In 1964, when Martin Luther King Jr. had just been awarded the Nobel Peace Prize, Coca-Cola took a stand that it’s still remembered for in its hometown of Atlanta.
A dinner was planned to honor the civil rights leader in January 1965, but many in the city’s white business elite were initially reluctant to attend. After the New York Times reported on the sparse RSVPs, Coca-Cola’s then president and CEO, Paul Austin, gathered the city’s business leaders for a private meeting at the exclusive Piedmont Driving Club and flexed the corporation’s considerable heft—with a threat.
“It’s embarrassing for Coca-Cola to be located in a city that refuses to honor its Nobel Prize winner,” Austin reportedly told the group. “We are an international business. The Coca-Cola Company does not need Atlanta. You all need to decide whether Atlanta needs the Coca-Cola Company.”
Within days, tickets for the dinner had sold out.
Coca-Cola’s intervention revealed the hard power beneath the rhetoric of corporate citizenship: A company with deep roots in a city can use the prospect of its displeasure—or its departure—to force a reckoning. Beyond campaign donations or lobbying muscle, companies can wield the power they hold over jobs, local investment, and the economic ecosystem attached to their presence.
In the past, that influence has largely operated quietly, and such threats—like Coca-Cola’s—were mostly made behind closed doors. But lately, amid a run of clashes over taxes, regulation, social policy, and corporate deals, executives are increasingly making the ultimatum explicit and public: Accommodate us, or risk losing us.
In California, Paramount Skydance CEO David Ellison settled a state-led antitrust lawsuit last week challenging the company’s roughly $110 billion acquisition of Warner Bros. Discovery, after signaling that the entertainment giant could abandon Hollywood and sell its famed back lot if the legal fight kept the deal from closing.
In New York, Ken Griffin recently warned that Citadel could favor Miami for future growth and rethink a major Manhattan development after New York City Mayor Zohran Mamdani explicitly called out Griffin’s penthouse while promoting a “pied-à-terre” tax on expensive second homes.
Some billionaire chief executives have gone further and carried out their threats. Elon Musk cited a California law barring school districts from requiring staff to notify parents of a student’s gender identity in his announcement that SpaceX and X would move their headquarters to Texas in 2024. Chevron announced plans to relocate its headquarters to Houston that same year, after a protracted fight with California over energy policy. Oracle, led by David Ellison’s father, Larry, had already joined the California-to-Texas migration in 2020, moving its headquarters from Redwood City to Austin amid a pandemic-era reassessment of remote work, operating costs, and taxes. And Disney scrapped a planned Florida campus in 2023 that would have brought roughly $1 billion in investment and 2,000 jobs to the state, as its feud with Gov. Ron DeSantis escalated.
Many of the recent campaigns by corporations have centered on left-leaning administrations, but the modern template was established by companies seeking to protect LGBTQ rights. In 2015, Angie’s List halted a $40 million Indianapolis headquarters expansion after Indiana adopted a religious-freedom law that critics said could enable discrimination against LGBTQ people. A year later, PayPal canceled plans for a 400-job Charlotte operations center and Deutsche Bank froze 250 planned North Carolina jobs after the state enacted its HB2 “bathroom bill,” which effectively barred transgender people from using facilities in schools and public buildings consistent with their gender identity.
American corporations have never been shy about deploying political donations and private negotiations to shape the policies of the geographies where they operate. What is increasingly conspicuous now is CEOs’ willingness to put the economic stakes on the table for everyone to see, openly tying where they place jobs, headquarters, and billions of dollars in investment to the actions of cities and states.
That emerging tension between CEOs and governments has become a high-stakes game of chicken. Either side can inflict serious economic damage on the other—and on workers.
In a negotiation, an ultimatum only works if it’s credible: The other side must believe you can—and will—follow through. A CEO’s threat to leave a city or state carries power only if the company has somewhere else to set up shop, and is genuinely prepared to go there.
“If they have an option to move, that means that they have leverage,” says Enrico Moretti, an economist at the University of California, Berkeley, who has spent much of his career studying where companies and workers choose to locate.
The operative word is “option.” How viable that option is depends heavily on what a company needs to operate, and what it would leave behind. A manufacturer can move production in search of cheaper land, labor, or taxes more easily than a technology company can re-create a community of specialized talent somewhere new.
“Industry clusters” exist for a reason. A movie studio can move its headquarters, but it cannot take Hollywood’s more than century-old ecosystem with it. A financial firm fleeing south may well find itself missing New York’s extraordinary concentration of money, well-heeled clients, and financial expertise. Yes, there are thriving tech hubs in cities from Miami to Hyderabad, but a cutting-edge artificial intelligence company would be hard-pressed to match the abundance of high-caliber expertise located in Silicon Valley.
Moretti describes companies that depend heavily on industry clusters as “stickier,” meaning their value has become intertwined with the place where they have operated and invested. Moving can mean leaving behind employees and industry connections that took years to build.
Relocating skilled workers can be a hard sell, Moretti notes: Some employees will refuse to follow a company because they have spouses with careers, children in schools, homes, aging parents, and lives rooted in a particular place. For businesses built around scarce and in-demand skills, a big move risks losing institutional knowledge, breaking up productive teams, and having to compete again for talent the company once had in-house.
State officials have their own reasons to sweat. When a company leaves town, it extracts more than just its own headcount from the local economy. Workers who leave a region or lose their jobs take their spending with them, hitting restaurants, contractors, real estate firms, and other local businesses.
Moretti’s research on manufacturing shows how quickly the economic fallout can spread. When a traditional manufacturer moves or shuts down a plant, he said, every lost job can cost the surrounding community another 1.6 jobs. The effect can be much larger in high-paid fields such as tech, where Moretti puts the figure at four to five additional local jobs for every job lost at the company. So an elected official contemplating the loss of 5,000 technology jobs may also be weighing thousands of livelihoods elsewhere in the local economy, along with a reduction in tax revenue and the political consequences of being held responsible for losing a valuable business to another city or state.
It’s a harsh bargaining dynamic, but one that elected officials arguably played a role in creating: They routinely compete to land headquarters, factories, and investments by offering incentives—subsidies, tax credits, and regulatory changes. It should be no surprise that companies have learned to play states and municipalities against one another.
Corporate America has effectively been told, “Bring your investment here, and we will make it worth your while,” says Jo-Ellen Pozner, an associate professor at Santa Clara University’s Leavey School of Business who studies corporate governance and organizational ethics. She calls what follows “learned behavior”: If a state is willing to pay to bring in 5,000 jobs, the prospect of taking 5,000 jobs away is a negotiating asset that a CEO would be hard-pressed to ignore.
For the employees caught in the middle, the threat can carry a much bigger cost. Pozner says putting workers’ jobs into play in a political fight can strain the social contract between a company and its employees. Workers often shape their lives around where they work. Treating their jobs and the roots they have put down as bargaining chips in a political negotiation can feel like “a betrayal.”
Even when the company ultimately stays, employees can come away with the impression that their careers could be derailed by a dispute that has little to do with them, which can sour how workers view the company and the executive running it.
A CEO can reasonably argue that deciding where to operate is a fundamental part of running a company. If a state’s taxes, labor laws, or regulations make doing business there significantly more expensive, moving jobs or directing new investment elsewhere can be a perfectly rational response.
The terrain grows murkier when a CEO threatens to leave over ideology, politics, or a government action that does not directly change the economics for the company. That was arguably the case for Griffin’s showdown with Mamdani in April. The mayor had promoted a proposed pied-à-terre tax in a social media video filmed outside Ken Griffin’s $238 million Manhattan penthouse, presenting it as part of his case for taxing wealth stored in lightly used luxury homes. Griffin called the video, which drew attention to the location of his home, “creepy,” “weird,” and a personal attack. Then Citadel signaled it could reconsider its role in the planned redevelopment of 350 Park Avenue and direct future job growth to Miami instead. The company ultimately recommitted to the Manhattan development.
The ripple effect
1.6
Average number of additional jobs lost for each eliminated manufacturing job
4 to 5
Average number of additional jobs lost for each eliminated tech job
SOurce: Enrico Moretti, UC Berkeley
In David Ellison’s confrontation with California, the threat to leave came during a heated legal battle that threatened to become very costly for Paramount Skydance. If the merger doesn’t close before Oct. 1, the company will accrue additional payments of roughly $7 million a day to Warner Bros. Discovery shareholders until the deal closes.
There also appeared to be a personal aspect: In an August meeting with his senior leadership that was first reported in Puck, Ellison reportedly told executives that he was loath to leave the state where he grew up, but he might be obligated to do so as Paramount’s leader. “Clearly we’re not wanted here,” he was quoted as saying. California Attorney General Rob Bonta shot back by accusing the company of seeking to “blackmail and threaten” the state.
The rise of the celebrity CEO raises the stakes. An executive with a large following can turn a relocation or investment decision into a way to telegraph a political message or identity. When Elon Musk announced that SpaceX and X would move their headquarters to Texas, for example, he framed the new California law on transgender teens as the “final straw,” explicitly presenting the move as a response to the state’s cultural politics.
Pozner compares the spectacle to a celebrity divorce proceeding in which both parties try to win over public opinion. But even if there are performative aspects to the public battles, the consequences are real: A corporate-political rupture can disrupt the lives of workers and reverberate through the businesses and communities built around them.
Pozner sees the recent bravado of corporate leaders as evidence that CEOs are abandoning some of the old restraints on how they wield their political power.
Corporate leaders have always been able to take jobs and investment elsewhere, as Coca-Cola threatened to do to Atlanta in the 1960s. But as she puts it, there was something of a “gentleman’s agreement” around the relationship and an understood set of conventions for such threats. Since then, Pozner says, “The rules of engagement have changed dramatically.”
Connecting that change to a broader erosion of decorum in American political and business life, Pozner describes relocation ultimatums as a kind of “bully politics.” Conduct that once risked being regarded as unseemly is these days sometimes praised for its aggression.
“Now,” Pozner says, “the gloves are off.”
Still, for all the tough talk, both sides often have reasons to avoid following through on their threats. A standoff is ultimately a test of who needs whom more—but when it comes to large companies and their hometowns, each side needs the other. If either side pushes too far, everyone may end up losing.
This article appears in the October/November 2026 issue of Fortune.