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.
What part of the phrase “international stock holders” don’t you understand?
The part of AMERICANS that vote and own stock in International Corporations, like United Technologies Corporation.
Non citizens do not ( or are not supposed) to have a vote in this country.
What part of the U S Constitution do YOU not understand?
What a dolt, I will spell it out for you. Foreigners i.e. people that are not US citizens can own stock in US companies but they don’t get to vote in the US. There is often a conflict of interest. Get it yet?
EPA did not mess up water heaters last year.
The heaters are exactly the same as before. The insulation is thicker.
To distinguish further, the labeling was changed to allow instant recognition however the content of the labeling was virtually the same
Ons primary problem is that export shipment quantities were reduced because less heaters could be loaded into a 40’ container
Yes, which leads to a second problem. Many people will have to remodel their furnace rooms to fit in the new water heater. They are also considerably more expensive.
I did get one of the last run old school 50 gallon heaters last summer. $375. Need to install it this spring.
And I’ll bet some handsome political contributions to boot.
I had that very problem and the result was rearranging the stuff in the closet. It might actually end up being a better arrangement of stuff than that which evolved over the last 40 years.
I had this one installedby the plumber. Having done it I think twice before I just wasn’t up to it again.
I have occasion to visit a major heater manufacturer and the actual cost increase is not so much in materials but in the seemingly endless rework of processes and systems.
When UTC bought Carrier and closed the factory in Syracuse I don’t remember anyone in Indiana complaining.Following that logic, are the Mexican's complaining?
My aircon guy still swears by Carrier. Says he has seen many units that run well for 25 years or more.I have a over 25 yr old (basicly trouble free, knock on wood) Rheem HVAC system on my house.
Yes, for an increase in efficiency you'd be hard pressed to notice on you utility bill.
Behold, the king shall issue executive orders to accomplish this.
The only candidate that is preaching the right things to "make the country great again" is Trump.
Prosperity, and economic growth will cure all our ills.
Wrapping yourself in the armor of Christ isn't the answer this time.
Very good. Rheem has a pretty good rep for residential equipment. At 25 years I would caution you to have the heat exchanger inspected by someone you trust (perhaps yourself if you can) to make sure there are not metal fatigue cracks developing. Carbon monoxide can be introduced into the air stream, bad juju.
no, companies off shore because:
union work rules are too costly and promote a complete lack of productivity. they are designed to keep more union people on the payroll...
government regulations and fees are more costly than the tax rates....
now go back to your local union hall and tell them that you have failed in your attempt to try and push their agenda...
Despite receiving millions in federal support to create domestic green jobs.
With the move that puts them in the double dipper club and their products on the do not buy list failure to ensue.
Rheem has a pretty good rep for residential equipment. At 25 years I would caution you to have the heat exchanger inspected by someone you trust (perhaps yourself if you can) to make sure there are not metal fatigue cracks developing. Carbon monoxide can be introduced into the air stream, bad juju.
Of course that only applies if it’s a gas-fired heating unit.
Since only 10% of the manufacturing workforce is unionized then you would be 90% wrong.
BTW the Carrier CEO couldn't name one regulation that caused the shift to Mexico.
Good point, my comment assumes facts not in evidence.
When I see one of those damned “reinvestment and recovery” signs, my blood pressure spikes about 30 points.
Just seeing it.
Those are two different things, in my opinion, and I can readily understand why many people would view them quite differently.
Taxes are too high, the government takes your money by default. You have zero control over how your money is to be used to run your business. The way it should be done is to lower THAT corporate tax rate, and let you run your business as you see fit and invest money in your company in a way that works best for your company and employees, NOT what works best for what flunky POS politicians think is best.
Tax Credits have to be “requested” and approved with conditions to be met to be given back. I know I’m not telling you anything you don’t already know here...the government supposedly uses this as a carrot to get behavior and products that are in line with what the government wants, such as “green” BS. This borders on fascism. There are strings attached. As a business owner, you have to pay that money out in taxes with no recourse, and you have to go hat in hand to the government to get some portion of it back, making business decisions that the government wants you to make for their own reasons, not what is best for your company.
As we see, this tax credit money is also used to reward political allies.
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