Trump and the Carrier Deal
On December 3rd, I spoke with Neil Cavuto, Kennedy and Charles Payne on Fox News concerning President Elect Trump’s action after Carrier, a division of United Technology, announced that it was going to move 2,100 factory jobs to Mexico. The president-elect announced that he would make them keep the jobs in the U.S. The initial claim for the negotiations the Trump had with Carrier was the 1,100 jobs would be saved, but at this point, it looks like around 300 of those jobs were white collar positions that were never going to Mexico in the first place. The total number of jobs remaining in the U.S. is expect to be around 800.
In order to keep those 800 jobs in the country, Carrier was granted about $7 million in tax breaks paid out over 10 year, which means $875 per worker per year. That’s a pretty small number when comparing the cost of labor in the U.S. versus Mexico.
A more plausible story is that some discussions were had concerning the $6.7 billion in federal contracts held by Carrier’s parent company, United Technologies. While I’m all for reducing taxes and regulation, making the U.S. a more competitive place for companies to do business, I’m not too happy to see the power of the White House used to force a company to do something that it originally believed was not in the best interest of its shareholders.