Howard Schultz Delivers Pitch for Doing Good, Leaves Details for Later

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Starbucks CEO Howard Schultz, ever the master of marketing, says he's now trying to sell American capitalists on the idea of exercising their conscience. Judging by Wednesday's annual meeting, he's got a winning pitch.

Schultz was nearly inspirational as he talked about the challenges facing Americans in the Great Recession, and the "responsibility" of CEOs like himself to do something about it. "We cannot be a bystander," he declared.

He brought on stage a Harlem preacher, the Rev. Calvin Butts, who runs a non-profit that builds housing and schools. After hugging Schultz, Butts delivered the kind of oratory--addressing his audience as "beloved" and talking about a "nation where the lion and lamb can lie down together"-not usually heard at an annual meeting.

"We didn't do it for the marketing," Schultz said of his new do-gooding campaign, deflecting the obvious question. He'd be more convincing if he didn't simultaneously talk up himself and his lieutenants as "bold and courageous." His view of himself is no doubt enhanced by the recent lionization he received from the likes of New York Times columnist Joe Nocera and former U.S. Secretary of Labor Robert Reich.

In the end, though, it doesn't really matter whether he's doing it for the marketing or not. Reich is right when he says Schultz's campaign is "something all of us should get behind." Hugely successful companies do have a responsibility to help the country get back on its feet.

The question is, though: How? Schultz named a few things his company is doing. It started a fund-raising campaign (complete with the requisite bracelets for donors) to lend money to small businesses. Starbucks contributed $5 million to seed the program.

Schultz also says the company is giving the profits from two stores, in Los Angeles and Harlem, "back to the community." (One of the non-profits Starbucks is working with is run by Butts, which accounts for his presence Wednesday.)

Yet those things don't quite add up to a grand plan. Lots of companies do good works, after all. Boeing, for instance, spent $57 million last year on charitable donations. One gets the feeling that Schultz hasn't fully thought through where he's going with this that sets it apart.

Maybe that's why he didn't realize all the implications of his announcement that Starbucks would be building a new plant in Augusta, Georgia. He portrayed the decision as another example of the company's dedication to rebuilding the U.S. "The economics of facilities would be better if we built the plant outside of North America," he said.

But, while Georgia isn't China, it isn't Seattle either. Like other states in its region, Georgia offers low wages and a "right to work" law that discourages unions. That's why American manufacturing has been decamping to the southeast (see Boeing and South Carolina), which is one of those problems Schultz might want to do something about.

 
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