After the 2016 election there was much trepidation in the corporate world about what the election of a self-proclaimed populist would mean for business. Trump’s intervention in the controversy over layoffs at a Carrier plant in Indiana was taken as a signal that he would be tough on the Fortune 500. “Corporate America unnerved by Trump” was the headline of a front-page story in the Washington Post on December 7, 2016.
At the one-year mark of the Trump Administration, those fears have been long forgotten. Although some corporate executives have spoken out against the president on certain social and civil rights issues, they have generally made peace with him on economic policy. They are delighted with his deregulatory moves and are thrilled at the windfall they are enjoying from the tax bill. Meanwhile, they grow wealthier by the day as a result of the stock market’s new bout of irrational exuberance.
Some companies are taking things a step further by also adopting Trump’s style of making exaggerated and self-serving claims while pretending to be acting in the national interest. The ranks of the these corporate Trumps seem to be proliferating.
Even before Trump took office, the Japanese company SoftBank proclaimed that it was inspired to invest $50 billion in the United States and create 50,000 jobs. The Taiwanese company Foxconn promised $7 billion in investment and also the nice round number of 50,000 jobs.
In February Intel, praising Trump’s policies, said it would invest $7 billion in a U.S. chip plant and create 3,000 jobs. In May the Indian business services outsourcer Infosys claimed it would hire up to 10,000 people in the United States.
During the summer, Foxconn upped its ante with an announcement that it would spend $10 billion to build a flat-screen plant in Wisconsin that would ultimately employ some 13,000 workers.
The latest company to Trumpify itself is Apple, which says it is so happy with the tax law changes that it will invest $30 billion in the U.S. over the next five years and create over 20,000 new jobs. Although it has not linked its move directly to Trump’s policies, Amazon’s announcement in September that it planned to create a second headquarters with 50,000 new jobs fits into the same trend.
What these announcements have in common is that they seem to be designed more as public relations stunts than as serious economic commitments. Many of the numbers are far beyond the norm and appear to be chosen to attract attention.
At a time when the typical plant workforce is shrinking, especially in high-tech, Foxconn’s claim that it will employ 13,000 people in that Wisconsin facility seems far-fetched. Equally implausible is Amazon’s stated intention to more than double its headquarters staff. The idea that Apple, which was built on cheap Chinese labor, will suddenly become a high-road domestic employer is preposterous.
It is unclear whether some of these initiatives will ever see the light of day at any employment level. Foxconn, in particular, has a track record of failing to follow through on announced projects.
Some of the companies are probably currying favor with the Trump Administration in order to achieve regulatory relief or other administrative benefit. Some, especially Foxconn and Amazon, have used their announcements to encourage state and local officials to offer bountiful financial incentive packages. Apple is trying to burnish its image long tarnished by foreign labor scandals and accusations of tax evasion on a monumental scale.
What all the companies are counting on is that eventually their lavish promises will have been forgotten when they deliver a lot less in the way of investment and jobs – and especially job quality. Taking their cue from Trump, they are focusing on the short-term benefits of making unsubstantiated statements and giving little heed to the longer-run consequences of their actions.