Government & Politics

Tweet-happy Trump puts corporate America on notice

mdavis@kcstar.com

President-elect Donald Trump, above in Cincinnati in December, negotiated a deal with Carrier that keeps 1,000 jobs from leaving the U.S.
President-elect Donald Trump, above in Cincinnati in December, negotiated a deal with Carrier that keeps 1,000 jobs from leaving the U.S. Bloomberg

Well before taking the oath of office, President-elect Donald Trump was acting like an elected CEO — grabbing a bully pulpit to bark orders at corporate America.

Trump in recent days has used Twitter to issue edicts to General Motors and Toyota about where to build their cars. He has claimed at least some credit for Ford’s turnabout on building another plant in Mexico and Sprint’s pledge to create or bring to America 5,000 jobs.

On Twitter, he also has gone after air conditioner maker Carrier, industrial parts maker Rexnord and aerospace giants Boeing and Lockheed Martin.

The bully pulpit of the presidency historically comes with the White House, but some are questioning what they see as Trump’s early and capricious use of it. He has targeted specific companies and put boardrooms everywhere on notice: Trump’s watching and ready to call out malefactors as he sees them.

“This is a very new way of governing,” said Diane Lim, a public policy economist at The Conference Board, who stressed she was not speaking for the business organization. “Presidents usually don’t govern one company at a time. That’s exactly why it’s a very confusing time for companies.”

Yet some are impressed.

“It’s extraordinary what Trump has been able to do, with the jawboning and potentially holding out the possibility of whatever presidential actions he may take,” said Marc Selverstone, chairman of the presidential recordings program at the University of Virginia’s Miller Center. “He’s able to move the needle without invoking the levers of formal power.”

At any rate, Trump’s maneuvers are stirring unease even within the political right, which includes the conservative minds at Missouri’s Show-Me Institute, a free-market think tank.

Patrick Ishmael, director of government accountability in the institute’s Kansas City office, said market forces and consumers should determine whether an enterprise succeeds or fails or decides where to locate.

“We’re not for government getting involved and putting its thumb on the scale.”

Trump’s public comments have focused on restoring manufacturing jobs within America’s borders, though some in labor harbor doubts about his sincerity in putting workers ahead of big business.

So who falls into Trump’s Twitter sights next? What can they do about it? And what difference can 140 characters from @realDonaldTrump make?

Historical precedent

Prior presidents have used the bully pulpit against business and labor alike.

The phrase itself came from President Theodore Roosevelt, noted for breaking up powerful American business trusts early in the 20th century. Roosevelt saw public office as a platform for advocacy and meant the word “bully” to mean outstanding or first-rate.

“I suppose my critics will call that preaching, but I have got such a bully pulpit!” the nation’s 26th president declared.

A generation later, Harry Truman battled to transition the economy from war to peace in 1946. Labor strikes by railway workers and coal miners, the president believed, most threatened the nation.

After efforts to negotiate the disputes had failed, Truman assembled not the media but the Congress on May 25. He already had seized the railroads and asked lawmakers for authority to draft the striking workers into the Army so it could then run the railroads.

It worked. In the 1946 equivalent of a news-breaking tweet, Truman received word midspeech that the railway strike had been settled, as he told members of Congress, “on terms proposed by the president.”

In April 1962, President John F. Kennedy held a news conference to call out U.S. Steel and other domestic steelmakers. Their public sin was a $6-a-ton hike in steel prices as the nation’s economy recovered and crises brewed in Berlin and Southeast Asia. Privately, Kennedy believed he’d gotten commitments that they wouldn’t raise prices.

Kennedy called the simultaneous price increases an “irresponsible defiance of the public interest” and said the executives showed a “ruthless disregard of their public responsibility.”

U.S. Steel’s chairman Roger Blough struck back the next day at his own news event.

The White House responded by leaking Kennedy’s comments that the steel executives were “sons of bitches,” though that remark was a cleaned up alternative to what the president actually called them, Selverstone said.

He said the Kennedy administration took private steps to pressure the executives and companies, and they ultimately rolled back prices.

In 1981, Ronald Reagan used his bully pulpit moment to make good on a threat against striking air traffic controllers.

He had assembled the media to blast members of the PATCO union, or Professional Air Traffic Controllers Organization, and read aloud the oath he said each had taken not to strike against the U.S. government. Those who failed to report to work in the next 48 hours will have “forfeited their jobs,” Reagan said.

Populist appeal

Trump’s bully pulpit moments also feed his populist message. He wants people to cheer him on, and many do.

Enough Michigan voters switched loyalties this year to support the Republican Trump, who during the campaign regularly blasted Ford’s plans to build a plant in Mexico.

Four years earlier, Michigan voters sided with President Barack Obama over GOP nominee Mitt Romney, a native son who nevertheless attacked the Obama-supported bailout of the auto industry. Romney called it “crony capitalism on a grand scale.”

Trump’s tactics also excite his supporters who desire a forceful leader able to make change without subjecting proposals to what he calls “the swamp” of Washington as usual.

“Politics from the outside looks bad to people who are impatient with the many, many steps that need to be taken to get things done,” said Chris Crandall, a social and political psychologist at the University of Kansas.

He added that Twitter is the “perfect” platform for Trump to pressure companies.

“Trump lives in the now, and Twitter is all about now,” Crandall said. “And what he says can be discounted to some extent because it’s just Twitter.”

Since the November election, public-opinion polls show an uptick in optimism about Trump’s potential to lift the economy. His emphasis on boosting U.S. manufacturing jobs falls in line with a survey released this month in which 48 percent of respondents said it was “very important” that Trump raise the topic in his inaugural speech on Jan. 20.

The only issue that Americans ranked higher in the Politico/Morning Consult survey was the need for Trump to speak about “healing the nation.”

Still, Trump’s pressure tactics — reflective of the bluntness he showcased in the reality TV series “The Apprentice” — defy how policymaking ought to be carried out in a democracy, with inclusion and careful deliberation, said professor Crandall: “He’s playing a dangerous game.”

Labor members largely voted for Trump, but some leaders remain skeptical.

“Donald Trump is a dealmaker” capable of helping the big businesses that his tweets deride, said Mike Louis, president of the Missouri AFL-CIO, which represents 183,000 active workers. “He’s for large corporations, and that’s reflected in the billionaire executives he’s picked for his Cabinet. They’re not worker-friendly people.”

Other labor groups are withholding judgment on Trump’s support for workers until he takes action as president. “I think it’s too early to tell,” said Joe L. Hudson, political director for the St. Louis-Kansas City Carpenters Regional Council.

Bully chill

Even if his policies turn out to be good for the economy, Trump’s bully pulpit tweets have cast a chill over how he might treat individual businesses.

Since the election, Trump has turned on aircraft maker Boeing over complaints that the next Air Force One was costing too much and threatened, “Cancel order!”

Trump challenged Lockheed Martin two weeks later for costs and overruns on a military jet, adding that he had “asked Boeing to price-out” a competing aircraft.

Trump also has publicly hailed Overland Park-based Sprint and its Tokyo billionaire chairman Masayoshi Son for their pledges to create thousands of jobs in the United States. Some have seen those commitments to the president-elect as a preamble to seeking a controversial merger with T-Mobile.

President-elect Donald Trump said Tuesday that the Tokyo-based parent company of Sprint Corp. has agreed to invest $50 billion and create 50,000 jobs in the United States. Trump made the remarks with Masayoshi Son, chairman of Sprint and CEO of So

Others have questioned whether Trump meaningfully influenced Ford’s decision to change plans that he had criticized.

Whether Trump’s hand or agenda made a difference in those decisions, his public involvement has shown business leaders that the rules have changed.

Public policy economist Lim said that new uncertainty has caused businesses to delay big decisions. Some also are waiting to see how much of the president-elect’s economic agenda comes to fruition.

Her advice to CEOs weighing decisions, especially involving jobs or non-U.S. production, is to be proactive instead of waiting for the next Trump tweet to land. Reach out and bring him into the announcement.

It’s late advice for Japanese automaker Toyota, which became Trump’s target on Thursday. He tweeted that Toyota said it would build an assembly plant in Mexico to build Corollas for the U.S. market.

“NO WAY! Build plant in U.S. or pay big border tax,” Trump’s post said.

The assembly plant in question, in Guanajuato, Mexico, was one that Toyota announced in 2015 for production starting in 2019.

Who’s next?

The impact Trump’s bully pulpit moments have, or any president’s can have, may depend largely on how critical a company’s decision is to its pocketbook.

A decision to locate a manufacturing plant in Mexico or the United States often is a close call, said Chris Kuehl, an economist at Armada Corporate Intelligence in Kansas City, Kan. Labor, transportation, energy, taxes, personnel and other costs all weigh on the outcome.

Ford’s decision to scrap plans to build in San Luis Potosí, Mexico, certainly reflected more than political pressure.

It wanted to move production of the Focus out of Michigan to the new plant, but sales of the small car have slumped badly. It already had moved the Fusion family sedan production in Michigan to a Fusion plant in Hermosillo, Mexico. Ford said last week that it would also move the Focus to Hermosillo.

Trump’s praise was for $700 million and 700 jobs Ford said it would bring to the Flat Rock, Mich., plant to build an electric SUV and a hybrid vehicle for commercial ride-hailing operations.

Kuehl’s point is that presidential pressure, backed by the threat of a future tariff or other policy action, can make the difference in big-dollar decisions that play out over years. The negative publicity of being singled out for criticism can be bad for business.

“If you change that equation a little bit,” Kuehl said, “that’s enough to tip the scales.”

One risk for Trump is picking the wrong battle and confronting a corporate decision whose scales he can’t tip. Failure to follow through would weaken his influence.

It also is risky for the president-elect to use a mostly punishment-based approach, rather than favoring a carrot over the stick. Carrier did win some economic incentives with its decision to stay, but repeated threats can carry backlash.

“It may end up being a serious misstep by Trump. He’s not making any friends this way,” Kuehl said.

Still, there are many potential candidates for future bully pulpit moments.

Airlines may consider whether Trump would weigh in on a decision to buy aircraft from U.S.-based manufacturer Boeing or Airbus, the European company that already has a heavy presence at U.S. airports.

Orders for smaller aircraft from Brazil’s Embraer or Bombardier in Canada similarly could draw Trump’s attention as both supply the U.S. market, at least partly, from production abroad.

Trump’s promised infrastructure spending means ordering a lot of steel for construction projects. That could prompt presidential scrutiny of companies that import girders, rails or other elements for bridges, towers and the like.

Kuehl said there’s even a case that Trump could hope to protect coal miners’ jobs by calling out utilities that aggressively pursue alternative energy sources.

“It’s a brave new world,” Lim added.

Mark Davis: 816-234-4372, @mdkcstar

Rick Montgomery: 816-234-4410, @rmontgomery_r

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