Trump’s Wall Is 30 Feet of Scary Politics for Builders

EghtesadOnline: Hundreds of companies have been eyeing work on President Donald Trump’s 30-foot border wall with Mexico. Some, however, won’t touch it with a 10-foot pole.

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25 March 2017

Mexican cement giant Cemex SAB won’t participate, though it is well positioned to profit with plants on both sides of the border.

Neither will Vinci SA, a big French engineering company, after Chief Executive Officer Xavier Huillard cited the “sensitivities” of employees. Emmanuel Macron, frontrunner for the French presidency, has warned LafargeHolcim Ltd., the world’s largest cement maker, to steer clear. Union leaders at that company have branded the wall undemocratic, according to Bloomberg.

And Democratic lawmakers in California -- the state that, for many, stands for everything Trump doesn’t -- have gone further, threatening to cut ties with companies that work on the project.

“If they participate in something so harmful to California’s economy and environment as a wall, then we don’t want to do business with them,” said state Senator Ricardo Lara, who introduced legislation that would blackball them from government contracts.

There is little doubt that if Congress finds as much as $25 billion to construct the wall, someone will happily take it. But increasingly, major corporations are weighing potential profit against political costs.

Political Storm

Trump touted his wall from the beginning of his campaign as a way to cut off the northward flow of Mexicans, whom he labeled criminals, drug dealers and rapists. Supporters cheered, while opponents whacked Trump pinatas. Now, companies on both sides of the more than 1,900-mile (3,060 kilometer) border and across the Atlantic are caught in the political storm.

LafargeHolcim will get pressure from workers, said Sylvain Moreno, a leader of the union that represents employees. The Confederation Generale du Travail, one of France’s most powerful labor organizations, would communicate its opposition even if it probably wouldn’t resort to slowdowns or strikes.

“Fundamentally, we are against any construction that is anti-liberty, or anti-freedom of movement,” Moreno said. “There’s a certain immorality” in participating.

Potential Backlash

The wall and Trump’s insistence that Mexico pay for it have incensed broad swaths of that nation’s population. The potential consumer backlash for any company daring to profit makes it unlikely that cement producers including Cemex and Grupo Cementos de Chihuahua SAB and steelmakers such as Altos Hornos de Mexico SAB or Industrias CH SAB would participate. Cemex and Grupo Cementos have plants in Texas and near the Mexican border that normally would be in a good position to supply the project.

Many U.S. companies have kept low profiles. Fluor Corp., Chicago Bridge & Iron Co. and KBR Inc. are among the few publicly traded ones on a government list of businesses that have expressed interest in bidding. KBR declined to comment, and Chicago Bridge & Iron didn’t return phone calls and emails.

“Fluor is evaluating the current requests for proposals, but the company has not made any decisions,” said spokesman Brian Mershon.

Not all businesses are cowed. Closely held R.E. Staite Engineering Inc. has shrugged off the threat from California legislators as it prepares a bid. The San Diego-based construction concern has taken on projects that spark passions, including the cleanup of the Exxon Valdez oil spill in Alaska and building a wharf for a nuclear-powered aircraft carrier, said Ralph Hicks, senior vice president of governmental affairs.

‘Inflamed Emotions’

“There’s a lot of talk and inflamed emotions over it. We get that,” Hicks said. “We’ve been around a lot of controversial projects in our time.”

In the call for bids, the Homeland Security Department has asked companies to build demonstration structures in San Diego, right in Hicks’s back yard. The wall must be resistant to pickaxes, climbing and tunneling and “aesthetically pleasing” -- at least on the north side.

The Associated General Contractors of America has condemned moves to punish businesses that help erect it.

“It’s troubling that some state and local politicians may seek to propose measures that would exclude hard-working Americans just because they’re doing honest work on behalf of the U.S. government to build public infrastructure,” said Brian Turmail, spokesman for the Arlington, Virginia-based trade group.

Boost Funding

Large companies may be able to pass up bids because of an influx of work related to increased defense spending and Trump’s plan to boost funding for other infrastructure operations, said Michael Dudas, an analyst with Vertical Research Partners who covers engineering and construction companies.

“If it were a different part of the cycle, there might be more excitement about getting a contract for the wall,” he said. “There’s a lot of opportunity in the marketplace that we anticipate in our analysis over the next handful of years.”

Actividades de Construccion y Servicios said the wall isn’t in its area of specialty, even though the Madrid-based company has built projects from dams to mass transit and had a U.S. backlog of work of more than $20 billion last year. Balfour Beatty Plc, which gets about half its construction-services revenue from the U.S., won’t participate because the company doesn’t have resources along the border, said spokesman Matt Averitt.

Vinci, Europe’s largest builder, also will pass, Huillard said. “If we were to plan doing something that might offend a majority of our employees then I think it would be better not doing it.”

Pension Offensive

That sits well with California lawmakers, Lara said. The legislature will consider a bill that would require the teacher and public-employee retirement funds, which together manage more than $500 billion, to divest from companies that help build the wall.

“This legislature has made it clear what our position is on the Trump policies,” said Lorena Gonzalez Fletcher, a Democratic assemblywoman from Oceanside who co-sponsored the measure. “We have supermajorities in both houses that are committed to lead the resistance.”

The pressure on large contractors opens the door for smaller companies such as closely held KWR Construction in Sierra Vista, Arizona, which plans to submit a bid.

KWR already has built three miles of border barriers to repel vehicles from Mexico and has installed 10 miles of lighting, said General Manager Al Anderson. Workers have endured verbal abuse and hurled rocks, he said. In one case, a tractor used to dig holes was stolen and never recovered.

“It’s a challenging work environment,” Anderson said.