Later today, P/E Trump and Carrier will announce that 50% of the 2,000 jobs set to be outsourced to Mexico will be retained. There are no details available yet, but there appears to be a defense-budget stick used on United Technologies, the corporate parent, and some Hoosier carrots, delivered by Indiana. VP/E Pence remains the Governor. Kudos to Trump for saving these jobs.

There are special factors at play here: the defense contract tie-in, Pence’s ties to the state, and the fact that keeping the jobs will mean only $.02 on Carrier’s profits of $6.50, less than half of 1%. In other words, the Carrier “deal” is a one-off.

The jobs saved are high-paying, with hourly rates in excess of $20.00. Even with high-paying labor costs, Carrier shares are earning $6.50. Carrier is profitable without moving any of the jobs.

So why the impetus to move? Wall Street earnings, competition, the lack of effective collective bargaining. All but forgotten is the fact that disappearing jobs mean disappearing consumers. But that is beyond the horizon of the next quarterly earnings forecast. No need for this manufacturer to think about it.

Evan Sarzin
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Copyright 2016 The Moderate Voice
  • Shannon Lee

    Makes you wonder how the american tax payer is subsidizing these 2,000 jobs….

    They were slated to move overseas for a reason…and now they are not.

  • dduck

    Break a few arms for jobs, what’s the harm. ๐Ÿ™

  • Dorian de Wind, Military Affairs Columnist

    Andy B.:

    Trump Warns That Companies Shipping Jobs Overseas Will Be Slapped with Enormous Bribes

    โ€œDo you really want to wind up like Carrier, with seven million dollars in your pockets?โ€ Trump said. โ€œI donโ€™t think so.โ€

  • Markus1

    The free market is an abstraction useful as a teaching tool for elementary thinking about economics. In reality, the government has always had a huge impact on the economy directly and indirectly. The feds spend about 21% of the GDP, and the laws and rules that are administered have a huge impact. Property rights, both real and intellectual, make a big difference. It is part and parcel of life on this earth.
    I can’t just drive a car. My car has to have seat belts and emission controls and a thousand other things. Many of these things are for good and defensible reasons, but it would be naive not to recognize that some laws are made in collusion with industry and for their benefit.
    I would be willing to bet that the recent deal will benefit Carrier’s bottom line. It will probably save some jobs, but there could be some hype in the 1000 jobs number. Does it benefit the nation as a whole? Many of us who buy air conditioners will probably pay a bit more, and many who don’t buy air conditioning will provide the tax money to make the deal work. How does it all shake out?
    Let me say that the bailout of GM seems to have been beneficial. The mandating of gasohol seems to have benefited corn producers but not the US as a whole.
    Trump’s plans will have some failures and some successes. We’ll see if he throws more strikes or more balls.

    • dduck

      Yup.