CARRIER: IT’S NOT SO MUCH ABOUT WAGES AS ABOUT OVERREGULATION:
In March, a debate broke out about why Carrier, the air conditioning manufacturer, was planning to move 2,100 jobs from two Indiana factories to Mexico. “This is about Carrier chasing Mexican wages at $3 an hour,” Democratic Sen. Joseph Donnelly (Ind.) charged at the time.
That prompted Jim Schellinger, president of the Indiana Economic Development Corporation, to write a letter to correct the record. While Carrier would indeed pay Mexican workers $3 an hour, plus another $3 in benefits, “extensive federal regulations were the leading factor of the decision to relocate 2,100 manufacturing jobs,” he wrote to Donnelly, according to a copy of the letter released as part of a public record requests.
Carrier’s plans sparked national attention after President-elect Donald Trump, who had promised to prevent the offshoring, intervened, securing a deal to keep 800 jobs on American soil in exchange for roughly $7 million in state tax incentives.
That was a sliver of the $65 million the company projected it would annually save after shuttling jobs south of the border, triggering questions about why Carrier agreed to the deal.
The March letter, which was previously reported by Indianapolis television news, may offer a clue. How Trump and Carrier reached an agreement remains murky. Speculation has focused on the company’s desire to please the new president and maintain United Technologies’ government contracts. But in a company statement, Carrier asserted the Trump administration will “create an improved, more competitive U.S. business climate.”
Trump, meanwhile, has promised to scale back regulation.
“Fifty-three new regulations,” Trump said in a Dec. 1 speech at Carrier’s Indianapolis plant, repeating a figure that Robert McDonough, the chief executive of Carrier parent United Technologies, had used to explain the regulations his company faced. “Massively expensive and probably none of them amount to anything in terms of safety. … Your unnecessary regulations are going to be gone.”
Well, good.