I am sure you are well aware of President Trump’s explosive first week in office, made full with the delivering of campaign promises.
He has held true to every promise he has made thus far. One many are eager to see met is the bringing in and creation of more jobs on American soil.
We are tired of seeing so many companies outsourcing labor from foreign countries, which has ultimately been killing the prospect of any resurrection of the American manufacturing scene for years.
President Trump says he’s going to put an end to that.
On the Monday after the inauguration, the president invited many prominent business leaders to a meeting on manufacturing held in the Roosevelt Room of the White House.
The topics discussed were expediting tax cuts for corporations and decreasing regulations by at least 75%.
According to a report by Business Insider, the president stated that the current regulations in place “make it impossible to get anything built.”
The goal, according to President Trump, is to “bring back manufacturing to our country.”
“There will be advantages to companies that do indeed make their productions here.”
Tariffs and hefty border taxes will be awaiting those who continue to manufacture their goods outside of the U.S.
Some of the business executives present for this meeting were none other than:
- Elon Musk of Tesla
- Mario Longhi of U.S. Steel
- Kevin Plank of Under Armour
- Mark Fields of Ford
- Michael Dell of Dell Technologies
- Jeff Fettig of Whirlpool
- Alex Gorsky of Johnson & Johnson
- Marillyn Hewson of Lockheed Martin
- Klaus Kleinfeld of Arconic
- Andrew Liveris of Dow Chemical
- Mark Sutton of International Paper
- Wendell Weeks of Corning
Tesla
Elon Musk, co-founder and CEO of Tesla, was also present for the tech summit hosted back in December at Trump Tower in New York.
Musk’s latest appointment to the president’s new council, which is designed to regularly discuss manufacturing policy, only strengthens ties he has been making with the president in recent months, says The Motley Fool author Daniel Sparks.
Musk was also appointed to the president’s Strategic and Policy forum, which includes some of the most respected and successful business leaders.
The fact that President Trump is granting this much access to Musk, considering their differing views on climate change and oil dependency that occupy either ends of the Big Oil spectrum, is incredibly substantial.
This speaks highly of both parties being open and willing to cooperate with the other’s opposing administrative goals and ideals.
What could these new political ties mean for Tesla as a company?
It is easy to assume that nothing but stagnant political movements as result of quarrels between politicians and appointees are in the near future.
But it seems those assumptions are wrong.
Investors have been placing considerable weight on Musk’s associations with President Trump.
Tesla stock has increased 38.22%.
Tesla also has plans to increase jobs in the U.S. astronomically with the completion of its Gigafactory in the near future.
It is estimated to create approximately 50,000 new jobs, if not more.
In addition, Tesla has created over 13,000 U.S. jobs that are directly related to manufacturing.
Its ever-growing manufacturing presence is directly linked with one of the president’s main prerogatives.
Musk and President Trump working together has done much to create more domestic jobs available.
I’m sure such an alliance will continue to prosper.
U.S. Steel
Despite controversy over the ethical constructs of the latest trans-American pipeline endeavors, President Trump has most recently signed an executive order stating that only American-made steel will be used during the process.
U.S. Steel CEO Mario Longhi remains strongly optimistic with the Trump administration for its potential to create good-quality jobs in America’s declining steel industry.
While speaking to investors during a conference call, the U.S. Steel CEO stated, “The president is remaining true to his campaign promises, and one of them is to buy American and to hire America.”
The president has directed the Commerce Department to design a plan in which the pipelines will be built “to the maximum extent possible” with American-manufactured materials.
This is great news for some 10,000 laid-off steelworkers; all will be called back to work, says the CEO.
And better yet, this is merely reflective of an industry-wide trend that is taking place, not exclusive to U.S. Steel alone.
All domestic steel producers should expect the following benefits from President Trump’s latest policies concerning the industry: an infrastructure push, which could rev up demand; corporate tax cuts that would deliver increased after-tax earnings; and tariffs against Chinese steel imports, which could solidify pricing, says Len Boselovic of The Pittsburgh Post-Gazette.
Tesla is not the only company to benefit from the president’s attentions.
During the same conference call with investors, Longhi claims, “We are starting 2017 with better market conditions than we faced at the beginning of 2016.”
U.S. Steel revenue is expected to climb 3.1% to $2.65 billion, and its stock has increased a massive 78% since the election.
Even better yet, the company will restart an iron ore plant in Keewatin, Minnesota, after it had been sitting idle for two years due to the favoring of cheaper imports from competitors, which means an additional opportunity for more workers to come back to work.
Let’s hope this “environment of positive optimism” for all industrial steel manufacturers, not just U.S. Steel, will continue on amidst pipeline protests.
Under Armour
An especially favored athletic brand with Marylanders due to the company’s strong roots in Baltimore, Under Armour has extended its reach and has achieved a vast international presence in both sales and manufacturing.
Under Armour states on its website that its products are primarily manufactured in Asia, Central and South America, and Mexico.
The Street stating that just under 8% of all of Under Armour’s factories are located within the U.S.
However, this could mean detrimental things for the company if President Trump’s border taxes and tariffs take hold.
The company and others like it could be looking to spend millions to import their products back into the U.S.
Some of this could be combated with the grand opening of Under Armour’s UA Lighthouse in Baltimore this past July.
This new state-of-the-art, 35,000-square-foot facility could potentially reshape the company’s future.
The UA Lighthouse has been outfitted with the latest technologies, 3D printers, and body scanners, which are designed to completely innovate the clothing and shoe manufacturing process.
With staffed scientists, everything will be made and tested in house.
Streamlining and accelerating its supply chain is imperative to Under Armour after CEO Kevin Plank’s latest invitation to the White House.
CEO Kevin Plank said recently in a speech that moving manufacturing where labor is cheap isn’t sustainable, but consistently innovating is.
We should be bringing jobs back, not just to America, but tightening supply chains all over the world.
We have the ability to do better.
It’s time for us all to make an investment.
Plank goes on to say that Under Armour intends to invest more into its beloved Baltimore, improving upon the 1,000 jobs created with the opening of the UA Lighthouse.
Under Armour no longer wishes to rely on cheap labor, Plank says.
With the impending release of “border taxes,” this could easily become an additional catalyst for Under Armour to accelerate its domestic innovations.
This does not solve Under Armour’s foreign manufacturing issue outright.
But it is definitely a step in the right direction, as more and more consumers prefer locally produced goods.
The Dawn of a New Era
The mission to revitalize the manufacturing sector of America’s domestic business front is well under way.
Many companies contributing to the mission with the creation of tens of thousands of new jobs, especially those mentioned above, are doing so to avoid the consequences of monumentally increased taxes on goods produced outside of the U.S.
In an effort to punish those companies that continue to outsource foreign labor, border taxes and tariffs are soon to be called into action.
And it seems as if companies are responding positively to the new order.
Tens of thousands of newly created jobs on American soil illuminates the promise of future prosperity for our domestic infrastructure.
Until next time,
Jennifer Clark
Pro Trader Today