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Posts Tagged ‘United Technologies’

91115-enos

Something stinks badly.

We’re supposed to believe that President-elect Donald Trump negotiated with United Technologies (UT) management to give them $700,000 in state tax cuts for each of the next ten years in exchange for not exporting roughly 730 jobs in Indiana to Mexico. Exporting those jobs would have saved the company roughly $32.5 million a year. So management gives up $32.5 million for $700,000? Not likely. Something stinks here, as in, we’re not being told the whole story by anybody. Not by the news media, not the twin political parties, not by anybody.

What did Trump really promise UT? Am I right to be suspicious?

Could Trump have promised UT something of much greater value than $32.5 million a year, or at least the same, when he becomes president? UT owns Pratt and Whitney, which manufactures aircraft engines, including US military aircraft. Assuming a 10 percent profit margin, Trump would’ve had to promise a minimum $325 million a year in additional government business to compensate UT for $32.5 million.

If he did this, then he wheeled and dealed with taxpayer money, and he didn’t do a very good job with our money. He got screwed. It appears UT CEO Gregory Hayes took Trump to the back of the shed, slapped him around, and stole the lunch money we’d entrusted Trump with.

It’s difficult to believe UT management would give up $32.5 million a year in exchange for $700,000 a year. Are they really that stupid? What we know about the deal is that Trump caved in to management and failed to use any leverage against UT, such as having the US government cancel a few of those UT contracts if those jobs are exported to Mexico, or threatening to tax the products UT makes in Mexico when they come into the USA. Trump promised he would do this during the presidential campaign, but he didn’t have the courage to do it once push came to shove.

That’s why something tells me this deal is quite a bit shadier than we have been lead to believe.

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Several days ago, Donald Trump announced he had successfully negotiated with United Technologies, parent corporation of Carrier Corporation, to keep “1100” of the 1700 Indiana jobs about to be exported to Mexico. Trump had vigorously campaigned against exporting US jobs, but isn’t that primarily what US negotiated trade agreements are all about? Precisely!

Trump promised during his campaign that he would tax US corporations that exported jobs, and then shipped their products made in other nations to the USA.

When push came to shove, Trump backed down on his promise like a scared nerdy kid against a gang of bully thugs. Trump offered tax cuts, equivalent to giving up the nerdy kid’s lunch money, rather than tax increases. In other words, United Technology executives got away with extortion.

Worse yet, Trump must have known he’d been spanked, so he exaggerated the number of jobs he’d negotiated to save. For $7 million in tax breaks, Trump saved 730 jobs, not the 1100 he’d claimed a week ago.

According to the Washington Post,

“Trump had pledged to save the plant’s jobs, most of which were slated to move to Mexico. Then the businessman won the election, and the 1,350 workers whose paychecks were on the line wondered if he’d keep his promise.

Chuck Jones, president of the United Steelworkers 1999, which represents Carrier employees, felt optimistic when Trump announced last week that he’d reached a deal with the factory’s parent company, United Technologies, to preserve 1,100 of the Indianapolis jobs — until the union leader heard from Carrier that only 730 of the production jobs would stay and 550 of his members would lose their livelihoods, after all.

In exchange for downsizing its move south of the border, United Technologies would receive $7 million in tax credits from Indiana, to be paid in $700,000 installments each year for a decade. Carrier, meanwhile, agreed to invest $16 million in its Indiana operation. United Technologies still plans to send 700 factory jobs from Huntington, Ind., to Monterrey, Mexico.”

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Carrier Corporation is moving to Mexico, and laying off hundreds of workers in Indianapolis.

Carrier Corporation is moving more production to Mexico, and laying off hundreds of workers in Indianapolis.

Donald Trump negotiated with United Technology (UT) officials to keep 1000 US jobs from being exported to Mexico. That means, however, that Trump failed to save 1100 other United Technology jobs from being exported to Mexico. Give Trump some credit. He negotiated and won some concessions.

Last year UT announced it would export 2100 jobs to Mexico, and Trump railed about how he would tax the products of any US jobs exporter that manufactured stuff overseas, and then exported their products to the USA. Trump was going to be tough on corporations like UT.

So when push came to shove, tough guy Trump backed down. Trump made a promise to save all of those jobs, and he backed far away. Give him credit, Trump wasn’t as weak-kneed on this issue as President Obama. He saved some of the jobs.

Trump will reportedly give the company tax and regulatory favors that the corporation has sought.

Bernie Sanders wrote,

“Instead of a damn tax, the company will be rewarded with a damn tax cut. Wow! How’s that for standing up to corporate greed? How’s that for punishing corporations that shut down in the United States and move abroad? In essence, United Technologies took Trump hostage and won. And that should send a shock wave of fear through all workers across the country.”

This sends a loud and clear signal that any corporation can threaten to export jobs and receive tax cuts that will be paid for by US workers.

Instead of being tough, Trump was pummeled into submission. United Technologies makes billions of US defense contracts. Instead of leveraging that, Trump offered them tax cuts. What a wimp! He had them by the financial scotum with those defense contracts, or through the use of selective tariffs, and Trump fell to his knees with a light verbal body blow. Apparently, taking a dive is Trump’s art of the deal.

So what needs to be done?

Sanders wrote, “If United Technologies or any other company wants to keep outsourcing decent-paying American jobs, those companies must pay an outsourcing tax equal to the amount of money it expects to save by moving factories to Mexico or other low-wage countries. They should not receive federal contracts or other forms of corporate welfare. They must pay back all of the tax breaks and other corporate welfare they have received from the federal government (and state governments, and with interest). And they must not be allowed to reward their executives with stock options, bonuses or golden parachutes for outsourcing jobs to low-wage countries. If Donald Trump won’t stand up for America’s working class, we must.”

For more on the story click the link below.

Bernie Sanders: United Technologies Executives Just Showed Corporations How To Beat Donald Trump-Washington Post

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Let’s assume that tariffs are raised in the near future to 35 percent on the goods US corporations export to the United States from their manufacturing facilities abroad. What would happen? Think Nike, Ford, United Technologies, Microsoft, Dell, Campbell’s Soups and thousands of other corporations.

The corporate news media will lie to you and say prices would go up, or the economy would tank. Totally wrong. Lies.

If select tariffs were enacted, the stock market bubble would deflate since corporate profits would decline. On the other hand, the Parasites of Wall Street are now so big that they are sucking the life out of the 99 percent. This means the stock markets are going to tank anyway, and sooner than you might expect. See The New Recession Is Knocking at the Door, and It’s Going to Be Worst Than the Last One–JohnHIvely.Wordpress.com.

The things that make up the wealth of nations are the things that are manufactured. The stock markets are a tool to redistribute income from those who actually produce the wealth of nations to those who produce nothing save for political and financial power. A vast decline in the stock markets would redistribute economic and political power back to those who produce the wealth of the United States.

The bond markets would tank too, if select tariffs were enacted. That means wealth inequality would decline in the USA. Currently, the top 1 percent own more wealth than the bottom 90 percent. Wealth are the things that you own, like houses, stocks, bonds, gold, cars, toys, smart phones, etc…. The video above was made years ago and the statistics the moderator uses are skewed even more to the ultrarich now than when the film was produced.

US manufacturing jobs would come home, probably by the millions. Wages would be forced up with so many jobs coming home. Demand for goods and services would accelerate and power the economy forward. The days of the bubble economies would be over. In other words, it would give life to the host that the Parasites of Wall Street, including all those hedge fund managers, have been sucking dry.

wealth-inequality1

Income inequality would decrease because more people would have decent paying jobs, while the rich would see their share of income decline. The rich now steal roughly 36 percent of all the income created every year in the United States, up from 8 percent in 1980. That’s precisely why the current economic expansion is the worst in modern US history in terms of job and wage growth, as well as growth in the Gross Domestic Product.

Our social safety nets, such as social security, medicare and medicaid, as well as our roads, schools, and other infrastructure would be financially strengthened.

The rich would have less money to corrupt government and both political parties. Let’s face it. Income and wealth inequality is produced by political inequality.

Foreign governments would not need to retaliate since the products of their nation’s businesses would not be subject to the tariffs.

The time has come for placing tariffs on the goods of US corporations which have exported jobs to China, Mexico and elsewhere, and then exported the goods those jobs produce to the USA.

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Last month, Carrier Air Conditioner announced the closing of a plant in Indiana, and that the 1400 jobs from that factory will be exported to Monterrey Mexico. The company announced on the same day that it would be exporting another 700 jobs in Huntington Indiana to Mexico, as well. Thank you Nafta, thank you President Clinton, thank you Hillary, thank you Wall Street Senator Ron Wyden.

Carrier Air Conditioner is a subsidiary of United Technologies. The US government has billions of dollars of contracts with United Technologies. So now your taxpayer dollars are going to subsidize the lower wages of Mexican workers, and the rising share price of United Technologies, which go primarily to the wealthy.

The difference between the old, higher wages of the US employees, and the new lower wages of the Mexican workers will go straight into the pockets of rich United Technology shareholders via higher corporate earnings, rising share prices and enhanced dividends. That’s your taxpayer dollars going straight into the pockets of the wealthy, and Wall Street, and Goldman Sachs. Those are the folks that support Hillary Clinton.

CEO Gregory Hayes received nearly $20 million in compensation in 2013, and another $10 million in 2014.

The corporation earned profits of, or swindled from US taxpayers (which is more accurate), $7.6 billion in 2015, up from $6.2 billion in 2014, and $5.7 billion in 2013. You’d think the company was garnering enough profits to keep those jobs, but the answer is no it wasn’t, not with the way the US economy is structured. And the job of the US corporate media is to keep you ignorant of reality. So here it goes.

The share price of United Technologies peaked at $124 on February 20, 2015, and it was dropping since. On February 11, 2016, (almost one year after its peak) the share price had dropped to $84.66 despite $7.6 billion in profits garnered in 2015, which was higher than the year before.

The share price is the score card for how effective CEO’s are at doing their jobs. Nothing else matters, not even record profits, if those profits cannot boost share prices.

This shows that the real competition among publicly traded, limited, liability corporations is in the financial markets. Increasing earnings need to entice more and more investors to purchase their shares to bid up share prices. If they don’t, CEO’s are forced to resort to other methods of increasing earnings even more. Such as exporting jobs, which is precisely what all those so-called trade agreements are about.

These agreements are directly related to stock market performance, not because they increase overseas business, although that is a byproduct of these agreements. Exporting jobs is the intended and deliberately negotiated result of these agreements, with an eye toward improving stock market performance. The proof is in the stock price, time after time.

Since United Technologies announced it was exporting jobs to Mexico, which occurred on February 12 2016, its share price has risen to $99.11 as of March 17, 2016. Exporting jobs was all it took to get the share price going back up.

That’s why it is the pressures of the financial markets which has forced United Technologies to export jobs, and so-called trade agreements have been negotiated to legally pave the road for its CEO to do this. The Trans-Pacific Partnership is no different, except its worse than NAFTA. (More on that later)

There’s another issue lost in all of this mess that the corporate press doesn’t want you to know about. The loss of United Technologies 2100 jobs means the loss of an additional 6000 to 8000 other jobs, which are supported by the Carrier Air Conditioning jobs. All of these jobs increase the tax base for schools, infrastructure, police, fire, social security and other things. Those jobs are soon going to be gone, and everything they support, such as the tax base, are being redistributed to rich shareholders.

And those 2100 soon to be ex-employees of United Technologies, and the other 6000 to 8000 folks who will also lose their jobs, will be forced to compete with other unemployed folks for fewer and fewer jobs, placing downward pressure on local wages and other compensation. The beneficiaries will be the shareholders and CEO’s of other corporations that will pay less.

And that’s one of the ways the economic game is rigged against the 99 percent. That’s why Hillary needs to release the transcripts of her speeches to Goldman Sachs, although we already can pretty much guess what she said.

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