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2017-08-14 22:05:02
Under Armour C.E.O. Follows Merck Chief, Quitting Panel in Rebuke to Trump

Late Sunday evening, Kenneth C. Frazier, the chief executive of Merck — one of the biggest drugmakers in America — informed his board members that he was about to do something that would have major fallout for him personally and for the company he leads: He was about to take a public stand against President Trump.

As white nationalists in Charlottesville, Va., clashed with counterprotesters, and as Mr. Trump offered an ambiguous response to the violence, Mr. Frazier decided to act. If the president could not condemn the hate groups, Mr. Frazier could not support him.

A few hours later, Mr. Frazier resigned from Mr. Trump’s American Manufacturing Council, one of several advisory groups the president formed in an effort to forge alliances with big business.

Mr. Frazier, the son of a janitor and grandson of a man born into slavery, had been the only African-American chief executive to join one of the groups. And for most of Monday, he was the only executive to break ranks with the president in the aftermath of the events in Charlottesville.

Late Monday, Kevin Plank, the founder and chief executive of Under Armour, said he was also stepping down from the same panel.

“Under Armour engages in innovation and sports, not politics,” Mr. Plank said in a statement.

But for most of the day, dozens of other chief executives who have agreed to advise Mr. Trump remained silent, and none came to Mr. Frazier’s defense after the president attacked him on Twitter.

Of the dozens of chief executives who have agreed to advise Mr. Trump, none aside from Mr. Frazier criticized the president’s initial response to the ugly episode, in which a woman was killed. And none came to Mr. Frazier’s defense after the president attacked him on Twitter.

The muted response was a reminder that while big companies are increasingly willing to take public stands on many contentious social issues, they also covet their access to a business-friendly White House and are being careful not to jeopardize their relationship with the president.

“I’m sure that corporate leaders feel some reticence to speak out because they’re afraid of being attacked by the president by name,” said Michael Strain, an economist at the conservative American Enterprise Institute. “I think that’s a shame, and I think the president is behaving irresponsibly.”

Mr. Frazier’s decision was made public through a statement on Merck’s Twitter account early on Monday.

“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,” Mr. Frazier wrote. “As C.E.O. of Merck and as a matter of personal conscience, I feel a responsibility to take a stand against extremism.”

The decision seemed certain to draw the ire of a president famously sensitive to personal slights. Sure enough, Mr. Trump lashed out at Mr. Frazier on Twitter less than an hour later.

“Now that Ken Frazier of Merck Pharma has resigned from President’s Manufacturing Council, he will have more time to LOWER RIPOFF DRUG PRICES!” he wrote.

The president continued to criticize the drugmaker later in the day, writing on Twitter: “.@Merck Pharma is a leader in higher & higher drug prices while at the same time taking jobs out of the U.S. Bring jobs back & LOWER PRICES!”

Mr. Trump has routinely used Twitter to chastise companies that displeased him, including Boeing and Lockheed Martin, with his criticism sometimes sending share prices tumbling, but Merck stock was up slightly on Monday.

Merck did not respond to either of the president’s Twitter posts and declined to make Mr. Frazier available for an interview, but within the company, he appeared to have the support of his board.

“Any time someone stands up and does something brave, rather than wimping out, sure, there is a risk,” said Thomas R. Cech, a Merck board member who was among those that Mr. Frazier contacted Sunday night. “You put your name and your company’s name in the spotlight, and people who don’t like what you did can find ways to try to retaliate.”

Leslie A. Brun, another board member, said Mr. Frazier had emailed him on Sunday to seek his input before making his decision. Mr. Brun said he was supportive, and that he felt Mr. Frazier’s background, in some part, informed the action he chose to take.

“As you can imagine, as the only African-American in that position, on that council, you can’t take yourself out of your own personal context,” Mr. Brun said. “As a consequence, Ken had a very strong reaction to what he saw as a failure of leadership.”

As for Mr. Trump’s reaction, Mr. Brun added, “I thought the pettiness of the president’s response, on a personal level, is indicative of how far we’ve sunk.”

Over the course of the day, several top executives made statements denouncing racism and bigotry generally, although none went as far as Mr. Frazier or Mr. Plank.

“Bigotry, hatred and extremism are an affront to core American values and have no place in this country,” said Stephen A. Schwarzman, the chief executive of the private equity firm the Blackstone Group and one of the president’s closest advisers in the business community. “I am deeply saddened and troubled by the tragic events in Charlottesville.”

Dell Technologies said that its chief executive, Michael Dell, would remain on the White House manufacturing advisory council. And General Electric said in a statement that it had “no tolerance for hate, bigotry or racism” while adding that Jeff Immelt, the company’s chairman and recently retired chief executive, would also continue to advise the president.

The president of the A.F.L.-C.I.O., Richard Trumka, went further than most, suggesting that Mr. Trump’s initial comments about the violence in Charlottesville was giving him pause.

“We are aware of the decisions by other members of the President’s Manufacturing Council, which has yet to hold any real meeting, and are assessing our role,” Mr. Trumka said in a statement. But he, too, stopped short of stepping down or endorsing the actions of Mr. Frazier.

Several hours after Mr. Frazier resigned from the manufacturing council, Mr. Trump offered the kind of sharp denunciation of racism that many critics believed had been lacking over the weekend. In a prepared statement, the president explicitly condemned hate groups, including neo-Nazis and the Ku Klux Klan.

Mr. Frazier, 62, grew up in a poor neighborhood in North Philadelphia, the son of a man who instilled in his children a sense of ambition.

“My father had a very strong view of what it took to be successful, and he in effect brainwashed all his children to think that we could do anything,” Mr. Frazier said in a 2011 interview with the Harvard Law Bulletin. “Although he was a janitor by accident of birth, I believe he could have been a C.E.O. of any company.”

Mr. Frazier attended Harvard Law School and then went to work for a Philadelphia law firm. His most rewarding legal victory, he has said, involved the case of James Willie Cochran, a black death row inmate in Alabama who had been convicted of killing a white store manager.

Mr. Frazier and his colleagues determined that Mr. Cochran, who was known as Bo, had been convicted on shoddy evidence. After a yearslong legal battle, they secured him a new trial. He was acquitted in 1997.

In a 2004 article Mr. Frazier wrote about the case for The University of Toledo Law Review, he said race had clearly played a role in Mr. Cochran’s conviction.

“It became obvious that one of the major factors contributing to Bo’s conviction centered around the fact that each of his jury trials was distorted when viewed through the lens of race,” Mr. Frazier wrote. “Although some maintain the criminal-justice system is colorblind, the reality is that race plays a substantial role in the judicial process.”

Mr. Frazier also had corporate clients, including Merck. In 1992, he became general counsel of a Merck joint venture. He went on to lead the drugmaker’s public affairs group and eventually held several other executive positions before becoming chief executive in 2011.

P. Roy Vagelos, a former chief executive of Merck, recruited Mr. Frazier to join the company and said he had made the right decision by acting on his conscience.

“He is always smart, always ethical and repeatedly makes the right decisions,” Dr. Vagelos said in a statement provided by the pharmaceutical company Regeneron, where Dr. Vagelos serves as chairman. “I applaud his decision to step down from the council this morning.”

Mr. Frazier and Mr. Plank are not the first chief executives to walk away from one of the president’s advisory groups.

In February, as Mr. Trump moved to adopt stringent new immigration rules, Travis Kalanick, the chief executive of Uber at the time, quit the president’s economic advisory council. And after the president said he would withdraw the United States from the Paris climate accord, Elon Musk, Tesla’s chief executive, and Robert A. Iger, Disney’s chief, stepped down from the president’s Strategic and Policy Forum.

“I don’t think when corporate leaders sat on councils and commissions in the Bush or Obama administration, that they were in some way worried that their public reputations were affected by that service, one way or the other,” said Mr. Strain of the American Enterprise Institute.

But, he added, in the wake of Mr. Trump’s initial reluctance to condemn the white nationalists in Charlottesville, it was understandable that a top executive like Mr. Frazier might feel the need to distance himself from the president.

“It’s not surprising to me,” Mr. Strain said, “that we saw a corporate leader say, ‘I know what happened over the weekend had nothing to do with manufacturing or pharmaceuticals, but I don’t want to be associated with it in any way.’”