Trump already saving American jobs - Carrier to keep jobs in the US

Liberal rag Wall Street Journal hates the deal ...

Trump’s Carrier Shakedown

Workers don’t prosper when politicians force companies to make noneconomic decisions.

Dec. 1, 2016 7:40 p.m. ET

A giant flaw in President Obama’s economic policy has been the politicized allocation of capital, from green energy to housing. Donald Trump suffers from a similar industrial-policy temptation, as we’ve seen this week with his arm-twisting of Carrier to change its decision to move a plant to Mexico from Indiana.

Carrier announced Wednesday that it will retain about 1,000 jobs in Indianapolis that would have moved to Mexico over the next three years, and on Thursday Mr. Trump held a rally at the plant and claimed political credit. The President-elect had made Carrier a piñata for his trade politics during the campaign, and post-election he lobbied Gregory Hayes, the CEO of United Technologies Corp. (UTC) that owns Carrier, to reconsider.

Everyone—even the Obama White House—is hailing the move as a great political victory, and in the short term it is for those Indianapolis workers, who make more than $20 an hour on average. But as U.S. auto workers have learned the hard way, real job security depends on the profitability of the business. Carrier wanted to move the production line to Mexico to stay competitive in the market for gas furnaces. If the extra costs of staying in Indianapolis erode that business, those workers will lose their jobs eventually in any case.

This isn’t to fault Mr. Hayes’s decision, since Mr. Trump made him an offer he couldn’t refuse. The state of Indiana threw in $7 million in tax incentives, but those weren’t decisive. Mr. Trump’s real hammer is his threat to impose a tariff on Carrier imports to the U.S. Carrier has a 30% share of the U.S. gas-furnace market, and a 35% tariff could kill the business. That’s the same sword Mr. Trump previously held over Ford Motor Co.

United Technologies also gets about 10% of its revenue from sales to the Pentagon, another source of government leverage. Then there’s the potential damage to the Carrier brand, especially its consumer air conditioner sales, if Mr. Trump decided to blast it from the bully—and we mean bully—pulpit. So United Technologies decided to take the small cost against earnings and invest to make the Indiana plant more competitive.

The company is also betting that Mr. Trump will fulfill his promise for tax and regulatory reform to make U.S. manufacturing more competitive. United Technologies does about 61% of its sales outside the U.S., and it has some $6 billion in cash overseas that would be taxed at a 35% rate if it brought the money home today. Carrier currently pays a 28% effective tax rate, so a tax reform that cut the corporate rate to 20% and only taxed earnings in the country where they are earned would more than make up for the Indianapolis concession.

UTC is also no corporate scofflaw. It pays $2 billion a year in taxes and offers to finance four years of college for every employee. Its exports are worth $10 billion a year, mostly in aerospace products, which support some 40,000 American jobs.

A mercantilist Trump trade policy that jeopardized those exports would throw far more Americans out of work than the relatively low-paying jobs he’s preserved for now in Indianapolis. Mr. Trump’s Carrier squeeze might even cost more U.S. jobs if it makes CEOs more reluctant to build plants in the U.S. because it would be politically difficult to close them.

Mr. Trump has now muscled his way into at least two corporate decisions about where and how to do business. But who would you rather have making a decision about where to make furnaces or cars? A company whose profitability depends on making good decisions, or a branding executive turned politician who wants to claim political credit?

The larger point is that America won’t become more prosperous by forcing companies to make noneconomic investments. A nation gets rich when individuals and business are allowed to take risks as they see fit in a competitive economy. Politicians are rotten investors. Mr. Trump would help the economy, and his Presidency, far more if he focuses on getting the pro-growth parts of his agenda through Congress.

Like the Nixon Administration, Donald Trump’s unpredictable, non-ideological policy-making will sometimes be disorienting for those who claim to believe in free markets. Some conservatives will be tempted to tolerate bad policies that appear to be popular that they’d never accept from President Obama. Many Republicans stayed silent or supported Nixon as he imposed wage-and-price controls and created the EPA, only to regret it later. They shouldn’t make the same mistake with Mr. Trump.

The better strategy is to support him when his policies promote growth and try to block him when he veers into big-government cul-de-sacs. In that spirit, his Carrier shakedown is a short-term political victory that will hurt workers and the economy if it becomes the norm for the next four years.

 

Libs hate the deal because of incentives that cost the Indiana taxpayer but yet libs tax me (non-Indianian) like a mofo and want even more of my money anyway. Seems disingenuous.

 

It could be. There is also the potential promise of govt. taxpayer funded govt. contracts. Liberals don't love all govt. spending. As a liberal (but not all liberals), I'm fine with the deal if it doesn't encourage every corporation out there to threaten to leave in order to be bribed by the govt.

So 800 jobs are staying here, but 1300 are still going to be lost. That's not a great record as far as percentage. It also didn't Carrier to stay the way that Trump promised. He said they would all stay because of the Tariffs he would charge if they left. He even derided the idea of using taxpayer funded incentives to get companies to stay. Yet now that he's in office that is exactly what he did. So liberals are also free to point out another of Trump's lies, and hypocrisy when it comes to the campaign and governing. His administration hasn't even started yet.

 

I personally don't hate the deal. I just would like people to be honest about what it actually is. And it's funny to see some people who decried Obama "interfering" in the auto industry, for example, now applauding this tiny piece of corporate welfare for 800 jobs (perhaps net negative even then). I don't mean you, by the way. Cheers.

 

Looks like Carrier made Trump their b**** lol. Trump gave incentives (tax breaks) as to not lose face. Trump couldn't let Carrier leave the US, so he gave in like a little b****.

What happened to imposing Tariffs for LEAVING? Apparently, you get tax breaks if you threaten to leave. Great precedent here lol

 

^^^
Obama's advise might be good for the 1300 Carrier employees who did lose their jobs.

 

Not really. This was more of a PR damage control on Trump's part. There's no way he could walk away from the negotiation table with a L. He needed this first "win" (albeit only 800 jobs). It costed him "giving into corporations" far more than he ever said he would.

Basically this just looks good on paper; nice headline with Trump's name on it, but is illogical macro-economically.

Protectionist policies are a band-aid solution for the symptom, not a cure to the problem. If you need protectionist policies to keep your business afloat, then your business model is not truly competitive. Protectionist policies are not good for the economy as a whole (efficiency), costs are ultimately passed to the end-consumer (if tariffs), or tax-payers (if given tax breaks). It's a zero-sum game. Trump just wants these victories because it makes him LOOK GOOD. Give him some nice headlines.

Let me ask you, are you supportive of a $15 minimum wage?

The reality is SOME JOBS ARE NOT coming back. Due to automation, technology, and simple economics. You can't stop globalization.

http://www.forbes.com/sites/realspin/2016/04/25/mcdonalds-minimum-wage-reality/#7e84edc058bb

 

You can face the hard honest truth and be better prepare or not. Doesn't mean a lending hand shouldn't be offered - there is a balance after all. But long term, we know where the jobs will be. It's a shame that we don't put a big emphasis on education for tomorrow jobs. The changes in the world are so fast that I wonder if anyone know what the global job market will look like in 15-20 years. The troubling trend is we are trailing so many countries in STEM that will be necessary for the next workforce.

 

Again if they actually implemented job training programs like Capital IDEA does around the Austin and Houston area, you'd actually have taxes go to local citizens for real job training skills that pay well. Programs like Capital IDEA also yield a rate of return of 10% over 10 years so tax payers actually earn interest for their investment in programs like this. No corporate welfare. It provides job for the future and educates poor people out of poverty. Those students who have kids then pass along those skills to their children while making enough to support them so they don't need assistance with programs like this. It's been proven to break the cycle of poverty in multigenerational families as well as break the need for other government assistance like food stamps, medicaid and welfare once students graduate and get a competitive paying job. There are at least 1,000 students that are apart of this program every year that later contribute to the workforce with jobs Austin and Houston are in dire need of filling.

http://www.capitalidea.org/

If programs were implemented like this nationwide, you'd have a real way of providing job training that would actually work without the need for corporate welfare.

 

You laugh at yourself. When Obama intervene in 2008= Bad! Bad!

When Pence intervene in 2016= Good! Good!

Y U Embarrass Yourself?

 

I like jobs. Iffy on the subsidies.

Maybe the difference is that Trump didn't use a Czar?

 

700 million to save 800 jobs? 875,000 per job. That doesn't sound like good business.

How about just send me a check for $875,000 and I'll take care of it from here.

 

Emperor Poutine is a little touchy about that term.

 

“If you think you’re going to get away with sending jobs out of the U.S., think again,” Trump said. “You are about to be bribed, big league.”

 

“I warned those boys at Carrier: we can do this the easy way, or the hard way, where you get seven million dollars,” he said. “They backed down so fast—it was terrific.”

 

I agree with #1.
But on #2, I'm not so sure anymore. I used to think you couldn't stop it. But I underestimated how fearful our species could get and how determined and demented certain politicians would be in their attempts to absolutely stop globalization. If you get enough far right politicians in enough countries, you can definitely turn back the clock. Maybe turn it back a good long way.

 

Frank Zappa

 

Off the cuff remarks lead to bad policy and precedents.

 

Ignorance is bliss huh champ?

Trump saved less than half the jobs proposed at this ONE company. Obama is correct, too many Americans aren't skilled enough for those well paying manufacturing jobs that your ilk 'members. Or those midwest folks need to come to the dirty South, gulf coast, or pacific northwest where the jobs are. It's American history packing up moving to where the jobs are.

Whatever happened to personal responsibility? Pwned.