When Merck Chief Executive Ken Frazier resigned from the President’s American Manufacturing Council, he probably didn’t know just how big a statement was making. Within 48 hours, at least five more members of President Trump’s council said that they too would leave, all in the context of the events in Charlottesville, Va. more than a week ago.
“As CEO of Merck and as a matter of personal conscience, I feel a responsibility to take a stand against intolerance and extremism,” Ken Frazier said in a statement.
Companies ranging from Tesla to HP Enterprises to Unilever to 3M to Campbells to Intel resigned from the council, all before it would collapse of its weight. And while many of those chief executives — especially those representing the high tech sector — didn’t politically agree with the president, they thought it necessary to have his ear. Why?
Most, generally, wanted tax policy that favored increased production. Others were more geared toward environmental concerns and especially climate change. All are concerned, however, about the so-called triple bottom line that doesn’t just focus on shareholder value but also tries to address the interests of employees and communities.
Analytics firm Target Rock Advisors says that if companies focus on the triple bottom line — economics, environment and social — they can outperform other broader indices. Doing so also demonstrates that they are living their missions and ingraining their brands among their customers.
As long as companies are meeting the standards that their governors have set forth, then they are within their right to pursue societal objectives, says Richard Rudden, managing partner of the benchmarking firm in New York State. In other words, companies can still maximize returns while being environmental stewards or having a social conscience.
To that end, the manufacturers sell products in the market and that they need the acceptance of the customers they serve and the communities they represent. In short, they are concerned about their brands and the messages their companies are sending to the buying public.
Under Armour is a case-in-point: it is making athletic gear and selling that merchandise in the market. To do so, it is hiring famous athletes of all creeds to increase sales. “Under Armour engages in innovation and sports, not politics,” Chief Executive Kevin Plank announced.
Are the resignations and the subsequent collapse of this council symbolic? Experts have said that the failure of the council connotes a lack of confidence in the Trump administration — not necessarily the policies it espouses but whether the president can get anything accomplished. That includes everything from tax reform to environmental policy to infrastructure planning.
“I resigned because I want to make progress, while many in Washington seem more concerned with attacking anyone who disagrees with them.” Intel Chief Executive Brian Krzanich said.
After the initial resignations from the council, President Trump accused those specific chief executives of “grandstanding” and said that many other company chiefs were waiting in the wings to take their place. With that, Dell, Dow Chemical, International Paper, Johnson & Johnson and Nucor are among those on the council and who had made no mention of their intentions. But as the weight of the announced resignations began to have a ripple effect, the president said he would disband the manufacturers council.
Shortly after the president’s allegations of grandstanding, Scott Paul, who is the chief executive of the Alliance of American Manufacturing tweeted, “I’m resigning from the Manufacturing Jobs Initiative because it’s the right thing for me to do.”
President Trump first announced the Manufacturing Jobs Initiative in January to “continually seek information and perspectives from a diverse range of business leaders, including those listed below and others, on how best to promote job growth and get Americans back to work again.”