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Sunday, December 04, 2016

Message to Carrier - your products are now branded

Carrier Corporation: (read this before the company website takes this down!)
Responsibility from the Carrier Corporation website:
  • Successful businesses improve the human condition.
  • We act with integrity and maintain the highest ethical standards.
  • We are environmentally responsible and drive to sustainability.
  • We care for the health and safety of our employees and customers.
  • We actively support the communities in which we do business.

Obviously, Carrier rode roughshod over its self described corporate responsibilities. 

Honestly, Carrier corporation wasn't exactly a household word before the recent dodge ball game of throwing "jobs to Mexico", or "no jobs to Mexico', and now "some jobs to Mexico" played with the Trump transition.

Nevertheless, as a result of this latest round of crony capitalism, as Sarah Palin so aptly called it (broken clock award there, Sarah!) the company's name becomes synonymous with corporate welfare.  

"I want a Carrier deal" will be the euphemism for taxpayer funded incentives to keep American jobs from leaving the country while the rest of us provide the subsidies.  Indeed, the company is now branded in a way that wasn't envisioned in their strategic plan.

Here's the fact: Carrier had no reason to move jobs to Mexico.  Rather, this greedy move was made to leverage profit margins without regard for workers.  Moreover, the reason Carrier has somewhat expressed a change of heart is because the Trump transition team created an opportunity for Carrier to skim even bigger profits out of the pockets of government.  In other words, Carrier was promised tax incentives (TIFs- Tax increment funding) to change its mind about moving jobs to Mexico.

But here is the rest of the story. This is the letter Carrier sent to explain their change of heart decision.

The letter from Carrier to its employees that Donald Trump doesn’t want you to read: “It is not good news for everyone.”
On Thursday, President-elect Donald Trump traveled to the Carrier factory in Indianapolis, Indiana to tout the deal he helped orchestrate to keep about 800 manufacturing jobs in the United States in exchange for state and federal incentives, including $7 million from Indiana.

“Companies are not going to leave the United States anymore without consequences. Not going to happen. It’s not going to happen, I’ll tell you right now,” Trump said during a speech at the factory.

What Trump didn’t mention, either then or during a subsequent “thank you” rally later Thursday in Cincinnati, is that the deal he and Vice President-elect Mike Pence helped broker won’t prevent Carrier from outsourcing more jobs than are being saved in Indiana. The company will keep about 800 jobs at the Indianapolis plant, but will still move 600 jobs from Indianapolis to Mexico. Another 700 jobs are being moved to Mexico from a separate factory in 
Huntington, Indiana, which will be closed. In sum, about 800 American jobs are being saved, but another 1,300 are disappearing. Those painful details were acknowledged in a letter Carrier sent to affected workers on Thursday that was posted to Twitter by Indianapolis-based journalist Rafael Sánchez.

Trump’s deal with United Technology, the company that owns Carrier, is good news for the workers who will keep their jobs, of course. 
Indianapolis Governor and Vice-President elect Mike Pence explains how Carrier will keeps some jobs while others will be lost like a corporate coin flip.

Of course, it goes without saying, doling out huge tax breaks and other incentives to entice companies to keep jobs in the United States is bad economics, as Trump himself acknowledged on the campaign trail when he denounced government officials for believing that providing economic incentives to corporations keeps jobs in the United States.

During a Thursday appearance on CNBC, conservative economic policy analyst Jimmy Pethokoukis went so far as to call Trump’s speech at the Carrier plant “absolutely the worst speech” about economics in more than 30 years.

James_Pethokoukis_300x225

Jimmy Pethokoukis: "absolutely the worst speech about economics in more than 30 years"
“The idea that American corporations are going to have to make business decisions, not based on the fact that we’ve created an ideal environment for economic growth in the United States, but out of fear of punitive actions based on who knows what criteria exactly from a presidential administration,” Pethokoukis, a scholar with the conservative-leaning American Enterprise Institute, said. “I think that’s absolutely chilling.”
On Friday, the latest jobs numbers reinforced that Trump’s Carrier deal comes amid a long-term downturn in manufacturing jobs in the country. While a net 178,000 private and public positions were added in November and the unemployment rate fell to 4.6 percent, the lowest since August 2007, manufacturing jobs fell by 4,000. For the year, manufacturing jobs across the country have fallen by 78,000.

If the trend continues into 2017 — manufacturing jobs in the country have been declining since before George W. Bush took office — Trump would need to strike roughly 100 Carrier-equivalent deals to stem the tide, at an untold cost to taxpayers.

Bryce Covert contributed reporting.

So, how to help solve this decline in manufacturing? Certainly, companies like Carrier should begin by upholding it's own corporate responsibilities- including improving the human condition!

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