Well there you go, Donald Trump just broke our True/False/Tralse scale!
I will be going to Indiana on Thursday to make a major announcement concerning Carrier A.C. staying in Indianapolis. Great deal for workers!
— Donald J. Trump (@realDonaldTrump) November 30, 2016
Yesterday, President-Elect Donald Trump posted the above message on Twitter. While usually we treat Donald Trump tweets with a fair amount of skepticism, various news agencies started to pick-up the story during the week, claiming it to be a “huge victory for the Trump administration.”
For those that need some background, Carrier Corporation – a company that primarily makes heating and air conditioner units – announced a couple of months ago that they would be closing down two production facilities in Indiana and moving them down to Mexico. While the company tried to put the best “spin” on the situation that it could, the primary reason for the move was just cold hard economics; it was just cheaper to move production to Mexico. As the Indiana Star had reported, while most Carrier workers were making $26-per-hour plus overtime pay at the Indiana plants, their Mexican counterparts would be making $3-per-hour as their base wage.
Many politicians had seized on this story during the 2016 election cycle, however Donald Trump made the Carrier plant closures a rallying cry of how businesses were taking factory jobs overseas and “screwing over hard working Americans.”
Now fast forward to after Trump’s 2016 presidential win where he made this tweet during the Thanksgiving break.
I am working hard, even on Thanksgiving, trying to get Carrier A.C. Company to stay in the U.S. (Indiana). MAKING PROGRESS – Will know soon!
— Donald J. Trump (@realDonaldTrump) November 24, 2016
As CNBC had originally reported, the Trump Team and United Technologies CEO Greg Hayes – the parent company of Carrier Corporation – had come to an agreement about keeping some of the production facilities in Indiana. So did Donald Trump save 1,000 factory jobs in Indiana?
So this is where all this gets really, REALLY tricky! In a very literal sense; yes, Donald Trump did save about 1,000 factory jobs from leaving Indiana. The problem many are having however is in how he did it.
Originally, Trump promised that he would keep factory jobs in America by charging a 35% tax on companies that decided to take these jobs out of the US.
In this Carrier deal however, he did EXACTLY OPPOSITE of what he said he would do. The Wall Street Journal is reporting that Indiana officials (along with Donald Trump and Mike Pence) agreed to give United Technologies Corp. $7 million in tax breaks over 10 years to keep about 1,000 jobs from leaving the state. Also the deal DOES NOT include keeping 600 additional Carrier jobs from moving to Mexico or from closing down a second plant in Huntington, Ind. (which would relocate another 700 factory jobs from the US).
Not surprisingly, many financial experts and economists are worried about what precedence a deal like this could create going forward.
Every savvy CEO will now threaten to ship jobs to Mexico, and demand a payment to stay. Great economic policy. https://t.co/t2WAJOgh8F
— Justin Wolfers (@JustinWolfers) November 30, 2016
The worry here is the potential in which, as Bernie Sanders states, could create the blueprint for “large-scale corporate blackmail” for anytime a company wants to move plants outside of the US! Not to mention, the Trump Team has been uncharacteristically mum about whether they would tax Carrier Corporation for outsourcing the other 1,300 or so jobs to Mexico.
I asked the Trump transition if the president-elect still plans to penalize Carrier for outsourcing 1,300 jobs to Mexico. No response.
— Olivia Nuzzi (@Olivianuzzi) December 1, 2016
While this is no doubt a major PR victory for Trump – his team will undoubtedly be milking this story for months – the specifics of how this “Carrier deal” went down make it very hard for us to give a solid verdict of “True.” In the very literal sense he did save 1,000 factory jobs from moving to Mexico, yet at the same time he did it in a way that potentially puts more jobs at risk down the line! In a way, he followed through on what he was going to do, but at the same time, completely ignored the spirit of what he was trying to go for.
In other words, he won the battle, but might have potentially lost the war by doing so!
Because of that, we’ve decided the verdict of this case should be…
(Photo Credit: Carrier’s Website, Google Images)