Trump: The Art of the (Carrier) Deal
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Trump critics cite his touting of last May’s Carrier deal as a sign of his habit of breaking promises he can’t keep. His supporters point out that jobs were saved, even though some were let go, so he did keep his word. I looked into it.

The Short Answer

The Presidential Carrier Deal did save 730 jobs from being shipped to Monterey, Mexico. Not quite the “over 1100” that the President boasted. 553 were still shipped over. In this one case, more jobs were saved than lost, even if it falls short of what was claimed. The controversy, especially among those laid-off, was the expectations set by Trump’s campaign Tweets and Presidential visits, that no more jobs were going to be shipped from Indiana to Mexico. That did not happen. Details below.

What Everybody’s Talking About

A quick look at headlines shows that most mainstream headlines sound like the President failed to be truthful. The HuffPost’s showcasing of labor union leaders paints The Donald as a con man and liar.

“When he was saying these jobs would not be leaving this country, not at any point in time did he say, ‘I’m bringing back my jobs I’ve got outside the country. I’m going to bring back my daughter’s jobs,’” added Jones, referring to overseas manufacturing for Trump and Ivanka Trump products. “He’s a pure and simple con man … and I’m sorry people bought into his message. He sold us a bag of shit, and now we’re stuck with it,”

Even Trump-friendly FOX News ran the headline “Final round of layoffs planned at Carrier plant Trump promised to save.” Reuters was one of the few outlets that gave a more balanced perspective, in claiming that the President did save jobs, but with caveats:

“Trump did save hundreds of positions at Carrier, but manufacturing workers who now face unemployment say they feel let down by a deal that started out as a presidential campaign rallying cry but turned out to be less than it appeared.

Carrier said this week that 1,100 workers will remain at the factory, upholding its deal with Trump. They include 730 manufacturing jobs and about 300 engineering and administrative positions that were never slated to move.

But Carrier also laid off 338 manufacturing workers in July and another 215 this week. Those jobs are going to the company’s plant in Monterrey, Mexico, where workers make about $3 an hour, according to Indiana union officials.”

I could not find any specifics about the incentives package.

Carrier confirmed with CNN Money that 300 of the administrative jobs that were counted as “saved” were actually never slated to leave. Giving the benefit of the doubt for the rest of the numbers, that means the deal did keep 730 manufacturing and engineering jobs alive.

Reuters points out that during the campaign, Trump blasted Carrier and other regional employers for (in his own Tweet) “rather viciously firing” its workers. “This is happening all over our country. No more!” 

Deal or Dud?

In context, in 2017, Carrier’s parent company laid-off 400 more workers at its United Technologies Electronic Controls plant, in nearby Huntington, Indiana, 300 more when it shuts it down in 2018 to move operations to Monterey Mexico, where the Carrier jobs went to.  While in Indiana touting the Carrier deal, “Companies are not going to leave the United States any more without consequences. Not going to happen,” Trump said. No mention of the consequences faced by United Technologies that relocated operations and more than 1400 jobs to Mexico since Trump’s campaign tweet. Besides a $9 million incentive package.

Is The Carrier Deal Legit?

Kinda, but not really. Only less than 800 jobs were saved, and despite “No more!” and “Not gonna happen,” over 1400 jobs were still relocated to Mexico. I’m not counting the Rexnord relocation losses, because those were already in motion during Trump’s campaign, and were done by the time he was sworn in.

That aside, we all heard the speech at Indianapolis. President Trump made it seem like that manufacturing jobs bleeding to Mexico was going to no longer be tolerated, especially in the home state of the Vice President and former Governor. A closer look at the Carrier deal and its parent company United Technologies, shows a more tolerant result than what the President’s words seem to indicate.

 

The overall impact is that Indiana still has a lower-than-national-average unemployment rate.

That is buoyed by the observation that many of those laid-off have been able to find jobs, though union leaders have conceded that many of those are barely half of the average $25/hr union rate they were originally making. The trend shows that the declining unemployment rate had been trending since two years into the Obama administration. Note that Mike Pence was governor of Indiana from January 14, 2013, until he took the office of VP in Jan 2017.

From an unemployment standpoint, Indiana seems to be doing better than average, long before the election year uproar. However, I could not find any data related to average annual earnings per-person for the state to see if Hoosiers were actually doing better or worse with lower unemployment. More jobs, but lower paying, for example.

Showboating

Personally, I think President Trump’s showboating may be inspiring to some, but it also sets up unrealistic expectations for those actually affected by issues such as employment. Many of the wage earners interviewed for by various news agencies were under the impression that their jobs were going to be spared upon hearing Trump’s speeches and tweets. Many were disappointed. He did not lie, but he didn’t paint a realistic picture of the truth, either.

The Reality

What is missing in all the news reporting is discussions on how to make US-based labor competitive in the global manufacturing markets. The jobs are leaving because Carrier employees in Indiana are making $25/hr, while their Monterey counterparts are only making the equivalent of $3/hr, for the same work. It’s hard to ignore that reality. We run into the same disparity when competing with Vietnam, India, Pakistan, Japan, China, Hong Kong, etc. etc. etc.

Made In USA

What We Can Do

If we are going to Make America Great Again, that is going to mean buying American, and being able to afford to buy American.  But the reality is that we like to buy Amazon and Wish, which features products manufactured overseas at ridiculously lower prices. And when was the last time you bought anything at Walmart that was Made In America, by Americans? The President can’t do that. Only we can. It’s only his job to direct federal resources and negotiate trade deals and investments that makes Made In USA more accessible, to us and abroad.

 

 

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