Dealing with Donald Trump's Twitter rants is a new phenomenon for U.S. companies. For many of his favorite targets, creating jobs isn't.
General Motors Co. and Wal-Mart Stores Inc. on Tuesday became the latest corporations to talk up the part they're playing in the president-elect's plan to become "the greatest jobs producer that God ever created." GM largely just summed up U.S. spending plans that had been in the works for a while, but it did so with panache, touting a $1 billion headline number and pledging to create or retain (emphasis on retain) about 7,000 jobs. Only about 2,000 of those will be in factories. Wal-Mart, meanwhile, celebrated the planned addition of 10,000 retail jobs, even as it expands its store count at a slower pace.
Wal-Mart and GM aren't the first companies to retool past plans into a good PR moment. Honestly, given how easily companies can turn Trump's ire into praise with a few "big league" numbers, more power to them. This time two weeks ago, Trump was openly attacking GM on Twitter, claiming (without context, according to the company) that it made Chevrolet Cruze vehicles sold in the U.S. in Mexico. By midday on Tuesday, Trump had already tweeted his thanks to the company. Moving on!
These are real jobs that are being preserved or created, and that is a good thing. But while such announcements have taken on new meaning in the wake of Tweet Storm Trump, GM and Wal-Mart have been making them since well before he came along and neither company is demonstrating a significant shift in strategy.
Here is a sampling. In August 2014, GM said it would move production of the Cadillac SRX sport-utility vehicle from Mexico to a Tennessee facility. A contract signed in 2015 with the United Auto Workers union included a commitment by GM to invest $8.3 billion in U.S. factories in total and create or retain (there's that word again) more than 3,300 jobs. GM has also cut a number of jobs, often in response to shifting demand -- see here and here -- but the net effect on U.S. employment in the wake of the financial crisis has been positive.
GM says it's invested more than $21 billion in its U.S. operations since 2009. The planned $1 billion in spending actually pales in comparison to the $2.9 billion of investments announced in 2016.
Wal-Mart, like most retailers, has had to close stores to cope with the shift to online shopping, and with that has come job cuts. But the company has still managed to keep its overall U.S. employment flat to trending upward following the financial crisis. A Sam's Club opening in Ankeny, Iowa, in May 2015 brought 160 jobs to the area, while a location in El Paso that opened earlier that year added 170 positions. Neither of those sound particularly impressive on their own, but those jobs add up over time. Then, of course, there is Wal-Mart's decision to raise minimum wages for its employees.
There are real issues undermining an American manufacturing revival and focusing on nice-sounding jobs announcements keeps us from addressing them. While Trump has spent plenty of time railing against companies that manufacture goods in Mexico, he's failed to give a solid answer as to how he will manage an ongoing effort to automate more factory work. Robots are coming for U.S. jobs. United Technologies Corp. CEO Greg Hayes acknowledged as much after "saving" 800 positions at the company's Carrier unit. The automation trend was implicit in the fact that Ford Motor Co.'s $700 million Michigan investment plan will create just 700 jobs. Meanwhile, Carrier is still moving some jobs to Mexico and GM hasn’t backed away from its plan to invest $5 billion in Mexico plants by 2018.
Companies know how to play the job-creation and press-release games. Does Trump?
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Reynolds American Inc. on Tuesday claimed that its takeover by British American Tobacco Plc could increase -- yes, increase -- job growth potential.
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