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State wants cash back from Carrier, UTEC as jobs flee to Mexico

February 11, 2016

State officials say they will try to get back taxpayer-funded economic development incentive money given to Carrier Corp. in Indianapolis and its parent company, Connecticut-based United Technologies Corp., who on Wednesday said they would shutter plants in Indianapolis and Huntington, lay off 2,100 workers, and move the jobs to Mexico.

The Indiana Economic Development Corp. has paid the companies—which manufacture heating, ventilating and air conditioning systems—nearly $530,000 over the past nine years in training grants through several contracts. And, in 2015, the agency awarded another $300,000 training grant, which it had not disbursed and now won't.

“We’re definitely looking into it,” said IEDC spokeswoman Abby Gras. “If the terms [of the contracts] are noncompliant, we would seek to recapture those incentives. It’s a process and we’re just starting that now. The company has to comply with the terms agreed to in the contract in order to be eligible for those. There is a reporting period in which they have to remain in compliance. We’re still talking to the company and trying to get a better hold on their plans. If they close a plant, that would be non-compliant.”

Carrier Corp., on Indianapolis’ west side, received nearly $198,000 in training grants to date from a 2013 contract with the company. That money was to be used to train 500 new or existing employees.

The state also awarded United Technologies, which owns the Huntington UTEC manufacturing plant, $182,500 from a 2010 contract, which was to be used for training 522 current employees. Under a 2007 contract, United Technologies received $140,500 for the same plant.

Gras said it is too soon to tell how much, if any, money the state would be able to recapture from the company. All the money came from the state's Skills Enhancement Fund.

The IEDC said it will “de-obligate” the company from the 2015 contract. And the 2007 incentive package is too old, so officials would not be able to recapture money from that $140,500 award.

That leaves the 2013 contract with Carrier and the 2010 contract with United Technologies still in play.

Carrier Corp. and UTEC are both units of United Technologies Corp., a Fortune 500 company that had $56 billion in revenue in 2015. Job losses are scheduled to begin in 2017 and continue through 2019.

Meanwhile, the Indiana Department of Workforce Development said it will connect its “rapid response team" with employees at the companies to try to get them jobs in related fields or trained in new skills. DWD spokesman Joe Frank said especially in northeast Indiana, where Huntington is located, employers are “really having to compete for the labor force.”

Frank said that region is "probably the best place to be right now if you’re unemployed.”

“The goal is to get them reemployed as quickly as possible or get them into our free training and education programs so they can go in a different direction if they want to,” Frank said. “For these folks that are being laid off, none of this comforts them that much. It’s a time of turmoil. But we do have a lot to offer them from an agency standpoint.”

Democrats on Thursday said Pence should demand incentive money back from the company. Indiana House Minority Leader Scott Pelath, D-Michigan City, said it “called into question the overall economic development strategy of this state."

“We’d also challenge the governor to ask United Technologies for Indiana’s money back,” said Indiana Democratic Party Chairman John Zody. “No business should be able to use Hoosiers hard earned tax dollars to ship our jobs to Mexico.”

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