James Briggs, Chelsea Schneider, and Tony Cook

IndyStar

About 1,400 Indianapolis workers who've spent months grieving the impending loss of of their high-wage manufacturing jobs received a shocking dose of hope Tuesday as the incoming Trump administration scored its first major victory.

Their jobs might be saved.

Carrier Corp. has reached an agreement with President-elect Donald Trump to keep "close to 1,000 jobs" in the city, scrapping a plan to shift all of its Indianapolis operations to Mexico. The heating and air conditioning giant confirmed the agreement on Twitter, but did not provide details.

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Trump and Vice President-elect Mike Pence are scheduled to appear in the city Thursday for a formal announcement, according to a transition official who requested anonymity.

The agreement, first alluded to by Trump in a Thanksgiving tweet, comes nearly nine months after Carrier announced it would shutter its Indianapolis plant. The deal promises to save the majority of Carrier's Indianapolis jobs, yet suggests many workers will still be laid off. It also raises questions about what his administration can do to help other manufacturing workers across the country who are losing their jobs to automation and cheaper labor.

Details about the deal were scarce Tuesday night. A source, who is familiar with the plan, said state incentives are part of the deal. Sources did not specify what type of incentive package Carrier has agreed to in order to stay in Indianapolis.

The United Steelworkers Local 1999, which represents Carrier workers, had not been briefed on the deal as of late Tuesday, said Chuck Jones, the union president. He noted that he's cautiously optimistic.

"We're trying to find out what that consists of," Jones said. "We haven't had any luck."

City officials also remained in the dark Tuesday. Indianapolis Mayor Joe Hogsett in a statement said he is "hopeful that President-elect Trump's efforts will keep many of these jobs here in Indianapolis."

Whatever the terms of the deal turn out to be, they will be better than the bleak exodus of jobs that Indianapolis had spent months preparing for. And the deal fulfills one of Trump's most prominent pledges.

Trump campaigned on keeping manufacturing jobs in the U.S.,and promised he would convince Carrier to stay in Indianapolis — or punish the company if it refused. Trump has said he would impose a 35 percent tariff on companies that move jobs outside the U.S.

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Carrier in February announced that it would begin layoffs next year and shutter its Indianapolis factory in three waves through 2019 as part of a larger reorganization that also includes the closing of Huntington-based United Technologies Electronic Controls. The company did not say whether any additional jobs would be saved in Huntington.

Carrier had been planning to shift all of its Indianapolis jobs to Monterrey, Mexico, where workers would earn $3 an hour. The highest-paid Indianapolis employees make $26 an hour and can earn more than $70,000 a year with overtime.

It is unclear whether Carrier will seek salary concessions as part of its agreement to stay. The company can't unilaterally enforce pay cuts, Jones said.

Carrier already had taken steps toward relocating. The company reached a severance agreement with workers, agreed to repay Indianapolis $1.2 million for past tax breaks and refunded $380,000 to the state for grants.

Beyond potential tax breaks, Carrier would have had several motivations to reach a deal with the Trump administration, said Mohan Tatikonda, an operations management professor for the Indiana University Kelley School of Business.

For one, Carrier's parent company, Connecticut-based United Technologies Corp., is a large government contractor. About 10 percent of the company's $56 billion in annual revenue comes from the government, according to The New York Times. The company "would like to start off on the right foot" with a new presidential administration, Tatikonda said.

In addition, he said, Carrier's image took a beating in recent months as Trump and other public officials assailed it for planning to send jobs to Mexico. The damage, which likely spread to Carrier's distributors, might have made any move to Mexico less attractive, Tatikonda said. Carrier has said it would save $65 million a year by relocating jobs.

Although the agreement with Carrier is a clear win for Trump and Pence, Tatikonda cautioned that it would not have broad implications for the manufacturing industry, which is still shedding jobs as factories become more efficient and companies find savings abroad. For instance, Rexnord Corp. is still planning to close another west-side Indianapolis plant early next year, costing the city 300 jobs.

"The Rexnord folks are likely complaining, 'What about us?'" Tatikonda said. "(An agreement with Carrier) doesn't get at the technological progress and cost-reduction imperative that reduces manufacturing employment. It's just a spot solution to keep some of Carrier's operations in Indianapolis for some time, but it doesn't affect the larger issue of manufacturing losses."

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U.S. Sen. Joe Donnelly echoed that point in a statement applauding the "welcome news" of Carrier's agreement.

"We need to change our laws to encourage companies to grow here at home," said Donnelly, a Democrat. "I hope President-elect Trump will work with me toward this goal, so that companies will invest in the foundation of our economy: our workers and our communities.”

Still, Carrier's agreement with the Trump administration is a stunning change of plans that experts and union officials said was all but impossible just days earlier. After Trump said Nov. 24 that he was "making progress" in discussions with Carrier, Jones said he would be "shocked if anything was done."

Jones on Tuesday was absorbing that shock and trying to determine what it would mean for hundreds of Indianapolis workers who suddenly were learning they might keep their jobs.

"I don't know how good the news is because I don't know what's attached to the proposed thousand jobs staying here," Jones said. "They haven't chosen to include us. I wouldn't know what to speculate."

Call IndyStar reporter James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.