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Major Corporations Distance Themselves From Saudi Arabia After Journalist's Disappearance


It's not just governments figuring out how to deal with Saudi Arabia's role and the suspected death of Jamal Khashoggi. Major corporations are distancing themselves from the kingdom. Top executives have pulled out of an investment conference scheduled to take place in Riyadh next week. They include leaders of JPMorgan and Ford. Andrew Ross Sorkin of The New York Times also planned to attend and moderate panels. Not only did he pull out. He is also now reporting on how CEOs made the decision to withdraw from the Saudi conference. And he joins us now. Welcome.

ANDREW ROSS SORKIN: Thank you for having me.

SHAPIRO: You say this incident is forcing business executives to become reluctant statesmen. Why reluctant?

SORKIN: Well, I think that over the past year or two really under the Trump administration, CEOs have been forced into these uncomfortable positions of having to speak out on moral issues. This conference in Riyadh known as Davos in the Desert has become a crucible of sorts for so many CEOs over the past week and all of it being done without really direction from Washington. Treasury Secretary Steven Mnuchin is still going. CEOs have been left to make these hard decisions.

SHAPIRO: What's on the line for these CEOs? Why is it such a hard decision?

SORKIN: The Saudis look at attendance of something like this as a show of loyalty. And so the idea that somebody like Jamie Dimon of JPMorgan would decide not to attend really puts potentially the employees, the business at risk. Larry Fink is the CEO of BlackRock. He's - manages billions of dollars of the central bank's money from Saudi Arabia. You know, there's a big question about whether he will continue to be able to do that.

SHAPIRO: You report on the actual phone calls where the CEOs were making these decisions over the weekend. What went into their ultimate decision to pull out of this conference?

SORKIN: I think for most of them, this reported murder was one step too far. Now, by the way, there are people who say that's hypocritical given what's happened in the Yemenis crisis.

SHAPIRO: You're referring to Saudi Arabia's role leading the war in Yemen which has created a massive humanitarian crisis there.

SORKIN: Absolutely. You have employees who know so much more about what's happening, and they are in real time reacting, providing feedback to executives on these issues in a way that they didn't.

SHAPIRO: So in the same way that consumers might expect executives to take a position on immigration or same-sex marriage, you're saying there could be consequences if they did not take a position on this issue.

SORKIN: Absolutely. These executives have come out so forcefully taking a moral position - whether it was on Charlottesville, whether it was on immigration, whether it was on the Paris climate accord, they felt compelled to do those things.

SHAPIRO: As you know, the news cycle moves fast, and memories are short. Do you think this will have long-term consequences, or is it pretty quickly just going to get washed downstream, and things will go back to normal?

SORKIN: I think for some of these companies - frankly, I think there are going to be real implications for their business. Richard Branson had announced last week that he was going to step away from Saudi Arabia. Literally this afternoon, the Saudis are canceling the Virgin Hyperloop project that they put together in retaliation. And so memories in Saudi Arabia are long. Whether they're long in the United States - I don't know. We will see. I suspect that they're much shorter.

SHAPIRO: Andrew Ross Sorkin writes the DealBook column for The New York Times. Thanks for joining us.

SORKIN: Thank you for having me. Transcript provided by NPR, Copyright NPR.