Even before Donald Trump was sworn in as the 45th of the United States last week, big business had already thrown him a veritable inaugural ball.
A series of blue-chip companies, among them Ford, Lockheed Martin, Amazon and Sprint, all announced plans in recent weeks to hire and invest in the US. A who's who of executives from boardrooms here and overseas made the pilgrimage to Trump Tower and sought the president-elect's blessing.
The near-daily drumbeat of announcements? First it was the turn of General Motors and Wal-Mart. It is not just about winning good headlines or a favourable mention from the tweeter in chief, however.
While the jobs and investments are real enough, all of these corporate behemoths will soon have business before the new administration, with make-or-break moves expected on mergers, trade policy, tax reform, defence contracts and regulation.
Signalling to Mr Trump and his team that they are on board now also provides chief executives with more leverage down the line. “It might be an attempt to buy goodwill, but I don’t blame them for trying to do that,” said Tom C Korologos, a longtime Republican strategist and an adviser at the law firm DLA Piper in Washington. “It’s a new administration, and companies are nervous and don’t know what to expect.”
Ultimately, the new administration’s decisions will be formulated far from the limelight in conference rooms at federal agencies in Washington or behind closed doors on Capitol Hill.
Concerned automakers
The money riding on the outcome runs into the trillions. And on high-profile issues, the companies will need to make a strong case. Detroit automakers, for example, are concerned that Washington will impose tariffs on cars made in Mexico, but they are eager for wiggle room on new fuel-efficiency standards at home.
On a call with the news media last Tuesday, Mr Trump's press secretary, Sean Spicer, cited a new pledge by Bayer to invest $8 billion (€7.5 billion) in the US and create 3,000 jobs.
“The reason for this commitment and expansion is because of the president-elect’s focus on creating better business climate here in the United States,” he said.
What Mr Spicer didn't mention is that Bayer, the German chemical giant, faces intense scrutiny from antitrust regulators in Washington and Europe over its plan to buy Monsanto, based in St Louis, for $57 billion (€53 billion).
If Bayer cannot win approval from the US department of justice and the Federal Trade Commission, it will be costly, with Bayer obligated to pay Monsanto $2 billion (€1.9 billion) under the deal’s terms.
Two weeks ago, the chief executives of the two companies met with Mr Trump and made their case for the merger, which some advisers to Mr Trump have criticised.
Companies are also closely attuned to where government policy is headed, and want to show they are getting with the programme, said Bruce P Mehlman, founder of Mehlman Castagnetti Rosen & Thomas, a lobbying firm whose clients include Fiat Chrysler, Procter & Gamble and Walmart.
Domestic manufacturing
“In 2009 and 2010 under President Obama, it was sustainability, and in 2017 with Trump it’s domestic manufacturing,” Mr Mehlman said.
For automakers, that is an important issue as GM and many other companies make cars in Mexico for sale in the US. The automaker has so far declined to stop importing cars from Mexico.
But the entire auto industry is bracing for potential changes in the North American Free Trade Agreement that could disrupt their intricate production structure in the US, Canada and Mexico.
Industry analysts see the widely publicised announcements of new jobs as attempts by car companies to both blunt Mr Trump’s criticism and curry favour with the new administration.
“Retaining and growing jobs in the US is a political hot button right now,” said Michael Harley, an analyst with the auto research firm Kelley Blue Book.
“The timing of the announcement shows General Motors is more than willing to play the new administration’s publicity game.”
– (New York Times news service)
