by Gaius Publius
I think by now most people know the story of the Carrier plant layoffs that sparked such anger (discussed in the video above; to view the Carrier clip only, click here). A group of workers at a Carrier plant in Indianapolis were being told by management that their jobs were being eliminated and the plant moved to Mexico. The clip, shot by one of the workers at the meeting, shows their reaction. There's no doubt that the clip going viral had an influence on both the primary and the general election. It perfectly captures the state of working in American, and workers' reaction to it.
During the campaign, Trump said he'd fight, as president, to restore all of the Carrier jobs lost in Indianapolis. From the New York Times (my emphasis):
Carrier’s decision to move the factory to Monterrey, Mexico, will eliminate 1,400 jobs by 2019. Mr. Trump quickly made the factory Exhibit A in his argument against the trade policies of Republicans and Democrats alike.
He cited Carrier again and again on the campaign trail, threatening to phone executives at the company and its parent, United Technologies, and to hit them with 35 percent tariffs on any furnaces and air-conditioners they imported from Mexico. To the cheers of his supporters, he predicted at rallies that Carrier would call him up as president and say, “Sir, we’ve decided to stay in the United States.”
The writer added:
Now his supporters expect action. “If he doesn’t pass that tariff, I will vote the other way next time,” warned Nicole Hargrove, who has worked at Carrier for a decade and a half and is not certain what she will do if and when her job goes to Mexico.
“I will vote the other way next time.” This is exactly the leverage the Sanders wing of the Democratic Party needs to bring non-racist Trump voters back to the Sanders camp. (Do the Democrats want to be part of that camp? We'll find out soon.)
As it turns out, Trump may be backing down. First, there's this:
In order for Trump to place a tariff on heating and cooling products made in Mexico coming to the US, first, he’d have to withdraw from NAFTA, the North American Free Trade Agreement between the US, Canada and Mexico. The treaty was formally signed into agreement by President Bill Clinton in 1994, but it was negotiated by Republican President George H.W. Bush.
He could do that — and in fact, he promised to renegotiate NAFTA in the first 100 days of his presidency. But will he do either — save all Carrier jobs in Indianapolis, plus renegotiate NAFTA? Many are doubtful, including the president of the union representing Carrier's workers (notice, Carrier's Indianapolis workers were unionized; their Mexican workers won't be).
The Indianapolis Star:
Union president would be 'shocked' if Donald Trump convinces Carrier to stay in Indianapolis
The president of the union that represents 1,400 Carrier Corp. workers in Indianapolis is not optimistic that a last-ditch effort by President-elect Donald Trump can save their jobs.
Chuck Jones, president of United Steelworkers Local 1999, said Friday he has not been briefed on talks between the incoming Trump administration and Carrier. But he doesn't see any chance for Trump or Vice President-elect Mike Pence to reverse Carrier's plan to move its west-side furnace operations to Monterrey, Mexico.
“If in fact (discussions) do materialize into something, I would think they'd have to include us at some point in time,” Jones said.
Trump announced his administration's talks with Carrier on Twitter, writing that he was “working hard, even on Thanksgiving, trying to get Carrier A.C. Company to stay in the U.S.” Trump said he was “making progress” in keeping the heating and air conditioning giant in Indianapolis.
CNBC on Friday reported Pence is leading those talks, citing unnamed sources. Marc Lotter, a spokesman for Pence's vice presidential campaign, said in an email he had no comment beyond what Trump said. Spokespersons for Pence's office did not respond to requests for comment.
Carrier issued a statement via Twitter that confirmed it has been in touch with the Trump administration, but did not describe the nature of those communications. …
Jones worries that campaign promise might be driving Trump to offer false hope.
“I think it's all a PR move,” Jones said. “Trump said what he said when he was campaigning. We've been calling him out, that he made promises Carrier wouldn't move. In order to do something, I think he came up with this.”
I hope you can see what's brewing — a classic bait-and-switch by Trump. After all, as Uyger points out above, all the government needs to do is threaten to cancel the lucrative United Technology (UTC) defense contracts — $6 billion worth of them — or refuse to grant new ones, until the plant, with its full complement of union workers, is restored.
Even I could make that deal. The government has all the aces. It just has to play them. Will Donald Trump play his aces and keep his very high profile promise to Carrier workers and American workers through the nation?
Bernie Sanders on Trump and Carrier Outsourcing
Will Trump keep his promise to Carrier workers? Perhaps he needs a nudge. Enter Bernie Sanders. Via his press office we find this (my emphasis):
Sanders Statement on Carrier and Outsourcing
BURLINGTON, Vt., Nov. 26 – U.S. Sen. Bernie Sanders (I-Vt.) issued the following statement Saturday:
“During the campaign, Donald Trump made a 100 percent commitment to prevent United Technologies from shipping 2,100 jobs from Indiana to Mexico. All of us need to hold Mr. Trump accountable to make sure that he keeps this promise.
“Let’s be clear: it is not good enough to save some of these jobs. We cannot rest until United Technologies signs a firm contract to keep all of these good-paying jobs in Indiana without slashing the salaries or benefits workers have earned.
“United Technologies is not going broke. Last year, it made a profit of $7.6 billion and received over $6 billion in defense contracts. It has also received more than $50 million in corporate welfare from the Export-Import Bank and very generous tax breaks.
“In 2014, United Technologies gave its former CEO Louis Chenevert a golden parachute worth over $172 million. Last year, the company’s five highest paid executives made over $50 million. The firm also spent $12 billion to inflate its stock price instead of using that money to invest in new plants and workers.
“I call on Mr. Trump to make it clear to the CEO of United Technologies that if his firm wants to receive another defense contract from the taxpayers of this country, it must not move these plants to Mexico.
“We need to send a very loud and very clear message to corporate America: the era of outsourcing is over. Instead of offshoring jobs, the time has come for you to start bringing good-paying jobs back to the United States of America.
“If United Technologies or any other company wants to keep outsourcing decent-paying American jobs, those companies must pay an outsourcing tax equal to the amount of money it expects to save by moving factories to Mexico or other low-wage countries. They must pay back all of the tax breaks and other corporate welfare they have received from the federal government. And they must not be allowed to reward their executives with stock options, bonuses or golden parachutes for outsourcing jobs to low wage countries.
“I will soon be introducing legislation to make sure that Donald Trump keeps his promise to prevent the outsourcing of American jobs. For the sake of American workers, this is a promise that cannot and must not be broken.”
That's just the first half of the Sander challenge to Donald Trump — restore all Indianapolis Carrier jobs. The second half of his challenge is even stronger, both politically and in terms of policy. Look at the last paragraph in the press release again, the part that mentions the legislation.
The Outsourcing Prevention Act of 2017: “We need to send a very loud message to corporate America: the era of outsourcing is over.”
Legislation like this is exactly what the Sanders and the Sanders wing needs to be doing — it's what Sanders would have done as president — and it's excellent to see them doing it. The “Outsourcing Prevention Act” that Sanders will introduce is described below. Read it for the pleasure it gives you.
Note that just introducing it will do three things at once:
Introducing the bill challenges both Trump and the Democratic Party to show where it stands — out loud and in public. Points 2 and 3 interlock. If the corporate wing of the Party publicly blocks this bill, point 3 will be made in reverse — the Democratic Party will be outed as being no better than Trump when it comes to jobs and the economy.
Challenging the Carrier promise is a great first move, but if Trump does successfully negotiate to get those jobs back, the critical (to the nation) issue of job loss via outsourcing disappears for a while. Having a bill that works its way through Congress (a) keeps the conversation going for quite a while longer, and (b) represents a systemic fix to a systemic problem. Again, kudos to Sanders and his team for this strong move.
Here are the details of the bill, from the Sanders press release quoted above:
Summary of the Outsourcing Prevention Act
In February, Carrier and UTEC [sic] announced that it would be closing two plants in Indianapolis and Huntington, Indiana shipping 2,100 jobs to Monterrey, Mexico, where workers are paid just $3 an hour. Both of these plants are owned by United Technologies. This legislation will provide a comprehensive solution to address this problem. United Technologies is not an outlier; it is representative of how so many multi-national corporations are taking advantage of our rigged economic system to pad their profits while hurting American workers. President-elect Trump made a promise during the campaign that he would prevent all of these jobs from being shipped overseas. The Outsourcing Prevention Act would make sure that Donald Trump keeps this promise by:
1. Preventing companies that outsource jobs from receiving federal contracts, tax breaks, grants or loans.
Last year, United Technologies received over $6 billion in federal contracts, making it the seventh largest recipient of federal contract funds. Over the past 15 years, this Fortune 500 company has used loopholes in the tax code to shelter more than two-thirds of its $38 billion in profits from federal taxation. It has also received over $50 million in corporate welfare from the Export-Import Bank. Under this legislation, companies would be barred from receiving future contracts, tax breaks, grants or loans from the federal government if they have announced plans to outsource more than 50 jobs overseas.
2. Clawing back federal benefits from companies that outsource jobs have received over the last decade.
This legislation would require all companies that outsource more than 50 jobs in a given year to pay back all federal tax breaks, grants and loans they have received from the federal government over the last decade.
3. Establishing an outsourcing tax on companies that move U.S. jobs offshore.
This legislation would impose a tax on all companies that outsource jobs. The tax would be equal to the amount of savings achieved by outsourcing jobs or 35 percent of its profits, whichever is higher. United Technologies estimated that it would save $65 million a year by moving its jobs in Indiana to Mexico. Under this legislation, the company would be required to pay a tax of no less than $65 million a year.
4. Prohibiting executives from profiting off of the outsourcing of U.S. jobs.
This legislation would prohibit companies that offshore jobs from enriching executives through golden parachutes, stock options, bonuses, or other forms of compensation by imposing stiff tax penalties on this compensation. In addition, companies that outsource jobs overseas would be prevented from buying back its own stock. In 2014, United Technologies gave its former CEO a golden parachute worth over $172 million. Last year, the company’s five highest paid executives made over $50 million. The firm also spent $12 billion to inflate its stock price instead of using that money to invest in new plants and workers.
If you don't want to read the whole piece above, read just the four major points. Very nicely done. Again, exactly what Sanders would have done as president, and exactly why all those thousands showed up in all those stadiums to see and hear him.
The only difference now is, he has to do it all from his Senate seat instead of the Oval Office. Pity that. Still, he's doing it, and we should be continuously grateful.
Just thought I 'd throw that in. Remember, it didn't have to be this way.
“When fascism comes to America, it will be wrapped in the flag and carrying the cross.” — Sinclair Lewis