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Layoffs Occur at Carrier Plant Outlined in Trump Deal

  • VOA News

FILE - President-Elect Donald Trump speaks at event at Carrier HVAC plant in Indianapolis, Indiana, Dec. 1, 2016.

The U.S. Carrier factory where President Donald Trump says he saved 800 jobs from moving to Mexico notified 300 people last week that they were being laid off.

The layoff notices began Thursday, exactly six months since Trump took office. The layoffs are part of a deal Trump made with the company in December to prevent deeper cuts at the Indianapolis plant.

The layoffs are the first of a group of 630 job terminations planned for the year as the company moves some of its operations to Mexico. Carrier – owned by United Technologies Company (UTC) – announced in December that its fan coil department would relocate to Mexico by the end of 2017.

WATCH: Despite Trump's efforts, Indiana Carrier lays off employees

The Carrier plant, which makes gas furnaces, became an issue in last year's presidential election when UTC announced plans to eliminate about 2,100 jobs in the state and transfer those operations to Mexico. As a presidential candidate, Trump roundly criticized that decision.

After winning the election, Trump worked out a deal with his vice president-elect, Mike Pence, who was then the governor of Indiana, to provide as much as $7 million in tax incentives and training grants for Carrier in exchange for keeping about 700 of those jobs in the state.

In a letter sent to the Indiana Department of Workforce Development in May, a human resources manager for Carrier said, "While the entire facility is not closing, the separations are expected to be permanent."

In addition, UTC is expected to lay off an additional 700 workers at factories in the town of Huntington, Indiana, near the city of Fort Wayne.

However, Carrier has also said it will honor its commitment, made in 2016, to employ about 1,100 people in Indianapolis.

Robert James, head of the United Steelworks Local 1099, the Carrier workers' local union, told VOA the union is trying to negotiate retirement incentives and "voluntary separation" incentives, or buyouts, for the workers to cut down the number of actual job losses.

FILE - Employees of Carrier watch as President-elect Donald Trump and Vice President-elect Mike Pence take a tour in Indianapolis, Indiana, Dec. 1, 2016.
FILE - Employees of Carrier watch as President-elect Donald Trump and Vice President-elect Mike Pence take a tour in Indianapolis, Indiana, Dec. 1, 2016.

During the 2016 presidential election campaign, James was most concerned about job security. When he spoke to VOA in April of 2016, he was expecting to lose his job when Carrier moved the work to Mexico.

A lot has happened since.

“We appreciate what President Trump did,” James said at the time, referring to Trump’s efforts to keep the Carrier facility open and employing workers in Indianapolis making furnaces.

Uncertainties

While a lot of positive developments have happened since VOA last spoke to James, he recently said a cloud of uncertainty still hangs above the facility.

“What we saw in December when President Trump came to Carrier … it was a dog and pony show.” Because only some, not all, of the jobs were saved, he added.

“He stood up there before 100 people who were in that room and told those 100 workers that there were 1,100 jobs being saved. And he was wrong,” James said.

According to James, only 730 are slated to stay in Indiana.

Mohan Tatikonda, a professor of Operations Management at the Kelly School of Business at Indiana University, said most factories like Carrier “have already moved.”

Tatikonda said lower-skill jobs such as those at Carrier naturally flow to a lower-wage environment, eventually.

"We can be happy – it [[saving some jobs]] made a difference for so many families, but it wasn’t a lasting solution, and it is not a solution that is in any way replicable or applicable to other factories,” Tatikonda said.

FILE - United Steelworkers Local 1999 President Chuck Jones speaks during a news conference in Indianapolis, Dec. 9, 2016.
FILE - United Steelworkers Local 1999 President Chuck Jones speaks during a news conference in Indianapolis, Dec. 9, 2016.

While James’ job at the plant is secure, for now, he is focused on helping those who are leaving this year to look for other work, including “some the same age as I am that is going to make it a lot harder. Because when you are in your 50s, trying to look for a job – that’s not a good thing,” he added.

Earlier this year, Trump tweeted twice about former union leader Chuck Jones after Jones criticized the deal. Trump said Jones had done a "terrible job" negotiating for the workers and suggesting that he "spend more time working."

Jones has since retired.

Carrier said the employees who lose their jobs will get severance pay. It says at least 30 people are taking advantage of educational funding offered by Carrier.

VOA's Kane Farabaugh contributed to this report.

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