Indiana officials agreed to give United Technologies Corp. $7 million worth of tax breaks over 10 years to encourage the company’s Carrier Corp. unit to keep about 1,000 jobs in the state, according to people familiar with the matter.
The heating and air conditioning company will invest about $16 million to keep its operations in the state, including a furnace plant in Indianapolis that it had previously planned to close and shift the work to Mexico, the people said.
Carrier has previously said it expected to save about $65 million a year by shutting the plant and moving its operations to Monterrey.
President-elect Donald Trump and Vice President-elect Mike Pence were expected to announced the deal with Carrier in Indiana on Thursday.
The deal would cover 800 Carrier workers from the Indianapolis furnace plant and an additional 300 research and headquarters positions that weren’t slated to go to Mexico, according to another person briefed on the deal.
The company still plans to move 600 jobs from the Carrier plant to Mexico. It also will proceed with plans to close a second plant in Huntington, Ind., that makes electronic controls, moving 700 other jobs to Mexico.
Mr. Trump has played up the partial rescue as a sign he can deliver on campaign promises. Through the presidential primary and general election, the Republican businessman had made an example of Carrier, at one point threatening to put a 35% tariff on Carrier imports unless it reversed its decision to move the jobs to Mexico.
“This is a big win for the incoming administration but an even bigger win for the people of Indiana,” transition spokesman Jason Miller said Thursday. The transition team has declined to provide details about the cost of keeping those jobs in the state.
Mr. Trump also will host an evening rally at U.S. Bank Arena in Cincinnati, a Republican stronghold. Ohio was one of six states the Republican captured after being won twice by Democratic President Barack Obama. That is the start of a broader “thank you” tour that is expected to include stops in Florida and across the Midwest.
Sen. Bernie Sanders, who during his presidential campaign had also attacked Carrier and other firms shifting work abroad, criticized the deal on Thursday, saying Mr. Trump failed to make good on his campaign pledge to save all of the jobs from moving to Mexico.
The deal also creates a bad precedent, Mr. Sanders contended, writing that Mr. Trump “has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives.”
The deal that emerged from weeks of negotiations between United Technologies brass and officials in the Trump camp led by Mr. Pence, the Indiana governor, is a relatively standard package of state incentives, according to people familiar with the agreement.
On Wednesday, Carrier said “incentives offered by the state were an important consideration,” without providing further details.
“This agreement in no way diminishes our belief in the benefits of free trade and that the forces of globalization will continue to require solutions for the long-term competitiveness of the U.S. and of American workers moving forward,” the company said.
In addition to Carrier, United Technologies makes Pratt & Whitney jet engines and Otis elevators. It employs about 200,000 people, about one third of them in the U.S.
Representatives of the incoming administration also discussed the Farmington, Conn., company’s wishes regarding federal regulations and their desires for an overhaul of corporate tax laws, according to one of the people.
For Mr. Trump, the trips to Indiana and Ohio meant there were no announced meetings on Thursday with prospective cabinet members. Those meetings will resume on Friday in New York, where Mr. Trump is scheduled to visit with Sen. David Perdue (R., Ga.), retired Adm. Jay Cohen, Florida Attorney General Pam Bondi, former United Nations Ambassador John Bolton, and Sen. Heidi Heitkamp (D., N.D.).
—Michael C. Bender contributed to this article.
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