America’s CEOs are running away from the CEO president.
The collapse of President Trump’s business councils on Wednesday was a stunning and unprecedented rebuke to a chief executive who prides himself on being business-friendly.
It showed just how radioactive corporate leaders believe Trump has become barely seven months into his presidency. Customers, employees and activists put enormous pressure on CEOs after Trump insisted that both sides were to blame for violence at a white nationalist rally in Charlottesville, Virginia.
At least eight executives quit Trump’s manufacturing council this week. A second economic strategy council was reportedly on the verge of dissolving itself — before the president decided to save face and disband both groups himself.
It’s highly unusual for a CEO to put out a statement calling out a sitting president. But that’s what happened — repeatedly — as the CEOs desperately tried to distance themselves from him.
“This ship of state is sinking — and the CEOs want to get off of it,” said William Klepper, a professor at the Columbia Business School.
That doesn’t bode well for Trump’s economic agenda of tax cuts and infrastructure spending.
Several CEOs specifically called out Trump’s incendiary comments over the weekend and again on Tuesday, when he blamed “both sides” for the violence in Virginia.
Johnson & Johnson CEO Alex Gorsky, for instance, slammed Trump for “equating those who are motivated by race-based hate with those who stand up against hatred.”
Jamie Dimon, the CEO of JPMorgan Chase, started a memo to employees on Wednesday by saying: “I strongly disagree with President Trump’s reaction to the events that took place in Charlottesville.” He added, “There is no room for equivocation here.”
And Campbell Soup CEO Denise Morrison said she had no choice but to quit the manufacturing council after Tuesday, when Trump clung to his point of view in an off-the-cuff press conference.
“Racism and murder are unequivocally reprehensible and are not morally equivalent to anything else that happened in Charlottesville,” the CEO said.
Keep in mind that Trump handpicked his CEO councils — and praised them lavishly. In December, he hailed the executives on his strategy forum as “pioneering CEOs” who are “at the top of their fields.”
Likewise, the White House called the members of the manufacturing council “some of the world’s most successful and creative business leaders” when it was formed in January.
Merck chief executive Kenneth Frazier, one of America’s most prominent black CEOs, touched off the CEO exodus on Monday when he cited a “responsibility to take a stand against intolerance and extremism.”
It didn’t help that Trump quickly attacked many of these respected business leaders. Trump lashed out at Frazier within minutes, saying his resignation will give him “more time to LOWER RIPOFF DRUG PRICES!”
The next day, Trump called the CEOs who were quitting “grandstanders” who should not have joined in the first place. He dismissed Walmart CEO Doug McMillon, who criticized Trump’s initial response to Charlottesville, as a “very nice guy” who “was making a political statement.”
Of course, Trump already had a shaky relationship with corporate America. His views on climate change, immigration and trade put him at odds with many CEOs. And because he can say anything at any time, it was always risky for corporate leaders to align too closely with him.
Indeed, Trump’s decision to quit the Paris climate agreement led Tesla founder Elon Musk and Disney boss Bob Iger to leave Trump’s councils in June. Former Uber CEO Travis Kalanick cut ties after Trump’s controversial travel ban.
Yet most CEOs were willing to keep their seat at Trump’s table. They argued it gave them a way to influence policy and help move the country forward.
And then came Trump’s response to Charlottesville, the final straw for CEOs who were forced to stand up for employees and customers.
All this raises questions about the fate of Trump’s economic agenda. His push to repeal Obamacare has already sputtered in Congress. He had been relying on support from the business community to push tax reform and infrastructure spending.
For those proposals and anything else Trump wants, this week shows that CEOs will think twice before attaching their name.
