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.

Confirmed Cases: 113876

Reported Deaths: 3238
CountyConfirmedDeaths
Hinds7850176
DeSoto685779
Harrison505083
Jackson445084
Rankin388186
Madison377993
Lee350779
Forrest299578
Jones287784
Washington255199
Lafayette245943
Lauderdale2418134
Lamar221238
Bolivar200177
Oktibbeha199354
Neshoba1831111
Lowndes176362
Panola169038
Leflore165187
Sunflower159749
Warren153655
Monroe147372
Pontotoc145819
Marshall139227
Lincoln138557
Pike137756
Copiah136236
Coahoma124736
Scott124729
Grenada121138
Yazoo120733
Simpson120449
Union116525
Tate114939
Leake114340
Holmes114160
Pearl River112259
Itawamba112125
Adams106743
Prentiss103719
Wayne99821
Alcorn98112
George97718
Covington95326
Marion93542
Tippah88121
Newton85227
Chickasaw83626
Tallahatchie83025
Winston82821
Tishomingo80041
Hancock79827
Attala78926
Clarke73450
Clay68321
Jasper67717
Walthall63627
Calhoun61912
Noxubee59617
Smith58916
Montgomery53523
Claiborne53316
Tunica52817
Yalobusha51914
Lawrence50714
Perry48623
Carroll47612
Greene46918
Stone46214
Humphreys42616
Amite42113
Quitman4196
Jefferson Davis40011
Webster37013
Wilkinson33520
Benton3255
Kemper32015
Sharkey28014
Jefferson27410
Franklin2373
Choctaw2046
Issaquena1074
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Alabama Coronavirus Cases

Confirmed Cases: 155915

Reported Deaths: 2674
CountyConfirmedDeaths
Jefferson22861374
Mobile14468314
Tuscaloosa10148139
Montgomery9875196
Madison915094
Shelby720462
Lee649665
Baldwin647569
Marshall433049
Calhoun418960
Etowah418749
Morgan403635
Houston369232
DeKalb330229
Elmore314852
St. Clair287142
Limestone276530
Walker272293
Talladega261035
Cullman235724
Lauderdale214841
Jackson210015
Autauga202330
Franklin202131
Colbert196731
Russell19233
Blount189325
Dallas186227
Chilton184132
Escambia171929
Coffee171710
Covington169929
Dale165451
Chambers133643
Pike132313
Tallapoosa130587
Clarke130017
Marion106229
Butler100140
Barbour9979
Marengo99222
Winston91313
Geneva8527
Pickens82417
Lawrence82131
Randolph81216
Bibb81114
Hale74930
Clay72912
Cherokee72614
Lowndes70328
Monroe64010
Henry6396
Bullock63717
Washington63412
Crenshaw60230
Perry5836
Wilcox56212
Fayette56113
Conecuh55713
Cleburne5438
Macon52920
Sumter47021
Lamar4665
Choctaw38812
Greene34216
Coosa2023
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