2016 Presidential campaign

According to The New York Times, three days after the Carrier announcement, Presidential candidate Donald Trump made the company's decision to move to Mexico, "a centerpiece of his stump speeches attacking free trade."^[7] Carrier's move to Mexico quickly became a talking point in the 2016 presidential primary campaign as both Bernie Sanders and Donald Trump used the Carrier move to criticize existing trade policies.^{[6][14][15][16]} Democratic candidate Bernie Sanders called the Carrier move, "another example of how NAFTA and other trade policies have been a disaster for American workers."^[10]

During the February 13, 2016, Republican Presidential Primary Debate, Trump referenced the video, saying that if elected he would l impose a 35% tax on every air conditioner Carrier imports from Mexico.^[17][6][18] Trump used the Carrier move as "a key talking point," during the campaign, telling the crowd gathered for a Trump for President rally in Dayton, Ohio that, "I'm going to tell the head of Carrier: 'I hope you enjoy your stay in Mexico folks. But every single unit that you make and send across our border, which now will be real, you're going to pay a 35 percent tax.'"^[10]

The Carrier firing video fueled popular anger over the offshoring of jobs that was reflected in the campaigns of both Sanders and Trump.^[19] Voters supporting both Sanders and Trump told The New York Times journalists that the loss of jobs caused by free trade policies was their #1 issue.^[7]

Financial journalists including David Dayen, and Lance Selfa have used the Carrier move to analyze the argument, made by Sanders and Trump, that the offshoring of manufacturing jobs hurts American workers.^[14]

Others focus on Trump's position. Dismissing Trump's argument as "folk economics," Tim Worstall argues that moving production to low-wage countries like Mexico is good for Americans who can buy air conditioners more cheaply.^[16] Binyamin Appelbaum, writes that while the overwhelming majority of economists argue that importing goods manufactured by low-wage manufacturing work has been good for America because the balance of trade remains positive, economists have "oversold their case," neglecting to encounter the reality that, "trade has a downside, and while the benefits of trade are broadly distributed, the costs are often concentrated," borne by former factory workers.^[20] By contrast, Jim Cramer thinks Trump is correct when he asserts that trade deals lowering tariff barriers have devastated the American economy.^[21]

Details of the deal

As details emerged, it appeared that Carrier had agreed to keep one third of the 2,100 jobs it had planned to move to Mexico in Indiana in exchange for about $7 million in government subsidies over the course of 10 years.^[22][28] 800 jobs that Carrier had planned to move to Mexico will stay at the Indianapolis plant, while Carrier will move 600 from the Indianapolis plant to Mexico. However, United Technologies, the parent corporation of Carrier, will go ahead with plans to close a factory in Huntington, Indiana, that manufactures electronic controls, moving 700 jobs from Indiana to Mexico.^[22][29]

The deal also calls for a $16 million investment in the Indianapolis facility. Most of that money will be invested in automation said Greg Hayes, CEO of United Technologies, Carrier's corporate parent. And that automation will replace some of the jobs that were saved.^[30] In June 2017, union officials stated that Carrier planned to lay off about 600 employees in July and December 2017.^[31] One forklift driver who worked at Carrier for 14 years who did not lose his job in the June closings interviewed by NPR's Morning Edition said he would be bumped down to an assembly line position that was likely to be cut later: "I'm not really optimistic that they're going to be around in another five years," said employee David Simmons. "I mean, I hope I'm wrong, but I just don't see it. I mean, they've been threatening this - to go to Mexico - for at least 10 years."^[32]

David A. Graham at The Atlantic saw the Carrier deal as an early indication that Trump may enact some campaign pledges that had been widely viewed as mere campaign posturing.^[33]

Aftermath

As part of the deal, Carrier was permitted to move 600 jobs from Indiana to a plant in Mexico. The facility is located in Monterrey, Mexico.^[23] Carrier's labor costs are 80% lower in Mexico than in the USA.^[23]

The New York Times reported on August 10, 2018 that Carrier's Indianapolis furnace plant was plagued by low morale and absenteeism because “employees share a looming sense that a factory shutdown is inevitable — that Carrier has merely postponed the closing until a more politically opportune moment.”^[34]

The Washington Post reported in October 2020 that in early 2017 - four months after the deal was struck - Carrier started building a new facility in China.^[23] In May 2017, Carrier notified the state of Indiana that it was eliminating 632 jobs from the Indianapolis plant.^[23]

After the deal was struck, Carrier kept approximately 800 jobs in Indiana that were originally planned to go to Mexico, but eliminated over 1,300 jobs in Indiana: 632 at the Indianapolis plant, and 738 from another plant in Indiana.^[23] In addition, Carrier eliminated 1,300 jobs outside Indiana as part of company-wide cost-cutting measures.^[23]

During 2020, at least 17 Indiana-based companies moved some jobs from Indiana to Mexico, including Black & Decker and Johnson Controls. The total number of jobs moved in 2020 exceeds the number of jobs that were retained in the USA under the Carrier deal.^[23]