News just broke that Carrier says it has struck a deal with Trump to keep jobs in Indiana. I am excited about this development. Of course, the details will reveal how good a deal this is for not only the 1000 folks whose jobs are not eliminated but the rest of the country.
Once upon a time I took a class entitled Strategic Corporate Research at Cornell University in Ithaca, NY. This class focused on decoding corporate financial reports, news releases, and behavior to understand the real strenghs and weaknesses of a corporation. This knowledge could then be applied in a variety of ways but the one I was most interested in was resolving labor disputes. The story about Carrier linked above contains some clues as to what the actual details of the deal may be and how easy it should of been to convince Carrier to reach this agreement to keep these 1000 jobs in Indiana. Here’s the clue…
United Technologies is a leading defense contractor that benefits from billions of dollars in federal spending, so it needs to maintain good relations with the incoming Trump administration.
United Technologies collects about $5.6 billion in annual revenue from U.S. government contracts, according to company filings, which is equal to about 10% of its overall revenue. The government also pays for nearly $1.5 billion of the company’s annual research and development spending.
No offense to the author of Art Of The Deal but it probably didn’t take a coffee induced negotiating frenzy to reach an agreement. Simply reminding Carrier (United Technologies) that future contracts will be up for review and a long look at the taxpayers role in UT’s Research and Development could be in the offing as budgets are revamped should have been enough to do the trick. Can you imagine the Board of Director’s review of the CEO that lost all that when keeping a profitable plant operating in Indiana was the tradeoff?
Of course, the right-wing and libertarian pointy cap gang doesen’t like any attempt to save American jobs.
Justin Wolfers, a professor of economics at the University of Michigan, commented that the deal could set a troubling precedent.
“Every savvy CEO will now threaten to ship jobs to Mexico, and demand a payment to stay,”
True enough, particularly if we keep the same system we have now. A system that has produced record trade deficits, job loss, and wage stagnation. It is time for a new system.
Thom Hartmann describes such a system in his latest article on Alternet, Here’s How We Can Really Protect America…
Prior to the Reagan administration, when we still had strong tariffs in place and almost a quarter of our workforce was both engaged in manufacturing and unionized, America was the world’s largest creditor nation. More countries owed us money—mostly from importing our well-made goods—than any other country in the history of the world.
Today, we are the largest debtor nation in the world, almost entirely because of neoliberal changes in our trade policies, what the best and the brightest call free trade.
Similarly, before Reagan, we were the world’s largest exporter of finished, manufactured goods, and the world’s largest importer of the materials necessary to make them (from iron ore to exotic woods).
Today, the tables have completely flipped: we’re now the world’s largest importer of finished goods, and have become one of the world’s largest exporters of iron ore, oil/fuel, coal, timber, and other raw materials that are then used to make the goods and packaging that we import back here from China, et al.
When Donald Trump proposed a return to protectionism, he wasn’t promoting some bizarre, right-wing theory. It has a long and successful history.