Tuesday, February 16, 2016

Carrier Says It Never Received $5 Million In Federal Stimulus Money

The politicians have been rushing to make statements to win favor with the public following the cruel and awkward announcement the company made to its workers at its west side Indianapolis facility of its plans to close the plant and move it to Mexico, putting 1,400 workers out of a job. Clawing back past incentives to the company has been tossed about a lot. Perhaps the largest incentive awarded to the company was $5 million in federal stimulus dollars back in 2009, but the company now claims it never received that money, which was billed as a way of allowing the company to expand production at the Indianapolis facility to meet increasing demand for the company's eco-friendly condensing gas furnace line.

The company told WRTV that it's evaluating all credits and grants it has received from the government and will not retain or claim any credits for obligations that have not been met. That includes about $200,000 in job training grants the company received from the Indiana Economic Development Corporation, which is a drop in the bucket for a company the size of United Technologies, Carrier's parent company. None of these talked about claw backs are a deal-breaker for Carrier's plan to relocate its production to Mexico. Public shaming is probably the only effective tool left to stop the company from going forward with its plans. Donald Trump talked about imposing tariffs or taxes on their imported units if they go forward to moving to Mexico if he's elected president. How do you single out this single company? What do people think NAFTA was all about? Remember Ross Perot's warning about the giant sucking sound to Mexico once that trade deal was approved?

11 comments:

leon dixon said...

One of the idiot political sorts, Joe Donnelly, is involved in this "shaming" aspect along with other fools. "Joe might be right but only in part. Joe loves the regulatory state. He votes for growing government. The regulatory state, all by itself, adds 25% to the cost, on average, of anything made in America. It is too large a cost to be absorbed by American workers or their employers. Joe knows the corporate taxes in America are way too high but he isn't doing anything at all about them. Seems like he is happy to see American jobs being exported, too, via what are called 'inversions" where companies seek fewer goverment parasites. Joe seems happy enough with the double taxation of corporate earnings. Joe was a mistake-a bad hire by Indiana." The rules of economics are quite clear, load a body with too many parasites and the body dies. If 95,000,000 people in America are not working most folks would say that the policies which led to that situation were not good policies....that is, if they had not been trained otherwise to abandon the capability of making judgements. Driving factories out of America is a liberal goal and they ought to be out celebrating in the streets this latest victory of theirs.

Anonymous said...

The company's suppliers are in Mexico because the company's competitors are in Mexico. When you manufacture, you chase your supply chain. It's Business 101. This has less to do with labor costs than it does with that.

Let me ask a question. Have you been to Mexico? I'm not talking Gringo Mexico where fat, dumb Americans exploit locals at below poverty level wages while living high on the hog. I'm talking the real Mexico...Monterrey, Ciudad Juarez, Nuevo Laredo, Reynosa, Matamoros, Tijuana? Have you seen the factories, talked to the operations people or workers? No, of course you haven't. If you had, you wouldn't be advancing this silly narrative. The unvarnished truth is that Mexican build quality is as good as American build quality. It is. I've seen it. Google Fender guitars. The only reason they get cheaper prices for their Mexican guitars is because they use cheaper components. The quality is every bit as good as the quality out of California. Fact. Easily verifiable.

There's nothing new here. It's not just American companies either. The Japanese presence in TJ (Tijuana) is truly staggering. Read this...http://www.cnn.com/2015/06/03/travel/tijuana-from-sin-city-to-mexican-tech-hub/.

Here's reality, folks. Indiana is no longer competitive. We are a state of whining, lazy drug addicts that talks a lot about how much better we are than anyone else, and yet when you look around, sober, with your eyes wide open it is so obviously not so. The wonder in all of this isn't that they're leaving. The wonder is that they stayed for as long as they did.

Anonymous said...

Gotta agree with 9:29, plus the union and its members priced themselves right out of a job

Flogger said...

Yeah all those pesky rules and regulations just get in the way of profit. Rules or regulations on clean air, clean water, human rights, and labor rights impede Profit. You could probably take a drive up to Flint Michigan and fill up your car with water right out of the tap. Those pesky rules and regulations were ignored in Flint, Michigan.
Sure all the Mexicans are sooo happy in the Mexican Worker's paradise they risk life and limb to cross the border.

Anonymous said...

The end of year 2014 US effective tax rate for United Technologies was 25.5% with $1.002 billion in tax benefits that if applied would decrease this number. The company also held $28 billion in undistributed earnings that if repatriated would be subject to US taxation. With the company's propensity to argue tax issues in court, it may be too costly to recoup any clawback.

Anonymous said...

And let a major Republican campaign issue be about the low wages of American workers. West Virginia is the latest of 26 states to succumb to the business funded National Right to Work Committee as their state legislature overrode the governor's veto of a right to work/prevailing wage bill that passed on a straight party-line vote - guess which party.

Pete Boggs said...

Leon's right about the over-regulatory nature of what's really statism / fascism. Why would victims of decades-plus statist abuse, return to their abusers for remedy, or quaint sound-bite fragmented discussion? Governmental greed has yielded decades of morbid growth of an anti-citizen abuser; not Constitutionally relevant government, proportionate to the purpose of its skeletal frame.

Anon 9:29 is right about Mexico & other places not mentioned. The question is what environment facilitates the exodus of domestic corporations from the comforts of origin? Answer: Reckless & unsustainable, crony statism.

Flogger: Flint has failed to remediate or remove lead pipes from their supply system; a lesson taught long ago by Rome. It should tell us something, that it's more affordable for corporations to pay for protection that's unavailable to "average" Mexican citizens. It turns out the border runs much further North than is understood by most Americans; suffering the serial abuse of what's supposed to be their "government."

Anonymous said...

Mike Pence will have the IEDC to review the $200,000 in grants Carrier/United Technologies was awarded.......http://www.theindychannel.com/news/local-news/pence-to-investigate-carriers-plans-to-move-to-mexico


If they can get the money back it will help offset some of the $365,000 spent on hiring a PR firm outside of Indiana for the RFRA debacle. http://www.indystar.com/story/news/2015/07/02/indiana-cancels-pr-contract-tied-rfra/29628745/


Downtown Indy said...

I question how much wages actually matter in the real world. They pay $22 on average, they expect to pay $3 in Mexico. Of course there are benefits to factor in, like mandatory healthcare (hmmmm) but how many hours go into building each unit? One or two? Are we to believe that competitiveness hinges on less than $100 in a $3000 product?

Anonymous said...

When faced with restructuring, companies often overinflate the cost of labor to achieve a negative public perception of employee income. What is reported as an average wage takes in all of the factors involved in employing a worker and not any monies the employee actually receives. For instance, my former employer even included as pay the benefit of an unassigned onsite parking space where parking was always plentiful. The higher salaries of upper management upwardly skew the average wage while adding few to the entire worker population.
It is not worker wage issues that keep company planners up at night but it is the savings that can be accomplished by tax avoidance. With an inept or complicit Congress, and highly paid lawyers navigating through questionable tax loopholes, the trending business model is to funnel earnings through what is now a well oiled system of compliant entities. What used to be a necessary condition to obtain a charter to do business was that a corporation act for the public good. Now all the is necessary is an empty office room in the Cayman Islands.

Paul K. Ogden said...

We have a world economy and American consumers benefit greatly from that. Taking a protectionist approach would hurt American consumers and the American economy. NAFTA was one of the reasons why we had such strong growth of our economy in the 1990s. Of course by far the biggest factor was the technological revolution which greatly increased productivity. That reason was why we experienced the longest peacetime expansion of the American economy during the Reagan, Bush I, and Clinton years.