What Companies Are Saying About Border Adjustability

In quarterly earnings calls, CEOs and CFOs admit the Blueprint’s border adjustability aspecy will bring jobs, investment, and production to the United States:

What CEO’s Are Saying

Bill Simon, Former CEO of Walmart

"...But the current tax code is structured, and the way it is structured has resulted in a massive migration of jobs, manufacturing jobs in particular, to countries outside of the U.S. And a simple restructure of the tax code, to equalize the playing field would result in expansion of US manufacturing, something that I am very passionate about... it is an idea that has merit.”

(Fox Business, Feb. 16, 2017)


Bill O’Keefe, Former CEO of the George C. Marshal Institute

"One key element in many proposals is a border adjustment provision that exempts taxes on exported goods produced domestically while adjusting taxes on imported goods at the border. Under this provision, services and products "Made in America" would level the playing field so we can compete more fairly.  Virtually all countries around the world similarly employ border adjustment systems. This reform would end the "Made in America tax" so that exported goods no longer face discriminatory taxation by our trading partners." (Real Clear Energy, Feb. 21, 2017)


Brad Anderson, Former CEO of Best Buy

“The other thing is the US economy is such a powerhouse in the world that the companies have had to sort of adjust their pricing to this market because they so desperately need this market. And as it gets more vibrant and grows, they need it all the more, so I'm not sure that the full impact would get passed along to the consumer. And the stronger the consumer’s individual financial situation is, the better for most retailers.” (Fox Business, Mar. 02, 2017)


Brian Goldner, CEO Hasbro

“You have to think about it holistically. The border adjustment tax, we would see it in line with a reduction of corporate tax rates, first. We see it as a total package.” (CNBC, Feb. 16, 2017)


Hakan Samuelsson, CEO Volvo

"We have to look into that but I think always our concept has always been not just importing cars into U.S., but also exporting out of South Carolina. I think that is something that is good for us and I think also good for jobs in the U.S. So, I mean, we are creating really [good] jobs in the US by using free trade and exporting." (Bloomberg, Mar. 07, 2017)


Harald Krueger, CEO BMW

"We have a big footprint in the United States, we are the biggest net exporter from the United States, it is worth $10 billion a year, so I think that is what BMW in the Unites States is all about…"
CNBC, Mar. 02, 2017)


Mark Bloomfield, CEO American Council for Capital Formation

"[Supporters] also expect it to raise revenue, and so do independent analysts: $1 trillion over 10 years, according to the Tax Foundation. And while it's premature to begin doling out revenue offsets, there's no question that revenue generation at that scale will be essential to achieving the other goals of tax reform — especially rate reduction both for businesses and individuals." (The Hill, Feb. 26, 2017)


Chip Wilson, CEO Lululemon

"I think like anything else, if prices rise, you would think that people would buy less. But as I said, I’m very bullish on the American economy and the American dollar, and so, I think that they're going to have more money to spend on it. And I don't think it's going to affect the U.S. retail that much.”
(CNBC, Mar. 03, 2017)

They Said It Themselves

In quarterly earnings calls, CEOs and CFOs admit the Blueprint’s border adjustability will bring jobs, investment, and production to the United States

Constellation Brands

Distributor of Corona

“Constellation Brands Hearing up for GOP Border Tax: CEO outlines plan to avoid raising prices if company can no longer take tax deductions on imports.” 

“Constellation Brands Inc. would consider buying more natural gas and packaging materials from the U.S. … according to comments company executives made during a post-earnings conference call Thursday.”

“Constellation finance chief David Klein said it is possible that, under the House Republicans’ proposal, companies wouldn’t be able to deduct costs incurred abroad against their U.S. corporate taxes, creating an incentive to make as much in the U.S. as possible.”*

“The company still expects that any price increases on its Mexican beers would remain in the 1% to 2% a year range, based on a pricing algorithm.” (Wall Street Journal, Jan. 05, 2017)


Brian Gladden, CFO Mondelez

Maker Of Oreos, Triscuits, And Many Other Consumer Products

 “’To the extent that we face higher costs for imported products, we’d obviously need to look for ways to cover these costs, adapt our supply chain model,’” said Chief Financial Officer Brian Gladden.”* (Wall Street Journal, Feb. 02, 2017)


Spirent Communications

[Responding to question about border adjustability] “Yes. So we generate a lot of the intellectual property and most of the product value that we sell is in the intellectual property in the equipment. The actual physical hardware is off-shored. So, as Paula says, we import, but our net export position, we are a much stronger exporter in net.” (Quarterly Earnings Call, Feb. 26, 2017)


Libbey, Inc.

“So, what we are doing is trying to influence the discussion wherever we can, being very prudent about our long-term capital investments to make sure that we place capital on the right spots, and waiting to see.”* (Quarterly Earnings Call, Feb. 26, 2017)


Thomas A. Amato, President and CEO TriMas Corp.

Question: “just given the chatter around border tax under the new administration, can you give us a sense of … how much flexibility will you have to move some of the facilities back to the U.S.?”

Thomas A. Amato: “As far as flexibility goes, we have flexibility because we have a large footprint in the states, and where we have overseas production.” (Quarterly Earnings Call, Feb. 26, 2017)


Don Walker, CEO Magna International

“Yeah. And I think that would be over time. I think no matter what happens with this border adjustment tax in NAFTA. Some things they are easy to move then the car companies don't like moving things since you got to recertify everything, but some things could be moved around. I wouldn't expect their margins change other than maybe the cost to move, but some things are easy, some things are more difficult.

I think the big issue will be, where our future investments going to be located. And I can't speak for the car companies, but I would think that if somebody is thinking we're making a major investment in a new assembly plant based on everything that's going on. There is probably larger likelihood that they'll put that in the U.S. if they're making that decision now, but people will wait and see what the end result is here and make their decisions.”* (Quarterly Earnings Call, Feb. 19, 2017)


Jack Lipinski, CEO CVR Refining

 [In response to question about border adustible tax] “We do import at the Canadian, and we will be in an area or have the ability because of our large presence in [indiscernible], if it became uneconomic to run heavy Canadian. We would simply swing over to run full 100% domestic.”* (Quarterly Earnings Call, Feb. 12, 2017)


Jeffrey Schoen, CEO Orchids Paper Products

 [In response to a question about the impact of border adjustability] “I don’t know, I mean the market is the market; you have to be competitive in the market. So I would say right now there is probably not a lot of room to pass it on. So I think it would be a negative for the company if that’s the case. Now what it does is in terms of decisions for the company, I mean, I think our -- I think in the future our West Coast expansion kind of becomes one of our next thing that we look at. And what that would do is obviously drive us and it doesn’t mean we wouldn’t do this anyway to look at West Coast U.S. based manufacturing sites.”* (Quarterly Earnings Call, Feb. 05, 2017)


Jeff Lorberbaum, CEO Mohawk Industries

“Listen, everything is a risk. But when you look at it … we primarily manufacture our U.S. products in the United States and we have the largest capacity in all the categories of anybody. So if it’s going to be advantaged to being a local producer, we are in a position to take advantage of it better than anybody else. We have the capability of expanding our businesses and capacity, if it makes sense; if the market changes and imports are less advantageous to be here. And we have the people in order to execute it. So if it’s advantageous to do more here, we are first in line to do it.” * (Quarterly Earnings Call, Feb. 05, 2017)


Robert Pagano, CEO Watts Water Technologies

“We do export some products out, but it’s primarily import, and we’re reviewing alternatives. We do have the ability to bring more stuff to our local foundry, as well as we’ll look at other capabilities inside the U.S. so we’re reviewing all alternatives at this point in time until we -- there's more clarity on this.” (Quarterly Earnings Call, Feb. 05, 2017)


Stan Askren, CEO HNI Corporation

Stan Askren, CEO: “Yes, it is an interesting question, so I am going to use your question, Matt, if you are okay, to expand a little bit on how we feel about this potential for a border tax or whatever. We're okay with that. We do import components from China, from Asia, other parts of the world. It's not a huge exposure, it is relatively moderate, by the way we have the ability to domestically source or domestically produce a lot of those components.

Quite frankly, we have a significant product underway to develop manufacturing capabilities specifically around seating, et cetera. Before this whole sort of phenomena, political phenomenon happened, really to in-source or to resource or back source seating made in America for our largest customers, so we can play this either way. I think we're in a good spot regardless of where it goes with our domestic manufacturing capability, along with our offshore sourcing and so I can paint a picture either way, that it will be fine, it may be good, either way as we think about it, Matt.”*

Matthew McCall: “Okay. So looking at it as a percent of cost of goods is kind of meaningless, because you would be able to adjust if you need it?”

Stan Askren: “That's a good way to think about it.” (Quarterly Earnings Call, Feb. 09, 2017)


Simon Dingemans, CEO GlaxoSmithKline, PLC

Question: “And then, Simon, again in terms of the new administration, obviously U.S. tax reform, border tax proposals look like they're going to happen. Could you talk how that will impact GSK? In particular I note that you committed to new manufacturing sites in Scotland rather than the U.S. And whether these are indeed going to be supplying the U.S.? And then second, I know you also relocated some IP out of the U.S. into the UK.”*

Simon Dingemans: “On balance from what we can see today, we think it's likely to be a net positive. Exactly how much, impossible to say at this point. But we feel reasonably well hedged, given the manufacturing footprint that Andrew just described. [Previous answer had noted nine manufacturing facilities in the United States which can serve the U.S. market.] And we have retained structural flexibility to move parts of the group around, including our R&D investments and intellectual property to respond to where governments place the incentives. And that would include the U.S. as well as the UK. So at the moment we're watching. We're participating in the debate. And we'll see what proposals appear.”*
Quarterly Earnings Call, Feb. 05, 2017)


James K. Kamsickas, CEO Dana, Inc.

 “We're not going to be able to quantify, we're not going to quantify specific on the numbers, although we appreciate the question. What I would say is that we feel like we're in a very good situation. Perhaps it's unaware, but approximately 30% of our major facilities, our facilities are actually located in the United States. And we're actually adding quite a few jobs, you're aware of, for example, the plant that we'll be adding here in Toledo at about 300 to 350 jobs. We've made significant or in the process of making significant investment in Auburn Hills, Michigan; Louisville, Columbia, Missouri; Fort Wayne, you name it. And because we have essentially a capability, if it's in Mexico or America, to do the same thing, in the event that the border tax legislation moves in a direction that – making the right business case, we very much have the ability from an operating standpoint to do so.”* (Quarterly Earnings Call, Feb. 05, 2017)


*Denotes Emphasis Added 

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