Trump’s 38 per cent Indiana victory

This editorial appeared in the St. Louis Post-Dispatch

If you overlook the details — as many of Donald Trump’s supporters seem happy to do — the decision by United Technologies Corp. to keep 800 factory jobs in Indiana instead of shipping them to Mexico, ranks as a symbolic victory.

Certainly, Trump thinks so. On Thursday he took a victory lap at the Carrier furnace factory in Indianapolis, one of two plants United Technologies planned to close in the Hoosier state. He portrayed the decision as a triumph for his personal, hard-nosed negotiating style.

During the campaign, Trump seized on the Carrier plant as a prime example of the loss of U.S. manufacturing jobs to foreign countries. The message resonated with blue-collar voters in Midwestern states who swept Trump to his upset victory.

During the campaign, Trump repeatedly blasted the company’s plans to move more than 2,000 Indiana jobs to Mexico. Carrier’s Indiana workforce earned an average of $20 an hour, and those in Mexico earn about $3 an hour. Trump had vowed to impose steep tariffs on Mexican-made air conditioners if the plants moved.

His election gave Trump considerable leverage. Carrier is just one of the many companies under the United Technologies umbrella, and it didn’t need trouble with the new administration when, for example, the company tried to sell its Pratt & Whitney aircraft engines to the Pentagon and foreign buyers. So it was willing to deal: It won’t move 2,100 jobs to Mexico. It will move 1,300. Trump can claim a 38 per cent victory.

The Wall Street Journal reported that Indiana, whose governor, Mike Pence, is vice president-elect, will kick in $7 million in tax breaks over 10 years. Given that Missouri Gov. Jay Nixon has offered $100 million incentive packages to big manufacturers, Carrier might have been better off moving to Mexico, Mo.

Since 2000, the United States has lost 5 million manufacturing jobs, so keeping 800 of them is not a big deal in the grand scheme of things. But it’s a big victory for 800 families, and least a small victory for Trump. But bribing companies with incentives that Indiana taxpayers ultimately must pay is neither a fair nor a sustainable industrial policy.