Eli Lilly and Cummins speak out against Indiana's new abortion ban

Yahoo Finance senior columnist Rick Newman highlights the corporate backlash Indiana lawmakers are receiving after signing a new abortion ban into law.

Video transcript

DAVE BRIGGS: Indiana is the first state in the country to pass a near-total abortion ban in the wake of the Supreme Court's overturning of Roe v. Wade. And the business blowback was immediate. Pharmaceutical company Eli Lilly and manufacturing company Cummins both weighing in, as did the Indiana Chamber of Commerce. Senior columnist Rick Newman here with the implications. It's going to be interesting to watch this space in the next year or two.

RICK NEWMAN: Just what companies love. Companies love talking about divorce and abortion rights.

DAVE BRIGGS: Yeah, and now they have to.

RICK NEWMAN: Yeah, I mean, this is just going to be ongoing. So this is a problem for big employers because about half-- so Indiana just enacted this law, but there have been other states that had trigger laws that went into effect. So we've got roughly half of US states mostly with Republican governors or legislatures that are banning or seeking to ban abortion largely, or at least, in part.

And this is just going to be a problem for big employers because about 60%, 61% of Americans say abortion should be legal. And 37% of minorities say it should be illegal. So you've got-- 61% is a pretty sizable majority. It's not everybody, but it's enough that if you're a big employer that generally represents the US population, the majority of your population is going to be telling you, we don't really want to live in one of these states if it's a matter of relocating.

Or what Eli Lilly said is that-- it didn't say they're leaving the state. What they said is in terms of hiring talent in the future, we think this could make it a lot more difficult to draw workers to Indiana so that what we think what we're going to do is we're just going to focus more of our development the future outside of Indiana.

RACHELLE AKUFFO: And Rick, when you have a company like Eli Lilly speaking up, but then you have other companies perhaps sort of quietly expanding some of the health benefits to include transportation for people to be able to travel to other states to get care, what sort of position, though, does this put companies in now, where they essentially have to pick some sort of side in this because of their employees?

RICK NEWMAN: They do have to pick sides. And I think that's the lesson for what we saw with Disney in Florida earlier this year, for example. Now, that was not over abortion. That was about opposition among Disney employees to that education law, the so-called Don't Say Gay law. And Disney made a mistake because it waited too long. They didn't want to say anything at all about taking a-- they didn't want to take any stance on that.

And then when they finally-- when their-- really, their employees kind of forced them to take a stance, they were the only one at that time. There had been other companies that had taken a stance sort of at the same time, so not-- no single company was sort of standing there alone, saying we don't like this legislation.

So I think one thing for companies is, to the extent you can get together through a Chamber of Commerce, you know, have your business group be the one that makes the statement if you're going to say it, several companies getting together and saying, more or less, the same thing at the same time.

But if you're a big company, you just have to deal with this. I think it's not as difficult for smaller companies because let's say you're a company that only operates in Indiana, you're not going to say, oh, we're going to expand outside of Indiana. I mean, you're going to stay in Indiana. But it's the bigger companies that don't wanna-- they don't want to have to take a position on divisive political issues. But they're just going to have to find a way to thread the needle.

SEANA SMITH: And Rick, how quickly can we expect to see some maybe Democratic governors trying to capitalize on this and lure some of these businesses to their states? Because in previous situations outside of abortion, but some of the other-- the Don't Say Gay bill or even Texas trying to lure businesses to their state because of tax laws, I mean, that is something that we have seen other governors try to capitalize in the past. I wonder if that's going to be the case this time.

RICK NEWMAN: Well, I'm not sure it's going to be blue states, but it is purple states for sure. So, in Colorado, which is a purple-- you can call it a purple state that has both Republicans and Democrats, and that the governor there, Jared Polis, he told Disney, why don't you come on-- ditch Florida or come on up to the Rocky Mountains and make a Disney park in the mountains? We'd be happy to have you. And he-- Jared Polis is an openly gay governor, by the way. So he doesn't have any problem with this.

The blue states do have a problem, which is, they do tend to be high tax, highly regulated states that do not fare well in rankings of business climate. I mean, think New York, where we're sitting right now, and California, which has been losing companies to places like Texas-- Tesla, you know. Elon Musk wants to relocate to Austin. I think it's still pretty attractive, given the low regulation and the lower taxes in some of those states. So there might be a sweet spot here for lower tax purple states, whatever-- whoever those states might be.

DAVE BRIGGS: I'm just watching the sports space because the NCAA is headquartered there. They have the 26 Final Four. I reached out to them yesterday, and they said we have officially no comment. They better figure out a comment. And the NFL better find a comment, too, because they're going to go back for a Super Bowl at some point. They had one in 2012. That is the space to watch.

SEANA SMITH: Yeah, certainly is. All right, Rick Newman--

RICK NEWMAN: A lot of spaces to watch.

SEANA SMITH: There are a lot of spaces to watch. Rick Newman, thanks so much--

RICK NEWMAN: Bye, guys.

SEANA SMITH: --for joining us here on set.