Trump wall is 30 feet of political panic for edgy companies
Bloomberg News
DALLAS — Hundreds of companies have been eyeing work on President Donald Trump’s 30-foot border wall with Mexico. Some, however, won’t touch it with a 10-foot pole.
Mexican cement giant Cemex SAB won’t participate, though it is well positioned to profit with plants on both sides of the border.
Neither will Vinci SA, a big French engineering company, after CEO Xavier Huillard cited the “sensitivities” of employees. Emmanuel Macron, front-runner for the French presidency, has warned LafargeHolcim Ltd., the world’s largest cement maker, to steer clear. Union leaders at that company have branded the wall undemocratic.
And Democratic lawmakers in California — the state that, for many, stands for everything Mr. Trump doesn’t — have gone further, threatening to cut ties with companies that work on the project.
“If they participate in something so harmful to California’s economy and environment as a wall, then we don’t want to do business with them,” said state Senator Ricardo Lara, who introduced legislation that would blackball them from government contracts.
There is little doubt that if Congress finds as much as $25 billion to construct the wall, someone will happily take it. But increasingly, major corporations are weighing potential profit against political costs.
Mr. Trump touted his wall from the beginning of his campaign as a way to cut off the northward flow of Mexicans, whom he labeled criminals, drug dealers and rapists. Supporters cheered, while opponents whacked Trump pinatas. Now, companies on both sides of the more than 1,900mile border and across the Atlantic are caught in the political storm.
LafargeHolcim will get pressure from workers, said Sylvain Moreno, a leader of the union that represents employees. The Confederation Generale du Travail, one of France’s most powerful labor organizations, would communicate its opposition even if it probably wouldn’t resort to slowdowns or strikes.
The wall and Mr. Trump’s insistence that Mexico pay for it have incensed broad swaths of that nation’s population. The potential consumer backlash for any company daring to profit makes it unlikely that cement producers including Cemex and Grupo Cementos de Chihuahua SAB and steelmakers such as Altos Hornos de Mexico SAB or Industrias CH SAB would participate. Cemex and Grupo Cementos have plants in Texas and near the Mexican border that normally would be in a good position to supply the project.
Many U.S. companies have kept low profiles. Fluor Corp., Chicago Bridge & Iron Co. and KBR Inc. are among the few publicly traded ones on a government list of businesses that have expressed interest in bidding. KBR declined to comment, and Chicago Bridge & Iron didn’t return phone calls and emails.
“Fluor is evaluating the current requests for proposals, but the company has not made any decisions,” said spokesman Brian Mershon.
Not all businesses are cowed. Closely held R.E. Staite Engineering Inc. has shrugged off the threat from California legislators as it prepares a bid. The San Diego-based construction concern has taken on projects that spark passions, including the cleanup of the Exxon Valdez oil spill in Alaska and building a wharf for a nuclear-powered aircraft carrier, said Ralph Hicks, senior vice president of governmental affairs.
In the call for bids, the Homeland Security Department has asked companies to build demonstration structures in San Diego. The wall must be resistant to pickaxes, climbing and tunneling and “aesthetically pleasing” — at least on the north side.
The Associated General Contractors of America has condemned moves to punish businesses that help erect it.
“It’s troubling that some state and local politicians may seek to propose measures that would exclude hard-working Americans just because they’re doing honest work on behalf of the U.S. government to build public infrastructure,” said Brian Turmail, spokesman for the Arlington, Va.-based trade group.
Large companies may be able to pass up bids because of an influx of work related to increased defense spending and Mr. Trump’s plan to boost funding for other infrastructure operations, said Michael Dudas, an analyst with Vertical Research Partners who covers engineering and construction companies.
“If it were a different part of the cycle, there might be more excitement about getting a contract for the wall,” he said.