Donald Trump bragged on Twitter about the “great deal” he reportedly struck with Carrier Corporation to keep more than a thousand jobs in Indiana, but new reports suggest that the company may have come to an agreement with him simply to get on the President-elect’s good side.
Carrier’s parent company does billions of dollars of business annually with the federally government, a huge incentive for them to play ball with the incoming administration, one member of the Indiana Economic Development Corporation suggested.
Former Indiana Lt. Gov. John Mutz (R) told the Indianapolis Business Journal on Wednesday that while he hadn’t seen the specifics of the deal between Carrier’s parent company, United Technologies, and Trump, he did not think the tax incentive package reportedly offered as part of the deal was enough to convince the company to keep some jobs in the Hoosier State.
“United Technologies is a gigantic international company with many different divisions and subsidiaries, many of which do substantial amounts of business with the U.S. government,” Mutz said.
An anonymous source with some knowledge of the negotiations told the Indianapolis Star that “Carrier wants to stay in good graces with the federal government.”
“Finalizing this deal was a show of good faith,” the source told the newspaper.
CNN Money reported government contracts constitute $5.6 billion in annual revenue for the company, which is about 10 percent of its total business. The U.S. government also funds much of the $1.5 billion United Technologies receives in research and development grants from its other customers, according to the same report.
“The dynamics are considerably different than they were even before the election. You’re talking here about a company that is trying to be competitive and also wants to keep their business with the government,” Mutz told the Indianapolis Business Journal.
According to a report from Fortune, while Carrier’s planned shifting of jobs to Mexico would have saved the company $65 million, United Technologies can expect receive $700,000 in state tax incentives “for a number of years” as part of the deal to keep some jobs in Indiana.
“The incentives offered by the state were an important consideration,” Carrier said in a statement.
As governor of Indiana, Pence is a member of the Indiana Economic Development Corporation alongside Mutz. That entity has the ability to approve tax incentives for businesses without legislative approval.
The president of United Steelworkers Local 1999, the union that represents workers at Carrier’s Indianapolis plant, told Politico that Pence wasn’t interested in any deal to save the plant’s jobs before the election.
“He pretty much wrote it off,” Chuck Jones told Politico. “He met with UTC reps at one point in time, but he wrote it off entirely.”