United Technologies Corp (UTX.N) has reached a deal with President-elect Donald Trump and Vice President-elect Mike Pence to keep 1,000 jobs at its Carrier unit's air conditioner plant in Indianapolis, roughly halving the number of U.S. jobs it planned to move to Mexico.
The deal, announced by Carrier on Twitter late on Tuesday, is a victory for Trump, who campaigned hard on keeping jobs in the United States, a message which appealed to blue-collar workers in the Midwest.
Trump, Pence and company officials will meet in Indianapolis onThursday afternoon to announce the deal, a source familiar with the matter told Reuters.
Indiana state officials were also involved in the talks. It was unclear what, if any, inducements the state may have made to encourage Carrier to keep the jobs in the United States.
Carrier's parent, United Technologies, is on track to report revenue of $57 billion this year, including significant U.S. military contracts through its Pratt & Whitney and UTC Aerospace Systems units, giving the company an incentive to keep good relations with the president and federal government.
Carrier announced plans in February to close an air conditioner factory in Indianapolis with the loss of 1,400 jobs. It said a further 700 jobs would be cut from another plant in Huntington, Indiana, northeast of Indianapolis.
The company planned to move the jobs to Monterrey, Mexico starting in 2017. Local union leaders said Carrier had told them it would pay Mexican workers $3 an hour compared with more than $20 for their U.S. counterparts.
The announcement prompted harsh criticism from Trump during his campaign, and he vowed to impose hefty taxes on imported Carrier products if it did not reverse the move.
He predicted in February the company would call him to say "Mr. President, Carrier has decided to stay in Indiana," and promised the chances of the plant staying open was "100 percent."
As recently as 10 days ago, Carrier insisted it had no plans to reverse course, but then acknowledged on the Thanksgiving Day holiday on Nov. 24 that it was in talks with the Trump transition team.
Carrier is one of many U.S. manufacturers moving jobs to Mexico. However, videos of a company official delivering the news to the Indianapolis plant's stunned workforce, posted on YouTube, provided a vivid look at the pain and anger such decisions cause.
Earlier this month, Ford Motor Co <F.N> made a decision to keep production of a Lincoln sport utility vehicle in Kentucky, which Trump claimed as a victory for keeping the plant in the United States, even though Ford never had plans to move the entire factory to Mexico.
(Reporting by Emily Stephenson and David Shepardson in Washington and Sruthi Shankar in Bengaluru; Editing by Sandra Maler and Bill Rigby)