Politics & Policy

A Stimulus-Funded Manufacturing Facility Tanks

(Dmitry Rukhlenko/Dreamstime)
Carrier lays off 1,400 workers, moves to Mexico after receiving millions in tax credits to keep green jobs in the U.S.

Carrier Corp. announced this week that it plans to shutter its Indianapolis manufacturing facility, laying off 1,400 workers and moving operations to Mexico.

Yet less than three years ago, the company received a $5.1 million stimulus-funded tax credit from the Department of Energy — for the sole purpose of creating and maintaining green jobs in the United States.

“In this instance, Carrier Corp. is betraying the program’s aim of keeping green jobs in the United States,” says Philip Mattera, research director at Good Jobs First, a nonprofit tracking subsidies.

The shuttering of the Carrier facility is yet another failure in the Obama administration’s attempts to use stimulus cash to prop up domestic green manufacturing.

The $2.3 billion Advanced Manufacturing Tax Credit Program, more wonkily known as the 48C program, provided a 30 percent tax credit for companies that invested in green manufacturing facilities in the United States.

Energy Secretary Ernest Moniz then claimed that the tax credits would “create new jobs and supply more clean-energy projects in the United States and abroad with equipment made in America.” And Senator Joe Donnelly (D., Ind.) said, “The tax credits will help these companies invest further in more good-paying manufacturing jobs right here in Indiana.”

Carrier, a subsidiary of United Technologies Corporation, won the $5.1 million award in 2013 after vowing to expand production of energy-efficient gas furnaces at its Indianapolis facility.

“Now, they’re going to build them in Mexico instead of building them here,” says Chuck Jones, the president of Indianapolis’s United Steelworkers Local 1999. “It’s a damn shame all the way around. . . .  They blind-sided us — 1,400 people and their families are going to be disrupted. . . . There will be no more jobs in Indianapolis.”

#share#Under the 48C Program, facilities that received awards in 2013 were supposed to have functioning projects in place by 2017.

A 2010 report by Good Jobs First and the Apollo Alliance raised questions about some of the companies receiving tax credits through the 48C program.

A sizeable minority of recipients had foreign parent companies, and U.S.-based companies received only 59 percent of the total amount of money distributed in the first round of funding, announced in 2010. Furthermore, many of the recipients with foreign ownership also seemed to be expanding their production at facilities in other low-wage countries.

“While the 48C credits are likely leading these companies to pay more attention to U.S. production, it is also possible that their American manufacturing activities are little more than fig leaves meant to hide the fact that they are mainly relying on offshore low-wage activities,” the report concluded.

Though the report ultimately supported the 48C Program, Good Jobs First recommended “adding ‘clawback’ provisions that would enable the federal government to recoup the tax credits if 48C jobs ended up being sent offshore.”

By deadline, the Department of Energy had not responded to National Review’s queries about what went wrong at the Indianapolis facility, whether any such clawback provision was introduced, or whether taxpayers would recoup their investment.

A spokesperson for Carrier wrote in an e-mail, “We do not disclose the details of our negotiations with state and local officials, but we will honor the terms of our agreement in Indiana as we do everywhere.” She would not provide more-specific details of how the company would fulfill its obligations.

Most Popular


It’s Time for Colin Kaepernick to Move On

Colin Kaepernick. Remember him? Below-average quarterback. Above-average poseur. Not “activist,” not really. Activists actually say stuff. Kaepernick almost never says anything. He’s like the Queen or most popes — you have to read the deep-background musings of supposed members of his inner circle to get ... Read More

Trump and the Black Vote

"Donald Trump is a racist, white supremacist, white nationalist. So are his supporters." Some version of that refrain is heard almost hourly somewhere in mainstream media. Democratic politicians seem to proclaim it more often than that. Listening only to the Left, you'd conclude that more than half a ... Read More
PC Culture

Courage Is the Cure for Political Correctness

This might come as some surprise to observers of our campus culture wars, but there was a time, not long ago, when the situation in American higher education was much worse. There a wave of vicious campus activism aimed at silencing heterodox speakers, and it was typically empowered by a comprehensive regime of ... Read More

The Age of Miscalculation

On August 7, 1998, more than 200 people were killed in terrorist attacks on U.S. embassies in Dar es Salaam, Tanzania, and Nairobi, Kenya. Americans learned three names most of them never had heard before: Ayman al-Zawahiri, Osama bin Laden, and al-Qaeda. On August 20, 1998, President Bill Clinton ordered a ... Read More