Chip Cutter
Appearances
The Journal.
Is DEI Done?
The high court saying colleges and universities can no longer rely on race in the admissions process.
The Journal.
Corporate America's Embrace of Trump 2.0
I think what has been striking this time is the level of shape-shifting that's happening. From what companies have done and said in the past and what they're saying now, companies see an opportunity. They realize that they need to be in Trump's ear, that now is the time. If you want to get your views in front of him, you need to do it now.
The Journal.
Corporate America's Embrace of Trump 2.0
And as one person told us, the billionaires are coming around the mountain.
The Journal.
Corporate America's Embrace of Trump 2.0
We've seen one company after another really kind of follow a similar playbook for how to deal with this administration. And it starts by opening their wallets.
The Journal.
Corporate America's Embrace of Trump 2.0
Most of corporate America really didn't have a relationship with Trump then. You know, he was kind of a political unknown. And so a lot of executives didn't know what to expect.
The Journal.
Corporate America's Embrace of Trump 2.0
And almost from the very beginning, there were issues. Companies like Ford and others all pushed back against Trump's early immigration moves in 2017.
The Journal.
Corporate America's Embrace of Trump 2.0
CEOs quickly got out there to say how much they objected to this in what was oftentimes called his Muslim travel ban.
The Journal.
Corporate America's Embrace of Trump 2.0
Here's a rundown of many of the major ones. Nike, General Electric, Microsoft. And Charlottesville was the big one.
The Journal.
Corporate America's Embrace of Trump 2.0
And it was Trump's comments that there were fine people on both sides, essentially, that really got CEOs upset. And after that happened, CEOs were almost tripping over themselves to get off of these councils and to distance themselves from Trump.
The Journal.
Corporate America's Embrace of Trump 2.0
He was willing to be threatening. I mean, he would make jabs at Amazon's Jeff Bezos, calling him Jeff Bozo, for example.
The Journal.
Corporate America's Embrace of Trump 2.0
One executive after another has all decided to give a million dollars. Sort of name the company, name the big brand. McDonald's.
The Journal.
Corporate America's Embrace of Trump 2.0
Trump published a coffee table photo book of his first term that showed him meeting with Mark Zuckerberg in the Oval Office. And that photo carried an ominous warning. The caption said, quote, we are watching him closely. And if he does anything illegal this time, he will spend the rest of his life in prison.
The Journal.
Corporate America's Embrace of Trump 2.0
you get turned on. That's what companies are afraid of. If Trump can sort of whip up a large segment of the American public against a company or change sort of a public view of a company, that freaks executives out. They do not want consumers to turn against them either.
The Journal.
Corporate America's Embrace of Trump 2.0
So Nikki Haley is now advising companies, CEOs, and boards on how to navigate this next administration.
The Journal.
Corporate America's Embrace of Trump 2.0
That's right. She's telling CEOs if they are about to meet with Trump, here's how to handle that, here's what to say. And so what is she saying? Well, she says companies and CEOs should try to be more like Dolly Parton.
The Journal.
Corporate America's Embrace of Trump 2.0
Yes, the beloved country music star. Nikki Haley said... Dolly Parton is a good example for how CEOs should operate. Even though Dolly Parton has for years supported gay rights and COVID-19 vaccine research and other efforts, her personal politics aren't really that well known.
The Journal.
Corporate America's Embrace of Trump 2.0
And Nikki Haley says this should be the model that, you know, basically CEOs should shut up. This is the advice Nikki Haley says will position companies well.
The Journal.
Corporate America's Embrace of Trump 2.0
So, for example, Apple's CEO, Tim Cook, has developed a real approach. And that's when he has dinner with Trump or he has a meeting with him, he will just bring one topic up. He knows that he doesn't want the conversation to wander or go in all different directions.
The Journal.
Corporate America's Embrace of Trump 2.0
He wants to bring up one thing and try to use that time to really advocate for his positions and try to get Trump to understand what Apple is doing.
The Journal.
Corporate America's Embrace of Trump 2.0
I think they learned that they need to have a relationship with him. I think they realized that Trump is someone who values those one-on-one connections. They kind of know what Trump stands for now. They know how he operates.
The Journal.
Corporate America's Embrace of Trump 2.0
And many have come to the conclusion that it's better to engage, it's better to be sort of in his ear than it is to be on the sidelines quietly criticizing him or sort of publicly much more or loudly criticizing him.
The Journal.
Corporate America's Embrace of Trump 2.0
We've seen companies roll back some of their DEI efforts. After the election, for example, Walmart did this. We've seen McDonald's walk back some of its DEI policies. We saw a number of big banks pull back from a UN-backed climate coalition.
The Journal.
Corporate America's Embrace of Trump 2.0
So those were just like real moves it made that could be seen as trying to make Trump happy.
The Journal.
Corporate America's Embrace of Trump 2.0
Well, perhaps unsurprisingly, he's kind of loving it.
The Journal.
Corporate America's Embrace of Trump 2.0
He's basking in all this attention and all these CEOs wanting to get his time.
The Journal.
Corporate America's Embrace of Trump 2.0
You know, how is the right going to view all of these moves by CEOs and by companies? And are companies really going to be as effective as they think they are in donating to this fund and trying to shape policies in a way that they think Trump will appreciate? Like, we'll see how that's all received.
The Journal.
Corporate America's Embrace of Trump 2.0
So these companies get some tickets to the inauguration. There is a candlelit dinner that will be attended by Trump and Melania Trump.
The Journal.
Corporate America's Embrace of Trump 2.0
I think he does. And so that's partly why some some question just whether this is all going to work or not.
The Journal.
Corporate America's Embrace of Trump 2.0
Well, I think some are looking at those and trying to kind of square all this and wondering, like, where do CEOs really stand? Do they actually care about any of these issues they've talked about in the past? And I think many executives, when you talk to them quietly, will say, like, yeah, we do, actually. We do still care about climate change. We do still care about equality.
The Journal.
Corporate America's Embrace of Trump 2.0
We just don't feel like this is a moment politically where we can speak out about those.
The Journal.
Corporate America's Embrace of Trump 2.0
Yes, and so I keep asking about this. Like, give me the scenario where you might speak out this time.
The Journal.
Corporate America's Embrace of Trump 2.0
And one person who leads communications for a big multinational, he said the bar is so high right now that he says, I could see us putting out a public statement if Trump does something that is just seen as so egregious, so sort of against the law that we have to take a stand because we can't do business otherwise. He's like, I could see us weighing in there.
The Journal.
Corporate America's Embrace of Trump 2.0
But otherwise, if it's just sort of policies that we don't like, we're not going to say anything. And I think there's a lot of companies that are in that boat.
The Journal.
Corporate America's Embrace of Trump 2.0
I was with a bunch of HR executives at a small breakfast, and they were all saying that they are preparing for this exact scenario. Like, if there are mass deportations, what do we do? How do we respond? And the answer was, well, our lawyers have been advising us to have our paperwork ready, to know where our employees are.
The Journal.
Corporate America's Embrace of Trump 2.0
If there are immigration raids, for example, we better be prepared for that. It was not, well, we're just all going to band together and there's going to be a really forceful public letter. I just think that those days are kind of past us.
The Journal.
Corporate America's Embrace of Trump 2.0
Well, I think the risk is that companies go too far and that they anger consumers, employees, other stakeholders. Many have said that there's just this risk that companies appear too cozy with the incoming administration. And that's this view among some employees, some consumers, that these companies are what some have described to us as spineless, that they're just willing to blow
The Journal.
Corporate America's Embrace of Trump 2.0
in whatever way the political winds blow, that they're not willing to stand up for broader principles. I mean, there are a lot of consumers, for example, that feel deeply concerned about climate change. They really do worry about the state of equality in the workforce, and they want to see companies show that they care about these things.
The Journal.
Corporate America's Embrace of Trump 2.0
And so I think the cost here is that you turn off employees, you turn off consumers, and you just frustrate a lot of people.
WSJ What’s News
Trump’s Clash With the Library of Congress Sets Up Constitutional Fight
We spoke with one job seeker who said that you look at the listings right now, and it's just crazy what one job is asking for. It really could be multiple positions in that single job. And we've heard this from managers, too. A lot of companies right now say they want to flatten their ranks.
WSJ What’s News
Trump’s Clash With the Library of Congress Sets Up Constitutional Fight
So what that means is pushing out the middle managers, but those managers that remain are now having to do the roles of multiple people. And what workers say is that companies just want it all right now, and they can largely sort of do that. They can get away with it because the job market is cooling. And it's a
WSJ What’s News
Trump’s Clash With the Library of Congress Sets Up Constitutional Fight
Kind of a tricky time for workers trying to navigate all this and trying to figure out, you know, what can we say if we do complain? Will our bosses even hear us? There's some evidence. No.
WSJ What’s News
Trump’s Clash With the Library of Congress Sets Up Constitutional Fight
I mean, there was a recent incident at Uber where the company rolled back its sabbatical policy, where up until now, the company had given its corporate employees paid one month sabbatical after five years of the company. Well, it's now going to be eight years. And as you can imagine, that didn't go over all that well.
WSJ What’s News
Trump’s Economic Messaging Spooks CEOs. Why Are They Keeping Quiet?
CEOs are saying the stock market would have to fall by a lot for them to really say anything. And there was still a group of CEOs in those respondents who said they didn't feel like there was any sort of room for them to speak out right now.
WSJ What’s News
Trump’s Economic Messaging Spooks CEOs. Why Are They Keeping Quiet?
They're scared. They're worried they're going to be targeted. They're worried their businesses are going to suffer. They really just want to be very careful in this moment in terms of how they interact with the Trump administration. So you have a number of CEOs in private really just expressing so much frustration over tariff policies, over national security issues, whatever it might be.
WSJ What’s News
Trump’s Economic Messaging Spooks CEOs. Why Are They Keeping Quiet?
But then in public, CEOs oftentimes say something else or don't say anything at all.
WSJ What’s News
Trump’s Economic Messaging Spooks CEOs. Why Are They Keeping Quiet?
They just feel like there's very limited upside right now and actually speaking out, and there's a lot of downside. So when you have these forums of executives, what's interesting is many feel like they can be a little more comfortable and they can share with their peers. I was at a meeting of the Yale CEO caucus, and there it was interesting.
WSJ What’s News
Trump’s Economic Messaging Spooks CEOs. Why Are They Keeping Quiet?
You know, you had frustration there with CEOs just saying that they wanted more certainty. They felt like this was an environment that was really tough for them to do business in. But then later in the day, when President Trump appeared in front of the business roundtable, The environment was a little more polite. There wasn't as much pushing back, according to those familiar with the meeting.
WSJ What’s News
Trump’s Economic Messaging Spooks CEOs. Why Are They Keeping Quiet?
People were mostly just asking questions, but it wasn't necessarily a contentious meeting.
WSJ What’s News
Trump’s Economic Messaging Spooks CEOs. Why Are They Keeping Quiet?
Well, so it's interesting. There was a survey question at the Shiel meeting, and the people there in the audience, the CEOs, were asked how much the stock market would need to decline for them to speak out collectively. And 44% of those in the room said it would have to fall 20%, and another 20%. 22% of people said the stocks would need to fall 30% before they take a stand.
WSJ What’s News
Trump’s Economic Messaging Spooks CEOs. Why Are They Keeping Quiet?
So put that all together, CEOs are saying the stock market would have to fall by a lot for them to really say anything. And there was still a group of CEOs in those respondents who said they didn't feel like there was any sort of room for them to speak out right now. So we'll see what happens here.
WSJ What’s News
Trump’s Economic Messaging Spooks CEOs. Why Are They Keeping Quiet?
It's the early days of this administration still, and I think a lot of companies are trying to figure out how to navigate this. But unlike the first Trump administration, when a number of CEOs were very vocal, we're just not seeing that this time.
WSJ What’s News
Trump’s Economic Messaging Spooks CEOs. Why Are They Keeping Quiet?
Thanks for having me.
WSJ What’s News
Two Israeli Embassy Staffers Shot Dead in Washington D.C.
And for the bill to move off of the floor, these issues have to be addressed.
WSJ What’s News
Two Israeli Embassy Staffers Shot Dead in Washington D.C.
The surveys are a little bit surprising in that the part of the economy where this weakness is most manifest is services. Und das ist die Part of the economy that is not directly affected by the tariffs. So what seems to be happening is that you're still seeing a lot of inventory build up around these tariff announcements. And factories are still producing at quite high levels.
WSJ What’s News
Two Israeli Embassy Staffers Shot Dead in Washington D.C.
But in the other parts of the economy that are less kind of directly affected by that, businesses have gotten a lot more gloomy about the kind of longer term prospects. And they're already cutting back.
WSJ What’s News
What’s News in Earnings: Big Retailers Start to Worry
How doable is it for companies trying to avoid these?
WSJ What’s News
What’s News in Earnings: Big Retailers Start to Worry
Target this week warned that its profit would come under pressure this quarter and its sales could be flat this year because of consumer uncertainty and escalating tariffs. Its net sales shrank by 0.8% for the full year to around $107 billion. What stood out to you in its results?
WSJ What’s News
What’s News in Earnings: Big Retailers Start to Worry
Walmart had been on a tear until fairly recently. Walmart enjoyed a post-pandemic streak that had pushed the company's stock price near all-time highs. This quarter, it reported $180.6 billion in total revenue and $7.9 billion in operating income, meeting Wall Street's expectations. Even so, is it still worried about some of these same issues as Target?
WSJ What’s News
What’s News in Earnings: Big Retailers Start to Worry
But now the industry is grappling with a growing list of issues, tariffs, cautious consumers, and still high inflation. Some big companies like Best Buy are already warning of challenges ahead and possibly higher prices for shoppers. Sarah Nassauer covers the biggest retailers for The Journal and is here to explain all that's happening across the industry. Sarah, so good to see you.
WSJ What’s News
What’s News in Earnings: Big Retailers Start to Worry
Is there any evidence that shoppers are just changing what they're buying yet? Like, do these companies tell us like, oh, we're seeing just a totally different sort of mix of what consumers are spending on?
WSJ What’s News
What’s News in Earnings: Big Retailers Start to Worry
So our colleague Suzanne Kappner recently wrote that the internet had made in-store shopping kind of miserable right now. So in addition to all the big themes that we're talking about, she had written that physical stores don't have enough staff. They also now don't have enough stuff. I just wonder for someone just going into stores right now, like what are they experiencing?
WSJ What’s News
What’s News in Earnings: Big Retailers Start to Worry
Hey, listeners, it's March 6th. I'm Chip Cutter for The Wall Street Journal, and this is What's News in Earnings, our look at the broad themes that stood out in the latest earnings season. Today, we're talking about retailers. For years, consumers have gravitated towards companies such as Walmart, Amazon, and Costco that are known for low prices and fast shipping on lots of items.
WSJ What’s News
What’s News in Earnings: Big Retailers Start to Worry
Finally, Sarah, lots of companies are trying to understand just how consumers are feeling right now. This goes beyond retail, of course. But what do the reports from big retailers tell us about just the state of the economy? And what signs will you be watching in the weeks ahead to sort of understand how consumers feel about all this?
WSJ What’s News
What’s News in Earnings: Big Retailers Start to Worry
Sarah Nassauer, retail reporter for The Journal. Thanks for being here.
WSJ What’s News
What’s News in Earnings: Big Retailers Start to Worry
And that was What's News in Earnings. Today's show was produced by Zoe Kokun and Pierre Bien-Aimé with supervising producer Michael Cosmides. Later today, we'll have the PM edition of What's News out for you as usual. And we'll be back with you in the next earnings season with a look at the earnings reports of major U.S. companies. Until then, I'm Chip Cutter. Have a great day.
WSJ What’s News
What’s News in Earnings: Big Retailers Start to Worry
So let's start with what happened this week. The Trump administration's long-awaited, long-feared tariffs on Mexico and Canada took effect, adding to those already in place for goods from China. These, of course, could still be retracted. But what did retailers have to say about them, and what will it mean for consumers?
WSJ What’s News
What’s News in Earnings: Big Retailers Start to Worry
And so Best Buy chief executive Corey Berry said U.S. consumers are likely to face higher prices as a result of this. A lot of electronics come from places like China and Mexico. What can companies do to negotiate with suppliers and to try to avoid some of these tariffs? Obviously, they would like to try to negotiate around them. How likely is that?
WSJ What’s News
What’s News in Earnings: Consumer Shakiness Worries Food and Drink Companies
And does this sentiment cut across industries? What are we hearing from big food and restaurant companies, for example?
WSJ What’s News
What’s News in Earnings: Consumer Shakiness Worries Food and Drink Companies
You write a lot about beverage makers. And I wonder, given all of these factors that we're talking about, what companies are faring better right now and why?
WSJ What’s News
What’s News in Earnings: Consumer Shakiness Worries Food and Drink Companies
You've also been focusing a lot on Pepsi lately. And as you reported, Pepsi has been struggling. It's been losing market share in the U.S. What do their turnaround efforts look like at this point?
WSJ What’s News
What’s News in Earnings: Consumer Shakiness Worries Food and Drink Companies
So if you're selling soda or beer right now, you are affected by those aluminum tariffs. Cans are getting more expensive. What can companies do, if anything, to mitigate this?
WSJ What’s News
What’s News in Earnings: Consumer Shakiness Worries Food and Drink Companies
If consumers are trading down on what they eat, what beverages they buy, do the earnings reports of tobacco makers show us that people are spending differently on cigarettes and tobacco products right now?
WSJ What’s News
What’s News in Earnings: Consumer Shakiness Worries Food and Drink Companies
Hey, listeners, it's Monday, May 5th. I'm Chip Cutter for The Wall Street Journal, and this is What's News in Earnings, our look at the broad themes that stood out in the latest earnings season. Today, we're taking a look at what's happening to some of the country's food and beverage companies. One of the big takeaways so far, consumers are hitting pause on spending in all sorts of noticeable ways.
WSJ What’s News
What’s News in Earnings: Consumer Shakiness Worries Food and Drink Companies
Well, we often speak about consumers. It sometimes seems like we refer to them as a monolith, that they're one big, broad group of spenders. And of course, we know that's not true. So are there segments of consumers right now that are facing particular challenges that companies are having to focus on?
WSJ What’s News
What’s News in Earnings: Consumer Shakiness Worries Food and Drink Companies
So finally, just looking forward, what should we expect from these companies? Are they going to make more pricing changes? Will they change the mix of products that they offer? What are you watching for in the weeks ahead?
WSJ What’s News
What’s News in Earnings: Consumer Shakiness Worries Food and Drink Companies
That was Laura Cooper, a reporter for The Wall Street Journal. Thanks, Laura.
WSJ What’s News
What’s News in Earnings: Consumer Shakiness Worries Food and Drink Companies
And that was What's News in Earnings. Today's show was produced by Charlie Duffield and Anthony Bansi with supervising producer Michael Kosmides. Later today, we'll have the PM edition of What's News out for you as usual. And we'll be back later this earnings season diving into another industry. Until then, I'm Chip Cutter. Have a great day.
WSJ What’s News
What’s News in Earnings: Consumer Shakiness Worries Food and Drink Companies
Something is happening in the economy right now. Consumers feel shaky. Many are in belt-tightening mode, and they're buying less. For big soda makers, for big food companies, that's a worrisome development. Wall Street Journal reporter Laura Cooper covers the world of beverage and tobacco makers, and she's here to explain all that these companies and others are facing. Laura, great to see you.
WSJ What’s News
What’s News in Earnings: Consumer Shakiness Worries Food and Drink Companies
So big picture, what do the earnings reports show us about how consumers are feeling right now?