Just My Thoughts …on Corporate Promises: Are You a Believer?

My initial response is: “Prove it”.

I know, me too!

To be honest, I hate myself for it. I’m not a natural cynic. But that’s what goes through my head after these pledges are made. 

Right, right. And it has nothing to do with IBM. It could be any large corporation. In fact, here’s an inexhaustive list of companies who have recently announced investments in the US:

·         Apple

·         Nvidia

·         Johnson & Johnson

·         Bristol Myers Squibb

·         Hyundai

·         Toyota

I just looked at the WhiteHouse.gov website and there’s a total of 60 companies who have committed to a US-based investment! There are an additional 4 foreign countries with planned investments totaling more than $3 trillion.[2]

Even with the political twist to it, I should be excited by these announcements. Yet skepticism seems to wash over the excitement.

Well, to be fair, what is the track record of large corporations as it comes to these pledged investments in the US? Do they tend to follow through?

That’s a good question. As an Ohioan, this is the first thing that comes to mind:

Eesh, that’s ugly.

As it turns out, they’re in good (or bad) company. Here are some other similar stories:

   (1)     Foxconn (2017)[3]

a.        Pledged investment: $10 billion LCD manufacturing complex in Wisconsin; 13,000 jobs

b.       Result: $672 million facility; 1,000 jobs

 ( (2)     SoftBank (2016)[4]

a.        Pledged investment: $50 billion in US startups and tech companies; 50,000 jobs

b.       Result: $15-20 billion investment ($10 billion of which in WeWork); 10,000 jobs

   (3)     General Electric (2011)[5]

a.        Pledged investment: $1 billion to revitalize US manufacturing facilities; 10,000 jobs

b.       Result: $400 million investment; 3,000 jobs

Is there a common thread with these shortcomings?

An array of reasons including unrealistic projections, unforeseen economic/financial challenges, and regulatory issues. The degree of blame does vary.

            There have to be some success stories, no?

Thankfully, several of them. Here are some memorable ones: 

(   (1)     Apple (2012 & 2018)[6]

a.        Pledged investment: $300 million in Austin, TX campus expansion; 3,600 jobs

b.       Result: $1.3 billion after eventual 2018 expansion; 7,000 jobs

   (2)     Amazon (2010s)[7]

a.        Pledged investment: billions of dollars in logistics infrastructure; tens of thousands of jobs

b.       Result: $30 billion investment; US workforce grew from 30,000 to 800,000 in the decade 

   (3)     Boeing (2009)[8]

a.        Pledged investment: $750 million-$1 billion for 787 Dreamliner Facility; 3,800 jobs

b.       Result: $2 billion investment by 2020; 7,500 jobs

So our skepticism is unfounded at times?

It most definitely is. In fact, a study by the Brookings Institution estimates that 60-70% of large-scale manufacturing projects announced in the US reach completion.[9]

            60-70% ain’t bad.

I’ll take it. For the sake of the economy and national security, my hope is that at least 70% of these recent pledges hold. Time will tell.