Manufacture This

The blog of the Alliance for American Manufacturing

First published on Medium.

President-elect Donald Trump and Vice President-elect Mike Pence plan to appear at Carrier’s Indianapolis factory on Thursday to announce a deal to keep nearly 1,000 jobs in Indiana, according to officials on Trump’s transition team and Carrier.

The president-elect campaigned heavily on bringing manufacturing jobs back to America and often cited Carrier as an example of jobs moving to Mexico after the company announced last February it was moving approximately 2,000 jobs from Indiana to Monterrey. The projected economic damage to Indiana from these plant closures — Carrier’s parent corporation, United Technologies Corp., also has a facility in Huntington — was estimated to be $108 million.

Carrier received months of pressure from local officials and the United Steelworkers before working out the forthcoming deal. We won’t know until we see the details what was promised, or if any severe worker concessions are expected, which I would view as unacceptable.

But I’m glad we’re focused on this for a moment rather than Trump’s regular early morning tweet-rants.

One of the lessons of this campaign was that economic pain in the industrial heartland has been ignored. If we can help nearly one thousand American workers, it’s a welcome development. And before you weigh in with your own judgment, you should consider how these workers — diverse and unionized — feel about things. Most of them were facing the prospects of diminished livelihoods for the rest of their working lives and retirement.

Now, some of them may feel some hope, as may some of the neighborhood restaurants and stores, the plant’s suppliers, and the scores of others touched by factories.

State governors aggressively seek to keep and court businesses every day, and foreign countries do the same. Inducements are not in any way unusual. In fact, they’re almost always part of the equation. While economic purists may be bitterly disappointed, they aren’t living in the real world. Pretending like this game doesn’t exist is naïve.

Are interventions, like Trump’s at Carrier, efficient? No. But they are absolutely necessary.

In this case, Carrier is of a higher profile because of action from the plant’s United Steelworkers local, a viral video, and the attention that Sen. Bernie Sanders and the president-elect brought to bear on the company during the campaign. But there are other companies around the nation — not to mention in Indianapolis, like nearby Rexnord — that still have plans to move jobs overseas.

In fact, there were more than 1600 workplaces certified in the past two years under the Department of Labor’s Trade Adjustment Assistance program, which means some (or all) of those workers lost their jobs due to shifts of production overseas. Research from as early as 1997 showed that NAFTA was being used by companies to extract concessions from workers.

That dynamic hasn’t changed, and its only accelerated with competition from China, as well. The fact that state and federal officials don’t fight for these jobs is one of the reasons why we’re in such a goods-producing jobs hole.

So are interventions, like Trump’s at Carrier, efficient? No. But they are absolutely necessary.

His Carrier intervention is only a bandage on our industrial heartland that has suffered from thousands of similar wounds. It will take carrots, sticks, and a lot of policy changes to reshore some manufacturing jobs and keep more of them here, even in this age of robotics and automation.

First, trade agreements must address exchange rate manipulation and include stronger provisions for labor and the environment. We must also more aggressively enforce trade rules. That’s not starting a trade war; it’s working to end one that has been waged on us.

Second, our tax code must provide incentives for bringing investment and jobs back to the United States and deterrents for sending them abroad.

Third, we’ll need ongoing investments in worker training, infrastructure, and research to create a more competitive environment.

Fourth, we absolutely should use federal contracts and procurement as leverage to attract and retain good jobs.

There has been early talk of some industrial-state Democrats working with the Trump administration to secure some of these changes. It won’t be easy. Nearly all of Trump’s other policies are at odds with these Democrats, and his penchant for fanning the flames is unsurpassed in modern times.

But this partnership is worth pursuing for growing the middle class and restoring the real engine of our economy: manufacturing.

My hope is that this is one of many steps the incoming administration takes to ensure a strong manufacturing sector in America. We must tilt the playing field back to America to create good jobs. And Trump still has a long way to go to catch up with the most recent successful intervention: President Obama’s massive and successful 2009 rescue of America’s auto industry, which saved hundreds of thousands of jobs.