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Only a day after
Donald Trump
labeled the growing number of CEOs quitting his business council
“grandstanders” who, in some cases, were hurting ordinary Americans, the
president tweeted that he would abolish the advisory groups rather than
put pressure on executives to stay.
“Thank you all!” Trump
tweeted Wednesday afternoon.
His announcement came within an hour of
reports
that one of the groups -- a forum of top finance and business
executives -- was planning to disband. It appeared to be an effort by
Trump to get ahead of the business leaders who were abandoning him
following his
remarks the day before at a New York City press conference.
It’s
a stunning rebuke for the first CEO president, who pitched himself as a
savvy businessman who would slash taxes and regulations to unleash
growth by U.S. companies. Markets largely ignored the move, however, and
the Standard & Poor’s 500 Index was up less than 1 percent as of
3:24 p.m.
At a press conference Tuesday, Trump said he would replace those who
quit his council of manufacturing executives. He bid good riddance to
one CEO -- Merck & Co.’s Kenneth Frazier -- who was first to resign.
He then went on to talk about race relations and the violence in
Virginia, placing partial blame on demonstrators protesting a gathering
of white supremacists in Charlottesville. A woman was killed during the
event after a man rammed a car into a crowd.
The evening after Trump’s comments, members of the strategy and policy forum -- led by Blackstone Group LP’s
Stephen Schwarzman
-- began to waver. BlackRock Inc. CEO Larry Fink called some of his
firm’s clients and said he planned to resign from the forum, according
to a person familiar with the matter. The next morning, he told
Schwarzman he was out.
On a conference call late Wednesday morning with members of the
strategy forum, the group was polled to ask who would stay. Of the dozen
executives on the call, 10 voted to leave, according to another person
familiar with the event. The group planned to tell the White House about
their decision before making it public, according to a third person.
In a memo sent to BlackRock employees and provided to
Bloomberg Wednesday, Fink said that the violence, racism and
antisemitism in Virginia had to be criticized without caveats.
“While
I have disagreed with the president in certain instances this year, I
continued to participate in the forum because I believed it was
important to have a voice at the table for investors, including our
clients,” Fink wrote. “Unfortunately, after the last few days, I
concluded that I could no longer in good conscience participate in the
forum.”
“The events that occurred in Charlottesville, as I said on
Monday, are nothing short of domestic terrorism. Such racism and
bigotry must not just be condemned, but must be condemned
unequivocally,” he said.
Business Advisers
The strategy
group is one of several the White House convened earlier this year to
advise the president, though it and the manufacturing panel haven’t met
recently.
Jamie Dimon, the JPMorgan Chase & Co. CEO, was also a member of the strategy council and said he supported the breakup.
“It
is a leader’s role, in business or government, to bring people
together, not tear them apart,” he said in a memo to employees provided
to Bloomberg.
The strategy and policy forum said the controversy
over Trump’s remarks about the Virginia violence led to the decision.
“The debate over forum participation has become a distraction from our
well-intentioned and sincere desire to aid vital policy discussions on
how to improve the lives of everyday Americans.”
Manufacturing Council
Several CEOs from a manufacturing council
quit before Wednesday,
including the CEOs of Under Armour Inc. and Intel Corp. Before Trump’s
announcement, Inge Thulin, CEO of 3M left, as did Campbell Soup CEO
Denise Morrison.
“Following yesterday’s remarks from the
president, I cannot remain on the Manufacturing Jobs Initiative,”
Morrison said in a statement. “I will continue to support all efforts to
spur economic growth and advocate for the values that have always made
America great.”
The dispute over the panels began on Monday, when
Merck’s CEO Frazier took a public stand against Trump, saying that
quitting the manufacturing council was “matter of personal conscience”
and said that U.S. leaders had to reject “hatred, bigotry and group
supremacy.”
In the past several days, other executives have echoed those sentiments.
General
Electric Co.’s Jeffrey Immelt, one of the biggest names in American
manufacturing, said soon after Trump’s tweet that he too planned to step
down from the now-disbanded group, reversing a decision from two days
prior. Immelt, who notified council members earlier in the day, said
Trump’s comments at the Tuesday press conference “were deeply
troubling.”
The disbanding of the councils doesn’t mean corporate
America will fully turn its back on Trump, said Dan Eaton, a business
ethics lecturer at San Diego State University. Businesses are still
hoping that the administration can move ahead with corporate tax reform
and infrastructure spending.
“It was personal, not necessarily
policy related,” Eaton said of CEOs. “They are going to continue support
the agenda of the president and congressional leaders when it serves
corporate America’s purpose.”
— With assistance by Justin Sink, Melissa Mittelman, Hugh Son, Sabrina Willmer, Matthew Townsend, and Rick Clough
