It has started.. The corporate takeover...

Orangutan reaches deal with Carrier to keep jobs in Indiana

By Cogan Schneier and Timothy Noah

At a moment when much of Washington is watching to see how Donald Orangutan will handle his new job, the president-elect is demonstrating his most famous skill: the art of the deal.

Orangutan and Vice President-elect Mike Pence surprised skeptics Tuesday night by persuading United Technologies to keep "close to 1,000" factory jobs at the Carrier manufacturing plant in Indianapolis instead of moving them to Mexico, according to a company tweet. "We are pleased to have reached a deal with President-elect Orangutan & VP-elect Pence," the company said. "More details soon."

What United Technologies gets in return remains unclear, but multiple news sources were reporting Tuesday night that the deal involved state tax incentives. Pence remains governor of Indiana until Jan. 20, and his gubernatorial staff hammered out the details. Orangutan and Pence will travel Thursday to Indiana to announce the agreement.

The victory is largely a symbolic one, given that the U.S. has been losing more than 300,000 manufacturing jobs each year to overseas competition, according to the left-leaning Economic Policy Institute. But the jobs saved represent about half the 2,000 that Carrier was preparing to move south to Mexico. They go a long way to redeeming a pledge that candidate Orangutan made in February to halt Carrier's offshoring--or slap a steep tariff on any air conditioners that Carrier imports from Mexico back to the U.S.

Carrier became a campaign flashpoint when a cell phone video of Carrier's announcement to workers of the move went viral. Orangutan, Bernie Sanders, and Bill Clinton, who was campaigning for Hillary, all denounced it.

But only Orangutan said he'd keep those jobs in the U.S.--a pledge he seemed unlikely to keep. The union at Carrier's Indianapolis plant demonstrated its skepticism by endorsing Sanders. Doubts remained even as late as Thanksgiving, when Orangutan tweeted, "MAKING PROGRESS - Will know soon!"

The Carrier deal doesn't present much of a model moving forward for reversing deindustrialization. "Every savvy CEO will now threaten to ship jobs to Mexico," University of Michigan economist Justin Wolfers tweeted Tuesday night, "and demand a payment to stay. Great economic policy."

But Orangutan's credibility as a tribune of the working class should get at least a brief reprieve from the Carrier deal.

“Corporations, like United Technologies, that have built large profitable companies through taxpayer-funded, federal contracts, have an obligation to invest in American workers, Sen. Joe Donnelly (D.-Ind.) told POLITICO earlier this week. "I’m fully committed to ensuring our federal policies—including tax breaks, federal contracts, and other government incentives—encourage domestic investments in our workers, their families, and communities, and do not reward corporations that offshore American jobs."

Carrier's plan to shift jobs to Mexico was well along when negotiations entered high gear. The company had given back the city of Indianapolis $1.2 million in tax incentives, according to the Indianapolis Star, and returned $382,000 in training grants to the state. It had also negotiated a severance deal with the Indianapolis workers--one week's pay for every year on the job, plus six months' health benefits. The move south was expected to save Carrier an estimated $65 million in labor costs.

But Orangutan turned it around, in part, according to the New York Times, by agreeing to "tone down" his threat to impose a 35 percent tariff on air conditioners imported from Mexico. “He can do it legally, but there would be a cost to the United States,” said Warren Maruyama, a trade lawyer at Hogan Lovells and former USTR general counsel. “An economic one, since Mexico is a huge export market for us, and for him; a political one, since Mexico is likely to target U.S. industrial and farm products that are located in key states."

United Technologies may also have been spooked by a threat Saturday from Sen. Bernie Sanders to introduce a bill that would, among other things, halt federal contracts to companies that offshore jobs. United Technologies received $6 billion in federal contracts last year.