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Trump intervenes to prevent US company relocating to Mexico

Move will save 1,000 jobs at Carrier air-conditioning plant in rust-belt state of Indiana

US President-elect Donald Trump says he and Vice-President Mike Pence will travel to the state of Indiana on Thursday to announce a deal that will save around 1,000 jobs by keeping open an Indianapolis air conditioning factory owned by Carrier, and which was due to close and relocate to Mexico.

Vice-President Mike Pence speaking in New York on Tuesday.
Vice-President Mike Pence speaking in New York on Tuesday. AFP

Few details have yet emerged, apart from Carrier sending out a tweet on Tuesday that it was “pleased to have reached a deal” with Trump.

Throughout his election campaign, Trump promised to prevent US manufacturers from moving US jobs overseas, particularly to Mexico. His emphasis on industrial jobs in part explains his appeal with working-class voters in states throughout the country's rust belt that have traditionally voted Democrat in presidential elections.

Last week, Trump said he was “making progress” on making sure Carrier would remain in Indiana.

The President-elect plans to provide US industry with state aid

The company had announced in February that it was closing its Indianapolis plant and moving its manufacturing to Mexico. This would have seen the factory’s workers laid off over three years from 2017.

In a September debate against Democratic rival Hillary Clinton, Trump picked out Carrier for criticism.

“So many hundreds and hundreds of companies are doing this,” he said, adding: “We have to stop our jobs from being stolen from us. We have to stop our companies from leaving the United States.”

Trump seems to be living up to his campaign pledge to be friendlier to businesses by easing regulations and overhauling the corporate tax code.

The state of Indiana also plans to give economic incentives to Carrier as part of the deal to stay, according to local officials.

Trump had also criticized Ford after the company said it planned to invest $2.5 billion in engine and transmission plants in Mexico. The company has since announced it will continue to produce its upscale Lincoln model at its Kentucky plant.

Trump promised during his campaign to keep jobs in the United States

The decline of US industry has hit the country’s middle and working classes hard; men and women who have spent their adult lives working in factories now find themselves flipping burgers or working in other low-skilled, low-wage service sectors. Globalization has forced many companies to relocate to countries with lower wage bills in a bid to maintain competitiveness. In the last 15 years, 60,000 factories have closed, with the disappearance of 4.8 million jobs, as Bernie Sanders, who lost the Democratic Party’s presidential nomination race to Hillary Clinton, pointed out repeatedly on the campaign trail.

As The New York Times, which broke the Carrier story, has argued, only a businessman like Trump could take on corporate America without being called a Bernie Sanders-style socialist. “If Barack Obama had tried the same maneuver, he’d probably have drawn criticism for intervening in the free market,” said the paper on Monday.

English version by Nick Lyne.

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