When he was elected President on November 8, Trump made it clear that in his quest and campaign slogan to “Make American Great Again” he would bring to book companies that in his view were sending US jobs abroad.
True to form, he has taken on major industrial heavyweights to prove his point and deliver on his promise.
So the roll call is a very impressive one indeed. Either during the campaign or since, Trump has trampled on IBM (NYSE:IBM), Apple Inc (NASDAQ:AAPL), Ford (NYSE:F), General Motors (NYSE:GM), United Technologies Corp's Carrier (NYSE:UTX), Rexnord Corp (NYSE:RXN), Mondelez (NASDAQ:MDLZ), and on Thursday he added to Japan’s Toyota (NYSE:TM) to his victory tally as keenly as an air force pilot daubs how many enemy aircraft he has downed on the side of his own plane.
Under pressure from Trump, Apple began last year to look for potential sites inside the United States to manufacture its iconic iPhones.
Anyone following his Twitter account will get the gist of all these proclamations real-time. On Thursday he tweeted “Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax.”
It led the investor relations team at Toyota gasping with this response:
“Toyota has been part of the cultural fabric in the US for nearly 60 years. Production volume or employment in the US will not decrease as a result of our new plant in Guanajuato, Mexico, announced in April 2015. With more than $21.9bn direct investment in the US, 10 manufacturing facilities, 1,500 dealerships and 136,000 employees, Toyota looks forward to collaborating with the Trump administration to serve in the best interests of consumers and the automotive industry.”
It was a gracious and courageous response from the carmaker. At least it wasn’t the capitulation that we have seen from Ford and others.
Trump and Ford have already tangled over Mexico, with the President-elect taking credit for keeping a Kentucky assembly plant in the US—a claim the automaker disputed last November.
But on Tuesday, Ford said it would cancel another planned $1.6bn factory in Mexico and instead invest about $700mln in its Flat Rock, Michigan factory. The plan is expected to add some 700 jobs to Michigan.
Ford CEO Mark Fields said he did not cut a deal with Trump—though he did inform the president-elect of the decision in the morning.
However, there are signs that not all corporates are taking stick from Trump lying down.
Hours before the Ford reverse gear, Trump sparred with automotive rival GM. In a tweet he said: “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!”
GM offered a matter-of-fact response that General Motors that all Chevy Cruze sedans sold in the U.S. are made in the U.S. at a plant in Ohio and that it manufactures the Cruze hatchback in Mexico, “with a small number sold in the U.S."
Back in December, Trump rattled Carrier, but there it was down to incentives – a case of doing business with the President-elect to make him look good.
Trump revealed that he cut a deal with air-conditioning manufacturer Carrier to keep some 1,000 jobs in the U.S. Parent company United Technologies would also receive up to $7mln in state tax incentives as a part of the deal.
Trump has also attacked manufacturer Rexnord for closing an Indianapolis ball-bearing plant and shifting work to Mexico.
A month ago he tweeted: “Rexnord of Indiana is moving to Mexico and rather viciously firing all of its 300 workers. This is happening all over our country. No more!”
On this one Trump was too late as the employer had agreed terms with its staff.
During the election campaign Trump famously pledged to no longer eat Nabisco Oreos because parent company Mondelez would cut jobs in Chicago and move production to a plant in Mexico.
Mondelez shareholders have made the relevant observation that if 75% of sales are outside of the US it makes sense to employ workers where the product will be consumed.
And perhaps there was an air of irony when at the end of October Mondelez issue a press release declaring that as a matter of precaution it was announcing a nationwide voluntary recall in the United States, including the U.S. Territories of Puerto Rico, St. Croix and St. Thomas, of certain Oreo Fudge Cremes product, due to milk allergen not being declared in the ingredient list.
Overall, corporates unfortunate enough to find themselves at the receiving end of a Trump rebuke are trying to respond in a constructive way – if not out and out changing policies on the cuff.
But what happens when he is head of state after January 20? Will he have to temper his Twitter headline-grabbing rebukes? Will advisers wean him away from bold proclamations that could land him in trouble with Congress or the Supreme Court?
A stint in officialdom usually mellows even the most ardent campaigner for change.
Whether or not Trump is right, he will find corridors of power difficult to negotiate. And negotiate is a word he will have to practise because decrees have their limit.