WASHINGTON (BLOOMBERG) - Even before President Donald Trump began speaking at Trump Tower on Tuesday afternoon (Aug 15), America's most prominent chief executives knew they had a problem.
In the days following the racially charged violence in Virginia, where white supremacists marched with swastikas and a young woman was run down by an alleged Nazi sympathiser, alarmed executives began reaching out to Stephen Schwarzman, the billionaire leader of the Blackstone Group and a key figure in President Trump's business brain trust.
What followed was a frantic 48 hours of high-level debate and cold calculation among some of the nation's most prominent CEOs - from Jamie Dimon of JPMorgan Chase & Co to Indra Nooyi of PepsiCo - that ended abruptly on Wednesday with a remarkable rebuke to the President.
Schwarzman, one of the administration's business ambassadors, listened over the phone this week as one CEO after another expressed dismay over Trump's response to the deadly events in Charlottesville - and then over his full-throated attack on a prominent black executive, Kenneth Frazier of Merck & Co, who, unlike many CEOs, had refused to remain silent.
A conference call on Wednesday morning cemented the decision: The CEOs would disband a White House forum that Trump, the first CEO president, assembled to showcase his supposed rapport with big business.
This account of the struggle to contain the controversy is based on interviews with numerous people with knowledge of the matter who asked not to be identified because they were not authorised to discuss the talks.
As the violence unfolded in Charlottesville over the weekend, uneasiness among the executives began to build, especially after the President made a statement on Saturday saying "many sides" were to blame for the chaos. But by Monday, Trump condemned white supremacists, calming the waters for a time.
The quiet was short-lived. Speaking at a news conference in the lobby of Trump Tower in Manhattan on Tuesday, the President told reporters that "both sides" were to blame for the violence in Virginia, going back on the statement he had made just 24 hours earlier.
The reversal stunned and angered the strategy forum executives. After a flurry of phone calls late on Tuesday and into Wednesday, a loose consensus was reached that the forum should disband.
A group call was arranged for Wednesday morning. Several members who spoke to one another earlier went into the call saying that if the group was not dissolved, they were going to drop out.
Among those pushing for a bold statement were International Business Machines CEO Ginni Rometty, Dimon, Nooyi and General Motors CEO Mary Barra. Nobody from the administration participated.
After the 11.30am call, Schwarzman was in touch with top White House aide Jared Kushner to inform him of the group's decision: The controversy had become too much of a distraction.
The President tweeted at 1.14pm on Wednesday afternoon that he was ending the forum and a parallel manufacturing council, "rather than put pressure on the businesspeople" serving on them.
Figuring out how to handle the ever-shifting rhetoric of an unpredictable president is a challenge like few others businesses have faced in recent years.
Early on, America's largest companies were eager to work with a new president promising to ease regulatory constraints and cut and simplify taxes. Trump showed a fondness for loudly calling out companies on Twitter, but most absorbed the punches and promised to hire more people in the US while touting plans to build more factories and other facilities.
But the events in Charlottesville appear to have raised the political costs of working with the President.
"Within companies, there's a high level of alert on the public outrage," said Ben Wikler, the Washington director of MoveOn.org, a progressive advocacy group. "The cost to corporate brands rises each day that they continue to align themselves with Trump."
Merck chief Frazier's resignation from Trump's manufacturing council on Monday marked the first crack in the councils after the bloody weekend in Charlottesville. Trump was fast to fire back at Frazier, chiding him on Twitter over high drug prices.
But investors shrugged - Merck's shares briefly ran in front of a modestly rising market before sliding back to the pack - and for most of Monday, the other executives on the business panels kept quiet.
It was not until late that evening that Intel CEO Brian Krzanich and Under Armour chief Kevin Plank emerged to say that they, too, were stepping back.
Trump had another Twitter outburst over Frazier's decision on Tuesday morning, before the new conference, calling executives who quit "grandstanders", while claiming others were eager to sign on.
While the strategy group was weighing its future in private, one executive after another began to pull out of Trump's manufacturing council, condemning the President's statement on white supremacists.
Following Trump's comments on Tuesday, General Electric's leadership decided the company would not be associated with the council any longer, despite chairman Jeffrey Immelt saying a day earlier that he would remain.
Immelt and John Flannery, who took over as CEO on Aug 1, received "valuable input" from leaders inside and outside the company, including representatives of GE's affinity groups, according to a note Flannery sent on Wednesday to employees.
The executives also spoke with other companies "to discuss the possibility of disbanding the committees", Flannery said.
3M chief executive Inge Thulin, who announced his decision to quit shortly before the councils were disbanded, was pressed by Skiftet, a Swedish progressive grassroots organisation, to exit Trump's manufacturing council after the President "failed to properly condemn right-wing extremists and Nazis", according to the group.
PepsiCo and Nooyi were pushed to leave the council by a German group, Campact, which posted a video on Facebook, calling for her to step down. PepsiCo declined to comment on others resigning from the councils, the President's press conference on Tuesday or a Twitter movement created to pressure Nooyi to step down.
Johnson & Johnson's Alex Gorsky had been among the last to weigh in publicly, saying before Trump's Tuesday news conference that he planned to remain on the manufacturing council, "as a way to present the values of our credo as crucial public policy is discussed and developed".
But by early Wednesday, Gorsky called Trump's comments equating white supremacists with the people protesting against them "unacceptable", and resigned from the manufacturing committee.
The group had already been disbanded by the time Gorsky's statement went out, though J&J said that his decision to quit preceded that move.