From the earliest days of his campaign, Donald Trump made keeping manufacturing jobs in the United States his signature economic issue, and the decision by Carrier, the big air-conditioner company, to move more than 2,000 of them from Indiana to Mexico was a tailor-made talking point for him on the stump.
On Thursday, Trump and Mike Pence, Indiana’s governor and the vice president-elect, plan to appear at Carrier’s Indianapolis factory to announce a deal with the company to keep roughly 1,000 jobs in the state, according to officials with the transition team as well as Carrier.
Trump will be hard-pressed to alter the economic forces that have hammered the Rust Belt for decades, but forcing Carrier and its parent company, United Technologies, to reverse course is a powerful tactical strike that will hearten his followers even before he takes office.
“I’m ready for him to come,” said Robin Maynard, a 24-year veteran of Carrier who builds high-efficiency furnaces and earns almost $24 an hour as a team leader. “Now I can put my daughter through college without having to look for another job.”
It also signals that Trump is a different kind of Republican, willing to take on Big Business, at least in individual cases.
And just as only a confirmed anti-communist like Richard Nixon could go to China, so only a businessman like Trump could take on corporate America without being called a Bernie Sanders-style socialist.
If Barack Obama had tried the same maneuver, he’d probably have drawn criticism for intervening in the free market.
In exchange for keeping the factory running in Indianapolis, Trump and Pence are expected to reiterate their campaign pledges to be friendlier to businesses by easing regulations and overhauling the corporate tax code, according to a transition official.
The message from Trump that captivated the Carrier workers — keeping manufacturing jobs in the United States after decades of losses to overseas factories and automation — resonated throughout the Rust Belt.
That promise, plus his opposition to free-trade pacts like NAFTA, were key reasons he was able to edge out Hillary Clinton in traditionally Democratic states like Pennsylvania, Michigan and Wisconsin and capture the White House.
Trump first announced he was talking to Carrier on Thanksgiving Day via Twitter, which the company quickly confirmed. The discussions have continued this week, and with a tentative deal in hand Tuesday, transition officials scheduled Trump’s and Pence’s visit to Indianapolis.
“I didn’t think it would be this quick,” Maynard added. “I voted for him and had my hopes that it would get it done, but I wasn’t sure because of the shareholders.”
Carrier is best known for its air-conditioners, but it also sells a variety of heating and cooling equipment for homes and businesses, like the gas furnaces and fan coils for electric furnaces made at the Indianapolis factory. The jobs in Indiana that Trump has referred to are in two separate plants — the Carrier facility in Indianapolis, with 1,400 employees, and a United Technologies factory in Huntington, with 700.
While Carrier will forfeit some $65 million a year in savings the move was supposed to generate, that’s a small price to pay to avoid the public-relations damage from moving the jobs as well as a possible threat to United Technologies’ far-larger military-contracting business.
Roughly 10 percent of United Technologies’ $56 billion in revenue comes from the federal government; the Pentagon is its single largest customer. Its Pratt & Whitney division, for example, supplies the engines for the Air Force’s most advanced fighters and other planes. And with $4 billion in profit last year, the company has the flexibility to find the savings elsewhere.
Because of those billions in military contracts, along with Carrier’s role selling to consumers and small business, leaning on them was a much easier proposition than it would have been on manufacturers more broadly.
Many industrial companies are under intense pressure from Wall Street to increase profits, even when the economy is growing slowly — a major reason United Technologies decided to move in the first place.
That isn’t going to change after Trump takes office — especially when hourly pay in the Indianapolis plant is equivalent to what workers in Mexico make in a day.
“This is a spot solution,” said Mohan Tatikonda, a professor at the Kelley School of Business at Indiana University. “If it goes through, it helps some Carrier employees for a period of time, but it doesn’t address the loss of manufacturing jobs to technological change, which will continue.”