State to Review Carrier, UTEC Incentives

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(Image courtesy of Carrier Corp.) The largest of the two announcements involves an eventual 1,400 jobs in Indianapolis. (Image courtesy of Carrier Corp.) The largest of the two announcements involves an eventual 1,400 jobs in Indianapolis.

The state is prepared to take back training incentives offered to Connecticut-based United Technologies Corp.'s (NYSE: UTX) if its plans to move Indiana manufacturing operations to Mexico are found to break previous agreements. The company has subsidiaries in Indianapolis and Huntington, and announced last week the relocations could affect 2,100 Hoosier jobs. The Department of Workforce Development has also extended resources to potentially displaced workers. Pence adds he is pushing for federal regulation changes to "encourage investment and job growth."

Governor Mike Pence says he is "profoundly disappointed" by the news, and says the Indiana Economic Development Corp. will review the incentives.

UTC is planning to move its Carrier Corp. manufacturing operations in Indianapolis and Huntington-based United Technologies Electronic Controls Inc. headquarters and engineering center to a new facility south of the border.

Pence says neither Carrier nor United Technologies gave advance notice to the state about the moves. "From the moment our administration learned of this announcement, our Department of Workforce Development reached out to employees of both companies to offer job-seeking, training and education resources,” Pence said in a statement.

The state says the steps taken by DWD's Rapid Response officials include:

  • Immediate onsite contact with employer and employee union representatives
  • Assessment of worker job function and skills
  • Matching employee skills with open positions in local community
  • Providing training as necessary to impacted employees to help them gain new employment
  • Assisting in the application for additional benefits (federal Trade Adjustment Assistance – TAA)
  • Career counseling and individual case management for each employee

Pence says IEDC incentives are performance-based, and if Carrier Corp. and United Technologies' training grant contracts with the state are found to be non-compliant, the IEDC will try to claw-back the funds "to the maximum extent permitted by the agreement." Over the last six years, the state has offered the two subsidiaries more than $380,000 in conditional incentives that it could seek to recapture. The IEDC says it has de-obligated United Technologies from a $300,000 training incentive contract issued just last year.

Last week, Indianapolis Mayor Joe Hogsett announced the creation of a task force to help affected workers and Senator Joe Donnelly (D-Ind.) took his concerns to Carrier Corp. HVAC Systems President Chris Nelson. During a conference call, Nelson said efficiency of lower production and labor costs in Mexico were the primary benefits of the move. He said Nelson did not name any federal regulations that led to the move. Donnelly said Carrier secured $5.1 million in tax credits from the U.S. Department of Energy in 2014, which he requested be repaid.

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