Washington - President Donald Trump is injecting himself into the daily business of US companies to an unprecedented extent, spurring investors and executives to weigh their exposure to his wrath when making decisions.
The latest was Nordstrom, which drew Trump’s public anger on Twitter on Wednesday for discontinuing his daughter Ivanka’s line, saying sales had slumped.
Trump shot back, first from his personal account, then re-tweeted from his official @POTUS account: “My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person - always pushing me to do the right thing! Terrible!”
My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person -- always pushing me to do the right thing! Terrible!
— Donald J. Trump (@realDonaldTrump) February 8, 2017
The tweet initially sent Nordstrom’s shares down slightly before they rebounded and ended the day up 4percent, the biggest daily gain in two months.
Two hours after attacking the department store, Trump hosted Intel Corporation chief executive Brian Krzanich in the Oval Office to announce that the semiconductor-maker would spend $7billion (R94.06bn) on a factory in Chandler, Arizona, creating 3000 jobs - a move that was already widely expected by investors and did little to boost shares.
Once again, Trump took to Twitter. “A great investment ($7 BILLION) in American INNOVATION and JOBS! #AmericaFirst,” he wrote.
Thank you Brian Krzanich, CEO of @Intel. A great investment ($7 BILLION) in American INNOVATION and JOBS! #AmericaFirst🇺🇸 pic.twitter.com/76lAiSSQ1l
— Donald J. Trump (@realDonaldTrump) February 8, 2017
Not even three weeks into Trump’s presidency, the moves fit a familiar pattern in his dealings with companies: do what Trump wants, or face a presidential rebuke.
This direct, company-by- company intervention is forcing chief executives and corporate boards into a choice they have never before faced with a sitting president - are we with him, or against him? - in a way that distorts normal decision-making and conflicts with shareholder interests.
Holding back
“There are some firms that are invariably going to hold back their punches; they are holding back certain announcements or decisions, because this is a time of uncertainty,” said Mohan Tatikonda, a professor at Indiana University’s Kelley School of Business. “On the other hand, there are firms that are taking advantage of the climate,” he said. “Damned if you do, damned if you don’t.”
Some choose to fight. Technology companies Apple, Alphabet, Amazon.com, Microsoft and others have emerged as vocal critics of Trump’s immigration executive order.
Starbucks chief executive Howard Schultz on the weekend Trump’s immigration order was enacted wrote that he had a “heavy heart” and that the coffee chain plans to hire 10000 refugees over five years around the world.
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United Technologies cancelled plans to shutter an Indianapolis factory in its Carrier unit and agreed to trim the number of jobs it would send to Mexico after Trump’s complaints.
Even so, the company will still move hundreds of jobs, while receiving a $7million incentive package from Indiana in exchange for the operations that will remain.
Discussing issues
Yesterday, Trump was to meet at the White House with the chief executives of US airlines to discuss regulatory issues, taxes and infrastructure improvements at airports. He met last week with pharmaceutical companies, and in the first week of his presidency with car makers.
Lockheed Martin and Boeing, both targets by Trump over the costs of military aircraft, have pledged to work with the new administration to keep spending in check, without divulging specific details.
The moves have given Trump public victories even as it is unclear whether any aspect of the companies’ government contracts has changed.