CEOs have long been trained that it’s unwise to provoke a president. That’s no longer always the case
CHICAGO • Bosses of the world’s largest corporations are still learning to deal with one modern peril: When US President Donald Trump shows he’s not afraid to call them out on Twitter.
General Motors Corp (GM) is the latest example. Even though CEO Mary Barra (picture) reached out to the president before announcing plans to cut 14,000 jobs and close plants, Trump still excoriated GM on social media and threatened it with the loss of electric-vehicle subsidies: “Very disappointed”!
Here’s how some companies that landed in the president’s social-media crosshairs have coped with fiery tweets from the commander-in-chief:
Strategy: Attack, Riposte, Provoke
CEOs have long been trained that it’s unwise to provoke a president. That’s no longer always the case, said Paul Argenti, a communications professor at Dartmouth’s Tuck School of Business who, in the wake of an embarrassing GM recall, wrote “The Crisis Communications Playbook: What GM’s Barra (and Every Leader) Needs to Know.”
Social media — and the expectations of millennial customers — have changed so much since that 2014 article in the Harvard Business Review that today there might be an addendum.
Argenti said it’s actually good business for a CEO to get in front of provocative, but urgent issues when such a move is aligned with the company’s mission, the risk has been assessed and standing up may help effect change.
“There’s a huge cost of not speaking out today,” he said.
Case in point: Apple Inc CEO Tim Cook’s stand against violent neo-Nazi protests in Charlottesville, Virginia, in 2017, was a direct rebuke to Trump’s statement that there were good people on both sides of the issue.
Argenti said the position was well-aligned with Apple’s values statement of trying to “always change the world for the better”. Millennial customers expect Apple to take a stand, and studies are starting to show Cook can influence public sentiment on policy, he said.
Nike Inc might fail by such standards, according to Argenti.
He would have advised against the shoemaker’s support for quarterback Colin Kaepernick’s national-anthem protests, saying it jeopardised relations with a key customer — the National Football League — and had little to do with its mission, even if it produced a short-term bump in sales.
“Standing up to the president is a really stupid thing unless it’s completely in your wheelhouse and connected to what you’re doing,” Argenti said.
Nike investors might disagree. The company’s shares are up about 20% this year, compared to a 3% gain in the S&P 500 Index.
Strategy: Parry, Deflect, Defend
Few companies have taken more blows from Trump than the newspapers and TV networks covering him, such as the “failing” New York Times, “lowly rated CNN” and “Fake News Washington Post”. These outlets have one advantage over other most companies — a platform from which to fight back.
The first way they engage is with continued reporting on Trump’s policies and potential legal perils. But they’ve also used the attacks to burnish their brands: The Times has run “The Truth Is Hard” ads — you can even buy the framed poster for US$90 (RM376.20) from the newspaper’s store — while CNN’s “Facts First” campaign uses apples and bananas to illustrate that words don’t change facts.
The strategy can pay off: The Times’ total subscriptions just rose to four million and it ’s using Trump-related investigations in a new ad campaign.
Media companies aren’t the only ones that have learned to deflect Trump’s criticism. After taking heat from the president for planning to raise drug prices, Pfizer Inc said it would hold off on increasing the prices of some drugs. By November, however, the drugmaker said it would be raising the prices of about 10% of its medicines at the start of the coming year.
Strategy: Ignore What You Can, Charm If You Must
Some companies avoid Trump’s wrath by letting him take credit for their successes — even letting it slide if he’s got the facts wrong. As part of the president’s lashing of GM last week, he lauded Germany’s BMW AG for building a new auto plant in the US — even though no such decision has been made final yet.
GM’s crosstown rival Ford Motor Co has learned the hard way. The automaker took multiple direct blows from Trump during the 2016 presidential campaign for building cars in Mexico. Chairman Bill Ford worked on the relationship, helping pave the path when the company and Trump part ways on policies such as Trump’s initial travel ban.
Whenever it corrects him — such as denying Trump’s tweet that a certain Focus model would be built in the US instead of China because of his tariffs — Ford doesn’t mention him by name and leavens the message with reminders of its US employment or praise for the economy.
Harley-Davidson Inc took a similar tack in August after Trump backed a potential boycott by Harley owners upset with the company’s plan to expand production in Europe. Harley’s response, in a memo from CEO Matt Levatich to workers and dealers, spoke of “misinformation” but never mentioned Trump by name — or the irony that the decision was made because of retributive tariffs the European Union imposed because of Trump policies.
Argenti, the Dartmouth professor, said he might have played that one differently — calling out Trump directly, along these lines: “Look, we have no interest in moving jobs to Europe; stop playing with a tariff system that works really well, and our customers need to know we did this because of the tariff system you put in place.”