Under Armour CEO’s Political Comments Helped Spawn Yet Another Avoidable Squabble in Trump Era

For Craig Schmidt, the second week of a mild February should have been like most others at the Under Armour offices in Baltimore, Maryland (Craig is a pseudonym for a current employee at the sports apparel company).  He expected to arrive at his casually decorated cubicle underneath slightly luminous fluorescent lights, chat with his co-workers about plans for the weekend, answer his phone calls and emails, and return home in time to catch the Washington Capitals or Wizards game before heading to bed.  But on Wednesday morning, Craig discovered that his routine would stray from the normalcy he had become accustomed to over the course of his first year working there, and it only took a few scrolls through Twitter on his iPhone to know why.

In an interview with CNBC, CEO Kevin Plank made remarks that President Donald Trump’s administration will be an ‘asset’ for American businesses, which sparked a national discussion.  Expectedly as a result, customer service representatives saw an unnecessary surge in their workload.  Craig, even after lengthy conversations with frequent shoppers, still found himself asking the simplest of questions over the phone.

“Do you have a problem with something you bought, sir?”

“Is there an issue with one of our services on the website, miss?

The customers kept saying no and Craig was beginning to feel like a broken record – repeating the same questions, and never receiving a satisfying answer, or at least an answer that could progress the conversation.  They were neither interested in the products, nor the services.  The office had now shifted to a customer feedback center, with those either offering their support or airing their grievance about Plank.

“Some of these calls ended up lasting 20, 30 minutes because they would just keep droning on, but you’re not allowed to hang up on them.  Some of us have a few funny stories actually.  But you also end up getting those looks from higher-ups wondering why you took so long for one phone call,” Craig sighed.

* * * *

Thanks to social media, the interview went “viral” overnight and suddenly Under Armour was at the center of a nationwide debate alongside President Trump.  But it should be worth noting that they are not the first – and surely won’t be the last – organization to be frantically confronted by the press for their actions or comments.  A few weeks before the interview, Uber, the popular car ride-sharing service, triggered a boycott on Twitter and Facebook for advertising discounted fares during the taxi union strike at JFK airport opposing President Trump’s “Muslim ban” executive order.

And in comparison to Nike, who have been accused of utilizing sweatshops to produce some of their merchandise, the issue at hand for Under Armour was lighter in severity, and yet the reactions in both instances appeared equally as substantial.

Prominent athletes and celebrities under contract with Under Amour were quite vocal in their displeasure towards Plank.  Stephen Curry, the three-point-shooting superstar of the Golden State Warriors, mentioned he agreed that Trump is an asset if “you remove the –et.”

This climate might just be the new normal that athletes, celebrities, and businesses will have to adjust to.  Dr. Tom Rhoads, a sports economics Professor at Towson University and author of The Call Up to the Majors: A Proximity-Based Approach to the Economics of Minor League Baseball, said to WBAL-TV, “Twenty or thirty years ago, there was a distinction that [when] you’re an athlete, you play the sport, and that’s all you do.  It’s not that way anymore.”  Instead, Dr. Rhoads suggests that the values between the athlete, the brand, and the audience must be aligned to ensure economic and brand stability.

Associating with Trump isn’t just causing international companies headaches either.  At Pikesville, Maryland, owner Stanley Drebin of Goldberg’s New York Bagels saw a 15 percent drop in business and a 20 percent drop in foot traffic following an incident involving a few Trump supporters and his patrons.  Justin Silberman, the Jewish Times writer that reported the story, says this is simply another microcosm. “It’s clear that companies have much more to lose than gain when it comes to sharing their political views.”

Maybe it’s a net-zero ploy.

* * * *

Craig wasn’t much surprised by Mr. Plank’s full-page ad in the Baltimore Sun, reassuring local residents about Under Armour’s commitment to diversity and gender equality in the workforce.  As the CNBC interview was met with a tense combination of encouragement and scrutiny, so too was the ad.

Net-zero again.

While publicly Plank was apologizing, internally he was stabilizing the ship.  All of Craig’s co-workers received an internal memo from the CEO.  “It was a lot of the same things he had already said,” Craig added.  Also attached to the memo were guidelines to handle customer interactions that would inevitably ensue.  “It was basic stuff we already knew, really.”

There were those who did not fall for Plank’s Baltimore Sun gimmick.  A member of the Democratic Socialists of America’s (DSA) Baltimore chapter demanded that Plank “stop getting handouts at the expense of the school system, housing system, and infrastructure of [our city]…They have ruined our city’s finances for the next several decades in order to make a few people very rich,” referring to the local Port Covington project that’s promising to revitalize the area and feature increases in retail, residential, and recreational spaces.  Currently slated to be one of the largest tax increment financing (TIF) deals in the country, including over $500 million in aid provided by Baltimore city, DSA’s frustrations reflect similar tones expressed by the Baltimoreans United in Leadership Development (BUILD), who are demanding a 51 percent local hiring guarantee and a commitment that the city be reimbursed any state school aid it loses from the wealth the project is expected to create, as reported by the Baltimore Sun.

There’s a transformation happening on Baltimore’s waterfront.

A post shared by Port Covington (@port_covington) on

Port_Cov_GoogleEarth
Aerial View of Port Covington (Courtesy of Google Earth)

However, The DSA Baltimore rep urged that there is opportunity to do well by his city.  “If Mr. Plank is truly interested in the community, he should follow his own earlier promise of 20 percent affordable housing in the Port Covington development.”  The project is being arranged through a real estate firm called Sagamore, owned by, that’s right, Kevin Plank.  The original 20 percent agreement was dropped to 10, and some argue that this is because law requires the city to compensate the developer (Sagamore) for the units, and the city already lacks vastly in available funding.  This apparent conflict of interest has left some frustrated.   There is also anger in regards to the deal’s parameters of “affordable housing,” which is only defined as units that are less than 80 percent of the medium household income, meaning many local residents will likely be priced out.

Dr. Thomas Maronick, a Towson University Professor in the department of marketing, recommends Plank manage his brand’s image in Baltimore by reaching out to the community.  “[Under Armour] can contribute to the local market by hiring locally, especially minorities, given that the majority of Baltimore residents are [non-white].  Additionally, [they] must be respectful of the needs of citizens as they expand within the city.”

And what the citizens need, what they have demanded for decades, are funding and job opportunities.

Maybe there is something that Trump supporters and his opponents can agree on – the ingredients of politics and business produce a dependable recipe for dilemma.  Dr. Maronick suggests that in today’s climate, business leaders don’t necessarily have an “obligation” to engage in politics, “and, for the most part, do so at their peril, since political issues are always controversial – with proponents on both sides of [an] issue.”

And to this point, one could argue that Plank was not necessarily engaging in politics, but merely discussing the political influence the Trump administration will have on businesses.  Which is fair, but it is obvious the public is now hyper-aware of these connections.  And Under Armour was not shy to point out Plank’s involvement with the American Manufacturing Council – consisting of companies such as Dell, Ford, and Tesla – that is currently working with the Trump administration in order to “to begin an important dialogue around creating jobs in America,” in a statement released by the company after the CNBC interview.

* * * *

Under Armour has, in just two short decades since the company’s founding, experienced remarkable growth in both domestic and international markets, and are now synonymous with high-quality gear for high-quality performance, solidifying their status as a legitimate competitor in their industry,.  They have previously outfitted U.S. teams and athletes participating in the Olympics, currently have two of the largest sponsorship deals in college athletics , and recently acquired an exclusive merchandise rights deal with Major League Baseball, all of which are helping generate annual revenues of $4 billion.  They have won awards for creative advertising, showcasing Misty Copeland and the United States Olympics women’s gymnastics team, and encouraging young girls to defy gender stereotypes.

Most cities would be impressed with Under Armour’s global presence.  And Baltimore is too, but they are also wondering, “What about us?”  In order to address those concerns, Plank is hoping his plans to establish manufacturing and research centers in Sparrows Point (estimated to create close to 1,000 jobs), the numerous recreational performance centers located around the city with their partner, FX Studios, and the aforementioned multi-billion dollar Port Covington development project will be well-received.

Clearly there is at least a partially concerted effort by Under Armour to transform the city struggling by various economic standards.  According to a 2017 report by the Bureau of Labor Statistics, Baltimore city has a higher rate of unemployment than the national average and is experiencing little to no growth in all industry sectors, excluding service.  The passion for better economic conditions coalesced in the fervor that surrounded the city Mayor Catherine Pugh’s recent decision to veto a bill that would have raised the minimum wage to $15, a move other cities have already begun implementing to address income inequality.

Whether Plank’s ideas are for better or worse remain to be seen, and his company’s image in “Charm City” will almost certainly be formed by the results from these developments.

* * * *

As the mid weeks of April pass, Craig acknowledges that public reaction has mostly settled.  There was probably a new story that more reasonably warranted their attention and outrage anyway.

“It’s more or less back to normal.”  Normal.  That’s really what Craig and his co-workers wanted.  At times, their work can be tedious, but they recognize what Under Armour represents and they are more than satisfied with their work environment.  So for now, they will continue to answer inquiries about the latest sneakers, or help customers navigate their website, and hope for opportunities to move up the ladder.  Just like any normal company.

And yet, maybe this tense, short-lived national discussion of a company in crisis-mode is now the new normal for media too.  “People tend to forget things rather quickly and are willing to move on, and forgive and forget,” says Jewish Times’ Justin Silberman.  That sounds about right.  Forgive (or not), forget (or not), and move on (because the next story is already being discussed).  Perhaps this entire development – from the interview, to the reaction, to the apology ad, to the reaction to the apology ad, and subsequent waning of public scrutiny – reveals something larger about the overall state of business, politics, and media in contemporary America:  Overreactions are common, communications are absolutely paramount, and broad resolutions are difficult.

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