The Starbucks CEO is concerned about the economy, unemployment and the general direction of the country. As the 4th of July approaches, he is speaking out -- and not pulling any punches.
As Americans begin observing Independence Day, Starbucks CEO Howard Schultz has written an open letter to the nation, "How Can America Win this Election," in which he spells out his concern about our economy and specifically unemployment. In the letter he asks politicians to stop fighting and for business leaders to step up. "I love America, but we all know there is something wrong. The deficits this country must reconcile are much more than financial, and our inability to solve our own problems is sapping our national spirit. We are better than this," he writes. (See the full letter here.) Schultz is running the letter in an advertisement in national newspapers and websites this week. Schultz previously voiced his unhappiness with the state of the union last summer during the deadlocked federal budget debate. I caught up with Schultz by phone as he was in Colorado speaking at the Aspen Ideas Festival.
Howard, what prompted you to write this letter?
The letter is a continuation of the concern that I share with many Americans about the economy and unemployment and the lack of political leadership to address the problem. Since I took this position a year ago things really haven't gotten better, they have gotten worse. I'm not trying to criticize the President or the Republican Party; I just want to try to with civility and respect to use the scale of Starbucks for good. Business leaders need to change too. We all have a stake in this. In the letter, you can see we are trying to create a platform using social media and digital to give people a place to elevate the conversation.
Since you spoke out last summer, the silence has been kind of deafening, though -- from other CEOs.
Well when we called for suspending financial support to incumbents until there was real progress in American politics, some 150 CEOs signed on in support. But you are right we haven't seen a groundswell of business leaders raising their voices. Having said that, the program we launched, Create Jobs for America, has raised over $11 million directly -- and $80 million in new financing if you count the leverage used -- to create more than 4,000 jobs with loans in 44 states. Google (GOOG), Citibank (C) and Banana Republic (GPS) have joined us in this effort. I should mention that we have announced a new roasting plant in Augusta, Georgia that we could have located in Central America or Asia for 15% to 20% less, but we felt that creating 200 or so jobs domestically was more important.
Is it right for the CEO of a public company to be spending time and money this way?
Starbucks (SBUX) is performing at a high level across the board, record revenues, record profits, and record stock price. But we're not perfect; we have our own challenges. The people who work at the company and our 70 million-a-week customers know we are consistently embracing values in the way we practice business. Starbucks has always tried to manage its business by balancing profitability with a social conscience; for more than 20 years since going public, that has served us well. If you look at the history of companies 'doing the right thing,' most have performed extremely well. Really we are witnessing a seismic change in consumer behavior. The amount of information and transparency means we can see so much more, we have more choices and you can see what a company does in terms of what it stands for.
Getting back to your letter, so you're really sincerely concerned about this entrenched political mismanagement?
Yes. We can't be bystanders anymore. It's a dangerous time, we are drifting towards mediocrity. We deserve a better America. You probably read that Stockton, California just declared bankruptcy. What was incredible to me was how it was reported in such a de minimus fashion. Like it was not a big deal. I don't want to sound like I'm preaching, but we need to try to do everything we can to create confidence and stimulate the economy. I hasten to think what might happen if we end up in another budget deadlock in a few months and S&P lowers the U.S. debt rating again. I was just in Europe. We don't want that to happen to us. We need real leadership from Washington and from the business community. I've been the ultimate beneficiary of the American dream and that dream is now in jeopardy. I can't just stand by.