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Translating Trump

Manufacturing

What “America First” Might Mean for Manufacturers

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Days before Donald Trump’s inauguration, Edelman’s Chicago office hosted a private dinner discussion with CEOs and government affairs leaders from some of the world’s largest manufacturing companies. Top of mind was assessing the incoming administration on competition, labor and trade, among other issues. A few companies represented already had experienced run-ins with the president-elect on Twitter. Others had been invited to visit Trump Tower. Such an off-the-record conversation in those early days following the election proved exceedingly helpful because all anyone knew then was that the rules of engagement had changed.

Since taking office, President Trump has continued to focus a disproportionate level of attention on the manufacturing and industrial sector. No wonder: His repeated pledge to bring back good-paying American manufacturing jobs proved a winning message.

A series of made-for-TV Oval Office meetings with car makers, industrial and pharma CEOs now aides our pattern recognition. The President offers a deal: bring manufacturing jobs back to the U.S. and he will help them by cutting regulations, speeding approval processes and otherwise leveling the international playing field. An important part of the value exchange also enables these companies to stand next to the President and discuss their commitment to their U.S.-based operations.

Other policy actions, including the cancellation of the Transpacific Trade Partnership to pursue individual bilateral agreements, possible import taxes on products from Mexico and recent travel restrictions present a more complex set of issues for companies to evaluate and respond – especially in those instance where “America First” can be easily interpreted to mean “Everyone Else Last.” Companies here and abroad find themselves playing a complex mix of offense and defense in their business and communications strategies.

This proves especially challenging for manufacturers. Certain dimensions of the administration’s policy agenda provide helpful protections and incentives, especially for domestic producers. A business-friendly administration likely will share its views on tax and regulatory relief, revenue repatriation, environmental rules and patent protection. But in areas that reflect the needs of modern production –such as workforce development, efficiencies gained by robotics, programming and automation – things start to get a bit dicier. A highly productive manufacturing sector simply doesn’t require armies of blue collar labor as it once did.

As a result, the election-winning rhetoric playing on a populist nostalgia is, in reality, simply incongruent with a technology- and service-driven future.  This creates risk, not only for President Trump but for manufacturers as well. Edelman’s 2017 Trust Barometer reveals a global implosion of trust that encompasses business, and that partly reflects fears among the public about innovation’s continued impact on jobs. Business has done little about communicating how those advances will affect people’s jobs. And the old jobs aren’t returning.

The full complexity of this dilemma hasn’t sunk in yet, but industrial companies must start framing the conversation now.  Here are a few things businesses should be thinking about today:

Engage in the conversation. This may be the most business-friendly administration ever, and President Trump is demonstrating a high degree of receptivity to meet “CEO to CEO.” If you haven’t tried getting an audience with the new administration, absolutely nothing is holding you back. This probably is the best way to determine if the administration’s primary goal will be job or value creation. And if President Trump thinks all manufacturing activities deserve equal treatment, or if the government must target its efforts.  

Get local. Whether your company is based in the US or overseas, local engagement has become more important than ever.  Enable local operations to double down on their often-underfunded community relations and employee engagement efforts.  Every day, companies here and abroad are making decisions to invest right here in America and often not taking enough credit.

Be clear about what the future looks like for your employees. America’s manufacturing sector has grown exponentially more productive over the past half-century but has created fewer factory jobs.  If your business will be increasingly automated, clearly set expectations on how and when that shift may occur. Shift the focus to the kinds of jobs your business will be creating and prepare employees for the pivot, including those who will transition into new roles outside the company into service sector jobs.

Bring others along for the ride. To his credit, President Trump is talking to both industry and labor. It’s hard to argue with productivity as a goal, and companies assisted by the new administration must do a better job of removing uncertainty about that term for their employees while investing more heavily in workforce development in a way that invites labor along for the ride.

No matter your personal politics, it’s healthy to see America talking about its workforce again. Unlike the most recent “maker movement” that seemed to dwell either on 3D printing or micro business craftspeople on Etsy, we now are talking about the making of stuff at scale. A lot more details must be ironed out, but that makes it the right time to help shape and perhaps even lead the conversation about where manufacturing is headed next.

Matthew Vander Laan is a general manager in Edelman’s Chicago office.

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