As Trump touts Indiana jobs deal, U.S. factory work seeps overseas

By Nick Carey and Andy Sullivan

ELKHART, Ind./WASHINGTON (Reuters) - President-elect Donald Trump goes to Indianapolis on Thursday to celebrate a deal that will keep 1,000 factory jobs there, but employers elsewhere in Indiana are laying off five times that many workers because of foreign competition.

The decision by United Technologies Corp's (NYSE: UTX) Carrier unit to keep half of the 2,100 Indiana jobs it was to shift to Mexico has allowed Trump to claim credit after he held rallies during his populist campaign promising to revive the industrial base of the United States.

But the author of "The Art of the Deal" will have a lot more dealmaking to do if he wants to stop the steady erosion of manufacturing jobs from the country due to automation and lower costs abroad.

In Indiana alone, employers are eliminating at least 3,660 jobs because they are shifting work to other countries, according to a Reuters analysis of Labor Department filings.

Some 960 workers employed by five companies in Indiana are losing their jobs because their U.S. employers are not able to compete with cheaper imported goods, filings show.

Some of those facing job cuts said they did not expect Trump to intervene on their behalf, but they will expect him to take broader steps to protect factory work.

"If in four years it's the same old crap that's going on we'll give another candidate a shot," said Michael Mobley, whose employer, Aurora Casket, eliminated 35 jobs in September and plans to cut another 35 jobs next year as it shifts work to Mexico from Aurora, Indiana.

As elsewhere in the United States, factory work in Indiana has lagged as the broader economy has recovered from the 2008-2009 recession. Manufacturing employment is down 7.4 percent from January 2007 levels even as total employment in the state has risen 3 percent since then, according to the U.S. Bureau of Labor Statistics.

Nationwide, manufacturing employment is down 12.5 percent since 2007, according to the bureau.

Carrier faced harsh scrutiny after it announced in February that it was eliminating 1,400 jobs at an Indianapolis plant that makes heating and air conditioning units, and another 700 jobs at a United Technologies factory in Huntington, Indiana.

On the campaign trail, Trump turned the Carrier layoffs into a symbol of working-class frustration, promising that he would rebuild a manufacturing base that has been eroded over the past three decades.

Trump and his vice president-elect, Indiana Governor Mike Pence, worked out an agreement with United Technologies CEO Gregory Hayes that gives the company financial incentives from the state, along with a promise to improve the U.S. business climate.

The deal does nothing to prevent other employers from shipping work out of state and has been criticized by Democrats and Republicans alike.

In Elkhart, a small city 160 miles north of Indianapolis, electronics maker Harman International (NYSE: HAR) plans to eliminate 125 jobs by January as it shifts work to Tijuana, Mexico. Auto-parts maker CTS Corp (NYSE: CTS) is laying off 230 workers as it shifts production overseas.

Still, Trump's willingness to provide tax breaks and other incentives for employers is an encouraging sign, said one Elkhart business leader.

"If we have to wait for President Trump to come to Elkhart it may take a while. But if he says here are some tools, we can figure out how to use them," said Kyle Hannon, president of the Greater Elkhart Chamber of Commerce.

Others are counting on Trump to take greater steps. Employers will continue to shift work overseas until he rewrites trade agreements, raises tariffs and adds other protections, labor leaders said.

"We're going to need to hold Trump to his word to save American workers' jobs across the country," said Wayne Dayle, who as regional director for the United Steelworkers union in Indianapolis represents employees at the Carrier plant.

(Reporting by Nick Carey bin Elkhart, Indiana and Andy Sullivan in Washington; Editing by Soyoung Kim and Grant McCool)

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