Intimidation As a Bargaining Technique


The Donald Acting Out (David Becker/Getty Images)

The Donald Acting Out (David Becker/Getty Images)

Many years ago, WC was involved in the negotiations for the purchase of large tracts of Alaska real estate. Through a series of mergers, leveraged buy-outs and bankruptcies, ownership of the real estate had wound up in the hands of a corporate raider from New York named Victor Posner,1 who came to Alaska with his entourage to unload stuff he didn’t want.

WC mentions Posner because Posner was the first businessman WC met who used apparently uncontrolled rage as a negotiation technique. Understand: Posner’s situation was pretty dire; the corporation that controlled the Alaska real estate had to sell. The number of potential purchasers was very small.

But Posner, instead of dickering price, would explode into extraordinary invective-laced rages, eyes bugged out, face beet red, screaming at the people he needed to have buy his property. It seemed to be an intimidation tactic.

But it backfired. At the first meeting, with all prospective purchasers present, most walked out a few minutes into the first tirade, leaving only two possible purchasers. The two purchasers agreed between themselves who would buy which parcels and at what price. And then waited out the repeated hissy fits from Posner.

The thing about intimidation as a business tactic is that it only works if your buyer really wants what you are selling and you are in a position of perceived strength.

President Trump seems to be attempting intimidation himself. When Kenneth Frazier quit the President’s American Manufacturing Council, the President “punished” him. “Quit the Council and make me look bad,” the President was showing, “and I’ll make you look bad.” As an attempt at intimidation, it was a failure: more quit and finally, to avoid complete humiliation, Trump had to dissolve his American Manufacturing Council, the political equivalent of taking your marbles and going home. America’s business executives weren’t buying what Trump was selling.

Maybe intimidation is a common tactic for these New York developers? It didn’t work for Posner in Fairbanks. It hasn’t worked for Trump in D.C. It hasn’t worked with North Korea. It hasn’t worked with Venezuela. It’s not working with Iran. It’s not going to work with Senate Majority leader Mitch McConnell.

As Trump’s authority continues to weaken from his self-inflicted wounds, intimidation is going to be even less successful. It wont stop Trump from trying. But it is going to be less and less successful.

Watch.

 


  1. Victor Posner might have been the least scrupulous corporate raider Wall Street ever spawned. He bankrupted most of the publicly-traded corporations he touched, while paying himself millions in salary. He made Michael Miliken look like a pussy cat. 
Advertisements