INDIANAPOLIS (AP) — Indiana political leaders are casting blame in different directions for a company's decision to shut down a 1,400-worker factory in Indianapolis and move production to Mexico.
Democratic U.S. Sen. Joe Donnelly said he came away from a discussion with Carrier Corp. executives convinced that the company is chasing lower labor costs in deciding to close the heating, ventilating and air conditioning factory over the next three years. The company announced its plans last week.
Republican Gov. Mike Pence cited federal regulations as contributing to the decision — a factor that Carrier Corp. pointed to in its statement on the factory closing.
Donnelly said the company executives couldn't specify any federal regulations to him.
"The only discrepancy so far is on the fact that the minimum wage in Mexico is $4.19 a day," Donnelly told the Indianapolis Business Journal. "It's certainly not that they're not making money and they're not succeeding. What they're trying to do is to sell heating and ventilation products to (Americans) but aren't willing to pay those same wages to the people who build the products."
Carrier's Indianapolis factory workers are separated into a two-tier wage system. A quarter of the workers make about $14 an hour, with the rest making about $26 an hour, The Indianapolis Star reported.
A Carrier spokeswoman didn't immediately return a telephone message from The Associated Press seeking comment Monday.
A company statement last week said the shifting of Carrier production to Mexico was intended "to address the challenges we continue to face in a rapidly changing HVAC industry, with the continued migration of the HVAC industry to Mexico, including our suppliers and competitors, and ongoing cost and pricing pressures driven, in part, by new regulatory requirements."
United Technologies Electronic Controls, owned by the same parent company as Carrier Corp., also announced last week that it would close a 700-worker factory in the northeastern Indiana city of Huntington by 2018, moving those manufacturing operations to a new plant in Mexico. The Huntington factory makes microprocessor-based controls for the HVAC and refrigeration industries.
Pence called the closing decisions "disappointing" but said "federal regulations continue to stymie our national economy."
"The fact that these companies are leaving the United States speaks broadly about the need for reform in our nation's capital," Pence said in a statement.
Donnelly said Carrier Corp. should return a $5.1 million taxpayer-funded federal tax credit that it accepted in 2014. The company said at the time the tax credit would help it "expand production at its Indianapolis facility to meet increasing demand for its high-efficiency gas furnace line."
Pence said Monday that the Indiana Economic Development Corp. would review its incentive contracts with Carrier and United Technologies to see whether any state money could be recovered. The agency has given the companies a total of nearly $400,000 in training grants since 2010 based on their job-creation plans, according to the governor's office.
The owner of 911 Heating and Cooling in Anderson said he's stopped selling Carrier products to protest the company's decision. R.D. Poffenbarger said he has been using Carrier products since he got into the HVAC business about 15 years ago.
"Why would we support someone who is taking away from our economy and moving to Mexico?" he told The (Anderson) Herald Bulletin.