As news broke that President-elect Donald Trump reached a deal to save nearly 1,000 jobs at an Indianapolis plant on Tuesday evening, factory worker Brian Reed prepared to lose his job of 24 years just a mile away.
Reed assembles roller bearings at Rexnord, an industrial supplier that plans to send his job and 294 others from the Midwest to Mexico. The 45-year-old father worries about the mortgage, college tuition for his daughter and health insurance for his son, a football player. He hopes Trump will try to save his family's livelihood, too.
“We are counting on him,” Reed said. “The working class elected him. Now take a stance.”
This week, the president-elect steered national attention to Carrier, the air conditioning manufacturer that had intended to move roughly 1,400 jobs from Indiana to Monterrey, Mexico. Carrier now says it will keep nearly 1,000 of those jobs in the state's capital after coming to an agreement with Trump and Vice President-elect Mike Pence, who is governor of Indiana.
Neither the company nor Trump's transition team released details of the agreement.
The deal followed Trump’s pledge at an April rally in Indianapolis to rescue the jobs.
“That’s what is going to happen,” he said at the time. “It’s not like we have an 80 percent chance of keeping them or a 95 percent. 100 percent.”
Yet, the situation in Indianapolis highlights just how intractable the outflow of manufacturing jobs is in much of the nation. For every factory Trump publicly targets, there’s another downsizing somewhere else, sometimes just around the corner.
Since 1969, Indiana has lost more than 235,000 manufacturing jobs, shedding nearly a third of such positions, data from the U.S. Bureau of Economic Analysis shows. Rexnord is at least the third manufacturer in Indiana this year to reveal Mexico relocation plans. Carrier announced its decision nine months ago, along with United Technologies Electronic Controls, its parent company, which said it will lay off 700 workers by 2018.
Local and state officials had pleaded with the companies to keep their operations running, but the appeals proved fruitless. Mayor Joe Hogsett turned his focus to containing the economic fallout from the manufacturing exodus, creating a task force to, among other acts of aid, help laid-off employees with job training.
He urged Rexnord last week to pay back more than $300,000 in tax incentives because of the looming closure, set for June. The city plans to hire an “economic recovery coordinator,” said city spokeswoman Taylor Schaffer, and before the announcement of the deal with Trump, she said it planned to use the $1.2 million in tax incentives that Carrier returned to help displaced workers.
Hogsett didn’t respond to calls from The Washington Post. However, a letter to Rexnord that the mayor publicly released this month noted his own futile effort to keep the company in town.
“Despite every offer I have made and the good-faith efforts of your employees, Rexnord has decided to cast aside the quality and experience of your longtime, dedicated Indianapolis employees to chase cheap labor in Mexico,” Hogsett wrote in a publicly posted letter to the company.
Rexnord, headquartered in Milwaukee, is packing up its Indianapolis operations to resettle in the same Mexican city that Carrier had picked for its new domicile. It expects to save $15.5 million during its first year south of the border, said Chuck Jones, president of United Steelworkers Local 1999, which represents both Carrier and Rexnord. That cushion is estimated to grow by $200,000 a year, according to figures the manufacturer shared with the union.
To reverse course, Jones said, Indianapolis employees would have had to slash their hourly pay from an average of $25 to $5.
Jones said he was surprised by Trump's deal to save the Carrier jobs.
“I don't know how to react because they haven't told us the particulars,” he said. “One word to describe how I'm feeling right now is optimistic.”
Trump has pledged to bring back American jobs that were offshored, promising to generate 25 million as president. He spoke to workers who have lost their paychecks to the forces of trade and technology, and they responded enthusiastically. Men in economically shabbier counties, particularly older white men, overwhelmingly voted him into the White House.
“Our politicians have aggressively pursued a policy of globalization — moving our jobs, our wealth and our factories to Mexico and overseas,” Trump said in his June jobs speech. “It doesn’t have to be this way. We can turn it all around — and we can turn it around fast.”
Economists have pushed back on that point. Since the North American Free Trade Agreement took effect in 1994, quashing tariffs and tripling the product exchange between the United States, Canada and Mexico, about 4.5 million American manufacturing jobs have disappeared — a consequence they ascribe to both globalization and automation.
Though Trump argues that NAFTA shoved jobs south of the border, wiping out some of the best-paying gigs Americans can find without a college degree, proponents of the move say it brought prices down for American families, stretching their dollars while boosting the economy.
Derek Scissors, who studies global economies at the American Enterprise Institute, a right-leaning think tank, said Trump’s promises to resurrect manufacturing jobs thus far appear impossible to keep. Renegotiating NAFTA or imposing new double-digit tariffs, two of Trump’s trade proposals, wouldn’t restore the American manufacturing landscape of the past, he said.
“You can’t make the world go backward 20 or 30 years,” Scissors said. “You could bring some jobs back, but it’s going to cost a lot. It would drive up prices.”
More from Wonkblog: