Donald Trump secured a victory on Tuesday night after the Carrier company agreed to keep about 1,000 jobs in Indiana instead of moving them to Mexico, with the president-elect having repeatedly threatened to penalise US companies that move jobs to cheaper foreign destinations.
The news came after Mr Trump tweeted on Thanksgiving Day that he was working with Carrier, a unit of United Technologies, to keep jobs at an Indianapolis furnace plant in the US. Doing so was one of his most concrete and oft-repeated campaign pledges.
Trump transition officials, including incoming vice-president Mike Pence who is currently governor of Indiana where the affected Carrier plant is based, have held talks with Carrier in the weeks since the election.
“I will be going to Indiana on Thursday to make a major announcement concerning Carrier A.C. staying in Indianapolis. Great deal for workers!” Mr Trump tweeted on Tuesday night.
Earlier, Carrier had sent a brief tweet confirming the agreement: “We are pleased to have reached a deal with President-elect Trump & VP-elect Pence to keep close to 1,000 jobs in Indy. More details soon.” The company gave no further details about whether it was able to secure any commitments from the new administration on tax reform — a priority for corporate America — as part of the deal. But with United Technologies earning about 10 per cent of revenues from military sales, the implicit threat that the Trump administration could cancel defence contracts with the company may also have pressured it to make at least an apparent concession.
United Technologies had previously said it would eliminate about 2,100 jobs in total in Indiana, with 1,400 jobs at the furnace plant moving to Mexico where production costs are cheaper. The deal to keep 1,000 jobs at the furnace plant would appear to save about half of the affected jobs. Mr. Trump had threatened to impose a 35 per cent tariff on Carrier products made in Mexico and shipped back to the US.
News of a possible deal surfaced last week when Mr Trump tweeted: “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!”
This is the second time that a US company appears to have ceded to pressure from Mr Trump by retaining some production in the US that might otherwise have gone overseas. Ford, which was also the target of attacks by Mr Trump on the campaign trail for its plans to move small car production to Mexico, made a minor concession to the president-elect when it agreed to retain production of one SUV model in the US rather than shifting it to Mexico, though the move would not have involved job losses.
Sample the FT’s top stories for a week
You select the topic, we deliver the news.
