Latest / Communication Breakdown / Ford Breaks Silence on Tariffs, Meta Breaks Decorum on Layoffs

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Ford Breaks Silence on Tariffs, Meta Breaks Decorum on Layoffs · Communication Breakdown

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Welcome back to Communication Breakdown, a new podcast from the Observatory on Corporate
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Reputation.
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Thanks for joining us.
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I'm Steve Dowling in Silicon Valley.
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And I'm Craig Carroll in New York City.
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Each week, Steve and I take a look at strategies companies are using to shape headlines and
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sometimes save their skins.
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It's a post game show for PR Pros.
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This week, comms in the time of economic anxiety, some do's and do's for navigating tariffs
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and layoffs.
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First up, Ford Motor Company CEO Jim Farley has put a face and a voice on the business community's
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concerns over Donald Trump's economic plans, starting with those tariffs on aluminum and
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steel.
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Unless you plan to drive a toboggan, those are pretty essential components of any automotive
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product.
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Ford gets about 10% of its steel from Canada.
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Speaking this week at the Wolf Research Conference on Auto Technology, Farley said Trump's
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proposed tariffs would be in his words, quote, "devastating."
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So far, what we're seeing is a lot of costs and a lot of chaos.
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If you look at the tariffs, let's be real honest, long term, a 25% tariff across the Mexico
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and Canadian border will blow a hole in the US industry that we have never seen.
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It would be on to say that Trump's promise to roll back the Biden-era inflation reduction
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act would put many production jobs at risk.
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The IRA established tax incentives for electric vehicle battery production, creating some
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200,000 American jobs so far.
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Farley said Trump's promise changes would hit workers at border-simile plants in Ohio,
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Michigan, Kentucky, and Tennessee, all states Trump carried in last year's election with
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help from blue-collar workers.
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And those comments come on the heels of Ford's earning call February 5th when Farley
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told analysts the company could weather a few weeks of tariffs but sounded the alarm about
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the domestic impact of a drawn-out trade war.
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There's no question that tariffs at 25% level from Canada, Mexico if they're protracted
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would have a huge impact on our industry, with billions of dollars of industry profits wiped
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out and adverse effect on the US jobs as well as the entire value system in our industry.
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There's would also mean higher prices for customers.
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Issuing such dire warnings, Farley's breaking with his peers in Detroit and most of the rest
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of corporate America who have largely avoided painting such a bleak picture.
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The story here is not that Ford sees the tariffs devastating their business, it's that they've
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decided to say it out loud and in public.
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Compare Farley's approach to that of Mary Barra, CEO of General Motors, who was on stage
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after his remarks about costs in chaos.
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Farley has been emphasizing preparedness, saying GM has contingency plans to avoid short-term
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impacts of tariffs and she's been saying she's very "goal aligned with Trump."
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No talk of job losses are blowing a hole in the auto industry.
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All these words are being chosen very carefully in Dearborn and Detroit, Craig.
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Who's got the right approach?
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Steve, it's not even a question.
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Mary Barra is playing this summer smarter.
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Ford's moved to me just wasn't acknowledging the impact of tariffs.
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It was deciding to make a public fight and what you do that, you're committed, you can't
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walk it back without looking weak and you can't escalate it without increasing risk.
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Meanwhile GM's approach, very clearly contingency planning, quiet confidence, no panic and that's
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what stability looks like.
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Yeah, I still think we need to give Farley credit for saying what other CEOs don't seem to
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want to say, at least in public.
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I can see a couple of factors playing into this strategy.
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Trump doesn't like to hear opposition to his ideas, but at the same time we know he gauges
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his own success in part by the economy and specifically the stock market.
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If Farley's making public comments and that helps fuel the conventional wisdom that tariffs
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will hurt American workers and companies bottom lines, which economists all agree on, there's
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I've seen, that could help his cause.
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Of course, the line of thinking banks on other business leaders joining the chorus and
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so far that hasn't happened.
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Yeah, I mean, I see what you're saying, you know, Farley's definitely taking a stand where
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others are staying silent and there's something to be said for that, but I wonder if Ford is
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gambling on a collective outcry that just isn't materializing and if other CEOs don't
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follow his lead then what?
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You know, he's out there alone taking all the heat while everyone else is watching from
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the sideline.
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So I see it as a big bet.
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I think that one of the things we need to keep in mind is that Farley was not CEO during
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most of Trump's first term and it's not clear that they have a personal relationship or
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if Farley has any direct access at all.
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Maybe he does, but he's been pretty circumspect when asked about his dealings with the White House.
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So taking this public route might be his only option or might be seen as his best option.
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I'm sure he'd prefer to be invited to dinner and make the case person to person, but that
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doesn't seem to be happening.
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To your point, also, I think it is a gamble.
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And one of the problems here, if they're betting on other business leaders joining the
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chorus is that not enough people may be getting this message.
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The other business leaders are quiet and Farley did make similar comments on CNBC after
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Ford's earning call, but otherwise he's talking off camera and that's making the coverage
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less impactful.
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You know, I mean, Farley might be banking on Trump's market sensitivity, but Trump has also
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shown he's willing to let short-term market pain play out.
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If he believes it's going to strengthen his broader agenda, so the question is whether
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Ford's messaging resonates enough to shift the broader narrative or if it's just going
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to put a target on its back.
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Well, yeah, and I think that short-term is the operative phrase there because you see both
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Ford and General Motors saying that they can absorb the impact of short-term tariffs.
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I think what they're basically saying is if this is just a negotiating tactic, like we
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can deal with it, but it's the longer term that Farley is warning about and I haven't seen
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Mary Barra say anything to contradict him.
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That is where the problems are going to come in for Ford, for the entire auto industry,
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for American workers.
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I think also we need to keep things in perspective here.
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Like, he's not exactly going hammer and tongs against Trump.
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One of the trade publications I saw said Farley went gloves off with Trump.
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It didn't feel that strong to me.
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But it's certainly farther than any other business leader has gone in criticizing a Trump policy.
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And I think that's what has made people pay attention in any other universe.
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I think we would just call this making a counter-argument.
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So, I suspect that Ford is now trying to gauge how this message goes over with the White
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House and also with the broader audience.
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And maybe they need to try getting a little more visibility, but I suspect more likely they're
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going to look to trade organizations like the US Chamber of Commerce, the National Association
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of Manufacturers to carry the water at least for a time, or maybe until another opportunity
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comes up what we see, how the implementation of this tariff threat actually goes forward.
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And Ford's a member of both of those groups and they have been speaking out.
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Yeah, I would say if Ford was planning to align with the Trade Association, you think they
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would have done that before Farley spoke out.
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Now it's just a lot harder to fall back on them.
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Ford had to know where the groups like the Chamber of Commerce and in a-m stood on this.
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Those conversations happened well in advance.
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So if they went out on their own, Ford went out on their own.
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That just tells me one of two things.
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They wanted to take the lead and own the message, or they didn't think that the trade groups
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were pushing hard enough.
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But for me, here's the thing.
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If Farley was hoping for other CEOs to follow, that hasn't happened.
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And if he's expecting the trade groups to pick up the baton, after made his point,
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well, now it just kind of looks like Ford went rogue and it's tough to walk this back and say,
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actually we're with the industry on this.
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So I don't know, stepping out this far ahead of everyone.
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I think the industry is with them.
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I don't see anybody saying, you know, Ford is unnecessarily sounding the alarm here.
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I think it's really just about speaking up and taking this route where we're publicly,
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essentially saying, let's have a public examination of what the impact of this policy would be.
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And I think that that's healthy and too Ford's credit.
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He's not sugar-coding the risks to his company, to the auto industry and the US economy.
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And that's important because there's not a lot of speaking truth to power these days and
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we need people to set a better example.
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We should point out also that he has framed his comments in a constructive way, I think.
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He talks about the overall industry as much as he does Ford specifically.
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And he talks about American competitiveness.
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And one of his arguments is, I think, something that you would think would resonate with the
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White House, which is penalizing Canada and Mexico would be a gift, as he puts it, to South
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Korea, Japan and the EU, whose automakers would not be subject to those tariffs.
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And Farley says it would be one of the biggest windfalls for those companies ever.
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So does Trump turn on the TV and see Farley or hear him read about his comments, turn to
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his trade representative and say, "Can't so the tariffs?"
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No, no chance.
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But if he can start to chip away, help turn the conventional wisdom on tariffs, then maybe
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this will have been worth it for Ford.
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So I'd say, look, he's basically telling Trump, "Hey, you could make strengthening the American
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industry as signature accomplishment."
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But that's great.
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Those are his words.
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Yeah, it was great.
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Does Trump even want that carrot?
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I mean, Trump doesn't make decisions based on industry logic.
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He makes them based on personal political considerations.
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And right now, tariffs for this narrative.
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So--
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Yes, but think about when he first announced the Canada, Mexico tariffs.
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It was.
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Yes.
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And, you know, that was a Saturday night.
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And by Monday, he was talking about a delay.
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So reactions do matter.
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I think that we're used to Trump doubling down and that certainly does happen.
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But there are, I think, real world reactions, especially real world market reactions that
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get his attention.
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Well, I got to say, that's one thing Mary Barra's response that I like, right, is that she's
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not locked into anything.
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Yeah, for sure.
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Right?
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So whatever direction that Trump goes, and she's still in the game.
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And otherwise, when Trump goes left, they're going to go right.
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When he goes right, they're going to be on the defense.
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So it just makes them look a little bit more reactive.
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Now, I feel like Ford has given themselves enough wiggle room on this.
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They've said enough in praise of the goals of the White House.
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And as I said, American competitiveness, making the auto industry stronger.
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So I think that they've covered themselves in that.
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I think that the issue here that is getting everybody's attention is that, wow, somebody
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actually said something out loud.
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And with conviction and authority, it wasn't strident.
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It wasn't, it was very measured as you heard in those clips.
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But it is just, you know, speaking some facts that may be inconvenient to the White House.
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And I think those are important to have out there.
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Sure.
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But there's a few other facts that they could have thrown in here.
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We should have been speaking Trump's language here, talking about jobs, swing states, political
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wins.
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I mean, that's what moves the needle for him.
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Instead, they're offering an economic argument when this is a political game.
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Well, but so, but that was one of the things that was remarkable to many about what Farley
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said was he did talk about the impact to jobs, specifically at those EV battery plants.
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Yeah.
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I think he is being pretty smart in what he is raising.
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I think another thing as communicators is another voice that we should really take note of in
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this, in this exchange.
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And that's the soon to be former Prime Minister of Canada, Justin Trudeau.
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And he has been saying very broadly the same thing as Jim Farley.
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And for context, for those who don't know it, this has been a huge story in Canada, as you
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can imagine.
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Like, I have gone myself and tuned into the CBC just sort of at random and every time I tune
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in, it seems they are talking about this tariff dispute.
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But on the Saturday night that Trump imposed that first round of tariffs, Trudeau came out,
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I think it was nine o'clock at night in Ottawa.
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And he made this really eloquent appeal.
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I want to speak directly to Americans, our closest friends and neighbors.
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This is a choice that yes, will harm Canadians, but beyond that, it will have real consequences
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for you, the American people.
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Tariffs against Canada will put your jobs at risk, potentially shutting down American auto
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assembly plants and other manufacturing facilities.
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They will raise costs for you, including food at the grocery stores and gas at the pump.
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Beach goes on for 12 minutes.
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And remember, when he speaks to Canadians, he says half of it in French, but it was beautifully
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crafted, earnestly delivered bit of oratory that covered shared history of our countries,
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100 years of mutual aid, including 9/11.
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It's a real shame, but none of the cable networks that I saw carried those remarks live.
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And in this news cycle that we live in with Trump by Monday, and there's a lot of things
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that sort of run over it.
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But if you haven't heard it, go find it on the CBC.
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You will appreciate it.
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It's a masterclass in persuasive speech, I think, and he used it as a rallying cry for Canadian
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unity, which has been getting some traction there.
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Okay, great.
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So it was a beautifully crafted speech, no doubt about that.
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Yeah, it'll give us logical persuasive, framed it away that should have resonated, but here's
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the problem.
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Sure.
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Logic isn't what moves Trump.
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And if anything, the more articulate, polished and globally minded that the leader sounds,
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the more Trump is going to turn them out.
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So I don't know, Trudeau to me just checks all the boxes of someone that Trump enjoys humiliating.
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I think that's the point in another commonality with Farley is that they know that the logic
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is not going to win Trump over, but they're banking that popular opinion might.
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If they can't appeal to Trump with logic, then maybe they can appeal to American citizens,
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investors, others to get behind that.
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Yeah, I think they face the same issue.
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They're both making rational, well-argued appeals.
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But in a game where power and perception matters more than a reason.
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And Trudeau try to appeal directly to Americans framing this as something that would hurt them,
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and Farley is making a case about global competitiveness, but neither one is talking in a way that
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Trump values, which is personal loyalty, political strength and winning.
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And I'm not trying to appeal to Trump in that sense, but that's why to me, Farley's GM's
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quiet behind the scene strategy makes more sense.
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It just doesn't invite a public confrontation that Trump builds the need to escalate.
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So here's my question, dude, do you have any lessons here?
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Like, what are the takeaways?
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I mean, what are the things that you'd say that or did right?
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Or is this something that we're going to be re-evaluating here in a few weeks?
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We're just going to wait and see.
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Yeah, I think that's what we've been talking about is weighing the options and understanding
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that the time it seems like for Ford, the time has come to get some of this out in the
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open.
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And maybe that is because their back channel is not as strong as GM's.
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Maybe I'm just speculating on that, but I don't think it's a bad thing to be saying out loud
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and in public, some things that to you are in convertible facts.
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And I find them very reasonable.
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And they are all in the interest, as Farley has put it, of not just his company, but the
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entire industry and American workers.
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I think it's a reality check from somebody who is very close to the actual real world impacts
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of this policy.
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Sure.
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I think it was a good idea.
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Is brave.
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Yeah, well, I would say, look, they both took two different responses.
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They are not mutually exclusive.
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They're not opposites.
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But we could very clearly see that the GM's response of engagement, we can at least acknowledge
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that it's worth a long game.
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And with the Ford response, we're just hoping that they stay in the game.
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So I guess a couple of things for me coming out of it, because I know we've got another
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story that we're going to cover here.
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One is that I think they've got to be careful about what happens if they're out there, right?
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It's not just sticking their next out front.
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Something's going to happen.
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And they're either going to gain support, something's going to change, or they're going
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to have to pivot or backtrack.
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And that's not exactly a great response.
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They certainly need to find a way of staying in the game and finding a way to avoid retaliation.
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But we haven't even talked about what all this means from a comms perspective inside the
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company, right?
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Yeah.
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I think that's something.
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I don't know if you have any closing thoughts on that.
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No, I think this is a really interesting test.
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And I think I suspect that folks inside the company understand the stakes here as folks
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inside many, many, many other companies do.
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And so I hope they're looking at Farley and saying, here's a guy who took a risk on our behalf
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as company, as workers, and that he gets rewarded with that.
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He'll just watch the space and we'll stay on it.
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So let's shift gears.
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This next topic, I think, falls into the adding insult to injury category meta, home of Facebook,
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Instagram, and apparently newfound self-described masculine energy.
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They laid off another 5% of their workforce this week, reportedly around 3600 people.
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Layoffs are an unfortunate fact of life and they happen for any number of business reasons.
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But this time in a memo to staff, Metacetio Mark Zuckerberg wanted to make it clear the move
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was to clear out what he called low performers and move them out fast.
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Yeah.
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So the memo leaked to Bloomberg and a few other news outlets that drew criticism from
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HR and communications leaders, not to mention many of the employees are actually laid off.
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What is move here comes on the heels of similarly described cuts at Microsoft, which handed
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out pink slips to 1% of its workforce last month.
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So there's nothing new about performance-based cuts.
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They've been around for generations, if not longer.
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But two things I think are problematic in this chapter at Meta.
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First, Zuckerberg accelerated the process.
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Usually, manage people out over the course of a year, he says, but this is going to be
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an intense year, so we're just firing them right away.
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And by the way, we just move the goalposts too.
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So it doesn't sound very fair to employees, frankly, and maybe some folks, you know, were
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already on a performance plan, but already we're hearing anecdotally about employees who
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got good reviews in the last cycle or just came back from family leave.
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These are out, you know, on LinkedIn.
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Second, you're making these employees wear a modern day scarlet letter.
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Now everybody knows why you got laid off.
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Yeah.
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I've seen a bunch of posts on LinkedIn saying, I got this rating.
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Last year in a better rating before that, but my manager was non-technical and here are all
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the ways I contribute.
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They're basically making these people feel like they need to sing for their supper in front
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of potential employees for jobs they haven't even applied for yet.
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Digging out from under this label that Meta has slapped on them.
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And there's a thousand open positions at Meta, apparently, and I'm sure they won't have
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problems filling them.
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But I got to believe that it gives some applicants pause when they see how that place lets people
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go, at least in this instance, and Zuckerberg said in that memo, he said, "I want to make
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sure we have the best people on our teams."
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Well, some of those people might decide they don't want to work for a company that treats
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at least some of its people this way.
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You know, I'm starting to see some parallels between this story with Meta and the story
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we just looked at with GM and Ford.
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And I'm going to make the parallel with Ford.
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This is when you're speaking out this strongly and you're making a claim, you can't really
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back off of it here.
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I mean, look, downsizing has gone on forever.
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But what's different about it this time is this focus about performance based downsizing
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in a public forum.
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That's not something that we've really seen before.
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And I like the way you described it about them wearing the letter A, right?
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So it's not just about optimizing the workforce, but I think there's something else that's
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going on here as well.
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I mean, my read on it is this is an attempt for companies to try to control the narrative
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in response to all the chaos.
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Yeah, but they're doing it at the expense of a lot of individuals who really, not, not,
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doesn't fall to them.
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Yeah.
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I mean, look, companies can't control inflation, they can't control interest rates.
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Certainly there's a lot of AI disruption going on, a lot of geopolitical instability.
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We're putting everything under this large umbrella of chaos right now instead of chaos.
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But I'm kind of viewing this as an attempt of companies to also signal to other stakeholder
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groups.
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You know, here, I think I'm going to focus on the investors that they're in control, they're
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attempting to do something.
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Now they're really not in control here, but saying that they're downsizing due to market
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conditions, which used to be something that was okay to do right now that just seems
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like a problem.
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So I think to me, it just sounds like a signal of being proactive when they're not.
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Now I think that that's right and it's really unfortunate that they have taken this step
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and you're right, you can't put the toothpaste back in the tube on this.
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It's the statement is out there and I think future employers, when they look and they say,
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oh, you left meta in February of 2025, we know why.
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Yeah.
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And that's, I think, really unfair to those employees.
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And it just, it didn't have to be this way.
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They could have treated people with more dignity and more compassion.
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And you know, Zuckerberg wrote in that memo, letting people go is never easy.
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But as I read it, he's not talking about compassion for people who just lost their jobs.
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He's sort of like trying to absolve himself maybe of the responsibility.
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And I think they just went about it in the wrong way.
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Yeah.
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Look, there's so much here.
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You know, number one, broad brush, broad brush labeling of low performance is dangerous.
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You know, it's one thing to make quite workforce adjustments.
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It's another to publicly brand the entire group of former employees is not good enough.
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That's just, not just callous, but I think it also opens up meta to legal risk.
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You know, for sure, are already circling.
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You can bet that we're going to see wrongful termination suits, potential defamation claims.
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Probably some very public litigation.
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What's those cases hit? I think medical lose even more control of the narrative.
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And I think to that point, you're going to see other people come out of the woodwork
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about working conditions at meta and how they treat the people this creates and opening
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for folks, you know, who in other circumstances might have felt.
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Not just legal avenues, but I think the press will be more receptive to hearing about that.
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Oh, absolutely.
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You know, if you've got employees and analysts or journalists who start poking around, you
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know, looking for holes in the performance-based claim, you know, the illusion is going to
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start to crack.
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And then instead of looking strategic, it's going to look like they're mismanaging the
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business.
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So I would say now, CCOs are going to have to be very careful as they walk this fine line
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between messaging, strategic optimization, and avoiding a backlash.
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The thing I worry about is that they're not as worried about the backlash.
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I worry that this is influenced or maybe springs from the same source as that Zuckerberg
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is masculine energy nonsense.
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And this anti-woke changes that have been taking hold since the election.
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And Zuckerberg has been out on the vanguard of it.
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Remember when he rolled back content moderation efforts, he said, feels like we're in a new
23:47
era.
23:48
And that somehow meant that people want this, you know, sort of more political coarser,
23:54
kind of discourse on, I don't know that there's any evidence to that.
23:57
But there's an arrogance to this.
23:59
There's an aggressive tone.
24:01
And it sort of projects that they're not worried about hurting people's feelings.
24:04
And so kind of this, in the vein of this tough guy talk, it's kind of crude language that's
24:10
somehow becoming more acceptable.
24:12
There was, you remember, there was that infamous quote in the financial times in early January
24:16
where some banker said he felt liberated.
24:18
He called it the new dawn, which kind of sounds like a new era, because he wasn't worried
24:23
about using cruel or vulgar language in the workplace anymore.
24:27
And that's an extreme example.
24:29
But I worry that there's something there that it's somehow acceptable to be, if not cruel
24:36
then crude or again, like aggressive in this language and not so terribly worried about
24:42
the people that it packs.
24:44
It certainly matches what's coming out of the administration, right?
24:46
I mean, this is an unfortunate consequence of a return to Trump 2.0 is the degree of
24:54
instability that is almost normalized or legitimized or made acceptable.
25:00
And I think that's something we got to fight back, push back against.
25:04
Yeah.
25:05
A number of folks that I've seen on LinkedIn both employees affected.
25:09
We talked about HR and communications experts.
25:11
A number of people have called the meta-statement cruel.
25:15
And I think the apparent tolerance for that type of cruelty is maybe the most worrisome
25:22
part of this.
25:23
All right.
25:24
I've got to ask you, what are some ways that companies can handle this differently?
25:28
So this performance-based chest beating does not become a phenomenon.
25:33
That's a now a thing, a permanent part of the conversation.
25:37
Well, I think that's just it.
25:39
Just don't do this again.
25:40
Just don't do it this way.
25:41
You didn't have to do it that way.
25:44
I think just go back to the way you used to handle these sorts of reductions and you're
25:49
used whatever euphemism that you want to for laying people off.
25:55
But there is a playbook for this.
25:57
Just go to the HR team.
25:58
They have it.
25:59
It's very well-worn.
26:01
And it works.
26:03
And nothing is ever cookie cutter.
26:05
But they know how to do this.
26:07
I think, but for these people who were all tired by the same brush, I think that they're
26:13
going to get sued.
26:14
There's nothing that is going to change that.
26:16
So I think that there is some room here for Metta to try to make it right with these people
26:22
and maybe issue a statement.
26:24
Yeah, I think it's a little late for the companies that have already made this move, but there's
26:28
an opportunity certainly for other companies.
26:31
I don't know.
26:32
Look, I'd still love to hear them apologize to some degree for their tonality.
26:38
The decisions have been made.
26:39
The people are let go.
26:40
I think maybe toning down some of the chest baiting here certainly in order.
26:47
I think there's another comment through that running through the things that we've been
26:50
talking about today.
26:51
And that's about civility and leadership.
26:54
So it's not just about what companies do, but it's how they communicate the decisions.
26:59
So whether it's for going public with a fight that they may not win or met a framing layoffs
27:03
in a way that builds cold and dismissive, one of the things that we're seeing is the
27:07
shift and tone.
27:09
And I don't know, this idea of bloodness and strength and that empathy is weakness or
27:14
that you have to be aggressive to look like you're in control, but in reality, that's just
27:19
not leadership.
27:20
That's just more noise.
27:21
That's absolutely right.
27:22
You have to make hard decisions, but you still have to communicate them with clarity,
27:26
honesty and respect.
27:28
And for me, the way GM handled the tear situation with measured confidence, they're protecting
27:34
their flexibility.
27:35
They're not escalating a fight that they didn't need.
27:38
And I don't know to me for it on the other hand was I could appreciate their leadership
27:42
in another direction that maybe they do get the support from other people in industry.
27:48
But I think the issue here is that the perception is that it's loud and if they're not getting
27:54
the support and they're isolated, now they've got to have the lip of the choice that they've
27:59
made.
28:00
Clearly, Metac could have handled early off, so a whole lot more sensitively without making
28:05
it personal, but they chose to frame it as a performance issue.
28:09
And now they're dealing with employees in the media calling it BS.
28:11
So I think here's where we land.
28:14
The world that's increasingly rewarding those that are the loudest, the toughest or the
28:18
most aggressive voices.
28:20
The real thing is that leadership is going to come down to people who know how to balance
28:24
strength and civility.
28:26
But companies that are able to manage chaos without creating enemies and know how to make tough
28:31
calls without turning them into spectacle, I think.
28:34
I don't know.
28:35
Those are the ones to me.
28:36
They're going to be the ones that have lasting inputs.
28:38
Yeah.
28:39
I agree with you on almost all of that.
28:41
I do think that Ford deserves credit and they're going to be able to look themselves
28:46
in the mirror.
28:47
They're going to be able to sleep well at night because they knew that they spoke up when
28:51
they needed to and everything that they said was true and not hyperbolic and hopefully
28:58
people heard their message.
29:00
Well, look, sleeping well at night, that is a great metric.
29:03
That's a note out.
29:06
That's our show for this week.
29:07
We want to thank @ShawnPNeal and the PeopleForward Network for making our podcast possible.
29:12
If you'd like to tell us what you think, if you have a topic you'd like to suggest for
29:15
a show, we'd love to hear from you.
29:17
Our email address is podcast@ocrnetwork.com.
29:22
Communication breakdown is a production of the Observatory on Corporate Reputation.
29:25
I'm Steve Dowling.
29:26
And I'm Craig Carroll.
29:27
We'll be back next week.
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Thanks for listening.
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