(Kris Turner) Carrier is shuttering its manufacturing facility in western Indianapolis and moving its operation to Mexico, eliminating about 1,400 jobs during the next three years.
The heating, ventilating, air conditioning manufacturer announced Wednesday that it would begin eliminating its Indianapolis workforce in 2017 and continue the layoffs through 2019. The company’s plan is being discussed with United Steelworkers Local 1999, which represents the employees who face termination.
“This decision is difficult and we recognize the impact on employees, their families and the community. We are committed to ensuring that our employees are treated respectfully and to working closely with their representatives throughout this transition,” said Chris Nelson, Carrier’s president of HVAC systems and services for North America.
The company is considering options for the facility and will communicate plans with employees and community leaders as soon as they are concrete.
United Steelworkers Subdivision Director Wayne Dale said the announcement was a shock.
“It was devastating to hear and it was not anticipated at all,” he said. “It’s a total disappointment for the employees and their families.”
For a company that’s been in Indianapolis since the early 1950s, the decision is unsettling for workers, United Steelworkers President Chuck Jones said.
“They are scared. There are a lot of questions and people don’t know whether it’ll affect their benefits and pension,” Jones said. “Our feeling is all the retirement benefits and whatnot are still in effect.”
In a statement, Carrier said some separation benefits, including one that pays for college tuition, books and fees, will be available.
Carrier’s residential HVAC headquarters and engineering organization are slated to remain in Indianapolis.
Mayor Joe Hogsett issued an executive order Wednesday afternoon to convene local, state, and federal resources to assist workers who will lose their jobs.
“Today’s surprise announcement was without warning and incredibly disappointing,” the mayor said. “While I am obviously concerned about the economic impact, my top priority is the well-being of the hardworking families affected by this decision.
“A job lost in any part of our community affects us all, and I believe these are the times we must come together as one city to lift up our neighbors.”
Carrier is a part of United Technologies Corp. It is operated through UTC Climate, Controls & Security, which runs 51 factories and 39 design centers across the globe. It employs 50,000 people in more than 180 countries.
Closing the manufacturing facility ultimately came down to cost, Nelson said.
“This move is 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,” he said.
Carrier’s workers are separated into a two-tier wage system. A quarter of the workers make about $14 an hour, or about $30,000 a year. The rest make about $26 an hour, or about $55,000, but make well above $70,000 a year with overtime, Jones said.
The economic impact of the closing will be felt mainly in Indianapolis and shouldn’t echo across the state, said Michael Hicks, an economic expert at Ball State University.
“The bad news is you lose 1,400 jobs that are mid-range manufacturing jobs in terms of wages in Indianapolis,” he said. “It’s going to have a ripple effect. The traditional multipliers means those workers will buy fewer things.”
Nelson said the move to Mexico is ultimately about Carrier’s bottom line.
“Relocating our operations to a region where we have existing infrastructure and a strong supplier base will allow us to operate more cost effectively so that we can continue to produce high-quality HVAC products that are competitively positioned while continuing to meet customer needs,” he said.