By Jacob Bunge in Chicago and Christopher Alessi in Frankfurt
Bayer AG has pledged to add U.S. jobs and investment after
meeting with President-elect Donald Trump, the latest in a string
of public displays from companies looking to head off criticism
from the incoming administration about job losses.
The German chemical conglomerate, which is seeking regulatory
approval for its planned $57 billion purchase of biotech seed maker
Monsanto Co., said Tuesday it would step up research investments
and create "several thousand" new high-tech positions in the U.S.
after completing the deal targeted to close by the end of the
year.
The pledge came hours after General Motors Co. separately
confirmed a plan to invest a further $1 billion in its U.S.
manufacturing operations, and Hyundai Motor Co. outlined a new $3.1
billion investment in existing U.S. manufacturing plants. Also on
Tuesday, Wal-Mart Stores Inc. touted its previous plans to add
about 10,000 U.S. jobs this year, following online retailer
Amazon.com Inc.'s announcement last week of an additional 100,000
full-time U.S. jobs, mostly through expansion plans already in the
works.
According to Trump transition team spokesman Sean Spicer,
Bayer's decision was the result of "the president-elect's focus on
creating a better business climate here in the United States."
Mr. Spicer's comments, made to reporters on a conference call
Tuesday, could leave Bayer and Monsanto little room to deviate from
the employment commitment.
Companies large and smaller are pondering their prospects under
Mr. Trump, who is set for inauguration Friday, and has wasted
little time since his November election spotlighting companies he
sees shirking their responsibility to the U.S. market and
workers.
Following a campaign that emphasized job creation and domestic
business expansion, Mr. Trump vowed to bring back manufacturing
positions to the U.S., and since his election has castigated
companies for shifting operations abroad while praising others for
domestic expansion plans.
That has presented companies with the choice to strike a deal
with Mr. Trump's team -- as Carrier Corp. did in November, keeping
about 1,000 jobs in Indiana in return for new government incentives
-- or reverse plans to shift some manufacturing abroad like Ford
Motor Co. did recently. Others are opting to lie low, hoping to
stay clear of the incoming president's Twitter feed. Wal-Mart's
jobs plan, which derives from previously planned store expansions
and openings and new e-commerce services, suggests that even the
country's largest private employer feels the need to tout American
job growth.
Concern over whether Bayer's planned takeover of Monsanto could
hurt U.S. farmers' competitiveness was one factor behind a meeting
in New York last week between Mr. Trump and Bayer Chief Executive
Werner Baumann and Monsanto CEO Hugh Grant.
Some farmers and state officials on a committee created to
advise the Trump campaign on farm policy this month called on the
president-elect to block tie-ups between some of the agricultural
industry's biggest players, saying competition will slacken and
prices for seeds and crop sprays will rise.
Besides Bayer's Monsanto deal, which would create the world's
No. 1 supplier by sales of both seeds and pesticides, Dow Chemical
Co. and DuPont Co. are pursuing a merger that would create another
agricultural giant, while China National Chemical Corp. plans to
buy Swiss pesticide maker Syngenta AG.
Bayer said Tuesday it aims to invest over the next six years
about $16 billion to research new crop seeds and pesticides, with
half that spending planned for the U.S., while adding several
thousand new high-tech positions in the U.S.
Mr. Spicer went further, telling reporters Tuesday that Bayer's
Mr. Baumann pledged to keep all of Monsanto's more than 9,000 U.S.
jobs in the country and to create at least 3,000 new U.S. high-tech
jobs.
A Bayer spokesman declined to elaborate on specific numbers.
While Bayer has said its deal for Monsanto isn't based on
cutting costs from the combined businesses, the German company has
targeted about $1.5 billion in cost savings from the deal. On a
September conference call with employees, Mr. Baumann acknowledged
that some layoffs could be inevitable due to overlapping jobs.
Bayer's Tuesday commitment on R&D spending works out to a
total of about $2.7 billion a year, which isn't far from what the
companies already spend. Monsanto spent slightly more than $1.5
billion on research and development efforts in each of the past two
years, while Bayer spent about $1 billion in agricultural R&D
in 2014 and $1.17 billion in 2015.
"The United States is a global leader in agriculture, and the
combination of Bayer-Monsanto will underscore that role and ensure
the United States retains a pre-eminent position as the anchor of
the industry," Bayer and Monsanto said in a joint statement
following Mr. Spicer's comments.
While Mr. Trump's critiques of megamergers like AT&T Inc.'s
planned takeover of Time Warner Inc. have fueled investor concern
that he could take aim at other big deals, antitrust lawyers said
that questions of lost jobs -- and pledges to keep them --
typically don't factor into the nitty-gritty of deal reviews.
"This kind of environment on the outside is, to the [antitrust]
agencies, very unhealthy," said Bill Kovacic, professor of
competition law at George Washington University and former chairman
of the Federal Trade Commission. "It creates the impression that
the competition agencies are a direct extension of the political
process."
Write to Christopher Alessi at christopher.alessi@wsj.com and
Jacob Bunge at jacob.bunge@wsj.com
(END) Dow Jones Newswires
January 18, 2017 02:48 ET (07:48 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.