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Corporate America voices its strongest repudiation yet of Trump as councils disband

America’s top business executives may have bristled over President Trump's ban on refugees, his withdrawal from the Paris climate accord and his decision to bar transgender Americans from the military.

But it wasn’t until the embattled president all but defended white supremacists in the aftermath of the deadly clashes over the weekend in Charlottesville, Va., that the country’s corporate elite decided they had had enough.

By Wednesday, so many executives had resigned from Trump’s economic advisory and manufacturing councils, including the heads of General Electric Co., Intel Corp. and Campbell Soup Co., that the president announced on Twitter that he was disbanding the panels.

“Rather than putting pressure on the businesspeople of the Manufacturing Council & Strategy & Policy Forum, I am ending both. Thank you all!” Trump tweeted.

Some members pushed back on Trump’s suggestion that the disbandment was the president’s decision. JPMorgan Chase & Co. chief Jamie Dimon said the economic advisory council, known formally as the Strategic and Policy Forum, had already decided to end on its own.

Members began discussing dissolving the group after watching Trump's news conference Tuesday, according to a source familiar with the matter speaking on condition of anonymity.

Forum members organized a call for 11:30 a.m. Eastern time Wednesday to survey who wanted to stay in or out. The group overwhelmingly sought to shut the forum down, according to the source.

Leaders of consumer brands expressed concern about how their images could be tarnished, while heads of other corporations feared the effect Trump was having on the business climate. The group informed Trump of their decision, who agreed and posted his tweet, the source said.

The dissolution of the councils marks corporate America’s strongest repudiation yet of Trump, who ascended to the White House touting himself as the first CEO president.

But instead of demonstrating a kinship with business leaders, the president has consistently put them on the defensive having to answer to White House policies seemingly out of step with mainstream values, and by extension, creating a risk to their brands.

Former Starbucks chief Howard Schultz was one of a handful of executives who criticized Trump’s refugee ban in January. Tesla and SpaceX founder Elon Musk quit the presidential business advisory council in June after Trump pulled out of the Paris climate agreement. And Apple Chief Executive Tim Cook and Facebook founder Mark Zuckerberg both chided Trump last month for his move to forbid transgender Americans from serving in the military.

As strong as the backlash was to those White House policy decisions, they were not as fierce as the reaction to the president’s remarks on the clashes between racist demonstrators and counter-protesters in Charlottesville.

Trump initially did not say that hate groups such as the Ku Klux Klan and neo-Nazis were behind the violence, and on Tuesday, he again faulted “both sides” evenly — a contention at odds with local police accounts. The president also said there were “fine people” among a group of Tiki-torch-wielding marchers chanting anti-Semitic slogans Friday night in Charlottesville.

“There’s not enough spin in the world to justify [Trump’s] position on this,” said Marlene Towns, a professor at Georgetown’s McDonough School of Business.

“Generally, it’s a bad idea to align your brand with the KKK and white nationalists. You don’t need a PhD in marketing to arrive at that conclusion,” she added.

Past opposition to Trump’s stances were at least partly driven by businesses’ bottom lines. Why, for example, diminish climate change when green technology was ascendant or clamp down on immigration when so many firms rely on the global labor market?

This time, business leaders appear to be taking more of a moral high ground in rebuking the president’s actions.

“America’s leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry and group supremacy, which run counter to the American ideal that all people are created equal,” said Merck & Co. Chief Executive Kenneth Frazier, one of corporate America’s leading black executives and the first member to quit the manufacturing council this week.

“As CEO of Merck and as a matter of personal conscience, I feel a responsibility to take a stand against intolerance and extremism,” the pharmaceutical giant’s chief continued.

And Inge Thulin, chief executive of 3M Co., resigned Wednesday, saying, “Sustainability, diversity and inclusion are my personal values and also fundamental to the 3M vision.”

Eric Flamholtz, president of Management Systems Consulting, who has served on a publicly traded company’s board, said the CEOs’ statements are partly aimed at calming employees.

“They’re sending a signal,” Flamholtz said. “They’re disassociating themselves from things that have been said and decisions that have been made.”

But, he added, “I wouldn’t underestimate that … they joined these councils to give the president a chance [and] to perform a duty for their country in some way. These CEOs are now telling us, ‘I don’t want to deal with this anymore.’”

And that’s probably an understatement, Flamholtz said.

Other CEOs who resigned include Denise Morrison of Campbell Soup, Brian Krzanich of Intel and Kevin Plank of Under Armour, who was originally bullish about a Trump presidency. AFL-CIO President Richard Trumka and Deputy Chief of Staff Thea Lee also left their advisory roles.

Here's who quit two of Trump's business advisory councils and when »

Even executives who initially planned to stay on publicly admonished the president.

“As we watched the events and the response from President Trump over the weekend, we too felt that he missed a critical opportunity to help bring our country together by unequivocally rejecting the appalling actions of white supremacists,” said Doug McMillon, chief executive of Wal-Mart Stores Inc., in a letter Monday to the chain’s 1.5 million U.S. employees.

As criticism from CEOs mounted this week, Trump lashed out. He criticized Merck’s Frazier on Monday for “high drug prices” and “taking jobs out of the U.S.” And he tweeted on Tuesday: “For every CEO that drops out of the Manufacturing Council, I have many to take their place. Grandstanders should not have gone on. JOBS!”

Presidents often form ad-hoc panels to provide advice, a move often designed to draw media attention to policy issues. President Obama also had an advisory panel that included many chief executives. The panels are less substantive than formal presidential councils or commissions.

3M’s Thulin, for example, said he decided the manufacturing panel was “no longer an effective vehicle” for his company to advocate for policies.

Chris Allieri, a principal with communications and public affairs firm Mulberry & Astor, said that participation on Trump’s councils didn’t give CEOs much additional access. And because of the companies’ size, he said, the executives probably don’t have to worry about retribution for distancing themselves from the president.

Trump “can’t target them,” Allieri said. “He would tank the country and the economy.”

The increased activism among CEOs could reflect well on the companies, as a generation of consumers emerges that cares more about corporate values than their predecessors.

In a survey designed to reflect views of the U.S. adult population, the public relations firm Weber Shandwick found this year that 51% of millennials — generally defined as those born from 1980 through 2000 — would be more likely to buy products from companies whose CEOs hold agreeable positions on certain issues.

“A lot of people are now going to be looking at which CEOs left and when they left,” said Towns, the Georgetown professor. “Did they quit on principle or did they do it under duress after everything had gone down? The hoods are off at this point and people are starting to see where people and brands stand.”

Times staff writers David Pierson and James F. Peltz contributed to this report.

paresh.dave@latimes.com

tracey.lien@latimes.com

jim.puzzanghera@latimes.com

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UPDATES:

4:20 p.m.: This article has been updated throughout with additional details and analysis.

1:05 p.m.: This article was updated with comments from JPMorgan’s Jamie Dimon and Georgetown University’s Marlene Towns, and with information about a survey by Weber Shandwick.

12:10 p.m.: This article was updated with information about additional departures from President Trump’s advisory panels.

11:05 a.m.: This article was updated with additional information about departures from the manufacturing council and President Trump’s reactions.

10:50 a.m.: This article was updated with additional details, including background on comments from President Trump and Merck CEO Kenneth Frazier.

This article was originally published at 10:20 a.m.

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