Employees of Rexnord Bearings in Indianapolis protest Rexnord's decision to likely move 300 jobs to Mexico
Employees of Rexnord Bearings in Indianapolis protest Rexnord's decision to likely move 300 jobs to Mexico on Nov. 11, 2016.
Shortly after he launched two tweets to address the Taiwan Snafu on Friday evening, Trump concluded his night on Twitter by calling out another Indiana manufacturing company for planning to move 300 jobs to Mexico. "Rexnord of Indiana is moving to Mexico and rather viciously firing all of its 300 workers. This is happening all over our country. No more!" Trump tweeted at 10:06pm on Friday.

Empowered by his victory over Carrier which agreed last week to keep 1,100 workers in the US instead of outsourcing them to Mexico in exchange for $7 million in tax breaks over a decade, Trump celebrated at a plant in the Indiana company on Thursday, warning other US companies there will be "consequences" for outsourcing jobs. He now appears to be focusing on Rexnord.

Rexnord, which is based in Milwaukee, intends to move production of industrial bearings from Indianapolis to Monterrey, Mexico, according to the employee union. In mid-November, Rexnord confirmed that it would close its Indianapolis plant and move about 300 jobs to Mexico. The announcement ended a last-ditch effort among union officers and city officials to keep the Milwaukee-based manufacturer in Indianapolis. "It wasn't anything that shocked any of us," said Chuck Jones, president of United Steelworkers Local 1999, which represents Rexnord employees.


Rexnord has said it expects to save $15.5 million during its first full year after moving Indianapolis operations to Mexico, Jones said, citing company figures shared with the union. That savings is expected to increase by $200,000 a year. Indianapolis employees would have had to cut their pay from an average of $25 an hour to about $5 an hour to compete, Jones said. "The law don't allow that," Jones said. "Our people wouldn't work for that wage, either."

Now that Rexnord has fallen in Trump's spotlight, the calculus may soon change.

The company, which didn't respond to WSJ requests for comment on Thursday, has yet to answer to Trump's tweet. Shares of Rexnord have tumbled more than 10% from Wednesday's close.
mployees of Rexnord Bearings in Indianapolis protest Rexnord's decision to likely move 300 jobs to Mexico on Nov. 11, 2016
Ironically, Chuck Jones, president of United Steelworkers local that represents Indianapolis workers at both Carrier and Rexnord, said Friday he was grateful for President-elect Trump's intervention but he isn't optimistic other companies will shelve plans to move manufacturing abroad, even if they are offered state or federal incentives. Taking a brutally pragmatic view, the union chief said that "there's not enough taxpayer money to reward companies not to leave the country when we're competing with $3-an-hour wages in Mexico."

Suggesting that Trump's gambit may be doomed from the beginning, Jones said Rexnord appears determined to leave and the union is negotiating over severance benefits.

There may be further political pressure, however. In early November, when the company confirmed the move, Indianapolis Mayor Joe Hogsett said "I am incredibly disappointed in Rexnord's decision to disregard the experience, the investment, the sacrifice and the good faith efforts of their long-time employees with the decision to uproot this plant and move 300 good-paying Indianapolis jobs to Mexico."

Trump's involvement comes shortly after Rexnord reported that it generated $24.6 million in profit during its fiscal second quarter, up from $22.6 million a year earlier. CEO Todd Adams received $1.5 million in total compensation in fiscal 2016, including a $750,000 salary. "It's corporate greed," Jones said, "because this plant was very profitable."

As the WSJ adds, "the steelworkers union said Rexnord rejected the union's proposals for wage freezes and other concessions to lower costs. The union said the hourly wages at the plant, which currently range from $18.82 to $30.81, would have to drop below the U.S. minimum to match the company's estimated costs savings in Mexico."

Rexnord's products include ball bearings, industrial chains and gears. It had 7,700 employees, including 4,200 in the U.S., as of March 31.

Deane Dray, an analyst for RBC Capital Markets, said many large industrial companies already have complex global manufacturing networks that aren't likely to be dismantled under pressure. "These are not U.S.-centric companies," Mr. Dray said. "They're manufacturing everywhere."

It remains to be seen if Trump will try to cut a similar deal with Rexnord as he did with Carrier, having come under significant pressure from both the left and the right, which have accused Trump of engaging in the same quasi-bailout, taxpayer-funded crony capitalist tactics that marred Obama's administration starting with GM and culminating with Solyndra. Alternatively, if Trump shifts from the "carrot" approach, it will be interesting to see what, if any, "stick" he would use to show Rexnord he was serious about outsourcing "consequences."

Meanwhile, expect another angry response from Mexico, which may lost another 300 "certain" jobs, and which accused Trump's Carrier deal of being worthy of a "banana republic."