Airlines, hotels and other firms getting crushed by the coronavirus recession are practically begging for federal bailouts. But not General Motors. The auto giant already got one of those, and it really doesn’t want another.
Instead, GM (GM) may help address the problem, by using its manufacturing and supply-chain expertise to speed the production of badly needed ventilators. Ford and Tesla (TSLA) may do the same. GM required a $51 billion bailout during the Great Recession in 2008 and 2009, with taxpayers ultimately losing $11 billion on the deal. That was the costliest bailout of the entire crisis, leading some consumers to swear off GM vehicles. Chrysler took a bailout too, while Ford (F) soldiered on without one.
This time, the automakers want to be part of the solution. “The automakers are conspicuously absent from the queue of industries lining up to feed from the coronavirus bailout trough despite being identified by Moody’s as being among the top three sectors exposed to financial risks from the pandemic,” Beacon Research wrote to clients recently. “They still have political scars.”
Even if they’re not on the front lines fighting the outbreak, many firms are clearly looking for ways to do good while maybe earning some goodwill. Walmart (WMT), a regular target of labor activists, is hiring 150,000 workers and giving employees temporary raises. It could probably do the opposite, since people losing jobs in other industries might sign on at reduced pay. But companies have learned that cutting labor costs can backfire if it upsets your customers and draws protesters.
Amazon (AMZN) is hiring and giving temporary raises, too, as shoppers stuck inside shift to online ordering. Consumers love Amazon, but some politicians don’t. President Trump routinely attacks CEO Jeff Bezos because he owns the Washington Post, a frequent Trump critic. Democratic Sen. Elizabeth Warren thinks Amazon is too powerful and wants to break it up. But now, with thousands of U.S. companies shedding jobs, does it still make sense for politicians to attack the few companies that are hiring?
Google (GOOG, GOOGL), Facebook (FB), Microsoft (MSFT) and Twitter (TWTR) say they’re taking dramatic new steps to police online coronavirus misinformation. Facebook has given its workers a $1,000 bonus each to help with childcare while they work from home during the pandemic. And it’s vaporizing any ads on the platform by profiteers selling marked-up masks or disinfecting products.
Funny, just a couple months ago Facebook provoked widespread condemnation for refusing to outlaw dishonest political ads, and that’s just one chapter in the saga that began with Russian disinformation efforts across Facebook in 2016. From 👎 to 👍?
Google is another tech firm attracting unwanted antitrust scrutiny, with state and federal authorities investigating whether it controls too much of the online advertising market. How nice of Google then, to launch the free coronavirus website that, while not what President Trump promised, is a decent starter effort with authoritative information. Could we really go after companies like this helping the American public, for free?
The answer is you betcha we could, if a nasty recession materializes and fuels the simmering anti-corporate resentment many Americans already feel. But minds do change, and let’s face it, the Trump administration’s late response to the crisis, and its directionless guidance, have left a gigantic leadership vacuum. Somebody has to lead. Why not Google and Amazon and GM?
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. Confidential tip line: firstname.lastname@example.org. Encrypted communication available. Click here to get Rick’s stories by email.