Pritzker Bridges Business-Obama Rift to Promote Trade

Photographer: Andrew Harrer/Bloomberg

Penny Pritzker, U.S. secretary of commerce, at the SelectUSA 2013 Investment Summit in Washington, D.C., on Nov. 1, 2013. Close

Penny Pritzker, U.S. secretary of commerce, at the SelectUSA 2013 Investment Summit in... Read More

Close
Open
Photographer: Andrew Harrer/Bloomberg

Penny Pritzker, U.S. secretary of commerce, at the SelectUSA 2013 Investment Summit in Washington, D.C., on Nov. 1, 2013.

U.S. Commerce Secretary Penny Pritzker sees herself as the administration’s ambassador to the business community. The corporate world is banking on the reverse, that she’ll represent them.

“The first thing I know about being a business person and leading a business is, you listen to your customer,” Pritzker said in an interview during Detroit’s January auto show. “Our customer at the Department of Commerce is the business community.”

Pritzker strolled among the latest versions of Ford Motor Co. (F)’s iconic Mustang and F-150 pickup truck as Mark Fields, the company’s chief operating officer, and Ziad Ojakli, one of its lobbyists, led the way, while also urging her to back efforts to prevent currency manipulation in trade deals.

Pritzker listened and took notes on her “Office of the Secretary” stationery. Two words she penned: “currency” and “trainwreck.”

Pritzker “may not be the point person, but with a seat at the table she can convey that this is a real concern,” Ojakli said in a later interview.

After years of rocky relations between the business community and President Barack Obama, Pritzker, 54, a Chicago businesswoman and billionaire whose family founded and runs Hyatt Hotels Corp., may be administration’s best and last hope of developing a working partnership with the corporate world.

Repairing the rift won’t be easy as executives lodge complaints from over-regulation of banks to costly burdens imposed by the president’s 2010 health care law.

Lawsuit Threat

U.S. Chamber of Commerce President Thomas J. Donohue, who heads the nation’s biggest business trade group, vowed in January that when “regulators insist on overstepping their bounds, we will head to the courts and sue” the administration.

In her eight months in office, Pritzker has held town-hall meetings to hear companies’ concerns, led the government’s first summit to lure foreign investment and kick-started a program to increase workers’ skills. In the first half of this year, she’s focusing on trade missions, including to Mexico, where Obama will meet tomorrow with Mexican President Enrique Pena Nieto and Canadian Prime Minister Stephen Harper.

She’s also the first Commerce secretary to manage fallout from Edward Snowden’s leaks of data surveillance programs, which such companies as Google Inc. (GOOG) say threatens their international credibility.

Trade Deals

If Pritzker succeeds, it could produce a bipartisan coalition to advocate passage of separate free-trade deals the U.S. is negotiating with 11 Pacific-rim nations and the European Union, as well as a bill on Capitol Hill to make it easier for companies to hire foreign-born, high-skilled workers.

“Having a Commerce secretary with someone of Penny’s caliber is extremely important to solidify those partnerships,” Valerie Jarrett, senior adviser to the president who has known both Pritzker and Obama for decades, said in an interview.

Her background and early steps show some promise. Even the chamber’s Donohue, in a statement, called Pritzker a strong appointment. “She’s a pragmatist who understands business and knows how to get things done,” he said.

Some of Pritzker’s positions, such as a proposal to upgrade the North American Free Trade Agreement with a new Pacific-rim trade pact, are opposed by Obama’s supporters among labor and consumer groups.

‘Tone Deaf’

“She’s fairly tone deaf on what the Congress and the whole country think about Nafta,” said Lori Wallach, director of Public Citizen’s Global Trade Watch program. Wallach said the pact has caused American job losses and noted the U.S. trade gap with Mexico has dropped from a $1.4 billion surplus in 1994, when it took effect, to a $54 billion deficit last year.

Scott Paul, president of the Alliance for American Manufacturing, said Pritzker should do more to prevent imports from erasing jobs. The agency has “a kind of one-sided view of trade policy” by focusing on export promotion, he said.

Pritzker is also working in an administration that has empowered the National Labor Relations Board, advocated for raising the minimum wage and imposed what Republicans call “job-killing regulations” on companies.

Obama Fundraiser

The Harvard University graduate, who also holds business and law degrees from Stanford University, shrugs off those differences. She says she regularly talks to Obama, for whom she was the chief fundraiser in 2008 and campaign co-chairman in 2012, and is focusing on areas where business leaders and the White House can work together.

“What’s shocking to me is how aligned I think the president’s economic agenda is and the business community’s top concerns” are, Pritzker said.

Her calls to executives began before she got the job.

On a Sunday afternoon after her May nomination, Pritzker called Caterpillar Inc. (CAT) Chairman Douglas Oberhelman to learn more about a problem that he said affected the company in its overseas business. She called again to check on the issue’s status after her confirmation in June.

“That’s the kind of follow-up we’re used to seeing in business,” said Oberhelman, who declined to make public his company’s specific business concerns.

12 States

Three weeks after taking office, Pritzker began a “listening tour” through 12 states to hear from businesses and local officials.

“She asks, basically, good financial questions about the business,” Mary Andringa, chief executive officer of Vermeer Corp., a farm-equipment company based in Pella, Iowa, that the secretary visited on her tour.

New Orleans Mayor Mitch Landrieu, who also attended a session with Pritzker, said “she wanted to know where they could be the most helpful in the shortest period of time.” The message delivered from his city’s leaders was for Washington “to break down the stovepipes” so departments can work faster by acting simultaneously, he said in an interview.

Pritzker followed that advice in October at the SelectUSA summit, a gathering to promote foreign direct investment and help businesses network with U.S. officials. Pritzker presided over the conference, a first-of-its-kind event, and had government officials from a variety of departments interact with corporate leaders. The White House plans to expand the program with as much as $7 million in funding.

Foreign Investment

“She definitely made it clear to me that foreign investment was a priority for her,” said Nancy McLernon, president of the Organization for International Investment, a Washington-based group that lobbies for foreign-based companies that have a major presence in the U.S., such as Honda Motor Co. (HMC) and Siemens AG. (SI)

McLernon, who spoke at the summit, had been pressing to include leaders of such companies on a U.S. panel that advises the Commerce secretary on manufacturing issues, a change Pritzker has made.

“She got it done, and she got it done very quickly,” McLernon said in an interview.

Pritzker keeps a sign on her office door that says “Open for Business,” and she titled her department’s agenda the same.

In November, she announced her priorities, including boosting trade and investment, developing a skilled labor force and advanced manufacturing, and making better use of the trove of data the Commerce Department collects from its bureaus, including the National Oceanic and Atmospheric Administration.

Business Startups

“She understands the priorities and she understands the goals because she’s been a businesswoman herself,” Marillyn Hewson, CEO of Lockheed Martin Corp. (LMT), said in an interview. “Now she’s in a role where she can bring that knowledge and capability to the job.”

Before joining the administration, the secretary had started five businesses including PSP Capital Partners LLC.

Earlier this month, Pritzker led executives from 17 companies, including Vermeer’s Andringa and officials from International Business Machines Corp. (IBM) and Oracle Corp. (ORCL), on her first trade mission, to Mexico.

The visit was part of her “Look South” initiative, an effort to increase business with the burgeoning Latin American market, which Carlos Gutierrez, a Commerce secretary under President George W. Bush, in 2012 said should be done “to make the hemisphere more globally competitive.”

Monterrey Visit

After two days of meetings in balmy Mexico City, the group flew north to frigid and rain-soaked Monterrey, the nation’s third-largest city and industrial capital at the foot of the Sierra Madre Oriental mountains.

Less than three hours’ drive from the Texas border, Monterrey is an ideal place for American companies to set up their manufacturing operations, taking advantage of lower labor costs and a growing middle class. Factories and distribution centers for companies as diverse as Mary Kay Inc., Callaway Golf Co. (ELY) and Whirlpool Corp. (WHR) dot the highway linking the city to the airport.

Lowe’s Cos. (LOW) entered the Mexican market in 2010 and plans to expand. The home improvement retailer recently donated $20,000 to renovate a school in Monterrey and raised money for a local special-education school.

With the Mexican media in tow, Pritzker promoted the U.S. company at a town hall-style appearance at the front end of the store, amid the backdrop of lawnmowers and garden tools.

UAE, Qatar

“Lowe’s commitment to community clearly reflects the values of many American companies that invest here in Mexico,” she said.

Pritzker will lead similar missions to the United Arab Emirates, Saudi Arabia and Qatar in March, and one to West Africa in May.

Within the department, Pritzker is striving to change the culture of the more than 45,000-person agency, which has become beleaguered by a revolving cast of leaders. On her first days, she personally greeted employees as they arrived for work. She did so again after the October government shutdown.

“I was shocked at the number of people who stopped me and said, ‘You know I’ve been here 20 years or 25 years, I’ve never met the secretary of Commerce,’” she said.

In September, she recruited Walter Isaacson, author of biographies of Steve Jobs and Benjamin Franklin, to give the agency’s top officials a pep talk on leadership.

Her aides say she leads by example. A triathlete who works out every morning, Pritzker rises at 6 a.m. and often works until 11 p.m., reading briefing books for the next day.

One of the most unusual topics Pritzker is tackling is the economic aftermath of Snowden’s exposure of the National Security Agency’s access to electronic communications, including mobile phone conversations between heads of state. Pritzker is part of a White House review of privacy issues being led by counselor John Podesta.

“It’s a new issue, and I think that it’s unbelievably complicated,” Pritzker said during an interview in Monterrey. “There’s a balancing act between national security issues and economic opportunity. There’s a balancing act between privacy and economic opportunity.”

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editors responsible for this story: Steve Geimann at sgeimann@bloomberg.net; Jon Morgan at jmorgan97@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.