Executive Briefings

Supply Chain Regulation: CEOs Taking Trump Seriously, But Not Literally

The word in Davos: Ignore the tweets. Executives gathered in the Swiss resort for the World Economic Forum last week kept repeating, like a soothing mantra, that Donald Trump is at heart a pragmatist who will avoid trade wars and regulations that make it harder to do business.

"What somebody's saying is not necessarily what they're going to do," said David Cote, chief executive officer of Honeywell International Inc. He should hope so: Honeywell is a global manufacturing giant with far more employees outside the U.S. than in, and it has made major bets on projects like supplying parts for China's first commercial jet.

With stock markets nearing record highs and business-friendly figures like billionaire investor Wilbur Ross named to the cabinet, a conviction has set in that a man who came to power as an anti-establishment populist might in fact usher in a golden age for business.

“In the end if he knows the facts, he’ll respond according to the facts,” said Hideaki Omiya, chairman of Mitsubishi Heavy Industries.

The stakes are high for companies that have prospered during the era of globalization, locating factories where labor is cheap and finding suppliers that can offer components at the most competitive prices. Trump has criticized the arrangements that make those integrated operations possible, calling the North American Free Trade Agreement — which has allowed automakers like Ford Motor Co. to build supply chains spanning the length of the continent — a “disaster.” During his campaign, Trump blasted the multilateral economic and political order, saying China, the most important U.S. trading partner, had been allowed “to rape our country.”

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"What somebody's saying is not necessarily what they're going to do," said David Cote, chief executive officer of Honeywell International Inc. He should hope so: Honeywell is a global manufacturing giant with far more employees outside the U.S. than in, and it has made major bets on projects like supplying parts for China's first commercial jet.

With stock markets nearing record highs and business-friendly figures like billionaire investor Wilbur Ross named to the cabinet, a conviction has set in that a man who came to power as an anti-establishment populist might in fact usher in a golden age for business.

“In the end if he knows the facts, he’ll respond according to the facts,” said Hideaki Omiya, chairman of Mitsubishi Heavy Industries.

The stakes are high for companies that have prospered during the era of globalization, locating factories where labor is cheap and finding suppliers that can offer components at the most competitive prices. Trump has criticized the arrangements that make those integrated operations possible, calling the North American Free Trade Agreement — which has allowed automakers like Ford Motor Co. to build supply chains spanning the length of the continent — a “disaster.” During his campaign, Trump blasted the multilateral economic and political order, saying China, the most important U.S. trading partner, had been allowed “to rape our country.”

Read Full Article