Carrier Corporation takes Trump for a ride

Donald Trump is taking credit for preventing nearly a thousand manufacturing jobs from moving from Indiana, where Carrier Corporation pays workers between $15 and $26 an hour, to Mexico, where it pays them about $2 or $3 an hour. But how was he able to get this great deal? Was it with sticks, or with carrots – with new taxes or with tax breaks and regulatory favours? At this juncture, it appears to be all about tax breaks and regulatory favours, without punitive taxes.

Here are details from a newspaper article in The Guardian, followed by by Bernie Sanders’ blog in the Washington Post. More information is available at each ungated link.

Nine months after announcing plans to move more than 2,000 jobs from Indiana to Mexico, the Carrier Corporation said Tuesday evening that it had reached a deal with President-elect Donald Trump to keep nearly 1,000 of those jobs in Indiana. ….

During the presidential campaign, Trump had repeatedly attacked Carrier’s plant-closing plans. Trump has threatened to impose a 35% tariff when American companies seek to import goods they once made in the US but now produce in Mexico. ….

For Trump, Carrier’s decision to effectively half the amount of jobs heading to Mexico will be a public relations triumph. …. Had Obama sought to pressure Carrier not to move the jobs to Mexico, many conservatives would have undoubtedly attacked him for improperly intervening in the free market.

Steven Greenhouse, “Trump reaches deal to keep 1,000 jobs at Indiana plant from moving to Mexico“, The Guardian, 30 November 2016.

Bernie Sanders, the US senator from Vermont who opposed Hillary Clinton in the presidential primary, is not impressed with the details of Donald Trump’s deal.

President-elect Donald Trump will reportedly announce a deal with United Technologies, the corporation that owns Carrier, that keeps less than 1,000 of the 2,100 jobs in America that were previously scheduled to be transferred to Mexico. Let’s be clear: It is not good enough to save some of these jobs. Trump made a promise that he would save all of these jobs ….

In exchange for allowing United Technologies to continue to offshore more than 1,000 jobs, Trump will reportedly give the company tax and regulatory favors that the corporation has sought. Just a short few months ago, Trump was pledging to force United Technologies to “pay a damn tax.” He was insisting on very steep tariffs for companies like Carrier that left the United States and wanted to sell their foreign-made products back in the United States. Instead of a damn tax, the company will be rewarded with a damn tax cut. ….

In essence, United Technologies took Trump hostage and won. And that should send a shock wave of fear through all workers across the country.

Trump … has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives. Even corporations that weren’t thinking of offshoring jobs will most probably be reevaluating their stance this morning. And who would pay for the high cost for tax cuts that go to the richest businessmen in America? The working class of America.

Let’s be clear. United Technologies is not going broke. Last year, it made a profit of $7.6 billion and received more than $6 billion in defense contracts. ….

I said I would work with Trump if he was serious about the promises he made to members of the working class. But after running a campaign pledging to be tough on corporate America, Trump has hypocritically decided to do the exact opposite. He wants to treat corporate irresponsibility with kid gloves. The problem with our rigged economy is not that our policies have been too tough on corporations; it’s that we haven’t been tough enough.

Bernie Sanders, “Carrier just showed corporations how to beat Donald Trump“, PostEverything, Washington Post, 1 December 2016.

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