By Maureen Hayden
Greg Goodnight is a former union steelworker who watched with mixed emotion as President-elect Donald Trump swept into Indiana recently as a job-saving white knight.
The estimated 800 union steelworker jobs that will now stay at the Carrier Corp. plant in Indianapolis — coming after Trump put some kind of squeeze on Carrier’s parent company, United Technologies — is a remarkable early Christmas gift for those families, said Goodnight, Kokomo’s mayor.
But he wonders what — if anything — it means for 160 workers slated to be laid off soon from a General Motors plant in his city. The plant, saved from oblivion by the 2008 auto bailout under President Barack Obama, will soon shut down its semiconductor production due to global forces that GM says make the plant no longer competitive.
“This doesn’t stabilize the current manufacturing environment in the U.S.,” Goodnight said of Trump’s latest deal. He noted 1,300 other Carrier jobs in Indiana that are moving to Mexico next year.
“It’s like one person winning the lottery,” he said. “You can be happy for them, but it doesn’t solve the problem of poverty.”
From the earliest days of his presidential campaign, Trump made keeping manufacturing jobs in the U.S. a signature issue. Politically he scored big with the Carrier announcement, covered by media outlets worldwide.
He boasted of saving up to 1,100 jobs, though the numbers are fuzzy. The company acknowledges about 300 of those positions are in research and management and weren’t going away.
Economists also tempered the glee with warnings that the Carrier decision, spurred by Trump’s call to United Technologies CEO Gregory Hayes, isn’t based on a sustainable model to bring back 5 million manufacturing jobs lost in U.S. in the last two decades.
Carrier got $7 million in state tax incentives over 10 years to stay here. We don’t yet know what Trump said to Hayes, but it may have had something to do with federal contracts that his company gets that are worth billions of dollars or a threat of imposing stiffer taxes on its foreign-made products.
Mohan Tatikonda, an expert in operations management at Indiana University’s Kelley School of Business, called the deal a “spot solution.”
And it’s one that fails to address the larger, complicated issue of declining manufacturing jobs, a trend driven in part by technology that has allowed U.S. companies to quadruple their American-made exports with fewer workers over the last quarter-century.
Back in May, when Carrier announced plans to close plants in Indianapolis and Huntington, U.S. Sen. Joe Donnelly tried to find a way to get them to stay. His calls to United Technologies’ Connecticut headquarters proved futile, prompting his offer to sit in a lawn chair outside the corporate offices until someone came out to talk.
Donnelly also asked the Republican-controlled Senate Finance Committee to amend legislation already in process to create tough penalties and lucrative incentives to reverse the flow of American companies moving jobs overseas.
Donnelly wants Congress to deny companies the ability to write off moving costs when shipping jobs abroad, and to add tax breaks for those that bring jobs now overseas back to rural and low-income communities in the United States.
Above all, he wants to tie billions of dollars worth of federal contracts received by the likes of United Technologies to a willingness to keep jobs in the U.S.
So far, his requests haven’t has gotten much traction, but he’s hoping the Carrier deal — and Trump’s political victory — will capture attention.
In an interview, Donnelly said it’s the American thing to do. The country was built on a social contract between workers and business, he said, with one’s success contributing to the other.
“When profitable companies choose to ship good, American jobs overseas, our families and our communities pay the price,” he said.
Maureen Hayden is statehouse bureau chief for CNHI newspapers. Send comments to [email protected].