This story has been updated to include Carrier's response
Carrier, the company President Trump pledged to keep on American soil, informed the state of Indiana this week that it will soon begin cutting 632 workers from an Indianapolis factory. The manufacturing jobs will move to Monterrey, Mexico, where the minimum wage is $3.90 per day.
That was never supposed to happen, according to Trump's campaign promises. He told Indiana residents at a rally last year there was a "100 percent chance” he would save the jobs at the heating and air-conditioning manufacturer.
About 1,400 positions were on the chopping block, per company estimates. Over the past year, Trump has claimed he could maintain at least 1,100 of those jobs in the United States. But on Monday, the company gave official notice to Indiana officials that it would start laying off workers at the factory on July 20 and keep slashing staff until approximately 800 factory employees remain.
“This action follows a thorough evaluation of our manufacturing operations,” wrote Steven Morris, a Carrier manager in Indianapolis, in a memo Indiana’s Department of Workforce Development received Monday,“and is intended to address the challenges the business faces in a rapidly changing industry.”
The dismissals, he added, are “expected to be permanent.”
Trump’s saga with Carrier began last spring, when he declared to an Indianapolis crowd that he would stop the company from uprooting in search of cheaper labor.
“Here’s what’s going to happen,” Trump said at the rally. “They’re going to call me, and they are going to say, ‘Mr. President, Carrier has decided to stay in Indiana.’”
He kept going. “One hundred percent,” Trump said. “It’s not like we have an 80 percent chance of keeping them or a 95 percent. 100 percent.”
After the election, Trump took credit for rescuing the Carrier jobs, tweeting on Thanksgiving that he had called the company’s leadership to cut a deal.
United Technologies, Carrier’s parent company, agreed to spare some of the positions in exchange for $ 7 million in state tax credits. (If the company outsourced any of those jobs over the next 10 years, it would have to pay back the money, according to the Indiana Economic Development Corp.)
A celebratory Trump visited the factory in December and announced that, thanks to his negotiating, more than 1,100 of the jobs would stay in the heartland.
“Carrier stepped it up, and now they’re keeping over 1,100 people,” Trump told an audience of cheering factory workers.
He said those numbers could go even higher, noting that United Technologies had agreed to invest roughly $16 million into updating the plant.
“And by the way, that number is going to go up substantially as they expand this area, this plant,” Trump said. “The 1,100 is going to be a minimum number.”
But later that month, Greg Hayes, chief executive of United Technologies, admitted that the $16 million investment would go toward automation.
“What that ultimately means is there will be fewer jobs,” he told CNBC's Jim Cramer.
Chuck Jones, president of the United Steelworkers Local 1999, which represents Carrier employees in Indianapolis, provided further evidence that Trump had inflated the number of jobs that would remain in Indianapolis. Only 800 Carrier employees would be able to keep their jobs — 770 factory workers plus 30 or so more employees, counting supervisors, according to the union count.
Jones told The Washington Post days later that Trump had “lied his a-- off.” He suspected the then-president-elect was including in his count design and engineering jobs that were never going to leave. Trump responded on Twitter by saying Jones had done a “terrible job” as union president.
The full extent of the layoffs emerged Monday with Carrier's announcement of 632 job losses.
The company told The Washington Post on Wednesday that “more than 1,000 jobs” will be preserved. However that figure included engineering and headquarters staff whose jobs were never scheduled to leave Indianapolis in the first place.
“Carrier will continue to manufacture gas furnaces in Indianapolis, in addition to retaining engineering and headquarters staff, preserving more than 1,000 jobs,” the company said. “We have also designated our Indianapolis facility as a Center of Excellence for gas furnace production, with a commitment to making significant investments to continue to maintain a world-class furnace factory.”
Holly Gillham, a spokesman for the Indiana Economic Development Corp., which was formerly led by Vice President Pence, said Monday's notice of jobs cuts was consistent with Carrier’s arrangement with the state and Trump.
“As announced in December, Carrier is fully committed to retaining more than 1,000 jobs in Indiana over the next 10 years,” she said in an email. “By choosing to maintain these Hoosier jobs, Carrier is showing confidence in Indiana’s skilled manufacturing workforce.”
According to Jones, 550 union members will be laid off, plus another 82 temporary factory staffers who were brought on to help with the transition.
“Everyone knew it was coming, they just didn’t know when, exactly. It's closure to a bad situation,” Jones said.
Michael Strain, director of economic policy studies at the right-leaning American Enterprise Institute, said Trump’s deal with Carrier offered a partial solution to a broader problem.
American manufacturing employment, he noted, has dwindled for decades, especially in Indiana, where a third of workers held those jobs 50 years ago; the share today is closer to 10 percent.
“I wouldn’t even call it a deal,” Strain said. “It seemed to be that Carrier was responding to political pressure and did so in a way that allowed them to make it through a political moment.”
Trump, he said, benefited from the optics.
“The president,” Strain said, “took the opportunity to position himself as a champion of American workers.”
The number of Carrier jobs that will be eliminated is twice the size of the imminent job loss at Rexnord, the ball bearing factory about a mile away from the Carrier facility. Trump has slammed that company on Twitter, too, for outsourcing work to Mexico — but the firm has stuck to its plan and is dismissing the last hundred of its 300 employees in Indianapolis this summer.