President Trump disbands White House business councils as CEOs leave

By The Associated Press
Headline Goes Here Chris Kleponis-Pool/Getty Images

President Donald Trump on Tuesday ripped into business leaders who resigned from his White House jobs panel -- the latest sign that corporate America's romance with Trump is faltering -- after his equivocal response to violence by white supremacists in Charlottesville, Virginia.

"They're not taking their job seriously as it pertains to this country," the president said at an impromptu news conference at Trump Tower in New York City.

After his remarks, a fifth member of his manufacturing panel resigned: AFL-CIO president Richard Trumka, who said in a statement, "We cannot sit on a council for a president who tolerates bigotry and domestic terrorism."

The president denied that his original statement about the violence in Virginia on Saturday -- saying "many" sides were to blame, rather than hate groups -- was the cause of the departures.

"Some of the folks that will leave, they're leaving out of embarrassment because they make their products outside" the United States, he said as he seemed to double down on his earlier comments.

Trump also assailed the CEOs who left on Twitter as "grandstanders" and said he had plenty of executives available to take their place. The president added that he believes economic growth in the U.S. will heal its racial divide.

But the parade of departing leaders from the informal panel seems closely linked to how the president responded to events that led to the death of a counter-protester that opposed the white supremacists.

Among those who've left are the chief executives for Merck, Under Armour and Intel and the president of the Alliance for American Manufacturing.

Alliance president Scott Paul, in a tweet, said simply, "I'm resigning from the Manufacturing Jobs Initiative because it's the right thing for me to do." Within minutes of the tweet on Tuesday, calls to Paul's phone were being sent to voicemail.

Wal-Mart CEO Doug McMillon joined the chorus, saying in a note Monday to employees, "(We) too felt that he missed a critical opportunity to help bring our country together by unequivocally rejecting the appalling actions of white supremacists."

But McMillon, whose business has customers on all sides of the political spectrum, plans to stay on a separate Trump advisory panel and said that the president's follow-up remarks on Monday that named white supremacists were a step in the right direction.

Corporate leaders have been willing to work with Trump on taxes, trade and reducing regulations, but they've increasingly found themselves grappling with cultural and social tensions amid his lightning rod-style of leadership. The CEOs who left the council quickly faced his wrath, while those who have stayed have said it's important to speak with the president on economic issues.

Like several other corporate leaders, Alex Gorsky, chairman and CEO of Johnson & Johnson, said that intolerance and racism have no place in U.S. society but that he intended to stay on the manufacturing council.

"We must engage if we hope to change the world and those who lead it," he said in a statement.

A White House official downplayed the importance of the manufacturing council and a separate policy and strategy forum featuring corporate leaders. The official, who insisted on anonymity to discuss private conversations, said the panels were informal rather than a set body of advisers. The departures, the official said, were unlikely to hurt the administration's plans to overhaul taxes and regulations.

Many corporate leaders have faced a lose-lose scenario in which any choice involving politics can alienate customers, not to mention a U.S. president who has shown a willingness to personally negotiate government contracts.

Merck CEO Kenneth Frazier, one of only four African-Americans leading a Fortune 500 company, was the first to tender his resignation Monday.

Trump criticized Frazier almost immediately Monday over drug prices, and again Tuesday for having factories overseas. Merck has 25,000 U.S. employees in all 50 states and has invested $50 billion in research and development since 2010, primarily in the United States.

Then came resignations from Under Armour CEO Kevin Plank and then Intel CEO Brian Krzanich. On Under Armour's Facebook page Tuesday, customers who supported Trump threatened to boycott the athletic clothier.

Austan Goolsbee, the former chief economist for President Barack Obama, said the departures suggest the president's response to the violence in Charlottesville could alienate those who work for the companies, and those who buy the products and services that they sell.

"It's certainly a sign that Trump's more controversial stuff isn't playing well with companies selling to middle America," said Goolsbee, now a professor at the University of Chicago.

There had already been departures from two major councils created by the Trump administration that were tied to its policies.

Tesla CEO Elon Musk resigned from the manufacturing council in June, and two other advisory groups to the president, after the U.S. withdrawal from the Paris climate agreement. Walt Disney Co. Chairman and CEO Bob Iger resigned for the same reason from the President's Strategic and Policy Forum.

The manufacturing jobs council had 28 members initially, but it has shrunk since it was formed earlier this year as executives retire, are replaced, or, as with Frazier, Musk, Plank, Paul and Krzanich, resign.

So far, the majority of CEOs and business leaders that are sitting on the two major, federal panels, are condemning racism, but say they want to keep their seats at the table.

"Our commitment to diversity and inclusion is unwavering, and we will remain active champions for these efforts," said a spokesman for Campbell Soup for CEO Denise Morrison. "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."

Boeing CEO Dennis Muilenburg also will remain. So will Michael Dell, the head of his namesake computer company. Both companies contract with the government.

Lawrence Summers, once the chief economist at the World Bank and senior Treasury official, wondered when more business leaders will distance themselves from Trump.

"After this weekend, I am not sure what it would take to get these CEOs to resign," he tweeted. "Demonizing ethnic groups? That has happened."

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