Wal-Mart CEO Criticizes Trump's Virginia Response

By Michelle Ma Features Dow Jones Newswires

Two more members of President Donald Trump's manufacturing advisory council said Tuesday they would resign, while the leader of Wal-Mart Stores Inc. criticized the president for his initial response to the weekend violence in Charlottesville, Va.

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Mario Longhi, the former CEO of U.S. Steel, and Scott Paul, the president of the Alliance for American Manufacturing, a nonprofit group formed by manufacturers and the United Steelworkers union, both said they were resigning.

Mr. Paul said he was quitting the council "because it's the right thing for me to do."

U.S. Steel said Mr. Longhi had resigned but refused to comment further.

The men joined other corporate chiefs who have left he council in apparent protest of the president's failure to quickly condemn the white supremacists who engaged in who engaged in violence over the weekend in Charlottesville. On Monday, Mr. Trump denounced the hate groups.

The others CEOs who stepped down were heads of Merck & Co., Intel Corp. and Under Armour Inc. They drew attacks from Mr. Trump, who indicated he had other executives with whom he could fill the slots.

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"For every CEO that drops out of the Manufacturing Council, I have many to take their place. Grandstanders should not have gone on," Mr. Trump tweeted late Tuesday morning.

Wal-Mart chief Doug McMillon, who is on another White House advisory council, criticized Mr. Trump's for how he responded to last weekend's violence in Charlottesville, but said, "we believe we should stay engaged."

"As we watched the events and the response from President Trump over the weekend," Mr. McMillon wrote in a statement, "we too felt that he missed a critical opportunity to help bring our country together by unequivocally rejecting the appalling actions of white supremacists.

Alex Gorsky, the head of Johnson & Johnson, who also said he would remain on the advisory council, said he respected other chief executives' decisions to leave it, but he decided to remain engaged "not as a way to support any specific political agenda" but to advocate for the company's positions when public policy is discussed.

"Ours is an important voice on healthcare, one that global leaders at every level, in and out of government, need to hear," Mr. Gorsky said in a statement Tuesday. "We must engage if we hope to change the world and those who lead it."

President Donald Trump's response to the weekend violence in Charlottesville, Va., has sparked a new round of soul-searching in U.S. corporate boardrooms over whether they should keep working closely with the White House.

On Tuesday, the number of members who have withdrawn from a White House advisory council grew to five, and executives including Wal-Mart Stores Inc. Chief Executive Doug McMillon criticized the president's initial unwillingness to specifically denounce the racist hate groups that rallied in Charlottesville over the weekend.

The fallout is testing already-tense relations between the White House and corporate executives, many of whom face new pressures from employees, consumers and activists to take stands on social and political issues. At times, those issues have put them in direct opposition with a president whose pro-business agenda they are also seeking to shape.

"This is one of the toughest times for the consciences of corporate boards and corporate CEOs," said Davia Temin, head of Temin and Co., a reputation and crisis-management consultancy. Ms. Temin said she expects more leaders to resign their advisory posts.

Privately and publicly, some business leaders have also indicated doubts about how worthwhile their White House access has been, given the mixed progress with Mr. Trump's pro-business agenda. Although the president's meetings with chief executives this spring attracted heavy news coverage, they haven't yielded significant results. Hopes of a corporate tax overhaul or an infrastructure-spending plan being completed soon are fading among executives.

Lawrence Summers, who served as Treasury secretary in the Clinton administration and as a top economic adviser in the Obama White House, said in an interview that business leaders serving on Trump advisory councils should pull out.

"I don't think these are forums for either detailed advice or critical advice," he said, adding that he didn't believe corporate leaders serving on such councils received much in return.

Three CEOs of major publicly held U.S. companies sought Ms. Temin's advice this week about whether to take a stance on the Charlottesville violence.

All three are Republicans who voted for Mr. Trump; each told her they would decline a seat on his councils if asked, Ms. Temin said.

Navigating the Trump presidency has been thorny from the start for CEOs. Tesla Inc.'s Elon Musk and Walt Disney Co.'s Robert Iger quit advisory councils to the president over his decision to pull out of the Paris climate accord. Others have had to justify their presence on the councils amid continued pressure from employees and some in the public over their roles.

Chief executives such as J.P. Morgan Chase & Co.'s James Dimon have said they want to help Mr. Trump shape pro-business policy, but have recently voiced frustration over Washington's pace including on broad changes to the tax code.

Merck & Co. Chief Executive Kenneth Frazier was the first executive this week to resign from the White House manufacturing council, followed by the heads of Under Armour Inc., Intel Corp and the Alliance for American Manufacturing.

Late Tuesday, AFL-CIO chief Richard Trumka also quit, saying, "I cannot sit on a council for a president that tolerates bigotry and domestic terrorism."

On Monday, Mr. Trump singled out white-nationalist groups for criticism for the Charlottesville violence after he initially had declined to do, though on Tuesday afternoon, he again said "both sides" demonstrating in Charlottesville were to blame for the clashes.

White House officials shrugged off the defections, saying Tuesday the councils aren't an active part of day-to-day policy-formulation. "We have an incredible number of CEOs that want to give us their advice and guidance," one White House official said.

Mr. Trump, in a news conference, characterized the CEOs as "not taking their jobs seriously as it pertains to this country." Earlier in the day, he called them "grandstanders" in a Twitter post, and he suggested more leaders were waiting in the wings to join his councils.

Inside boardrooms, leaders are torn between a desire to reduce regulatory burdens and wariness of appearing to support the administration, board members and crisis managers say.

Northwestern Mutual Life Insurance Co. hasn't taken a position on the president or his policies, and the company isn't part of any White House advisory councils.

But last weekend's events "will be fodder for a lot of boardroom discussion" for the insurer, said Dale Jones, a board member and CEO of Diversified Search Inc., an executive recruitment firm. "The conversations will be much broader than Charlottesville."

Northwestern's board members believe less government regulation "is good for policy owners in our industry," said Mr. Jones. "We have to honor the authority of the president while at the same time hold true to our values and respect for dignity of all people."

Yet some business leaders argue that without a seat at the president's table, companies will have no influence on the issues where they lock horns with the White House.

"There are just as many people who would say: Have a seat at the table, try to bring things to him and his cabinet that are of import from a moral point of view." aid an executive at a company whose chief executive is a member of Mr. Trump's Strategic and Policy Forum.

One reason CEOs may be more willing to publicly oppose the president is that his tweet attacks on corporations no longer appear to pack the same punch as they initially did after his election, crisis managers said.

Merck's share price rose nearly 1% Monday after Mr. Trump lashed out at the company's drug prices following Mr. Frazier's decision to withdraw from the White House manufacturing council.

Jonathan Bernstein, president of Bernstein Crisis Management, said he has been advising corporate clients not to participate in any official Trump advisory panel or White House gathering of business leaders. "It's just not worth the risk," he said. "Long before Donald Trump, corporations had plenty of significant ways to achieve what they wanted in Washington."

--Joann S. Lublin, Peter Nicholas, Jennifer Maloney contributed to this article.

(END) Dow Jones Newswires

August 15, 2017 20:27 ET (00:27 GMT)