¶ Navigating Economic Anxiety in Corporate Communication
Welcome back to Communication Breakdown, a new podcast from the Observatory on Corporate Reputation. Thanks for joining us. I'm Steve Dowling in Silicon Valley. And I'm Craig Carroll in New York City. Each week, Steve and I take a look at strategies companies are using to shape headlines and sometimes save their skins. It's a post game show for PR Pros. This week, comms in the time of economic anxiety, some do's and do's for navigating tariffs and layoffs.
First up, Ford Motor Company CEO Jim Farley has put a face and a voice on the business community's concerns over Donald Trump's economic plans, starting with those tariffs on aluminum and steel. Unless you plan to drive a toboggan, those are pretty essential components of any automotive product. Ford gets about 10% of its steel from Canada. Speaking this week at the Wolf Research Conference on Auto Technology, Farley said Trump's proposed tariffs would be in his words, quote, "devastating."
So far, what we're seeing is a lot of costs and a lot of chaos. If you look at the tariffs, let's be real honest, long term, a 25% tariff across the Mexico and Canadian border will blow a hole in the US industry that we have never seen. It would be on to say that Trump's promise to roll back the Biden-era inflation reduction act would put many production jobs at risk. The IRA established tax incentives for electric vehicle battery production, creating some 200,000 American jobs so far.
Farley said Trump's promise changes would hit workers at border-simile plants in Ohio, Michigan, Kentucky, and Tennessee, all states Trump carried in last year's election with help from blue-collar workers. And those comments come on the heels of Ford's earning call February 5th when Farley told analysts the company could weather a few weeks of tariffs but sounded the alarm about the domestic impact of a drawn-out trade war.
There's no question that tariffs at 25% level from Canada, Mexico if they're protracted would have a huge impact on our industry, with billions of dollars of industry profits wiped out and adverse effect on the US jobs as well as the entire value system in our industry. There's would also mean higher prices for customers. Issuing such dire warnings, Farley's breaking with his peers in Detroit and most of the rest of corporate America who have largely avoided painting such a bleak picture.
The story here is not that Ford sees the tariffs devastating their business, it's that they've decided to say it out loud and in public. Compare Farley's approach to that of Mary Barra, CEO of General Motors, who was on stage after his remarks about costs in chaos. Farley has been emphasizing preparedness, saying GM has contingency plans to avoid short-term impacts of tariffs and she's been saying she's very "goal aligned with Trump."
No talk of job losses are blowing a hole in the auto industry. All these words are being chosen very carefully in Dearborn and Detroit, Craig. Who's got the right approach? Steve, it's not even a question. Mary Barra is playing this summer smarter. Ford's moved to me just wasn't acknowledging the impact of tariffs. It was deciding to make a public fight and what you do that, you're committed, you can't walk it back without looking weak and you can't escalate it without increasing risk.
Meanwhile GM's approach, very clearly contingency planning, quiet confidence, no panic and that's what stability looks like. Yeah, I still think we need to give Farley credit for saying what other CEOs don't seem to want to say, at least in public. I can see a couple of factors playing into this strategy. Trump doesn't like to hear opposition to his ideas, but at the same time we know he gauges his own success in part by the economy and specifically the stock market.
If Farley's making public comments and that helps fuel the conventional wisdom that tariffs will hurt American workers and companies bottom lines, which economists all agree on, there's I've seen, that could help his cause. Of course, the line of thinking banks on other business leaders joining the chorus and so far that hasn't happened.
Yeah, I mean, I see what you're saying, you know, Farley's definitely taking a stand where others are staying silent and there's something to be said for that, but I wonder if Ford is gambling on a collective outcry that just isn't materializing and if other CEOs don't follow his lead then what? You know, he's out there alone taking all the heat while everyone else is watching from the sideline. So I see it as a big bet.
I think that one of the things we need to keep in mind is that Farley was not CEO during most of Trump's first term and it's not clear that they have a personal relationship or if Farley has any direct access at all. Maybe he does, but he's been pretty circumspect when asked about his dealings with the White House. So taking this public route might be his only option or might be seen as his best option.
I'm sure he'd prefer to be invited to dinner and make the case person to person, but that doesn't seem to be happening. To your point, also, I think it is a gamble. And one of the problems here, if they're betting on other business leaders joining the chorus is that not enough people may be getting this message.
The other business leaders are quiet and Farley did make similar comments on CNBC after Ford's earning call, but otherwise he's talking off camera and that's making the coverage less impactful. You know, I mean, Farley might be banking on Trump's market sensitivity, but Trump has also shown he's willing to let short-term market pain play out.
If he believes it's going to strengthen his broader agenda, so the question is whether Ford's messaging resonates enough to shift the broader narrative or if it's just going to put a target on its back. Well, yeah, and I think that short-term is the operative phrase there because you see both Ford and General Motors saying that they can absorb the impact of short-term tariffs.
I think what they're basically saying is if this is just a negotiating tactic, like we can deal with it, but it's the longer term that Farley is warning about and I haven't seen Mary Barra say anything to contradict him. That is where the problems are going to come in for Ford, for the entire auto industry, for American workers. I think also we need to keep things in perspective here. Like, he's not exactly going hammer and tongs against Trump.
One of the trade publications I saw said Farley went gloves off with Trump. It didn't feel that strong to me. But it's certainly farther than any other business leader has gone in criticizing a Trump policy. And I think that's what has made people pay attention in any other universe. I think we would just call this making a counter-argument. So, I suspect that Ford is now trying to gauge how this message goes over with the White House and also with the broader audience.
And maybe they need to try getting a little more visibility, but I suspect more likely they're going to look to trade organizations like the US Chamber of Commerce, the National Association of Manufacturers to carry the water at least for a time, or maybe until another opportunity comes up what we see, how the implementation of this tariff threat actually goes forward. And Ford's a member of both of those groups and they have been speaking out.
Yeah, I would say if Ford was planning to align with the Trade Association, you think they would have done that before Farley spoke out. Now it's just a lot harder to fall back on them. Ford had to know where the groups like the Chamber of Commerce and in a-m stood on this. Those conversations happened well in advance. So if they went out on their own, Ford went out on their own. That just tells me one of two things.
They wanted to take the lead and own the message, or they didn't think that the trade groups were pushing hard enough. But for me, here's the thing. If Farley was hoping for other CEOs to follow, that hasn't happened. And if he's expecting the trade groups to pick up the baton, after made his point, well, now it just kind of looks like Ford went rogue and it's tough to walk this back and say, actually we're with the industry on this. So I don't know, stepping out this far ahead of everyone.
I think the industry is with them. I don't see anybody saying, you know, Ford is unnecessarily sounding the alarm here. I think it's really just about speaking up and taking this route where we're publicly, essentially saying, let's have a public examination of what the impact of this policy would be. And I think that that's healthy and too Ford's credit. He's not sugar-coding the risks to his company, to the auto industry and the US economy.
And that's important because there's not a lot of speaking truth to power these days and we need people to set a better example. We should point out also that he has framed his comments in a constructive way, I think. He talks about the overall industry as much as he does Ford specifically. And he talks about American competitiveness.
And one of his arguments is, I think, something that you would think would resonate with the White House, which is penalizing Canada and Mexico would be a gift, as he puts it, to South Korea, Japan and the EU, whose automakers would not be subject to those tariffs. And Farley says it would be one of the biggest windfalls for those companies ever.
So does Trump turn on the TV and see Farley or hear him read about his comments, turn to his trade representative and say, "Can't so the tariffs?" No, no chance. But if he can start to chip away, help turn the conventional wisdom on tariffs, then maybe this will have been worth it for Ford. So I'd say, look, he's basically telling Trump, "Hey, you could make strengthening the American industry as signature accomplishment." But that's great. Those are his words. Yeah, it was great.
Does Trump even want that carrot? I mean, Trump doesn't make decisions based on industry logic. He makes them based on personal political considerations. And right now, tariffs for this narrative. So-- Yes, but think about when he first announced the Canada, Mexico tariffs. It was. Yes. And, you know, that was a Saturday night. And by Monday, he was talking about a delay. So reactions do matter. I think that we're used to Trump doubling down and that certainly does happen.
But there are, I think, real world reactions, especially real world market reactions that get his attention. Well, I got to say, that's one thing Mary Barra's response that I like, right, is that she's not locked into anything. Yeah, for sure. Right? So whatever direction that Trump goes, and she's still in the game. And otherwise, when Trump goes left, they're going to go right. When he goes right, they're going to be on the defense. So it just makes them look a little bit more reactive.
Now, I feel like Ford has given themselves enough wiggle room on this. They've said enough in praise of the goals of the White House. And as I said, American competitiveness, making the auto industry stronger. So I think that they've covered themselves in that. I think that the issue here that is getting everybody's attention is that, wow, somebody actually said something out loud. And with conviction and authority, it wasn't strident. It wasn't, it was very measured as you heard in those clips.
But it is just, you know, speaking some facts that may be inconvenient to the White House. And I think those are important to have out there. Sure. But there's a few other facts that they could have thrown in here. We should have been speaking Trump's language here, talking about jobs, swing states, political wins. I mean, that's what moves the needle for him. Instead, they're offering an economic argument when this is a political game.
Well, but so, but that was one of the things that was remarkable to many about what Farley said was he did talk about the impact to jobs, specifically at those EV battery plants. Yeah. I think he is being pretty smart in what he is raising. I think another thing as communicators is another voice that we should really take note of in this, in this exchange. And that's the soon to be former Prime Minister of Canada, Justin Trudeau. And he has been saying very broadly the same thing as Jim Farley.
And for context, for those who don't know it, this has been a huge story in Canada, as you can imagine. Like, I have gone myself and tuned into the CBC just sort of at random and every time I tune in, it seems they are talking about this tariff dispute. But on the Saturday night that Trump imposed that first round of tariffs, Trudeau came out, I think it was nine o'clock at night in Ottawa. And he made this really eloquent appeal.
I want to speak directly to Americans, our closest friends and neighbors. This is a choice that yes, will harm Canadians, but beyond that, it will have real consequences for you, the American people. Tariffs against Canada will put your jobs at risk, potentially shutting down American auto assembly plants and other manufacturing facilities. They will raise costs for you, including food at the grocery stores and gas at the pump. Beach goes on for 12 minutes.
And remember, when he speaks to Canadians, he says half of it in French, but it was beautifully crafted, earnestly delivered bit of oratory that covered shared history of our countries, 100 years of mutual aid, including 9/11. It's a real shame, but none of the cable networks that I saw carried those remarks live. And in this news cycle that we live in with Trump by Monday, and there's a lot of things that sort of run over it. But if you haven't heard it, go find it on the CBC.
You will appreciate it. It's a masterclass in persuasive speech, I think, and he used it as a rallying cry for Canadian unity, which has been getting some traction there. Okay, great. So it was a beautifully crafted speech, no doubt about that. Yeah, it'll give us logical persuasive, framed it away that should have resonated, but here's the problem. Sure. Logic isn't what moves Trump.
And if anything, the more articulate, polished and globally minded that the leader sounds, the more Trump is going to turn them out. So I don't know, Trudeau to me just checks all the boxes of someone that Trump enjoys humiliating. I think that's the point in another commonality with Farley is that they know that the logic is not going to win Trump over, but they're banking that popular opinion might.
If they can't appeal to Trump with logic, then maybe they can appeal to American citizens, investors, others to get behind that. Yeah, I think they face the same issue. They're both making rational, well-argued appeals. But in a game where power and perception matters more than a reason.
And Trudeau try to appeal directly to Americans framing this as something that would hurt them, and Farley is making a case about global competitiveness, but neither one is talking in a way that Trump values, which is personal loyalty, political strength and winning. And I'm not trying to appeal to Trump in that sense, but that's why to me, Farley's GM's quiet behind the scene strategy makes more sense. It just doesn't invite a public confrontation that Trump builds the need to escalate.
So here's my question, dude, do you have any lessons here? Like, what are the takeaways? I mean, what are the things that you'd say that or did right? Or is this something that we're going to be re-evaluating here in a few weeks? We're just going to wait and see. Yeah, I think that's what we've been talking about is weighing the options and understanding that the time it seems like for Ford, the time has come to get some of this out in the open.
And maybe that is because their back channel is not as strong as GM's. Maybe I'm just speculating on that, but I don't think it's a bad thing to be saying out loud and in public, some things that to you are in convertible facts. And I find them very reasonable. And they are all in the interest, as Farley has put it, of not just his company, but the entire industry and American workers. I think it's a reality check from somebody who is very close to the actual real world impacts of this policy.
Sure. I think it was a good idea. Is brave. Yeah, well, I would say, look, they both took two different responses. They are not mutually exclusive. They're not opposites. But we could very clearly see that the GM's response of engagement, we can at least acknowledge that it's worth a long game. And with the Ford response, we're just hoping that they stay in the game. So I guess a couple of things for me coming out of it, because I know we've got another story that we're going to cover here.
One is that I think they've got to be careful about what happens if they're out there, right? It's not just sticking their next out front. Something's going to happen. And they're either going to gain support, something's going to change, or they're going to have to pivot or backtrack. And that's not exactly a great response. They certainly need to find a way of staying in the game and finding a way to avoid retaliation.
But we haven't even talked about what all this means from a comms perspective inside the company, right? Yeah. I think that's something. I don't know if you have any closing thoughts on that. No, I think this is a really interesting test. And I think I suspect that folks inside the company understand the stakes here as folks inside many, many, many other companies do.
And so I hope they're looking at Farley and saying, here's a guy who took a risk on our behalf as company, as workers, and that he gets rewarded with that. He'll just watch the space and we'll stay on it. So let's shift gears. This next topic, I think, falls into the adding insult to injury category meta, home of Facebook, Instagram, and apparently newfound self-described masculine energy. They laid off another 5% of their workforce this week, reportedly around 3600 people.
Layoffs are an unfortunate fact of life and they happen for any number of business reasons. But this time in a memo to staff, Metacetio Mark Zuckerberg wanted to make it clear the move was to clear out what he called low performers and move them out fast. Yeah. So the memo leaked to Bloomberg and a few other news outlets that drew criticism from HR and communications leaders, not to mention many of the employees are actually laid off.
What is move here comes on the heels of similarly described cuts at Microsoft, which handed out pink slips to 1% of its workforce last month. So there's nothing new about performance-based cuts. They've been around for generations, if not longer. But two things I think are problematic in this chapter at Meta. First, Zuckerberg accelerated the process. Usually, manage people out over the course of a year, he says, but this is going to be an intense year, so we're just firing them right away.
And by the way, we just move the goalposts too. So it doesn't sound very fair to employees, frankly, and maybe some folks, you know, were
¶ Meta's Layoffs and the Performance-Based Narrative
already on a performance plan, but already we're hearing anecdotally about employees who got good reviews in the last cycle or just came back from family leave. These are out, you know, on LinkedIn. Second, you're making these employees wear a modern day scarlet letter. Now everybody knows why you got laid off. Yeah. I've seen a bunch of posts on LinkedIn saying, I got this rating. Last year in a better rating before that, but my manager was non-technical and here are all the ways I contribute.
They're basically making these people feel like they need to sing for their supper in front of potential employees for jobs they haven't even applied for yet. Digging out from under this label that Meta has slapped on them. And there's a thousand open positions at Meta, apparently, and I'm sure they won't have problems filling them.
But I got to believe that it gives some applicants pause when they see how that place lets people go, at least in this instance, and Zuckerberg said in that memo, he said, "I want to make sure we have the best people on our teams." Well, some of those people might decide they don't want to work for a company that treats at least some of its people this way. You know, I'm starting to see some parallels between this story with Meta and the story we just looked at with GM and Ford.
And I'm going to make the parallel with Ford. This is when you're speaking out this strongly and you're making a claim, you can't really back off of it here. I mean, look, downsizing has gone on forever. But what's different about it this time is this focus about performance based downsizing in a public forum. That's not something that we've really seen before. And I like the way you described it about them wearing the letter A, right?
So it's not just about optimizing the workforce, but I think there's something else that's going on here as well. I mean, my read on it is this is an attempt for companies to try to control the narrative in response to all the chaos. Yeah, but they're doing it at the expense of a lot of individuals who really, not, not, doesn't fall to them. Yeah. I mean, look, companies can't control inflation, they can't control interest rates.
Certainly there's a lot of AI disruption going on, a lot of geopolitical instability. We're putting everything under this large umbrella of chaos right now instead of chaos. But I'm kind of viewing this as an attempt of companies to also signal to other stakeholder groups. You know, here, I think I'm going to focus on the investors that they're in control, they're attempting to do something.
Now they're really not in control here, but saying that they're downsizing due to market conditions, which used to be something that was okay to do right now that just seems like a problem. So I think to me, it just sounds like a signal of being proactive when they're not. Now I think that that's right and it's really unfortunate that they have taken this step and you're right, you can't put the toothpaste back in the tube on this.
It's the statement is out there and I think future employers, when they look and they say, oh, you left meta in February of 2025, we know why. Yeah. And that's, I think, really unfair to those employees. And it just, it didn't have to be this way. They could have treated people with more dignity and more compassion. And you know, Zuckerberg wrote in that memo, letting people go is never easy. But as I read it, he's not talking about compassion for people who just lost their jobs.
He's sort of like trying to absolve himself maybe of the responsibility. And I think they just went about it in the wrong way. Yeah. Look, there's so much here. You know, number one, broad brush, broad brush labeling of low performance is dangerous. You know, it's one thing to make quite workforce adjustments. It's another to publicly brand the entire group of former employees is not good enough. That's just, not just callous, but I think it also opens up meta to legal risk.
You know, for sure, are already circling. You can bet that we're going to see wrongful termination suits, potential defamation claims. Probably some very public litigation. What's those cases hit? I think medical lose even more control of the narrative. And I think to that point, you're going to see other people come out of the woodwork about working conditions at meta and how they treat the people this creates and opening for folks, you know, who in other circumstances might have felt.
Not just legal avenues, but I think the press will be more receptive to hearing about that. Oh, absolutely. You know, if you've got employees and analysts or journalists who start poking around, you know, looking for holes in the performance-based claim, you know, the illusion is going to start to crack. And then instead of looking strategic, it's going to look like they're mismanaging the business.
So I would say now, CCOs are going to have to be very careful as they walk this fine line between messaging, strategic optimization, and avoiding a backlash. The thing I worry about is that they're not as worried about the backlash. I worry that this is influenced or maybe springs from the same source as that Zuckerberg is masculine energy nonsense. And this anti-woke changes that have been taking hold since the election. And Zuckerberg has been out on the vanguard of it.
Remember when he rolled back content moderation efforts, he said, feels like we're in a new era. And that somehow meant that people want this, you know, sort of more political coarser, kind of discourse on, I don't know that there's any evidence to that. But there's an arrogance to this. There's an aggressive tone. And it sort of projects that they're not worried about hurting people's feelings.
And so kind of this, in the vein of this tough guy talk, it's kind of crude language that's somehow becoming more acceptable. There was, you remember, there was that infamous quote in the financial times in early January where some banker said he felt liberated. He called it the new dawn, which kind of sounds like a new era, because he wasn't worried about using cruel or vulgar language in the workplace anymore. And that's an extreme example.
But I worry that there's something there that it's somehow acceptable to be, if not cruel then crude or again, like aggressive in this language and not so terribly worried about the people that it packs. It certainly matches what's coming out of the administration, right? I mean, this is an unfortunate consequence of a return to Trump 2.0 is the degree of instability that is almost normalized or legitimized or made acceptable. And I think that's something we got to fight back, push back against.
Yeah. A number of folks that I've seen on LinkedIn both employees affected. We talked about HR and communications experts. A number of people have called the meta-statement cruel. And I think the apparent tolerance for that type of cruelty is maybe the most worrisome part of this. All right. I've got to ask you, what are some ways that companies can handle this differently? So this performance-based chest beating does not become a phenomenon.
That's a now a thing, a permanent part of the conversation. Well, I think that's just it. Just don't do this again. Just don't do it this way. You didn't have to do it that way. I think just go back to the way you used to handle these sorts of reductions and you're used whatever euphemism that you want to for laying people off. But there is a playbook for this. Just go to the HR team. They have it. It's very well-worn. And it works. And nothing is ever cookie cutter.
But they know how to do this. I think, but for these people who were all tired by the same brush, I think that they're going to get sued. There's nothing that is going to change that. So I think that there is some room here for Metta to try to make it right with these people and maybe issue a statement. Yeah, I think it's a little late for the companies that have already made this move, but there's an opportunity certainly for other companies. I don't know.
Look, I'd still love to hear them apologize to some degree for their tonality. The decisions have been made. The people are let go. I think maybe toning down some of the chest baiting here certainly in order. I think there's another comment through that running through the things that we've been talking about today. And that's about civility and leadership. So it's not just about what companies do, but it's how they communicate the decisions.
So whether it's for going public with a fight that they may not win or met a framing layoffs in a way that builds cold and dismissive, one of the things that we're seeing is the shift and tone. And I don't know, this idea of bloodness and strength and that empathy is weakness or that you have to be aggressive to look like you're in control, but in reality, that's just not leadership. That's just more noise. That's absolutely right.
You have to make hard decisions, but you still have to communicate them with clarity, honesty and respect. And for me, the way GM handled the tear situation with measured confidence, they're protecting their flexibility. They're not escalating a fight that they didn't need. And I don't know to me for it on the other hand was I could appreciate their leadership in another direction that maybe they do get the support from other people in industry.
But I think the issue here is that the perception is that it's loud and if they're not getting the support and they're isolated, now they've got to have the lip of the choice that they've made. Clearly, Metac could have handled early off, so a whole lot more sensitively without making it personal, but they chose to frame it as a performance issue. And now they're dealing with employees in the media calling it BS. So I think here's where we land.
The world that's increasingly rewarding those that are the loudest, the toughest or the most aggressive voices. The real thing is that leadership is going to come down to people who know how to balance strength and civility. But companies that are able to manage chaos without creating enemies and know how to make tough calls without turning them into spectacle, I think. I don't know. Those are the ones to me. They're going to be the ones that have lasting inputs.
Yeah. I agree with you on almost all of that. I do think that Ford deserves credit and they're going to be able to look themselves in the mirror. They're going to be able to sleep well at night because they knew that they spoke up when they needed to and everything that they said was true and not hyperbolic and hopefully people heard their message. Well, look, sleeping well at night, that is a great metric. That's a note out. That's our show for this week.
We want to thank @ShawnPNeal and the PeopleForward Network for making our podcast possible. If you'd like to tell us what you think, if you have a topic you'd like to suggest for a show, we'd love to hear from you. Our email address is podcast@ocrnetwork.com. Communication breakdown is a production of the Observatory on Corporate Reputation. I'm Steve Dowling. And I'm Craig Carroll. We'll be back next week. Thanks for listening. [MUSIC] [BLANK_AUDIO] [BLANK_AUDIO]