May 22, 2017, 20:45 / Business / Interviews and profiles

Gregory Hayes: “Everything coming out of Washington these days should be taken with a grain of salt.”

United Technologies, which closed a U.S. plant for low-cost production in Mexico, became a target of Trump during the presidential campaign. CEO Gregory Hayes made a compromise, but is not going to follow the instructions from the White House in everything Joseph Rago

Gregory Hayes, CEO of United Technologies Corp. /Richard Drew /AP

“It feels somehow uncomfortable when the elected president calls you. A very big man,” says Greg Hayes. The CEO recalls how Donald Trump made United Technologies Corp. (UTC) a political antagonist - a kind of Jeb Bush, but from business circles.

UTC is a blue chip company, a transnational manufacturing conglomerate with subsidiaries such as Pratt & Whitney and Otis Elevator, founded in the 19th century. It produces everything from escalators to jet engines. Last November, Carrier, a UTC heating, ventilation and air-conditioning equipment company, became Trump's emblematic example of how trade and globalization are undermining the well-being of American workers.

“My wife calls me Patient Zero (the surviving patient from whom the disease began. - Vedomosti),” Hayes grins. - Because I was the first to be sucked into the funnel and I survived. The fact that we pulled it off can truly be considered a measure of success.” Hayes came to The Wall Street Journal to discuss what it's like to be a leader caught in the middle of political passions and to talk about the responsibilities of business leaders in a time of economic populism.

Hayes played football at Cornell University, transferred to Purdue University and then began his career at Sundstrand Corp., which was purchased by United Technologies in 1999. He took up his current post at the end of 2014. The first year, when shares fell by 18%, was difficult. In 2015, UTC developed a restructuring plan that would cut costs by $1.5 billion over three years.

The plan included closing two costly manufacturing facilities in Indiana. One of them, in the suburbs of Indianapolis, produced gas heaters. Another, in the small town of Huntington, is electronic circuit boards. With the transfer of heater production to the Mexican city of Monterrey, 2,100 people will lose their jobs.

The majority of both competitors and UTC suppliers for the production of heaters have already moved to cheap Mexico. The Indianapolis plant is an outdated assembly line with manual assembly, low-skilled work and low pay.

Hayes and the board of directors concluded that closing the plants "was the right decision for the business in the long term" to remain competitive in the market. If a large business is not profitable, no one will be able to guarantee employment. Hayes believed that UTC could provide Americans with high-paying, high-skill jobs in the aerospace industry.