Carrier gets state incentives, Trump pledge for keeping U.S. jobs

The ticker symbol for United Technologies is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) February 23, 2016. REUTERS/Brendan McDermid/File Photo · Reuters

By David Shepardson and Ginger Gibson

WASHINGTON (Reuters) - United Technologies Corp's (UTX.N) Carrier unit said on Wednesday it got financial incentives from Indiana and a pledge from President-elect Donald Trump to improve the climate for business in the United States in exchange for keeping more than 1,000 jobs in the state rather than moving them overseas.

The heating and air-conditioning unit of the industrial and military conglomerate did not give a value for the financial incentives, but a source briefed on the matter said it was a fraction of the $65 million that Carrier planned to save by moving production to Mexico.

The deal, an outline of which was announced late on Tuesday, is a win for Trump as he seeks to make good on his popular campaign message of persuading companies to keep jobs in the United States. More details are expected on Thursday when Trump visits the Carrier plant in Indianapolis.

Hammered out by United Technologies CEO Gregory Hayes, Trump and Vice President-elect and Indiana Governor Mike Pence, the deal lets the incoming administration claim an early victory before it takes office on Jan. 20. It allows the company to dodge some public backlash and avoid a drawn-out fight with Trump, who vowed to punish U.S. companies that shifted jobs abroad.

Perhaps more importantly for both, it helps set the tone of a business-friendly administration ready to ease regulations and cut U.S. corporate taxes.

“Today's announcement is possible because the incoming Trump-Pence administration has emphasized to us its commitment to support the business community and create an improved, more competitive U.S. business climate,” Carrier said in a statement on Wednesday. It said the incentives offered by the state were an "important consideration."

TAX SLASH?

Steven Mnuchin, Trump's pick for U.S. Treasury secretary and co-author of the president-elect’s tax plan, and Wilbur Ross, Trump's nominee for commerce secretary, on Wednesday reinforced the sweeping proposals Trump put forward in September to simplify the tax code and slash the corporate tax rate to 15 percent, cutting the top rate for all businesses from the present 35 percent.

“Our first priority is going to be the tax plan... lowering corporate taxes so we make U.S. companies the most competitive in the world, making sure we repatriate trillions of dollars back to the United States,” Mnuchin told reporters at the Trump Tower in New York City on Wednesday.

He said the deal with Carrier showed that the incoming administration will have “open communications with business leaders.”