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Manufacture This

The blog of the Alliance for American Manufacturing

Carrier announces timeline for 632 layoffs; Harley is opening a new overseas plant.

Remember when President-elect Donald Trump visited the Carrier plant in Indianapolis in December 2016 to tout all the jobs he had just struck a deal to save?

“They’re so happy, they’re going to have a great Christmas. That’s most important,” Trump said of the Carrier workers.

Well… Carrier announced today a timeline for eliminating 632 jobs at that same Carrier facility, with 290 of those employees out of work by Dec. 22. Just before Christmas.

Or, remember when President Trump welcomed Harley-Davidson at the White House for a listening session?

“We want to make it easier for business to create more jobs and more factories to be made in the U.S. and you’re a great example of that,” Trump said at the time.

Well… The New York Times reported on Tuesday that Harley-Davidson is building a factory in Thailand, quickly drawing the ire of labor leaders and others.

“Harley-Davidson has been the crown jewel of American manufacturing,” said Leo Gerard, president of the United Steelworkers union, which represents Harley workers. “It’s an iconic brand that represents true American spirit. Management’s decision to offshore production is a slap in the face to the American worker and to hundreds of thousands of Harley riders across the country.”

Oof. This is probably not how Trump expected things to play out.

After all, the Carrier deal was supposed to be the just the first of many deals to come — and the Harley-Davidson meeting was among the first things Trump did after taking office. It was billed as a kickoff to a bigger job creation effort.

But as today’s news shows, one-off deals or PR-friendly gatherings on the White House lawn are no substitute for effective job-creating policy.  

While Trump does deserve some credit for the Carrier deal — it did end up saving about 800 jobs and kept the plant open — it was never as good as he made it out to be. The layoffs announced today don’t even include the 300 additional jobs that will be lost just around the corner at Rexnord, either.

And although Harley bills itself as an all-American company, this isn’t the first time that it has opened a facility abroad. It also has factories in India, Brazil and Australia. The company says it’s building the new plant in Thailand to get around that country’s high tariffs on imported motorcycles.

Companies like Carrier and Harley might be willing to build some goodwill with the White House from time to time, but ultimately they make business decisions based on their bottom line. There’s not enough time in the day for the president to make deal after deal with individual businesses. Even if he could, those deals never will be as great as he'd probably like. Instead, the White House needs to work with Congress to enact smart policy that will encourage domestic manufacturing and job creation.

Despite what some critics might say, this is possible to do. We’ve seen it begin to happen.

Former President Barack Obama didn’t hit his goal of creating 1 million in his second term, but he did manage to oversee an economy with 315,000 new factory jobs. The Reshoring Initiative found that combined reshoring and foreign direct investment added 77,000 jobs, surpassing the rate of offshoring by 27,000 jobs in 2016— which might not seem like a lot, but is a big difference from the 220,000 jobs that were offshored from 2000 to 2003.

The Trump administration and Congress can work together to do a lot to strengthen American manufacturing, including through tax reform that promotes exports and a robust infrastructure investment package with strong Buy America preferences. Getting tough on trade cheats like China won’t hurt, either.

These are tough policy asks, and will require Trump and his team to focus up and think about big picture policy. But there’s a strong desire on Capitol Hill for tax reform, there’s widespread bipartisan support for fixing America’s infrastructure, and Trump’s trade team is finally all in place.

Meanwhile, many of Trump’s supporters are still looking to him for help, including in Lumberton, N.C., where news broke last week that a garment factory would be closing, leading to 150 layoffs.

“We need to get Donald Trump down here so he can pull a Carrier,” said Biggs, a longtime Republican operative. “We got a president concerned about our jobs, but still we got all this drama.”

Can Trump get past all the drama and manage to enact meaningful policy? That’s the question.