#QuickTake: Carrier’s Magic Number with Trump? $5.6 Billion | NTK Network #QuickTake: Carrier’s Magic Number with Trump? $5.6 Billion

#QuickTake: Carrier’s Magic Number with Trump? $5.6 Billion

Media are focused on the 1,000 Carrier jobs staying in the U.S., but the real number of note in Trump’s deal with United Technologies is $5.6 billion.

By NTK Staff | 11.30.2016 @7:03am
#QuickTake: Carrier’s Magic Number with Trump? $5.6 Billion

President-elect Donald Trump and VP-elect Mike Pence will take a victory lap on Thursday after securing a deal with Carrier to keep 1,000 jobs in the U.S.

Back in February, Carrier decided to move operations at an Indiana factory to Monterrey, Mexico, killing 1,400 U.S. jobs by 2019.

In the same month, Trump said “[t]here’s only one way you’re going to reverse [job losses to Mexico], and that’s that you’re going to have to make it more expensive to do business that way.”

It would appear Trump’s deal doesn’t “make it more expensive to do business” for Carrier: he’s pledging less regulations and a lower corporate tax rate in exchange for Carrier’s cooperation.

But Trump may have brought disincentives to the negotiating table, worth billions of dollars per year to Carrier’s parent company United Technologies (UTC).

The New York Times has more:

Roughly 10 percent of United Technologies’ $56 billion in revenues comes from the federal government, with the Pentagon its single largest customer. Its Pratt & Whitney division, for example, supplies the engines for the Air Force’s most advanced fighters and host of other planes.

Trump, as president-elect, could dangle existing contracts over UTC’s head. The bottom line for Carrier? Around $5.6 billion, according to NYT’s estimates.

When UTC weighs $5.6 billion in annual revenue against the labor savings from moving just 1,000 jobs from Indiana to Mexico, the math becomes easy.

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