How Corning Is Using Trump’s Tariffs To Its Advantage

0:00For the average person, I don't think they know anything about Corning. You want to start in the beginning? Yeah, let's start with Thomas Edison. Actually, I keep that in my office, the very first order that he ever gave to Corning for glass envelopes. I keep that to remind me that big things start out very small, because that is a very small order.

0:29This week on Bold Names, we have Corning CEO Wendell Weeks. Now, what does Corning do? They have made everything from the glass in Thomas Edison's light bulbs to the glass screens on every iPhone ever manufactured. They also make the glass fibers in the fiber optic cables, which comprise the Internet and which are huge now because of the AI boom. So how has this company remained relevant from the 1800s until the present day? That's what's next.

1:01From The Wall Street Journal, I'm Christopher Mims. This is Bold Names, where you'll hear from the leaders of the bold name companies featured in the Wall Street Journal. On this week's show, how is this 175-year-old company thriving in 2026?

1:28Wendell, welcome to the show. I hear you endured the dot-com bubble. survived. So talk to me about what happened, right? Because there was the telecom boom. Yes. You guys were a big part of it in a way that isn't often acknowledged or known because you were building the fiber optic cable that was being put into the ground by companies that, you know, later went bankrupt. That affected you. What was the peak? What was the trough? So at the peak, I mean, our optical communications business was far and away by the core of our market value. At that point in time, I think our shares hit a high of about$100 per share in that zone.

2:13And because of our core invention, fiber optics, we did another one that went itself beautifully to long distance transmission, which is what the internet was about. And so when that then went through its cycle, probably 90 % of our revenue in our photonics business disappeared. So 2000, 2001, 90 % of your... Revenue in photonics and probably about half of fiber optics, and we moved to a lost position. And at that point in time, our stock got as low as$1.50, and you could have bought the whole company for a billion and a half dollars. Wow. Yes. So you were kind of on death's door or private equities hit list.

2:57Yes, I am sure. Yes. So that happened pretty rapidly. And so what we had to do is first just quickly right the ship. But then after that, we went through a deeply reflective process about, okay, if we want, we've just lasted 150 years. if we wanted to last another 150 years after this near-death experience, probably the harshest time in our company's history, right? What would we have to do? What was that process of recovery then? Well, in the early days, what we really felt was we had broke the social contract with our people because they had trusted us. They had signed up with us. We are a company that has very low attrition rates.

3:47We tend to hire a little old-fashioned. we tend to hire for a whole career. So we had to let a large number of our folks go to get the liquidity, right? So that was enormously painful. And of course, we went through a period of where leadership had low credibility. So what we had to do is decide what do we want to build on top of this once we righted the ship? And we ran a process that did that and involved our folks. And it really changed a lot. of not only how we ran the company, but also the attitude the leadership brought to it. Yeah. I mean, you use the phrase social contract. Yes. I've never heard those words out of any CEO's mouth other than the chiefs of maybe Costco.

4:34So I'd just love to dwell on this for one more moment. Sure. You said you feel like you have a social contract. Yes. You want low turnover. Yes. But in this day and age, why do employees find that credible? It's easy to keep the commitment that you have to folks when either things are going really well for you and that person is a high performer. What is hard is either when things are going poorly for the company, we just had a cycle with that. Back post-pandemic, all of our balance, normally balance businesses were force correlated during the pandemic. And so they all went down at the same time.

5:13We had the longest decline period for us in revenue, six or seven quarters since the telecom downturn. And what we decided to do was rather than to adjust our size by taking out another sort of 4 ,000 people, just to say, no, like we believe in our innovations. We're down because our markets are down. So just very quickly, how did you make that work financially? Basically, we made it work financially by letting our returns drop. There's no magic math, right? We kept higher fixed costs than our revenues with normally support. So our profitability dropped pretty significantly. And what we basically said is like, we're willing to be misunderstood for periods of time so that we can live to what it is we believe in.

6:09And at that time, we were just kind of mid-cycle into our Gen AI products we've been working on for four years, and that really helped lift us out. So you said you're willing to be misunderstood for a long period of time. Yes. What are you working on now that might be misunderstood or underappreciated that you think is going to drive your growth 10 years, 20 years beyond? But right now, we're just opening up the largest solar wafer manufacturing facility in the United States of America. Because what we believe is that the U.S. would need to have energy independence, and that included renewables.

6:56And that is a market that has been dominated largely by China. And we knew because we understood the base material well, and we make that for use in semiconductor, use a dirtier form of that for solar. and we took the opportunity to move forward in the value chain and build this because we believed that we could build a really significant business and that solar would take a very large position over time in our energy mix in the U.S. And so that is largely unappreciated right now because we went through an investment cycle through it. But I think that's going to be a tremendous growth. How does Corning approach research and development while still turning a profit?

7:48I think people misunderstand innovation quite often, especially in the material space, which is they think the most important piece of innovation is invention. And it actually isn't. In many ways, that's sort of the most trivial part. Stay with us.

8:19you know there's two rules in life right number one is never get into a land war in asia number two oh baby you're my kind of people if we're good to do princess bride you and i are gonna get along but um but number two though is um it's a close corollary never get into a business that the Chinese government is willing to subsidize for all eternity. So why are you getting into solar panels when your opponent is literally the CCP and for 30 years completely taken over the global solar panel market? It just seems crazy. So first of all, this is something we've done a lot of. So you've got to realize in stuff like fiber optics, in display, in mobile consumer electronics, all of those products, we compete against Chinese companies, both in China and around the world.

9:27And we've done it quite successfully. The way we do it is we're always the lowest cost producer in the world, right, in what we do. So you're confident that with this new plant, which I think is in Michigan, you're going to be able to beat the subsidized cost of Chinese solar panels? For a start, the government policy gave us a head start, which is the U.S. is either going to protect this market through tariff structures, which they're doing, or through what they did in the tax code to say, yet there's tax credits available if you manufacture renewable. That gave us the opportunity to do this, be able to quite confidently believe we'll get twice our money back that we're investing.

10:14And then after that, that will give us enough time to reinvent solar. And we have a number of ways which we think we can do that. Okay, well, let's talk about that reinvention. We can talk about it in terms of solar if you want or in terms of your overall product strategy. outside of, let's say, defense contracting, the number of companies that are doing U.S. R &D for hardware, for stuff, for atoms rather than bits, that generally is in decline. What is it about Corning that allows you to do so much of that R &D domestically? I think people misunderstand innovation quite often, especially in the material space, which is they think the most important piece of innovation is invention.

10:59And it actually isn't. In many ways, that's sort of the most trivial part. What we try to do is build the whole company to deliver a real innovation. And that means we have to invent, yes. But then we have to make. We have to be deep experts in it. And we invent our own manufacturing processes. We build all of our own equipment ourselves. Because that's how we develop these high proprietary vintage products and processes. You know, in 2017, Tim Cook said the reason that they are doing their manufacturing, you know, with Foxconn in China is that there is so much more talent there. How are you able to close that skills gap, which we know exists in American manufacturing now?

11:43Because we have lost, frankly, the knowledge for how to do so many things. So a number of ways. First, if you're interested in our little slice, if you're an engineer or a scientist out there and you're interested in our little slice of the periodic table and our little slice of the electromagnetic spectrum, we're like deep place to work. So we never have had a problem with tracking talent. Now, when it comes to manufacturing, one of the keys is to never stop. So we develop our own manufacturing folks. We train them themselves. We hire right out of school. We have our own pieces. And then they work all over the world.

12:28So when we built our solar operation, we were able to take the last time we built a factory that big, we were building it in China. But those were the same Corning people that we sent from there that built that. And then some of the people that we had hired locally there to do that. And then that same skill set then helps us start up the next thing. And so we've always done this. We move skills between businesses because since we're so well balanced, there's always something in our innovation portfolio that's undergoing growth, while another piece sort of is undergoing a little bit of decline and maturity.

13:07but just because you work in one of our divisions or technologies that's going down you don't work for that you work for corning so what we do is we then move you from that division that plant to the area where we grow and that's why most of the people at corning have had tons of careers all working for the same company i'm glad you're talking about manufacturing expertise because as I understand it, part of your current growth is that you're benefiting from provisions in the so-called Big Beautiful Bill. Is that right? Well, I think we're benefiting not so much from the Big Beautiful Bill as we are.

13:49This administration's focus on U.S. manufacturing is something that we are feeling. and our customers are feeling. And it's increasing demand for us with sort of a pretty unique ability. But to be clear, it's primarily increasing demand for your fiber optic product, right? Fiber optics, but also what you just saw from Apple, which was super exciting, was we're going to make Apple's covers all in Harrodsburg, Kentucky, which was a plant we actually opened, I don't know, 1950s during the Cold War for particular Cold War products. And now Apple, we're going to dedicate that entire facility to them.

14:34And I think there's no question. Part of that is the focus on American-based manufacturing. And we're one of their suppliers and partners that can actually do that and do it at enough scale to do every iPhone. Now, correct me if I'm wrong, but in terms of shiny glass objects that you've been manufacturing for Apple, this summer when Tim Cook gave President Trump a glass plaque, did Corning manufacture, I guess, the glass portion of that at least? Yes, it was actually made in the Harrodsburg, Kentucky plant by the folks whose sort of lives are going to get covered and transformed for the next two decades because of Apple's commitment.

15:22So we wanted it to be made by those folks is what Apple asked us to do. I would love a little bit of behind the scenes color on that. Like, how do you and Tim Cook communicate? Did he call you up? Do you guys have like a red phone between the two of you? And he was like, Wendell, I need you to make a very special plaque. No, they wanted something to commemorate this because it just didn't work out to have the White House come to the plant in the appropriate time, but we were firing up this brand new tank and everything. And so to commemorate that, basically we just kicked around ideas and we thought what would be great would be if the people made the product out of the glass that they actually make every day as sort of a labor of love for Apple to be able to make the gift.

16:14So it's our little version of arts and crafts. And to be clear, this is like Gorilla Glass. Like if that gets knocked off of Trump's desk, it's not going to shatter. I can't even scratch it with my keys. But if we didn't take it all the way through the process, but it's the same base composition, yes. Overall, U.S. manufacturing output is down. You know, you talk to the big manufacturers in the U.S., right? The biggest by volume, and they're not fans of tariffs. Why are these policies benefiting you but not others? Why are you uniquely positioned that you're not seemingly being hurt by tariffs, or if you are, it's being more than offset by increased demand and other incentives?

16:54Because we make it all ourselves in a totally controlled supply chain manner. So if you're a big automotive company, you have tier one and tier two suppliers. And then over time, as you seek to optimize cost, what happens is those various suppliers at various levels move to all sorts of different places. And so car companies don't actually personally manufacture the super high level of their content. They do in certain areas, right? So what happens is then tariff structures, since their suppliers aren't making it here, end up exposing them to that incremental economic penalty, which is meant to encourage them to make more of their content here in the U.S.

17:55And so the differential is what we did is we kept our advanced manufacturing footprint here and we're able to do all the pieces. yeah but to put a fine point on that also like you're not buying your base material from overseas or if you are like there are no tariffs on i don't know sand yeah so in our base material this is how seriously we take localization we try to develop local sources for that like if we want to use like glass it's going to be manufactured in kentucky yes where is that mind we will we will We source that stuff in Pennsylvania, particular sand made in Pennsylvania. So the billion-year-old hills of Pennsylvania, you're taking sand out of there.

18:42Uh-huh. You're shipping it to Kentucky. Uh-huh. That gets turned into the cover glass for every iPhone on Earth. Yeah, that's what we're going to do. But we also will localize. Does it get a made in Pennsylvania sticker on there? I wish we did. That's such a great idea. Like Apple, where they say designed by Apple in California, manufactured in China. There's outweighants that made from Pennsylvania sand. Right. Just ahead, Corning has benefited from new industrial policies under both the Biden and Trump administrations. Wendell says shifting away from globalized manufacturing will end up benefiting the U.S.

19:20in the long run. we need to be able to produce in the U.S. for the U.S. because, like, the world's not necessarily always a safe place, right? And we're not providing enough for our people. We get hollowing out all these great paths to middle-class jobs. That's next.

19:54but i'm really curious though how specifically the sort of trump uh manufacturing incentives are helping you versus uh the incentives in the inflation reduction act which you know incentivized solar right that that was the regime under which you were like we're going to invest in solar panels yes you know now obviously it's a different world structures so what a great question it's a deep question so the first place to start is sort of the consensus has changed the consensus used to be right uh sort of Milton Friedman it was this financialization it's like we're all going to trade with the world and whatever's the lowest cost everybody's going to have their comparative advantage.

20:45And like that worked for a while, right? But then it stopped working, right? And so the consensus has sort of changed. Now, wait a minute. Like we need to be able to produce in the U.S. for the U.S. because like the world's not necessarily always a safe place, right? And we're not providing enough for our people that we get hollowing out all these great paths to middle-class jobs. So then the consensus shifted to, we're going to do some form of industrial policy. It's a very unpopular world, but it is really what they're doing. Like under Biden, it was, we're going to subsidize those things that we like.

21:29Yeah, clean energy, for example. Like in green energy. So we're going to create a tax, an advantage tax situation. Just like way back when, we've always had some form of industrial policy. Like the reason you have it, why do we have a deduction on your home interest, but not rent? Well, that's like industrial policy. I want to build a lot of homes. I mean, the entire Department of Defense is industrial policy. Yeah, that's exactly right. Is responsible for Silicon Valley in the first place. It's just what people hate is like when they always like the story when a government picks a winner and loser, that's what we don't like, right?

22:03But creating incentive structures, you know, that makes perfect sense. That's what you're supposed to do for your society. So that was the before, that was the IRA, industrial policy. And then now Trump, what he would rather do is say, okay, what we're going to do is if you don't make it here, we're going to subject you to a tariff structure. Well, it's got the same effect, right? It's just who is paying for what when? This administration has proved so many economists wrong about what would the effect be of these tariff structures. Now, will it work? We'll see. I mean, the problem with manufacturing is it takes a long time.

22:48It took a long time for the U.S. to lose it, right? And it's taken a long time, it'll take a long time to bring it back. And that, to me, is the challenge of how do we want to face this as an American society. So to sum it up, it feels like you are able to thrive in this new world order, which if we look to history is, I mean, it was many, many, many moons ago that tariffs were the primary tool of restructuring the American economy. you're 175 nearly 175 year old company so it feels like you are you're you're a company from another era yes and now the u.s government is saying we'd like to return to that era you're one of the few manufacturers that's actually positioned and it's it's largely because like we do us right no matter what the problem is like we're doing us right that's just us And like, sometimes it's incredibly advantaged, like living our life the way we want to live it.

23:59Sometimes it's disadvantaged. And when it's disadvantaged, you got to be willing to eat that pain to sustain manufacturing. And it just so happened that sort of government policy is now switched to be more in line with who we are. So now we look really smart. But in truth, we're just being us. We're not really smart. we're just being honest. We're living our values, right? Does that make sense to you, Chris? Yeah, yeah, yeah, yeah, yeah. You're a highly advanced, innovation-focused, slightly twee, sepia-toned company from another era, bridging the ages from Thomas Edison to Sam Oldman. Yes, because what we really believe is this.

24:51Like, you can just think about it. Like, there's a lot from the past that's always worth keeping. There's also a lot from the past that is worth changing, right? But one thing from the past that's always worth keeping is the degree with which you never forget that it's not just standing behind a corporation, right? It's like real humans, right? Trying to build real lives. We don't always get it right. But that's like we try to leave from who we are. That's who we are. Right. And, you know, sometimes we look stupid and sometimes we look smart. Neither is that true. Yeah. Wendell, it's been a pleasure.

25:36Thank you so much for coming on Bold Names. Well, I've loved getting to know you. Come visit. We reached out to Apple, but they did not respond to our request for comment. We also reached out to the Chinese embassy in Washington, D.C. and a spokesperson disagreed with the characterization of China's place in the solar market. The spokesperson said China's, quote, leading edge, end quote, is the result of competitive advantage, not subsidies. A spokesperson for the White House said that President Trump's tariffs have yielded results for the American people, while the Biden administration, quote, haphazardly doled out taxpayer money.

26:18Finally, we reached out to the Biden administration and former chief of staff Ron Klain said that President Biden put a strong focus on American manufacturing during his term in office without the, quote, inflationary impact of tariffs.

26:40And that's bold names for this week. Our producers are Danny Lewis and Alexis Green. Our video producer is Kasha Broussalian. And our fact checker is Aparna Nathan. Jessica Fenton is our technical manager. Jessica and Michael Laval are our sound designers. Jessica also wrote our theme music. Our supervising producer is Katie Ferguson. Our development producer is Aisha Al-Muslim. Chris Zinsley is the deputy editor. And Philana Patterson is the Wall Street Journal's head of news audio. For even more, check out our columns on wsj.com. We've linked them in the show notes. I'm Christopher Mims. Thanks for listening.