Carrier — the Indiana manufacturer that announced early this year that it was outsourcing 1,400 jobs to its plant in Monterrey, Mexico — announced on Tuesday that it had made a deal with President-elect Donald Trump to keep "close to 1,000" of those production jobs in Indianapolis.
The terms of the deal remain unclear. Even Trump's involvement in the negotiation is unknown.
Sources told CNBC that Vice President-elect Mike Pence negotiated with CEO Greg Hayes of United Technologies, Carrier's parent company that's publicly traded under the ticker UTX.
While terms of the deal are not yet clear, the sources indicated there were new incentives on offer from the state of Indiana, where Pence is governor, that helped clear a path for the agreement, according to CNBC:
While UTX was seeking the savings that would come from moving some production to Mexico, people familiar with the situation indicated that the savings were not worth incurring the wrath of the incoming administration, including the potential threat to the significant business that UTX currently conducts with the U.S. government, largely in the form of orders for jet engines and other defense-related equipment
Chuck Jones, president of the United Steelworkers' Local 1999 that represent Carrier's production employees, told The Washington Post that the union had been boxed out of the talks.
"We’re trying to figure out what the hell is going on," he said.
"If I weren’t so scared of the damage a Trump administration might do, I’d find it refreshing to see an administration fighting for factory jobs like this," economist Jared Bernstein told The New York Times. "That said, no one should confuse what Trump is doing here with sustainable economic policy."
alternative reality question: If Obama had done this, would he be accused by the GOP of picking winners and losers? https://t.co/IM2l1CoQWG
— Glenn Kessler (@GlennKesslerWP) Nov. 30, 2016
In keeping its Indianapolis factories, United Technologies would sacrifice only a marginal gain in earnings per share, according to Howard Rubel, a senior equity analyst with investment banking firm Jefferies.
"Every penny counts, but if we step back and I’m looking at earnings of $6.60 per share this year, 2 cents is an easy concession if the president-elect listens to some of the company’s bigger concerns," Rubel told The Times.
Trump and Pence will travel to Indianapolis on Thursday to announce further details of the deal.