivizes bad corporate behavior
Donald Trump "saved" a few hundred jobs by bribing the company with tax breaks. That's a grift, not a policy
Topics: American Economy, Carrier, carrier air-conditioning, Carrier Corporation, Donald Trump, Jobs, President Trump, Business News, News, Politics News
The more we learn about the agreement that Donald Trump reached with Carrier Corp. for the manufacturer to keep 1,000 or so jobs in Indiana instead of moving them to Mexico, the more the whole shaky edifice looks to be propped up by positive spin and Trump’s own immense self-regard. In other words, it is your typical Trumpian public relations coup.
In this, it is not unlike the type of hype the mogul might once have used to invade Atlantic City or Las Vegas. Announce you have reached a “tremendous deal” to build a giant casino or keep open a manufacturing plant, stand in an empty lot or on the shop floor to brag about it, then luxuriate in the hosannas tossed your way by local leaders whose constituents will soon be able to apply for jobs dealing blackjack or keep the ones they already had building air conditioners. By the time anyone notices all the ways the locals got screwed, you’ll be on to building your next building or starting a nuclear war between Pakistan and India or whatever.
Basically, the deal amounts to short-term ego gratification for Trump but does nothing to address the long-term problem of manufacturing decline in the Rust Belt or honestly level with blue-collar workers about the future of factory jobs that are growing ever scarcer in America. Trump has no more idea about how to do that than anyone else in his party — assuming it is even interested in doing so — beyond bribing companies with tax breaks. Which is not a long-range sustainable model for the manufacturing sector.
Here is what we know about the Carrier deal. The company had planned to close its Indianapolis plant and ship about 2,000 jobs to a new facility in Monterrey, Mexico, where it can get away with paying workers $19 a day. On the campaign trail this year Trump had been railing against the move as an example of the creeping globalism that has hollowed out America’s manufacturing industry and he promised to reverse it. If he couldn’t, he promised his voters, he would slap a 35 percent tariff on any products that Carrier made in Mexico and then tried to import into the United States.
After the election and a call to its CEO from the new president-elect, Carrier’s parent company, United Technologies, hammered out a deal with outgoing Indiana governor and Vice President-elect Mike Pence. In exchange for tax breaks that will cost the state of Indiana $700,000 a year for an unspecified number of years, Carrier will keep 850 manufacturing jobs in the state, along with 300 headquarters and engineering jobs that slated to move to North Carolina. About 1,300 jobs will still relocate to the glorious workers’ paradise of Mexico.