Over the weekend, Jeffrey Immelt, the chief executive of General Electric, the venerable manufacturing conglomerate that dates back to 1892—and Thomas Edison—issued a statement to G.E.’s employees distancing the company from Donald Trump’s travel bans on people from predominantly Muslim nations. “We have many employees from the named countries and we do business all over the region,” Immelt pointed out. He said the firm would “stand with” its employees and customers in the countries affected by Trump’s discriminatory policy.
That was a laudable statement, and Immelt, a longtime G.E. executive, deserves credit for issuing it. On the same day it was issued, however, the National Association of Manufacturers, which has representatives from G.E. and many other large U.S. companies on its board of directors, was striking a very different pose toward the Trump Administration. It ran ads on the Sunday talk shows urging congressional confirmation for Scott Pruitt, the attorney general of Oklahoma, whom Trump has chosen to run the Environmental Protection Agency.
Pruitt has close ties to the oil-and-gas industry. He is an archenemy of federal regulations and laws that are designed to tackle global warming and other environmental threats, but which one of the trade association’s ads describe as “job-killing regulations slapped on manufacturers, energy producers, and farmers.” If Pruitt is confirmed, he will almost certainly roll back many federal directives, lowering the financial costs facing big companies like G.E.
The juxtaposition of Immelt’s statement with the expression of support for Pruitt summed up corporate America’s Janus-faced attitude to the Trump Administration. On the one hand, many senior executives welcome the promises to cut corporate taxes and make a bonfire of federal regulations. They also fear incurring Trump’s wrath and appearing on his Twitter feed. At the annual Alfalfa Club dinner, in Washington, on Saturday, a long-established get-together for corporate bigwigs, one C.E.O. approached a rival and inquired how he could condemn Trump’s executive order “without poking the bear,” the Times columnist Andrew Ross Sorkin reports.
The answer to the anonymous C.E.O.’s query was that it probably can’t be done. Trump is a vengeful figure who takes careful note of slights and sometimes brings them up months or years later. As President, he has the power to punish firms and individuals that cross him. For some Fortune 500 companies, such as defense contractors like G.E. and Boeing, and the big pharmaceutical companies, representatives of which met with Trump at the White House on Tuesday, the federal government is a big customer: huge contracts are at stake. Banks and other financial firms require good relationships with the federal agencies that regulate them. Corporate mergers, such as the pending one between A.T. & T. and Time Warner, require approval.
In a normal Administration, it might be outlandish to suggest that the President would interfere with the workings of specialist federal agencies, such as the Justice Department’s antitrust bureau. But of course, there is little that is normal about Trump or his Presidency. Shortly before he took office, he met with Randall Stephenson, the chief executive of A.T. & T. Afterward, A.T. & T. officials insisted that the pending merger didn’t come up in the discussions, but public-interest groups pointed out that the meeting violated long-standing tradition that Presidents (and Presidents-elect) avoid direct contact with parties that have important regulatory decisions pending.
In this environment, it is understandable that C.E.O.s, mindful of their shareholders and their own hefty stock-and-option packages, are reluctant to criticize the new Administration’s policies, let alone Trump himself. But it’s also becoming evident that, in many areas, the long-term interests of America’s biggest corporations, far from being aligned with the Trump Presidency, run directly counter to it.
In terms of outlook, organization, and revenues, firms like G.E., General Motors, Caterpillar, Apple, Google, and Facebook are globalists. The Administration is isolationist—its slogan is “America First.” Multinational corporations prosper from free trade, open markets, and offshoring; the Administration is protectionist and intent on preserving U.S. manufacturing jobs. Trump’s chief strategist, Stephen Bannon, describes himself as “an economic nationalist.”
To gain access to foreign markets and foreign talent, the multinationals rely on America’s “soft power”—the ability to get other countries to act in the interest of the United States and its citizens, including its corporate citizens, without using force. Trump is undermining U.S. soft power by the day. Demonstrations against him have been held all over the world, and many foreign governments increasingly view his America as a rogue nation.
Pointing out that, in the past, big companies have coöperated with authoritarian regimes won’t make this conflict of interest go away. The U.S. economy isn’t an autarky like Germany in the nineteen-thirties, where Volkswagen, Bayer, Siemens, and other German corporations benefitted from protectionism, the outlawing of independent trade unions, and big government contracts. In today’s economy, firms like G.E., Intel, and Apple get most of their revenue from overseas, and their operations are spread all over the world. What matters to them most is the preservation of a global trading system that took decades to build.
Trump, with his chauvinistic rhetoric, his opposition to multilateral trade deals, and his casual denigration of multilateral organizations like the European Union and NATO, represents a threat to that system. So far, no well-known C.E.O. has come out and said all this explicitly, although Immelt did hint at some of it. “There would be no GE without our smart dedicated colleagues from all over the world,” he wrote. “We are a global team, and we will stand together as the global political situation continues to evolve.” In another significant development, Netflix’s Reed Hastings expostulated the ethical argument against the ban as well as the economic one. “Trump’s actions are hurting Netflix employees around the world, and are so un-American it pains us all,” Hastings said on Facebook. “It is time to link arms together to protect American values of freedom and opportunity.” (My colleague Vauhini Vara wrote about Silicon Valley’s reaction to the travel bans.)
In the weeks and months ahead, it will be interesting to see which, if any, corporate leaders summon the courage to follow Hastings’s lead. Tax cuts and regulatory relief are one thing. But for some of America’s biggest and most successful companies, the issues here are much bigger. With Trump and Bannon in the White House, their entire ecosystem is under threat.