Carrier Corporation garnered national attention last week with a gauche announcement that it would close down its Indianapolis manufacturing facility, lay off 1,400 workers, and move to Mexico — all this despite receiving millions in federal support to create domestic green jobs.
That Carrier got this federal support was well known. Now, National Review has learned that, under the Obama administration, Carrier’s parent company, United Technologies Corporation, also received more than $121 million in tax credits from the Department of Energy through the Advanced Energy Manufacturing Tax Credit, known also as the 48C Program, a stimulus-funded program created for the sole purpose of ensuring that green manufacturing jobs stay in the United States.
The South Windsor plant didn’t fare well under new management, either. A month after acquiring it, new parent company ClearEdge Power laid off 170 people, more than half of UTC Power’s workforce.
(Fortunately for South Windsor’s workers, Doosan Fuel Cell America Inc., a South Korean company with operations in nearly 40 countries, bought the South Windsor plant out of ClearEdge’s bankruptcy. It has since begun hiring back some of those laid-off workers. Notably, a spokesperson from Doosan says none of the prior tax credits carried over, and it has succeeded without receiving any clean-energy manufacturing tax credits since it acquired ClearEdge Power’s assets in July 2014.)
Carrier’s announcement seems almost inevitable, given how determined the Department of Energy apparently is to throw good money after bad.
The Department of Energy approved the tax credit anyway — and the Middletown, Conn., facility that received its support quickly began to struggle. Almost immediately, Pratt & Whitney began layoffs nationwide, dropping 1,300 jobs in 2011 alone. And, in a series of layoffs in 2012–13, hundreds more workers lost their jobs, including many at the Middletown facility.
Though the company is more stable today, its employment remains lackluster. In 2009, before the stimulus-backed tax credit, Pratt & Whitney employed 11,000 in East Hartford and Middletown — but by mid 2015, its Connecticut workforce was down to 9,000, far below projections.
As Pratt & Whitney suffered through a volatile couple of years in Connecticut, United Technologies was also bogged down in another big controversy. In 2012, the company pleaded guilty to a major violation of U.S. arms control.
The United States had forbidden sales of military equipment to China after the 1989 Tiananmen Square Massacre, but United Technologies and two of its subsidiaries, including Pratt & Whitney Canada, had ignored this restriction, selling Beijing restricted military software that it used to build its first helicopter gunship. For its illegal sales and subsequent cover-up, United Technologies ended up paying $75 million in fines.
But neither these illegal sales nor the turbulent performance of other United Technologies subsidiaries that received support from the 48C Program prevented the Department of Energy from choosing Carrier Corporation for a $5.1 million tax credit during its second round of 48C Program awards in 2013. Carrier’s announcement last week seems almost inevitable, given how determined the Department of Energy apparently is to throw good money after bad.
— Jillian Kay Melchior writes for National Review as a Thomas L. Rhodes Fellow for the Franklin Center. She is also a senior fellow at the Independent Women’s Forum and the Tony Blankley Fellow at the Steamboat Institute.