BRANDS IN THE AGE OF TRUMP
At 7:30 a.m. on January 3, as most workers were just returning to their jobs after the holidays, Donald Trump picked up his phone and fired a virtual cannonball at America’s largest automaker. “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border,” he tweeted. “Make in U.S.A. or pay big border tax!”
Trump’s threat was quickly shared or liked nearly 100,000 times on Twitter, and soon dominated the news. GM’s stock dropped in pre-market trading. “I had been in my office for barely 40 minutes after the New Year, and all of a sudden my day went whoooosh,” recalls a source familiar with the situation at GM. “The question was, How should [the company] react?”
There was no perfect solution. Part of the problem was that Trump’s tweet wasn’t exactly true. GM sold around 190,000 Chevrolet Cruzes in the U.S. last year, and just 2.4% of them, or roughly 4,500 vehicles, were imported from Mexico. The majority of models were actually built at a plant in Lordstown, Ohio. The situation seemed to cut to the core of GM’s values: whether the company believed in the future of U.S. manufacturing, of U.S. jobs. Complicating the matter, CEO Mary Barra had recently agreed to join Trump’s economic advisory council. Would any pushback damage her relationship with the incoming administration? The best course of action, two sources familiar with the situation say, was “to take a big, deep breath” and “calmly” clarify the facts in a three-sentence public statement. By the end of the day, GM’s stock had rebounded. (Two weeks later, when GM announced a $1 billion investment in U.S. operations—which had been long in development, according to The Wall Street Journal—Trump offered up a thank-you tweet.)
GM’s measured response may have prevented any lasting damage, but the fact that it
