When the Commander in Chief clashes with chief executives


WASHINGTON (AP) — Fallout from President Donald Trump’s reaction to violent, racial clashes in Virginia over the weekend continued in the business community with another resignation from a federal panel of executives that was created to advise him.

Following the departure of chief executives for Merck, Under Armour and Intel, the president of the Alliance for American Manufacturing stepped down Tuesday. Scott Paul, in a tweet, said, “I’m resigning from the Manufacturing Jobs Initiative because it’s the right thing for me to do.”  

Once an apolitical appointment, the job of providing advice to the U.S. president has become decidedly more political under Trump, who has attacked those who have stepped down this week. On Tuesday, Trump tweeted, “For every CEO that drops out of the Manufacturing Council, I have many to take their place. Grandstanders should not have gone on. JOBS!”

Merck CEO Kenneth Frazier, a highly respected businessman and one of only four African Americans to lead a Fortune 500 company today, was the first to tender his resignation Monday. He was attacked almost immediately by Trump on Twitter.

Then came resignations from Under Armour CEO Kevin Plank and then Intel CEO Brian Krzanich. Austan Goolsbee, the former chief economist for President Barack Obama, said that the departures suggest that 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.

Dan Eaton, a business ethics instructor at the San Diego State University Fowler College of Business and a partner at San Diego-based law firm Seltzer Caplan McMahon Vitek, said that while CEOs may feel it is their civic duty to serve the president, their responsibility ultimately is to their shareholders, employees and customers.

“That’s something that’s always in play, and as a result some companies choose to abstain from getting involved in political roles,” he said. Eaton said that the potential for a public rebuke from a sitting president is not a concern only to those now on advisory panels, but to all who may be asked to serve in the future.

Already, there is a push on social media lobbying other executives to distance themselves from Trump, and 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 a seat 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. Therefore, Ms. Morrison will remain on the President’s Manufacturing Jobs Initiative.”

Boeing CEO Dennis Builenburg also will remain. 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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