The opinions expressed here are those of the author, a correspondent for Reuters. This column is part of the Reuters Sustainable Finance Newsletter, which you can sign up for here - https://www.reuters.com/newsletters/reuters-sustainable-finance/
By Ross Kerber
Jan 28 (Reuters) - Maybe you caught the speech by BlackRock BLK.N CEO Larry Fink at last week's Davos conference, coverage of which focused on his worries that capitalism has undermined itself with too much inequality, and that artificial intelligence is poised to accelerate the trend.
Fink, who now helps lead conference organizer, the World Economic Forum, also said to expect it will "start doing something new: showing up - and listening - in the places where the modern world is actually built. Davos, yes. But also places like Detroit and Dublin - and cities like Jakarta and Buenos Aires."
So, duh, I got in touch with Sandy Baruah, president of the Detroit Regional Chamber of Commerce, a big area lobbying and networking group, to ask what Fink could expect to hear if he shows up. The following is a transcript of our conversation from Friday, edited for length and clarity.
Q: Sandy, what sort of message might the (Detroit area) business community have for the WEF if they show up?
A: We would tell the attendees of a World Economic Forum, should it be held in Detroit, knock on wood, that the industrial economy still matters. While the tech economy is certainly driving the markets, market valuations, where the people work, where the value is created in terms of life for people on the planet, it's really the industrial economy, and Michigan is the heart of that.
Q: In Detroit, your housing prices collectively are much lower.
A: Right now we're amongst the most affordable, but our prices are going up pretty quickly. When you look at the city of Detroit and its suburban environments, it feels very dynamic. Now, as you said, the success levels, the prosperity levels are very uneven. And you see that very starkly in Detroit, to be perfectly candid.
Q: Are there any bipartisan state policies or city policies that you could point to that look like consensus easy wins?
A: So Michigan is perhaps one of the few remaining truly purple states. One (policy area) is around infrastructure. I'd also say around education, we have some real serious challenges around education, but funding people directly to complete at least a two-year post-secondary credential, either a community college degree, your first two years of a four-year degree, or a skilled credential, that has a lot of support and we've actually implemented that.
Q: Larry Fink and others talked about populist forces that have given rise to challenges to the Davos crowd. Is it a cultural or economic story that has given rise to the MAGA base in Michigan?
A: The answer is yes, it's both, very much both. We're super concerned about this because one, income inequality has a lot to do with educational attainment. I have Fortune 500 CEOs on my board. They want, they need the talent of today and tomorrow to work in their companies.
Q: You mentioned the big CEOs. I want to talk about tariffs and their impact on the U.S. auto industry. The U.S. Chamber has been somewhat critical of the Trump administration's path, heavy use of tariffs. I assume your affiliated regional chamber shares that view?
A: We actually take a stronger view. We're being even more vocal than our friends at the U.S. Chamber. Michigan industries, you know, manufacturing, automotive, mobility related, are at a disproportionate risk of the policies that, especially the trade policies that have been enacted. And then you have ... money that was spent on EV (electric vehicle) investments that are now stranded capital. Because whatever, you know, EV technology is moving so, so quickly.
A: There are several things that the Trump administration has done that have been super smart around the auto industry. The rationalization around some of the regulations, especially, I mean, for literally decades we had discordant regulations around emissions and fuel economy that didn't match up.
Q: One of the criticisms I've heard from a lot of corporate governance experts is that the tariffs that Trump was able to put in place, obviously they face a court challenge now, are an example of his administration's overreach. People say that the business community should be taking a stronger line against him.
A: Business organizations, large and small, we kind of pick our battles. Given that we're Michigan, given that we're a very automotive mobility-centric state, you know, we've made a very strong stand on tariffs. The U.S. Chamber is being very strategic. You have to remember that at any given time, the business community has a myriad of issues pending in Washington. And going to war with Congress or the White House, any White House for that matter, is not a good long-term or short-term strategy.
Q: Let's go back to the WEF. If they were to stage some kind of formal meeting in Detroit, who are the stakeholders that they ought to bring together?
A: You would need to be broad-based, you'd need philanthropy in the room, you'd need certainly the university presidents and some of the leaders of our K-12 system, some of the major non-profits that represent social services. I think you need that kind of patina of an audience and participants to really have a good discussion. Otherwise, frankly, then you're just at a Chamber meeting.
(Reporting by Ross Kerber in Boston; Editing by David Gregorio)
((ross.kerber@thomsonreuters.com; (617) 412 0093;))
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