Thursday, July 20, 2017

The Death of US Manufacturing

Politicians talk, but the secular trend that transferring production/manufacturing from high to low cost countries remain undisturbed under North American Free Trade Agreement (NAFTA) and Trans-Pacific Partnership (TPP).

Under NAFTA, cheap American grain shipped to Mexico, thus, destroying peasant farming. This prompted migration north in search of jobs. American factories began closing as desperate Mexicans were willing to work for very low wages. Tariff free manufacturing good encouraged more production to move south of the border. This cycle has shifted production and created large trade deficits for the US. The Trans-Pacific Partnership (TPP), a free trade deal among 12 countries rather than 3 and even large labor pool, strengthens and worsens the above cyle.

Headline: Carrier Begins Job Cuts at Indiana Factory Championed by Trump

Carrier Corp. is beginning job cuts at the Indianapolis factory that became a rallying cry for President Donald Trump because of the company’s plans to shift work to Mexico.

About 300 employees will leave this week as part of a previously announced plan to relocate production of fan coils, Carrier said in a statement Wednesday. A total of 600 jobs will be eliminated during the next few months, the unit of United Technologies Corp. said.

Carrier said it continues to honor a commitment to employ about 1,100 at the gas-furnace plant. The manufacturer agreed late last year to halt plans to send the jobs abroad after a firestorm of criticism from Trump. The move garnered national notice during the presidential campaign after a worker’s mobile-phone video of the announcement to employees took off on social media.



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