As CEOs walk, Trump disbands Manufacturing Council

Nick Wakeman By Nick Wakeman,
Editor-in-Chief, Washington Technology

By Nick Wakeman

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As the number of defections grew, President Donald Trump announced on Twitter that he had disbanded his manufacturing council to allegedly spare the pressure on the chief executives.

UPDATE: President Trump has disbanded his manufacturing council and his strategy and policy forum as more CEOs put distance between the president and themselves.

Almost simultaneously with Trump's tweet, United Technologies tweeted that its CEO Greg Hayes would resign from the manufacturing council.

3M CEO Inge Thulin left the council also. Hayes and Thulin joined the CEOs of Merck, Intel, and Under Armour in stepping down from the manufacturing council in the wake of the violence in Charlottesville that left three dead and 19 injured. Also stepping down were officials with the AFL-CIO and the Alliance for American Manufacturing.

Below is the blog I posted Tuesday that describes the dilemma government contracting CEOs on the panel had to navigate.

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The protests and violence in Charlottesville, Va. this past weekend again show how far we have to go as a country to address racial injustice and inequality. It also raised serious questions about the kind of leadership President Trump and the White House exhibit on these issues.

Many have criticized the president for taking more than two days to respond in a way that clearly condemned the white supremacists for fomenting the violence that left one dead and injured 19.

The president’s slow response pushed several CEOs to resign from the President’s Manufacturing Council including the chiefs of Merck and Intel.

But several CEOs at large government contracting firms remain on the council, at least for now. These include:

  • Marillyn Hewson, CEO of Lockheed Martin, ranked No. 2 on Washington Technology’s Top 100 list of the largest government contractors.
  • Dennis Muilenburg, CEO of Boeing (No. 4)
  • Bill Brown, CEO of Harris Corp. (No. 17)
  • Michael Dell, CEO of Dell Technologies (No. 34)
  • Greg Hayes, United Technologies Corp. (No. 46) (resigned from the council on Wednesday)
  • Jeff Immelt, GE (No. 74)

I’ve reached out for comment to these companies for comment on their plans to stay on the council.

A spokesman for Boeing said that Muilenburg remains on the council.

Dell said that Michael Dell is still on the council. “There’s no change in Dell engaging with the Trump administration and governments around the world to share our perspective on policy issues that affect our company, customers and employees,” a spokesman said via email.

GE strongly condemned the violence in Charlottesville but said that with 100,000 employees in the United States, “it is important for GE to participate in the discussion on how to drive growth and productivity in the U.S.”

Lockheed Martin declined to comment. And I’ve gotten no response from Harris or UTC.

Of the companies whose CEOs resigned, Intel was the only one to have a government presence. But their products are mostly embedded in products that are sold to the government. They largely don’t sell products directly to the government.

But there is pressure to strike a balance if your products are directly purchased by the government. GE seems to have done that by condemning the violence and intolerance but remaining on the council.

After all, any recommendations that the council makes that eventually translate into policy decisions could have a significant impact on the company.

If you are selling directly to the government, there seems to be a need to walk a tighter line. You don’t want to embarrass or antagonize the Trump administration if you are selling them a huge weapons platform or other high-dollar product.

Caution is justified when you consider Trump’s tweet after Merck CEO Kenneth Frazier resigned. And Trump called other CEOs who stepped down after Frazier “grandstanders.”

But just because you stay on the council doesn’t mean you support everything the president does or are condoning the views of neo-Nazi and white supremacist groups. Many of the CEOs who remain on the council have made that clear in their statements.

They are balancing condemnation of the violence with a desire to influence economic policy initiatives.

It is hard find a silver lining to the Charlottesville violence and the death of Heather Heyer. It does have us talking about race again and that’s a good thing. It is also a good sign that the business community takes it seriously.

But we’ll have to see where it goes from here.

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