Sunday, November 18, 2012

Republican CEO Tantrums

Papa Johns

Remember when you were a little kid and you didn't get your way. I sure do. If you were like me you were quietly enraged, but powerless to do any thing about the situation, so sometimes acted out by pouting, or give the silent treatment to everyone, or did your chores half ass, or some other passive aggressive form of protest.
It seems we now have a bunch of grown up right wing CEO's of major companies who are acting the same way because President Obama was reelected.
My niece Shannon is conservative, as I mentioned a couple of days ago. Not surprisingly so is her husband. He likes to upload pictures from right wing websites that consist mostly of right wing platitudes. Most of the time they are not accurate. For instance the first picture at the top of this post suggests that all Denny's restaurants were adopting a policy of charging customers a 5% surcharge due to increased costs incurred by the Affordable Health Care Act, or in other words, the cost of providing their employees with health insurance, rather than let tax payers foot the bill when these employees use hospital emergency rooms as their primary health care providers.
The picture was captioned "WOW and we voted for this?" And: "Denny’s has announced it will charge a 5% “ObamaCare surcharge” and cut employee hours. LIKE if you agree this is more evidence that ObamaCare must be defunded!"
You see how they say "Denny's has announced..." That implies that the entire restaurant chain has decided to take this action and I fell for it. I commented, "Blame Denny's." And, "The Affordable Care Act won't even fully kick in until 2014. Denny's, Papa Johns, and all the others who are still making millions are acting like little kids that didn't get their way. It's pathetic really... and sad."
The next morning I was watching The Stephanie Miller Program on Current TV, when she mentioned that the CEO of Denny's had decided not to implement this surcharge. Well, I immediately went back to the Facebook entry and wrote this, "Denny's CEO says now he's rethought his position and will not pursue this surcharge. Throw a little publicity on the way kids act, that will cost them money through bad press, and they grow up real fast."
The next day I would discover that it was not the entire Denny's chain that had contemplated this drastic action, but one guy, a John Metz (2nd picture above), who owns dozens of Denny’s restaurants and the Hurricane Grill chain, plus some Dairy Queens. It finally dawned on me (I'm slow) that after all, Denny's is a franchise operation, and only has control of the entire chain within certain limits.
Now let's be clear about what Metz wants to do (I don't know about Stephie's news. As far as I know Metz still wants to do this). He wants to add a "5% “Obamacare Surcharge," on his menu, and charge his customers an additional 5% to their bill. He also wants to cut the hours of his front-of-house workers to fewer than 30 hours/week. By doing so, he would be able to avoid the Affordable Health Care Act's requirement that employers with 50 or more full-time equivalent employees must pay a penalty for each full-time employee without coverage (above a 30-employee threshold).
Metz says, "If I leave the prices the same, but say on the menu that there is a 5 percent surcharge for Obamacare, customers have two choices. They can either pay it and tip 15 or 20 percent, or if they really feel so inclined, they can reduce the amount of tip they give to the server, who is the primary beneficiary of Obamacare… Although it may sound terrible that I’m doing this, it’s the only alternative. I’ve got to pass the cost on to the consumer."
But he says he's going to reduce his worker's hours to the point that they do not have to be covered under the Affordable Health Care Act, therefore he incurs no additional costs to his business, he's just screwing his own employees out of hours paid.
So what's up with the surcharge?
He told the Huffington Post that he will take the extra step of adding a surcharge because he believes the law will eventually expand to include penalties for not covering full-time equivalent employees. If he has to pay a penalty for his average 35 full-time equivalent employees per restaurant, he said it would cost him $75,000 per location. In that case, he said raising prices wouldn’t be an option, since he’d have to raise prices about 25 percent to cover the costs of Obamacare, which would be “catastrophic” for his business.
Okay, Metz is announcing at this time that he is going to institute a 5% surcharge to his customers and cut his employees hours even though there is no additional costs to his business now, not until 2014, when the Affordable Health Care Act is fully implemented. He is charging his customers 5% more due to a belief that he has that he may incur certain penalty charges later. And, he claims his motives are not political. He says he will talk to his employees at upcoming meetings about the changes, "What we’re going to ask them to do is to speak to their elected officials, to try to convey what this means in terms of their jobs and their livelihoods."
He's the one that is screwing them, but he wants them to discuss the matter their political representatives.
What a douche. If I lived near any of his restaurants, dear readers, I'd find somewhere else to eat.
But he's not nearly as bad as Robert Murray, CEO of Murray Energy (third picture above). He's the guy who forced his coal mining employees to attend a fund raiser for Mitt (Mitt) Romney last May. You know, the one when Mitt was speaking with all of these down to earth, hard working coal miners behind him. Yeah, well it seems they weren't even getting paid for the time spent at the rally. So they were forced to go without pay (Murry's spokesperson later stated "Attendance was mandatory but no one was forced to attend the event." WTF?). Well if that wasn't douchy enough, in October 2012, the non-profit group Citizens for Responsibility and Ethics in Washington filed a complaint with the Federal Election Commission against Murray and his company alleging violations of federal campaign law in which employees of Murray Energy were required to give one percent of their salary to the company's political action committee, which of course was pro-Romney.
The day after after the election giving Obama a second term, Murry read the following prayer to his employees:

Dear Lord:
The American people have made their choice. They have decided that America must change its course, away from the principals [sic] of our Founders. And, away from the idea of individual freedom and individual responsibility. Away from capitalism, economic responsibility, and personal acceptance.
We are a Country in favor of redistribution, national weakness and reduced standard of living and lower and lower levels of personal freedom.
My regret, Lord, is that our young people, including those in my own family, never will know what America was like or might have been. They will pay the price in their reduced standard of living and, most especially, reduced freedom.
The takers outvoted the producers. In response to this, I have turned to my Bible and in II Peter, Chapter 1, verses 4-9 it says, “To faith we are to add goodness; to goodness, knowledge; to knowledge, self control; to self control, perseverance; to perseverance, godliness; to godliness, kindness; to brotherly kindness, love.”
Lord, please forgive me and anyone with me in Murray Energy Corp. for the decisions that we are now forced to make to preserve the very existence of any of the enterprises that you have helped us build. We ask for your guidance in this drastic time with the drastic decisions that will be made to have any hope of our survival as an American business enterprise.

Apparently sanctioned by God, he then fired 156 people, even though no changes had taken place in the coal industry, or were scheduled to take place after Obama’s re-election.
Murry didn't get what he wanted (a Romney win), so he acted out like a little baby by hurting his own employees, and I bet you he expected the rest of the country to sympathize with him, the poor deluded bastard.
Zane Tankel (4th picture above), the owner of 40 Applebee's franchises in the New York metropolitan area, announced on the Fox Business Network, that because of the Affordable Care Act, he would not hire any more workers and was considering cutting the hours of current employees.
Zane is experiencing a bit of an unwanted backlash due to his remarks. Some employees seem eager to find new jobs. And customers are threatening boycotts -- on Twitter and Facebook.
"It's ridiculous with all the money they make they can't take care of their employees. They sit in their mansions and we scrape by," said 35-year-old Brandon Baker, an Applebee's waiter. "I have no idea what it would be like to get a real break or have sick days or insurance."
"Zane Tankel is a pathetic, greedy, mentally and follicle-impaired fraud," wrote Rex Kenneth, a New York City resident, in an email to The Huffington Post. "By [boycotting] Applebee's you can save money and improve your health."
To be fair, as I always strive to be, the Affordable Health Care Act will impose new costs on businesses that employ 50 or more people.
"I can't tell you how many franchises say they would like to be able to provide coverage, but once they start analyzing the costs, say this isn't going to work," said Judith Thorman, senior vice president for government relations and public policy with the International Franchise Association, a trade group that has opposed the new health care law.
But what would you expect a trade group to say? "Yeah, we want to dish out more money we didn't have to before?" I don't think so.
And last but not least on this particular post we have Papa John Schnatter, CEO of Papa John's Pizza, you know, the guy who does those commercials with football player Peyton Manning giving away two million free pizzas, 120,000 free pizzas a week throughout the 2012 NFL season.
Schnatter, a Romney supporter and fundraiser, has also threatened the cut employee hour route, in reaction to the Affordable Health Care Act. He also says the new law will force him to add 10 to 14 cents to every pizza sold in order to make up for the cost of complying with the law, the cost of which he estimates to be $5-8 million annually.
So we have here the same conundrum we had with Denny's. If Papa John's cuts it's employees hours so they do not fall under the insurance requirements of the Affordable Health Care Act, then why do they wish to raise prices? Does Schnatter also have a belief about some future unknown costs. Or maybe these guys just want to capitalize on Obamacare and make some more money.
Papa John's has probably garnered the most attention and publicity relative to the other CEO's we've examined, and is currently receiving quite a bit of harsh criticism. One thread on social news site Reddit, titled "There are plenty of places to get cheap s***** pizza in the world- Anyone else on reddit ready to boycott Papa John’s?" has captured more than 21,000 up-votes and 4,500 comments. A host of Facebook groups with the same idea have cropped up.
Shares in Papa John’s International have been tumbling for two weeks, falling from $51.70 the day after the election to $47.05 yesterday, a 9% drop.
Forbes magazine takes issue with Schantter's math, stating the health care law will amount to a .4% to .7% of one percent cost to his company, which translates, according to the average pizza, to approximately 3.4 to 4.6 cents a pie.
In any case, the 2 million pizza giveaway, which of course, is a promotion designed to increase brand awareness and eventually increase sales of pizza, will cost the company somewhere between $24 million to $32 million American dollars, for an average of $28 million.
So we have $28 million dollars for advertising (which seems to be an annual expense), vs an average of $6.5 million a year to provide health insurance for employees.
Some smaller competitors of Papa John's, like Ian’s Pizza, with 4 locations in Wisconsin, has offered full heath care coverage to its 50 full-time employees for years, making it all the more difficult to compete with national chains like Papa John's that pay workers low wages without health benefits. "This may level the playing field for us," part owner Martin said of the Papa John's price hike. “If they have to pay for benefits, and that pushes their prices up closer to ours, it will justify what we’ve been paying for and what we’ve been fighting to do the past few years."
So if Ian's Pizza has been providing it's employees health benefits for years, why is Papa John's, a much larger, powerful, and profitable company, raising such a stink?
Because Schnatter's a douche, that's why. And I don't say that lightly.
So come on guys, buck up. You don't see the Koch Brother's crying and saying they are going to be forced to charge more to keep polluting the air, do you? Or Sheldon Adelson decreasing slot pay outs in Macao.
Take care of your people. You might not realize this but their human beings just like you.
If indeed you can call yourself human and not big, fat, douches.

Addendum: 11-21-12: CEOs John Metz & John Schnatter reversed their positions on how they will react to the enactment of Obamacare today. They will not be taking any punitive actions toward customers (raising prices) or their employees (lessening their work hours). Negative publicity may have been a factor,

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