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Why Ford, Chanel and other companies pitch in during a crisis – without the government ordering them to

Why Ford, Chanel and other companies pitch in during a crisis – without the government ordering them to

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3 years ago

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Ford employees assemble ventilators. AP Photo/Carlos Osorio

Severe shortages of critical medical supplies have prompted governments to compel private companies to fill the gap. In the U.S., President Donald Trump invoked rarely used powers to force General Motors to make ventilators, while the leaders of France, the U.K. and Japan have put pressure on companies to make more medical supplies.

But, judging by how many non-medical companies have voluntarily stepped up to shift their manufacturing might to produce health care supplies – including GM rival Ford – it seems hardly necessary.

Fashion brands such as LVMH, Chanel and L’Oreal are transforming their factories to mass produce face masks. Spirit and beer makers Anheuser-Busch, Diageo, Molson Coors and Bacardi are shifting some of their production and distribution towards hand sanitizer. And automakers Toyota, Volkswagen and Fiat Chrysler are leveraging their 3D printing capabilities to produce face shields and are partnering with other companies to make ventilators.

And that’s just three industries. In all, hundreds of companies across the globe have committed money, supplies and know-how to help with the COVID-19 response, according to the U.S. Chamber of Commerce Foundation’s corporate aid tracker.

Why are these companies being so generous?

As scholars of corporate social responsibility, we believe altruism certainly plays a role for many of them, but it’s not the only motivator. Research on company behavior points to two others: bolstering reputation and avoiding regulation.

Burnishing the brand

In normal times, companies often undertake socially responsible initiatives to enhance their brand and build a stronger relationship with consumers, investors and employees in order to drive profits.

What’s a socially responsible initiative? There are many definitions, but the way scholars like us think of it is it means taking voluntary action that is not prescribed by law or not necessary to comply with a regulation.

Reputation Institute, a management consultancy, found that people’s willingness to buy, recommend, work for or invest in a company is significantly influenced by their perceptions of its corporate social responsibility practices. So doing something that benefits people in their community can lead to higher sales, increase the company’s valuation and keep good employees around longer.

But these are anything but normal times. Rather, it is a global crisis that has created a need for an all hands on deck response from everyone, including corporate America. In other words, just like during natural disasters, people expect companies to do their part – and not appearing to do so could damage a brand’s reputation. A 2013 survey of citizens of 10 countries that included the U.S., France, Brazil and China found that 9 in 10 people said they would boycott a company they believed behaved irresponsibly.

And this is especially true of industries that are more directly connected to the crisis. In the current situation, for example, there’s been a shortage of hand sanitizer, which fashion companies that make perfume can easily produce. And manufacturers are, as we’ve seen, capable of repurposing their assembly lines to build ventilators.

Not doing its part, in this environment, could result in a long-term hit to a company’s reputation.

Eluding onerous regulations

The other motivator is preempting government regulation, which becomes a greater risk during and after a crisis.

For instance, we saw more financial regulation after Wall Street’s behavior sparked the Great Recession, and lawmakers from districts that suffer from hurricanes tend to support bills promoting more environmental regulation.

So companies will often pursue voluntary self-regulation and take other proactive measures during a crisis in hopes of forestalling a more onerous government reaction. A recent Stanford study found that even a modest effort can work to effectively preempt regulation.

Furthermore, this allows companies to set the terms and control the agenda, allowing them to choose actions that are in the interest of society, profitable, and avoid the costs and pains of complying with new regulations.

At the moment, companies may be stepping up to avoid a more draconian response from the government, such as when Trump invoked the Defense Production Act against GM, which allows him to control and direct corporate resources towards production of critical equipment. This also gives the federal government priority in contracting, limiting a company’s ability to find the most efficient or profitable contracts.

So next time you read about a company doing something for the greater good, applaud the effort. But you could consider its other strategic motivations as well.

[Insight, in your inbox each day. You can get it with The Conversation’s email newsletter.]

The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

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Tesla rival Stellantis unveils its lowest price electric vehicles

The Big Three automaker unveils details on its low-priced electric vehicles that will be delivered over the next two years.

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12 hours ago

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October 18, 2023

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Electric vehicle manufacturers have realized that the prices of their cars are making it more difficult for many of them to compete against makers of lower-priced internal combustion engine vehicles.

Tesla saw its third quarter deliveries fall below market estimates, prompting Elon Musk's company in early October to lower the list price of the Model 3 from $40,240 to $38,990 and its industry leading seller Model Y has recently fallen from $47,740 to $43,990.

Related: Tesla Japanese rivals debut concept vehicles in latest challenge

Tesla top rival Ford already cut the price of its all-electric Mustang Mach-E by up to $4,000 in May and its F-150 Lightning by about $10,000 in July.

Stellantis revealing entry-level electric cars

Stellantis  (STLA) - Get Free Report has been busy revealing low-priced entry-level electric vehicles that it plans to begin selling in 2024 to compete with French automaker Renault in Europe as well as Chinese EV companies. The company in August said it would unveil a second new entry-level Fiat-branded electric vehicle in July 2024 that will be priced less than €25,000 or about $27,390. The company, however, didn't say when the vehicle might be sold in the U.S.

The company said in June that it will deliver the new Citroën e-C3 electric car to Europe in early 2024. The Citroën e-C3 was expected to have a range of 186 miles on a charge and would be among lowest priced EVs on the market. Stellantis had already said it would bring Fiat's best-selling EV, the Fiat 500e, to the U.S. market in 2024 to compete against Tesla and the growing U.S. EV market.

Citroën e-C3 all-electric subcompact hatchback.

Stellantis

Big Three automaker unveils its low-priced electric vehicles

Stellantis on Oct. 17 revealed its updated all-new, all-electric Citroën e-C3, which is its first European-designed, European-built B-segment, or subcompact, EV hatchback. The new vehicle is now estimated to have a 199-mile range, charging 20% to 80% of capacity in as little as 26 minutes. The EV accelerates 0 to 62 mph in 11 seconds with a provisional top speed of 84 mph for everyday driving and traffic in urban and suburban areas.

The company estimates that the vehicle will be priced below £23,000 ($27,900) in the UK. No word yet if the Citroën e-C3 will roll out in the U.S.

In 2025, Stellantis will offer a Citroën e-C3 with a 200 km- or 124-mile range and priced at €19,990 or $21,068, the company said. That price would be lower than any new EV sold in the U.S. today. General Motors  (GM) - Get Free Report Chevy Bolt's lowest manufacturer suggest retail price is $26,500, while the 2024 Nissan  (NSANY) - Get Free Report Leaf has a starting price of $28,140.

The new Citroën e-C3 will be available in three versions You, Plus and Max. The You version's standard equipment includes LED headlights, Citroën Advanced Comfort Suspension, Active Safety Brake, the new Citroën Head Up Display, ‘My Citroen Play with Smartphone Station’ for infotainment, electric door mirrors, auto lighting, rear parking radar, rear spoiler, cruise control, manual air conditioning, and six airbags.

Plus vehicles include 17-inch alloy wheels, Citroën’s two-tone paint with contrasting roof, decorative roof rails, front and rear skid plates, the 10.25-inch color touchscreen with smartphone mirroring, Citroën Advanced Comfort Seats, auto wipers, power-folding and heated door mirrors, leather-effect steering wheel, 60/40 folding second-row seat, and driver seat adjustment.

The premium Max version additionally has LED rear lights, rear privacy glass, enhanced seat textiles, automatic air conditioning, 3D navigation, wireless charging, rear camera, electrochrome rear-view mirror, and rear power windows.

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Putin, Xi In Beijing Pitch For ‘Alternative World Order’ As Biden Departs A Burning Middle East

Putin, Xi In Beijing Pitch For ‘Alternative World Order’ As Biden Departs A Burning Middle East

As a Rabobank note has highlighted, the main…

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13 hours ago

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October 18, 2023

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Putin, Xi In Beijing Pitch For 'Alternative World Order' As Biden Departs A Burning Middle East

As a Rabobank note has highlighted, the main theme on display during Xi Jinping and Vladimir Putin's Wednesday talks in Beijing was one of "common threats" bringing the two "dear friends" closer, according to a press readout. Observed Rabobank earlier in the day, "Meanwhile, as the Middle East rages and the West recoils, Xi Jinping welcomes Russia’s Putin and a host of Global South leaders, ex-India, to his Beijing Belt and Road Forum to talk about what an alternative world order might look like. The ‘global’ Western press mostly failed to even cover it."

Putin said at a media briefing following the meeting with his Chinese counterpart, "We discussed in detail the situation in the Middle East." He added: "I informed Chairman (Xi) about the situation that is developing on the Ukrainian track, also quite in detail." The Russian leader then emphasized: 

"All these external factors are common threats, and they strengthen Russian-Chinese interaction."

AFP/Getty Images

CNN subsequently called it a "pitch for a new world order" at a moment crisis has gripped the Middle East.

Yet, almost simultaneously, Bloomberg reported that Biden is overseeing a fast unfolding disaster in the Middle East:

President Joe Biden’s 7.5-hour trip to Tel Aviv signaled full US backing for Israel but fell short on another key goal: winning over Arab leaders.

Amid growing signs the conflict may be spinning out of control, Biden made plain that the US will protect its ally, sending a clear message to rivals in the region like Iran to stay out of the fight. With one US aircraft carrier in the area and another on the way, Biden promised a new package of “unprecedented support.”

The Bloomberg headline aptly reads, "Biden’s Whirlwind Israel Trip Fails to Calm Fears of Wider Middle East Conflict." At this time, Lebanon, Jordan, and Egypt are on edge - with Western and Saudi embassies reducing staff and issuing travel advisories. 

Meanwhile, related to Xi's Belt and Road (the purpose of the gathering in Beijing), Putin praised the potential for it to usher in a "fairer, multi-polar world" as Moscow and Beijing grow closer based on "deep friendship": 

In his speech at the opening ceremony, Putin hailed Xi’s flagship foreign policy Belt and Road Initiative as “aiming to form a fairer, multi-polar world,” while touting his country’s deep alignment with China.

Russia and China share an “aspiration for equal and mutually beneficial cooperation,” which includes “respecting civilization diversity and the right of every state for their own development model” – he added, in an apparent push back against calls for authoritarian leaders to promote human rights and political freedoms at home.

This is at a moment Putin is "wanted" by the International Criminal Court (ICC) and shunned and sanctioned by the West, while at the same time Global South countries are expressing growing anger at Israel's unrelenting bombing of the Gaza Strip, as the Palestinian death toll soars into the thousands.

Directly related to this, a Thursday UN Security Council resolution brought by Brazil and seeking a ceasefire in Gaza was shot down, given the US was the only "no" vote.

Also missed by the mainstream media was the following pro-China sentiment expressed by a top Palestinian official over a week ago:

China will soon lead the world, and it supports the “Palestinian position, whatever it may be,” according to Fatah’s Central Committee member Abbas Zaki.

In a public address that aired on Palestine TV on Sept. 29, Abbas Zaki called on the United States to “reconsider its stance” with regard to Israel or risk becoming irrelevant. The Israelis, he said, were “sons of bitches,” “murderers” and agents of instability, while the Palestinians are “messengers of peace.”

“I know that there is serious change in Europe and even in the United States,” said Zaki.

But, he added, “do not forget the emerging camp, which is on your side—the Chinese camp. China is going to lead the world, and it proclaims: ‘There can be no stability and progress without the liberation of Palestine, with East Jerusalem as its capital.'”

Putin too, has expressed more sympathies with the Palestinian side, days ago warning Israel of the "catastrophic" death toll its attacks on Gaza will result in. He has also held calls with Arab leaders, seeking to mediate peace and a possible two-state solution.

Tyler Durden Wed, 10/18/2023 - 19:40

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Survey delivers bleak news for remote workers

Remote work is increasingly under fire.

Published

13 hours ago

on

October 18, 2023

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Covid-era alternative work solutions have come under fire as businesses increasingly deploy a carrot-and-stick approach to convincing employees to return to offices.

Technology titan Meta Platforms  (META) - Get Free Report, which owns Facebook, threatened poor performance reviews if workers failed to attend offices three times weekly. JP Morgan Chase  (JPM) - Get Free Report CEO Jamie Dimon recently suggested workers uncomfortable with returning to offices should look for employment elsewhere.

Workers don’t like the idea of giving up the flexibility afforded by remote work, but a recent survey shows that these workers may face an uphill battle if they hope to continue working from home.

A woman working on a laptop in a cafe, on Sept. 14, in Edmonton, Alberta, Canada. (Photo by Artur Widak/NurPhoto via Getty Images)

NurPhoto/Getty Images

Remote work loses its luster

Companies big and small rushed to offer flexible alternative work schedules like remote and hybrid work during Covid. Remote work quickly became a key benefit used to fill jobs created by those who took early retirement and newly created positions in response to demand growth fueled by easy-money policies.

Related: Facebook issues more tough-luck news to workers

Remote work initially appeared to be a win/win for companies and employees. It allowed businesses to source job candidates nationally rather than locally and sometimes save money by closing expensive offices. Meanwhile, workers could live in the suburbs rather than crowded cities and save money by eliminating expensive childcare costs.

Unfortunately, the love affair with remote work has soured over the past year.

Businesses, from technology to financial services, have rolled back remote work, citing a need for increased collaboration and greater productivity. Many companies have likely sought to reduce the number of remote workers as part of layoff plans or to fill otherwise vacant office spaces.

Businesses are winning the return-to-office battle

Worker surveys suggest employees prefer remote work. However, they’re losing the battle with employers demanding more office face time.

The Census Bureau’s latest Household Pulse Survey shows remote work has reached a new post-pandemic low, with declines seen in all 50 states, reports Bloomberg.

More Jobs:

The survey showed that fewer than 26% of households include someone who works remotely at least one day weekly. That’s a significant drop-off from the high of 37% in 2021. A total of 31 states had remote work rates above 33% at the peak. Now, only seven states exceed that hurdle.

States with the highest percentages of remote workers are typically Democratic states, mainly on the east and west coasts. Middle America and the South boast some of the lowest rates of remote work.

There’s also a more significant push for a return to office (RTO) in major metro markets where office building valuations are tumbling because of empty offices. During its recent quarterly conference call, Goldman Sachs  (GS) - Get Free Report told investors that it reduced valuations on office properties in its portfolio by 50%.

The impact of lower valuations on financial companies could contribute to the stricter return to office demands. Big banks like JP Morgan have been among the most vocal in demanding RTO, and they’re also heavily exposed to commercial real estate.

For instance, in addition to loans held on commercial properties, JP Morgan is building a new multibillion-dollar headquarters in New York City.

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