President Donald Trump reached out to two dozen of America’s largest companies last month in an unusual appeal: Help him come up with a workable plan to put American jobs back in the manufacturing sector. Suffice it to say, he got an earful.
Twenty-four CEOs, selected to represent four key focuses of the Trump reform agenda, turned up at the White House on Feb. 23 to “brainstorm” with the president and a panel of advisors about the biggest stumbling blocks to growth when comes to taxes and trade, infrastructure needs, federal regulations, and workforce potential.
The CEOs, including Mario Longhi of U.S. Steel, Phebe Novakovic of General Dynamics, Marillyn Hewson of Lockheed Martin and Inge Thulin of 3M, were assigned to working groups that later reported to the president.
Members of the press were invited to the first part of the meeting, but according several reporters, they were restricted from quoting CEOs by name during the meeting. Interestingly, much of what companies saw as key points was disclosed publicly after the meeting in press follow-ups. The following are some of the key points U.S. manufacturing companies felt the president should know.
When it came to government oversight, CEOs assigned to reporting on the effects of regulations and trade pretty much agreed with Trump’s view that the Environmental Protection Agency’s “overreach” is hampering business potential. “The Clean Power Plan should be re-crafted to address concerns about EPA overreach infringing on state authority, while providing maximum flexibility for compliance,” the CEOs said, according to a press release from the National Economic Council.
The CEOs also called for the repeal of an Obama-era regulation to make 4 million more workers eligible for overtime pay. The regulation is currently on hold by the courts. Business leaders said it was unaffordable; the Department of Labor is appealing the court ruling that blocks the rule from taking effect.
Affordable Care Act (ACA) regulations also need to be revised, say the CEOs. The ACA requires employers to pay a 40 percent tax if the aggregate cost of the medical plan they offer is in excess of a set dollar amount. (These high-priced plans are often called “Cadillac plans.”) That tax is meant to keep plan options affordable. According to the roundtable participants, however, the increased cost for employers is “staggering.” The CEOs advised eliminating the tax.
Tax and overseas manufacturing
Some of the CEOs supported the idea of a “border-adjusted tax” that Republicans in Congress want to see passed. The tax would essentially lend favor to products manufactured in the U.S. and would exclude exports.
Trump hasn’t said if he’ll back the strategy, but retailers (who weren’t included in this series of roundtables) have strongly opposed the tax. Companies such as Target and Walmart, whose market often relies on overseas manufacturers, said the retail market would suffer if the border tax were imposed.
Workforce of the future
When it comes to employing Americans in factories and tech industries, the CEOs said there were plenty of jobs to offer, but not enough qualified applicants.
The issue isn’t that the jobs are being “taken” out of the U.S., but that U.S. high school graduates often don’t have the math and language skills that overseas applicants are able to demonstrate, the CEOs said. Aligning educational curricula with what vocational jobs demand would help increase job opportunities for U.S. high school graduates, they insisted in the meeting with Trump.
And vocational training carries a stigma here in the U.S., some CEOs explained, unlike in Europe and the U.K. where blue-collar, industry-trained jobs are viewed as professional choices. Expanding opportunities for public-private partnerships such as those being pushed by some auto companies would help ensure more technical jobs, the execs said.
Many of the representatives were receptive to Trump’s pro-business strategies, which Michael Dell, founder, chairman and CEO of Dell Technologies, told Business Insider would “bring capital back onto the balance sheet of the United States.”
Trump’s immigration policies appear to have been diplomatically avoided, with some participants noting that members of the regulatory business roundtable “stand ready to help avoid unintended consequences that would inhibit the ability for U.S. companies to drive economic growth and be globally competitive.”
What wasn’t heard
The roundtable focused on large-scale manufacturing companies’ needs. It didn’t necessarily address Main Street small businesses that often have different concerns but are impacted by the supply-chain decisions of those larger companies.
The meeting also didn’t address how service-related industries would be impacted by these suggestions. How will ethnic restaurants, for example, deal with a border import tax that clearly benefits large manufacturers but could restrict those restaurants from offering affordable services and selling authentic imported goods?
Bringing “millions of jobs” back to the U.S. means ensuring those industries that depend on the resources and values already in place have a voice in the process as well.
Image credit: Flickr/Nicole Yeary