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How Donald Trump Sealed the Deal to Keep Carrier Jobs in the U.S.

Nov 30, 2016

Even before becoming Commander-in-Chief, Donald Trump has become negotiator-in-chief, as illustrated by the deal he struck with air conditioning manufacturer Carrier.

A source close to the company said President-elect Trump called Greg Hayes, CEO of Carrier’s parent company United Technologies, two weeks ago and asked him to rethink the decision to close the Carrier plant in Indiana.

Hayes explained that the jobs were lower-wage and had high turnover, and the move was necessary to keep the plant competitive, according to the source. He said the plan would save the company $65 million a year.

(Related: Does Trump's Carrier Deal Make Economic Sense?)

President-elect Trump replied that those savings would be dwarfed by the savings UTC would enjoy from corporate tax-rate reductions he planned to put in place. During the recent campaign, Trump threatened to slap tariffs on Carrier imports from Mexico.

At the end of the conversation, Mr. Hayes agreed to work with Vice President-elect Pence to see what he could do.

In the end, UTC agreed to retain approximately 800 manufacturing jobs at the Indiana plant that had been slated to move to Mexico, as well as another 300 engineering and headquarters jobs. In return, the company will get roughly $700,000 a year for a period of years in state tax incentives.

Some 1,300 jobs will still go to Mexico, which includes 600 Carrier employees, plus 700 workers from UTEC Controls in Huntington, Ind . The company has plans in place to offer displaced workers employment and relocation in UTC’s aerospace business, or to provide funding for reeducation.

Next up, the AT&T and Time Warner merger, which candidate Trump said he would block. BET founder Robert Johnson told CNBC yesterday that he met with Trump last week, and his sense is the President “is going to sit down and negotiate” that deal as well.

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