Merck’s Frazier leads the way quitting Trump business council after Charlottesville; J&J’s Gorsky’s bail way too late.

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The News:

One day after J&J chief exec Alex Gorsky pub­licly com­mit­ted to stay­ing on Pres­i­dent Don­ald Trump’s man­u­fac­tur­ing coun­cil, he abruptly re­versed course–just as the sud­den mass departure of ex­ec­u­tives forced the Pres­i­dent’s hand and pushed him to scuttle two promi­nent ad­vi­sory com­mit­tees.

J&J an­nounced Wednes­day (August 16, 2017) af­ter­noon that the pres­i­dent’s po­si­tion on the deadly Char­lottesville con­fronta­tion was un­ac­cept­able, adding that Gorsky was re­sign­ing with im­me­di­ate ef­fect. But as J&J was putting out their state­ment, Trump is­sued his on Twit­ter, says John Carroll at Endpoints.

Gorsky had no sooner told the world on Tues­day that he wasn’t fol­low­ing Ken Fra­zier’s de­ci­sion to re­sign from the man­u­fac­tur­ing coun­cil than Trump called a press con­fer­ence and ve­he­mently in­sisted that both sides of the vi­o­lent and deadly con­fronta­tion in Char­lottesville, VA–the neo-Nazis, KKK and oth­ers as well as the pro­test­ers who came out to op­pose their demon­stra­tion–were equally to blame.

Equat­ing the two, Carroll says, while also not­ing that the right-wing ex­trem­ists had a legal per­mit for their demon­stra­tion, led to a po­lit­i­cal tsunami in Wash­ing­ton DC which is still crashing through the Capi­tol.

Steve’s Take:

Gorsky wasn’t en­dors­ing the Pres­i­dent’s po­si­tion when he an­nounced his plans to stay on the man­u­fac­tur­ing coun­cil. That de­ci­sion to stay on, he said in a pre­pared state­ment, was in­flu­enced by his de­sire to main­tain the com­pany’s eth­i­cal credo within a se­nior White House cir­cle.

I guess we’re going to have to take him at his word for that.

Gorsky’s decision to bow out in the wake of new remarks from the President came about the same time Trump ended the panel, as the President announced via Twitter. Both decisions follow Merck CEO Ken Frazier’s move to pull out of the group in protest after the President’s initial weak-worded response to deadly violence in Charlottesville.

Trump has changed his statements on the violence several times in the face of criticism. Initially, he condemned the violence on “many sides,” but as pushback mounted, he called out neo-Nazis and white supremacists by name. Late Wednesday, at a heated press conference, he returned to his stance that both sides were at fault.

Frazier quit the panel Monday morning, saying America’s leaders need to clearly reject “expressions of hatred, bigotry and group supremacy.” Several other business leaders followed him on the way out; Trump responded with a pair of tweets criticizing Frazier and Merck.

Gorsky initially committed to staying on the panel to “remain engaged” with ongoing policy talks, says FiercePharma. But that stance apparently changed after the President’s Tuesday press conference, which set off another backlash. As he had Saturday, the President again blamed “both sides” for the violence.

That apparently was too much for Gorsky:

“The President’s most recent statements equating those who are motivated by race-based hate with those who stand up against hatred is unacceptable and has changed our decision to participate in the White House Manufacturing Advisory Council,” Gorsky said in a Wednesday statement.

The episodes of the last several days highlight a risk drug companies and other businesses encounter dealing with a conflict-prone administration in pursuit of regulatory cuts, tax reform or other measures that would provide them with a boost.

Joe Nocera for Bloomberg noted that, one by one, some of the most important people in corporate America lined up on Wednesday to criticize the president of the United States. Though many of them didn’t speak Donald Trump’s name, they didn’t need to. Everyone knew they were talking about Trump’s repugnant “both-sides-are-bad” response to the violence in Charlottesville last weekend.

Never one to be one-upped, Trump beat the council’s decision to disband by tweeting that he was dissolving it.

He also got rid of his second business advisory board, the American Manufacturing Council. That’s the one that had included Merck’s Kenneth Frazier, whose decision to step down last Monday triggered a mass departure of CEOs. By the time Trump eliminated it, 12 of its 28 members had either left or had announced they were leaving.

But what is happening now between Trump and corporate America is unique. Businessmen turned against Roosevelt because they feared him, as they had good reason to do. He knew how to pull the levers of power, says Bloomberg’s Nocera–how to create a Securities and Exchange Commission, for instance, and push for the passage of the Glass-Steagall Act, which separated commercial banking from investment banking.

When Trump started running for president, the business community had a leg up in understanding him. Some had done deals with him, or had attended galas that he also attended, or had shot a round of golf with him at one of his resorts. They knew he was crude, narcissistic and only out for himself. And having watched the collapse of his casino business in the early 1990s, few had much respect for his business skills.

Steve's Take: CEOs are bailing on @realDonaldTrump because they know he can't help their agenda Click To Tweet

So what’s changed? Yes, Trump’s inflammatory press conference on Tuesday made most corporate executives uncomfortable. But if they still felt that Trump had the power to help get their agenda through Congress, most of them probably would have stuck with him.

As Nocera summarizes:

“They’ve come to realize that Trump is not going to be of any use to them. He is never going to get anything through Congress, which now shrugs when he demands action. His one legislative push, repeal and replacement of his predecessor’s signature healthcare program, was a political disaster that has largely eliminated the chances for, say, an infrastructure plan. (Indeed, the S&P 500 Construction and Engineering Index is down 20% since Trump became president.”

Nocera continues:

“Trump’s idea of lobbying is to send out bullying tweets. He couldn’t even intimidate his own attorney general, Jeff Sessions, who showed not long ago that Trump’s blustery tweets have no consequences if you ignore them. Trump truly is the little man behind the curtain, pretending to be the Wizard of Oz. Business gets that now.”

Bottom Line:

With this wise counsel, the LA Times Michael Hiltzik says let’s examine and rank the members of Trump’s Manufacturing Jobs Initiative and Strategic and Policy Forum, based on when they bailed and why.

The pioneers (resigned before Charlottesville):

Travis Kalanick, Uber: Kalanick, who since has been deposed as Uber’s CEO, resigned from the strategic panel on Feb. 2, even before it met. He was responding to Trump’s travel ban, saying,

“Immigration and openness to refugees is an important part of our country’s success and quite honestly to Uber’s.”

Elon Musk, Tesla/SpaceX: Musk resigned from both the strategic and jobs panels on June 1 over Trump’s withdrawal from the Paris climate change agreement.

“Climate change is real,” Musk tweeted and “Leaving Paris is not good for America or the world.”

Bob Iger, Disney: Iger quit the strategic panel, also on June 1 and also over the Paris decision.

“Protecting our planet and driving economic growth are critical to our future, and they aren’t mutually exclusive,” Iger said.

The liberator:

Kenneth Frazier, Merck & Co.: Frazier quit the jobs panel last Monday morning after Trump’s first inadequate statement on Charlottesville.

“As CEO of Merck and as a matter of personal conscience,” Frazier said in a tweeted statement, “I feel a responsibility to take a stand against intolerance and extremism.”

One of only four black CEOs of a Fortune 500 company, Frazier’s resignation paved the way for others to leave.

The “let’s check which way the wind’s blowing” crowd:

Included in this CYA, follow-the-crowd assemblage, Alex Gorsky, Johnson & Johnson CEO, wanted the public to know that his decision to quit the jobs council, which was announced after Trump’s dissolution of the panel, preceded the dissolution of it. As I said earlier, guess we’ll have to take him at his word.

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