Measuring Trump’s role in U.S. jobs announcements

Trump at Carrier
Donald Trump, then the president-elect, mingles with Carrier Corp. factory workers in Indianapolis after announcing a job-saving deal on Dec. 1.
(Darron Cummings / Associated Press)

Jobs growth is a centerpiece of President Trump’s agenda, but there’s already debate over his role in creating and protecting thousands of U.S. jobs.

Since election day, several U.S. and foreign companies — as varied as Wal-Mart Stores Inc. and South Korea’s Hyundai Motor Co. — have unveiled plans to add American jobs, shift jobs back to U.S. soil or keep jobs in the United States.

Having vowed to be “the greatest jobs producer that God ever created,” Trump has touted the announcements as evidence of the new business climate he’s brought to the White House, including his pledge to seek lower corporate taxes and fewer regulations.

Some of the announcements came after the companies’ executives met with him at Trump Tower in New York, and the implication was clear: Trump’s power of persuasion, or his threats to make the companies’ futures more costly if they didn’t promote U.S. jobs, also prompted them to invest more heavily in jobs at home.


But some of the companies, economists and the media were quick to question whether Trump deserved credit, noting that in many cases the added jobs already were planned.

That reasoning got under Trump’s skin. “Ask top CEO’s [sic] of those companies for real facts” about jobs, he tweeted at one point. “Came back because of me!”

Skeptics contend that the companies were highlighting their job growth mostly to curry Trump’s favor because they do business with Uncle Sam, have to contend with federal tax or regulatory issues or because they don’t want to be hit with one of Trump’s critical tweets that could hurt their stock prices, if only briefly.

The automakers, for instance, are trying to align with Trump because he has threatened to slap a 35% tariff on cars built by U.S.-based companies in Mexico or other overseas plants that are then sold in the United States.


A CNBC headline on the issue put it this way: “Companies are recycling old news to avoid being the target of a Trump Twitter attack.”

Some economists doubt that Trump’s tweets or policies have had a genuine effect on executives’ decisions about creating new jobs for Americans. They say Trump may be prompting companies to make a bigger show of plans they had in the works long before the new president took office.

“These things happen in both directions all the time — new factory, closed factory, jobs move out and jobs move back,” said David Neumark, a professor of economics at UC Irvine. “This is pure PR …. They are making these announcements to keep him off their back.”

Even so, the flurry of announcements regarding U.S. jobs and investment following Trump’s election and before he even was sworn in as president mark an unusual chapter in U.S. business history.

Trump immediately brought enormous publicity to the issue of job creation, and the spotlight is likely to intensify now that he can actually influence corporate taxes, trade and other policies.

Indeed, the White House last week joined with executives from several major U.S. companies and labor leaders to set up a “manufacturing jobs initiative” to help Trump formulate policy.

Some experts say Trump’s promise to cut corporate taxes and regulations might be changing hearts and minds in executive suites nationwide.

“He is creating a much better, more competitive investment environment for corporations in this globalized world,” said William Yu, an economist at UCLA’s Anderson School of Management.


Yu acknowledged that the recent announcements were probably driven by concerns about impressing the president and the public, but that Trump’s “pro-business” bent could be at least a small part of the calculus for corporations.

Of course, companies will still have to contend with higher U.S. labor costs if they cancel plants abroad. Yu suggested they might try to save on labor by pouring money into machines and technology that would ultimately eliminate some chunk of their workforce here.

“I think CEOs are thinking maybe we can use automation to offset the cost of American labor, and revitalize some part of manufacturing,” Yu said.

Here’s a look at some of the jobs announcements and the debate surrounding Trump’s role in each of them:

General Motors Co.

Jobs at issue: 7,000

The details: GM said it planned to invest $1 billion in U.S. factories and create or keep 7,000 U.S. jobs in the next few years, including about 2,000 at factories.

GM said the actions were in the works well before the election, but company spokesman Patrick Morrissey acknowledged that “this is good timing for us to share what we are doing. There’s no question there is an emphasis on job creation in the U.S. right now.”


That didn’t stop Trump from claiming credit.

“With all of the jobs I am bringing back into the U.S. [even before taking office], with all of the new auto plants coming back into our country … I believe the people are seeing ‘big stuff,’” Trump said on Twitter.

Hyundai Motor Co.

Jobs at issue: “Thousands”

The details: Hyundai, whose affiliates include Kia Motors Corp., said it would invest up to $3.1 billion in its existing U.S. manufacturing facilities and was considering building a new U.S. plant, which would help create “thousands of new jobs.”

Although Hyundai wasn’t specific about the jobs count, the company said it aimed to spend the money over the next five years on updating existing facilities and investing in new technologies such as autonomous vehicles.

Wal-Mart Stores Inc.

Jobs at issue: 10,000

The details: The giant retailer said the additional jobs would come from planned store openings, store expansions and new e-commerce services. Wal-Mart said those plans also would lead to about 24,000 additional construction jobs.

In announcing his approval, Trump again took to Twitter: “Thank you to General Motors and Walmart for starting the big jobs push back into the U.S.!” he wrote, even though neither company appeared to be talking about a major employment push “back” to the United States.

Separately, Wal-Mart has been trimming jobs at its Bentonville, Ark., headquarters and its California-based e-commerce operations. Memos obtained by the Wall Street Journal put the combined total at about 1,200, mostly in Arkansas.

Bayer AG/Monsanto Co.

Jobs at issue: “Several thousand”

The details: The two agrochemical giants are seeking U.S. approval of their proposed $57-billion merger and they hope their pledges of job growth will help secure that clearance.

After meeting with Trump recently, the companies’ chief executives issued a joint statement vowing $8 billion in spending for U.S. research and development over six years that would “create several thousand new high-tech, well-paying jobs.”

White House Press Secretary Sean Spicer told reporters that the U.S. jobs figure was “at least 3,000” and that the companies would “retain 100% of Monsanto’s 9,000-plus U.S. workforce.” Inc.

Jobs at issue: 100,000

The details: After the e-commerce giant said earlier this month that it would add another 100,000 full-time U.S. employees, mostly in its fulfillment centers, over the next 18 months, Spicer told reporters that Trump “was pleased to play a role in that decision.”

But the company, which currently has more than 180,000 U.S. employees, did not mention Trump in its announcement, and Amazon has been on a hiring spree for years.

UC Irvine’s Neumark pointed out that it wouldn’t make sense for Amazon to start putting distribution centers for American consumers in other countries in the first place. “Where else are you going to build a distribution center?” he said.

Sprint Corp.

Jobs at issue: 5,000

The details: The wireless company committed to creating or bringing back 5,000 jobs to the United States, saying it was “excited to work” with the Trump administration “to do our part to drive economic growth and create jobs in the U.S.”

The Overland Park, Kan.-based company said the jobs would mostly be new sales positions and call-center jobs filled by U.S. workers managed by overseas vendors at U.S. sites.

Sprint is controlled by Japanese billionaire Masayoshi Son and his SoftBank Group Corp., and after meeting with Trump in December, Son said his company would invest $50 billion in the United States and create 50,000 new jobs overall.

Trump said Sprint’s decision was influenced by “the spirit and the hope” of his administration.

Carrier Corp.

Jobs at issue: About 1,000

The details: The maker of air conditioners and furnaces agreed in late November to keep roughly 700 manufacturing jobs in the Indianapolis area rather than shift them to Mexico as planned, and to retain about 300 engineering and headquarters staff in Indianapolis. In exchange, Carrier received several million dollars’ worth of state tax breaks.

During the presidential campaign, Trump repeatedly had criticized Carrier’s planned move to Mexico. Trump and Mike Pence, who had been Indiana’s governor before becoming vice president, helped reach the deal with the company and toured Carrier’s factory after the deal was reached.

But some observers criticized Trump for saving the jobs at the cost of providing added tax incentives.

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