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Tax cut will drive innovation, ex-Home Depot CEO says

One of Corporate America's biggest proponents of the Republican tax cut says companies will spend their savings on th...

Posted: May 16, 2018 5:59 PM
Updated: May 16, 2018 5:59 PM

One of Corporate America's biggest proponents of the Republican tax cut says companies will spend their savings on themselves.

"In today's world you either innovate or evaporate," Bob Nardelli, founder and CEO of the investment and advisory company XLR-8, said Wednesday on CNNMoney's "Markets Now."

Nardelli, the former CEO of Chrysler and Home Depot and a former executive at GE, said he expects companies to "significantly" increase their capital spending by as much as 30% because of the tax breaks.

He noted that companies produced strong earnings in the first quarter, and many are reinvesting in their own businesses.

"The corporations are taking great advantage of this new tax program," he said.

Nardelli was critical, however, of Corporate America's initial rush to use their tax savings on stock buybacks. He noted that buybacks are unpopular with the public, and he believes that at least a quarter of tax savings should have gone to improve infrastructure.

"Overall, it did well, though there could have been some level of refinement," Nardelli said. "We worked expeditiously to get it done. It's done a good job."

President Donald Trump's tariffs may have eaten a bit into corporate profits, but Nardelli praised them nonetheless. He said they have encouraged US manufacturers to buy more American steel and "create more patriotism," calling Trump "a savvy negotiator."

Corporations have mostly fought the tariffs. They say there is not enough American steel or aluminum to fulfill their needs, and tariffs force them to pay more for imports.

Nardelli also weighed in on his former companies. He said that Home Depot had a decent quarter, despite slow sales because of the harsh winter.

But he chastised GE CEO John Flannery for moving too slowly to turn the company around. Nardelli said he wants to see "more bold moves" and more decisive, aggressive action to streamline the company and sell underperforming assets.

"I went through this at Chrysler, and time is not your friend," Nardelli said. "I love that company; I'm pulling for them. I would like to see them move more quickly. There can be no slow maybes."

He joined CNNMoney anchor Maggie Lake on the program, which streams live from the floor of the New York Stock Exchange every Wednesday at 12:45 p.m. ET.

Related: Watch 'Markets Now' here every Wednesday at 12:45 p.m. ET

"Markets Now" is hosted by Lake and CNNMoney editor-at-large Richard Quest. You can watch at your desk or on your phone or tablet at CNNMoney.com/MarketsNow.

Each episode features incisive commentary from investors and experts on the biggest news of the day. Previous guests have included crypto bull Mike Novogratz, BlackRock strategist Kate Moore, hedge fund manager Kyle Bass and others.

Can't watch at 12:45 p.m. ET? Interview highlights will be available online and through the Markets Now newsletter, delivered to your inbox every afternoon.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 259117

Reported Deaths: 5668
CountyCasesDeaths
DeSoto17331186
Hinds16373328
Harrison13731199
Rankin10854217
Jackson10557187
Lee8922141
Madison8335166
Jones6483112
Forrest6038120
Lauderdale5965187
Lowndes5425118
Lafayette503193
Lamar490865
Washington4826124
Bolivar4024109
Oktibbeha397681
Panola374680
Pontotoc369855
Monroe3591105
Warren3569100
Union348063
Marshall347769
Neshoba3413152
Pearl River3329103
Leflore3059107
Lincoln299386
Sunflower288271
Hancock282559
Tate274362
Alcorn267454
Itawamba265260
Pike264679
Scott250847
Prentiss248252
Yazoo247356
Tippah244450
Copiah243949
Coahoma242254
Simpson238368
Leake232966
Grenada220671
Covington215072
Marion215073
Adams207870
Wayne203232
Winston202667
George201939
Newton195044
Attala194659
Tishomingo191661
Chickasaw185744
Jasper174438
Holmes169168
Clay161335
Tallahatchie148235
Stone145921
Clarke141762
Calhoun137621
Smith122725
Yalobusha119134
Walthall112836
Noxubee111423
Greene111029
Montgomery110136
Carroll105321
Lawrence103217
Perry102831
Amite98826
Webster93924
Tunica87421
Claiborne86625
Jefferson Davis85827
Benton83323
Humphreys83324
Kemper78420
Quitman6969
Franklin67115
Choctaw61213
Wilkinson58825
Jefferson55419
Sharkey44017
Issaquena1596
Unassigned00

Alabama Coronavirus Cases

Cases: 429655

Reported Deaths: 6283
CountyCasesDeaths
Jefferson63040956
Mobile30794557
Madison27486201
Tuscaloosa20996268
Montgomery19352315
Shelby18833120
Baldwin16653184
Lee12749102
Morgan12389119
Etowah11861176
Calhoun11292201
Marshall10290113
Houston8746156
Limestone813276
Cullman8125106
Elmore7999104
DeKalb776599
Lauderdale768698
St. Clair7651121
Talladega6309108
Walker5954174
Jackson586341
Colbert539873
Blount537683
Autauga525755
Coffee450456
Dale402981
Franklin369948
Russell340711
Chilton338966
Covington332668
Escambia326043
Dallas308896
Chambers293170
Clarke287833
Tallapoosa2641107
Pike255230
Marion248953
Lawrence246649
Winston229535
Bibb218847
Geneva205446
Marengo202829
Pickens197531
Hale179542
Barbour176036
Fayette172928
Butler170858
Cherokee161930
Henry156523
Monroe149818
Randolph142135
Washington139126
Clay127645
Crenshaw121544
Cleburne119023
Lamar119021
Macon118637
Lowndes112036
Wilcox105121
Bullock101128
Perry99019
Conecuh95720
Sumter89626
Greene76623
Coosa61015
Choctaw51624
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