Davos CEOs ‘go local’ on supply chain in Trump era
DAVOS: Business leaders in Davos, traditionally the high priests of globalisation, are talking up the benefits of local production this week to shield themselves from criticism from incoming US President Donald Trump.
Elected on a jobs-focused ‘America First’ platform, Trump has taken to Twitter to rebuke major companies like General Motors, Lockheed Martin and United Technologies , either for making goods in Mexico or for the price of their products.
At this week’s World Economic Forum ( WEF), a gathering of business and political elites in the Swiss Alps synonymous with free markets, company bosses said they were now preparing to adjust to the Trump era.
“The basic message is to be more national, don’t just be global,” Richard Edelman, CEO of communications marketing firm Edelman, told Reuters.
“Let’s try and pre-empt that tweet by having a long-term discussion about the supply chain.”
General Motors on Tuesday highlighted moves it said would add nearly 2,000 US manufacturing jobs, including a decision to shift some production of axles to an American factory, rather than have them supplied from Mexico. The automaker said it wanted to “build where we sell”.
“There is no doubt we need to adapt,” Carlos Ghosn, chief ex-
The basic message is to be more national, don’t just be global. Richard Edelman, CEO of Edelman
ecutive of Renault-Nissan , told Reuters.
“All carmakers have to revise their strategy as a function of what is coming.”
At the same time, companies are reviewing potential mergers and rethinking job cuts, fearing the stigma of being labelled ‘antiAmerican’.
What companies have yet to spell out is the economic cost of such shifts or the extent of localisation that will be needed to keep the peace with the new White House administration.
Adding to the incentive to increase US manufacturing is the promise of lower corporate taxes under the Trump administration.
“It could mean increased investment in the US,” Novartis CEO Joe Jimenez told Reuters.
Vishal Sikka, chief executive of Infosys, which provides IT services to large companies including banks, said his company expected more business from helping companies localise. — Reuters