Return to Carrier

Plant will stay active; some jobs will remain in Indiana

Indiana has suddenly become the center of the universe. The Hoosier State was thrust into the spotlight again this week due to more news surrounding working-class industrial jobs. On Tuesday night, Carrier—which makes heat pumps, fan coils, and other industrial equipment as well as its recognizable line of air conditioners—announced it will keep around 1,000 jobs in the state that were previously slated for a move to Mexico. On Thursday, the announcement was made official on-site, with the President-Elect mentioning that that figure is at least 1,100. Greg Hayes, CEO of Carrier’s parent company United Technologies, said that at least $16 million will be devoted to renovating the Indianapolis facility over the next 2 years. Below is a video of the conference.

As was the case at the Rexnord bearings plant in the capital city, Carrier’s plant became a point of reference during this year’s presidential race due to its implications for outsourcing American jobs to other countries that provide cheaper labor. In both of these cases, that country was Mexico. Rexnord has not gotten the celebratory news that Carrier just did. As of this press time, Rexnord’s Indianapolis location was still set to lose around 300 jobs for employees who manufacture the roller bearings made there.

For Carrier employees and the hopes of many of working-class Americans, the immediate scope of this decision is promising. A large manufacturing plant will definitely stay in operation, at the very least, and will at least retain some of its jobs in a Rust Belt state and city that undoubtedly needs them. Also of tangential importance is the fact that a new President-Elect—who championed manufacturing jobs, the condition of the middle class, and promised to strictly punish companies attempting to outsource said jobs—appears to have followed through on a campaign promise in all three of those areas.

The details bring cause for caution and containment of that excitement. Most importantly, nothing has been finalized yet. Second, take a close look at the numbers. While the number 2,000 has been used (by both the press and the incoming administration) for its roundness, this figure includes the 1,400 employees at Carrier’s Indianapolis plant as well as about 700 at a Huntington, Ind., factory, a location of United Technologies. Bear in mind that the exact number of remaining jobs announced has not been confirmed beyond the approximation of 1,100, which would account for about half of the overall total. None of the participants in Thursday’s announcement took questions from the audience or the press. Still, all of these presumed jobs are in the state of Indiana.

Other big question marks include economic and wage specifics. What are the terms and duration of the agreement? How will the stay be facilitated, financially? Many are wary that it could involve tax increases for the state of Indiana, although the President-Elect mentioned Thursday that he anticipates business tax in Indiana to be lowered from 35% to 15%. Also, will these workers only be getting to stay at the cost of losing hourly pay? One main incentive for Carrier (and other manufacturing plants) to move was that many of its line employees make around $20-$25/hour, which would have shrunk drastically to around $5/hour in Mexico.

Other factors may have been at play. Some early reports suggested that the deal may have been struck due to pressure from the federal governmentUnited Technologies gets most of its revenue from military contracts (its largest is with the Pentagon). The state of Indiana may also have made concessions to the company. Carrier may also have been concerned about a flurry of negative publicity, seen as a threat to the company’s brand and reputation.

Regardless, a large number of manufacturing employees are viewing this as a big win for their state and industry.

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