Lyft and Waymo = Carpool; Bud Spending $2 billion to Up Its Game; AIG Bets Big on Latest CEO

Self-less…

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In case you were having trouble envisioning a world with driverless cars, you might want to check out Alphabet Inc.’s company Waymo. Waymo, a self-driving car company,  has just teamed up with Lyft, and that should be enough to make Uber more than a little nervous. You might be wondering why a company owned by Google even needs a much smaller company like Lyft for a partnership. But believe it or not, there’s a little quid pro quo going on because since Lyft has the dubious distinction of being the second largest ride service company, it will allow Waymo’s technology to reach even more people than without it. Isn’t that just beautiful? Uber, on the other hand, is looking to develop driverless technology on its own. If you recall, Waymo sued Uber back in February, alleging that Uber stole Waymo’s self-driving technology to build its own fleet.  But with the way things are going for Uber lately, it might be more prudent for the embattled ride-sharing company to focus on its current crop of legal and publicity challenges instead of driverless cars. For the time being anyway.  By the way, Lyft’s deal with Waymo is not exclusive. Which is super important considering that GM is a big Lyft investor and already has its own partnership in place to develop self-driving cars. It’s like legit double-dipping and everybody wins. In fact, come 2018, Lyft and GM will be set to deploy and test thousands of self-driving cars. Yikes!

Competitive beer…

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It might be hard to believe but the King of Beers is not looked upon as the royalty it once was. And so, its parent company Anheuser-Busch InBev NV is plunking down $2 billion to try and fix that issue. The plan is to make a substantial, lucrative foray into new categories, while at the same time boosting its flagship brands which have been staring down the wrong end of increased competition.  The money will be spent over the next four years, using approximately $500 million per year. In case you were thinking that $2 billion seems like an awfully bloated  – no pun intended – number to spend on improving a beer brand, consider that beer is a more than $107 billion industry and no self-respecting beer company wants to lose ground in a market like that.  And make no mistake, beer has been losing ground lately with not as much of it being consumed like in years past. Hard to believe. I know, but various types of other alcoholic beverages have been flooding the market in recent years and consumers are digging them. Which leaves companies like Anheuser-Busch scrambling to reclaim its foamy territory.

No pressure or anything…

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Maybe the seventh time’s a charm for AIG, which just announced it’s coughing up $12 million – and then some – to pay its newest CEO, Brain Duperreault. By “then some” I refer to an additional 1.5 million stock options and a $16 million pay package all based on the hope that Duperreault will finally be the one to turn AIG around. Did you catch that? He’s getting all that and he hasn’t sat at his new desk yet. The last CEO, Peter Hancock, left in March because he wasn’t feeling the love, or rather investor support, including from the one and only Carl Icahn. But Brian Deperreault just might have what AIG’s been looking for all these years, well at least since 2005. He’s no stranger to AIG, having worked there as a deputy way back when. He’s coming over from Hamilton Insurance, and before that he was at Marsh & McClennan Cos. earning solid reputations at both firms. As for his first order of business: achieve stability in a company that has seen too many high-level departures, four straight quarters of losses and high claims costs. Good luck with that one, Mr. Duperreault. You’re gonna need it.

Show Me the Money! Forbes Unveils Its Annual List of People With Money to Show; UK Shows Google What Happens When You Don’t Shut Down Haters; Twitter Did Something Impressive. Just Not With Its Earnings

Rich-y rich…

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It’s that time of year again. The one where Forbes reminds us just how much money we don’t have relative to the richest people in the world. And here goes. There are 13% more billionaires this year than last year and their combined net worth totals almost $7.7 trillion. Yes. Trillion.  The number one spot goes to Microsoft co-founder Bill Gates who’s net with totals $86 billion. When Gates is not busy fixing the world and explaining to the President why his budget ideas are bad ideas, he runs the world’s largest charitable organization. Naturally, the Oracle of Omaha, Warren Buffet, comes in a close second with a net worth of $75.6 billion, while Amazon’s Jeff Bezos makes his debut into the top three with a net worth of $72.8 billion. And even though we only finally see a woman on this list at the number 14 spot, there’s still some uplifting news. For instance, the number of women who ma∂e it onto the list has increased 170% since 2009. Also, there’s a record 56 women on the list who are self-made billionaires. If you’re curious to see who did and didn’t make the list, click here to find out. And spoiler alert: Perhaps President Donald Trump really ought to consult Bill Gates on any and all future budget concerns for the country, considering he lost a billion in the last year and ranks #544.

Dis-content…

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Just when you thought Google could do no wrong, the search engine giant finds itself in the midst of some major policy revamping after a bunch of big-name advertisers pulled their marketing  – and whole lot of money – because it was showing up on /sexist/hate-filled/offensive/anti-semitic/terrorist-promoting content. The trouble started when major brands, including the BBC and department store chain Marks & Spencer, noticed their ads being being placed alongside content promoting violent extremist groups. Last I heard, department stores were no great fans of terrorism. Now, part of the policy revamp includes broadening Google and YouTube’s definitions of hate speech, which is always a good thing since hate manages to always rear its ugly face no matter how subtly its presented. Also, content won’t be able discrimnate against groups based on their identity, socieo-economic class and country of origin. Such measures ought to make it a tad bit more difficult for the haters to get their odious messages out. In addition to some added controls and a few default settings, Google should end up creating a kinder, gentler platform. Hopefully…

Speaking of which…

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Even though Twitter doesn’t exactly have the fiscal luxury to delete accounts, to its credit, the social media company did just that and put the kibosh on close to 380,000 of them because of their links to terrorism. So lousy earnings aside I say “Kudos” to Twitter.  Those accounts were just the ones it took down between July and December of 2016.  Since August of 2015, over 635,000 accounts have been removed for the same reason. The information was disclosed in its latest transparency report and these actions are part of an effort to weed out extremist groups and other assorted haters. Interestingly enough, almost 75% of the accounts that were removed from Twitter were discovered by technology created just for this purpose for Twitter, while 2% of those accounts came down after governments made requests for the company to get rid of them.

 

Bill Gates Is So Not Into President’s Budget Blueprint; Does Uber Have Some High-Level Job Openings?

Just letting you know…

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Chances are if Bill Gates is not into your budget blueprint, then maybe it’s worth it to make a few (hundred-billion dollar) changes to it.  Which explains one of the reasons why the world’s richest man is in DC today, to have a little chat with the President of the United States.  Bill Gates, who knows a thing or two, isn’t taking too kindly to President Trump’s budget blueprint, particularly the part about cutting foreign aid. Gates is of the very informed and highly researched opinion, that providing foreign aid not only assists the world’s poorest individuals, but it also helps Americans. A lot. Gates said as much in a recent TIME op-ed piece, explaining how foreign aid actually decreases global conflicts, strife and get this…political instability. There’s a joke in there somewhere, but I’ll leave you to make it. Feel free to leave it in the comments. In any case, Mr. Gates went on to say, “These projects [foreign aid] keep Americans safe. And by promoting health, security and economic opportunity, they stabilize vulnerable parts of the world.” I think the philanthropist billionaire/Microsoft co-founder just might be onto something, no?

Outta here…

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As if a lawsuit from Google and claims of sexual harassment couldn’t make things any worse for Uber, things are about to get even more awkward – if that’s possible – with two very high-level execs saying buh-bye to the ride-hailing app. First we have President Jeff Jones, who is leaving after less than a year on the job. It seems that a few weeks ago, Uber CEO Travis Kalanick announced he was seeking new leadership, along with plans to install a new COO. Rumor has it that that bit might have had something to do with Jones untimely departure. In the meantime, Jones explained, in his own special spin that “…the beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber, and I can no longer continue as president of the ride sharing business.” You just know there’s an ugly, yet presumably very juicy story behind that articulate statement. But I guess we’ll just have o wait for the book to come out. Naturally, Uber officially thanked Jones and wished “him all the best” no doubt with the utmost sincerity. The other Uber exit is brought to us by Brian McClendon, who is set to ditch his post of Vice President of Maps and Business Platforms. Mr. McClendon announced plans to return to his native Kansas to pursue a career in politics. He’s apparently very disenchanted with the state of Kansas’ fiscal crisis and presumably the rest of the political climate. At least that’s the story he’s sticking to.

Buy buy baby…

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Well, at least somebody has finally stepped up who has a bit of faith in Snap Inc. Enter James Cakmak, a Wall Street analyst with the firm Monness, Crespi, Hardt, who gave the app its very first – and only –  “buy” rating, slapping it with a $25 price target. And fyi, Snap identifies itself as a camera company. Got it? Having the dubious distinction of being crowned as the biggest tech IPO in two years, Snap managed to raise a whopping $3.4 billion its first day out. It went up almost 60% on its first day but since then came barreling back down over 25%. Its shares have been losing steam over concerns that the company has a ridiculously high valuation, yet grim prospects for profits. Cakmak graciously said that he’s giving Snap the benefit of the doubt because, even though he himself is unsure if Snap will be able to crank out an actual profit, he likes the way the company stacks up against its competitors. Awww.

 

CEO Leaving Ralph Lauren Over “Difference of Opinion”; Apple Gets De-Throned; “Fake News” Scandal Leaves Facebook Unscathed

Ride the pony…

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Shares of Ralph Lauren fell today, over 11% at one point, all because CEO Stefan Larsson announced he is stepping down after a little over a year on the job. It seems Larsson and the big kahuna himself, Ralph Lauren, just didn’t see eye to eye on how the company should evolve to attract more shoppers, and younger ones, to boot. Which roughly translates to: the two guys just didn’t get along.  Larsson, who used to be the global president of Old Navy,  will step down in three months while the company searches for a new CEO. In the meantime, Ralph Lauren will stay put, in his role as Executive Chairman and Chief Creative Officer while Chief Financial Officer Jane Nielsen will serve as interim CEO. The other thing staying put is a plan – that was already in the works – to enhance the Ralph Lauren brand.  Shares of Ralph Lauren had fallen 22% in the last twelve months and it has had to close several stores and eliminate several jobs. But apparently, and ironically, it’s all part of its growth plan. The news came down during the company’s quarterly report call, where the lifestyle brand reported earnings of $1.86 per share, with revenue down 12% to $1.71 billion. At least that last bit was forecasted. And it was welcome news since analysts expected the company to only pull down $1.64 per share. As for Larsson, he’ll be walking away with a nifty $10 million in severance, not to mention health benefits, for the next two years.

Taking a bite out of the apple…

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Move over Apple. There’s a new sheriff in town. Well, maybe “sheriff” isn’t quite the right word. But the tech giant has been dethroned, this year anyway, as the world’s most valuable brand, and now ranks as the second most valuable brand. Which is ironic, since yesterday it released its earnings report and brutally beat expectations adding  $3.36 per share on a record setting $78.4 billion in revenue. Analysts predicted earnings of $3.22 per share on $77.3 billon in revenues. But I digress. The company to earn the dubious distinction of being the world’s most valuable company for 2016, as determined by Brand Finance, is none other than Google. No great shock here. Brand Finance takes it upon itself to conduct this yearly study, identifying and ranking the 500 most valuable brands in the world. Google, by the way used to sit in the top spot. But it’s been years. Like five of them, to be precise, since it sat atop this illustrious throne. Apple’s brand value tanked 27% from last year’s $146 billion to this year’s $107 billion. As for Google, its brand is currently valued at $109.5 billion. Part of the problem, for Apple anyway, is that the Apple watch failed to become as fabulous as Apple thought it should be.  Then there’s the fact that the tech giant seems to have no new products on the horizon – that we know of – while battling all the  smart-phone competition. According to Brand Finance, “Apple has failed to maintain its technological advantage and has repeatedly disillusioned its advocates with tweaks when material changes were expected…” That’s gotta hurt. And in case you were wondering, because I know you were, Amazon ranks third with a brand value of $106.4 billion, AT&T comes in fourth at $82 billion, while Microsoft rounds out the fifth spot with a brand value of $76.3 billion. And no, I didn’t forget Walmart or Facebook. They rank eighth and ninth respectively.

That’s just beautiful…

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Speaking of Facebook, the social media giant just released its latest quarterly earnings and well, it would be really swell if all companies could have earnings as good as that. And with over one billion users, it’s no wonder the company posted better than expected earnings, to the tune of $2.57 billon with revenues of $8.8 billion and $1.24 added per share. Estimates had Facebook pulling down $1.11 per share and $8.5 billion in revenues while last year at this time Facebook raked in $5.84 billion. If you do the math, that’s a 51% increase over last year. In fact, this quarter marked Facebook’s sixth straight quarter in which it beat forecasts in both profit and revenue. A lot of that success can be attributed to Facebook’s mobile and live video. Its ever lucrative ad revenues also don’t seem to ever disappoint. Facebook is now planning on a hiring spree, especially because it’s looking to create even more community and groups. Its monthly active users are up 17% to 1.86 billion and mobile users were up 21% from last year to 1.74 billion. As for Facebook being enmeshed in the “fake news” controversy, well as you can see, the scandal failed to make a dent at the company. Well, fiscally anyway.

 

GM Invests in US. Trump Takes All the Credit (Again); Tiffany & Co. Credits Trump for Quarterly Loss; No Trump-ing Mattel with New CEO

Pressure cooker…

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GM just announced that it is throwing a whopping $7 billion into several of its U.S. plants in order to bring back thousands of jobs, in addition to the 56,000 hourly workers it already employs here. Naturally, Trump is taking credit for these actions and it’s kind of weird that he would since GM said these plans were already in place for months. Who you choose to believe doesn’t matter because Trump already tweeted about it:”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…I believe the people are seeing ‘big stuff.'” Nothing says POTUS quite like the term, “big stuff.” But just so you know, GM didn’t exactly deny that Trump didn’t have something to do with its newly announced plans either. Although, General Motors did mention something to the effect of “this was good timing.” Feel free to read into that however you want since it’s no secret that Trump was gunning for GM over its manufacturing of the Chevy Cruze south of the border, and then bringing it back into the country tax-free. Incidentally, GM CEO Mary Barra is part of a panel of CEOs who are advising Trump on economic policy. Also incidentally, Mary Barra is expected to attend the President-elect’s inauguration.

Good fences?

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Guess who else is not happy with Trump? Okay, I guess that list is kind of long so I’ll just tell you: Tiffany & Co. The jeweler, which happens to own a flagship store that is adjoined to Trump Tower, reported a 14% drop in sales at that very store on Fifth Avenue. To be fair, the iconic jeweler was expecting a drop thanks to Trump. Only this one was worse than expected, citing “post-election disruptions.” Roughly translated, that means that in addition to the many many anti-Trump protesters, potential shoppers also had to contend with heightened security, courtesy of the secret service and NYPD, not to mention journalists and hoards of tourists eager to see if they could catch a glimpse of the President-elect. So just how bad were Tiffany & Co.’s sales? Well, in the US, those numbers only came in at $483 million, with comparable store sales down 4%.  And the luxury retailer isn’t very hopeful about those numbers going up in 2017.  But because Trump isn’t everywhere, global sales of Tiffany & Co. came in at $966 million, which was just a tad bit higher than last year at this time.

Don’t toy with her…

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Barbie is getting a new boss as Mattel gears up for its second CEO since 2015. Enter Margaret “Margo” Georgiadis, whose last gig, for the past six years, was over at Google. She was President of Google Americas and oversaw commercial operations and ad sales for the U.S., Canada and Latin America. So, it’s safe to say she’s (over?) qualified for the job. She is among just 27 top ranking female executives at Fortune 500 companies. Georgiadis, who also worked at Groupon and Discover Financial Services, begins her role at Mattel on February 8, where she will also sit on the board of the company. She’ll be tasked with coming up with new, and hopefully ingenious ways to boost sales in a climate that has kids hypnotized by mobile devices. Unfortunately, these nefarious electronic gadgets have been putting a dent into the sales of not only Mattel, but Hasbro and Lego as well. However,  given that Georgiadis has a reputation for successfully building brands, boosting sales of Fisher-Price, Hot Wheels and the American Girl line should be easy as pie. Well, hopefully.

Oil-vey! Trump’s Secretary of State Pick Putin Us On; Trump vs. Silicon Valley; Rate Hike Sends Joy Throughout Wall Street

Energized…

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Trump’s latest pick, this time for Secretary of State, has naturally already ruffled more than a few political feathers. Enter Exxon Mobil Corp. CEO Rex Tillerson, a man who happens to be very very cushy with Russia and its fearless leader, Vladimir Putin. If you recall, Russia is very brazenly messing with Ukraine, to the point where the U.S. felt compelled to impose sanctions. Now, the CIA said the country also launched cyber attacks against the U.S. in an effort to influence the election results. But that very same country awarded Tillerson the Friendship Medal in 2013.  Tillerson, who has never held a public office, has been at Exxon, the world’s largest energy firm, for 40 years and during that time spent many many hours cultivating relationships and establishing major business deals with countless foreign countries and companies. But he’ll still need to be confirmed by the Senate. However, considering that former Secretaries of State Condoleeza Rice and James Baker are big fans, not to mention Defense Secretary Robert Gates, he shouldn’t have too much of an uphill battle. By the way, Condoleeza Rice also happens to be a consultant at Exxon Mobil, and Robert Gates was a consultant at one point too. Rumor has it that they all plan to vouch for the CEO.  Lindsay Graham and John McCain, however, are just not that into him, presumably because of his chummy relationship with Putin, of whom they are not particularly fond. Also not in Tillerson’s favor is the fact that Exxon currently has billions of dollars in deals with Russia, not to mention one valued at $500 billion that involves exploring and pumping for oil in Siberia. Those deals can only go forward if the U.S. decides to lift its sanctions against Russia and, fyi,  Tillerson was never much of a fan of the sanctions. And just so you know, according to a filing from a year ago, Tillerson owns $218 million in Exxon stock along with a $70 million pension plan. Shares of Exxon Mobil went up 2.2% on the news of Tillerson’s nomination.

 

Speaking of Trump…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Tomorrow is a big day at Trump Towers as some of Silicon Valley’s top execs head over to the President-elect’s digs for a little quality time with Donald Trump. Expected to attend the power meeting are: Apple’s Tim Cook, Facebook’s Sheryl Sandberg, Microsoft’s Satya Nadella, Amazon’s Jeff Bezos, Tesla’s Elon Musk and Google’s Sergey Brin and Eric Schmidt…to name but a few. While the agenda’s not public, there are some predictions about what might be discussed tomorrow. There’s the not-so-minor issue of antitrust enforcement and those pesky government demands for user data. But much higher on that list is Trump’s immigration policies and how they have the potential to put a very major damper on the inner workings at many of these Silicon Valley companies. The fact that these companies bring in a lot of employees on special visas, not to mention that they also send plenty of jobs overseas, doesn’t exactly jibe well with Trump’s vision of “Making America Great Again.”  To be fair, Apple did say it has 80,000 employees in the United States and is also responsible for creating another 2 million jobs from all the business opportunities Apple creates. However, Trump did say, in his very eloquent way, that he wants to “get Apple to build their damn computers and things” right here.  Donald Trump is all for establishing major tax reforms and is acutely aware that all these tech companies have a lot of cash offshore. Major reform will help bring that cash back to the States. So its in everyone’s best interests to work together towards that goal, whether they supported Trump’s presidential aspirations or not. And for the record, they did not.

Stocks, and bonds and hikes…Oh my!

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Stocks all over the world rejoiced today by going up while the Dow Jones Industrial Average came thisclose to hitting the 20,000 mark following its 9% surge since Election Day. Actually, the index came within 50 points of the 20,000 mark which sent Wall Street into fits of fiscal joy. The S&P got in on the action by going up .8% to its very own all-time high. The reason for all this excitement is because the Federal Reserve is expected to officially and finally finally announce a rate hike tomorrow, marking the second time in ten years that we get to witness and take part in that elusive increase. Rate hikes are welcome since they signal that the economy is strong and steady in all the right ways. Low interest rates have this nifty little effect on stocks that makes them cost higher. Problem is low interest rates are just no good  for the savers among us who like high interest rates because of the income they get from bonds and bank accounts.  Even though borrowing costs are about to get that much higher, investors are still positively giddy at the prospect that the President-elect intends to usher in an era of potentially lower corporate tax rates, less regulation and lots more infrastructure spending.

 

Smackdown: Google, Facebook vs. Fake News; Controversy Over New Balance Seems Unbalanced; Ford Revs Up Tariff Debate with Trump

Just faking it…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

As the Trump controversies keep on pouring in, Google and Facebook have now decided to crusade against fake news, as widely shared, yet wholly fabricated stories about the candidates may (or may not) have adversely influenced the presidential election. Part of the problem began when Google realized that the top results for search phrases such as “final election results” and “who won the popular vote” were directing users to a fake news site. By Monday, Google started pulling AdSense from several sites that “misrepresent, misstate or conceal information” and were profiting off such bogus political news stories. As for Facebook, it plans to put the kibosh on ad money from fake sites, but it’s not entirely clear how it will achieve this objective and identify these sites. However, it seems to be a prudent move considering that, according to a Pew study, 44% of Americans get their news from the social network giant. No matter how you slice it, the internet and social media figured prominently last Tuesday and now everyone’s looking to find out what went wrong – or right.

Unbalanced…

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Privately-held company New Balance has inadvertently, and presumably unwillingly, become the unofficial “official shoes of white people.” Unlike its much more enormous rival, Nike, the 110 year old Boston-based New Balance has always been committed to manufacturing its products in the U.S. across 14 factories where it employs over 1,400 people of various races, ethnicities, genders, religions etc. Hence, the company never cared much for the Trans-Pacific Partnership Trade Agreement that gives companies – like Nike – a very humongous edge because they can manufacture a greater quantity of goods abroad, for a lot lot less money than doing it here. The TPP basically jeopardizes companies who choose to domestically produce goods by making for a very un-level playing field. Because Trump is a huge fan of domestic manufacturing and job creation, his election was welcome news for New Balance. And when New Balance said as much, social media either skewered the company and called for boycotts and mass destruction of the sneakers or had white supremacists proclaiming it as their footwear of choice.  Incidentally, New Balance supported the trade policies of Hillary Clinton and Bernie Sanders too.  A fact that both Trump haters and white supremacists seemed to have overlooked.

Have you manufactured a Ford lately?

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

After congratulating Donald Trump on his election last week, Ford Motors CEO Mark Fields shared some thoughts about Trump’s proposed 35% tariffs on imports – he thinks they’re a bad idea. After reporting a 12% decline in car sales for October earlier this month, Fields said in a speech given at the L.A. Auto show, that those tariffs will have a very big bad impact on the U.S economy and trusts (or hopes) that Trump will do what’s in the best interests of the United States. However, Trump, early on in his campaign spoke about how he didn’t appreciate the fact that Fields moved Ford’s small car production to Mexico, where wages are a whopping 80% less than what they are in the U.S. If you recall, Trump thinks NAFTA is “the single worst trade deal ever approved in this country” and he’s licking his chops to put the kibosh on it. Although, to counter that last tidbit, Fields did say that Ford added 25,000 jobs since 2011. In the meantime, experts have said that Trump’s tariffs, which are on this side of punitive, in fact, violate the rules of the World Trade Organization. So it’s anybody’s guess how far those tariffs will actually go.