The Memo: Trump’s GM attacks stir worries in business world
President Trump’s fierce attacks on General Motors (GM) have stirred new worries in a business world grappling with his propensity to slam corporations by name.
At various times during Trump’s presidency, Amazon, Nordstrom, Boeing and Lockheed Martin have found themselves in his crosshairs.
But his assault on GM has been particularly vigorous following this week’s announcement by the automaker that it would cut about 14,000 jobs, shuttering plants in the electorally vital states of Ohio and Michigan.
“Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China. The U.S. saved General Motors, and this is the THANKS we get!” Trump tweeted on Tuesday, a day after the news broke.
He also floated the idea of cutting U.S. government subsidies to the automaker — an idea that had been discussed only minutes before at the White House press briefing by economic adviser Larry Kudlow.
Trump later retweeted a message from a supportive account: “If GM doesn’t want to keep their jobs in the United States, they should pay back the $11.2 billion bailout that was funded by the American taxpayer.”
On Wednesday, he followed up by suggesting he could be open to new tariffs on auto imports.
GM had previously complained that the president’s tariffs on steel and aluminum had caused problems.
In July, the automaker’s chief financial officer, Chuck Stevens, said, “The big challenge we’re having right now is on raw materials, especially aluminum and steel,” according to USA Today.
The bigger picture is one in which figures in the business world worry about the president’s willingness to browbeat CEOs and their corporations.
“It does unnerve the business community, and companies struggle with how to deal with it, particularly when the president’s comments don’t reflect a firm understanding of the company’s business situation,” said one official at a major business trade association, who asked for anonymity to speak candidly.
“They’re not just having to respond; in many cases they’re having to correct inaccurate statements made by the president of the United States,” the official said.
One example cited by this source and others came when Trump attacked Harley Davidson in June.
The president suggested that the legendary motorcycle manufacturer was using his tariffs and trade policies as an “excuse” to move production out of the United States. In another tweet he threatened that the company “won’t be able to sell back into U.S. without paying a big tax.”
In fact, Harley Davidson motorcycles sold in the U.S. are made here. The company had decided to build and then expand a factory in Thailand to serve foreign markets. Separately, it had announced the closure of a Kansas City facility because of softening domestic demand.
“The president was just dead wrong about what was happening,” the trade association official said. “That was an iconic American brand being falsely attacked by an American president.”
Other experts emphasized just how unusual it is for a president to level criticisms at specific companies.
Jeffrey Sonnenfeld, a professor at the Yale School of Management, said he could not think of anything comparable since former President Kennedy attacked executives of U.S. Steel in 1962 after they announced an unexpected price increase.
Sonnenfeld also noted that some business leaders have taken stands against Trump’s positions on unrelated issues.
After Trump’s deeply controversial response to racist violence in Charlottesville, Va., in 2017, Merck CEO Ken Frazier resigned almost immediately from a presidential advisory council.
Trump blasted Frazier on Twitter, but other business leaders followed the CEO’s lead and the advisory council (as well as another, related one) later collapsed.
“We have seen collective action among these highly diffuse CEOs, to band together when one comes under attack,” Sonnenfeld said.
Trump makes no bones about the fact that he believes he is in the right in hitting back at companies that have displeased him — and he casts his actions as standing up for the public against corporate power.
That argument may still carry some populist power. But it could be badly undercut when jobs are being lost, especially in the Rust Belt states that were central to Trump’s 2016 election win.
“There is a real consequence in the part of the electoral map that he is still looking at very closely for 2020,” said Julian Zelizer, a professor of history and public affairs at Princeton University. “He doesn’t want to have people losing jobs, as he has come in promising to keep them.”
To Zelizer, Trump’s approach places CEOs in an almost impossible position.
“It seems the only way to placate him is not to do anything that embarrasses him,” he said. “That is the one thing you need to avoid if you are a big company and [GM] just crossed that line. But it is really hard for a company to make their decisions looking at that.”
The Memo is a reported column by Niall Stanage, primarily focused on Donald Trump’s presidency.
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