POLITICS
02/02/2017 01:47 pm ET Updated Feb 03, 2017

CEOs Must Take A Stand On Donald Trump Or Pay The Price

The immigration ban proved that U.S. companies can no longer take a wishy-washy stance on politics.

Mild and jargon-laden statements from U.S. businesses don’t cut it in the Trump era.

Employees, customers and activists want business leaders to pick a side. That became increasingly clear over the past week, as businesses grappled with President Donald Trump’s executive order placing new restrictions on immigrants and refugees. The situation crystallized on Thursday, when Uber chief executive Travis Kalanick quit Trump’s CEO advisory council under pressure from the company’s drivers and customers to disassociate himself from the president.

“Earlier today I spoke briefly with the president about the immigration executive order and its issues for our community,” Kalanick wrote in a memo to employees, obtained by The New York Times. “I also let him know that I would not be able to participate on his economic council. Joining the group was not meant to be an endorsement of the president or his agenda but unfortunately it has been misinterpreted to be exactly that.”

There doesn’t seem to be one company actually in favor of the order, which suspends all refugee resettlement for 120 days, bans Syrian refugees indefinitely and suspends travel from seven Muslim-majority countries. Indeed, more than 230 companies ― from Coca Cola to Starbucks to Goldman Sachs ― put out statements opposing it.

Yet even companies and CEOs who spoke out or raised objections to the policy found themselves targeted by demonstrations, boycotts and petitions. Any sign you are willing to work with Trump can put you in protesters’ crosshairs.  

Activists called for a boycott of the Washington-based hoagie chain Taylor Gourmet and labeled its co-founder, Casey Patten, a fascist collaborator after he attended a White House ceremony on small business last week.

Patten said he urged Trump to consider his 300-plus workers, more than half of whom are immigrants or the children of immigrants. “My political views don’t lean to one side or another,” he told The Washington Post.

“It’s going to be harder and harder to sustain an apolitical stance,” said David Bach, an associate dean at Yale’s business school. Typically, companies try and “make nice with the White House,” Bach said. In this political climate, that’s a problem.

Take ride-hailing company Uber. Before Kalanick quit Trump’s advisory board, he put out a statement opposing the immigration ban on moral grounds. Still, he was savaged as a Trump “collaborator” by customers and activists.

It didn’t help that over the weekend, Uber lowered its pricing during a taxi protest over the immigration ban in New York City. Customers were outraged: #DeleteUber trended on Twitter.

More than 50,000 people so far have signed a petition called “Tell Uber: Stop collaborating with Trump.”

“I don’t know how many people have deleted the app, but this gives you a sense of how poorly they’ve managed this,” Bach said. “It’s so easy to get this wrong.”

The reaction to the immigration ban is the most dramatic sign yet that Trump’s “America first” populism is going to be tough to reconcile with his pro-business posturing.

To be sure, there are plenty of companies eagerly anticipating the Trump administration’s promised tax reforms, as The Wall Street Journal notes. And some companies have customers who are more firmly in Trump’s camp.

For example, executives from motorcycle manufacturer Harley-Davidson met with the president on Thursday. On Twitter, the responses to that decision were decidedly mixed, with many expressing extreme displeasure with the company.

For many firms, “America first” just doesn’t work: These companies are global in scope, connected to a vast supply chain. They were already antsy about Trump’s talk of trade wars.

Smaller operations, like the hoagie shop, are less globally connected, but they also employ diverse, often foreign-born workers who are terrified of the new president.

The immigration ban also seems personally offensive to many executives who are themselves immigrants ― like Google co-founder Sergey Brin and Microsoft’s Satya Nadella. Or those who are the descendants of immigrants and refugees, like Facebook CEO Mark Zuckerberg.

Even if none of this applies, though, Trump’s erratic, off-the-cuff style ― exemplified by his hastily signed and chaotically implemented executive order ― is destabilizing for business, Matt Levine writes in the latest issue of Bloomberg Businessweek.

“The reason the U.S. is a good place to do business is that, for the past two centuries, it’s built a firm foundation on the rule of law,” Levine writes. “President Trump almost undid that in a weekend. That’s bad for business.”

Billionaire hedge funder Ray Dalio, who previously said he believed Trump would be good for the economy, has changed his tune: “There is significant risk [Trump’s] populist policies could hurt the world economy (and worse),” he wrote in a letter published Wednesday.

Many CEOs and companies spoke out against Trump during the election, but it’s clear that now is the moment for them to go all-in on their opposition, instead of hiding behind the hope of tax cuts and regulation relaxation.

Some Tesla buyers this week withdrew orders for new cars, voicing their displeasure with CEO Elon Musk, who also sits on Trump’s advisory council. Musk said he’d present issues with the immigration ban to the president. 

That hardly mollified critics.

Leading corporate feminist Sheryl Sandberg, Facebook’s chief operating officer, finds herself now “dancing around a land mine” on Trump, as one person put it to BuzzFeed’s Nitasha Tiku on Wednesday.

While she’s put out a couple of Facebook statements condemning the immigration ban and the administration’s anti-abortion gag rule, Sandberg is still talking about her hopes for Trump. “It’s very early days,” she said of the Trump administration at a women’s conference.

Most companies are trying to do a Sandberg-like dance, carefully choosing their language and not speaking about Trump directly, but that just doesn’t seem sustainable, said Susan Lamotte, who runs an HR consulting company called Exaqueo. Lamotte is advising clients to come up with a Trump strategy.

“Your workers and prospective workers ― especially millennials ― are going to want to know where you stand,” she said. “People are talking about their pride in their company for coming out with a statement.”

Always proud to work at @google, extra proud today. #nobannowall #nomuslimban #googlersunite #dontbeevil

A photo posted by Dan Vallejo (@mutual_dan) on

It’s not surprising companies don’t want to openly criticize the sitting president, but the ethics of the situation demand it, Gautam Mukunda, a Harvard Business School professor and author of Indispensable: When Leaders Really Matter, told The Huffington Post by phone on Monday.

“Clearly, being seen as the most aggressive anti-Trump company is not a role you want to have. But is that nearly as pressing a problem as seeing millions of people out marching on back-to-back weekends?” Mukunda said. “If I were them, I’d be a lot more worried about being on the wrong side of that phenomenon.”

This article was updated to reflect Uber CEO Travis Kalanick’s resignation from Trump’s advisory board. 

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