Burgers, bikinis and Obamacare, oh my!
posted at 7:01 pm on June 15, 2013 by Jazz Shaw
Now that we’ve got your attention…
Even with an intentionally provocative title, the Wall Street Journal delivers an excellent interview this weekend with Andrew Puzder, CEO of CKE Restaurants. (That’s the parent company of Carls’ Jr. and Hardee’s.) He has an extensive and successful background, and his no-nonsense, business oriented attitude really comes through with his opening quote in the interview.
‘We’re not the brand for people who eat nuts and bark,” CKE Restaurants CEO Andy Puzder, tells me without apology. “Hell, I’ll walk into one of our stores to get a barbecue chicken sandwich and walk out with a Western bacon cheeseburger. You smell them, and you just get hungry. We’re the ‘young, hungry guy’ brand.”
The interview touches on how Puzder was tapped to turn the company around after a rough economic stretch, including his famous television ads featuring scantily clad models such as Nina Agdal and Kate Upton eating burgers. But he also gets down to the serious business of what worries him in terms of keeping the firm on a profitable track.
Government policies, he says, are stifling young, hungry entrepreneurs, and he doesn’t mean tech hotshots. He means the kind of entrepreneurs who run fast-food joints, often immigrants and minorities without much education. In other words, the very people that liberals say they want to help.
The fast-food executive rattles off a list of market suppressants, including uncertainty over labor costs, commodity and food prices, and taxes. But his bete noire is ObamaCare.
Mr. Puzder says his health-care consultants have calculated that it’s cheaper to offer his company’s 21,000 U.S. employees more expensive health-insurance plans than to drop them into state exchanges and pay the penalty for not covering what ObamaCare regulators deem are “essential health benefits.” Yet his consultants can’t figure out how many people will sign up under the new plans because the Health and Human Services Department hasn’t issued final regulations.
This interview – particularly the section on Obamacare and its emerging effects on business – is definitely worth a read if only for the direct experience, planning and reactions which the CEO relates. Unlike the hyperbole coming from many people on both sides, he’s hammering out the issues which he has had to deal with in the real world and what that has meant for his business model. He’s not saber rattling and threatening to lay people off and hire part timers to avoid health care costs, but he is stating that he is allowing full time workers to leave through attrition and replace three of them with four part timers.
He also deflates the idea of “McJobs” and how there are no benefits, as his company offers a limited benefit medical plan. But only 6% of his workers sign up for it because most of them are young and don’t see the need to pay for a health plan. These complicating factors make it far more of a burden to keep as many people working while complying with the new requirements of the law as it rolls out. He’s also looking at technology investments, such as replacing register workers with kiosks. It removes some of the human touch from the business, which he regrets, but “we don’t have to pay benefits for any of those things.”
The debate over Obamacare will remain a hot topic for some time to come until it’s fully implemented. In order to deal with it fairly, we’re going to need to listen to the actual people who are directly affected by it in terms of providing the coverage under discussion. Mr. Puzder would be a good place to start.