Toxic Trump: CEOs are now abandoning him in droves

By Michael HiltzikBusiness Columnist

Aug. 16, 2017 10:15 AM PT

President Trump hasn’t shown himself to be a man accustomed to facing reality, but he finally did so Wednesday by disbanding his two leading councils of business CEOs and other leaders.

The move had the air of the old exchange between boss and worker:

“You’re fired!”

“You can’t fire me! I already quit!”

That’s because Trump had become so toxic to the business community that eight members of his manufacturing jobs council had resigned as of midday Wednesday, and his 19-member strategic and planning council already had decided to disband itself. (The original membership of both panels can be found here, courtesy of Forbes.)

CEOs might argue that while they loathe all that is wrong with the Trump administration, they can be more effective by remaining involved. Give me a break.

— Former Treasury Secretary Lawrence Summers

It will be tempting to regard this moment as a turning point in the history of the Trump administration — or rather, to regard Tuesday as that moment. That’s when Trump held an impromptu news conference in the lobby of Trump Tower in New York and declared that anti-Nazi protesters were as culpable for the weekend’s violence in Charlottesville, Va., as the neo-Nazi and white supremacist groups who marched, shouting racist and ant-Semitic slogans. Trump’s failure to decry outspoken racism threatened to rub off on any CEO or business leader who remained associated with him.

Merck & Co. CEO Ken Frazier began the exit from the jobs council Monday morning. By Wednesday, it was on the verge of looking like a possible flood. By midday, 3M CEO Inge Thulin and Campbell’s Soup CEO Denise Morrison had become the seventh and eighth members to quit the group this week, and the question implicitly being put to every one of the 16 CEOs remaining on board was: “Why are you still there?”

General Electric CEO Jeff Immelt evidently was poised to become the ninth refugee from the jobs panel, but Trump disbanded the group before Immelt had a chance to make his departure public. In a statement he issued subsequently, he called Trump’s Tuesday statements “deeply troubling”

“The committee I joined,” he said, “had the intention to foster policies that promote American manufacturing and growth...Given the ongoing tone of the discussion, I no longer feel that this Council can accomplish these goals.”

Trump said in his tweet announcing the end of both panels that he was doing so “rather than putting pressure on the businesspeople” who were members. But what percolated below the surface was the business community’s recognition of the obvious: As we observed Tuesday, these panels were never more than Potemkin Villages — fake facades of public-private cooperation that never met and had no detectable influence on Trump or his economic policies. In normal times and with a normal president, such fakery might serve a purpose. With this administration, they served only to apply a veneer of responsible policy-making to a process of utter chaos.

Plainly, the business leaders who have been lining up at the exits have calculated that the cost of affiliating with Trump now vastly outweighs the benefits. Economist Lawrence Summers, who served two Democratic presidents, Clinton and Obama, as Treasury secretary and chief economist, demolished the case for sticking with Trump concisely in a Financial Times column Tuesday.

“CEOs might argue that while they also loathe all that is wrong with the Trump administration, they can be more effective by remaining involved,” Summers wrote. “Give me a break. Anyone who thinks that by attending a meeting less than monthly with 30 people in a room they are moving the nation is engaged in egotistical self-delusion of a high order.”

From the other side of the political aisle, the Wall Street Journal editorial page implicitly accepted the CEO resignations as the inevitable harvest of Trump’s behavior, casting them as a warning shot at a president who won’t pay attention.

“The business community is, or ought to be, a natural part of a Republican President’s governing coalition,” the Journal observed. “Yet Mr. Trump has seemingly taken every opportunity to escalate feuds and attack even allies in Congress like Senate Majority Leader Mitch McConnell. As if to prove this point, Mr. Trump lashed out at Merck’s Mr. Frazier on Twitter Monday with what amounted to a political threat…. This display of pique does nothing but make others less likely to get anywhere close to Mr. Trump’s orbit.”

Plainly, many of these business leaders held on in the expectation that Trump would accomplish policy goals they share — less regulation, lower taxes. The tone of the Journal’s editorial implies that may already be a forlorn hope. The importance of this sea-change can’t be overstated: Traditionally, even Democratic or progressive Presidents are seen as cheerleaders for American business. Trump, however, is now seen as an obstacle.

The CEOs who remained within “Mr. Trump’s orbit” had nothing to gain any longer, and much to lose. Many were consumer product manufacturers vulnerable to customer boycotts — Dell computers, Whirlpool appliances, Johnson & Johnson, Campbell’s soup. Newell Brands, whose CEO Michael Polk was on the jobs panel, owns the brands Sunbeam, Rubbermaid, Graco, Sharpie and dozens of others; to stay on the panel amounted to leading with its chin. Two AFL-CIO officers, including President Richard Trumka, were on the jobs panel; unbelievably, it took the union until Tuesday to withdraw.

Others faced more generalized threats to their reputation. The members of the “strategic and policy forum” included Jamie Dimon of JPMorgan Chase, Virginia Rometty of IBM, and Wal-Mart CEO Doug McMillon.

McMillon tried to finesse the uproar over Trump’s response to Charlottesville with a statement Monday lamenting that Trump “missed a critical opportunity to help bring our country together by unequivocally rejecting the appalling actions of white supremacists.” But he said he would remain on the panel, especially after Trump issued a statement Monday denouncing white supremacists. But when Trump returned to the fray Tuesday effectively praising the white supremacist marchers, the heat on McMillon and his fellow business leaders was turned back up.

The record of the Trump White House thus far offers no reason for confidence that Trump’s increasing isolation will lead to a change of tone or policy. But the collapse of his support within the business community presages a further collapse, this time in the political community. Tuesday and Wednesday may indeed have marked a turning point.

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