Carrier in Indy, UTEC in Huntington to move units to Mexico, costing 2,100 jobs

Update: It's unlikely other U.S. manufacturing companies will move to Mexico, economic experts said. Carrier and UTEC's move is highly unusual, they said.

Two Indiana plants that make products for the heating, ventilating and air conditioning industry are shifting their manufacturing operations to Mexico, which will cost about 2,100 workers their jobs, company officials announced Wednesday.

Carrier is shuttering its manufacturing facility on Indianapolis' west side, eliminating about 1,400 jobs during the next three years.

United Technologies Electronic Controls announced Wednesday that it will move its Huntington manufacturing operations to a new plant in Mexico, costing the northeastern Indiana city 700 jobs by 2018. Those workers make microprocessor-based controls for the HVAC and refrigeration industries.

Carrier Corp. and UTEC are units of Hartford, Conn.-based United Technologies Corp.

Carrier  announced 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.

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“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.

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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.”

Alex Housten, UTEC’s managing director, told WANE-TV the company will work with employees and union officials to manage the 700 layoffs that will accompany the closure of the plant in Huntington, about 20 miles southwest of Fort Wayne.

“We are aware of the effect on our employees and the community, making this a difficult decision,” said Housten, adding that the move to Mexico “is the best way for us to remain competitive.”

Carrier is operated through UTC Climate, Controls & Security, which runs 51 factories and 39 design centers around the globe. It employs 50,000 people in more than 180 countries.

Closing the Indianapolis 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 employees react to layoff news in raw video

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 midrange 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 ultimately is 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.

The Associated Press contributed to this story.

Call IndyStar reporter Kris Turner at (317) 444-6047. Follow him on Twitter: @krisnturner.

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