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Howard Schultz to Step Down as Starbucks Executive Chairman

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Howard Schultz, the outspoken executive chairman of Starbucks, will leave the company at the end of the month, bringing to an end the tenure of a socially conscious entrepreneur who turned a local Seattle coffee chain into a global giant with more than 28,000 stores in 77 countries.

Mr. Schultz’s decision to retire, a plan he said he privately outlined to the board a year ago, will most likely stoke speculation that he is considering a run for president in 2020. He is frequently mentioned as a potential candidate for the Democratic Party and has become increasingly vocal on political issues, including criticizing President Trump last year as “a president that is creating episodic chaos every day.”

While Mr. Schultz, 64, typically bats away speculation about his political ambitions with an eye roll or a pithy answer, on Monday he acknowledged for the first time that it is something he may consider.

“I want to be truthful with you without creating more speculative headlines,” he told The New York Times. “For some time now, I have been deeply concerned about our country — the growing division at home and our standing in the world.”

One of the things I want to do in my next chapter is to figure out if there is a role I can play in giving back,” he continued. “I’m not exactly sure what that means yet.”

Asked directly if he was considering running for president, he said: “I intend to think about a range of options, and that could include public service. But I’m a long way from making any decisions about the future.”
Mr. Schultz said he and the board had expected to announce his departure last month, but that plan was upended after an episode at a Philadelphia store in mid-April in which two black men were arrested after waiting inside one of the company’s stores without making a purchase. Last week, Starbucks closed all of its company-owned stores around the country for four hours for racial bias training, a program that Mr. Schultz had spearheaded.

[Read: “Starbucks’s Tall Order: Tackle Systemic Racism in 4 Hours.”]

The possibility that Mr. Schultz, who has spent three decades leading Starbucks, could run for president has become far more realistic with the election of Mr. Trump, a real estate developer and reality-television star before his political career.

Mr. Trump’s successful candidacy has set off a wave of speculation about business leaders eyeing a shot at the White House. Robert Iger, Disney’s chief executive, publicly said he had been considering running for president until he struck a deal to buy 21st Century Fox. Jamie Dimon, chief executive of JPMorgan Chase, is also thought of as a possible candidate, and Mark Cuban, the billionaire owner of the Dallas Mavericks N.B.A. team, has said he planned to consider running as Republican, but would need to convince his wife first.
“She asked me if I want to stay married,” Mr. Cuban said last November.

Under Mr. Schultz’s leadership, Starbucks has waded into debates over social issues such as gay rights, race relations, veterans’ rights, gun violence and student debt. Mr. Schultz was an early champion of the idea of a corporate executive as a moral leader as he sought to achieve what he described as “the fragile balance between profit and conscience.”

Still, Mr. Schultz cautioned against reading too much into his decision to leave Starbucks. “I want to be of service to our country, but that doesn’t mean I need to run for public office to accomplish that,” he said.

He stepped away from the chief executive role at Starbucks last April, handing the reins to Kevin Johnson. It was the second time that Mr. Schultz had made that move, having given up the role in 2000 to become chairman, only to return to the chief executive position eight years later.

His latest departure, however, is a greater separation than before. Myron E. Ullman, the former chairman of J. C. Penney, will become Starbucks’s new chairman, and Mr. Schultz will be given an honorary title of chairman emeritus.
Mr. Schultz said he planned to work on his family foundation and write a book about “social impact work and the efforts to redefine the role and responsibility of a public company.”

Bill Gates, the co-founder of Microsoft, whose father was the lawyer who helped Mr. Schultz buy Starbucks in 1987, said, “Howard has built an amazing organization in Starbucks, and it’s exciting to consider what he might accomplish philanthropically.”
On Monday, just hours before Mr. Schultz planned to send a letter to the company’s 350,000 employees around the world announcing his decision, he visited Starbucks’s first store at Pike Place Market for the last time as its leader.

“I’ve been doing this for almost 40 years,” he said. “Taking my green apron off is hard. It is emotional. More emotional than I thought it would be.”

“I told myself a long time ago that if I was ever going to explore a second act, I couldn’t do it while still at the company,” he added.

Mr. Schultz’s legacy as an entrepreneur will be defined as much for his vision to create a global coffee chain as for his progressive approach to running the company — or, as he has often said, “to build the company my father never got to work for.”

Mr. Schultz, who grew up in the Canarsie section of Brooklyn, said watching his father, a World War II veteran who became a truck driver and later a taxi driver, struggle to make enough money to pay for basics had led him to offer complete health benefits for full- and part-time employees and their domestic partners, a first for such a chain. He later provided stock options for part-time workers and offered to cover college tuition for students enrolled in online courses at Arizona State University.

“Howard proved that a company could be more successful and profitable by elevating humanity,” said Mellody Hobson, president of Ariel Investments and a Starbucks director who will become vice chairwoman when Mr. Schultz steps down.

Under Mr. Schultz, the company’s financial success has been immense. Shares of Starbucks have risen 21,000 percent since the company’s initial public offering in 1992; an investor who had put in $10,000 then would have more than $2 million today.
Still, Mr. Schultz’s progressive approach to management has not been without criticism. The company announced two weeks ago that it would let customers and non-customers alike use its restrooms following the incident in Philadelphia, and it was soon criticized by some as putting its store managers in increasingly complex and difficult situations that they may not be properly trained to handle.

And Mr. Trump has criticized Starbucks as trying to be too politically correct, bashing the company for no longer selling Christmas-themed cups. “Maybe we should boycott Starbucks?” Mr. Trump said on the campaign trail.

For Starbucks, Mr. Schultz’s departure will most likely be seen — both internally and externally — as a new challenge. While Mr. Schultz had already handed over the chief executive title to Mr. Johnson, he largely remained the face of the company as he continued to champion the idea of Starbucks as “the third place” — a meeting ground between home and work that he modeled from coffee bars in Italy after he took a trip there in 1983.

Starbucks itself is transitioning in the United States from a fast-growing company to one that’s more likely to rise and fall with the rest of the economy. Still, it is growing wildly in China, where it is planning to open as many as two new stores a day. It is one of the few American companies that operate in China without a local partner.

Mr. Schultz, however, said his decision to leave now — even after the episode in Philadelphia — illustrated the complete confidence he had in Mr. Johnson, the company’s top management and its board.

“The timing was never going to be perfect,” he said.

At the original Pike Place Market store early Monday, with only a handful of customers looking on, Mr. Schultz leaned over to inscribe the wall next to an espresso bar he installed himself in 1987: “This is where it all began. My dream to build a company that fosters respect and dignity and create a place where we can all come together over a cup of coffee. Onward with love.”

Source: https://www.nytimes.com/2018/06/04/business/dealbook/starbucks-howard-schultz.html

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TESLA’S PRICE CUT AND MORE CAR NEWS FROM THIS WEEK

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HAPPY NEW YEAR, and welcome back. 2019 is young, and we’ve already got a transportation bombshell on our hands: New York governor Andrew Cuomo announced he wants to cancel a planned subway line shutdown in the country’s largest public transit system. He says a panel of experts found a smarter way to fix tunnels damaged by 2012’s Hurricane Sandy—and according to engineers we spoke to, Cuomo might be right. But what happens now? Will the city stick with its plans, formed over the course of three years, to revamp bike and bus lanes and pedestrian spaces? Transportation advocates hope so.

Meanwhile, we’re still a little stuck on 2018, which was filled with exciting advances for Tesla, scooter-share, and even self-driving cars (sometimes). Read about the happenings, before it all fades away. It’s been a few weeks. Let’s get you caught up.

Source: https://www.wired.com/story/tesla-price-cut-car-news-this-week/

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New TLC commissioner should have economic smarts: Advocates

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Professional driver advocates say the city should be looking for a new Taxi & Limousine commissioner with a background in economics and a focus on policy.

“There’s a serious economic crisis in this industry, and [the next chairperson] needs to be interested in policy, not just politics, and care for the workers at the end of the day,” said Bhiaravi Desai, the executive director of the New York Taxi Workers Alliance, which represents 20,000 of the city’s professional drivers. “Given the level of crisis that drivers have been under, you need a chairperson who is going to be bold and really willing to put even their own kind of career interests second to the plight of the drivers.”

The head of the city’s Taxi & Limousine Commission, Meera Joshi, will step down from her post in March, the de Blasio administration announced over the weekend.

Joshi, whose policy positions clashed with those of the mayor’s, has headed the department since 2014 and oversaw a tumultuous period for the driving industry, as Uber and Lyft flooded the market and upended long-held practices of the ride-hailing industry.

“Thanks to a skilled and principled TLC staff, a Commission dedicated to doing the right thing and engaged industry members and advocates, through public debate and data, we increased accountability, safety, access, modernized taxi regulation, protected drivers and increased consumer protections. I am deeply grateful to the TLC community that made this possible,” said Commissioner Joshi in a statement.

Joshi oversaw the department as New York became the first major city to temporarily cap the number of e-hail vehicles on the road, and more recently spearheaded the nation’s first minimum wage for e-hail drivers. She also succeeded where other cities failed in acquiring more pickup and drop-off data from e-hail companies.

She also grappled, however, with a tragic series of driver suicides as e-hails multiplied on the streets of the city, decreasing the value of taxi medallions and rattling the economics of the industry.

Desai did praise Joshi for her “heart” as well as her “institutional knowledge” and “vision.”
De Blasio undercut Joshi several times this past year. In July, as Joshi’s agency issued a report that became the foundation for setting the minimum wage for e-hail drivers, de Blasio’s office failed to endorse the idea, with the mayor’s press secretary calling it “very premature.”

De Blasio stepped on Joshi’s toes more recently as the state looked to administer a congestion surcharge on taxi and e-hail trips in a large swath of Manhattan. After Joshi said the policy would be “devastating” for taxi drivers, de Blasio endorsed the proposal as a way to decrease traffic volumes. A judge blocked that policy from taking effect last month after cabdrivers filed suit.

In a statement announcing the news, de Blasio hailed his commissioner, saying she will be leaving an “unparalleled legacy.”

“In this unprecedented period of growth, Meera has brought about equally unprecedented and vital change that will serve as a model for cities throughout the nation and the world,” de Blasio said. “Under her leadership, New Yorkers who use wheelchairs can get service, passengers are assured that every driver and vehicle is safe, our city has detailed records of the one million daily trips, and New York City is the only place where app drivers have pay protection.”

Source: https://www.amny.com/news/tlc-commissioner-meera-joshi-1.25622343

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Sony’s Chief Plans to Make Entertainment Assets a Priority

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What will happen to Sony Pictures?

That has been a question in Hollywood since Kenichiro Yoshida took over as Sony Corporation’s chief executive in April. Unlike his two predecessors, Mr. Yoshida, a number-cruncher based in Japan and known for jettisoning underperforming businesses, seemed to have little affinity for the company’s also-ran movie and television division, which is best known as the home of Spider-Man and “Seinfeld.”

Surely this would be the moment for Sony to get rid of the midsize studio — especially since Rupert Murdoch had just decided to sell his bigger 20th Century Fox to Disney, having concluded it did not have the scale needed to compete with moviedom insurgents like Netflix, Apple and Amazon.

Surprise. When Mr. Yoshida takes the stage on Monday at the CES trade show in Las Vegas, he plans to use the high-profile platform to showcase Sony movies, television shows and music. He plans to telegraph that not only will his Sony not exit any of these businesses, it will make them a priority as his predecessors have not. In particular, Mr. Yoshida wants to make better use of the company’s online PlayStation Network as a way to bring Sony movies, shows and music directly to consumers. PlayStation Network, introduced in 2006, now has more than 80 million monthly active users.

“I want to convey the message that Sony is a creative entertainment company,” Mr. Yoshida said by phone from Tokyo before leaving for Nevada. That description amounts to a significant shift. Sony has long been seen as a consumer electronics superpower first and a Hollywood entity second.
He added that Sony’s three separately run entertainment businesses — music, gaming and motion pictures — have been told from on high that it is time to collaborate more consistently. In the past, analysts say, PlayStation Network managers have been hesitant to team up with their movie and music counterparts, worrying that the service’s core gamers would balk if they felt that Sony was pushing, say, family films at them.

Mr. Yoshida seemed less concerned. He called PlayStation Network “a very strong entertainment platform for all of Sony — very suitable for video and music content.”
Mr. Yoshida said he was asking for collaboration at a time when all the pertinent divisions have new leaders. Tony Vinciquerra became chief executive of Sony Pictures in June 2017. John Kodera took over gaming slightly more than a year ago. In recent months, Rob Stringer and Jon Platt were named as Sony’s top executives in music recording and publishing. All report to Mr. Yoshida; he said he had no plans to consolidate the entertainment businesses under a single executive.

“Entertainment is in Sony’s DNA,” Mr. Yoshida said. “We’ve now been in the music business for 50 years, the motion picture business for 30 years and the game business for over 25 years.” For its last fiscal year, the three units made up 47 percent of Sony’s operating profit, which totaled $6.7 billion, the highest in the conglomerate’s 72-year history.

Positioning Sony as an entertainment company represents a “directional change” and fits with other public comments Mr. Yoshida has made since he took over nine months ago, said Masaru Sugiyama, a Goldman Sachs analyst. “It has felt as if entertainment is more integrated with the rest of Sony within Yoshida-san’s mind,” Mr. Sugiyama said.
Even so, Sony is in no way leaning away from its portfolio of technology and consumer products.

At CES, as the Las Vegas trade show is known, Sony is expected to showcase image sensors for cars, new audio products, ultra-ultra high-definition televisions and robotics. Thomas E. Rothman, Sony’s movie chief, will take the stage after Mr. Yoshida to talk up the company’s turnaround in film, bringing along Phil Lord and Christopher Miller, producers of the studio’s recent “Spider-Man: Into the Spider-Verse.” But Mr. Rothman’s remarks will be peppered with references to how Sony cameras have helped the studio — its tech breakthroughs bolstering its creative endeavors.

Sony’s entertainment empire has its share of challenges, of course.

After buying out partners, Sony has outright control of the world’s largest catalog of music publishing assets. But the recording unit had a soft 2018 in the hit department.

Apple has been poaching Sony television and film executives to work on its coming streaming service. And major Sony-made television shows like “Better Call Saul” and “The Blacklist” are aging. Efforts to find replacements have mostly fizzled, in part because the highest-paying TV networks are ordering more shows from in-house suppliers.

As a whole, however, Sony’s entertainment businesses are stronger than they have been in memory — in particular the film division, which suffered a devastating cyberattack in 2014. Mr. Rothman and Mr. Vinciquerra have turned movies into an unexpected engine by cutting costs and focusing more intently on all-audience “tent pole” fantasies like “Jumanji: Welcome to the Jungle,” which took in $962 million worldwide in 2017. To dropped jaws in Hollywood, “Venom” generated $856 million in ticket sales late last year.

Sony has a parade of big-budget sequels on the way — “Men in Black: International” arrives in June — and the studio is aggressively mining the rights it holds to Marvel characters in the Spider-Man comics family. To that end, movies based on Morbius, Black Cat and Silver Sable are in the works; the Sinister Six could be Sony’s answer to “The Avengers.” Sony is also considering making animated television shows based on characters introduced in “Spider-Man: Into the Spider-Verse,” which has collected $276 million at the box office.

Now that Fox has been sold, only Disney and Sony have rights to make Marvel-related film and television content.

And Marvel characters are popular with the PlayStation Network crowd. One reason that Mr. Yoshida is pushing for more collaboration: Marvel’s Spider-Man, a $60 game, set a record for Sony in September by selling 3.3 million copies in its first three days of release.

Source: https://www.nytimes.com/2019/01/06/business/media/sony-movies-television-ces-playstation.html

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