It’s time to see if President-elect Donald Trump can follow through on one of the biggest promises of his campaign: keeping two factories that employ more than 2,000 people from moving to Mexico.
Last week, on Thanksgiving Day, Trump announced that he was “making progress” convincing Carrier — an air conditioning, heating, and refrigeration manufacturer — to keep its plants open in Indiana.
Carrier announced earlier this year that it planned to close the factories and move manufacturing jobs to Mexico, a change that was estimated to save parent-company United Technologies Corp. $65 million a year, in large part due to reduced labour costs.
Carrier confirmed its discussions with the incoming administration, but said the company had nothing to announce at the time.
Workers say they’re unsure if the apparent negotiations will keep the factory open. T.J. Bray, a Carrier worker who serves as a media representative for the manufacturer’s United Steelworkers Local 1999 union, told Business Insider that all workers know “is what [Trump] and Carrier put on Twitter.”
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
Trump’s attempts to convince Carrier to keep its Indiana factories open represent the culmination of a campaign in which he promised he would prevent jobs from leaving the US.
“If I was in office, Carrier wouldn’t be leaving,” Trump said in a speech at the Indiana Fairgrounds in April, saying that he would impose an aggressive tax on Carrier and other companies moving manufacturing jobs outside the US.
Carrier became a go-to example that Trump used to represent problems facing American workers as manufacturing jobs leave the US. Under his presidency, he promised to reverse the North American Free Trade Agreement, or NAFTA, and bring these jobs back to America — a promise that helped him win over blue collar, Rust Belt workers.
Now that he has won the election, Trump needs to back up his promises with actions. And, the first signal of if he will succeed or fail to keep these promises is the future of Carrier.
While Trump has revealed few details regarding his Carrier plans since the election, there are a number of strategies the president-elect could utilise to convince the manufacturer to keep the factory open.
Imposing higher taxes or reducing tax breaks for manufacturers like Carrier that outsource jobs have become common proposed fixes. The Wall Street Journal reported Sunday that negotiations with Carrier have also included discussion of tax overhaul that could potentially result in companies’ reduced taxation of overseas profits.
As president, Trump also has the power to favour certain companies when it comes to government contracts. United Technologies makes roughly $5.6 billion, or 10% of its annual sales, every year from military sales.
In both of these strategies, Trump could push for new regulation that applies to all companies that utilise a certain amount of outsourcing, in the form of new taxes or ending the possibility of federal contracts. Alternatively, he could attempt to convince each individual manufacturer to stay in the US through negotiation — a tactic that, if the Journal’s tax overhaul report is correct, the president-elect seems to be attempting to some degree with Carrier.
Trump needs to keep Carrier’s jobs in the US, and is apparently willing to work directly with United Technologies to try to make sure that happens. Losing the 2,100 jobs would not only be failing to keep a promise — it would require Trump to admit he isn’t the negotiator or leader he promised he was.
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