president-elect donald trump <u+2019>s campaign pledge to save jobs at a carrier plant in indiana was framed around free trade, but negotiations about corporate tax law changes could be just as important to any possible deal. representatives for the incoming administration, including vice president-elect mike pence, have held wide-ranging policy talks with top-ranking executives at carrier<u+2019>s parent company, united technologies corp., said a person familiar with the discussions. the discussions include the conglomerate<u+2019>s plans to shift more than 2,000 jobs from indiana to mexico, but have covered other issues, including the company<u+2019>s wishes for a tax overhaul that mr. trump and republicans have promised to pursue early in his administration, this person said. united technologies ceo gregory hayes has pledged to work with the new administration despite mr. trump<u+2019>s attacks on the planned carrier plant closure during his campaign. it wasn<u+2019>t clear what role mr. trump himself has played in the discussions, though he said in a tweet on thanksgivng he was working on the matter . a spokeswoman for mr. trump didn<u+2019>t immediately respond to a request for comment. the incoming president<u+2019>s goal is to show that he can keep some of his boldest campaign promises, and the ceo needs to keep peace with the federal government, a critical customer for products like its jet fighter engines. military sales account for roughly 10% of the company<u+2019>s $56 billion annual total, the company says. united technologies, like other globalized u.s. companies, also has large reserves of cash overseas<u+2014>profits that corporations are waiting to repatriate to the u.s. until congress cuts the level of tax they would pay. the company reported that 85% of its total cash, or more than $6 billion, was overseas, as of the end of 2015. one idea backed by house republicans but not mr. trump would be to create a two-tiered tax rate that would help companies that have used foreign profits for factories and other assets they can<u+2019>t easily repatriate. large u.s. companies also want a lower corporate tax rate. given the variables of the company<u+2019>s interests and the three-year window over which united technologies planned to stagger the job cuts in indiana, there is the potential for a deal, the person familiar with the discussions said. in april, at a rally near carrier<u+2019>s indianapolis plant, mr. trump pledged to impose a 35% tariff on air conditioning units the company built in mexico for sale in the u.s. democratic sen. bernie sanders said saturday that mr. trump must make it clear that if united technologies <u+201c>wants to receive another defense contract from the taxpayers of this country, it must not move these plants to mexico.<u+201d> though only a portion of overall sales at united technologies<u+2014>which makes pratt & whitney jet engines, otis elevators and an array of building equipment<u+2014>defense is a key focus of the conglomerate. the company is the sole provider of jet engines for the f-35 joint strike fighter. carrier said on thanksgiving day that it didn<u+2019>t have any changes to announce, roughly an hour after mr. trump tweeted that he was <u+201c>making progress<u+201d> in convincing the company to keep the jobs in indiana. in indianapolis, mr. trump<u+2019>s message engendered only muted optimism. <u+201c>for us, we pretty much think it<u+2019>s a done deal that they<u+2019>re moving, and don<u+2019>t think he can do anything to change that, although we don<u+2019>t want to give up hope,<u+201d> said kelly ray hugunin, business representative for united steelworkers local 1999, which represents 1,400 workers at a carrier plant that makes residential furnace equipment. the union hasn<u+2019>t received any word from the company or the trump administration about any talks to prevent jobs moving to mexico, said the union local<u+2019>s president, chuck jones. <u+201c>if trump<u+2019>s got a trump card to play on this,<u+201d> mr. jones said saturday, <u+201c>even though carrier<u+2019>s saving $65 million a year [by closing the plants], it<u+2019>s that he would try to leverage some of the billions of dollars that united technologies has on military contracts.<u+201d> <u+2014>richard rubin contributed to this article. write to ted mann at ted.mann@wsj.com
deal for carrier to keep u.s. plant open may hinge on tax overhaul - wsj
ted mann