Class Warfare Blog

January 12, 2018

Three Billion = Not Enough

Today, Carrier, the profitable heating/ventilation/air conditioning company, owned by United Technologies Corporation, a federal contractor whose climate, controls, and security division, of which Carrier is a part, reported three billion dollars in operating profit in 2016—is letting go of more than two hundred employees in its second and final wave of Indiana-based layoffs, which began last July. In total, the company will be laying off more than five hundred employees as it moves manufacturing jobs to Monterrey, Mexico. Many of those employees voted for Donald Trump, who made saving Carrier’s “big, beautiful plant” one of his most repeated campaign promises. It was part of his broader pre-election claim that “A Trump Administration will stop the jobs from leaving America.”

Do realize that careful analyses of such moves often show the savings are minimal. Because the jobs are no longer near the U.S.-based managers, another level of managers has to be hired. Then there is transportation costs, and…. One thing you can be sure will be affected is their stock price. “Shareholders” love these moves, why no one knows. I suspect it is the choir praising the minister as both managers and shareholders belong to the same church, the Church of Greed.

Three billion dollars in profits in just one year and a sterling reputation for quality and … oh, we have to move to save the company? WTF?

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9 Comments »

  1. Looks like he lied. Wow! Just read a market watch article I’m so shocked. “Instead of being a worker’s champion, he has named union busters to the National Labor Relations Board, the U.S. Labor Department and the U.S. Supreme Court; he has rolled back wage protections; and he is actively pushing anti-worker bills in Congress,” he said.” Great work Steve!

    Liked by 1 person

    Comment by jim- — January 12, 2018 @ 8:50 pm | Reply

    • Thanks, it just looks like huge profits are not enough. This is the problem with capitalism; there is no upper limit on greed.

      On Fri, Jan 12, 2018 at 8:50 PM, Class Warfare Blog wrote:

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      Liked by 1 person

      Comment by Steve Ruis — January 13, 2018 @ 8:02 am | Reply

  2. So. Much. Winning.

    Like

    Comment by john zande — January 13, 2018 @ 5:30 pm | Reply

    • @ John… the only question they forgot to ask on the winning thing, was who was going to be doing the winning. Hugs

      Liked by 1 person

      Comment by Scottie — January 13, 2018 @ 5:58 pm | Reply

      • 🙂

        Liked by 1 person

        Comment by john zande — January 13, 2018 @ 8:51 pm | Reply

      • People like Trump will be doing the winning, obviously. Which is why he kept saying “we’re going do so much winning” and not “you’re going to do so much winning”.

        Liked by 1 person

        Comment by List of X — January 14, 2018 @ 8:53 am | Reply

        • Unfortunately, he gets to define what “winning” means. Studies seem to show that as the middle class does better, so do the wealthy. It is only shortsightedness and greed that prevent them from seeing this,

          On Sun, Jan 14, 2018 at 8:53 AM, Class Warfare Blog wrote:

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          Liked by 1 person

          Comment by Steve Ruis — January 14, 2018 @ 9:10 am | Reply

  3. I got to say, the US employees are extremely expensive. (And I say that as a US employee who is at least somewhat surprised to still have a job knowing how much less an Indian equivalent gets paid.)
    Salaries is just a portion of what an employee costs, so each of those Carrier employee probably cost above $100K a year, and a Mexican worker would probably cost a third of that. Even with increased transportation and other costs, I’m pretty sure it’s cheaper to produce in Mexico than in the US.
    However, even the difference is actually small, there is another factor in play: by laying off 500 workers when times are good, the company signals to the shareholders that it would not be too scrupulous with people’s livelihood when times turn bad, or there is an opportunity to squeeze out an extra buck.

    Like

    Comment by List of X — January 14, 2018 @ 9:24 am | Reply

    • The expense of employees is higher in Germany, yet they are the #2 manufacturing country in the world (exports). Labor costs are costs, no doubt, but Carrier did make three billion dollars in profits in 2016. This is the problem when profit or “shareholder value” is the only goal of a corporation. So, corporations threaten to move their plants or their headquarters to squeeze tax concessions out of their states/countries. They go on “tours” to see which states will offer them to biggest benefits to move there. What ever happened to sticking with a reasonable physical situation and trying to satisfy one’s customers, and fine new ones? Why are corporate raiders praised for buying a company, loading the company with debt, paying themselves big salaries, selling off the companies physical assets and then declaring bankruptcy. Who does that serve, other than the raiders/pirates? We are rapidly sanctioning a kleptocracy.

      On Sun, Jan 14, 2018 at 9:24 AM, Class Warfare Blog wrote:

      >

      Liked by 1 person

      Comment by Steve Ruis — January 14, 2018 @ 9:36 am | Reply


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