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Trump's threat to retaliate may not sway firms from moving

This article is more than 12 months old

US President-elect's push to stop companies from offshoring jobs might backfire on him

US President-elect Donald Trump's threats to retaliate against US companies planning to shift operations overseas constitute a new risk for multinationals, but the threats may not sway them.

Mr Trump laid down the gauntlet on Thursday at a rally after striking a deal with furnace and air-conditioner maker Carrier to keep about 1,100 jobs in Indiana in exchange for US$7 million (S$9.9 million) in state tax incentives over 10 years.

"Companies are not going to leave the United States any more without consequences. Not going to happen," Mr Trump told the cheering crowd.

"They can leave from state to state, and negotiate deals with different states, but leaving the country will be very, very difficult."

He did not offer details on how he plans to pressure companies to keep jobs in the US, but one obvious lever includes the removal of government contracts.

Some companies said his broadside was not sufficient to compel a change in plans.

Equipment maker Caterpillar announced last March it plans to shutter a plant in Illinois that makes oil pumps and valves, and move 230 jobs to Mexico.

"We are continuing to execute on the previously announced plan on the stated timeline," said a spokesman.

Food giant Mondelez International also signalled it would proceed with plans to relocate hundreds of jobs from an Oreo cookie plant in Chicago to Mexico.

Companies are not going to leave the United States any more without consequences. Not going to happen. Mr Donald Trump

"We have not had any contact with the new administration," said a spokesman.

She added that the Chicago baker remains an "important part of our manufacturing network", and that it continues to make Oreos at three US factories.

Not far from Mr Trump's victory celebration at Carrier in Indiana, industrial companies Rexnord, CTS and Manitowoc Foodservice all plan to shift activities overseas from the Indianapolis area.

Manitowoc Foodservice opted to close a plant there due to a decline in demand for soda-drink dispensers, which had been made there, a spokesman said.

Most of the 87 jobs are being moved to Tijuana, Mexico.

"The wind-down of the plant is proceeding according to our original schedule," spokesman Rich Sheffer said.

"Yesterday's speech did not include anything specific enough for us to reconsider our plans."

Senator Bernie Sanders said Mr Trump's plans were a losing proposal, in part because Carrier will still transfer 1,000 jobs to Mexico. Mr Trump failed to save all 2,100 jobs, as he had promised, Mr Sanders said.

Carrier "took Trump hostage and won", Mr Sanders said in an op-ed he wrote for The Washington Post.

Mr Trump "endangered" other US jobs, he said, "because he has signalled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives". - AFP

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