Posted on 02/19/2016 5:57:29 AM PST by SeekAndFind
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 Obama administration gave Carrier a $5.1 million subsidy in 2013 even after two previous awards from the same program yielded disappointing results. In 2010, during the 48C Program's first round of funding, the Department of Energy awarded a $5.3 million tax credit to UTC Power Corp. to open a clean fuel-cell power plant in South Windsor, Conn. Just three years later, United Technologies literally paid another company $48 million to take UTC Power off its hands. The South Windsor plant had never turned a profit, and United Technologies also ended up losing over $200 million as it struggled to get rid of its troubled subsidiary.
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.
Connecticut's Department of Economic and Community Development launched a valiant effort to save the failing company, offering a $1.4 million loan and promising to forgive $650,000 of that sum if ClearEdge could retain 17 jobs and create 80 new ones by 2017. But ClearEdge turned down the offer, filing for bankruptcy not long afterward and laying off even more workers.
(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.)
In addition to subsidizing the South Windsor operation, the Department of Energy in 2010 awarded a $110.4 million tax credit through the 48C Program to Pratt & Whitney, another United Technologies subsidiary, to make an energy-efficient jet engine in Connecticut. The tax credit came less than a year after Pratt & Whitney had shuttered two Connecticut plants, a move that cost about a thousand jobs. The work once done in the state moved to Japan, Singapore, and a nonunion plant in Georgia.
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.
The US DOE gave Carrier a tax credit and that caused them to move to Mexico? Wait, what?
Nation Review = Cheap Labor Whores.
Makes no sense. The paid glowBULList corporate apologists are losing it.
He needs to add, getting America out of the UN.
I spec HVAC equipment and know many others in the business.
My friends and I let them know we won’t be sending UTC another dime in our business after this decision
What you don’t Mexican equipment? That’s racist! /sarc
Another one of these convoluted NRO article that leave you scratching you head.
I think it says, that the Carrier plant was doing poorly and probably ready to make the move, until the DOE gave them the tax credit that kept them in the USA. Entirely political so they wouldn’t have left the country prior to the 2012 election.
Another example of the crap that goes on, that Trump knows and understands.
Since corporations ain’t people, regardless of what Mitt Romney says, they are entities made up of and by people. Entities, whose only purpose is to generate profits for the shareholders (Owners). So United Technologies Corporation made as much profit as they could from the government(s), then moved to greener and cheaper pastures. Condemning them for making a (seemingly smart) business decision is as silly as condemning the boy king for being an immature socialist Son of a Bitch.
It is just his/it’s nature.
That says it all right there.
THERE IS NOTHING GOOD THAT CAME FROM THAT STIMULUS BILL. NOTHING. IT WAS A GIANT BOONDOGGLE OF WASTED TAXPAYER MONEY THAT WAS USED FOR EVERYTHING FROM PAYING FOR OPERATING FUNDS TO PAY FOR QUARTERLY HEALTH CARE PREMIUMS FOR TEACHERS UNIONS TO BUYING DODGE CHALLENGER POLICE CARS FOR LOCAL POLICE FORCES. THE ENTIRE STIMULUS AND RECOVERY ACT WAS A GIGANTIC SCAN.
Another Connecticut FAIL.
That's fine and when they do something which adversely affects the US it is in our(citizen) power to change their behavior. Voting matters. International stock holder with no allegiance to the USA don't get to vote in the USA. Deal with it. They can sell their shares if they don't like it. I have to live here.
Trump is making the anti American Cheap Labor Whores go bat sh!t crazy.
“What you don’t Mexican equipment? That’s racist! /sarc”
Well, I can’t imagine what they thought would happen. The guys in this business are American as hell.
I suppose there is a bright side- you’ll immediately know any contractor pushing UTC on you is crap
We have Free Traitor™ Freepers that tell me corps off shore because taxes are too high. Then they tell me tax credits are bad. These people are inscrutable.
United Technologies isn’t even an American Company. They are British.
Their centrifugal chillers are/were pretty good machines. We had three of the old R-11 machines that ran 30 years and were replaced when R-11 became too hard to get.
So you’re left with what, Trane and York?
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