CPU Trump No.670715[View]
One of Donald Trump's most memorable moments in the campaign was when he attacked air conditioning company Carrier for its decision to eliminate 1,400 employees at its Indiana location and move the jobs to Mexico. Trump promised to reform America's taxation and regulatory climate to make domestic business more competitive with foreign industry, and also to punish companies that off-shored American jobs. It's a promise that resonated with voters, especially in rust belt states.
Well, apparently Trump is already keeping his promise, at least for those Carrier employees. Carrier confirmed via Twitter that it has reached an agreement with the incoming administration to keep 1,000 manufacturing jobs in Indiana. The deal reportedly will keep a majority of the jobs in the state in exchange for friendlier U.S. business regulations and an overhauling of the country's corporate tax code.
What's just as likely is that Trump leveraged the fact that Carrier's parent company, United Technologies, earns about $5.6 billion in annual revenue from U.S. government contracts, equal to about 10% of its overall revenue. That dwarfs the $65 million in labor cost savings that Carrier expected to save by relocating its Indiana operations to Mexico.
The move follows a similar announcement from Ford several weeks ago, saying it would not move production of one of its SUV lines to Mexico after discussions with Trump officials. "We are encouraged that President-elect Trump and the new Congress will pursue policies that will improve U.S. competitiveness and make it possible to keep production of this vehicle here in the United States," a Ford spokeswoman wrote. It's not clear in the case of Ford whether jobs were saved, however, as plans to move them were never finalized.
Either way, these announcements have given Trump an important early success to point to when negotiations over lowering America's tax and regulatory burdens begin.