President-elect Donald Trump and Vice President-elect Mike Pence campaigned on promises to keep manufacturing jobs in America and punish companies that outsource its production. Recently, the two announced they were able to keep 1,000 jobs in Indiana due to their deal with air conditioning company Carrier which has drawn its share of criticism.
An IndyStar investigation from August has now resurfaced, and it explains that while governor of Indiana Pence awarded economic incentives to the tune of millions for companies that relocated to other countries.
"[T]he Indiana Economic Development Corporation — which Pence leads — has approved $24 million in incentives to 10 companies that sent work to foreign countries," IndyStar reported. "Of those incentives, nearly $8.7 million has been paid out so far," and "those companies terminated or announced layoffs of more than 3,800 Hoosier workers while shifting production to other countries."
Though the state has made an effort to retract incentives from four out of the 10 companies that shipped jobs to countries such as Mexico and China — returning taxpayer subsidies that amounted to $746,000 — the remaining companies were left unscathed, according to the report. Pence's Commerce Secretary Victor Smith defended the state's economic incentive program in an email to IndyStar, arguing that "if a company chooses to neglect its commitment to the state and to its Hoosier employees, we aggressively seek to claw back any incentives the company has received."
Part of the problem with the incentive system appears to be a loophole in the job creation and retention requirement. It allows companies to receive incentives based on the performance of a single facility — rather than considering job creation company-wide — which leaves "workers at other sites owned by the same company vulnerable to offshoring."
The IndyStar report is circulating on social media, again, as Trump and Pence arrive Thursday at Indiana's capital for an event touting the pair's deal with Indianapolis based company Carrier.
Carrier announced in a statement released Wednesday that it "will continue to manufacture gas furnaces in Indianapolis, in addition to retaining engineering and headquarters staff, preserving more than 1,000 jobs" after striking an agreement with the incoming administration. Trump thanked the company Wednesday on Twitter and said his administration "will keep our companies and jobs in the U.S."
As ATTN: previously reported, sources with knowledge of the deal claimed that Pence directly negotiated with Carrier's parent company United Technologies, offering financial incentives in addition to a promise to slash corporate taxes, to prevent the company from moving two of its plants to Mexico — which would have led to the loss of about 2,000 jobs. Economists worry, however, that this approach will send a message to corporations to use outsourcing as leverage to win tax breaks from the Trump administration in the future.
ATTN: reached out to the Trump administration and the Indiana Economic Development Corporation for comment, but representatives were not immediately available. We will update this story when we hear back.