ADA, MI — So how will a global company like Amway fare under President Trump’s “America First” approach to economics?
The leaders of one of Michigan’s largest family-owned companies say they aren’t sure.
“There’s a lot of stuff being said on the campaign, a lot of stuff being said now,” President Doug DeVos said. “There’s a lot of activity but where it really lands finally at the end of the day from a policy perspective is still a bit of a question.”
DeVos says he expects change, but also good working relationships with markets around the world.
“We appreciate the role the government has, the more it can be steady and predictable, the better it is.”
DeVos and Amway Chairman Steve Van Andel spoke with MLive and The Grand Rapids Press this week as part of the company’s annual announcement of year-end revenues.
There are mounting fears that Trump’s promises of tariffs on foreign goods could create a U.S. trade war with China, where many U.S. consumer goods are made. China is Amway’s biggest market, accounting for about one-third of its $8.8 billion revenues in 2016.
The Ada-headquartered Amway isn’t vulnerable like other U.S. manufacturers that source production overseas, or rely on imported parts to make products stateside.
The company’s export to import ratio is 14-to-1. All but three of its 15 manfacturing facilities are in the U.S. Nine are in Michigan, two are in California and one is in Washington.
“We’re a huge exporter,” said Van Andel. “We need to make sure we have policies that are good for trade or it hurts our exporter business.”
Most of what Amway exports overseas are supplements and beauty products made in its Ada plants. Ingredients are grown on the company’s certified organic farms in Washington and processed at a nearby facility that opened in 2015. The direct sales giant also operates production facilities in China, India and Vietnam. The vast majority of products manufactured in those facilities are sold in the nation where they were manufactured. .
“I think there is a lot of talk and angst because we just had an election, but from our perspective is this isn’t really new,” DeVos said. “We have dealt with this whether it is changes in government in the U.S. or changes in the governments in other markets around the world.”
With operations in 100 countries, the 60-year-old company is seasoned in dealing with economic upheaval that comes with the pendulum swing of politics.
Over the years, Amway has become adept at adjusting to the changing of the guard.
“It’s not just one administration or one set of changes,” DeVos said. “It happens throughout history, if you will. There’s always some sort of back and forth. You just have to figure out how to deal with it.”
What may be more surprising about the leaders’ wait-and-see attitude is that they are seen as insiders in the Trump Administration. DeVos’ sister-in-law, Betsy, officially joined President Trump’s cabinet this week as the U.S. Education Secretary.
Both the DeVos and Van Andel families have long been Republican mega donors. Doug DeVos gave $35,000 to the Trump Victory Fund. (His dad, Amway co-founder Rich, brother Dan and sister Cheri each donated $70,000.)
Like many business leaders, DeVos and Van Andel want to see Trump keep his promise to roll back federal regulations blamed for putting companies at a competitive disadvantage globally.
Amway — which this week reported its third consecutive year of declining sales — is vulnerable to global issues such as fluctuating exchange rates, rising duties and border issues that could make moving products between countries more difficult.
Still, Van Andel points out Amway has weathered many trade battles.
“There was one country that was getting into a trade dispute so one country put a big duty on one industry, and the other country put a big duty on another — which happened to be the beauty industry which we are in so all of sudden we have to adjust to that,” said Van Andel, giving an example of how one snarled his company. “So those sort of things have happened.”
Article Source: http://www.mlive.com