Thursday, December 1, 2016

Hot Issue with Cold Facts

Did Donald Trump save real jobs at Carrier’s Indianapolis, Indiana plant and set a precedent for any other company making the choice of moving to Mexico, or are we watching headline-generation that falls apart on further scrutiny? Estimates that the purported 1,000 Carrier jobs being retained in Indianapolis will cost that company an estimated $65 million more annually than if they moved these jobs to Mexico. But is that the real cost, the real number of retained employees or is something else going on? Let’s look at the bigger picture.
“In tiny Sellersburg, Ind., just across the border from Kentucky, Manitowoc Foodservice is in the final stages of closing a factory that makes beverage dispensers and ice machines and is laying off 84 workers… The company is moving production to Mexico.
“Just 100 miles away, President-elect Donald J. Trump [appeared on November 30th] with workers at Carrier’s Indianapolis plant to boast of his success in saving at least 1,000 jobs from moving to Mexico.
“The truth across the Rust Belt is that there are more Manitowoc Foodservices than Carriers. The layoffs and closing in Sellersburg follow similar shutdowns by Manitowoc in Ohio and Wisconsin.
“‘I’ll give Trump his due, but I hope he and the American people and Congress don’t forget about all these other jobs going to Mexico,’ said Chuck Jones, the president of Local 1999 of the United Steelworkers in Indianapolis, which represents Carrier. ‘Down the pike, a lot more are going to be moving out.’” New York Times, November 29th. Some believe that only 800 jobs are actually going to remain in the Indianapolis plant.
But Carrier is telling its shareholders that it really isn’t going to cost the company remotely as much money as reported, that Carrier was able to extract hard-dollar financial concessions and improve relations as major government vendor.
Left-leaning, (November 30th), dug a little bit deeper into the underlying facts –with a little help from CNBC: “First, let’s be clear that around 1,300 jobs are still being moved to Mexico. Second, the workers who are not losing their jobs and their union are still waiting to hear if they’re going to be pushed to accept pay cuts. Third, the jobs that are being kept in the U.S. are in part a result of major tax incentives—basically, Indiana is paying Carrier to employ people in Indiana rather than in Mexico, and Mike Pence is the governor of Indiana, so he could have done that part all along. Which makes you wonder why he didn’t—or, more disturbingly, what else Carrier was promised:
“In exchange for keeping the factory running in Indianapolis, Mr. Trump and Mr. Pence are expected to reiterate their campaign pledges to be friendlier to businesses by easing regulations and overhauling the corporate tax code, according to a spokeswoman for Mr. Trump.
“That could be more specific than it sounds: Another possibility is Trump is doling out company-specific promises. He'll roll back a specific regulation that affects the company in particular, or muster up some federal loan guarantees or worker training dollars, or maybe, as CNBC reported in the Carrier case, he might cajole a state governor into offering new corporate subsidies.
“So Carrier keeps fewer than half the jobs in the United States and gets massive tax incentives, the good will of the president-elect, and possibly a little help down the line with regulations the company finds inconvenient. There are also reports that Carrier’s parent company, a major federal contractor [United Technologies], was concerned about losing its federal contracts. Note, by the way, that when President Obama signed an executive order just saying that violations of existing labor laws would be taken into account when awarding federal contracts, business groups and Republicans were outraged.” Was United Technologies the real party in interest?
We might also note that where exporting jobs is an unpopular option or where bringing manufacturing jobs back to America seems warranted, the vast majority of such mass production-driven plants will be primarily automated with robots performing the relevant work at a fraction of either the out-sourced wage rate or the existing U.S. pay scales… with a lot fewer workers. It is the darker side of “progress,” but as all of those who have tried to halt “progress” have discovered, it just cannot be stopped. Yup, there really were cities and towns that made driving cars on local streets illegal, because their engine noise scared the horses.
But then, for those who want a little help from a willing government – to generate subsidies, tax breaks or deregulation – maybe the threat of exporting jobs to Mexico is just what the doctor ordered; there is another side of that “precedent” issue I mentioned in my opening paragraph. Hi suckers… er… taxpayers, here the new corporate game that seems to reflect our “new” Trump philosophy: “As the University of Michigan's Justin Wolfers puts it: ‘Every savvy CEO will now threaten to ship jobs to Mexico, and demand a payment to stay.’… If these nice headlines for Trump were bought at the cost of more companies either getting big money from the government or cutting American jobs, how long will this continue to look like a win?”
You just have to look at the majority of Trump’s Wall Street insider/billionaire cabinet to answer that question. What will look like a win for those very, very few Americans who keep their jobs as a result of Trump’s efforts, will most probably be a vastly bigger win for the companies that were paid off handsomely to make those token concessions. Welcome to the real world where optics Trump reality in this post-truth era.
I’m Peter Dekom, and at what moment did any of us believe that Trump was truly the representative of the little guy and the enemy of traditional big business?

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