Business must chart its own path and not become captive to the vagaries of the marketplace, including those involving the Federal Reserve and interest rates, the stock market, tariffs and world trade and especially elections, former Walmart CEO William Simon told a group at a conference on trade Monday at Baylor University.
Simon, a Baylor University regent and an adviser to the KKR global investment firm, also lamented the caustic state of public discourse and the growing inclination among both Republicans and Democrats to “villainize” those who hold contrasting views.
Simon, who supported former Florida Gov. Jeb Bush in his run for the 2016 Republican presidential nomination, said he seldom agreed with the policies of President Barack Obama but enjoyed the company of Obama and his wife, Michelle, on several occasions during Obama’s eight years in office.
He said his admiration for the first couple compelled him to seek common ground on at least one issue, creation of a jobs-for-veterans program. As Walmart’s CEO, he committed the retailer to hiring any honorably discharged veteran during a five-year period starting in 2013, resulting in 294,000 veteran hires.
Not a fan of President Donald Trump, Simon said he nonetheless accepted an invitation to offer advice on reducing waste in the defense budget and has scheduled visits to Washington, D.C., in that capacity.
The world is becoming increasingly polarized, in part because of individual preferences in news sources, Simon said.
Where once American households overwhelmingly turned to Walter Cronkite and CBS News to report and analyze the news, they now can choose among Fox News, MSNBC, CNN, the Drudge Report and an array of other media outlets, and typically choose the one whose content reaffirms their notions. They become entrenched and less apt to pursue compromise.
Simon spoke at the kickoff dinner for “Trade Integration in the Americas,” a conference on international business and economics. It included presentations from economists in the United States, Canada, Mexico and Brazil.
He has held senior management positions at Brinker International, Cadbury Schweppes, PepsiCo and RJR Nabisco. In the public sector, he served as secretary of the Florida Department of Management Services.
He oversaw Walmart’s initiative to buy $250 billion in U.S.-manufactured products and helped formulate its policy to offer $4 prescription drugs.
He said business owners and executives should not fear mistakes, that they provide teaching moments. He said he was involved in launching Crystal Pepsi, a clear, caffeine-free soft drink that famously flopped.
“It was horrible, so bad it was spoofed on ‘Saturday Night Live,’ ” Simon said.
Turning to hot-button political and economic issues, he had this to say:
- On immigration: “Our GDP is great, between 3 and 4 percent, and our unemployment rate is less than 4 percent. To sustain this growth, we need people, and people want to come to this country. It’s not that difficult.”
He said private enterprise, including business and industry, should play a larger role in crafting solutions to the immigration stalemate.
“A caravan of people marching toward our border intent on entering illegally is not ideal immigration policy,” he said.
- On tariffs: “They are a blunt instrument to deal with trade inequities,” and not an ideal long-term solution to improving the U.S. manufacturing base, Simon said.
Efficiency primes the economic pump, “and efficiency means making a product as close as possible to where it’s used,” he said.
China, which Trump has blasted and threatened with tariffs, is seeing an explosion in its middle class, a trend that could mean more Chinese manufactured goods are used domestically.
The manufacturing sector is vital to a nation that wants to become or remain a major player on the world stage, and the service sector has dominated U.S. job creation for too long, Simon said. He said he is not “bashing” those who wait tables or stock shelves but believes manufacturing “is the fastest and easiest way to create traction” for those pursuing better jobs.
Two other conference speakers, Otaviano Canuto, a member of the executive board of the World Bank Group, and Musheer Kamau, regional operations adviser at the Inter-American Bank based in Washington, D.C., said Simon was giving short shrift to the service industry.
Canuto said the service industry creates well-paying jobs requiring valuable skills and gave the example of an Atlanta-based shoe company that takes photos of customers’ bare feet to create a form-fitting customized product.
Simon said Canuto’s example blurs the line between technology and service. Simon said people with what he considers traditional service-related jobs can more easily move up the career ladder via manufacturing.