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.
I think every AC unit shipped into the USA needs to be disassembled and inspected for contraband.
The article ignored the cause and effect in inIndiana where theCarrier plant in question actually resides
The author in question changed the subject to failed green energy efforts of the Obama Types
There are only a few air conditioning manufacturers that make dozens of different brand names. There’s also Lennox and Goodman, but they label many brands, as do Trane and York (and Carrier).
Obamaeconomy at work. Or rather not at work.
When UTC bought Carrier and closed the factory in Syracuse I don’t remember anyone in Indiana complaining.
You can't see a difference in moving a factory from one state to another from moving from the USA to a foreign country? Really?
Forgot about Lennox, though I don’t think I ever saw their commercial stuff. I think residential when I think Lennox.
My 55 year old father that lost his job wouldn’t see the difference for sure.
There is a difference and you know it. Somebody loses their job in NY can move to IN perhaps get their old job back. Americans competing with each other is good. Competing with third world peasants, not so much.
>> So you’re left with what, Trane and York? <<
My aircon guy still swears by Carrier. Says he has seen many units that run well for 25 years or more. But he says Trane has gotten better in recent years. Dunno about York.
I have to disagree on the stockholders losing their vote. Just a tad to totalitarian for my taste.
But, we the people can effect their bottom line. Just do not buy their product. A president can influence congress to pass tariffs on products imported from places like Mexico.
Stock holders are international. You can’t check id before they buy.
York makes good commercial packaged rooftop units and screw compressor chillers. They were bought by Johnson Controls several years ago.
What part of the phrase "international stock holders" don't you understand?
I have a 15 year old Trane. Where they built well back then? Anyone know?
Better a whore than a parasite, or the bagholder for a bankrupt casino bond issuer. At least a whore gets value for the service rendered.
You mean for your home? I think Trane makes good residential equipment, but most of my experience is with commercial equipment (I was/am a DDC control guy).
Yes residential Trane, how good is it?
Oh, BTW, a rule of thumb is if you get 20 years you had a good unit.
If it's 15 years old and still going, pretty good. Is it a furnace or AC unit or both?
Either way, you could expect 5 mores years of service with normal maintenance. You may want to plan around that because the EPA keeps making them more expensive and less reliable. I'm not up to speed on the latest. I do know EPA messed up water heaters last year.
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