New York, United States, Aug 16 – The honeymoon is definitely over.
When US President Donald Trump was elected last November, big business rejoiced.
In June, optimism among American CEOs was at a three-year high on hopes that Trump would succeed in implementing his pro-growth agenda, including tax cuts.
But Trump has now lost support from several executives who left an advisory panel on manufacturing over his response to a violent white supremacist rally in Virginia — a sign that big business is disenchanted with the billionaire leader.
The head of the powerful AFL-CIO union, Richard Trumka, added his name to the list of defectors that also includes the heads of Merck Pharmaceutical, Under Armour and Intel, as well as the Alliance for American Manufacturing.
“We cannot sit on a council for a president who tolerates bigotry and domestic terrorism,” Trumka said in a statement.
“We must resign on behalf of America’s working people, who reject all notions of legitimacy of these bigoted groups.”
Trump, never one to shy away from controversy, fired back.
“For every CEO that drops out of the Manufacturing Council, I have many to take their place,” he tweeted.
“Grandstanders should not have gone on. JOBS!”
But there was a definite feeling that other shoes were ready to drop.
“CEOs quit Trump’s Panel: Who’s Next?” asked a headline on Bloomberg News television.
Economist Joel Naroff said he suspected more would like to protest, but are “caught in a bind.”
“On one side, their job is to maximize the return to the shareholder. On the other side, they can’t be blind to the social implications of their companies’ actions,” Naroff said.
– To leave or not to leave? –
In the early days of Trump’s presidency, which began in January, most of the signs from big business were positive.
The Manhattan real estate tycoon-turned-world leader ran as a friend of the business community who pledged to enact tax cuts, streamline regulations and take other steps to boost growth in the world’s biggest economy.
But discontent first surfaced in January, when Apple chief Tim Cook and other criticized Trump’s controversial travel ban.
Then in June, Tesla’s Elon Musk and Disney’s Bob Iger removed themselves from White House advisory panels over Trump’s decision to withdraw from the Paris climate deal.
Nevertheless, the Business Roundtable’s CEO Economic Outlook Index published in June, which measures corporate spending and hiring plans over the next six months, rose to 93.9 for the second quarter, the highest since the same period of 2014.
“I know the vast majority of (CEOs) believe that really positive tax reform remains more than possible,” Business Roundtable president Joshua Bolten told reporters.
Of course, Trump’s business agenda has faced other obstacles during his six months in office, and it was not clear that a downward turn in his popularity among blue-chip industry leaders would hinder his progress.
But executives are certainly facing a tough choice on whether to stay in the camp of a president who has overall low approval ratings — but also has both a passionate following among a majority of Republican voters and tax plans they favor.
For some, the choice was clear.
“After this weekend, I am not sure what it would take to get these CEOs to resign,” former Treasury secretary Lawrence Summers, a Democrat, wrote in a Washington Post commentary.
“Demonizing ethnic groups? That has happened. Renouncing international agreements that have supported business interests? That has happened. Personal profiteering from the presidency? Also happened. Failure to deliver on ballyhooed promises? That has happened as well.”
– ‘Stay engaged’ –
Activists are aggressive on both sides on the issue.
The anti-Trump Grabyourwallet — which boycotts companies that sell Trump products — regularly prods its 62,300 Twitter followers to email companies that still have CEOs on White House panels.
On the conservative side, groups like the National Center for Public Policy have lambasted executives for criticizing Trump.
Last year, PepsiCo faced a brief boycott after chief executive Indra Nooyi publicly rued the election result shortly after Trump won last November. She later joined a White House advisory panel.
This week, Nooyi and other several prominent executives, including JPMorgan Chase chief Jamie Dimon, condemned the racism in Charlottesville — but signaled no plans to exit White House advisory panels.
Doug McMillon, chief executive of retail behemoth Wal-Mart Stores, joined their camp on Tuesday.
“He missed a critical opportunity to help bring our country together by unequivocally rejecting the appalling actions of white supremacists,” McMillon said.
But he added: “We believe we should stay engaged to try to influence decisions in a positive way and help bring people together.”
Charles Elson, an expert at the University of Delaware in corporate governance, said those who stay on as White House advisors would likely benefit.
Those who leave Trump’s informal circle of advisors are “making a non-partisan group more partisan,” said Elson.
“By stepping down, they lose the influence they could have,” he said.