During a CNBC interview, Greg Hayes, the CEO of Carrier’s parent company United Technologies, reveals some of those 800 factory jobs allegedly saved in the deal engineered by Donald Trump will eventually be lost to automation:
…we’re gonna make up $16 million investment in that factory in Indianapolis to automate, to drive the cost down so that we can continue to be competitive. Now is it as cheap as moving to Mexico with lower cost labor? No. But we will make that plant competitive just because we’ll make the capital investments there … But what that ultimately means is there will be fewer jobs.
Not only are many of the Carrier jobs still going to Mexico, but many of the ones remaining in America are at risk of being replaced by robots.
This is quite the bait-and-switch. So let’s recap what actually happened:
1. Trump threatens Carrier with tax penalties if it moves 2,100 jobs from Indiana to Mexico. (The number includes 1,400 jobs from its Indianapolis factory, and 700 jobs from the United Technologies Electronic Controls facility in Huntington. It does not include 300 white-collar jobs at headquarters also slated for elimination but not going to Mexico.)
2. Instead of punishing Carrier, Trump directs the incoming vice-president, and current Governor of Indiana, to reward Carrier with $7 million in tax breaks. Trump also promised federal tax reform in the near future that will slash corporate taxes, including on money parked offshore. (United Technologies has about $6 billion in cash held by foreign subsidiaries.)
3. Carrier says, instead of going forward with its initial plan, it “will continue to manufacture gas furnaces in Indianapolis, in addition to retaining engineering and headquarters staff, preserving more than 1,000 jobs.” Hayes also says the company will invest $16 million into the Indianapolis plant.
4. We later learn than “more than 1,000 jobs” is not “more than 1,000 jobs that would have gone to Mexico,” because it includes the 300 white-collar jobs. Of the Indianapolis factory jobs 600 of the 1400 still go to Mexico, as do all 700 of the Huntington jobs.
In other words, 62 percent of the jobs initially slated for Mexico and still going to Mexico.
5. Finally, the $16 million investment in the Indianapolis plant — partially funded by Indiana government tax subsidies and a promise of more federal tax help in the near future — is dedicated to “ultimately” replacing some of the remaining 800 American jobs with robots.
That is one enormous con. And you’re paying for it.