True to the promise Mr. Trump, as a Presidential Candidate, has made, President Elect Trump succeeded at saving 800 (according to some sources: 1,100) American jobs at Carrier furnace factory in Indiana. Without a question, saving well-paying American jobs is a praise-worthy achievement and so is fulfilling a promise. The workers whose jobs were saved are celebrating and we’re happy for them.
Still even a victory can be questioned and many question this one. Carrier, the well-known manufacturer of heating and air-conditioning equipment is a subsidiary of United Technologies. In order to prevent Indiana jobs from being moved to Mexico, President Elect’s team (including Indiana’s Governor – Vice President Elect – Mike Pence) offered Carrier financial incentives which include $7.000.000 in tax breaks over 10 years. (A concession on the anticipated import tax for air-conditioning units Carrier will manufacture in Mexico is expected as well.)
The final tally: hundreds of American jobs have been saved. Still, Carrier will move more jobs to Mexico than retain in the U.S. The general trend of decreasing demand for factory workers – caused mainly by technological progress and not job migration – can’t be stopped, no matter what incentives might be provided. President Elect’s big win with Carrier is an individual case which at worst will remain the only one and at best embolden other corporations – that consider moving their operations outside of the U.S. – to ask for government’s incentives.
Was there a better alternative that could have produced the same or even better outcome without concessions? Possibly. United Technologies, the owner of Carrier, is an aerospace and defense company which depends heavily on U.S. military’s contracts. Restructuring the eligibility for military’s contracts to include a provision that only companies based in their entirety in the United States could bid for military contracts would have forced United Technologies and (indirectly) Carrier to run its operations from the U.S., exclusively.
In business: any strategy that produces desired results fast (including incentives and concessions to appease the other party) may be smart. In government: foresight and long term policy may be better.
Eve Elrich, Anything L.A. Magazine’s Editor