Thursday, December 29, 2016

Companies Rush To Link Jobs To Trump

But firms like SoftBank were planning to invest in the U.S. even before the election.


By Tony Romm
Politico
December 30, 2016

Nearly a month before Donald Trump won the White House, Japanese conglomerate SoftBank pledged to invest billions of dollars in the U.S. economy.

But that didn’t stop the company and its shrewd chief executive, Masayoshi Son, from portraying those plans this month as the direct result of Trump’s election victory — an example of how SoftBank and many of its corporate counterparts are scrambling for ways to curry crucial, early favor with the president-elect.

A growing list of companies — including Dow Chemical, Carrier and IBM — have sought to give Trump the credit he seeks for job or investment announcements, hoping their concessions can win them seats at the table as Trump begins crafting policies in health care, education, financial services and technology. Sprint, which is owned by SoftBank, joined the list this week, pledging to bring back 5,000 jobs months after cutting thousands of employees. And OneWeb, which plans to provide satellite-based internet service and is backed by SoftBank, similarly pledged to create jobs. SoftBank’s support for the company predates Trump.

Some of the business pledges are recycled news, and others amount to little more than public-relations messaging that will be hard to track to see whether promises are realized — but analysts see it as an emerging way for investors and executives to stay on Trump’s good side.

“I suspect if companies can make announcements that are positive for American jobs, then of course they will, because every company wants to be on the good side” of Trump, said Steve Odland, leader of the Committee for Economic Development and the former CEO of Office Depot and Autozone.

“I think companies are learning, and have learned, actions taken can provoke a response,” Odland said. “Nobody wants to be shamed.”

Trump’s transition team expects additional companies could come forward with similar promises to create jobs or invest more in the United States. Sean Spicer, the administration’s incoming press secretary, predicted on Thursday that Trump would bring about “more and more of this,” later calling it the “tip of the iceberg.”

SoftBank did not respond to a request for comment; nor did Dow Chemical. IBM and Sprint declined further comment.

Companies have reason to want to be on Trump’s good side. For corporate America, the big fear is Trump’s bully pulpit, which includes his Twitter account with more than 18 million followers. As a candidate, Trump skewered companies like Apple for making some of its devices overseas, and his criticisms generated vast social media backlash for others in his cross hairs. As president-elect, his Twitter rants have gained the added ability to send stock prices tumbling — a lesson that Lockheed Martin and Boeing learned this month.

Maybe fearing a fall from grace, companies have so far done little to correct Trump even when he’s misrepresented their work, overstated their plans or taken credit for hiring and investment talks initiated before his election.

After the president-elect claimed he had stopped Carrier from sending thousands of jobs to Mexico — an overstatement, by some measures — Chuck Jones, the president of a local chapter of the United Steelworkers, chided Trump to “get all the facts straight before he starts talking about what he’s done.” Trump responded in kind, launching a vicious assault against Jones on Twitter.

“The lesson for companies is it’s better to just shut up and go with the flow than to launch a correction,” said Bill Reinsch, a fellow who works on trade policy at the Stimson Center. “Particularly if you’re being complemented, if he’s praising your company for doing the right thing, the rational response is shut up, say thank you and move on.”

Reinsch noted that United Technologies, Carrier’s parent company, likely considered how much goodwill could be gained from the Carrier move and hoped that “the next three decisions they make, he’s not going to complain about."

That strategy might have been on the mind of Dow Chemical CEO Andrew Liveris, who appeared with Trump earlier this month to tout a new innovation center. Speaking in Michigan, he said his company’s investment — and Trump’s presidency — would create “several hundred jobs” at Dow. That drew the praise of Trump, who earlier had named Liveris to a key manufacturing advisory post.

In reality, though, Dow is creating about 100 jobs, while moving an additional 100 back to the U.S. from other facilities, the company previously told POLITICO. Dow already was in the midst of a restructuring as it seeks to purchase rival chemical company DuPont.

Then came IBM: The day before CEO Virginia Rometty planned to huddle with Trump and other tech executives in New York, the company known as Big Blue promised to hire 25,000 workers in Trump’s first term. The eye-popping figure, however, belied the fact that IBM previously had as many of 20,000 jobs open anyway, months after it laid off as many as 14,000 workers around the world, according to one estimate earlier this year.

By far the most aggressive in its outreach, though, is SoftBank, whose chief executive, Son, long has aspired for a bigger foothold in the United States. For years, he’s eyed T-Mobile, hoping he could combine the wireless carrier with Sprint, which SoftBank purchased in 2013 — a plan that the Obama administration has not supported.

Son sought out Trump for a meeting in New York earlier this month, and he emerged promising to create 50,000 jobs and invest more than $100 billion in the United States.

The jobs figure may have been a new data point, but SoftBank’s investment plans were not: Son and others had publicized their aim to raise billions of dollars, with the help of backers in Saudi Arabia, for a new fund focused on U.S. startups. The fund reportedly had been valued at about $100 billion, and regardless of its size, probably would have contributed to U.S. job growth. And Sprint’s hiring targets weren't a new number but merely a portion of what Son already promised.

Even the OneWeb investment that Trump heralded on Wednesday began months before Trump became the president-elect.

The company, which hopes to use satellites to bring internet service to hard-to-reach areas, started talking to SoftBank well before Election Day, Greg Wyler, the company’s founder and executive chairman, said in an interview with POLITICO. Rumors of a tie-up began to swirl in October. By mid-December, OneWeb took home $1 billion in total investment, led by its Japanese benefactor, while pledging to create 3,000 new jobs, and it wasn't until Wednesday that it registered on Trump’s radar.

In Wyler’s telling, Son increased his “investment with us” after the SoftBank CEO met with Trump, though he declined to specify the amount of the increase. Still, the funding — and Trump’s positive feedback — appears to have offered some early benefit to the company. Wyler said there have been “indirect conversations” with Trump’s transition team about space policy but declined to comment on the nature or date of those talks.

“The announcement from the Trump administration, and the support for our space adventures, and to enable global internet access, is fantastic,” Wyler said.


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