Much as government officials across the country have never had as much to do with one another as they have while trying to tamp out COVID-19, the coronavirus also has America’s CEOs talking among themselves in an unprecedented display of cooperation and coordination.
David Farr has been a prominent figure in CEO conversations as chief of Emerson, an $18.4-billion diversified global manufacturer based in St. Louis and former chairman and continuing board member of the National Association of Manufacturers.
“In the environment we’re in now, CEOs need to touch base and find out what each other’s strategies are for dealing with certain situations, and make sure you line up.
“It’s not unknown for us to pick up the phone and talk to each other, of course,” Farr said. “But we’re doing much more of that right now—at small, medium and large companies. Sometimes even with competitors and frenemies, where we’re working together now even though we compete against each other.”
Much of why CEOs are stepping up their conversations revolves around accelerated efforts to produce ventilators, personal protective equipment and other items to battle COVID-19 and other contingencies that have been created by the nation’s crash program to defeat it.
“We’re all trying to do our normal jobs and at the same time many are being asked to do extraordinary things for the country, or do things at the normal speed where you study things and call in consultants,” Farr told Chief Executive. “So CEOs who have relationships with each other are picking up the phone and saying, ‘I know you’re working on this project relative to making masks, and we talked with the president; how can I help accelerate that?’
“The only time I can recall like this was after 9/11. It arises after a real crisis. And as a long-time CEO, I was brought along to believe that in these situations you talk with other CEOs.”
Alex Gorsky, chairman and CEO of Johnson & Johnson, is one of those CEOs. His company is working on producing a COVID-19 vaccine that would be produced in both the United States and Europe, Farr said, and Emerson is a “major supplier to the pharma industry. We’re working with them to be closely aligned to how they get that capacity up and running.” Similarly, Farr said, his company is working with Daniel O’Day, CEO of Gilead Sciences, which also is working on a vaccine.
President Trump actually jump-started much of the current chatter among company chiefs “by bringing in CEOs” to staff his Great American Economic Revival Industry Groups, Farr said. “We’d make contacts to help each other. We were all in crisis mode to help each other, and now we’re doing it to get the economy open. We’re sharing what works and what doesn’t work.”
This has involved sudden cooperation among CEOs who aren’t used to dealing in quite that way with each other. He and Honeywell CEO Darius Adamczyk—whom Farr calls his “frenemy”—had to work out coordination of each company’s facilities to help meet the White House task force’s demand for ramping up production of N95 masks.
“In that kind of situation you can’t be satisfied with just what a procurement guy says,” Farr said. “CEOs have to ask other CEOs, ‘What are you personally committing your company to?’ And then you have to make sure that your people will move heaven and earth to live up to your company’s commitment.”
Over the last couple of weeks, Farr and dozens of other CEOs mounted a sort of grass-roots campaign to get the federal government to pressure Mexico to enable production to continue at some of its plants that produced key components of medical equipment that was final-assembled in the United States.
“The president of Mexico was missing in action,” Farr said. “I started calling CEOs about how we get the Mexican government to wake up and support us and do the right thing … What’s different is that we’re going outside our normal process to make contacts, and we’re using our relationships to make those contacts.”
The growing group of CEOs—which eventually numbered 326—enlisted National Association of Manufacturers’ President Jay Timmons to draft a letter to the White House, which in turn expressed their sentiments to Mexican President Andrew Manual Lopez Obrador. The execs urged him to allow continued operations of facilities owned by these companies, and their suppliers, in Mexico that supported medical-equipment manufacture.
But CEOs’ growing discussions have been extending beyond efforts to ramp up medical-equipment production. For example, Farr said, a St. Louis-area CEO called him last week to discuss ideas with him about how to bring white-collar personnel safely back to work in offices. Beginning today, Farr expanded Emerson’s staff meeting at headquarters to about 50 or 60 people from about 15 people who manned an auditorium-sized room while physically distancing.
Other CEOs called Farr to discuss balance-sheet responses to the pandemic, recalling Emerson’s early steps during the onset of the Great Recession in 2008, which was caused by the collapse of major financial firms. “They remembered that we were doing things faster than others to cope with things back then,” Farr said.