Reality check: the trouble with Trump's outsourcing crackdown - Axios
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Reality check: the trouble with Trump's outsourcing crackdown

Donald Trump hates companies that cut U.S. workers and hire abroad. So who should he be mad at? An Axios analysis of financial filings of the 250 largest companies in America shows that there are very few large companies engaging in this behavior, and the ones that are significantly adding jobs abroad aren't doing so for the reasons Trump detests.

Here are the 4 companies we found that fit the bill:

Data: SEC filings

A spokesperson for General Electric says that the company is a totally different one than it was in 2005, after several divestments of U.S. assets, like NBC in 2009, which did not involve job losses, reduced its U.S. employee count. It also has purchased businesses abroad like Alstom which has increased its foreign headcount. Honeywell also points the finger at divestitures of domestic businesses, transactions that don't necessarily result in job losses, as the reason for it's falling U.S. headcount. Lear—the company on our list with the highest share of overall foreign employment—said said the automotive industry markets it supplies that are outside the U.S. are growing faster than the domestic market. Mondelez didn't respond to requests for comment.

Data: SEC filings; Chart: Lazaro Gamio / Axios

Even in the cases of these firms, where we have hard, public data, the issue of acquisitions and divestitures make identifying which, if any, major companies are "shipping jobs overseas" a difficult, if not impossible one to answer. Here's what else we found:

A severe lack of information: fewer than one-fifth of companies studied voluntarily reveal where their employees are located. Because there is no requirement for disclosing where public companies employ workers, it's impossible to study the problem in a systematic way, or know which companies are the worst offenders. Labor leaders have been lobbying to make the disclosure of outsourcing mandatory. The president may consider taking up this banner.

Car companies are being unfairly singled out: Take GM for example. The company has reduced U.S. employment over the past ten years, but it also cut jobs abroad too. Foreign jobs are shrinking at a slower rate, sure, but much of the story of disappearing manufacturing jobs is about automation rather than outsourcing. If car companies are reducing the number of workers overall that they need to produce ever more cars, it will not be very fruitful to focus as much energy on the industry as the Trump Administration has.

Motivation is paramount: When one thinks of outsourcing the typical picture is of employers who shutter a factory in the U.S., move it abroad, and then import those products for sale in America. This is exactly the type of behavior the president says he is targeting. But some international trade experts argue that these sort of moves are less common today than ten or twenty years ago. Harry Moser, a former manufacturing executive and president of the reshoring initiative says that the U.S. has, since 2010, seen more jobs come back to the U.S. than leave on the strength of cheap energy and the ability to automate tasks that once had to be done by hand.

Meanwhile, the majority of the foreign hiring in the financial statements reviewed by Axios appears to be motivated by a different concern: the desire to sell to foreigners, not Americans. Because developing economies grow at a faster rate than developed economies like the U.S., returns on investment will be higher abroad than at home. That means companies will naturally increase employment abroad, but those jobs were never going to go to Americans anyway. Starbucks illustrates this point, as it has increased the number of foreign employees by 278% since 2005, but it's not as if a displaced worker in Michigan can take a job serving coffee in Bangalore.

Why it matters: Trump has gone all-in on the idea that he'll bring American manufacturing back by sheer force of will. But much of these jobs left decades ago, and are now being done by machines. The sort of expansion Corporate America is doing abroad isn't the sort that Trump can easily vilify, and those companies that are engaging in this behavior aren't required to disclose it.

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Sessions vows to take travel ban appeal to Supreme Court

Ted S. Warren / AP

Attorney General Jeff Sessions has announced the DOJ will ask the Supreme Court to review Thursday's ruling from a federal appeals court keeping the block on President Trump's travel ban in place:

"President Trump's executive order is well within his lawful authority to keep the Nation safe…The Department of Justice strongly disagrees with the decision of the divided court..."

The dissenters: Sessions is right, the court was split 10-3. The dissenters said that the law does not permit judges to second-guess a president's ability to make decisions about national security.

The majority: Chief Judge Roger Gregory, however, wrote the ban "drips with religious intolerance, animus, and discrimination."

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Ford veteran returns after brief stint at Uber

Alan Diaz / AP

Sherif Marakby, an automotive executive who left Uber in April after one year, has re-joined Ford, where he previously spent 25 years, according to the Wall Street Journal. Marakby will be a vice president overseeing the company's self-driving and electric-car businesses.

The news comes a few days after Ford abruptly named James Hackett as its new CEO, replacing Mark Fields. Hackett was previously heading the company's Smart Mobility division.

Between the lines: Marakby's departure from Uber was only the latest amid a slew of controversies around the company, including an ongoing lawsuit from Alphabet's self-driving car unit, Waymo. And with Detroit's increasing focus on keeping up in the autonomous driving race and rethinking car ownership models, it's no surprise to see Marakby being wooed back by Ford, which has been heavily investing in those areas over the past year.

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U.K. resumes sharing intel with U.S.

Matt Dunham / AP

The U.K. has resumed sharing intel with the U.S. according to the U.K. Home Secretary, Reuters and BBC report. This comes after the U.K. halted sharing intel with U.S. officials due to undesired leaks to the media about the Manchester bombings and photos of the crime scene.

Why now? U.K. counter-terrorism officers reportedly received assurances today about the U.S. Earlier today Trump said he had asked the DOJ to launch review of the leaks and threatened prosecution.

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Millennials want to buy houses, but not save for them

Keith Srakocic / AP

Avocados aside, almost 80% of millennials plan to buy a home at some point, but aren't prepared for it, according to a study by Apartment List. The study also found that many millennials, especially those in metropolitan areas, significantly underestimate how much a down payment will cost them.

  • Almost 70% of 18- to 34-year-olds have saved less than $1K for a down payment.
  • 40% don't save at all on a monthly basis — even among 25-34 year olds who historically have owned or would be soon owning a home already.
  • Millennials making less than $24K typically save about 10% in general, while those who make more than $72K only save 3.5%.
  • Less than 30% of 25- to 34-year-olds can save enough for a 10% down payment in the next three years.

Why: In the survey, not being able to afford to buy a home was the biggest determent, followed by not being ready to settle down or waiting to get married. Student debt, rent and delayed careers due to the recession could all attribute to the affordability problem, as well as trends in urban areas to spend more on food and entertainment, Wall Street Journal points.out.


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Zuckerberg: We need more purpose

Steven Senne / AP

Mark Zuckerberg told Harvard's graduating Class of 2017 Thursday that strong projects creating a sense of purpose for everyone involved. He said his hardest times at Facebook came about when he didn't take the time to explain the purpose of the project.

His call to action: Let''s "do big things not just to create progress, but to create purpose...You are graduating into a world that needs purpose. It's up to you."

His advice to those with big ideas: "Be prepared to be misunderstood."

What pop culture gets wrong about tech and innovation: "The idea of a single eureka moment is a lie," which he says is detrimental to future innovators who tend to think, "we feel like we just haven't had ours yet." Also, "no one writes math formulas on glass."

Here's everything Zuckerberg says our society needs right now:

  • "How about stopping climate change before we destroy the planet and getting millions of people involved installing solar panels?"
  • Track health data and share genomes
  • "Invest in cures so people don't get sick"
  • "How about modernizing democracy so everyone can vote online?"
  • "And how about personalizing education so everyone can learn… continuous education through our lives"
  • "Let's do it in a way that gives everyone" a role
  • "We need affordable child care"
  • "Healthcare that's not tied to just one employer"
  • "We need a society that's less focused on locking us up and [that] stigmatizes us when they do"
  • Eliminate income inequality
  • Deal with automation and self-driving trucks
His take on globalization: "There are people left behind by globalization…It's tough to care about other people when we don't feel good about our lives at home. There's pressure to turn inward."
Zuckerberg was accepted into Harvard as a member of the Class of 2006 and today received a Doctor of Laws with the Class of 2017.
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OPEC down for "whatever is necessary" to raise oil prices

Ronald Zak / AP

Following a series of meetings between OPEC and non-OPEC countries in Vienna Thursday, Saudi Arabia's energy and oil minister, Khalid Al-Falih announced that all members will do "whatever is necessary to balance the markets," even if that means further extending cuts in oil output past March 2018.

Why March? Earlier today, the group agreed to extend its November deal to cut oil output by nine months. Al-Falih said that although they believe they will hit their desired target by the end of the year, the three-month extension should help with any buildup of stocks.

Conformity to deal: "The conformity level from the members is exceptional. We have reached 102% of overall conformity, so we are even exceeding our commitment," said Al-Falih. Russia's minster of energy, Alexander Novak, also noted that his country reached full conformity at the end of April.

The caveat: Despite Al-Falih's boasting of such high conformity, not all OPEC and non-OPEC members who agreed to cut oil output by 1.8 million barrels a day are keeping up their end of the bargain. Iraq is just one example of cheating the agreement. According to Bloomberg, Iraq produced roughly 80,000 more barrels of oil a day than permitted.

Next meeting: All OPEC and non-OPEC members will meet again on November 30, 2017. Al-Falih said that the two groups are considering extending their close alliance and continuing to work together beyond 2017 and the nine-month extension.

  • 14 OPEC countries, as of January 2017: Algeria, Angola, Ecuador, Equatorial GuineaGabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia (the de facto leader), United Arab Emirates, and Venezuela.
  • 10 non-OPEC countries: Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan and South Sudan.
Facts Matter Featured

What is NATO Article V and where does Trump stand on it?

Matt Dunham / AP

The issue

At a NATO leaders meeting May 25 President Trump did not explicitly endorse the collective defense article, Article V, of the North Atlantic Treaty, which binds member nations to defend one another if one comes under attack.

The facts

Trump was expected to make a commitment to Article V in the speech, but then stopped short of doing so. He did discuss shared "commitments," using the example of the September 11 attacks (the only time Article V has been invoked):

"We will never forsake the friends who stood by our side. And we will never waver in our determination to defeat terrorism and to achieve lasting prosperity and peace."

Why it matters

Article V is the cornerstone of NATO, and NATO member countries have been waiting to hear Trump confirm the U.S. will honor it, especially as he has repeatedly stressed that not all members are paying their fair share of defense spending and once called the alliance "obsolete." After the backlash to the omission, Sean Spicer stepped in to explain they're "not playing cutsie" and that Trump is "fully committed" to Article V.

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Ryan says Congress will move up deadline on debt ceiling

Andrew Harnik / AP

House Speaker Paul Ryan told investors Thursday that Congress will move up its deadline to raise the debt ceiling to avoid an economic default, reports AP. Congress was initially expected to vote on the debt limit this fall.
"The debt ceiling issue will get resolved."
—Paul Ryan
Timing: His reassurance comes a day after Treasury Secretary Mnuchin warned that Congress needs to vote to raise the nearly $20 trillion ceiling before their August recess.
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Trump to Macron: "You were my guy"

Peter Dejong / AP

French officials said today that President Trump denied having supported far-right nationalist Marine Le Pen in the recent French presidential election while meeting with French President Emmanuel Macron today. Instead, Trump told Macron:

You were my guy.

Worth noting: While it certainly seems like Le Pen's nationalist positions would have endeared her to Trump, he stopped short of endorsing her in an April interview with the AP: "No, I have no comment on [endorsing Le Pen], but I think that [the April 20 shooting of Paris police officers] will probably help her because she is the strongest on borders and she is the strongest on what's been going on in France."

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Senate will start putting together draft health care bill next week

(Jacquelyn Martin / AP)

After three weeks of working group meetings, Senate Republicans will begin drafting their version of a health care bill over next week's recess.

"Over the break, initial legislation will be drafted, and then we'll have more time — we'll actually have a basis to discuss on these things," Sen. Ron Johnson told reporters, saying leadership and committee staff will write the bill.

What to watch: While we expect the Senate bill to take on some the same basic policy structure as the House bill, some pieces are subject to change — particularly after the release of the Congressional Budget Office score yesterday. There's a lot of hesitation to include state waivers that allow states to opt out of the Affordable Care Act ban on charging sick people higher premiums, and the Medicaid per-person funding growth rate debate is still unresolved.