In it, but not of it. TPM DC
Eaton has shipped hundreds of jobs from facilities in Wisconsin and Ohio to Mexico since 2015. The company also came under fire in 2014 for relocating its corporate headquarters from Northeast Ohio to Dublin, Ireland, in order to secure massive corporate tax breaks, even as it raked in millions from federal contracts, as the Cleveland Plain Dealer reported at the time.
Those tactics drew the attention of Trump himself, who made an example of the multinational during a March campaign stop in Cleveland.
"You have Eaton that’s moving to Mexico,” Trump told a crowd in the Forest City. “What are we doing? We want to keep our factories here. We want to keep our manufacturing here.”
Convention host committee co-chairs Alexander "Sandy" Cutler, Christopher Connor and Chris Kelly all have ties to Eaton, as LittleSis, a project from the Public Accountability Initiative that tracks connections between business and government, reported on Friday. The co-chairs operate under the banner of the Cleveland 2016 Host Committee, a nonprofit with no political affiliation, and are tasked with funding and organizing the convention.
From left to right: Alexander "Sandy" Cutler, Chris Kelly, and Christopher Connor
As Mark Votruba, an economics professor at the Cleveland-based Case Western Reserve University, pointed out, it's not a surprise that the host committee co-chairs were linked to Eaton, which he described as "a big Republican supporter in this area."
Alexander “Sandy” Cutler served as Eaton’s president and chairperson for 15 years before retiring at the end of May. Under his tenure, Eaton purchased Cooper Industries PLC and established the combined company’s headquarters in Ireland. The Milwaukee Journal Sentinel reported in January that the move has saved Eaton $150 million a year in taxes.
This year, Eaton closed its facility in Berea, Ohio, leading to the loss of 102 jobs. The company bought parts from another manufacturer and shipped them to a plant it owned in Mexico for workers there to assemble, the Plain Dealer reported. Its facility in Aurora, Ohio, also shuttered and shed 150 jobs that would instead "be handled by production facilities in North America and Europe."
A similar story unfolded in the past couple years in the Wisconsin towns of Pewaukee and Watertown, where plants were shuttered and jobs were sent to Eaton plants in Mexico. Despite receiving nearly $370,000 in tax incentives from the Wisconsin Economic Development Corporation, Eaton laid off 339 employees from 2013-2015, according to WKOW.
Cutler did not respond to an interview request via the convention host committee. The other convention co-hosts with ties to Eaton, as well as representatives from the Republican National Convention, also declined to answer interview requests.
A Sherwin Williams spokesman turned down an interview with TPM on behalf of Connor, the company’s executive chairman, who has served as a board director at Eaton since 2006.
Kelly, head of law firm Jones Day’s global capital markets practice, represented Eaton when he was a partner at the firm (Trump has long retained Jones Day as his legal counsel, and his campaign lawyer is a partner there). He did not respond to TPM’s multiple requests for comment.
Sue Helper, a colleague of Votruba's in Case Western's economics department, studies the effects of outsourcing and offshoring in the manufacturing industry. Noting that Trump’s companies “have done a fair amount of outsourcing themselves,” she told TPM that global corporations like Eaton have profited from maximizing tax breaks and pursuing cheap labor abroad.
“The CEO who just stepped down, Sandy Cutler, was very focused on this tax stuff,” Helper said of the company’s decision to incorporate in Ireland.
Helper noted that “an increasing amount” of Eaton’s business was located abroad, so it followed that some of the goods intended for sale in the Chinese and Latin American markets were being produced in factories located in China and Mexico rather than in the United States.
“But I’m sure some of it is that they find labor costs cheaper in these places and the law allows them to do these things and so they do them,” she said of Eaton's push to offshore jobs.
Some politicians, including Democratic presidential candidate Sen. Bernie Sanders (I-VT), oppose trade agreements that encourage offshoring and low tariffs because of what they see as a lack of worker and environmental protections assured in these agreements. Helper noted others like Trump see it from a demographic perspective.
“The nationalist reason is that Mexicans are not as deserving as jobs as Americans, and that seems to be kind of the Trump view,” Helper said.
Trump’s opposition to offshoring has been a staple in his stump speeches. In April, he called Ford’s announcement that it was opening a new assembly plant in Mexico an “absolute disgrace.” Last week, Trump said that the PGA Tour’s decision to relocate an annual tournament from his Miami course to Mexico City “embodies the very reason I am running for president.”
“No different than Nabisco, Carrier and so many other American companies, the PGA Tour has put profit ahead of thousands of American jobs” and “millions of dollars in revenue for local communities,” Trump said in a statement.
Yet Trump’s own clothing line produces much of its wares in China and Mexico, countries Trump insists are “killing us on trade.”
The Trump campaign did not respond to multiple interview requests for this story.
As Votruba pointed out, Trump's focus on blaming the loss of blue-collar jobs on other countries is a red herring anyway. Before companies like Eaton started sending jobs abroad, they were sending them from the Rust Belt to poorer regions of the country.
"It wasn’t NAFTA necessarily or international trade that’s been the problem in Cleveland," Vortuba said. "We were already losing jobs internally to our own country before then."