Trump CEO Brain Trust Huddles as Corporate America Splits
Trump CEO Brain Trust Huddles as Rifts Open in Corporate America
(Bloomberg) -- President Donald Trump has needled Mary Barra at General Motors Co. He’s troubled Doug McMillon at Wal-Mart Stores Inc. and gone after Boeing Co., once headed by Jim McNerney.
Those business leaders, and about a dozen others, sat down on Friday with Trump to talk trade, regulation and more.
Welcome to “The Apprentice: CEO Edition.”
In his first two weeks as president, Trump has rewritten the Washington playbook for corporate America, as he has for U.S. allies. In the process, he has opened rifts between companies over how to approach matters ranging from taxes to immigration and revealed the first cracks in companies’ tentative embrace of him, drawing criticism from some of the chief executives who were in the room Friday morning.
And from one who wasn’t: Uber Technologies Inc.’s Travis Kalanick on Thursday quit the president’s Strategic and Policy Forum after coming under fire from drivers and customers.
Trump opened the meeting while the press corps was in attendance by flattering the CEOs, calling them “the biggest and best minds in the country.” With the topic of women in the workforce on the agenda, Trump positioned Barra to his left and PepsiCo Inc.’s Indra Nooyi and IBM’s Ginni Rometty to his right.
The gathering of the 18-member group, led by Blackstone Group LP CEO Steve Schwarzman, will give America’s first billionaire commander-in-chief a chance to reprise his “Apprentice” role on a grand scale. Business, after all, is Trump’s world. And after decades of globalization, that world is shifting rapidly as a confluence of forces, both economic and political, signal an end to an era of unbridled trade.
The format for the meeting is somewhat fluid, according to a person familiar with preparations for the session, and Kalanick’s departure upsets the plans. Walt Disney Co.’s Bob Iger didn’t attend as well due to a previously scheduled board meeting.
Later in the day, Trump is scheduled to order reviews of a requirement that investment advisers work in the best interests of their clients, and the Dodd-Frank Act, a White House official said.
After introductions, the CEOs and Trump discussed topics ranging from tax reform to infrastructure, with some executives presenting prepared remarks on specific issues.
“I’m pleased to have been part of a very constructive discussion on how we can all work together on policies that support a strong and competitive U.S. economy, create jobs and address safety and environmental issues,” Barra said in a statement.
Barra was expected to talk about the auto industry’s desire for a second look at fuel-economy rules that the Obama administration affirmed just before leaving office. The Environmental Protection Agency mandates a fleet average of 50.8 miles per gallon by 2025, from 35.3 mpg today. Trump’s comment that automakers “are being so stymied, so restricted with regulation,” suggested that the subject had come up.
Immigration, particularly sensitive for the technology industry, was at one point to be first on the agenda -- a week after Trump’s controversial action to halt immigration from seven mostly Muslim Middle Eastern countries that sparked nationwide protests and pushback from U.S. companies, including Nike Inc. and Coca-Cola Co.
Kalanick and Tesla Inc.’s Elon Musk had volunteered to lead that discussion, the person said. Kalanick, who was criticized by employees and customers for engaging with Trump, told Uber staff in a memo last week that he would raise his objections directly with the president.
Will the Uber co-founder’s former colleagues in the group challenge Trump?
On the issue of immigration at least, “they are emboldened,” said David Johnson, CEO of Strategic Vision PR Group in Atlanta. The protests against the executive order “gives them cover.”
Musk expressed his objections to Trump’s executive order on immigration and suggested changes, in what Schwarzman told CNBC were “straightforward, easy” discussions.
BlackRock Inc. CEO Larry Fink, a member of the forum, sent a memo to employees Thursday about the “uneasy times,” reiterating the firm’s “commitment to diversity and inclusion” and concerns about “the backlash against globalization.” What he will say at the meeting is anyone’s guess.
Given the president’s penchant for surprise attacks against companies on Twitter, and his stance as a hard-bargainer in his real-estate career, the men and women in the room may be wary, Johnson said. “The big question is what Donald Trump do they get. People say that the Donald Trump in these private meetings is different than the public Donald Trump.”
Taxes were on the agenda after battle lines were drawn this week on a proposal, spearheaded by House Speaker Paul Ryan, a Wisconsin Republican, that would reshape the corporate code. A coalition of retailers and automakers announced its opposition to the so-called “border-adjustment tax” on Wednesday. The next day, a group of big industrial companies went public with its support.
Billions at Stake
At stake is billions of dollars in potential taxes. Both sides were represented at the meeting, with Wal-Mart’s McMillon against the plan and former Boeing CEO McNerney supporting it, Schwarzman told CNBC.
The dueling arguments appeared to have pull with Trump, Schwarzman said. Supporters say it would boost U.S. job creation by favoring exports. Critics call it a new tax on American families -- because prices for goods would increase -- that might pay for companies that export a lot to reduce their taxes significantly.
Perceived support or criticism of the president could generate boycotts on either side of the country’s partisan divide, Johnson said.
“If it leaks out that they went along and didn’t say anything after taking stands publicly, their entire brand will look fake,” Johnson said. “Trump supporters will attack them as all mouth and no action. People who bought into the stand they were taking automatically turn on them.”
The meeting is the latest in a series of White House events designed to allow Trump to solicit feedback from business leaders -- and burnish his image as a can-do businessman ready to strike deals. Since taking office, the president has welcomed corporate executives from the pharmaceutical and automobile industries to the West Wing, as well as union leaders and the heads of large American manufacturers. On Thursday, executives from Harley-Davidson Inc. rode their motorcycles up the south driveway of the White House.
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