President-elect Donald Trump's deal with Carrier to keep some 800 jobs in Indiana has not cooled the company's enthusiasm about Mexico.
Gregory Hayes, the CEO of Carrier's parent company United Technologies, told CNBC in an interview Monday that Mexico has a “ much higher” competitive advantage in manufacturing over the U.S.
“So what’s good about Mexico? We have a very talented workforce in Mexico,” Hayes told CNBC’s Jim Cramer. “Wages are obviously significantly lower. About 80% lower, on average. But absenteeism runs about 1%. Turnover runs about 2%. Very, very dedicated workforce.”
Hayes said Trump called him just before Thanksgiving to convince him to keep jobs in the U.S. “He said, ‘We’re gonna do a lot of things in this country that’s gonna make it a lot more conducive to manufacturing. We’re gonna take the tax rate down. We’re gonna reduce all this burdensome regulation. When all that happens you’re gonna be printing money’.”
Carrier will receive $7 million in tax breaks to keep jobs in Indiana, according to The Wall Street Journal.
“Union workers got a letter at the plant saying Trump’s deal with Carrier will save only 730 factory jobs in Indianapolis, plus 70 salaried positions — 553 jobs in the plant’s fan coil lines are still moving to Monterrey, Mexico,” reported NBC affiliate WTHR. “All 700 workers at Carrier’s Huntington plan will also lose their jobs.”
“It appears they may have hyped that number (1,100) a little bit and then once the company and everything settled down we started seeing the real numbers and started getting a little discouraged about how many jobs,” a company worker and union member told WTHR.
Trump's first effort at deal-making is being slammed by critics as unsustainable, costly and a dangerous invitation to other companies to threaten outsourcing for sweetheart tax breaks.
Even GOP hardliners like Sarah Palin have criticized Trump’s deal as “crony capitalism.”