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The Carrier Deal – Why Does it Matter

Last night, in case you were hiding under a rock, or binge watching the Gilmore Girls reboot, our President-elect Donald Trump went on a Twitter rampage against Chuck Jones, head of the United Steelworkers 1999. The Twitter-tantrum came after Jones criticized Trump in a series of network news interviews for  “Lying his ass off” regarding the number of jobs saved by the Carrier (United Technologies) deal during his Indiana announcement last week. Jones said that he was informed of the true numbers by the Trump camp before the nation-wide announcement and knew that the numbers were false but he didn’t speak up during the press conference out of respect for the men and women he represented.

According to the Indiana Star, Jones took issue with Trump trying to take credit for saving 1,100 union jobs at Carrier, while the number of jobs retained was closer to 730. with about 600 layoffs expected in mid-2017.

In return for keeping some manufacturing jobs in Indiana, United Technologies will receive $7 million in tax credits from Indiana, to be paid in $700,000 installments over 10 years and to invest in infrastructure and automation, which Carrier CEO Greg Hayes has stated on record will ultimately reduce the overall workforce of Carrier’s Indiana facility.

After layoffs, Carrier’s Indianapolis plant will have about 800 manufacturing workers and 300-350 engineering, research, and supervisory employees. Jones pointed out those  engineering positions were not initially slated to leave the plant and therefor Trump could not take credit for “saving” them through the generous tax cuts.

The deal also brought out concerns over crony capitalism, and I can’t believe I’m going to do this here, but Sarah Palin made a very good point, “When government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent.”

Donald Trump’s camp has not defended their numbers, or explained where their math came from, and has not been responsive to requests for comment. Instead, Trump took to Twitter to blast Chuck Jones and the United Steelworkers 1999 stating that the workers needed to spend more time working and less time talking and their jobs wouldn’t be in jeopardy.

trump-carrier-tweets

The problem with Trump’s Twitter-tantrum, according to both left and right sources is that A. Jones’ statement is in fact true (it does not appear that Trump “saved” the 1,100 jobs he claimed), and B. It sets a precedent that the President-elect can and will use the “bully pulpit” in new and damaging ways to silence political opposition (as of last evening, Jones was receiving threats from Trump supporters). Additionally, Democratic Vermont Senator Bernie Sanders stated that “In essence, United Technologies took Trump hostage and won. And that should send a shock wave of fear through all workers across the country.” by threatening to leave the country and then receiving tax benefits and national praise for deciding to leave the country in smaller numbers.

But, the real problem is that there were hundreds of Carrier employees, hardworking men and women, who were lead to believe they would have a job, by the President-elect, who will in fact be laid off in the middle of 2017 and they seem to have been lost in the politics of the situation.

“What he did was he gave false hope for three days to people that worked in that facility that they might not lose their job,” Jones said. Carrier

Problems with the Deal & Trump Backlash:

  • It looks and feels like Crony Capitalism in which big corporations benefit at the cost of American taxpayers
  • Conflict of interest: Trump has historically owned stock in United Technologies he claims to have sold the stocks in June of 2016, but this cannot be independently verified because the self-proclaimed billionaire has not submitted tax returns.
  • Delays the Inevitable: The cost will be invested in automation thus only postponing the inevitable RIF that happens when manufacturers automate
  • Appears Dishonest: The number of jobs saved does not match the number that Trump quoted
  • The President or President-elect can’t be seen as threatening private citizens who disagree with him, his bully pulpit is too large, dangerous, and damning

Benefits of the Deal:

  • We can’t overlook the 600 employees who will keep their jobs
  • It creates a strong base for rewarding companies who invest in the USA and penalizing those who outsource
  • It shows instant progress, Trump isn’t even in office yet and he’s already focused on improving the lives of rust belt workers
  • Many union employees feel that their union doesn’t speak for them, and they are pleased to see their union leaders called out for not representing their interests.

Sources Used:

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