LDN - Business

Trump plan for Musk-led efficiency commission could give CEO influence over rules for his work, wealth

[September 06, 2024] By Sheila Dang, Akash Sriram, Joey Roulette and Nora Eckert

(Reuters) - Billionaire Elon Musk will head a government efficiency commission with a vast remit if Donald Trump is elected U.S. president, potentially putting him in position to change the rules for corporate America, including the wide swath of industries in which his companies compete.

Trump on Thursday announced the plan, including Musk's role, and said he wanted to see recommendations for "drastic reforms," starting with hunting down fraud and improper payments, that would target "the entire federal government." The commission would put Musk, who leads rocket company SpaceX, electric carmaker Tesla, technology companies X and xAI and several others, a chance to plan the slimmer government Republicans often advocate, but could see him making rules that directly affect his own work and wealth.

Musk repeatedly suggested creating a government efficiency commission in a public conversation with Trump on social media platform X in August, saying that government spending should be trimmed to a sensible level and that Musk himself was willing to help. Trump in the conversation responded that Musk was "the greatest cutter" of jobs.

Presidential commissions have been created on a number of topics, such as when President Joe Biden created one to examine the idea of reforming the Supreme Court, said Nikolas Guggenberger, an assistant professor of law at University of Houston Law Center, whose work focuses on antitrust, law and technology. But Musk's significant relationships with the U.S. government, worth billions of dollars, make it a different matter.

"He has a large company that sells electric vehicles, he has a large company that sells satellites, he has a social media platform. In all those areas, you can imagine advice being tainted by the fact that he has strong economic interests," Guggenberger said.

To be sure, Trump gave few details of how the commission would work but described it as carrying out audits and making recommendations, which has been tried before. "There's already been many, many audits done and recommendations made for efficiency," said Cristina Chaplain, a former director at the Government Accountability Office. Moreover, changing laws and rules is complicated. While business people could bring a fresh perspective, she added, "that often clashes with reality of government operations, and laws and regulations that affect them."

Musk has chafed for years at what he sees as government inefficiency, and his own corporations are heavily regulated: SpaceX must obtain signoffs for rocket launches and new technology; auto regulators are scrutinizing the safety of Tesla's self-driving technology; and health agencies must approve much of the work done by his brain technology implant startup Neuralink.

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Republican presidential nominee and former U.S. President Donald Trump speaks at the Economic Club of New York in New York City, U.S. September 5, 2024. REUTERS/Brendan McDermid/File Photo

Some investors would welcome his influence in Washington.

"Musk cleaned house at Twitter. He'd cut the fat out of government spending as well," said Triple D Trading analyst Dennis Dick, who has a long position in Tesla, referring to Musk's huge job cuts when he took over the social media firm.

Musk's view of efficiency in the space sector and elsewhere could spark action that hurts rivals, some space industry experts said. That could mean viewing government efforts to sustain multiple vendors of rockets as wasteful, for instance.

"There's a lot of people who are nervous about Musk, just because of the policies he promotes and the statements he makes and the fights he gets into with governments," said Tim Farrar, a satellite industry analyst.

Investors frequently ask whether Musk is doing too much. "He’s going to spread himself thinner and try to make the government efficient, as well as running an electric car company, a space company, the Boring company and Twitter? Something would have to give,” said Sam Fiorani, vice president at research firm AutoForecast Solutions.

"You can’t imagine Elon Musk would volunteer to work for a president who was planning on dismantling his business,” said Fiorani, adding the EV market could benefit overall.

Musk did not respond to a request for comment but wrote on X of the efficiency commission, "This is badly needed."

Tom Schatz, president of the watchdog group Citizens Against Government Waste, which grew out of a commission under President Ronald Reagan, said there was precedent for vast savings. Moreover, bringing in more executives would spread the responsibility.

"With the right team working on this full-time, the chairman of these task forces is not the one who works every minute of every day on it," he said. "With someone of Elon Musk's stature, that would help bring in other CEOs, other independent, non-governmental people to come in and examine the operations of the federal government."

(Reporting by Sheila Dang in Dallas, Akash Sriram in Bengaluru, Joey Roulette in Washington and Nora Eckert in Detroit; Additonal reporting by Abhrirup Roy in San Francisco and Ben Klayman in Detroit; writing by Peter Henderson; Editing by Matthew Lewis)

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