Economy

Carrier Will Cut Some of the Jobs Trump Helped Save Using Money from His Deal

December 9th 2016

By:
Mike Rothschild

Critics immediately pounced on President-elect Donald Trump's deal with Indiana-based manufacturer Carrier to have it keep about 1,000 jobs in the U.S. Among the charges leveled at the deal were that it was a massive case of corporate welfare, that it wouldn't save the number of jobs Trump claimed it would, and that it was an unsustainable solution to the issues causing the loss of manufacturing jobs.

Another consequence has now become public, and only fuels the deal's detractors. Carrier had agreed to make a $16 million investment in its Indiana plants, but most of it will be used to automate the plants - allowing the company to shed hundreds of jobs anyway.

It's likely that many of these will be among the jobs saved in the deal in the first place.

In an interview on CNBC, the CEO of Carrier's parent company said as much, telling the network's Jim Cramer that "making the plant competitive" will eventually lead to job loss:

"[I]f you think about what we talked about last week 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."

The company declined to tell CNBC how many of the roughly 800 jobs being kept in the U.S. will eventually be lost to automation fueled by money from the Trump deal, nor has it said when the job cuts will take place.

Automation has become a more prolific American job killer than outsourcing, and while the U.S. is actually producing more in its factories than any time in the last 40 years, manufacturing jobs themselves have dropped 30 percent, with between 4.5-5 million lost since the early 1990s.