Last February, Carrier announced that it was offshoring its US air-conditioner manufacturing jobs to Mexico, despite having made a $7.6B profit that year, despite having received more than $6B in US military contracts, despite having recved a $50M tax-break, despite having paid its retiring CEO a $172m bonus, despite having spent $12b on stock-inflating accounting tricks.
The shenanigans made them the poster child for the collapse of the rustbelt during the 2016 election, and Donald Trump promised that if elected, he would slap Carrier's Mexican-produced goods with high tariffs unless it kept "every one" of its jobs in the USA.
Yesterday, Trump announced with great fanfare that he had brokered a deal to keep less than half of Carrier's jobs in the USA, in exchange for a very generous tax-subsidy paid for by the Americans who -- unlike Trump -- pay taxes.
In other words, Trump has shown that companies that threaten to leave the USA will be allowed to do so with impunity, and will, furthermore, get paid to do so by the American taxpayer.
In a Washington Post editorial, Bernie Sanders points out that Trump could have used a stick rather than a worker-funded carrot to keep Carrier in the country -- for example, by threatening to end its generous tax-subsidies, or by threatening to yank the billions the company receives as a military contractor.
We need a president who can stand up to big corporations, not fold to their demands.
Donald Trump is going to have to toughen up if he wants to serve American workers.
Today, about 1,000 Carrier workers and their families should be rejoicing. But the rest of our nation's workers should be very nervous.
President-elect Donald Trump will reportedly announce a deal with United Technologies, the corporation that owns Carrier, that keeps less than 1,000 of the 2,100 jobs in America that were previously scheduled to be transferred to Mexico. Let's be clear: It is not good enough to save some of these jobs. Trump made a promise that he would save all of these jobs, and we cannot rest until an ironclad contract is signed to ensure that all of these workers are able to continue working in Indiana without having their pay or benefits slashed.
In exchange for allowing United Technologies to continue to offshore more than 1,000 jobs, Trump will reportedly give the company tax and regulatory favors that the corporation has sought. Just a short few months ago, Trump was pledging to force United Technologies to "pay a damn tax." He was insisting on very steep tariffs for companies like Carrier that left the United States and wanted to sell their foreign-made products back in the United States. Instead of a damn tax, the company will be rewarded with a damn tax cut. Wow! How's that for standing up to corporate greed? How's that for punishing corporations that shut down in the United States and move abroad?
In essence, United Technologies took Trump hostage and won. And that should send a shock wave of fear through all workers across the country.
Donald Trump could kill the American union
Trump scores publicity win after Carrier keeps jobs in Indiana. Now will other companies take advantage?
President-elect Donald Trump and vice president-elect Pence have convinced air conditioning manufacturer Carrier to keep 1,000 jobs at its Indianapolis, Ind. plant instead of moving them to Mexico. This is a major publicity score for Trump who had previously criticized Carrier and other manufacturers on the campaign trail. But putting pressure on individual businesses doesn't make for a winning long term strategy. Wonkblog's Jim Tankersley explains. (Daron Taylor/The Washington Post)
Trump has endangered the jobs of workers who were previously safe in the United States. Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives. Even corporations that weren't thinking of offshoring jobs will most probably be reevaluating their stance this morning. And who would pay for the high cost for tax cuts that go to the richest businessmen in America? The working class of America. ** **
Let's be clear. United Technologies is not going broke. Last year, it made a profit of $7.6 billion and received more than $6 billion in defense contracts. It has also received more than $50 million from the Export-Import Bank and very generous tax breaks. In 2014, United Technologies gave its former chief executive Louis Chenevert a golden parachute worth more than $172 million. Last year, the company's five highest-paid executives made more than $50 million. The firm also spent $12 billion to inflate its stock price instead of using that money to invest in new plants and workers.
Does that sound like a company that deserves more corporate welfare from our government? Trump's Band-Aid solution is only making the problem of wealth inequality in America even worse.
I said I would work with Trump if he was serious about the promises he made to members of the working class. But after running a campaign pledging to be tough on corporate America, Trump has hypocritically decided to do the exact opposite. He wants to treat corporate irresponsibility with kid gloves. The problem with our rigged economy is not that our policies have been too tough on corporations; it's that we haven't been tough enough.
Trump and the Carrier plant: Smart politics, unsustainable economics.
Trump promises not to lose Carrier jobs to Mexico
During a campaign rally in Indiana in July 2016, Donald Trump promised, "We're not going to lose Carrier air conditioning from Indianapolis...When people and countries take our companies and take our jobs, there's going to be consequences." (The Washington Post)
We need to re-instill an ethic of corporate patriotism. We need to send a very loud and clear message to corporate America: The era of outsourcing is over. Instead of offshoring jobs, the time has come for you to start bringing good-paying jobs back to America.
If United Technologies or any other company wants to keep outsourcing decent-paying American jobs, those companies must pay an outsourcing tax equal to the amount of money they expect to save by moving factories to Mexico or other low-wage countries. They should not receive federal contracts or other forms of corporate welfare. They must pay back all of the tax breaks and other corporate welfare they have received from the federal government. And they must not be allowed to reward their executives with stock options, bonuses or golden parachutes for outsourcing jobs to low-wage countries. I will soon be introducing the Outsourcing Prevention Act, which will address exactly that.
If Donald Trump won't stand up for America's working class, we must.
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