Trump Warns Outsourcing Firms of 'Consequences' at Indiana Carrier Visit

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U.S. President-elect Donald Trump greets worker Mauro Rosales as he tours a Carrier factory with Greg Hayes, left, CEO of United Technologies, in Indianapolis, Indiana, December 1. Mike Segar/Reuters

President-elect Donald Trump on Thursday warned that U.S. companies will face "consequences" for outsourcing jobs overseas, as he touted his early success in persuading an air conditioner maker to keep around 1,000 jobs in the United States rather than move them to Mexico.

"Companies are not going to leave the United States any more without consequences. Not going to happen," the Republican said on a visit to a Carrier Corp plant in Indianapolis.

Trump, who takes office on Jan. 20, did not say what the consequences would be but during the election campaign he frequently threatened U.S. firms that his administration would put a 35 percent import tariff on goods made by American manufacturers who moved jobs offshore.

Trump made keeping jobs in the United States one of the main issues of his election campaign and frequently pilloried Carrier for planning to move production to Mexico as he appealed to blue-collar voters in the Midwest.

Apparently under pressure from Trump, Carrier announced this week it had agreed to keep more than 1,000 jobs at the plant and at its headquarters, while still planning to move more than 1,000 other U.S. jobs to Mexico.

Trump said his negotiations with the maker of air conditioning units were a model for how he would approach other U.S. businesses that are tempted to move jobs overseas to save money. He pledged to create a healthy environment for business via lower taxes and fewer regulations.

"I just want to let all of the other companies know that we're going to do great things for business. There's no reason for them to leave any more," Trump said.

If that approach did not work, there would be penalties, Trump warned.

Though the company is still outsourcing Indiana jobs to Mexico, the deal marks a quick win for Trump, who has spent most of his time since the Nov. 8 election in New York building his team ahead of the handover of power from President Barack Obama.

He toured the plant in Indianapolis and shook hands with workers on an assembly line. Some workers yelled out "Thank you Mr. Trump" and "Thanks Donald" as he greeted them.

Carrier confirmed that Indiana agreed to give the company $7 million in tax incentives. A source briefed on the matter said the tax incentives are over 10 years and the company has agreed to invest $16 million in the state, which is run by Governor Mike Pence, Trump's vice president-elect.

Carrier, a unit of United Technologies Corp, still plans to move 600 jobs from the plant to Mexico, the Wall Street Journal said. Reuters reported earlier this week Carrier also still intends to close a factory in Huntington, Indiana, that employs 700 people making controls for heating, cooling and refrigeration and move the jobs to Mexico by 2018.

SANDERS CRITICISM

U.S. Senator Bernie Sanders, who lost the Democratic primary to Hillary Clinton, said the Carrier deal is incomplete and leaves the incoming Trump administration open to threats from companies.

"Trump has endangered the jobs of workers who were previously safe in the United States. Why? Because 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 on Thursday.

He noted that Trump had originally said he would save 2,100 jobs that Carrier planned to move to Mexico.

"Let's be clear: It is not good enough to save some of these jobs," Sanders said.

Despite Trump's deal, employers elsewhere in Indiana are laying off five times that many workers because of foreign competition.

Mexican billionaire Carlos Slim said on Thursday that if Trump succeeds as U.S. president, it would benefit major trading partner Mexico because of increased employment and U.S. economic growth.

Trump was due to hold a rally in Cincinnati, Ohio, later on Thursday and address supporters who helped him win that swing state in his stunning victory over Democrat Hillary Clinton.

The Indiana and Ohio stops will be Trump's first public events since he won the presidency.

At the Cincinnati event, Trump and Pence will talk about what is ahead and the "positive change" Trump will bring to the country, spokesman Miller said.