At 7:30 a.m. on January 3, as most workers were just returning to their jobs after the holidays, Donald Trump picked up his phone and fired a virtual cannonball at America’s largest automaker. “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border,” he tweeted. “Make in U.S.A. or pay big border tax!”
Trump’s threat was quickly shared or liked nearly 100,000 times on Twitter, and soon dominated the news. GM’s stock dropped in premarket trading. “I had been in my office for barely 40 minutes after the New Year, and all of a sudden my day went whoooosh,” recalls a source familiar with the situation at GM. “The question was, How should [the company] react?”
There was no perfect solution. Part of the problem was that Trump’s tweet wasn’t exactly true. GM sold around 190,000 Chevrolet Cruzes in the U.S. last year, and just 2.4% of them, or roughly 4,500 vehicles, were imported from Mexico. The majority of models were actually built at a plant in Lordstown, Ohio. The situation seemed to cut to the core of GM’s values: whether the company believed in the future of U.S. manufacturing, of U.S. jobs. Complicating the matter, CEO Mary Barra had recently agreed to join Trump’s economic advisory council. Would any pushback damage her relationship with the incoming administration? The best course of action, two sources familiar with the situation say, was “to take a big, deep breath” and “calmly” clarify the facts in a three-sentence public statement. By the end of the day, GM’s stock had rebounded. (Two weeks later, when GM announced a $1 billion investment in U.S. operations—which had been long in development, according to The Wall Street Journal—Trump offered up a thank-you tweet.)
GM’s measured response may have prevented any lasting damage, but the fact that it was necessary is a sign of just how fraught the political climate now is for U.S. companies. Across industries, many big brands are contorting themselves to avoid politics altogether, lest they draw the ire of customers, employees, shareholders, or the president himself. But when even the most trivial of Twitter spats can spiral into hashtag-fueled boycotts that call into question a brand’s reputation, it’s become clear that no company is safe from being dragged into the swamp.
Shortly after the election, Grubhub had to do damage control after an internal message from its CEO seemed to suggest that Trump supporters were not welcome at the company’s workplace. New Balance faced upheaval after an executive expressed support for one of Trump’s trade policies. Meanwhile, the president has been wielding his 140-character bully pulpit to chastise brands from Nordstrom to Boeing, creating volatility for their stocks, at least temporarily. And then there is the controversial executive order on immigration—the so-called travel ban—which catalyzed unprecedented levels of corporate activism. “Anyone who says the president isn’t affecting how they’re looking at the world isn’t being honest,” says the source involved with GM. “The key is, don’t let it paralyze you.”
What’s the strategy for corporate leadership in the face of such uncertainty? We canvassed CEOs, venture capitalists, branding executives, academics, and Washington lobbyists for answers. There may be no universal road map for the years ahead. Every company, after all, has its unique set of obligations to employees, customers, and shareholders. Still, studying how businesses have been buffeted during the first few months of the new administration offers clues for navigating the inevitable—and sometimes inescapable—hazards of the Trump era. Here is our five-part survival guide.
When it comes to politics, companies traditionally avoid picking sides. Why risk alienating half of your customer base—or worse, your employees? The instinct of many leaders to keep their heads low and brands above the fray is understandable—and possible, in many instances. “Every company has constituents,” says Keith Rabois, a Silicon Valley–based venture capitalist known for his outspoken views on politics, “and CEOs and their leadership teams need to represent all of those people, not just a subset.”
That changed for many companies on January 27, when President Trump signed his initial executive order on immigration. The travel ban rocked the business world, with the media rushing to press companies on its morality, its impact on their employees, and whether they felt it was a dangerous move toward isolationism. The response from many companies, at first, was vague concern, with corporate giants including Disney, Morgan Stanley, and Verizon skating by on “no comments” or press releases about supporting affected employees.
But in Silicon Valley—in an industry largely built by immigrants, with an international customer base and a strong culture of progressive values—such tepid tact quickly became untenable. Netflix CEO Reed Hastings set the tone by calling Trump’s actions “so un-American it pains us all.” Within a few days, tech companies were coalescing into a front of opposition to the ban.
Not all of them found their voice immediately. Google cofounder Sergey Brin, an immigrant himself, joined protesters at San Francisco International Airport the night after the ban was signed, but clarified to reporters that he was there in a personal capacity. The next day, the company set up a $2 million crisis fund for nonprofits working with refugees, which could be matched up to $2 million by employees. On Monday, thousands of Google employees staged a walkout in protest of Trump’s order. CEO Sundar Pichai (also an immigrant) and Brin joined the protesters on the search giant’s Mountain View, California, campus. “This is a debate about fundamental values,” Brin told the crowd. “I hope this energy carries forward in many different ways, beyond what just our company can do, beyond what just companies can do, but as a really powerful force and a really powerful movement.” Inspired, in part, by its community of employees, Google was announcing what it stood for as a company.
As politics continues to dictate the national conversation, more industries may be pulled into the debate. It’s hard to imagine Sephora or Office Depot, say, having to communicate their public policy. But what now seems impossible could soon be unavoidable. “Trying to keep your brand out of the cultural conversation today isn’t just a poor strategy,” says Jonah Bloom, chief strategy officer of ad agency KBS, which works with companies like American Express and BMW. “It’s a pipe dream.”
As Trump came into office, Starbucks embraced its identity as a “third place,” a nonhome, nonwork respite for all who walk through its doors. With 238,000 employees in 75 countries—and a whopping 90 million customers visiting his stores each week—chairman Howard Schultz has used this prism to consider public issues over the years, leveraging the coffee chain’s brand to support gun control, education access, and LGBT rights, among other things.
Schultz has held to this strategy in recent months. As the president pushed to repeal the Affordable Care Act, Starbucks assured its employees that their coverage would be protected. After the travel ban went into effect, Schultz committed to hiring 10,000 refugees at its stores around the world over the next five years. And with Trump continuing to advocate for a wall along the southern border, Starbucks, which operates 600 stores in Mexico, has promised to support and invest in its employees and partners there despite proposed trade sanctions and immigration restriction. It is also flexing its political muscle in favor of the Deferred Action for Childhood Arrivals (DACA) policy. “Let me assure you that we will stay true to our values,” Schultz stressed in a recent letter to his employees, “taking the actions that are squarely within our ability to control.”
Not every company can commit to hiring 10,000 new employees in response to a government policy it doesn’t like. But there are other ways of taking action—beyond just making noise. Amazon and Microsoft both expressed unease about the travel ban, yet they also took specific steps to lift or change it. (Both companies rely on global talent and customer bases.) Amazon had its public policy team calling senior administration officials to stress its opposition, and the company reached out to congressional leaders to seek legislative alternatives. Microsoft, likewise, pressed the Trump administration for changes. Meanwhile, the Washington-based companies were among the first to support the state’s lawsuit against the bill. (More than 100 tech companies would soon sign an amicus brief opposing the order.) As Amazon CEO Jeff Bezos noted in a memo to his staff, “I want you to know that the full extent of Amazon’s resources are behind you.”
One holdout among tech leaders distancing themselves from the Trump administration: Tesla and SpaceX CEO Elon Musk. When Trump convened his council of economic advisers on a frigid morning in Washington, D.C., just days after signing the travel ban, CEOs of some of the most important U.S. companies arrived at the west gate of the White House, among them IBM’s Ginni Rometty, PepsiCo’s Indra Nooyi, and Walmart’s Doug McMillon. GM CEO Barra got dropped off in a tanklike GMC Yukon, and Musk, of course, pulled up in a Tesla.
The image of Musk, who has committed his life to renewable energy, stepping into the White House for a meeting with Trump, who has called global warming a hoax and vowed to dismantle environmental regulations at home, was jarring. But in the days leading up to the meeting, Musk had made a compelling case for taking a seat at the table. Before and after the meeting, he was a constant presence on Twitter, taking on critics. “Activists should be pushing for more moderates to advise the president, not fewer. How could having only extremists advise him possibly be good?” he wrote on Twitter. “I believe at this time that engaging on critical issues will on balance serve the greater good.”
For Musk, criticizing the president and meeting with him are not mutually exclusive. (Tesla and SpaceX did later sign on to the amicus brief against the travel ban.) Musk has indicated that he has used his meetings with Trump to engage with the White House on a range of issues, including climate change and the carbon tax, as well as manufacturing, a centerpiece of the president’s agenda. In the same way, Apple CEO Tim Cook has spoken up about the dangers of fake news, which could be interpreted as a protest against the president, while also dining with Trump’s son-in-law turned consigliere Jared Kushner.
Noticeably absent at the advisory council meeting was Travis Kalanick. In dramatic fashion, the CEO of Uber had quit the council the previous day. Employees had been pressuring him to do so for days, despite the fact that Kalanick announced a $3 million fund for drivers affected by the travel ban and promised to voice opposition during his meeting with Trump. Customers had started a #DeleteUber campaign, believing Kalanick to be putting his business interests above all else. After 200,000 people reportedly quit the app, Kalanick resigned from the council, writing that his participation “was not meant to be an endorsement of the president or his agenda but unfortunately it has been misinterpreted to be exactly that.”
Some Washington insiders were stunned by this move: The idea that Kalanick couldn’t find ways to work with Trump on some issues while disagreeing with him on others seemed ludicrous—and shortsighted. If anything, they argue, Uber would be better served if Kalanick made his case against the immigration order directly, rather than giving up his leverage altogether. “It’s not every day that you are put in a position to speak truth to power like that,” says one D.C. power broker who advises several other members of the economic council.
Did Kalanick miscalculate? His change in posture is unlikely to increase Uber’s appeal among his dissatisfied customers, nor does it help his own standing. And on immigration, Kalanick now has less impact than ever. As one lobbyist who has worked on behalf of Uber argues, “Elon is in a position where he can actually tell Trump, ‘This immigration policy is wrong.’ Travis would’ve been vital to that conversation.”
Under Armour CEO Kevin Plank is on another of the president’s advisory panels, this one related to manufacturing, a position arguably of particular significance for a challenger brand that wants to demonstrate its cultural leadership. So when Plank appeared on CNBC last month, he may have felt emboldened to address policy topics, briefly praising the impact President Trump could have on his industry. “To have such a pro-business president is something that is a real asset for the country,” he said.
It was a tiny portion of a 26-minute-long interview, yet it sparked an immediate public onslaught. The Twittersphere, interpreting Plank’s comments as an endorsement of all of Trump’s policies, went after Under Armour. Soon many of the company’s biggest sponsored athletes and celebrities, including Stephen Curry, Misty Copeland, and Dwayne Johnson, were speaking out. (It didn’t help that this was happening just as rival Nike was launching a pointed new ad campaign celebrating equality.) By the following week, an analyst went so far as to downgrade Under Armour’s stock, writing to investors, “[This] simply cannot be good for business.”
For a time, it seemed as if Under Armour was hobbled. The company initially released a 280-word statement that suggested that Plank’s comments were related to Under Armour’s support for domestic manufacturing. When that didn’t work, it released a second statement coming out forcefully against the travel ban. Finally, Plank took out a full-page ad in The Baltimore Sun to apologize. “I want to clarify,” Plank wrote, “exactly the values for which Under Armour and I stand.”
If Under Armour’s response felt clumsy and stilted, it’s because digging out of the swamp is a dirty business. “Politics is a no-win situation,” Elon Musk recently tweeted. “Somebody is going to hate what you say no matter what that is.” But what made Plank’s initial faux pas perilous is that it implied a brand allegiance between Under Armour and Trump. What first looked like opportunity—to be considered among America’s leading businesses by participating in the president’s advisory process—quickly became something very different.
The thin line between opportunity and opportunism has been evident since Trump’s inauguration, perhaps nowhere more notably than in February’s Super Bowl ads. Several brands could have been critiqued for trying to co-opt the emotion around the immigration ban: Airbnb, Coca-Cola, and perhaps most of all Budweiser. Yet that risk was largely avoided. Budweiser’s ad, which had been in development months before the travel ban was signed, told the story of a German immigrant named Adolphus Busch coming to America, where he overcomes hardship, meets Eberhard Anheuser, and creates—what else?—a beer company. Tagline: “Anheuser-Busch: When nothing stops your dream, this is the beer we drink.”
On the surface, the ad smacked of opportunism: a chance to use one of the most talked-about issues of the past year to command the spotlight. It’s not as if immigration policy is core to Budweiser. But the spot, which was clever and heartwarming, didn’t come off as taking a political stance so much as reminding us of our shared cultural values. This is, after all, a company so wrapped in patriotism that it temporarily rebranded its beer as “America” ahead of the November election. Perhaps that’s why the ad has since racked up 30 million views on YouTube (despite, yes, a few calls for a boycott).
Most brands are still unaccustomed to weighing in on politics. The best efforts, says Wanda Pogue, chief strategy officer of Saatchi & Saatchi New York, are when companies embrace issues and principles that are authentically tied to their brands and expertise. That’s why you see Facebook and Google working to bridge the digital divide, and why American Express and PwC support causes related to improving financial literacy. “It is essential that companies remain true to their inherent values and do not come across as opportunistic,” Pogue says. “Their position needs to be genuine to their DNA.”
Rose Marcario, the CEO of Patagonia, isn’t afraid of engaging in the public debate. At a time when many companies are cowing to potential controversy, she seems to have renewed the outdoor-apparel maker’s commitment to corporate activism.
Four days after the inauguration, Marcario published an open letter criticizing the ties between Scott Pruitt, Trump’s then-proposed EPA head, and the fossil-fuel industry. (“We expected the worst . . . and we got it.”) And she’s thrown the company’s weight on social media behind the rogue federal agency Twitter accounts posting #ClimateFacts to counter the new administration’s skepticism of global warming. “We have to stand up for our values,” Marcario tells me when I ask about Patagonia’s recent actions. “Our customers expect it.”
For Patagonia, principles are simply part of business, thanks to the progressive values instilled by founder Yvon Chouinard. So when issues like the Keystone Pipeline come up, customers know that Patagonia will rally behind protesters. Employees do too. In that way, its activism is palatable and natural. “This is nothing new for us,” Marcario says. “We didn’t agree with everything President Obama did either.”
As a privately held company and certified B Corporation, Patagonia is in a unique position to pursue its mission. But even with these advantages, being a values-driven company requires years of consistent commitment. It also takes courage—a belief in mission that won’t be rattled by boycotts, cries of protest, or even a tweet from the president.
Is Marcario worried her advocacy will put Patagonia in Trump’s crosshairs? “Oh, god, I don’t even think about that!” she says with a big laugh. “Honestly, it’s not even on my radar.”
Additional reporting by Jeff Beer and Ruth Reader.