Washington
Ross Baldwin, whose San Diego-based business Tacna helps U.S. companies set up manufacturing operations in Mexico, said three new clients put their plans on hold until they see what Trump does as president.
At the McAllen Economic Development Corp., which assists companies seeking to expand across the Mexican border from the Texas city, two of five companies currently considering a move have put the brakes on their plans because of Trump, said Keith Partridge, the development corporation’s chief executive officer.
Trump’s Twitter vow that companies shifting jobs out of the U.S. will face “consequences” under his administration introduced new and difficult-to-gauge political risk for businesses considering offshoring to lower costs. The incoming president’s passion for the cause was underscored at his Dec. 1 rally to celebrate an agreement he reached with United Technologies Corp.’s Carrier unit to keep about 800 factory jobs in Indianapolis instead of moving them to Mexico.
“What they did in Indiana has made it clear to every board member in America that there is a clear and present danger in outsourcing” said Jim Courtovich, managing partner of the Washington public affairs firm Sphere Consulting, who said he has already heard from worried business executives.
GN Store Nord A/S looked into moving some hearing-aid production work from Minnesota to Mexico earlier this year but put the plan on hold because of U.S. campaign rhetoric, a person familiar with the matter said. GN wants to explore incentives to keep production in Minnesota and whether there would be penalties for relocating jobs to other countries, said another person. Both people asked not to be named because the discussions are private.
GN doesn’t comment on internal deliberations and has “no plans whatsoever” to move its Minnesota production, Anders Hedegaard, CEO of GN Hearing, said in an e-mailed statement. “We have recently consolidated our U.S. production in Minneapolis, where we have invested heavily and increased staff. We are very pleased with the location.”
Key congressional Republicans have indicated they’ll balk at a 35 percent tariff Trump has proposed for companies that move jobs outside the U.S. and then export products back to the country. But as president, he’ll have plenty of other levers of power — chiefly, the bully pulpit. Some companies are still moving ahead in shifting jobs. Rexnord Corp. is planning to move 300 manufacturing positions to Mexico from a ball bearings plant just a mile away from the Carrier plant Trump visited. He attacked Rexnord on Twitter for “rather viciously firing” the U.S. workers. Rexnord didn’t respond to requests for comment about the tweet and its plans for the Indiana plant.
Baxter International Inc., a maker of health care products, is moving some production from an Englewood, Colo., plant to Tijuana, Mexico, according to a certified trade adjustment assistance petition filed by the state government. Some of the work is being done remotely by employees who have remained and “much of the work is being transitioned to third-party business partners in the U.S.,” Baxter said in an e-mailed statement.
Cardone Industries, a closely held auto-parts maker based in Philadelphia, is moving work to Mexico, affecting 1,300 jobs, according to a trade adjustment assistance petition filed by the company. Cardone’s human resources director didn’t respond to requests for comment.
Baldwin said his clients will watch how Trump responds in such instances. Companies that have cold feet from Trump’s rhetoric have merely put their plans on “a pause,” he said, “until we sort out what’s happening.”