This is how it has worked for as long as corporations have been downsizing American facilities and offshoring the jobs to other countries:
A corporation announces that it is shutting down its US facilities (because of taxes or regulations or unions or fill in the blank) and moving production to another country (Mexico or China or Vietnam or fill in the blank).
Local, state, and national officials freak out. They announce that they will do “whatever it takes” to keep the jobs.
The corporation announces that it is skeptical but open to offers.
A deal is reached. The company collects concessions (tax breaks or regulatory “relief” or cuts in wages and benefits for workers or favorable consideration from government contractors or fill in the blank) and it is announced that a facility and some jobs will remain in the targeted town—for now.
Then everyone does their best to celebrate while other facilities are shuttered and most of the jobs are offshored.
As a young reporter working for the daily newspaper in Toledo, Ohio, a manufacturing city that was experiencing waves of downsizing and offshoring, my beat was economic development. I saw this scenario play out again and again and again.
It is, as they say, the oldest story in the book.
Yet, when President-elect Trump played it out once more Thursday, the newspaper front pages gave him all kinds of credit and the television networks went live. The media frenzy was so generous that a Washington Post headline declared: “The Carrier jobs deal proves Donald Trump can get good press.”
It sure did.
But the real story was not one of a striking economic turn of events engineered by a different kind of president.
The real story was that the downsizing and the offshoring is continuing—pretty much as it always has. Except that, this time, it’s coming with a heaping helping of Trump spin. And national media outlets that have never done a particularly good job of covering the story of the deindustrialization and the corporate abandonment of manufacturing towns across this country are eating it up.
“I called Greg and I said it’s really important, you have to do something because you have a lot of people leaving,” Trump said of United Technologies chairman Greg Hayes, as he appeared before the cameras in Indianapolis. “You have to understand, we can’t allow this to happen anymore with our country.”
The problem, of course, was that it was happening. Again. Facilities were being downsized. Jobs were being offshored by a multinational corporation. Most of the Carrier jobs in Indiana will still be eliminated. Yet the corporation was being rewarded as politicians patted themselves on the back.
None of this is new.
Corporations rarely do all their downsizing and offshoring at once. They play a crude and self-serving game with local, state, and national officials, looking to get paid off for not cutting as many jobs as they initially propose to eliminate. And if they play it right, instead of being demonized for shuttering factories and cutting jobs, they are celebrated for working with the politicians to “save” jobs.
That’s what we saw with the Carrier deal. As Vermont Senator Bernie Sanders noted, “In essence, United Technologies took Trump hostage and won. And that should send a shock wave of fear through all workers across the country.“
“He has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives,” Sanders wrote in a Washington Post opinion piece published Thursday. “Even corporations that weren’t thinking of offshoring jobs will most probably be reevaluating their stance this morning.”
In fairness, the corporations already knew that.
They’ve been playing this game forever. And, amazingly, they’re still getting away with it.
There’s nothing new about the Carrier “hostage” scenario. It followed absolutely predictable lines and it is ending absolutely predictably. Carrier had announced that it would cut 2,100 jobs in Indiana. Now the corporation says it will keep roughly 1,000 jobs in Indiana. But—and the “but” is what it’s all about—United Technologies got its concessions. On Thursday, the company announced that “The state of Indiana has offered Carrier a $7 million package over multiple years, contingent upon factors including employment, job retention and capital investment.” Trump showed up in Indianapolis with promises of corporate tax cuts and fewer regulations.
“This is about the president-elect and vice-president elect making good on their promise to go to bat for American workers, which they’re doing so, even before they’re actually sworn in,” chirped a spokesman for the Trump transition team.
But not all 2,100 Indiana jobs that were slated for elimination have been saved, as the business reporters who bothered to follow the real story revealed. The Wall Street Journal reported that the Carrier deal covered roughly 800 jobs in the company’s Indianapolis furnace plant and another 300 research and development jobs that had not been slated to go to Mexico.
At the same time that we learned the Indianapolis Carrier plant was being downsized, Indiana television station WTHR-TV headlined its Thursday report: “While Carrier workers in Indy celebrate, Huntington mourns job loss.”
According to the station, “a total of 700 people are expected to lose their jobs” at the United Technologies plant in the northeast Indiana city of Huntington, where employees “said that they will be phased out beginning in April.”
“A long line of cars with first-shift workers left UTEC for the day. Employees say the mood inside the plant is bad,” explained WTHR. “‘Everybody’s down. Tension’s high. Everybody is on everybody,’ said one employee, who asked to not be identified.”
Down in Indianapolis, President-elect Trump was announcing the arrival of a new day in which “Companies are not going to leave the United States anymore without consequences.”
That’s not true. The downsizing and offshoring threats continue. The concessions to multinational corporations continue. The job losses continue.
The only thing that’s different is that Trump is telling us that he is changing things for the better.
He’s not. But Trump is getting some more “good press.”