CEOs in the Trump Vortex: 8 Rules of
Engagement
by Dale Buss
President-elect
Donald Trump has made America’s CEOs sit up and take notice with many of his
pre-inauguration moves, ranging from one extreme—job-shaming—to the other,
selecting corporate chiefs for some key cabinet posts.
And
in the flurry, already an emergent pattern is clear. As president, Trump wants
to rely heavily on the kind of accomplished leaders he knows best and is
comfortable with: CEOs. And if CEOs aren’t on his team, he’s going
to buttonhole them to hold them accountable for things that run counter to his
view of the world.
This
new era creates both opportunities and challenges for CEOs, who may have gotten
used to being relatively neglected during the Obama administration, for better
or worse. And surely the playbook is about to change.
In
Trump’s most recent actions, including naming ExxonMobil CEO Rex Tillerson as
his designate for Secretary of State, inviting Silicon Valley moguls such as
Jeff Bezos and Elon Musk to a tech-CEO summit, and tweeting that Lockheed
Martin’s fighter jets are too expensive—he is certainly getting CEOs’
attention.
While
no game plan exists for how to handle a Trump administration, here are 8 rules
for CEOs to navigate the arrival of a new cabinet in Washington which already
seems to center around them.
1.
Expect the obvious chiefs to get called out. Trump made clear just days after his
election that he was going to reach out to CEOs who could address his strong
campaign theme of restoring American manufacturing jobs—and prevent them from
going to Mexico.
That’s
how Gregory Hayes, CEO of Carrier parent United Technologies, and Ford’s top
duo of Bill Ford and Mark Fields, ended up being early negotiators with the
President-elect over their companies’ plans to send more jobs south of the
border.
2.
Watch him dig below the surface. Trump already has shown that he’s going to pursue not only obvious
targets such as Ford, but also other CEOs who may be lurking at the second and
third levels beneath.
Did
he perceive Boeing as being too close to Hillary Clinton? Trump decided to make
a big deal of the aircraft maker’s $4-billion price tag for a new version of
Air Force One, taking CEO Dennis Muilenburg by surprise. Then he went after
Lockheed Martin for “out of control” costs of its new F-35 fighter jet, whose
price during Hewson’s tenure has doubled from initial estimates to nearly $400
billion.
For
SoftBank founder Masayoshi Son, Trump’s play came in the form of getting him to
agree to have the firm invest $50 billion in the U.S. to create 50,000 jobs,
though some observers noted that SoftBank essentially already had decided to do
so. Among Son’s vulnerabilities are the fact that the owner still might like to
buy T-Mobile, even as Trump has announced his opposition to the big telecom
deal currently on the table—the proposed AT&T/Time Warner merger.
3.
Note the absence of dodging. As Trump tallies up more and more CEOs as cabinet picks, he’s
unapologetically embracing some people who absolutely make his opposition howl.
Few
pundits predicted that Tillerson would be Trump’s pick for Secretary of State,
for example, because of complications from his existing relationships with
foreign leaders. (And, for that matter, because no one enrages progressives
more than oil-company chieftains.) Trump explained that Tillerson, like a good
CEO of any global company, knows many of the “players” worldwide and is a great
negotiator. Those are two of the things that Trump values more highly than
diplomatic experience.
And
Trump picked Dow CEO Andrew Liveris to head his Manufacturing Council despite
the fact that Dow has moved to eliminate thousands of manufacturing jobs under
Liveris, in part because of its merger with DuPont, even as it is boosting
white-collar R&D jobs in the United States.
4.
Try to beat him to the punch. Some CEOs are attempting to conclude certain business with
President Obama before Trump takes office. For example, Volkswagen CEO Matthias
Mueller reportedly is trying to get the company’s deal with the U.S. Justice
Department for settling Dieselgate wrapped up ASAP, because he may suspect that
a President Trump and new Attorney General Jeff Sessions will drive a harder
bargain.
Similarly
motivated was Alphabet CEO Eric Schmidt, a huge and open backer of Clinton’s
presidential bid. His Google unit has hurried to put the finishing touches on a
deal with Cuba to place computer servers there to speed the search service.
Obama championed construction of a new U.S. relationship with the island
dictatorship, while Trump would like to keep Cuba on ice.
And
having been nicked by Trump on the Air Force One kerfuffle, Boeing’s Muilenburg
tried to beat the president-elect to the punch on something that is sure to
displease Trump: Boeing’s $16.6-billion deal to sell planes to Iran. It came as
a result of the lifting of economic sanctions on that country because of
President Obama’s security deal with the regime. Hoping to beat Trump at his
own game, Boeing officially cast the deal with Iran as something that “will
support tens of thousands of U.S. jobs” associated with production and delivery
of the planes.
5.
Don’t keep your head down. Virginia Rometty raised her hand early after Election Day by
publishing an open letter to Trump outlining her recommendations on issues from
healthcare to infrastructure spending. Trump responded by tapping the IBM CEO
to join his Strategic and Policy Forum, one of only two women so invited.
Meanwhile,
the other female he picked, General Motors CEO Mary Barra, hadn’t said peep
about his election and he asked her to join anyway. And it’s already become
apparent that he’s put her in a hot seat with his tough rhetoric about trade
with China, where GM is the American automaker most dependent on domestic sales
and integration with its design and development needs in the U.S. market.
6.
Assume he may try to co-opt you. Trump already has displayed a willingness to summon enemies of his
views for an in-person discussion, such as when he called climate-change
activist Al Gore to Trump Tower. This week, he planned to meet with leading
members of the digital-tech community who largely had cast him as the
industry’s ultimate villain during the campaign.
7.
Figure he’ll impact you another way. For CEOs who didn’t get picked for his
cabinet, invited to a tete-a-tete, targeted for a tweet or otherwise not chosen
for a spot on his chess board yet, there’s this: He’s thinking of you anyway.
President-elect
Trump already has created hope that his tax-cutting, regulation-stripping,
growth-oriented administration will spark 3- to 4-percent annual increases in
GDP, a prospect that surely delights thousands of American CEOs.
8.
Prepare to tread his path. One obvious implication of Trump’s election for CEOs is that he’s
proven that a CEO can become elected president. This historic development could
open the door for other CEOs to consider following his path. And while it could
just be media hype, rumors are already spreading that Starbucks’ Schultz,
stepping down as the firm’s CEO, may consider a 2020 presidential run.
Clearly, the ascendancy of Donald Trump even
before he’s inaugurated has created a new world of possibilities for America’s
CEOs, some good, some not as much. Either way, it should keep all business
chiefs on their toes.
Source: Chief Executive
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