While headlines tout Trump’s success saving 1,000 jobs at an air conditioning factory in Indiana, his dealmaking might have put many thousands more at risk.
Sometime today Carrier is expected to reveal exactly how Donald Trump’s dealmaking skills compelled the company to keep its air conditioning plant open in Indianapolis. The company is reversing plans to move the facility to Mexico, leaving over 1,000 jobs behind and saving roughly $65 million per year.
Multiple sources have reported that perks including tax incentives were part of the deal sweetening the pot for Carrier and its parent, United Technologies, which earns over $5 billion per year off contracts with the federal government. Bernie Sanders wasted no time calling Trump’s bluff on his campaign promise to actually penalize companies for outsourcing and penned a fiery op-ed in the Washington Post.
“Today, about 1,000 Carrier workers and their families should be rejoicing,” Sanders starts. “But the rest of our nation’s workers should be very nervous.”
The Vermont senator held few punches from there, turning Trump’s promise to force the government contractor to “pay a damn tax” on its end.
Three months ago, Trump talked about slapping 35 percent import tariffs on companies that outsource workers. Never mind the complications involved with trying to levy taxes against specific companies. It now appears the President-elect is prepared to do just the opposite, cutting taxes and offering rebates to United and other companies who threaten to move jobs.
“Instead of a damn tax, the company will be rewarded with a damn tax cut. Wow! How’s that for standing up to corporate greed?” Sanders writes. “How’s that for punishing corporations that shut down in the United States and move abroad?”
The senator goes on to say that United Technologies used Trump’s pompous campaign grandstanding against him, forcing him to the table in a face-saving effort that ultimately played into the company’s hands. Trump promised to save those 1,000 jobs, and it appears he did, but at what cost, Sanders beckons.
“Trump has endangered the jobs of workers who were previously safe in the United States,” Sanders says. “Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives.”
It’s not as if The Donald didn’t have leverage to work with. Multiple economists pointed out in a New York Times article last week that United Technologies was vulnerable given the size of its dealings with the U.S. government. But it appears Trump was less concerned with actually negotiating a hard-line deal to stop the company from moving jobs, and more interested in a post-Thanksgiving day about face.
Many manufacturers already have plenty of incentives to relocate their factories without the added perk of a Trump-infused tax break. This type of gesturing surely must sweeten the pot. There’s also nothing keeping Carrier from accepting the deal and the perks, and then moving the jobs away anyway like the Center For American Progress recalled Boeing did in Washington:
Consider Boeing, which received a massive tax incentive package from the State of Washington — the biggest the state has even given out to a single company — only to announce less than a year later that it would send about 2,000 jobs to facilities in St. Louis and Oklahoma City.
And the ants come marching two-by-two. Seconds, anybody? How about thirds?