President-elect Donald Trump toured an Indiana factory Thursday where government tax breaks helped stop some jobs from moving to Mexico, while setting the stage for more direct negotiations with companies thinking of leaving.
Trump and Mike Pence, his running mate and the outgoing Indiana governor, toured the Carrier gas furnace plant in Indiana as part a “Thank You Tour” of the Midwest.
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The Wall Street Journal reported that Indiana officials agreed to give Carrier $7 million in tax breaks over 10 years to keep the plant in Indianapolis. The newspaper said 800 workers will be retained at the Indianapolis plant and 300 research and headquarters positions won’t be shifted to Mexico as previously announced. But 600 factory jobs still will be moved south of the border and a second Carrier plant in Huntington, Indiana, will close as previously slated, moving another 700 jobs to Mexico, the newspaper reported.
The bottom line: Carrier is keeping 1,100 factory and research jobs in the states, moving 1,300 Indiana jobs to Mexico and getting $7 million in tax breaks over 10 years.
Still, Trump touted the development as a sign of things to come. He also signaled he favors direct negotiations with companies, even though critics say it’s not good policy.
“I think it’s very presidential. And if it’s not presidential, that’s OK because I like doing it,” Trump said at a news conference at the factory. “But we’re going to have a lot of phone calls made to companies when they say they’re leaving this country because they’re not going to leave this country.”
Later Thursday at an evening rally in Cincinnati, Trump confirmed earlier reports and told a crowd he would appoint retired Marine Gen. James Mattis to be his defense secretary.
The president-elect delivered a rousing speech that was reminiscent of his high-energy campaign rallies and included chants from the crowd of “lock her up” — a reference to Hillary Clinton. His team billed the Cincinnati event as the launch of his “thank you tour.”
In Indianapolis, Trump blasted the North American Free Trade Agreement as a “disaster” and a “one-lane highway” sending jobs to Mexico.
“It’s going to be changed,” Trump said. “Leaving the country is going to be very difficult.”
Perhaps setting high expectations for his administration, the president-elect added: “Companies are not going to leave the United States anymore without consequences. It’s not going to happen.”
Carrier, in a statement, lauded the agreement: “Today’s announcement is possible because the incoming Trump-Pence administration has emphasized to us its commitment to support the business community and create an improved, more competitive U.S. business climate.”
But critics said the Republican just set a road map for other companies: Threaten to move and the government will cut your taxes.
“Just contact the White House and say, ‘We’re thinking of offshoring” jobs, former Pennsylvania Gov. Ed Rendell told MSNBC Thursday. “The precedent has been set by Carrier.”
Sen. Bernie Sanders (I-Vt.) wrote an op-ed for The Washington Post saying that Trump isn’t keeping his promise to slap tariffs on manufacturers that leave the United States.
“Just a short few months ago, Trump was pledging to force United Technologies to ‘pay a damn tax.’ He was insisting on very steep tariffs for companies like Carrier that left the United States and wanted to sell their foreign-made products back in the United States,” Sanders wrote. “Instead of a damn tax, the company will be rewarded with a damn tax cut. Wow!”
Steven Mnuchin, a former Goldman Sachs banker whom Trump will nominate for treasury secretary, indicated on CNBC Wednesday that direct talks with companies will be part of the new administration’s tactics.
“This president, this vice president-elect is going to have open communications with business leaders,” Mnuchin said.
Meanwhile Thursday, an election recount got underway in Wisconsin, where Trump narrowly defeated Democratic nominee Hillary Clinton.