'My arms are tied': Why states pay high-profit Carrier, DuPont for jobs
'We would be so much better' spending the millions on job training
United Technologies Corp. earned $5 billion in after-tax profits last year. Today the company said it would keep 800 jobs at its Indianapolis Carrier furnace plant in place after the state of Indiana agreed to give the company $7 million toward a $16 million upgrade, instead of moving the works to Mexico.
The company, a major U.S. defense contractor, is also expecting President Trump to make good on a proposal to cut United Technologies taxes on its foreign profits, which could save the company (and cost the government) hundreds of millions of dollars.
DuPont Co. and Dow Chemical Co., which plan to merge, earned more than $6 billion in after-tax profits last year. On Tuesday the New Castle County (Del.) council agreed to pay the company $7.5 million over the next three years in exchange for keeping their scaled-down headquarters offices and research center in Delaware instead of moving much of the operation to Indiana, or Iowa.
That's in addition to newly-passed Delaware corporate tax cuts, also enacted to keep what's left of DuPont in-state, which are blowing a hole in the state budget.
Should taxpayers have to give big corporations money to keep them from moving jobs out of state? "It would be my preference for the state not to have to be in the business of incentives," Delaware Gov. Jack Markell told me in an interview last week.
"We would be so much better off investing the money in workforce development, and quality of life," said Markell. "That's how we ought to compete" -- with projects that could benefit Delaware's employers and its current and future workforce -- instead of having to weigh program cuts and tax hikes, as he is having to do for his final lame-duck budget next month, to accomodate corporate grants and tax breaks.
"But I'm not prepared to compete with my arms tied behind my back," Markell added.
"I knew where DuPont could go in Indiana and Iowa. I knew JPMorgan Chase could go to Columbus, Ohio or Phoenix, Arizona" instead of setting up its 1,800-person tech center at the former AstraZeneca South campus, with state support.
"The leverage has certainly shifted to the employers, big or small. You have to differentiate yourself, particularly when you're a small state, with a can-do attitude," Markell concluded.
And, in Obama's -- soon to be Trump's -- America, that can mean giving some of the people's millions away, to companies that count their profits in the billions.
More in my column in this Monday's Philadelphia Inquirer