GM has not budged. After Trump’s tweets over the weekend, the company issued a terse statement noting that it was relocating workers and that it would be discussing plant closings with the United Auto Workers union. It made no mention of Trump’s demands.
In the past, GM has blamed the president’s trade war, including tariffs on steel and aluminium, for raising the company’s costs.
Making shareholder returns great again
When Trump was running for president, he promised to personally stop American companies from shutting down factories and moving plants abroad, warning that he would punish them with public backlash and higher taxes.
Many companies scrambled to respond to his Twitter attacks, announcing jobs and investments in the United States — several of which never actually materialised.
But increasingly, “companies are balancing political pressure against their own return requirements,” said Philippe Houchois, an automobile sector analyst at Jefferies. “I don’t think they are being swayed.”
Despite Trump’s efforts to compel companies to build and hire, they appear to be increasingly prioritising their balance sheets over political backlash.
‘Shock to the system’
“I don’t think there’s as much fear,” said Gene Grabowski, who specialises in crisis communications for the public relations firm kglobal. “At first it was a shock to the system, but now we’ve all adjusted. We take it in stride, and I think that’s what the business community is doing.”
Early on, Trump’s ability to direct outrage at companies appeared to work. Before Trump even took office, Carrier agreed to keep 1,000 jobs in Indiana that it had been planning to move to Mexico.
At first it was a shock to the system, but now we’ve all adjusted. We take it in stride, and I think that’s what the business community is doing.
Crisis PR specialist Gene Grabowski
In 2017, Ford cancelled plans to build a new factory in Mexico and increased its investment in a self-driving car plant in Michigan. Last year, Pfizer delayed drug price increases at Trump’s request after he threatened, vaguely, to take action against the industry’s pricing policies.
More recently that influence has waned. The president’s scattershot attention span has diminished his power to persuade the business world to bend to his will, corporate communications experts say, as once fearsome tweet storms have devolved into ephemeral annoyances.
At the start of the Trump administration, big companies hired firms like Grabowski’s to develop response strategies in the event they were targeted by Trump.
His team would scour social media to understand the trajectory of Trump’s tweets and how much damage they could do to a brand.
In the beginning, his tweets would actually hurt stock prices and companies were going into tailspins […] Now is there is tantrum congestion.
Corporate damage control specialist Eric Dezenhall
Ultimately, the public relations problems usually proved to be short-lived.
“In the beginning, his tweets would actually hurt stock prices and companies were going into tailspins,” said Eric Dezenhall, a Washington-based expert in corporate damage control. “There is a clinical difference between what was happening in the beginning and what is happening now.”
He added: “What’s happening now is there is tantrum congestion.”
Just a bit of noise
That congestion has been on display this week, as Trump assailed Facebook, Google, Twitter and “Saturday Night Live,” saying they are biased against Republicans.
Those outbursts on Twitter were interspersed with attacks on political opponents, the Russia investigation and Senator John McCain, who died last year.
While a tweet from Trump used to sink a company’s stock price, analysts say that these days a missive from the president’s Twitter feed merely injects a bit of noise into the market. Musings from Trump about the prospect of a trade deal with China or the Federal Reserve continue to rattle investors.
Responding with restraint has been something of a reorientation for the public relations industry. The traditional playbook often entails responding directly, quickly and forcefully to bad publicity.
However, when it comes to Trump, experts say an understated response that does not further agitate the president tends to be more effective.
Attacks on Harley, Amazon
Trump’s power over companies started to show signs of slipping last year. After Harley-Davidson announced plans to move some of its production overseas in response to Trump’s trade war, the president repeatedly blasted the company as disloyal and urged his supporters — many of whom ride motorcycles — to consider a boycott.
Harley-Davidson executives acknowledged the president’s disappointment, but pressed ahead with their plans.
Another frequent target, Amazon and its chief executive, Jeff Bezos, have largely met his criticism with silence.
In 2018, the president accused Amazon of pulling a “scam” on the US Postal Service and convened a task force to come up with ways to overhaul the Postal Service business model that would allow it to charge higher rates.
The task force’s report, which was released nearly eight months after the complaints, found that commercial package delivery for Amazon and other e-commerce retailers was actually profitable for the Postal Service and was not costing the United States “massive amounts of money,” as Trump had suggested in his tweets.
Since then, the president has focused his attention on Bezos’ marital problems.
In other cases, delay has been the path of least resistance.
The drugs don’t work
Pfizer agreed last summer to put off planned price increases after its chief executive, Ian Read, had an “extensive” call with Trump, who had said on Twitter that drug companies were taking advantage of the poor. In January, however, Pfizer moved forward with price increases on 41 drugs.
Trump lamented on Twitter that month that drug companies were not living up to their commitments on pricing, but has not taken any action against the industry.
Trump’s deal with Carrier has also been a bit less than advertised. While United Technologies, its parent company, agreed to maintain its Indianapolis factory in 2016, it still cut more than 500 manufacturing jobs in 2017 and 2018.
Many of those were shifted to Mexico. So far, Trump has been mum.
And Ford won plaudits from Trump for investing in Michigan, but after the spotlight moved on it had second thoughts about abandoning its Mexico investment. Instead of cancelling plans to set up shop south of the border, the company said it would assemble electric cars there, in addition to its Michigan investment.
No lasting damage
Despite Trump’s vast media presence and his popularity among Republicans, he has not demonstrated the ability to do lasting damage to a corporate brand that crosses him.
Houchois, the Jefferies analyst, said he was not surprised that GM was sticking to its plan despite Trump’s displeasure. Broader economic forces, such as lower petrol prices and falling demand for small cars, compelled the company to abandon the Lordstown plant.
And Trump’s metals tariffs, combined with the possibility of more levies on automobiles, have been a drag on the industry and made car companies less inclined to do the president any favours.
“The administration, to some extent, has made their life more difficult,” Houchois said.
“They felt wronged by some decisions, on tariffs for example, so they are less likely to bow to pressure if they don’t think there is a business case.”
The New York Times