All posts in "Politics"

Goldman Sachs rises to 1st record since crisis


Trump fills top spots with Goldman Sachs employees
Trump fills top spots with Goldman Sachs employees

Goldman Sachs rises to 1st record since crisis


Goldman Sachs has finally recovered from the 2008 financial crisis. Ironically, the main catalyst is President Trump’s promises to undo safeguards put in place to prevent another meltdown.

Goldman Sachs stock closed on Tuesday at a new all-time high, taking out the prior record that was set in October 2007.

Virtually all bank stocks have been on fire since Trump’s victory in anticipating of lighter regulation, higher interest rates and faster growth. But Goldman Sachs(GS) has been particularly hot, surging an incredible 37% since the election. That’s quadruple the S&P 500’s post-election advance.

Clearly, Goldman Sachs has already emerged as a big winner of Trump’s pledge to “do a big number” on Dodd-Frank, the 2010 Wall Street reform law.

“If you really think deregulation is coming and banks are going to be cut loose, who’s going to win? It’s going to be them. We’ve seen that time and again,” said Michael Block, chief market strategist at Rhino Trading.

Goldman’s market value surged by $4 billion on the day that Trump signed an executive order beginning the process of rolling back Dodd-Frank.

goldman sachs stock record high

The irony is that Trump slammed Wall Street and Goldman Sachs during the campaign. He even used an image of Goldman Sachs CEO Lloyd Blankfein during his closing campaign ad while condemning the “global power structure.”

But Trump has gone from criticizing Wall Street and Goldman Sachs to hiring Goldman veterans to help him govern. Trump’s two biggest economic hires are Treasury Secretary Steven Mnuchin, a former Goldman Sachs partner, and top economic adviser Gary Cohn, who stepped down in December as chief operating officer of Goldman Sachs.

Analysts say those hires may actually be helping Goldman stock.

“With so many Goldman Sachs alums in the administration, maybe some think that policies will skew in the bank’s favor,” said Michael Wong, a Morningstar analyst who covers Goldman Sachs.

Wong cautioned that he doesn’t think “anyone should make an investment thesis based on that.”

Mnuchin, who was confirmed on Monday as treasury secretary, is in favor of reforming the Volcker Rule, which prevents big banks like Goldman Sachs from making risky bets with their own money.

Goldman’s post-election surge can’t really be explained by higher interest rates. Higher rates provide a bigger boost to the profits of consumer-focused lenders like Bank of America and Wells Fargo(WFC) than investment banks like Goldman.

“Higher interest rates is not playing that much into Goldman Sachs’ valuation,” said Wong.

But Goldman Sachs would benefit from faster growth and increased CEO confidence that could spark a wave of lucrative M&A and IPO deals.

Goldman shares have made a remarkable rebound from the 2008 crisis when many investors feared the complete collapse of the financial system. Goldman is up 380% since its low of $52 in November 2008.

While JPMorgan Chase returned to its pre-crisis high in 2013, it wasn’t until now for Goldman stock. Other big banks like Bank of America(BAC), Citigroup(C) and Morgan Stanley(MS) are nowhere near their all-time highs.

But is the Goldman rally overdone?

After all, not even Trump is talking about completely repealing Dodd-Frank and efforts to water regulation down are running into resistance, including from Federal Reserve chief Janet Yellen.

Yellen: U.S. banks are lending and globally competitive
Yellen: U.S. banks are lending and globally competitive

Wong thinks Goldman shares are “slightly overvalued” at this point.

“They’re pricing in a lot of perfection in terms of deregulation and the ability to take advantage of that,” Block said.
Published at Tue, 14 Feb 2017 21:40:53 +0000

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Carl Icahn poses ‘unacceptable risk’ of conflicts


Icahn: I'm against the stupidity of some regulations
Icahn: I’m against the stupidity of some regulations


President Trump has tapped Carl Icahn to help him get rid of “strangling regulations” that are hurting the American economy.

Of course, gutting some of those federal rules will also mean big profits for Icahn.

Icahn’s new role as Trump’s special adviser on regulatory reform may already be boosting his vast fortune. Shares of CVR Energy, the oil refiner Icahn controls, spiked 10% the day after Trump announced his appointment.

Icahn has been a vocal critic of EPA rules that require refiners like CVR(CVI) to either blend their oil with renewable fuels or buy credits. Icahn told CNN in December the EPA’s renewable fuel standard rules are “natural stupidity.”

Icahn’s new role as Trump’s regulation-buster has given him a powerful platform to push for getting rid of this EPA rule. The legendary investor has said he was even consulted on Trump’s selection of Scott Pruitt as the new head of the EPA.

Now, Senate Democrats including Elizabeth Warren and Al Franken are flagging concerns over just how closely Icahn’s business interests align with his role in the Trump administration.

The CVR episode suggest a “conflict of interest between Mr. Icahn and advice he gave President Trump on the nomination of Mr. Pruitt,” the senators wrote in a letter on Monday to White House Counsel Donald McGahn II.

Icahn’s “sprawling business empire and potentially unlimited portfolio in the administration” present an “unacceptable risk” of “real or potential conflicts of interest,” the lawmakers said.

Five other Democratic senators signed the letter: Sheldon Whitehouse, Sherrod Brown, Tammy Baldwin, Amy Klobuchar and Debbie Stabenow.

The lawmakers note that his firm, Icahn Enterprises, invests in a broad range of industries regulated by the federal government, including auto, railcars, and mining.

The letter asked the White House to respond to a series of questions before Wednesday on Icahn’s role, including whether he is a federal employee, if he’s been barred from providing advice on any specific regulations and whether he’ll be required to divest any of his holdings.

The senators also want to know whether Icahn has recused himself from any matters and if any steps have been taken to “prevent his access to non-public, confidential or otherwise privileged information.”

The White House didn’t respond to a request for comment.

Before he was elected, Trump suggested Icahn would be his choice as treasury secretary. Ultimately, Trump selected Icahn to help him overhaul federal regulations — one of the president’s major priorities to unleash the U.S. economy.

“He is not only a brilliant negotiator, but also someone who is innately able to predict the future especially having to do with finances and economies,” Trump said when he announced Icahn’s new role.

But even Icahn couldn’t have predicted how his 2012 purchase of CVR stock would turn into a controversy in a Trump White House. Icahn’s firm Icahn Enterprises owns an 82% stake in the oil refiner, making it one of his biggest positions.

Icahn has warned that the EPA’s renewable fuel standard rule will cost CVR $200 million this year. CVR has even filed a lawsuit against the EPA over the law, according to press reports.

Pruitt, Trump’s pick to lead the EPA, has been critical of the rule, calling it “unworkable” in its current form during his Senate confirmation hearing.

Wall Street is betting CVR will emerge as a big winner of Trump’s deregulation push. Shares of CVR have surged 68% since Trump’s victory.

CVR’s success has helped lift Icahn Enterprises(IEP) too. Shares of Icahn’s firm have soared 18% since Trump’s victory.
Published at Mon, 13 Feb 2017 20:14:45 +0000

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Auto CEOs want Trump to order review of 2025 fuel rules

FILE PHOTO – The GM logo is seen in Warren, Michigan, U.S. on October 26, 2015. REUTERS/Rebecca Cook/File Photo


Auto CEOs want Trump to order review of 2025 fuel rules

By David Shepardson| WASHINGTON

The chief executives of 18 major automakers and their U.S. units urged President Donald Trump to revisit a decision by the Obama administration to lock in vehicle fuel efficiency rules through 2025.

In a letter sent late Friday and viewed by Reuters, the chief executives of General Motors Co (GM.N), Ford Motor Co, Fiat Chrysler Automobiles NV, along with the top North American executives at Toyota Motor Corp (7203.T), Volkswagen AG (VOWG_p.DE), Honda Motor Co (7267.T), Hyundai Motor Co (005380.KS), Nissan Motor Co (7201.T) and others urged Trump to reverse the decision, warning thousands of jobs could be at risk.

On Jan. 13, the head of the U.S. Environmental Protection Agency finalized a determination that the landmark fuel efficiency rules instituted by then President Barack Obama should be locked in through 2025, a bid to maintain a key part of his administration’s climate legacy.

As part of a 2012 regulation, EPA had to decide by April 2018 whether to modify the 2022-2025 model year vehicle emission rules requiring average fleet-wide efficiency of more than 50 miles per gallon through a “midterm review.” The agency in November moved up the timetable for proposing automakers could meet the 2025 standards.

The auto CEO letter asked Trump to reopen the midterm review “without prejudging the outcome” and praised Trump’s “personal focus on steps to strengthen the economy in the United States and your commitment to jobs in our sector.”

Days after Trump was elected, automakers quickly appealed to Trump to review the rules, saying they impose significant costs and are out of step with consumer preferences.

Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, said Sunday, automakers are “seeking a restoration of the process — that’s all. This is a reset.”

The chief executives of Ford, GM and Fiat Chrysler also raised the issue in a White House meeting with Trump last month.

The letter warned the rules could “threaten future production levels, putting hundreds of thousands and perhaps as many as a million jobs at risk.”

Environmentalists say the rules are working, saving drivers thousands in fuel costs and shouldn’t be changed. Luke Tonachel of the Natural Resources Defense Council, said lowering the standards would “cost consumers more, increase our dependence on oil and put Americans at greater risk from a changing climate.”

Trump EPA nominee Scott Pruitt told a Senate panel he will review the Obama administration’s decision.

In 2011, Obama announced an agreement with automakers to raise fuel efficiency standards to 54.5 miles per gallon. This, the administration said, would save motorists $1.7 trillion in fuel costs over the life of the vehicles, but cost the auto industry about $200 billion over 13 years.

The EPA said in July that because Americans were buying fewer cars and more SUVs and trucks, it estimated the fleet will average 50.8 mpg to 52.6 mpg in 2025.


(Reporting by David Shepardson; Editing by Andrea Ricci)
Published at Sun, 12 Feb 2017 16:53:37 +0000

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Senators question Goldman Sachs on its role in Trump banking policy


 Senators question Goldman Sachs on its role in Trump banking policy

By Sruthi Shankar

Two U.S. senators are seeking details from Goldman Sachs Group Inc’s (GS.N) chief executive on the extent to which the bank’s employees were involved in drafting of the recent executive orders on banking and fiduciary regulations.

In a letter to CEO Lloyd Blankfein dated Feb. 9 and made public on Friday, Democratic Senators Elizabeth Warren and Tammy Baldwin asked for details on “lobbying” activities in the bank related to review of the Dodd-Frank Act and the Obama-era fiduciary rule on financial advice.

Blankfein was also asked to detail the profits Goldman would make if these reforms came into effect.

“We’ve had no involvement in the drafting of any executive orders,” a Goldman spokesman said on Friday.

In December, Trump appointed Gary Cohn, former Goldman president and chief operating officer, to head the White House National Economic Council, a group that coordinates economic policy across agencies.

Trump last week ordered reviews of major banking rules that were put in place after the 2008 financial crisis, drawing fire from Democrats who said his order lacked substance and squarely aligned him with Wall Street bankers.

“The executive orders released by President Trump on Friday last week raise our concerns about the degree to which Cohn’s advice to Trump is good for Wall Street, but bad for Americans,” the senators wrote on Thursday.

“Goldman Sachs would be a major beneficiary of these efforts to deregulate the financial industry,” they added in the letter.

Trump also named former Goldman partner Steven Mnuchin as his pick for Treasury secretary in December.

The senators have asked for any communication between the bank’s employees and Cohn, Mnuchin, nominee for the SEC chair Jay Clayton and chief strategist Steve Bannon.

(Editing by Sandra Maler)
Published at Fri, 10 Feb 2017 21:41:26 +0000

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San Francisco is taxing the rich to pay for free community college

by tpsdave from Pixabay

San Francisco is taxing the rich to pay for free community college


San Francisco will be the first city in the nation to offer free community college to all residents starting this fall, Mayor Ed Lee announced this week.

The city will pay for it by taxes on properties selling for more than $5 million.

The real estate transfer tax, as it’s called, was increased last year for both residential and commercial properties. The hike was approved by voters in November.

The tax starts at 2.25% and goes up to 3% for properties worth at least $25 million. It’s expected to bring in an average of $45 million a year, according to the city controller. But the money goes into the city’s general fund and is also expected to be used for affordable housing and senior support services.

The free tuition plan is expected to impact about 28,000 residents who currently take classes at City College of San Francisco and encourage more people to sign up. Chancellor Susan Lamb said the school has the capacity for 85,000 students.

It’s difficult to predict how many more people will enroll, and how much the free-tuition plan will end up costing. San Francisco has committed $5.4 million a year for the next two years, and then will have to reassess. That includes a one-time $500,000 stipend to City College to help handle an influx of students.

San Francisco’s tuition-free plan is more progressive than others round the country. First, everyone is eligible as long as they have resided in San Francisco for at least one year.

It covers the $46 cost per credit no matter how rich you are, “even to the children of the founders of Facebook,” said city lawmaker Jane Kim.

You don’t have to be enrolled full-time or be a recent high school graduate. This means that people who are seeking job retraining or want to take a few foreign language courses won’t have to pay for the cost of the credits.

Students will still be on the hook for the mandatory $17 per semester fee at City College and the cost of books, so college won’t necessarily be free.

What also sets apart San Francisco’s plan is that it offers the poorest students additional money to help pay for these other expenses. An individual has to earn less than $17,000 a year to qualify for the aid, or less than $37,000 for a family of four. Eligible full-time students will get $500 a year and part-time students will get $200 a year.

“We have the fastest growing income gap than any city across the nation,” Kim said on Monday at a press conference.

“Making city college free is going to provide greater opportunities for more San Franciscans to enter into the middle class and more San Franciscans to stay in the middle class if they currently are,” she said.

The push for free tuition is gaining support across the country. Tennessee started offering free community college to residents in 2015, and will expand the program this year to include adults returning to school. Lawmakers in New York are discussing a program that would make four-year and two-year public colleges tuition-free for residents who earn less than $125,000 a year. And Rhode Island’s governor is pushing for two free years at public colleges for recent high school graduates.

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Mexico doubles down on Trump ‘contingency plan’


Top Mexico official eyes 'openness' in Trump stance
Agustin Carstens, Governor, Bank of Mexico, eyes ‘openness’ in Trump stance


Mexico is pulling out all the stops to shield itself from President Trump’s looming policies.

The country’s central bank raised interest rates Thursday for the third time since the U.S. election in an effort to save Mexico’s currency, the peso, which is near an all-time low. It raised rates by 0.5%.

Mexican leaders are very worried about all of Trump’s threats — a potential 20% tax on Mexican imports, a wall on the border, and renegotiating a trade deal.

In the big picture, Mexico’s leaders want — as best they can — to ease Trump’s impact on their economy and the peso’s diminishing value.

On Thursday, the peso did jump up a bit after the announcement. However, Trump has largely dictated its fate of late. The currency is down 10% since Trump’s election victory.

“The peso movement has mostly been a reaction to Trump” says Rodrigo Aguilera, an economist at the Economist Intelligence Unit. “Mexico hasn’t really had a huge influence in how the peso has behaved.”

Mexico’s central bank governor, Agustin Carstens, told CNN in November that Trump’s policies, if enacted, would be like a “hurricane” for the Mexican economy.

Mexico sends 80% of its exports north of the border, and its economy heavily relies on the northern neighbor.

The interest rate hikes are a part of what Carstens has called Mexico’s “contingency plan” to deal with Trump. However, Carstens announced late last year that he’ll be resigning from the central bank in June. It’s unclear who will take over for him and see through the contingency plan.

The contingency plan didn’t go well initially. Carstens and his colleagues tried rate hikes and selling dollars to international investors to prop up the peso, but none of it worked. Only recently, has the peso stopped bleeding despite being very low. One dollar equals 20.30 pesos. Before Trump’s election it was 18.30 pesos.

CNNMoney (Mexico City)First published February 9, 2017: 3:23 PM ET

Published at Thu, 09 Feb 2017 20:39:26 +0000

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Trump gives America’s ‘poorest white town’ hope


Can President Trump win the War on Poverty?
Can President Trump win the War on Poverty?

Trump gives America’s ‘poorest white town’ hope

Published at Mon, 06 Feb 2017 12:48:19 +0000

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Trump begins dismantling Obama financial regulations


Trump signs plan to roll back financial regulations
Trump signs plan to roll back financial regulations

Trump begins dismantling Obama financial regulations


With the stroke of a pen, President Trump has begun the push to dismantle the sweeping Dodd-Frank reform of Wall Street.

Published at Fri, 03 Feb 2017 18:47:59 +0000

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Goldman CEO takes lead on Wall Street in slamming Trump travel ban


Goldman Sachs Chairman and CEO, Lloyd Blankfein, waits to speak at the 10,000 Women/State Department Entrepreneurship Program at the State Department in Washington, March 9, 2015. REUTERS/Gary Cameron


Goldman CEO takes lead on Wall Street in slamming Trump travel ban

By Olivia Oran

Goldman Sachs Group Inc Chief Executive Lloyd Blankfein became the first major Wall Street leader to speak out against President Donald Trump’s order to halt arrivals from several Muslim-majority countries.

In a voicemail to employees on Sunday, Blankfein said diversity was a hallmark of Goldman’s success, and if the temporary freeze became permanent, it could create “disruption” for the bank and its staff.

“This is not a policy we support, and I would note that it has already been challenged in federal court, and some of the order has been enjoined at least temporarily,” Blankfein said, according to a transcript seen by Reuters.

In Silicon Valley, the heads of companies such as Apple and Facebook swiftly denounced Trump’s immigration ban. But the rest of corporate America has been more circumspect in speaking out, underscoring the sensitivities around opposing policies that could provoke a backlash from the White House.

Tepid responses from many of Blankfein’s peers made his comments all the more potent, especially because Goldman has gotten attention for the number of its alumni who have joined Trump’s administration.

Top BlackRock Inc executives including CEO Larry Fink, sent a memo to staff on Monday saying Trump’s order presented “challenges” to its goals of diversity and inclusion. BlackRock is examining the direct impact on its employees, as well as the broader implications of the order, they said.

“We, of course, all want to promote security and combat terrorism, but we believe it needs to be done with respect for due process, individual rights and the principle of inclusion,” they wrote.’


Citigroup CEO Mike Corbat said in a memo to employees on Monday the bank is concerned about “the message the executive order sends” as well as the impact immigration policies might have “on our ability to serve our clients and contribute to growth.”

JPMorgan Chase & Co’s operating committee, which includes CEO Jamie Dimon, avoided directly criticizing the policy. In a note to staff over the weekend, the firm said it was reaching out to all employees affected and noted that the country was “strengthened by the rich diversity of the world around us.”

Bank of America Corp CEO Brian Moynihan wrote in an internal memo obtained by Reuters and confirmed by a spokesman that the bank is “closely monitoring” the order and connecting with staff who may be affected and have questions.

“We depend upon the diverse sources of talent that our teammates represent,” the memo stated.


Other banks, including Morgan Stanley and Wells Fargo & Co, said they were reviewing the executive order and its implication on staff.

Representatives for stock exchange operators Bats Global Markets, Nasdaq Inc and New York Stock Exchange parent Intercontinental Exchange Inc all declined to comment.

The U.S. hedge fund industry was also virtually silent on the immigration restrictions. Representatives for most major firms —including Bridgewater Associates, Renaissance Technologies, Millennium Management and Two Sigma Investments — did not respond to requests for comment over the weekend.

Private equity firms, including Blackstone Group LP, whose CEO, Stephen Schwarzman, chairs Trump’s advisory panel of business leaders, also would not comment on the travel ban.


People familiar with some of the banks’ and firms’ decisions in making public statements said a fear of riling Trump was inhibiting most CEOs’ responses.

Since the election, he has taken to Twitter to excoriate certain companies, causing stock price swings. And because Wall Street is hoping for an easing of financial reform regulations, most firms want to stay in Trump’s good graces, they said.

The most high-ranking Goldman executive to have joined the Trump administration is former Chief Operating Officer Gary Cohn, who left the bank in December to become head of the White House National Economic Council. Others include Treasury Secretary nominee Steven Mnuchin and Trump advisers Steve Bannon, Anthony Scaramucci and Dina Powell.

Those recruits have put the Goldman back in the spotlight as a bank that long had influence in government and public policy, from the days of the Great Depression to the 2008 financial crisis.

But after the bank was embroiled in scandals over its mortgage-market bets, it embarked on a campaign to improve its image. Blankfein has promoted its focus on philanthropy and diversity initiatives, as well as Goldman’s role in job creation.

(Reporting by Olivia Oran in New York; additional reporting by Richa Naidu in Bengaluru and Lawrence Delevingne, David Henry and Trevor Hunnicutt in New York; Editing by Nick Zieminski and Tom Brown)
Published at Tue, 31 Jan 2017 00:05:48 +0000

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Goldman Sachs CEO warns of ‘disruption’ from Trump travel ban


Protesters storm airports nationwide
Protesters storm airports nationwide

Goldman Sachs CEO warns of ‘disruption’ from Trump travel ban


Goldman Sachs CEO Lloyd Blankfein fired off a companywide voicemail Sunday night saying he does not support President Trump’s travel ban and warned it could cause “disruption” to the Wall Street bank.

“This is not a policy we support,” Blankfein said in the message sent out to the firm’s global staff.

The comments followed a weekend of confusion and protests over Trump’s ban on travelers from seven Muslim-majority countries and a freeze on the U.S. refugee program.

“I recognize that there is potential for disruption, and especially to some of our people and their families,” the Goldman Sachs (GS) boss said in the voicemail, a transcript of which the bank provided to CNNMoney.

Like other global banks, Goldman has a significant presence in the Middle East. The Wall Street firm has offices in Israel, Qatar, Saudi Arabia and the United Arab Emirates — none of which are part of the ban.

Blankfein said Goldman executives will “work to minimize such disruption to the extent we can within the law and are focused on supporting our colleagues and their families who may be affected.”

In a subtle rebuke to Trump, Blankfein also quoted from Goldman’s business principles that preach the importance of diversity.

“We must attract, retain and motivate people from many backgrounds and perspectives. Being diverse is not optional; it is what we must be,” Blankfein quoted the principles as saying.

“Now is a fitting time to reflect on those words,” the CEO said.

Interestingly, a former Goldman employee is said to have played a role in the Trump travel ban: Steve Bannon. Trump’s chief strategist worked at Goldman in the 1980s as an M&A banker and has since emerged as a critic of Wall Street. Bannon was among the senior White House advisers who helped interpret the meaning of the executive order amid widespread confusion in the government, sources told CNN.

Bannon is one of several former Goldman execs who Trump has tapped for senior roles in his administration, including treasury secretary nominee Steven Mnuchin and top economic adviser Gary Cohn.

Goldman is the latest global company to raise concern over Trump’s travel ban.

The response has been the loudest from Silicon Valley, where Lyft donated $1 million to the ACLU, Google launched a $4 million fund that will also partly benefit ACLU, Airbnb offered free housing to those impacted and a slew of executives donated money to fighting the travel ban.

Elsewhere, Starbucks (SBUX) announced plans to hire 10,000 refugees over five years and General Electric (GE) CEO Jeff Immelt said in a blog post that he shares the “concern” felt by his employees.

JPMorgan Chase (JPM)CEO Jamie Dimon pledged “unwavering commitment to the dedicated people” who work at the bank and said the company has reached out to impacted employees.

Morgan Stanley (MS) CEO James Gorman sent an email to all employees Sunday afternoon saying he is “concerned” for employees who may be impacted by the new U.S. travel restrictions.

Gorman didn’t expressly say he opposes the travel ban, but the Australia native said Morgan Stanley “immensely” values the contributions of “all our employees from all over the world.”

–CNNMoney’s Jill Disis and Cristina Alesci contributed to this report.

 CNNMoney (New York)First published January 30, 2017: 9:45 AM ET

Published at Mon, 30 Jan 2017 14:45:16 +0000

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Trump travel ban stirs faint corporate outcry beyond Silicon Valley


By Devika Krishna Kumar and Ross Kerber

Most U.S. corporate bosses have stayed silent on President Donald Trump’s immigration curbs, underscoring the sensitivities around opposing policies that could provoke a backlash from the White House.

While the leaders of Apple Inc APPL.O, Google (GOOGL.O) and Facebook Inc (FB.O) emailed their staff to denounce the suspension of the U.S. refugee program and the halting of arrivals from seven Muslim-majority countries, many of their counterparts in other industries either declined comment or responded with company statements reiterating their commitment to diversity.

The difference in response shows the pressure large swathes of corporate America faces to avoid tussling publicly with the new administration.

Companies such as aircraft maker Boeing Co (BA.N) and automakers Ford Motor Co (F.N) and General Motors Co (GM.N) have already had run-ins with Trump over other issues, and they have much at stake in policy decisions that the administration will make on tax, trade and regulatory matters.

Before office, Trump attacked Boeing over the cost of the future Air Force One program. Boeing Chief Executive Officer Dennis Muilenburg met with him earlier this month and said he and Trump had made progress on the Air Force One issue and the potential sale of fighter aircraft.

Representatives from Boeing, General Motors and Ford declined to comment on Trump’s immigration curbs.

Wall Street, meanwhile, is hoping the new administration will ease some of the regulations introduced in the wake of the 2007-08 financial crisis and adopt a lighter touch in their enforcement.

Industries including banking, healthcare and auto manufacturing “see themselves on the cusp of a new era of deregulation, and they do not want to do anything that would offend the new emperor,” said Cornelius Hurley, director of Boston University’s Center for Finance, Law & Policy.

Trump had targeted both the tech industry and Wall Street during his presidential campaign, but once elected, he tapped former investment bankers, hedge fund managers and private equity investors to join his administration.

With friends in high places, Wall Street may have less reason to be as outspoken about the new restrictions.

“Bankers have direct access to this White House,” said Erik Gordon, who teaches at the University of Michigan’s Ross School of Business. “They don’t have to protest publicly.”


Representatives of Goldman Sachs Group Inc (GS.N), Citigroup Inc (C.N), Bank of America Corp (BAC.N) and Morgan Stanley (MS.N) declined to comment on Trump’s immigration order.

Wells Fargo & Co (WFC.N) said in a statement that it was reviewing the executive order and its implications for staff and its business.

JPMorgan Chase & Co’s (JPM.N) Operating Committee, which includes CEO Jamie Dimon, sent a note to staff saying it was reaching out to all employees affected and noted that the country was, “strengthened by the rich diversity of the world around us.”

To be sure, some CEOs were more outspoken.

Nike Inc (NKE.N) CEO Mark Parker said the company did not support the executive order.

“Nike believes in a world where everyone celebrates the power of diversity,” he said in a statement. “Those values are being threatened by the recent executive order in the U.S. banning refugees, as well as visitors, from seven Muslim-majority countries.”


Brent Saunders, CEO of U.S. drugmaker Allergan Plc (AGN.N), tweeted: “Oppose any policy that puts limitations on our ability to attract the best & diverse talent.”

But many boardrooms kept quiet. Representatives for some energy companies, including Exxon Mobil Corp (XOM.N), for example, declined to comment.


As the idea of corporate social responsibility has taken root, so companies have increasingly championed a range of causes, including gay rights, diverse workplaces and a global view.

Many in corporate America are still trying to work out how to deal with a new government that takes a more conservative stance on some social issues and has an anti-globalization platform.


Those non-tech companies that did issue statements over the weekend tended to emphasize their role as good corporate citizens rather than openly criticize Trump’s policies.

Starbucks Corp (SBUX.O) CEO Howard Schultz has put the coffee chain in the national spotlight before, asking customers not to bring guns into stores and urging conversations on race relations.

In a letter to employees, he said Starbucks was developing plans to hire 10,000 refugees over five years across dozens of countries, but he did not directly criticize Trump’s order.

“I am hearing the alarm you all are sounding that the civility and human rights we have all taken for granted for so long are under attack,” he wrote.

In his statement, General Electric Co (GE.N) CEO Jeff Immelt told staff that the company would engage with the U.S. government.

“We will continue to make our voice heard with the new administration and Congress, and reiterate the importance of this issue to GE and to the business community overall,” he wrote.

One of the most immediate ways for corporate bosses to communicate with Trump about the immigration order will be the first meeting of his advisory panel of business leaders next week.

Of the 19 leaders on that panel, only two, Elon Musk, who founded Tesla Motors Inc (TSLA.O) and SpaceX, and Travis Kalanick, CEO of Uber Technologies Inc [UBER.UL], have spoken out against Trump’s immigration curbs.

A spokeswoman for Stephen Schwarzman, the billionaire chief executive of Blackstone Group LP (BX.N) whom Trump tasked to set up and chair the panel, declined to comment.

(Additional reporting by Olivia Oran, Dan Freed, Lauren Hirsch, Lawrence Delevingne and Gui Qing Koh in New York, Joe White in Detroit and David Shepardson in Washington; Writing by Carmel Crimmins; Editing by Lisa Von Ahn)
Published at Mon, 30 Jan 2017 05:01:00 +0000

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RPT-WRAPUP 6-Chaos, anger as Trump order halts some Muslim immigrants

by b1-foto from Pixabay

RPT-WRAPUP 6-Chaos, anger as Trump order halts some Muslim immigrants

By Yeganeh Torbati, Jeff Mason and Mica Rosenberg

President Donald Trump’s order to restrict people from seven Muslim-majority countries from entering the United States sparked confusion and anger on Saturday after immigrants and refugees were kept off flights and left stranded in airports.

In his most sweeping decision since taking office a week ago, Trump, a Republican, put a four-month hold on allowing refugees into the United States and temporarily barred travelers from Syria and six other countries.

Civil rights and faith groups, activists and Democratic politicians were furious and vowed to fight the order.

Capping a day of confusion and chaos and protests in several airports across the country, a federal judge in Brooklyn, New York, granted a temporary reprieve. The American Civil Liberties Union successfully argued for a temporary stay that allowed detained travelers to stay in the United States.

Supporters outside the Brooklyn courtroom and at protests at airports in Dallas, Chicago, New York and elsewhere cheered the decision, but a bigger fight lay ahead.

The court action does not reverse Trump’s order, which was criticized by some of America’s closest allies.

Trump, a businessman who successfully tapped into American fears about terror attacks during his campaign, had promised what he called “extreme vetting” of immigrants and refugees from areas the White House said the U.S. Congress deemed to be high risk.

He told reporters in the White House’s Oval Office on Saturday that his order was “not a Muslim ban” and said the measures were long overdue.

“It’s working out very nicely. You see it at the airports, you see it all over,” Trump said.

Along with Syria, the ban affects travelers with passports from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen.

The Department of Homeland Security said about 375 travelers had been affected by the order, 109 of whom were in transit and were denied entry to the United States. Another 173 were stopped by airlines before boarding.

The order “affects a minor portion of international travelers,” the department said in a statement, saying the measures “inconvenienced” less than 1 percent of travelers.

The new rules blindsided people in transit and families waiting for them, and caused havoc for businesses with employees holding passports from the targeted nations and colleges with international students.

Pegah Rahmani, 25, waited at Washington’s Dulles airport for several hours for her grandparents, both Iranian citizens with U.S. green cards. “They weren’t treating them very well,” she said.

Rahmani’s grandfather is 88 and legally blind. Her grandmother is 83 and recently had a stroke. They were released to loud cheers and cries.



Several Democratic governors said they were examining whether they could launch legal challenges, and other groups eyed a constitutional challenge claiming religious discrimination.

“I don’t think anyone is going to take this lying down,” said Cleveland immigration lawyer David Leopold. “This is the tip of the spear and more litigation is coming.”

The White House did not respond immediately to a request for comment.

The Department of Homeland Security said the order would stay in place.

“No foreign national in a foreign land, without ties to the United States, has any unfettered right to demand entry into the United States,” the department statement said.

Mark Krikorian, the director of the conservative Center for Immigration Studies, called lawsuits challenging the order “last ditch efforts” that would only apply to a few individuals, and he said a broader constitutional argument would be hard to win.

“The first amendment doesn’t apply to foreigners living abroad. The law explicitly says the president can exclude any person or class of people he wants,” Krikorian said.


Some leaders from the U.S. technology industry, a major employer of foreign workers, issued warnings to their staff and called the order immoral and un-American.

“This ban will impact many innocent people,” said Travis Kalanick, chief executive of Uber Technologies Inc UBER.UL, who said he would raise the issue at a White House meeting on Friday.

Arab travelers in the Middle East and North Africa said the order was humiliating and discriminatory. Iran vowed to retaliate.

Sudan called the action “very unfortunate” after Washington lifted sanctions on the country just weeks ago for cooperation on combating terrorism. A Yemeni official expressed dismay at the ban.

Iraq’s former ambassador to the United States, Lukman Faily, told Reuters that Trump’s ban was unfair to a country that itself has been a victim of terror attacks, and could backfire.

“We have a strong partnership with U.S., more so in the urgent fight against terrorism. This ban move will not help, and people will start questioning the bond of this partnership, Faily said.

Allies in the United Kingdom, France and Germany were critical. Canadian Prime Minister Justin Trudeau tweeted a photo of himself welcoming Syrian refugees.



Confusion abounded at airports as immigration and customs officials struggled to interpret the new rules. Some legal residents with green cards who were in the air when the order was issued were detained at airports upon arrival.

However, senior administration officials said it would have been “reckless” to broadcast details of the order in advance.

Other officials said green card holders from the affected countries would require extra screening and would be cleared on a case-by-case basis.

Airlines were blindsided and some cabin crew were barred from entering the country.

Travelers were handled differently at different points of entry and immigration lawyers advised clients to change their destination to the more lenient airports, said Houston immigration lawyer Mana Yegani.

At Chicago O’Hare International Airport, brothers Bardia and Ayden Noohi waited for four hours for their father Kasra Noohi – who has an Iranian passport and a U.S. green card – to be allowed through.

They knew Trump had pledged tougher rules but did not expect the problems. “I didn’t think he’d actually do it,” Bardia Noohi, 32, said. “A lot of politicians just talk.”

Thousands of refugees seeking entry were thrown into limbo. Melanie Nezer of the Hebrew Immigrant Aid Society said she knew of roughly 2,000 who were booked to come to the United States next week.

Trump’s order indefinitely bans refugees from Syria. In a television interview, he said he would seek to prioritize Christian refugees fleeing the war-torn country.

U.S. officials, speaking on condition of anonymity, said they were not consulted on the action and in some cases only learned the details as they were made public.

At the State Department, a senior official said lawyers were working to interpret the executive order, which allows entry to people affected by the order when it is in the “national interest.”

However, a federal law enforcement official said: “It’s unclear at this point what the threshold of national interest is.”

(Reporting by Yara Bayoumy, Jeff Mason, Roberta Rampton, Doina Chiacu, Lesley Wroughton, Yeganeh Torbati in Washington; Mica Rosenberg, Jonathan Allen, Melissa Fares, Daniel Trotta and David Ingram in New York; Robert Chiarito in Chicago; Brendan O’Brien in Milwaukee; Lisa Maria Garza in Dallas; Alissa Greenberg, Joseph Menn, Julia Love and Kristina Cook in San Francisco; Jeffrey Dastin in Redwood City, California; Alex Dobuzinskis in Los Angeles; Khalid Abdelaziz in Khartoum; Parisa Hafezi in Dubai; Andrea Hopkins, Anna Mehler Paperny in Toronto; Writing by Doina Chiacu and Roberta Rampton; Editing by Grant Mary Milliken, Bill Rigby and Paul Tait)
Published at Sun, 29 Jan 2017 08:10:47 +0000

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U.S. tech leaders sound alarm over Trump immigration ban


Published at Sat, 28 Jan 2017 21:49:17 +0000

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Buffett, Gates have hope for America after Trump ascension

Warren Buffett, chairman and CEO of Berkshire Hathaway, speaks at the Fortune’s Most Powerful Women’s Summit in Washington October 13, 2015. REUTERS/Kevin Lamarque/File Photo

Buffett, Gates have hope for America after Trump ascension

By Jonathan Stempel and Jennifer Ablan

Bill Gates and Warren Buffett on Friday expressed optimism that the United States will move ahead as a nation, even as it works through political differences and gets used to the new Trump administration.

The world’s two richest people were speaking to students at Columbia University after U.S. President Donald Trump started to unwind the work of his predecessor Barack Obama in a series of executive orders, prompting concern from critics over what the actions mean for Americans and their place in the world.

“I am confident that America will move ahead,” Buffett said.

Gates, meanwhile, said the desire for innovation and support for research are “strong” and “largely bipartisan,” despite differences on how to accomplish and fund both.

“This administration is new enough; we don’t know how its budget priorities are going to come out,” but there is much intensity to ensure that the executive branch and Congress encourage “amazing things,” Gates said.

Gates co-founded and was the first chief executive of Microsoft Corp, while Buffett runs the conglomerate Berkshire Hathaway Inc.

Forbes magazine said on Friday that Gates is worth $85.2 billion and Buffett is worth $73.9 billion.

An estimated 1,300 people attended Friday’s event to watch the close friends, who have known each other for a quarter century.

Gates is also a Berkshire director, while Buffett is donating much of his wealth to the charitable foundation set up by Gates and his wife, Melinda.

Both told students it is important to invest and focus on doing good works over the long term, despite the impulse or perceived need for shorter-term thinking.

Gates said this was particularly true in areas such as climate change and vaccinations, calling it just as important to be sure people can get vaccines as it is to develop them.

Buffett said: “It’s very hard to have politicians think of something that’s wonderful for the country 20 years from now” if the short-term impact might cost them reelection, with their decisions often tainted by too much money, which he called “bad news.”

He also stressed the importance of immigration, a central issue for Trump, whom neither Buffett nor Gates discussed.

Buffett said the country has been “blessed” by immigrants, and might have come out quite different had the physicists Albert Einstein and Leo Szilard not in 1939 urged U.S. President Franklin Roosevelt to develop a nuclear program to counter threats from Nazi Germany.

“If it weren’t for those two immigrants, who knows if we would be sitting in this room,” Buffett said.

(Reporting by Jennifer Ablan and Jonathan Stempel in New York; editing by Bill Rigby)
Published at Fri, 27 Jan 2017 22:49:50 +0000

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How Trump’s Tax Plan Is Dividing Corporate America


How Trump’s Tax Plan Is Dividing Corporate America

By Charles Bovaird | January 27, 2017 — 7:25 PM EST

While dozens of major U.S. exporters have been coming together to form a joint coalition supporting the Republican “border adjustment” tax plan, several large importers have also been flocking to oppose the initiative, a development that is helping divide corporate America, according to The Financial Times. The ability to enact the border adjustment plan—which would tax imports but leave exports untouched—seems to be a key ingredient of existing Republican tax reform proposals.

General Electric Company (GE), Dow Chemical Co. (DOW), Boeing Co. (BA) and dozens of other manufacturers are currently in discussions about developing a coalition so they can lobby in favor of Trump’s proposed plan, according to The Financial Times. These organizations might hire Cavalry, a political consulting firm, to run this particular campaign. Retailers such as Wal-Mart Stores Inc. (WMT) are gathering to oppose the measure. Retail companies whose goods largely come from suppliers overseas have warned that the proposed plan could severely curtail their profits. (For more, see also: Is Amazon Affected by Trump’s Border-Adjusted Tax?)

Corporate Tax Specifics

The tax plan proposed by the House of Representatives, which was recently endorsed by President Donald Trump, is meant to help produce revenue so lawmakers can sharply reduce corporate and personal income tax rates, according to The Wall Street Journal. The House plan proposes to cut the corporate income tax rate to 20% from 35%, exempt exports from taxable income and eliminate companies’ ability to deduct expenses for imported goods. (For more, see also: Parties For Taxes: Republicans Vs. Democrats.)

A New Hope

While the border adjustment proposal would allow more comprehensive tax reform, the idea has created some very strong reactions from those who support and oppose it, The Financial Times reported. Companies based in the United States have spent years attempting to change the U.S. tax code, which some have described as “broken.” Greater hopes of fixing the current corporate tax regime has been credited with fueling the recent rally in stocks, which began following Trump’s victory.
Published at Sat, 28 Jan 2017 00:25:00 +0000

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Wells Fargo complaint website has vanished


Fmr. Wells Fargo managers: the pressure was unbearable
Fmr. Wells Fargo managers: the pressure was unbearable

Wells Fargo complaint website has vanished


Alarmed by allegations that Wells Fargo retaliated against whistleblowers, the Labor Department set up a dedicated website last year for the bank’s workers to report abuse and seek advice.

Earlier this month, the website disappeared — and Senator Elizabeth Warren is demanding to know why.

Warren fired off a letter to the Labor Department on Thursday raising concern over the removal of the Wells Fargo website. She cited the “substantial harm done to workers” as a result of “widespread and continuing” management problems at the scandal-ridden bank.

The Democrat from Massachusetts said the website — — was “up and running” as of January 20, the day Trump was sworn in.

However, Stephen Barr, a Labor Department spokesman, told CNNMoney that the Wells Fargo page was taken down on January 9 while President Obama was still in office.

Barr, a four-year Labor Department veteran who called himself a “career civil servant,” said he does not know why the page was removed nor whether it will go back up.

“The current administration has given no direction whatsoever here at the Department of Labor on anything regarding Wells Fargo,” Barr said.

A search on the Internet Archive, a nonprofit digital library of archived web pages, shows that the page was available on December 21. However, the archive doesn’t indicate precisely when the page was taken down.

Warren’s office did not respond to questions over the discrepancy about when the site was removed.

Wells Fargo was unaware that the website had been taken down, a person familiar with the matter told CNNMoney. Wells Fargo declined to comment on the matter.

Click here to read an archived version of the page.

wells fargo website labor department

Wells Fargo’s fake account scandal — the bank fired 5,300 workers for creating as many as 2 million fake accounts — has revealed a toxic sales culture and allegations it mistreated workers.

The Labor Department launched the website last September as a way for Wells Fargo workers to flag potential violations and learn about their rights.

“Taking down this website enables Wells Fargo to escape full responsibility for its fraudulent actions and the Department to shirk its outstanding obligations to American workers,” Warren wrote.

In addition to launching the site, the Labor Department under former President Obama opened a “top-to-bottom review” of Wells Fargo cases, complaints and violations. That review included an inquiry into both open and closed whistleblower complaints against Wells Fargo.

The Labor Department’s focus on Wells Fargo followed a CNNMoney investigation on former employees who said they were fired after trying to put a stop to illegal practices by calling the bank’s ethics hotline.

Wells Fargo (WFC) recently admitted that a review of its ethics hotline has uncovered evidence that at least some of these whistleblower retaliation claims may have merit.

A spokeswoman for the bank emphasized that “there is no place for retaliation at Wells Fargo.”

The Labor Department was also investigating claims from hourly Wells Fargo workers who said the bank’s pressure-cooker culture forced them to work late without overtime pay. CNNMoney spoke to numerous former Wells Fargo employees who alleged wage theft.

Wells Fargo has said that its employees are compensated for all hours worked, including overtime.

Warren wrote that she hopes the Labor Department “under President Trump” will make sure Wells Fargo workers cheated out of wages or illegally retaliated against will be provided “all of the remedies available” under current law.

The letter from Warren asked Labor Department officials to respond to several questions by February 3, including whether the agency will reinstate the Wells Fargo website and if the investigation will continue despite the transition of power.

There are signs that the investigation may have hit some recent obstacles.

In mid-December, the Labor Department wrote a letter saying that an outside attorney representing Wells Fargo tried to hamper the investigation, The Wall Street Journal reported. The letter said that in addition to denying access to records and interviews, the lawyer said she could be part of the new Trump administration, the Journal reported.

Warren asked the Labor Department to expand its investigation to look into how Wells Fargo employees told The Wall Street Journal that a 24-hour heads up ahead of internal branch investigations gave them time to shred paperwork and forge documents.

Published at Fri, 27 Jan 2017 18:34:31 +0000

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Pentagon starts cost-cutting reviews of F-35, presidential aircraft


U.S. Defense Secretary James Mattis ordered cost-cutting reviews of two major aircraft acquisition programs, the F-35 fighter jet and Boeing Co’s (BA.N) next-generation of Air Force One presidential plane, according to Pentagon memos released on Friday.

The review of Lockheed Martin’s (LMT.N) F-35 program, which President Donald Trump has derided as being too expensive, would have two parts: one looking at how to cut costs, and the other determining whether the F/A-18E/F, with improvements, could be an effective, cheaper alternative, the memo said.

Costs for Lockheed’s F-35 program had escalated to an estimated $379 billion. The program accounted for 20 percent of the company’s total revenue of $46.1 billion last year.

The review of the Air Force One replacement, which Trump has also called too expensive, would look at the plane’s requirements and systems and identify courses of action to reduce acquisition and sustainment costs.

In December, Trump extracted a promise from Boeing Chief Executive Officer Dennis Muilenburg that the cost of replacing Air Force One would not exceed $4 billion.

“We’re going to get it done for less than that,” Muilenburg told reporters last month, “and we’re committed to working together to make sure that happens.”

On Friday, a Boeing representative said the company had been providing information to the Trump administration for some weeks and was committed to providing equipment to the military as affordably as possible.

Lockheed Martin did not immediately respond to a request for comment.

(Reporting by Phil Stewart, Idrees Ali, and Mike Stone; Editing by Chizu Nomiyama and Lisa Von Ahn)

Published at Fri, 27 Jan 2017 20:44:18 +0000

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CEO who backs Trump: People must be realistic


Building Trump's Wall: For Texans, it's complicated
Building Trump’s Wall: For Texans, it’s complicated

CEO who backs Trump: People must be realistic


A CEO who voted for Donald Trump is confident that the president will get his big infrastructure plan through Congress.

But he said Wall Street might be just a little too giddy.

Bill Sandbrook, the head of U.S. Concrete (USCR), told CNNMoney that investors are ignoring the political reality in Washington. Even though President Trump is pledging to take quick action to help stimulate the stagnant U.S. economy, it may not be that simple.

“Investors are underestimating the complexity of getting deals done. There are a lot of steps between saying it and doing it,” Sandbrook said. “Things take a while. Shovel ready doesn’t mean it gets done immediately. People need to be more realistic.”

This is the third time CNNMoney has spoken with Sandbrook since the election. Trump’s win has given the company’s stock a significant boost, largely due to hopes that increased spending on roads and bridges will lead to a spike in demand for concrete.

On Election Day, shares of U.S. Concrete closed at just under $49. One week later, when CNNMoney first interviewed Sandbrook, the stock was trading at $56.25. By the time we spoke to Sandbrook again in mid-December, the stock was trading at about $65.

Shares hit an all-time high above $70 earlier this week after Trump reiterated his plans to build a wall on the border of Mexico. The stock has pulled back a bit since then. But it is still up more than 35% since Trump’s win.

Sandbrook joked that he’s really happy to have a company named U.S. Concrete at a time like this. And he continues to be impressed by what he’s heard from the new president so far.

“It is refreshing that a winning candidate is doing exactly what he said would do. Unequivocally. He’s quickly hit the ground running,” Sandbrook said.

He added that he’s confident that there will be a big increase in spending on infrastructure, even though it may take time to nail down the final details. But Sandbrook said he’s encouraged by the bipartisan support for investing in infrastructure.

To that end, a group of eight Democratic senators proposed their own $1 trillion infrastructure plan earlier this week. Even Jerry Brown, the Democratic governor of California, praised Trump’s plan in his state of the state address this week.

While Brown said he was concerned by Trump’s “disturbing” rhetoric and the use of “alternative facts,” he had no problem with the president’s infrastructure plans.

“The president has stated his firm intention to build, and build big,” Brown said. “I say ‘Amen to that, man! Amen to that, brother! We’re there with you.”

Sandbrook said statements like this are good to hear. But he concedes that getting an infrastructure plan through Congress still won’t be a slam dunk. It will take time.

“I am optimistic that things will get done. There will be tax reform. There will be increased infrastructure spending. There will be regulatory reform,” he said. “I am not worried about them not taking place.”

“But how long will it take to enact and what is the final scope? That’s still up in the air. But there will be changes. I am certain of that,” Sandbrook added.

As for the wall? Sandbrook still thinks more details need to be fleshed out before he considers how his company could be part of any construction plans. U.S. Concrete sells its products to big builders. It’s a subcontractor.

And even though a wall would be a tangible symbol of more anti-immigration polices under Trump, Sandbrook still isn’t worried that there will be a big backlash from foreign companies.

Sandbrook points out that two international cement giants — Mexico’s Cemex (CX) and Swiss-based LafargeHolcim (HCMLF) — have a significant number of workers in the U.S. They conceivably could play a role in — and benefit financially from — building a wall.

“If you have a quarry or cement plant in the U.S. you have American workers,” Sandbrook said, adding that as long as the new administration encourages global giants to do business here, that should be good for the U.S. economy.

“America first means American workers. It doesn’t preclude other companies from investing in the U.S. That’s not the focus. Trump needs to be pro-worker, not anti-foreign investment,” Sandbrook said.

Published at Fri, 27 Jan 2017 18:49:09 +0000

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A 20% Mexico tariff would pay for the wall. But it would hurt Americans


Published at Thu, 26 Jan 2017 23:19:47 +0000

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Trump talks to U.S. automakers, pushes for new American plants

by geralt from Pixabay


Trump talks to U.S. automakers, pushes for new American plants


By David Shepardson and Roberta Rampton

U.S. President Donald Trump urged the chief executives of the Big Three U.S. automakers on Tuesday to build more cars in the country, pressing his pledge to bring jobs to America and discourage the car industry from investing in Mexico.

Trump, who has threatened to impose 35 percent tariffs on imported vehicles, opened a White House meeting with General Motors Co CEO Mary Barra, Ford Motor Co’s Mark Fields and Fiat Chrysler Automobiles NV’s Sergio Marchionne by saying he wanted to see more auto plants in the United States.

In return, the new Republican president has vowed to cut regulations and taxes to make it more attractive for businesses to operate in the United States. He promised during his campaign to be a job-creating president and stressed that message in his inaugural address last Friday.

“We have a very big push on to have auto plants and other plants – many other plants,” he told reporters at the start of the meeting. “It’s happening. It’s happening big league.”

Matt Blunt, who heads a U.S. automaker trade association and attended the meeting, told Reuters that Trump asked what his administration could do “on domestic and trade policy that would help make the United States more competitive and strengthen the ability of automakers to add production here.”

The hour-long meeting was the latest sign of Trump’s uncommon degree of intervention for a U.S. president into corporate affairs as he has repeatedly pressured automakers and other manufacturers to “buy American and hire American.”

It was the first time the heads of the big three automakers met jointly with a U.S. president since a 2011 session with Barack Obama to tout a deal to nearly double fuel efficiency standards by 2025. Automakers have urged the Trump administration to rethink those aggressive mandates.

The auto executives on Tuesday raised the issue of the fuel efficiency rules, trade policy and other regulatory matters, another person briefed on the meeting said. Marchionne told reporters afterward that Trump did not give them specifics on what regulations he would cut.

The companies also discussed autonomous and electric vehicles and Trump asked about advanced vehicles, the person said.



With flattening U.S. auto sales and excess capacity in the United States, U.S. automakers have been reluctant to open new U.S. auto plants in recent years. GM and Ford last built new U.S. assembly plants in 2004, while Fiat Chrysler opened a new transmission plant in Indiana in 2014.

Kristin Dziczek, an analyst at the Michigan-based Center for Automotive Research, said automakers still had excess capacity in North America after suffering in the 1990s and 2000s from overcapacity and shifts in market share.

Building a new plant would take three or more years and cost at least $1 billion, industry experts said.

Automakers have expanded operations at existing U.S. plants to meet rising demand for trucks and SUVs. GM, Ford, Fiat Chrysler and foreign automakers have announced new U.S. jobs and investments in recent weeks.

Coinciding with Tuesday’s meeting, Toyota Motor Corp said it would add 400 jobs and invest $600 million in an Indiana plant, aiming to boost production of a popular SUV by 10 percent.


Ford’s Fields said automakers wanted to work with Trump to create a “renaissance in American manufacturing” and that Trump’s economic priorities were encouraging, including his move on Monday to formally bow out of the 12-nation Trans-Pacific Partnership trade pact championed by Obama.

“The mother of all trade barriers is currency manipulation. And TPP failed in meaningfully dealing with that, and we appreciate the president’s courage to walk away from a bad trade deal,” Fields told reporters after the meeting.

Barra said there was a “huge opportunity” to work together with the government to “improve the environment, improve safety and improve the jobs creation.”

U.S. automakers have collectively added more than 78,000 jobs since 2009, the year when GM and Chrysler, now a unit of Italian-American Fiat Chrysler, filed for bankruptcy as part of government bailouts during the U.S. recession. They have invested more than $40 billion in U.S. facilities during that period.



Despite the vocal pressure from Trump, the companies are unlikely to truly change their existing business plans for now, said Sam Fiorani, vice president of global vehicle forecasting with AutoForecast Solutions.

“We need to have more concrete policies from the president,” he said. “Automakers will make decisions on whether there is a solid business case. Does it make more sense to build outside the U.S. or to build in the U.S.?”

GM said in 2014 it would invest $5 billion in Mexico through 2018, a move that would allow it to double its production capacity, and Barra has said the automaker is not reconsidering the plan.

While automakers are adding U.S. jobs, they are also cutting U.S. production of small cars. On Monday, GM ended two shifts of production of small cars in Ohio and Michigan, cutting about 2,000 jobs.

Barclays auto analyst Brian Johnson said in a note on Tuesday that “automakers will be willing to make a deal that would bring back jobs to the U.S. in return for a slower ramp of (fuel efficiency) targets and related state-level mandates.”Auto stocks rose on Tuesday. U.S.-listed shares of Fiat Chrysler gained 5.84 percent to $10.88, while Ford was up 2.44 percent to $12.61 and GM rose 0.96 percent to $37.

(Additional reporting by Susan Heavey and Bernie Woodall; Editing by Frances Kerry and Peter Cooney)
Published at Tue, 24 Jan 2017 23:24:16 +0000

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