Corporate America's Embrace of Trump 2.0

Summary

The Journal: Corporate America's Embrace of Trump 2.0
Hosted by Kate Linebaugh and Ryan Knutson, with Jessica Mendoza
Release Date: January 17, 2025

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Introduction

In the January 17, 2025 episode of The Journal, host Kate Linebaugh delves into the evolving relationship between Corporate America and former President Donald Trump. Titled "Corporate America's Embrace of Trump 2.0," the episode explores how major companies have shifted their strategies to align more closely with Trump's administration, the motivations behind their actions, and the potential risks involved.

Initial Corporate Reactions to Trump's Election

June 2024 Highlights:

Following Donald Trump's unexpected victory in the 2016 presidential election, many business leaders were initially uncertain about how to navigate the new political landscape.

• Chip Cutter explains, "Most of corporate America really didn't have a relationship with Trump then. You know, he was kind of a political unknown. And so a lot of executives didn't know what to expect." [03:14]

Early efforts by Trump to engage with corporate leaders included inviting CEOs to join business councils aimed at advising on economic matters. While prominent figures from companies like IBM and Pepsi participated, the relationships were fraught with tension.

In 2017, Trump's administration faced backlash from nearly 100 companies protesting his controversial immigration policies, including the widely criticized Muslim travel ban.

• A protester voiced the sentiment: "Fight against President Trump's executive order on immigration." [04:12]

These events led to a significant exodus of CEOs from Trump's advisory councils.

• Chip Cutter noted, "CEOs were almost tripping over themselves to get off of these councils and to distance themselves from Trump." [04:25]

Shifting Strategies: From Opposition to Engagement

As Trump's first term progressed, some companies began to reassess their strategies toward the administration. The initial confrontations gave way to a more nuanced approach of engagement and support.

• Chip Cutter observed, "Companies see an opportunity. They realize that they need to be in Trump's ear, that now is the time." [01:41]

This shift was marked by substantial financial contributions to Trump's inaugural fund following his re-election.

• Kate Linebaugh stated, "These donations are helping pay for stuff like galas and balls at the inauguration." [00:22]

Major corporations such as McDonald's, Toyota, Boeing, Meta (formerly Facebook), Walmart, Uber, Goldman Sachs, and Bank of America each donated approximately one million dollars to the fund.

• Chip Cutter detailed, "Million donation to President Boeing. Boeing gave money to this bond." [00:55]

Corporate Strategies for Navigating the Trump Administration

In response to the evolving political climate, corporations sought expert advice on maintaining favorable relationships with the administration. Nikki Haley, former UN Ambassador and political rival of Trump, emerged as a key advisor.

• Kate Linebaugh introduced, "One person they've turned to has a lot of experience on either side of Trump. She was both his one time UN Ambassador and later his political rival." [06:40]

Haley advocated for a non-political stance, using Dolly Parton as a model for corporate behavior.

• Chip Cutter relayed Haley's advice: "Nikki Haley says companies and CEOs should try to be more like Dolly Parton." [07:28]

This "Dolly Parton strategy" emphasizes neutrality, allowing companies to maintain broad appeal without alienating any particular group.

Additionally, CEOs like Apple's Tim Cook developed targeted approaches when interacting with Trump, focusing on specific topics to maximize their influence.

• Chip Cutter highlighted, "Tim Cook ... will just bring one topic up. He knows that he doesn't want the conversation to wander or go in all different directions." [08:34]

Corporate Actions Post-Reelection

After Trump's re-election in November, corporations intensified their efforts to align with his vision:

• Rollbacks on Diversity, Equity, and Inclusion (DEI): Companies like Walmart and McDonald's scaled back their DEI initiatives.

• Climate Policy Retreats: Major banks withdrew from a UN-backed climate coalition.

• Meta's Strategic Moves: The company ceased Facebook fact-checking services, donated to Trump's fund, and appointed Dana White to its board, signaling a strategic pivot towards favoring the administration.

• Coca-Cola's Gesture: Despite a historically strained relationship, Coca-Cola gifted Trump a commemorative bottle for his inauguration, symbolizing corporate outreach.

• Chip Cutter summarized, "Meta ended fact checking on Facebook. It donated that million dollars to Trump's inauguration fund." [11:07]

Risks and Public Perception

While these strategic alignments aimed to secure Trump's favor, they carry significant risks:

• Consumer Backlash: Companies risk alienating consumers who prioritize issues like climate change and workplace equality. Critics argue that corporate acquiescence to political winds portrays companies as lacking firm principles.

  • Chip Cutter warned, "There's this risk that companies appear too cozy with the incoming administration. ... You're turning off employees, you're turning off consumers." [15:05]

• Potential for Public Outcry: Over-alignment with Trump could provoke negative reactions, especially if policies take a drastic turn, such as mass deportations.

  • Chip Cutter posed the question, "How is that all received?... Are companies really going to be as effective as they think they are?" [12:27]

Future Implications

As corporations continue their "charm offensive" towards Trump's second term, the long-term efficacy and repercussions of these strategies remain uncertain. Companies must balance their desire for political influence with maintaining consumer trust and upholding their declared values.

• Chip Cutter reflected, "I think there's a lot of companies that are in that boat... like, yeah, we do actually care about climate change." [13:09]

Future corporate actions will likely hinge on Trump's policies and the broader public's response to their alignment with the administration.

Conclusion

The episode of The Journal effectively captures the complex and shifting dynamics between Corporate America and the Trump administration. As companies navigate this political landscape, they must carefully weigh the benefits of alignment against the potential costs to their reputation and stakeholder trust. The strategies employed now will shape the future relationship between business leaders and political power.

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Notable Quotes:

• Chip Cutter: "Most of corporate America really didn't have a relationship with Trump then... lot of executives didn't know what to expect." [03:14]

• Chip Cutter: "Companies see an opportunity. They realize that they need to be in Trump's ear, that now is the time." [01:41]

• Chip Cutter: "Nikki Haley says companies and CEOs should try to be more like Dolly Parton." [07:28]

• Chip Cutter: "There's this risk that companies appear too cozy with the incoming administration... turning off employees, turning off consumers." [15:05]

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Credits:
Additional reporting by Eric Schwartzel. Produced by Kathryn Brewer, Pia Gadkari, Rachel Humphries, Ryan Knudson, Sophie Codner, Matt Kwong, and others. Fact-checking by Mary Mathis.

Transcript

[Kate Linebaugh]

After Donald Trump won the presidency in November, a flood of money started pouring into his inauguration fund.

[Chip Cutter]

We've seen one company after another really kind of follow a similar playbook for how to deal with this administration. And it starts by opening their wallets.

[Kate Linebaugh]

These donations are helping pay for stuff like galas and balls at the inauguration. And our colleague Chip Cutter has been following the money.

[Chip Cutter]

One executive after another has all decided to give a million dollars sort of name the company name, the big brand, McDonald's. McDonald's gave money to this fund. Toyota joining other major auto companies like.

[Unnamed Executive]

Ford and General motors and making $1.

[Chip Cutter]

Million donation to President Boeing. Boeing gave money to this bond.

[Kate Linebaugh]

Meta led by Mark Zuckerberg is also giving a million dollars to the fund Walmart.

[Chip Cutter]

Walmart gave money to the fund. Uber, Goldman Sachs, bank of America. The list goes on and on. Many of them making.

[Kate Linebaugh]

What are these companies getting for this money?

[Chip Cutter]

So these companies get some tickets to the inauguration. There is a candlelit dinner that will be attended by Trump and Melania Trump.

[Kate Linebaugh]

Actual things, actual things. Spending that kind of money isn't unusual for companies to get in with a new administration. But this time feels a little different because some companies that had once slammed Trump are now cozying up to him.

[Chip Cutter]

I think what has been striking this time is the level of shape shifting that's happening from what companies have done and said in the past and what they're saying now. Companies see an opportunity. They realize that they need to be in Trump's ear, that now is the time. If you want to get your views in front of him, you need to do it now. And as one person told us, the billionaires are coming around the mountain.

[Kate Linebaugh]

Welcome to the Journal, our show about money, business and power. I'm Kate LINEBAUGH. It's Friday, January 17th. Coming up on the show, corporate America comes around to Trump.

[Nikki Haley]

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[Kate Linebaugh]

Back in 2016, many business leaders were caught off guard by Trump's victory.

[Chip Cutter]

Most of corporate America really didn't have a relationship with Trump then. You know, he was kind of a political unknown. And so a lot of executives didn't Know what to expect.

[Kate Linebaugh]

You might remember one of Trump's early moves was to ask CEOs to join so called business councils, panels meant to advise him on economic matters. The bosses of companies like IBM and Pepsi signed up, but the relationship was shaky.

[Chip Cutter]

In almost from the very beginning, there were issues. Companies like Ford and others all pushed back against sort of Trump's early immigration moves. In 2017, Donald J. Trump is calling.

[Unnamed Executive]

For a total and complete shutdown of Muslims entering the United States until CEOs.

[Chip Cutter]

Quickly got out there to say how much they objected to this. You know, what was oftentimes called his Muslim travel ban.

[Kate Linebaugh]

Nearly 100 companies are joining the legal.

[Unnamed Protester]

Fight against President Trump's executive order on immigration.

[Chip Cutter]

Here's a rundown of many of the major ones. Nike, General Electric, Microsoft, and Charlottesville was the big one.

[Unnamed Protester]

You will not replace us.

[Kate Linebaugh]

It's a weekend of street battles and stark displays of racism exploding into a.

[Nikki Haley]

Deadly act of domestic terror.

[Chip Cutter]

And it was Trump's comments that there were, you know, find people on both sides essentially that really got CEOs upset. And after that happened, CEOs were almost tripping over themselves to get off of these councils and to distance themselves from Trump.

[Nikki Haley]

This just in tonight too, another CEO has quit the President's job council. Brian Krasanich of Intel said he was resigning to call attention to the, quote, divided political climate.

[Kate Linebaugh]

Merck CEO Kenneth Frazier is resigning from the President's American Manufacturing Council.

[Unnamed Protester]

Let me read you.

[Kate Linebaugh]

In response to those resignations, Trump attacked some of the CEOs and eventually shut down the business councils. Also during his first term, Trump was quick to strike out at companies that did things he didn't like.

[Chip Cutter]

He was willing to be threatening. I mean, he would make jabs at Amazon's Jeff Bezos, calling him Jeff Bozo.

[Kate Linebaugh]

For example, Trump calling for a boycott of Major League Baseball and threatening Delta Airlines and Coca Cola after their stand.

[Nikki Haley]

On Georgia's new voting law.

[Kate Linebaugh]

One company in particular really drew Trump's ire. Facebook, now known as Meta. Trump had accused its founder, Mark Zuckerberg of steering Facebook against him.

[Chip Cutter]

Trump published a coffee table photo book of his first term that showed him meeting with Mark Zuckerberg in the Oval Office. And that photo carried an ominous warning. The caption said, quote, we are watching him closely and if he does anything illegal this time, he will spend the rest of his life in prison.

[Kate Linebaugh]

Because it's like with Trump, if things sour, all of a sudden you get a nickname and you get mentioned in the tweets and you get turned on.

[Chip Cutter]

You get turned on. That's what companies are afraid of. If Trump can sort of whip up a large segment of the American public against a company or change sort of a public view of a company, that freaks executives out. They do not want consumers to turn against them either.

[Kate Linebaugh]

Then came election Day last November. Trump won both the Electoral College and the popular vote. So corporate America started looking for some advice. One person they've turned to has a lot of experience on either side of Trump. She was both his one time UN Ambassador and later his political rival.

[Chip Cutter]

So Nikki Haley is Now advising companies, CEOs and boards on how to navigate this next administration.

[Kate Linebaugh]

Okay, so she's like taking her experience of working with Trump and making it a job for herself.

[Chip Cutter]

That's right. She's telling CEOs if they are about to meet with Trump, here's how to handle that. Here's what to say.

[Kate Linebaugh]

And so what is she saying?

[Chip Cutter]

Well, she says companies and CEOs should try to be more like Dolly Parton.

[Kate Linebaugh]

Dolly Parton?

[Chip Cutter]

Yes. The beloved country music star Nikki Haley said Dolly Parton is a good example for how CEOs should operate. Even though Dolly Parton has for years supported gay rights and COVID 19 vaccine research and other efforts, her personal politics aren't really that well known.

[Unnamed Protester]

I'm not being political. I don't do politics. I'm not getting into any of that because I have a lot of fans out there and I don't want to offend anybody. And besides, I just don't get into that. And so if you are deciding you may want to ask me something more serious, don't because I'm not going to answer.

[Chip Cutter]

And Nikki Haley says this should be the model that, you know, basically CEOs should shut up. This is the advice Nikki Haley says will position companies well.

[Kate Linebaugh]

So that's the Dolly Parton strategy when it comes to having opinions in public. And then there's dealing directly with Trump. And one big business leader thinks he cracked the code during Trump's first term.

[Chip Cutter]

So for example, Apple's CEO Tim Cook has developed a real approach. And that's when he has dinner with Trump or he has a meeting with him, he will just bring one topic up. He knows that he doesn't want the conversation to wander or go in all different directions. He wants to bring up one thing and try to use that time to really advocate for his positions and try to get Trump to understand what Apple is doing.

[Kate Linebaugh]

Do you think there's something that companies Learned from Trump 1.0 that they're applying now.

[Chip Cutter]

I think they learned that they need to have a relationship with him. I think they realize that Trump is someone who values those one on one connections. They kind of know what Trump stands for now. They know how he operates. And many have come to the conclusion that it's better to engage. It's better to be sort of in his ear than it is to be on the sidelines quietly criticizing him or sort of publicly much more or loudly.

[Kate Linebaugh]

Criticizing him after the break. What companies are actually doing.

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[Chip Cutter]

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[Nikki Haley]

Bunk beds in a closet.

[Chip Cutter]

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[Kate Linebaugh]

Not long after Election Day, a lineup of private jets landed in Palm Beach, Florida. CEOs descended on Mar A Lago to have an audience with Trump.

[Unnamed Executive]

We've had everybody. Jeff Bezos came, Bill Gates came, Mark Zuckerberg came. Many of them came numerous times. The bankers have all come. Everybody's coming. I haven't had anybody saying anything bad about me. I'm not used to it, but.

[Kate Linebaugh]

And executives have been making real changes that align with Trump's vision for the country.

[Chip Cutter]

We've seen companies roll back some of their DEI efforts after the election. For example, Walmart did this. We've seen McDonald's walk back some of its DEI policies. We saw a number of big banks pull back from a UN backed climate coalition.

[Kate Linebaugh]

Over at Meta, the company ended fact checking on Facebook. It donated that million dollars to Trump's inauguration fund. And it also named Dana White, chief executive of the UFC and a friend of Trump's to its board of directors.

[Chip Cutter]

So those were just like real moves it made that could be seen as trying to make Trump happy.

[Kate Linebaugh]

There are also little things companies have done. Take Coca Cola. The company has had a strained relationship with Trump, but this week Coke gave Trump a gift.

[Nikki Haley]

The Coca Cola Company gifted Trump this special bottle commemorating his second inauguration. Look at that smile on the President Elect space.

[Chip Cutter]

Well, perhaps unsurprisingly, he's kind of loving it.

[Unnamed Executive]

The first term, everybody was fighting me. In this term, everybody wants to be my friend. I don't know my personal.

[Chip Cutter]

He's basking in all this attention and all these CEOs, wanting to get his time.

[Kate Linebaugh]

It's not yet clear how these strategies of playing nice with Trump will work out for companies in the long run.

[Chip Cutter]

You know, how is the right going to view all of these moves by CEOs and by companies? And are companies really going to be as effective as they think they are? And, you know, in donating to this fund and trying to shape policies in a way that they think Trump will appreciate, like, we'll see how that's all received.

[Kate Linebaugh]

He must see they're shape shifting.

[Chip Cutter]

I think he does. And so that's partly why some. Some question just whether this is all going to work or not.

[Kate Linebaugh]

How does that make the statements that CEOs made those years back about their values sound today?

[Chip Cutter]

Well, I think some are looking at those and trying to kind of square all this and wondering, like, where do CEOs really stand? Do they actually care about any of these issues they've talked about in the past? And I think many executives, when you talk to them quietly, would say, like, yeah, we do actually. We do still care about climate change. We do still care about equality. We just don't feel like this is a moment politically when we can speak out about those.

[Kate Linebaugh]

Are there issues where you could see CEOs taking a stand?

[Chip Cutter]

Yes. And so I keep asking about this, like, give me the scenario where you might speak out this time. And one person who leads communications for a big multinational, he said the bar is so high right now that he says, I could see us putting out a public statement if Trump does something that is just seen as so egregious, so sort of against the law, that we have to take a stand because we can't do business otherwise? It's like, I could see us weighing in there, but otherwise, if it's just sort of policies that we don't like, we're not going to say anything. And I think there's a lot of companies that are in that boat.

[Kate Linebaugh]

Do you think we'll see companies take a stand or speak out about Trump policies that could impact their businesses pretty directly, like maybe mass deportations?

[Chip Cutter]

I was with a bunch of HR executives at a small breakfast, and they were all saying that they are preparing for this exact scenario. Like, if there are mass deportations, what do we do? How do we respond? And the answer was, well, our lawyers have been advising us to have our paperwork ready to know where our employees are. You know, if there are immigration raids, for example, we better be prepared for that. It was not. Well, we're just all gonna band together and there's gonna be a really forceful public letter. I just think that those days are kind of past us.

[Kate Linebaugh]

On Monday at Trump's inauguration, the corporate charm offensive will be on full display. A bevy of high profile CEOs and business leaders have snagged tickets to be with Trump. Google boss Sundar Pichai is planning to be in the crowd, along with Jeff Bezos, Mark Zuckerberg and Tim Cook, and of course, Elon Musk. What are the risks of these kinds of moves for companies?

[Chip Cutter]

Well, I think the risk is that companies go too far and that they anger consumers, employees, other stakeholders. Many have said that there's just this risk that companies appear too cozy with the incoming administration. And that's, you know, this view among some employees, some consumers, that these companies are what some have described to us as spineless, that they're just willing to blow in whatever way the political winds blow, that they're not willing to stand up for broader principles. I mean, there are a lot of consumers, for example, that feel deeply concerned about climate change. They really do worry about the state of equality in the workforce. And they want to see companies, you know, show that they care about these things. And so I think the cost here is that you turn off employees, you turn off consumers, and you just frustrate a lot of people.

[Kate Linebaugh]

That's all for today. Friday, January 17th. Additional reporting in this episode by Eric Schwartzel. The Journal is a co production of Spotify and the Wall Street Journal. The show is made by Kathryn Brewer, Pia Gadkari, Rachel Humphries, Ryan Knudson, Sophie Codner, Matt Kwong, Colin McNulty, Jessica Mendoza, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alessandra Rizzo, Alan Rodriguez Espinosa, Heather Rogers, Pierce Singh, Jeevika Verma, Lisa Wang, Catherine Whalen, Tatiana Zamis and me, Kate Linebaugh, with help from Trina Menino. Our engineers are Griffin Tanner, Nathan Singapak and Peter Leonard. Our theme music is by so Wiley. Additional music this week by Peter Leonard, Bobby Lord, Emma Munger, Nathan Singapak, Griffin Tanner, so Wiley and Blue Dot Sessions. Fact checking by Mary Mathis. This thanks for listening. See you Monday.