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How Trumpian does Gavin Newsom want to get?
The California Democratic governor has achieved social media success and 2028 buzz by taking a page out of President Donald Trump’s all-caps social media playbook. But he’s also been following Trump’s lead in making things personal with corporate executives who run afoul of his agenda.
First on Newsom’s naughty list: General Motors CEO Mary Barra.
All the major automakers abandoned Newsom for Trump when they successfully urged Congress to repeal California's electric vehicle mandate, a critical climate policy that the new president wanted dead. But Newsom seems particularly piqued at Barra, who was a Democratic favorite when Joe Biden was in the White House and is now getting praise from Trump for backing his tariffs on imported car parts.
“Mary Barra sold us out,” Newsom said in September. “They sold out to this administration. They sold out our leadership.”
Much of the impetus for Newsom’s anger is that GM was reportedly double-dealing. According to the Wall Street Journal, the car company was engaging with California regulators on ways to tweak the state’s zero-emission sales mandate at the same time that it was urging Trump to remove the state’s authority entirely. Newsom is taking it personally.
“They were playing both sides of the field, and when the deal looked a little bit sweeter with the Trump administration, they went that way,” said a person familiar with GM’s negotiations with California whom POLITICO granted anonymity to discuss confidential talks. “The governor’s fired up because they were negotiating in bad faith. He feels personally jilted by GM through that process.” A GM spokesperson declined to comment but pointed to Barra’s remarks last month to the New York Times.
“We have the largest EV portfolio of anyone selling vehicles in this country,” she said. “We sell a huge amount of vehicles in the state of California. I am always going to advocate for one national standard and for making sure regulatory requirements don’t get in front of the consumer.”
Barra and other CEOs are making the rational choice here: Automakers have never liked California's mandates, which required them to sell ever-increasing proportions of EVs and produced the dreaded “regulatory patchwork,” as other blue states follow the rules while red states don’t.
But the policy reversal also seemed a piece of the broader wave of Corporate America genuflecting to Trump. This wasn’t as shameless as Apple CEO Tim Cook hand-delivering a plaque to Trump or FIFA awarding him a new peace prize of its own creation, but the move against California’s electric car mandate certainly offered automakers an opportunity to take part in the great grovel to Trump.
And yet, there are dangers in embracing a party — or a politician — too closely. CEOs who cozy up to Trump now are taking a risk for when the pendulum inevitably swings back, and it may not end well for them. That might be particularly true if the next president has a long memory and wants the personal to impact the policy.
Wading into politics is always fraught for businesses, and that’s been particularly evident in recent years. CEOs pivoted to the left during Trump 1.0, with businesses increasingly taking political stances on Twitter (now X) starting in 2017 and embracing more left-leaning speech beginning in 2019, according to a recent study by Washington University and Harvard researchers. It didn’t work out for them: S&P 500 companies saw a “noticeable decline” in their stock price in the 10 days after issuing partisan tweets, with an average decline of 20 basis points.
Harvard Business School Professor Elisabeth Kempf, the paper’s co-author, said she hasn’t crunched the numbers from the current wave of corporate speech, but she expects businesses have swung to the right in the Trump 2.0 era.
“Historically, we haven’t seen U.S. firms adjust their public messaging to align with the administration in power,” she told me. “I would expect that what we are seeing now is a sharp departure from that historical pattern.”
The threat of backlash has Corporate America increasingly scared to speak. An October Harris Poll found that 36 percent of executives feel uncomfortable “publicly expressing their views on government policy,” up from 25 percent in April.
CEOs have long tried to curry favor with the occupant of the Oval Office, of course, especially if lucrative federal contracts are at stake. And throughout American history, certain presidents have undertaken extraordinary interventions into the U.S. economy — though they didn’t always succeed, like when the courts stopped Harry Truman from taking over steel mills during the Korean War.
But where Barack Obama called the federal government a “reluctant shareholder” in GM during its financial crisis-era bankruptcy, Trump is eagerly having the U.S. take stakes in a host of businesses, including Intel and a rare earth mining company, among others. And through it all, he is inserting himself directly in the dealmaking with executives.
“There seems to be a cultivation of a personal relationship,” said Witold Henisz, vice dean and faculty director at the Wharton School’s Sustainable Business Initiative. “And I think that is pretty new with the United States.” He noted how “coercive” it all feels with Trump.
Though Newsom and climate activists may be stung by Barra’s about-face, it’s also true that GM actually still has the most electric vehicle models of any U.S. automaker, while Stellantis, the one automaker still on board with California’s standards, has the least.
“They’ve been very good actually rolling out a plethora of models,” Ivan Drury, an analyst at the automotive research firm Edmunds, said of GM. “And it kind of hurts more in that sense, right? Because they were on the track that was in alignment with California.”
Democrats will eventually wield power again, and when they do, will Barra find herself in alignment with the new president? At this way too early stage in the 2028 presidential race, Newsom has a strong case to be seen as the Democratic frontrunner. Newsom recently noted that Barra hasn’t reached out to him to smooth things over. That would surely change if he wins the White House — though it wouldn’t necessarily suggest a healthy state of affairs in the United States.
“Whenever you’re working in a more personal, relationship-oriented political system, overall, you’re losing money. Overall, you’re lowering growth,” said Henisz, who noted such a scenario was typically more common in poorer, less stable countries. “Then it becomes a question of who’s losing less… or it may be winning relative to somebody else, but the pie is shrinking.”
English (US)