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Trump Takes Aim at Executives Leaving Presidential Council Trump Takes Aim at Executives Leaving Presidential Council
(about 2 hours later)
President Trump on Tuesday hit back at the executives who have stepped down from his advisory council. The chief executive of Walmart, the world’s largest retailer, criticized President Trump in front of his 1.5 million American employees, widening a rift between the White House and the business community that has been growing since the weekend’s violence in Charlottesville, Va.
Speaking at Trump Tower in New York after announcing an infrastructure initiative, Mr. Trump said that the executives were “not taking their jobs seriously” and suggested they had stepped down from his manufacturing advisory council because they were making products overseas. “As we watched the events and the response from President Trump over the weekend, we too felt that he missed a critical opportunity to help bring our country together by unequivocally rejecting the appalling actions of white supremacists,” Douglas McMillon, the Walmart C.E.O., wrote in a letter to employees late Monday.
“They’re leaving out of embarrassment, because they make their products outside,” Mr. Trump said. The rebuke from Mr. McMillon came as six other business leaders stepped down from presidential advisory councils — including two late on Monday, the C.E.O.s of Intel and Under Armour — citing their own values as the primary motivation for distancing themselves from Mr. Trump.
Mr. Trump’s remarks came amid a growing rift between the White House and the business community that has emerged since the weekend’s violence in Charlottesville, Va., and criticism of Mr. Trump’s response to it. Six members in two days have stepped down from the president’s Manufacturing Jobs Initiative. The president hit back at his critics in the business world during a news conference at Trump Tower Tuesday. He spent several minutes lashing out at some of the most prominent executives in the country, saying that those who left his councils were “not taking their jobs seriously” and were “leaving out of embarrassment.”
One of them, Scott Paul, the president of the American Alliance for Manufacturing, a nonprofit group, said on Twitter on Tuesday morning that he was quitting the White House effort “because it’s the right thing for me to do.” The departures represent a rare spectacle in which prominent executives are looking for ways to pull back from an American president who campaigned, and won, partly on the strength of his pro-business stance. This has created an unusual calculus: Whether or not to stay on as advisers to a president, a role that traditionally is a coveted position with little to no attendant risk.
After Mr. Trump’s fiery news conference, two more participants resigned: Richard L. Trumka, the president of the A.F.L.-C.I.O., and Thea Lee, until recently the labor group’s deputy chief of staff. “I cannot sit on a council for a President that tolerates bigotry and domestic terrorism,” Mr. Trumka wrote on Twitter. “I resign, effective immediately.” The exodus began Monday, when Merck’s chief executive said he was resigning from Mr. Trump’s manufacturing council, citing the president’s tepid early statement on the violence in Charlottesville, where white nationalists staged a weekend march that turned violent. On Tuesday, the leaders of a labor group and a nonprofit business alliance resigned from the same panel. Mr. McMillon of Walmart has chosen to remain on the president’s economic advisory council, despite his criticisms.
On Monday evening, Douglas McMillon, the chief executive of Walmart, sent a letter to employees that was critical of the president. Having come into office boasting of his business bona fides, Mr. Trump was quick to forge ties with the corporate world. Central to these efforts was the formation of the business advisory groups made up of executives who would help shape policy discussions.
“As we watched the events and the response from President Trump over the weekend, we too felt that he missed a critical opportunity to help bring our country together by unequivocally rejecting the appalling actions of white supremacists,” said Mr. McMillon, who is remaining on a different advisory panel. “His remarks today were a step in the right direction and we need that clarity and consistency in the future.” Dozens of prominent business leaders joined the panels, and in the first weeks of Mr. Trump’s presidency, numerous meetings were held at the White House. Yet the early momentum dissipated and few meetings of the advisory groups have been held since.
At Trump Tower, Mr. Trump responded to Mr. McMillon’s statement. For the chief executive of Intel, who stepped down from the manufacturing council on Monday, the journey from engagement with the new president to a public breakup played out over the course of months.
“The head of Walmart — who I know, he is a very nice guy — was making a political statement,” Mr. Trump said. Brian Krzanich, the Intel chief, was curious about the Trump movement and, during the campaign, planned to hold a fund-raiser for Mr. Trump at his home to hear his views — only to cancel it after an outcry in Silicon Valley. Nevertheless, when Intel decided to expand a plant in Arizona in February, Mr. Krzanich called Mr. Trump and joined the president to announce it at the White House, even though the long-planned project was initially announced with President Obama.
When asked about Merck, the drugmaker whose chief executive, Kenneth C. Frazier, was the first to step down on Monday, Mr. Trump said he had been pressuring executives to return jobs to the United States. Yet Mr. Krzanich has publicly disagreed with Mr. Trump on key issues, like the president’s proposed immigration ban in January and the decision to withdraw from the Paris climate accords.
“I’ve been lecturing them, including the gentleman that you’re referring to, about you have to bring it back to this country,” he said. The president’s response to the weekend’s violence in Charlottesville, Va., was the final straw. In a thinly veiled reference to Mr. Trump, Mr. Krzanich wrote that he was disturbed by people in Washington who “seem more concerned with attacking anyone who disagrees with them.” In a nod to the protesters who challenged the white supremacists as well as to Kenneth C. Frazier, the chief executive of Merck, who quit the council early on Monday in protest of Mr. Trump’s actions, Mr. Krzanich added, “We should honor – not attack – those who have stood up for equality and other cherished American values.”
Mr. Trump took office boasting of his business bona fides. The first billionaire chief executive to reside in the White House, he promised to bring boardroom deal making to Washington and surrounded himself with presidential advisory councils stacked with big name C.E.O.s. After deliberating over the weekend and on Monday with senior executives and other advisers, Mr. Krzanich notified the council of his decision in writing on Monday night and published a blog post explaining it.
But as controversy continues to swirl around the White House, the dozens of executives who agreed to serve on the president’s advisory groups are increasingly finding themselves at the center of unwanted debates. “This should be his strong suit: courting C.E.O.s,” said Douglas Brinkley, a presidential historian at Rice University. “Instead, Trump finds himself with C.E.O.s not wanting to be in a photo op with the president. What should have been an honor has become an albatross.” The willingness of Mr. Krzanich and other C.E.O.s to walk away from the advisory panels highlights an uncomfortable reality for Mr. Trump: He billed himself as the businessman-president, but some executives no longer want to work with him.
Dozens of executives remain on the various councils, including the leaders of Boeing, Amazon and Oracle. And since taking office, Mr. Trump has met with hundreds of business leaders. “This should be his strong suit: courting C.E.O.s,” said Douglas Brinkley, a presidential historian at Rice University. “Instead, Trump finds himself with C.E.O.s not wanting to be in a photo op with the president. What should have been an honor has become an albatross.”
The president’s strategic and advisory forum, a council convened by the private-equity executive Stephen A. Schwarzman at Mr. Trump’s behest, met with much fanfare in both February and early April, with participants like JPMorgan Chase’s chief executive, Jamie Dimon, and IBM’s chief, Ginni Rometty, in attendance. Many executives remain on the various councils, including the leaders of Boeing, Amazon and Oracle. And since taking office, Mr. Trump has met with hundreds of business leaders.
But amid scheduling conflicts and dropouts, no meetings have since occurred. And no meetings of the strategic and advisory forum are scheduled. Several people involved in the panels also say that they can have a real impact on policy. Earlier this year, members of one of the advisory groups urged the president not regard China as a currency manipulator. That input, from a group led by the Blackstone chief executive Steve Schwarzman, seemed to inspire a change of stance on Mr. Trump’s part that may have smoothed relations with that country.
For business leaders, the invitation to advise the president is traditionally a coveted distinction. “In general, it’s good for your reputation if the president asks you to serve on one of these councils, regardless of what the administration is doing, ” said Michael Strain, an economist at the conservative American Enterprise Institute. Even those companies that decided to remain on the panels have debated about how to proceed. General Electric, which on Monday said its chairman, Jeffrey Immelt, would continue to advise the president, did so after careful deliberation.
But as Mr. Trump continues to rile his critics, the chief executives at his side are facing questions about their support for an administration mired in controversy. A handful of top G.E. executives worked on a statement that “acknowledged what the company’s values are,” condemning bigotry and racism. They did not check with the board, but did consult with G.E. diversity groups, including the one representing African-Americans in the company, to ensure that the statement was in sync with “the pulse of the company,” before releasing the statement, according to a person with knowledge of G.E.’s thinking.
The resignations began on Monday, as Mr. Frazier announced he would step down from the manufacturing council. Mr. Trump swiftly criticized Mr. Frazier on Twitter, and for much of the day, the Merck chief executive was the lonely voice of opposition in the business world. But late Monday, Kevin Plank of Under Armour and Brian Krzanich of Intel announced they, too, were stepping down from the panel. The departures from the advisory groups in recent days follow similar steps by the chief executives of Uber, Tesla and Disney in recent months. The president’s business advisers are in a quandary, said Jeffrey Pfeffer, professor of organizational behavior at Stanford’s business school. Among the considerations C.E.O.s must weigh when contemplating whether to step down from the advisory groups: the benefits of having a seat at the table, the political preferences of employees and customers, and the potential consequences of slighting the president.
On Monday, other executives said it was important to have a seat at the table. “We believe it continues to be important for Campbell to have a voice and provide input on matters that will affect our industry, our company and our employees in support of growth,” the Campbell Soup Company said in a statement, adding that its chief executive, Denise Morrison, will remain on the manufacturing council. “It’s easier, and it’s less offensive, to not take the position in the first place, than to take it and to, relatively quickly — six months later — say, ‘Whoops, I’m out of here,’” Mr. Pfeffer said. “Now you’re offending him. So I’m sure the calculus changes.”
Dell, the computer maker, said its founder and chief executive, Michael Dell, would continue to advise the president as a way to “share our perspective on policy issues that affect our company, our customers and our employees.” On Monday, Mr. Frazier of Merck, Kevin Plank of Under Armour and Mr.Krzanich of Intel stepped down from the manufacturing council. And Tuesday morning, Scott Paul, the president of the American Alliance for Manufacturing, a nonprofit group, said on Twitter that he, too, was stepping down from the manufacturing council “because it’s the right thing for me to do.”
Those who stepped down spoke in often-personal terms about their motivations. Mr. Krzanich, the chief executive of Intel, was the most forthcoming of the C.E.O.s who have moved away from their advisory roles. In a blog post late on Monday, Mr. Krzanich explained his thinking. After Mr. Trump on Tuesday equivocated in his criticism of far-right hate groups, Richard Trumka, the president of the A.F.L.-C.I.O., and Thea Lee, the deputy chief of staff, also stepped down.
“I resigned because I want to make progress, while many in Washington seem more concerned with attacking anyone who disagrees with them,” Mr. Krzanich said. “We should honor — not attack — those who have stood up for equality and other cherished American values.” “We cannot sit on a council for a president who tolerates bigotry and domestic terrorism,” Mr. Trumka said. “President Trump’s remarks today repudiate his forced remarks yesterday about the KKK and neo-Nazis. We must resign on behalf of America’s working people, who reject all notions of legitimacy of these bigoted groups.”
Mr. Plank, the chief executive of Under Armour, spoke of the tension between wanting to engage with decision makers in Washington, but being turned off by excessive politicization. “I joined the American Manufacturing Council because I believed it was important for Under Armour to have an active seat at the table and represent our industry,” he said. “We remain resolute in our potential and ability to improve American manufacturing. However, Under Armour engages in innovation and sports, not politics.” Crossing a famously sensitive president has its risks.
During the news conference Tuesday, Trump again took aim at Merck, criticizing the company for manufacturing its products overseas. “We want products made in the country,” he said during the news conference. On Monday, he similarly accused the company on Twitter of “taking jobs out of the U.S.”
A company spokeswoman declined to comment on Trump’s claim that the company was moving jobs abroad.
Some companies on the council, including Boeing and Lockheed Martin, do substantial business with the government, adding another complex dynamic to their calculations. But the consensus among business leaders was that the risks of crossing Mr. Trump had diminished in recent months.
“The risk calculus has changed dramatically,” said Scott Galloway, a professor at New York University Business School, who sits on several corporate boards said, “Yes, you may risk a tweet from Trump. But his tweets are increasingly flaccid.”