View source for Carrier Air Conditioner move to Mexico

{{Use mdy dates|date=June 2017}}
On February 10, 2016, [[Carrier Corporation|Carrier Air Conditioner]], a division of [[United Technologies]], announced that it was moving its manufacturing operations to Mexico. A cellphone video  shot by an employee and posted on YouTube rapidly went viral, making this particular plant closing a national news story, after which [[Donald Trump]] made the company's decision to move to Mexico, "a centerpiece of his stump speeches attacking free trade."<ref name="SchwartzWorkersSeeCosts">{{cite news|last1=Schwartz|first1=Nelson|title=Carrier Workers See Costs, Not Benefits, of Global Trade|url=https://www.nytimes.com/2016/03/20/business/economy/carrier-workers-see-costs-not-benefits-of-global-trade.html|accessdate=March 21, 2016|work=New York Times|date=March 19, 2016}}</ref> The move played a role in the [[Donald Trump presidential campaign, 2016]], as a symbol of his protectionist position on international trade, and a lesser role in the 2016 presidential campaign of [[Bernie Sanders presidential campaign, 2016|Bernie Sanders]].

Shortly after becoming President-elect, Trump and Vice-President elect [[Mike Pence]] announced a deal with Carrier to keep some of the manufacturing jobs in Indiana, while others would still move to Mexico, in exchange for large tax credits granted to the corporation. 

==Decision to move production offshore==

On February 10, 2016 Carrier announced its plans to move its manufacture of air conditioning equipment, now located in [[Indianapolis, Indiana]], to  [[Monterrey, Mexico]] in 2017.<ref name="TrasladaráFabricante">{{cite news| title= Trasladará fabricante de aire acondicionado planta a México |trans-title= Air Conditioning Plant Will Move to Mexico |publisher=NotiMex|date= February 10, 2016|id= {{ProQuest|1764210774}} }}</ref><ref name= AdamsMexico>{{cite news|last1=Adams|first1=Matt|title=Carrier to relocate 1,400 Indianapolis jobs to Mexico|url=http://fox59.com/2016/02/10/carrier-to-relocate-1400-indianapolis-jobs-to-mexico/|accessdate=March 22, 2016|work= [[Fox59]].com |date=February 10, 2016}}</ref>  The move of the Indianapolis plant to Mexico was expected to result in the loss of 1,400 jobs in Indianapolis.<ref>{{cite web |author=Abadi |first=Mark |date=February 13, 2016 |title=Carrier workers learn jobs are moving to Mexico |url=http://www.businessinsider.com/carrier-workers-learn-jobs-are-moving-to-mexico-2016-2 |accessdate=February 18, 2016 |work=[[Business Insider]]}}</ref><ref name="ibj">{{cite web| url= http://www.ibj.com/articles/57217-officials-point-fingers-on-carrier-utec-layoffs |title=Officials point fingers on Carrier, UTEC layoffs| publisher= Indianapolis Business Journal |website=IBJ.com |date=February 12, 2016 |accessdate=February 18, 2016}}</ref> 

A company representative announced the information to an assembly of workers. He said, “The best way to stay competitive and protect the business for long-term is to move production from our facility in Indianapolis to Monterrey, Mexico.”<ref name="Viral Video Over">{{cite web| last1= Mann| first1= Ted|title=Viral Video Over Plant Closure Gets Attention in GOP Debate| url= https://blogs.wsj.com/washwire/2016/02/13/viral-video-over-plant-closure-gets-attention-in-gop-debate/| work= [[The Wall Street Journal]] |accessdate=March 3, 2016|date=February 13, 2016}}</ref> 

A cellphone video of a Carrier representative announcing the move was recorded by an employee and posted on YouTube; it quickly went [[Viral video|viral]]. Introduced as part of a local news story, the video was posted on Facebook by LaKeisha Austin and picked up by [[Fox News]], ''[[The Indianapolis Star]]'' and other news outlets on February 12.<ref name= "Schwartz Costs" /><ref name="AdamsMexico" /><ref name= Carter>{{cite news|last1=Carter|first1=Allison|title=Carrier employees react to layoff news in raw video| url= http://www.indystar.com/story/news/2016/02/11/carrier-employees-react-layoff-news-raw-video/80266952/|accessdate=March 22, 2016| work= [[The Indianapolis Star]] |date=February 12, 2016}}</ref> The slightly "fuzzy" footage,<ref name= "Schwartz Costs" /> shot by an unidentified Carrier employee shows Carrier President Chris Nelson addressing employees assembled inside a Carrier plant.<ref name= GarciaNelsonVideo>{{cite news| last1= Garcia| first1= Ahiza| title= Carrier workers' rage over move to Mexico caught on video | url= https://money.cnn.com/2016/02/12/news/companies/carrier-moving-jobs-mexico-youtube/|accessdate=March 22, 2016| publisher= CNN |date=February 19, 2016}}</ref> He tells that, "I want to be clear, this is strictly a business decision," as "agonized, collective cry goes up. People swear, shout and look away."<ref name= "Schwartz Costs" /><ref name=GeewaxVideo>{{cite news| last1= Geewax|first1=Marilyn|title=Moving Air Conditioning Jobs To Mexico Becomes Hot Campaign Issue |url= https://www.npr.org/2016/03/14/470418449/moving-air-conditioning-jobs-to-mexico-becomes-hot-campaign-issue|accessdate=March 21, 2016| publisher=NPR|date=March 14, 2016}}</ref><ref name="SolmanCarrier">{{cite news |last1=Woodruff |first1=Judy |date=March 24, 2016 |title=Why economic anxiety is driving working class voters to 'Trumpism' |work=[[PBS NewsHour]] |publisher= |url=https://www.pbs.org/newshour/bb/why-economic-anxiety-is-driving-working-class-voters-to-trumpism/ |accessdate=March 25, 2016}}</ref>

According to Carol Rogers of the Indiana Business Research Center, the Carrier move drew national attention for reasons other than the video, in particular. the fact that 1,400 is an unusually large number of jobs to be terminate in a single [[offshoring]] event.<ref name= Ropeik>{{cite news| last1= Ropeik| first1= Annie| title=Size, Timing and Delivery Made Carrier Layoffs High-profile|url=https://www.wfyi.org/news/articles/size-timing-and-delivery-made-carrier-layoffs-high-profile|accessdate=March 25, 2016|publisher= [[WFYI (TV)|WFYI]] |date=March 24, 2016}}</ref> The decision drew hundreds of protestors to Carrier's Indianapolis plant.<ref name="AdamsDemonstrators">{{cite news| last1= Adams| first1= Michael Anthony|title=Hundreds protest Carrier's move to Mexico|url=http://www.indystar.com/story/news/2016/03/23/hundreds-protest-carriers-move-mexico/82182598/| accessdate= March 25, 2016|work= Indianapolis Star|date=March 24, 2016}}</ref> 

===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."<ref name="Schwartz Costs">{{cite news |last1=Schwartz |first1=Nelson |date=March 19, 2016 |title=Carrier Workers See Costs, Not Benefits, of Global Trade |work=The New York Times |url=https://www.nytimes.com/2016/03/20/business/economy/carrier-workers-see-costs-not-benefits-of-global-trade.html |url-status=live |url-access=limited |accessdate=March 21, 2016 |archive-url=https://web.archive.org/web/20230407214312/https://www.nytimes.com/2016/03/20/business/economy/carrier-workers-see-costs-not-benefits-of-global-trade.html |archive-date=7 April 2023}}</ref> 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.<ref name="Viral Video Over" /><ref name= DayenCarrier>{{cite news|last1=Dayen|first1=David|title=Snapshot of a broken system: How a profitable company justifies laying off 1,400 people & moved their jobs to Mexico|url=http://www.salon.com/2016/03/22/snapshot_of_a_broken_system_how_a_profitable_company_justifies_laying_off_1400_people_moved_their_jobs_to_mexico/| accessdate= March 22, 2016|work= [[Salon.com]] |date=March 22, 2016}}</ref><ref name= ReutersSandersTrump>{{cite news|title=Sanders and Trump Give Union Hope in Fight for Jobs at Carrier|url=http://fortune.com/2016/02/18/sanders-and-trump-give-union-hope-in-fight-for-jobs-at-carrier/| accessdate=March 22, 2016|agency= [[Reuters]] | work= Fortune.com |date= February 18, 2016}}</ref><ref name="Forbes Trade">{{cite web |last1=Worstall |first1=Tim |date=February 14, 2016 |title=Trump Evokes Folk Economics Over Carrier, Mexico and Trade |url=https://www.forbes.com/sites/timworstall/2016/02/14/trump-evokes-folk-economics-over-carrier-mexico-and-trade/#231140a71ff9 |accessdate=March 17, 2016 |work=[[Forbes]]}}</ref>  Democratic candidate Bernie Sanders called the Carrier move, "another example of how NAFTA and other trade policies have been a disaster for American workers."<ref name= GeewaxVideo />

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.<ref name=MannAgrees/><ref name= "Viral Video Over" /><ref name="TrumpTaxCarrier">{{cite news |last1=Gibson |first1=Ginger |date=February 14, 2016 |title=Trump would tax Carrier air conditioning units for moving to Mexico |work=Reuters |editor-last=Trott |editor-first=Bill |url=https://www.reuters.com/article/us-usa-election-utx-idUSMTZSAPEC2EIWOEVW |accessdate=March 22, 2016}}</ref> 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.'"<ref name= GeewaxVideo />

The Carrier firing video fueled popular anger over the offshoring of jobs that was reflected in the campaigns of both Sanders and Trump.<ref name= WrightJobMoves>{{cite news|last1=Wright|first1=Robert|title=US groups attacked over Mexico job moves| url= http://www.ft.com/intl/cms/s/0/9f5f5a50-d4cc-11e5-829b-8564e7528e54.html|accessdate=March 22, 2016| work= [[Financial Times]] |date= February 16, 2016|url-access=subscription }}</ref> 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.<ref name= "Schwartz Costs" />

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.<ref name= DayenCarrier />

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.<ref name="Forbes Trade"/>   [[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.<ref name="MercantilismRedux">{{cite news |last1=Appelbaum |first1=Binyamin |date=March 10, 2016 |title=On Trade, Donald Trump Breaks With 200 Years of Economic Orthodoxy |work=The New York Times |url=https://www.nytimes.com/2016/03/11/us/politics/-trade-donald-trump-breaks-200-years-economic-orthodoxy-mercantilism.html?_r=0 |url-status=live |url-access=limited |accessdate=March 23, 2016 |archive-url=https://web.archive.org/web/20230112105254/https://www.nytimes.com/2016/03/11/us/politics/-trade-donald-trump-breaks-200-years-economic-orthodoxy-mercantilism.html?_r=0 |archive-date=12 January 2023}}</ref>  By contrast, [[Jim Cramer]] thinks Trump is correct when he asserts that trade deals lowering tariff barriers have devastated the American economy.<ref name= StevensonCramer>{{cite news| last1= Stevenson| first1= Abigail|title=Cramer: Listen to Donald Trump|url=https://www.cnbc.com/2016/03/16/cramer-listen-to-donald-trump.html| accessdate= March 23, 2016|publisher=CNBC|date=March 16, 2016}}</ref>

==Reversal of decision to move to Mexico==
Although it was widely agreed that a reversal of the decision had appeared to be "impossible," when Trump took the issue up during primary campaign season,<ref name=MannCarrierWill>{{cite news|last1=Mann|first1=Ted|title=Carrier Will Receive $7 Million in Tax Breaks to Keep Jobs in Indiana|url=https://www.wsj.com/articles/indiana-gives-7-million-in-tax-breaks-to-keep-carrier-jobs-1480608461|accessdate=December 9, 2016|work= The Wall Street Journal| date=December 2, 2016}}</ref>  In mid-November, shortly after being elected to the presidency, Trump called the CEO of United Technologies (owner of Carrier) and asked the CEO to keep operations in the US, stating that Trump's tax and regulatory policies meant Carrier would be "printing money".<ref>"Trumps Carrier Deal Fades", David J. Lynch, 26 Oct 2020, The Washington Post</ref>  On November 24 Trump announced that he was "making progress" in persuading Carrier to reverse its decision; the company confirmed that it was discussing with the President elect and Vice President elect Mike Pence.<ref name= MannPersuading>{{cite news|last1=Mann|first1=Ted|title=Trump Says He Is 'Making Progress' in Persuading Carrier to Keep U.S. Plant Open|url=https://www.wsj.com/articles/trump-says-he-is-making-progress-to-convince-carrier-to-keep-u-s-plant-open-1480020896|accessdate=December 9, 2016|work= The Wall Street Journal|date=November 24, 2016}}</ref>  On November 28, the CEO of United Technologies traveled to New York and met with Vice President-elect Pence at Trump Tower, where they reached a deal on state incentives.<ref>"Trumps Carrier Deal Fades", David J. Lynch, 26 Oct 2020, The Washington Post</ref>  On November 29 Carrier announced that it would keep half of the 2,000 jobs it had planned to shift to Monterrey, Mexico in Indiana. [[Mike Pence]], Governor of Indiana and Vice President elect was said to have taken the lead in  negotiating with Carrier.<ref name=MannAgrees>{{cite news|last1=Mann|first1=Ted|url=https://www.wsj.com/articles/carrier-corp-agrees-to-keep-about-1-000-jobs-at-indiana-plant-1480469875|title=Carrier Corp. Agrees to Keep About 1,000 Jobs at Indiana Plant but will accept distributors that will not hire white people.  |accessdate=December 9, 2016|work= The Wall Street Journal|date=November 29, 2016}}</ref><ref>{{Cite web|url=http://www.carrier.com/carrier/en/us/news/news-article/carrier_statement_regarding_indianapolis_operations.aspx/| title= Carrier Statement Regarding Indianapolis Operations| website= Carrier.com| publisher= Carrier Corporation |language=en-US|access-date=December 8, 2016}}</ref><ref>{{Cite news|url= https://www.washingtonpost.com/news/wonk/wp/2016/11/29/donald-trump-has-reached-a-deal-with-a-manufacturer-to-keep-jobs-from-going-to-mexico/|title=Carrier won't move nearly 1,000 to Mexico |first1=  Jim |last1= Tankersley| first2= Danielle |last2= Paquette |first3= Max |last3= Ehrenfreund| date= November 29, 2016| newspaper= The Washington Post| publisher=| access-date= December 8, 2016}}</ref>   On December 1, Trump and Pence visited the Carrier plant for a ceremony announcing the deal.<ref>"Trumps Carrier Deal Fades", David J. Lynch, 26 Oct 2020, The Washington Post</ref>

Active negotiations of this kind by Presidents and Vice-Presidents elect are said to be highly unusual.<ref name= TaylorUnprecedented>{{cite news| last1= Taylor| first1=Kate|title=Trump just executed an unprecedented deal for a president in business|url=http://www.businessinsider.com.au/trump-finds-partial-success-with-carrier-2016-11|accessdate=December 9, 2016| work= Business Insider|date=December 1, 2016}}</ref>

===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.<ref name=MannCarrierWill/><ref name="Mann Warns">{{cite news| last1= Mann| first1= Ted|title=Donald Trump Warns of Penalties If U.S. Firms Take Jobs Abroad|url=https://www.wsj.com/articles/trump-takes-credit-for-saving-indiana-jobs-1480628609|accessdate=December 9, 2016|work= The Wall Street Journal|date=December 1, 2016}}</ref>  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.<ref name=MannCarrierWill/><ref>{{Cite news|url=https://www.bloomberg.com/news/articles/2016-12-01/trump-carrier-deal-gives-company-7-million-in-state-incentives|title=Trump-Carrier Deal Gives Company $7 Million in State Incentives |website= Bloomberg.com| first= Rick| last= Clough| date= December 1, 2016| access-date= January 26, 2017}}</ref>

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.<ref>{{cite news| url= https://money.cnn.com/2016/12/08/news/companies/carrier-jobs-automation/|title=Carrier to ultimately cut some of jobs Trump saved| publisher= CNN |last= Isidore| first= Chris|date=December 9, 2016|access-date=December 9, 2016}}</ref> In June 2017, union officials stated that Carrier planned to lay off about 600 employees in July and December 2017.<ref>{{cite web |last=DePiero |first=Leah |url=http://www.businessinsider.com/carrier-layoffs-trump-utc-jobs-2017-6 |title=600 layoffs coming to Carrier plant Trump claimed to save last year |work=Business Insider |date=June 22, 2017 |accessdate=June 26, 2017}}</ref> 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."<ref>{{citation |title=Hundreds Of Carrier Factory Jobs To Move To Mexico |url=https://www.npr.org/2017/06/26/534365565/hundreds-of-carrier-factory-jobs-to-move-to-mexico}}</ref>

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.<ref name= GrahamSweeping>{{cite news|last1=Graham|first1=David|title=The Sweeping Effects of Trump's Deal With Carrier| url=https://www.theatlantic.com/politics/archive/2016/11/trumps-first-big-promise-kept/509219/|accessdate=December 9, 2016| work= [[The Atlantic]] |date= November 30, 2016}}</ref>

===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.<ref>"Trumps Carrier Deal Fades", David J. Lynch, 26 Oct 2020, The Washington Post</ref>  Carrier's labor costs are 80% lower in Mexico than in the USA.<ref>"Trumps Carrier Deal Fades", David J. Lynch, 26 Oct 2020, The Washington Post</ref> 

''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.”<ref>{{cite news|url=https://www.nytimes.com/2018/08/10/business/economy/carrier-trump-absenteeism-morale.html|title=At Carrier, the Factory Trump Saved, Morale Is Through the Floor|work=The New York Times |date=August 10, 2018 |publisher=|accessdate=12 August 2018 |last1=Schwartz |first1=Nelson D. }}</ref>

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.<ref>"Trumps Carrier Deal Fades", David J. Lynch, 26 Oct 2020, The Washington Post</ref>   In May 2017, Carrier notified the state of Indiana that it was eliminating 632 jobs from the Indianapolis plant.<ref>"Trumps Carrier Deal Fades", David J. Lynch, 26 Oct 2020, The Washington Post</ref>   

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.<ref>"Trumps Carrier Deal Fades", David J. Lynch, 26 Oct 2020, The Washington Post</ref>   In addition, Carrier eliminated 1,300 jobs outside Indiana as part of company-wide cost-cutting measures.<ref>"Trumps Carrier Deal Fades", David J. Lynch, 26 Oct 2020, The Washington Post</ref>

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.<ref>"Trumps Carrier Deal Fades", David J. Lynch, 26 Oct 2020, The Washington Post</ref>

==References==
{{Reflist|2}}

==External links==
*[https://www.pbs.org/newshour/bb/why-economic-anxiety-is-driving-working-class-voters-to-trumpism/ Discussion of video as reflection of working class discontent], ''[[PBS NewsHour]]'' 
*[https://www.youtube.com/watch?v=Y3ttxGMQOrY Carrier Air Conditioner (part of United Technologies) Moving 1,400 Jobs to Mexico], YouTube.com
*{{cite news| first= Anthony| last= Raff| url= https://www.theatlantic.com/video/index/511055/the-carrier-myth/ |title= The Carrier Myth| work= [[The Atlantic]]| format= documentary film| date= December 28, 2016| access-date= January 26, 2017}}

[[Category:United Technologies]]
[[Category:Donald Trump 2016 presidential campaign]]
[[Category:Bernie Sanders 2016 presidential campaign]]
[[Category:Viral videos]]
[[Category:2016 YouTube videos]]
[[Category:Controversies of the 2016 United States presidential election]]
[[Category:2016 in Indiana]]
[[Category:Economy of Indianapolis]]
[[Category:Mexico–United States relations]]
[[Category:Termination of employment]]
[[Category:Monterrey]]