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Officials point fingers on Carrier, UTEC layoffs

February 12, 2016

Are onerous federal regulations the reason that Carrier Corp. and its parent company, United Technologies Corp., made the controversial decision to ship 2,100 jobs from Indiana to Mexico? The blame game is already starting.

Gov. Mike Pence on Friday said news that a Carrier plant in Indianapolis and a United Technologies Electronic Controls plant in Huntington would close was “disappointing” but ultimately said Washington was to blame—a sentiment echoed by Connecticut-based UTC in its initial statement.

“While our administration continues to foster an environment within the state that is attracting record investment, federal regulations continue to stymie our national economy,” Pence said in a written statement. “The fact that these companies are leaving the United States speaks broadly about the need for reform in our nation’s capital.”

Pence’s spokesman did not immediately reply to IBJ’s request for comment about which specific federal rule was problematic.

But Democratic U.S. Sen. Joe Donnelly blasted the assertion that federal rules were negatively affecting the Fortune 500 company, which has annual revenue of $56 billion and in 2014 accepted a $5.1 million taxpayer-funded federal tax credit.

The company said at the time the tax credit would help it “expand production at its Indianapolis facility to meet increasing demand for its high-efficiency gas furnace line.”

Indiana taxpayers have separately paid the company nearly $530,000 over the past nine years in economic development incentives, some of which the state says it will seek to recapture.

Donnelly said he asked Carrier executive Chris Nelson to cite the specific regulatory issue.

“He couldn’t tell me a single regulation that was causing him any issue,” Donnelly said Friday. “The only discrepancy so far is on the fact that the minimum wage in Mexico is $4.19 a day. It’s certainly not that they’re not making money and they’re not succeeding. What they’re trying to do is to sell heating and ventilation products to [Americans] but aren’t willing to pay those same wages to the people who build the products.“

The average wage for union members at the Indianapolis plant is about $23 an hour.

An official for Carrier Corp. told employees that relocating operations from Indianapolis’ west side and Huntington to Monterey, Mexico, would “allow us to maintain high levels of product quality and competitive prices, and continue to serve the extremely price-sensitive marketplace.”

“I want to be clear, this is strictly a business decision,” the unnamed official said to a crowded room of employees, according to a now-rival video circulating on YouTube.

Employees boo in the video and even shout expletives at the employee.

The layoffs are supposed to begin in 2017 and continue until 2019.

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