‘A Lot of Chaos’: Companies Try to Make Sense of Working with Trump

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(Bloomberg) — The chief executives of General Motors Co. and Ford Motor Co. made recent pilgrimages to Washington to figure out answers to questions on every CEO’s mind: How do you know which policies President Donald Trump will push through, attempt to influence his decisions, and, meanwhile, explain the business impact to investors without irritating the vocal — and very online — president?

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The car chiefs met with lobbyists, trade groups and Republican Congress members from states in the so-called Battery Belt in an attempt to delay a repeal of Biden-era electric-vehicle tax credits Trump has railed against and talk to the administration about tariffs.

“President Trump has talked a lot about making our US auto industry stronger, bringing more production here,” Ford CEO Jim Farley said at a conference ahead of his trip, adding that would be a “signature accomplishment.” But “so far, what we’re seeing is a lot of cost, a lot of chaos.”

The effort shows how Corporate America is shifting from trips to Trump’s Mar-a-Lago compound, where the aim was to woo the president personally to stops at Capitol Hill and the White House. Executives are trying to influence the policies beginning to take shape and mitigate negative effects of things like tariffs and regulation overhauls that are already impacting their companies’ stock prices.

While businesses typically adjust their approach to suit every new administration, executives and consultants say the second Trump term brings its own set of challenges.

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As the president moves at a faster pace than last time around to implement his agenda, his proclamations are disrupting markets, hiring and investment decisions, supply chains and unit economics. Companies are engaging earlier and more intensely with the president and are more cautious about what they say publicly. 

“Businesses have had to readjust — readjust culture, readjust investment thoughts, readjust everything that they’re doing,” said Nikki Haley, the former South Carolina governor who worked in Trump’s first administration before challenging him in his second presidential run. 

Haley, who joined public-relations firm Edelman in September, is among the throng of Trump-connected advisers that have cropped up to provide advice to companies on how to recalibrate their media strategies, boards, executive ranks and corporate policies for Trump’s second term.

To bolster its connection with the Trump administration, battery maker Eos Energy Enterprises, Inc. said it recently added David Urban to its board, tapping a key adviser to Trump’s 2016 campaign to shape policy decisions in Washington and make sense of the “evolving political and regulatory environments.”

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That makes it one of at least seven companies that have added board members with direct Trump ties since last summer.

Dramatic Shift

Eos is among the clean-energy companies confronting a dramatic shift in government  support. In December, just as Biden was finishing up his term, Eos closed on a more than $300 million US Department of Energy loan guarantee to fund and expand its production in Pennsylvania. Trump’s administration is now looking at whether it would be legally viable to cancel loans issued under that program.  

Trump allies are also going in-house: e-cigarette maker Juul hired Mary-Sumpter Lapinski, a former Trump health agency official, to lead its government affairs team as the firm seeks to shape regulations on vaping. Chris LaCivita, who co-managed Trump’s presidential campaign, and Kyrsten Sinema, a former Independent US Senator from Arizona, were among the latest recruits to the cryptocurrency platform Coinbase Global Inc.’s global advisory council.

The clean-energy firm Palmetto Clean Technology, meanwhile, recently hired Neil Chatterjee as its chief government affairs officer. Chatterjee, who had previously been on Palmetto’s board, had also worked as an advisor to Republican Senator Mitch McConnell before being named by Trump to lead the Federal Energy Regulatory Commission in 2018. The company, which operates a marketplace for products including solar energy panels, is Trump ally Chamath Palihapitiya’s Social Capital firm’s second-largest active investment.

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Chatterjee said in an interview that he has close ties to the Trump transition team and that “I am leveraging my relationship with the key players with the incoming administration to make certain that they understand the value that solar provides.”

Perhaps the most prominent example of a company adjusting to the Trump era is social-media company Meta Platforms Inc., which replaced its chief global affairs officer with Republican Joel Kaplan and hired a correspondent for the conservative publication the Daily Caller to work on its public policy. It also named UFC CEO and Trump ally Dana White to its board.

Putting “someone on your board who’s well connected in Trump world, that’s certainly a statement,” said Harry Clark, a senior counselor at strategic advisory firm Brunswick Group. “Since we know the Trump administration watches keenly the optics of everything, that’s not going to go unnoticed in some quarters of the West Wing.”

New Power Players

Companies looking to bulk up its Washington muscle are turning to K Street firms, where there’s been a boom in business for MAGA shops selling their insights into and connections with the new administration.

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“The second Trump administration will bring about a new era of American governance, with new rules, new norms, and risks for businesses ill-prepared to navigate this broad new Trump World,” said Michael Glassner, Chairman and CEO of Frontline Government Relations, who co-founded the MAGA-focused lobbying shop with John Pence, former Republican Vice President Mike Pence’s nephew.

 “To succeed in this new environment, you must truly understand what the MAGA Movement is all about — from personalities to policy goals — and how to adapt your business to the new realities,” Glassner said when announcing his new shop.

Mercury Public Affairs, where Trump chief of staff Susie Wiles previously worked, has signed on at least 16 new clients since last November, including the online trading platform Webull Technologies, which has come under scrutiny for its Chinese ties, and the US Cannabis Council, a trade group that advocates for the legalization of cannabis. 

Wiles’s daughter, Katie Wiles, was also promoted at the lobbying firm Continental Strategy last year, which was announced not long after Trump’s election. And Ballard Partners, which counts among its alumni Attorney General Pam Bondi, has signed vaccine maker Novavax Inc., Walt Disney Co. and at least 38 other new clients — more than double its gains during a comparable period four years ago. 

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Policy Pullback

In his first days in office, Trump issued an executive order asking agencies to compile a list of companies and other organizations that could be investigated for diversity, equity and inclusion policies the president said are wasteful and discriminatory.

Since Trump was elected, roughly 20% of companies in the S&P 100 have retreated from DEI commitments, bringing the total percentage of companies in the index that have altered these policies in recent years to nearly 30%, according to a Bloomberg News analysis of public commitments and news reports through Feb. 12. The count includes Amazon.com Inc., Target Corp., McDonald’s Corp. and Alphabet Inc. 

This week, Goldman Sachs also said it was ending its policy of only taking companies public in the US or Western Europe if they have at least two diverse board members, including one woman.

Edelman’s Haley said she is advising companies to move away from their DEI initiatives altogether.

“It distracts from business, and I think that it causes polarization, and I tell them that,” she said. “The majority of them do realize, and they’re reading the tea leaves and they’re pulling away from that.”  

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But some companies have continued to defend the value of their DEI commitments, including McKinsey & Co., Deutsche Bank AG and Costco Wholesale Corp., which recently fended off a proxy proposal that sought to have it assess DEI-related risks.

Richard Edelman, the CEO of the public relations firm that hired Haley, has taken a different approach. He is advising companies to continue to do DEI work, albeit with a different emphasis: instead of trying to guarantee certain types of outcomes through, say, hiring quotas, firms ought to instead focus on providing opportunities for job advancement.

“Any thought that you should give up on diversity and inclusion is a mistake,” he told a crowd of hundreds of people at a recent Executives’ Club of Chicago event. 

—With assistance from Naureen S Malik, David R Baker, Carrington York, Keith Naughton, David Welch and Michelle Ma.

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