Thursday, June 21, 2018
Business

President Trump's push to grow U.S. jobs — or else — looms at Jabil's annual shareholder meeting

One and only one question was asked Thursday morning at the annual shareholders meeting to Mark Mondello, CEO of St. Petersburg-based global manufacturer Jabil.

How might newly elected President Trump's push to get U.S. companies to grow more jobs in the United States — and not overseas — affect Jabil and its ability to remain competitive?

"Is this good or will it hurt?" posed a longtime shareholder.

As Corporate America just begins to enter the season of annual shareholder meetings, that is the most pressing query senior executives of companies with big overseas presences like Jabil will find themselves struggling to answer.

Jabil, a publicly traded Fortune 200 corporation, employs about 150,000 people in about two dozen countries, including China and Mexico. But it employs only about 7,000 (less than 5 percent) in 15 U.S. states, and 2,000 of those jobs are in St. Petersburg.

Odds are good Mondello had an inkling he might face a "what about Trump?" question, even though Jabil's annual meetings do not typically draw lots of shareholders. The CEO responded, saying he already has received 40 to 50 calls or messages from customers and others asking about the potential impact of Trump.

The worry, of course, is that the President would impose border tariffs on goods made elsewhere to discourage overseas expansion. On the flip side, Trump is promising to trim regulations, cut corporate taxes and make it easier to repatriate company profits earned in foreign countries.

"I think it is highly unlikely there will be a hardcore duty or tariff on products," Mondello said. "I just think the risk of that is really, really bad for the economy."

But regulatory cuts — "done well," Mondello said — and tax cuts sound good to Jabil.

Border taxes on goods means costs will go up, Mondello warned. "It hasn't worked all that well for other countries that have tried to drive protectionism. I see, and applaud, what President Trump is trying to do to bring some jobs back."

Jabil, Mondello suggests, is in a "great position" if bringing jobs back to the United States makes sense. "We are one of the largest, most diversified manufacturing companies in the world," he said.

"If there comes a time when customers are knocking on our door saying, 'Hey we really want to come back to the United States,' then we are well positioned."

In terms of overall risk? Mondello characterized as "interesting" what President Trump is doing in terms of domestic policy." But the CEO was more specific on the international front. "We need to keep a close eye on all the foreign policy stuff. So, if there's an agitation with certain countries, or if things were to occur, that's something we're keeping an eye on."

"He just got inaugurated last week," Mondello cautioned. "It's early days." Citing Jabil's corporate culture built on speed and adaptability, he added: "I think we'll be able to react to most changes."

Contact Robert Trigaux at [email protected] Follow @venturetampabay.

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