— The $7 million incentive package Carrier Corp. will receive in a deal
with President-elect Donald Trump and Vice President-elect Mike Pence is a
departure from how tax credits are commonly used in Indiana.
The furnace and
air conditioner manufacturer will receive $5 million in tax credits over
the next decade in exchange for keeping hundreds of jobs at its
Indianapolis plant, the Indianapolis Star reported. It will also get $1
million in training grants and up to $1 million in additional tax credits
based on its planned $16 million investment in the factory.
The deal differs
from most other economic development agreements in Indiana, where
incentives are usually aimed at bringing in jobs, not retaining them.
Trump has criticized the use of such incentives in the past.
The deal was an
early victory for the incoming administration and was mostly welcomed by
the plant's 1,400 employees, who were told in February that their jobs
would be dropped as the work moved to Mexico. But the deal will only save
about 800 jobs that were initially slated to be outsourced. That means an
estimated 400 to 500 workers at the plant, as well as 700 employees at
another plant owned by related company in Huntington, Indiana, will still
lose their jobs.
development experts said the agreement is troubling.
potentially dangerous policy where you reward a company that threatens to
leave. ... In this case, you're rewarding a company that is actually
cutting a lot of jobs in the state," said Steve Weitzner of site selection
firm Silverlode Consulting.
Mitch Roob, who
led the state's economic development agency under former Gov. Mitch
Daniels, said economic development needs to be handled on a case-by-case
basis. He said awarding incentives for retention wasn't common.
"But there were
certain circumstances when that became the best option for us, and we went
ahead and did it," Roob said.
The board of
Indiana's economic development agency must still approve the deal. As
governor of Indiana, Pence is chairman of the board and appoints its