We are live in Seattle with the Interview of the day of the morning Howard Schultz is here announcing Yesterday that he's going to step down From the company as the executive chair After nearly 40 years of course growing This company from just 11 stores and Here in Seattle to now 28 thousand in Over seventy seven different countries Talked about the future potentially some Philanthropy and of course a lot of Speculation but a comment you made about Public service which we're going to talk About as well thank you for being here First of all thank you Andrew oh the Last time we were together here Kevin Johnson was sitting next to you yes you Were handing over the reins of the Company as the CEO but you said I'm All-in I'm all-in for Starbucks So here we are a year later why now well Whether I leave Starbucks or not I will Always be all-in at Starbucks but this Has been planned for over a year and Like confidence in faith and Kevin and The leadership team the long-term Opportunity for Starbucks the company's In a great position and it's always been A team sport it's the right time for me To leave and I have other opportunities And other things that I want to do I Want to talk about those other Opportunities in a second but just in Terms of the timeline yes you talked to
The board about a year ago but had Planned for what I understand to step Down in May well the truth of the matter Is I thought this was going to happen in May and then we had the unfortunate Reprehensible incident in Philadelphia And we thought given what we wanted to Do in Philadelphia and the obligation we Had we were going to push it back a Month or two so here we are so you Talked about the opportunity ahead yes So why are you stepping down from Starbucks now well I think it's the Right time for me to step down it's been Planned as I said I know there's been Speculations let's just deal with that Right away about whether or not I would Run for public office and what I really Believe is there's a lot of things I can Do as a private citizen other than run For the presidency of the United States And let's just see what happens I've got Lots of things I'm thinking about I'm Writing a book it's only been 24 hours But we've talked many times about how Concerned I am about the country our Standing in the world and I think There's many things I can do as a Private citizen to advance the cause of The promise of the country but a lot of People look at the timing they say 20 22 Years away if you're gonna do it you Gotta especially wanting a publicly Traded company you have to get away from
The company what do you plan to do in Terms of thinking about running or Public service if you will over the next 12 months well I've been engaged in a Number of I think very important issues That are facing the country and trying To advance the cause of the national Conversation about such things as Immigration as an example let's just Take that I don't think we've got a very Humane policy I think we need border Security but there's a lot of non truth As an example two-thirds of the Undocumented people that we're talking About are people that have not crossed a Border these are people that are here Because your visa has expired that's one Thing we talked about trade we we're in A trade battle here that I do not Understand our problem is not China our Problem is here in the US we have a Twenty one trillion dollar debt we're Paying 400 billion dollars of interest These are things that are unsustainable We have a budget process that is broken We got a situation with veterans in Which we talk about taking care of Veterans but then the VA doesn't work And we have a tax policy as you know That we've talked about a year ago and I Was with you which I was you know very Disappointed at the corporate America Did not need a tax cut to 21 percent When we could have done so much more for
The people of the country 45 percent of The people in America don't have 400 Dollars in a bank for a crisis so all of These things I think are concerns of Mine and as you know I am living proof In many ways not like you're not unlike Your guest host of the American dream so I'm very sensitive to these issues of Ensuring the fact that we do the kind of Things that restore the promise of the Country and our standing around the World okay so that language by the way Is of somebody who know know who could Be running let me ask you this what Would what would be the tipping point For you what do you what do you have to Figure out about whether you want to Pursue what you call public service well That's kind of a leading question that Soon I'm not thinking specifically right now What I'm thinking about is what I can do To advance the cause of the country as a Private citizen I don't know what that's Gonna mean and there was lots of time There's lots of speculation I really I Honestly don't know we talked about this Yesterday and let me ask you a different Question that relates to that though People talk about the presidency 2020 You used the phrase public service yes And I want to see if there's a Distinction here would you ever run for Governor or senator I
I can't being nailed down today I'm a Specifically what I might or might not Run for I you know I want to think about This through the lens of what it means To be a great American citizen I don't Know what that means at this point but My concern for the country and my Concern for our standing in the world The lack of dignity the lack of respect The victory aaalac behavior coming from This administration I think we can do Much better and I think the political Class as a whole not only this Administration has been reckless Specifically with regard to 21 trillion Dollars in debt and not being as Fiscally conservative as we need to be And we are going to pay for this in Terms of the next generation and it's Unfair I want to get into the policies But but I want to I want to ask you About this this idea of a CEO as President yes this was sort of an Unthinkable issue or idea just a couple Of years ago how much I mean and now you See the stories whether it be Bob Iger Young who said he wanted to consider Doing this Oprah's name gets bandied about Jamie Diamonds name gets bandied about Mark Cuban's name gets bandied about do you Think that president Trump's presidency His election has changed the dynamic With which somebody like you could think
About public service in a way that you Couldn't before well I think it's an Interesting question because there is a Bifurcation and I want to say this Respectfully and so that no one Misunderstands what I'm about to say but There is a bifurcation between when you Say a CEO I I've run a public company For 26 years as a fiduciary the current President ran a private company were And what I understand there is he's Running a private company with I don't Know if there was a board I don't know What responsibilities he had two other Shareholders Bob Iger has run a public Company so when you're talking about a CEO in terms of public office there is a Very big difference between someone who Has run a global enterprise like myself Was traveled to China probably more than Any other CEO in the last ten years who Understands those issues versus someone Who's run a private company with very Little to do Shae responsibilities to Other shareholders and I'm not saying That as good or bad but there's a big Difference and so I think yes president Trump has given license to the fact that Someone who's not a politician could Potentially run for the presidency Whether or not that has anything to do With me will remains to be seen I want To read you this is a professor Douglas Brinkley in the New York Times today
He's a presidential historian at Rice University says the history of business Leaders in the White House has not been Good you basically have Herbert Hoover And Donald Trump what do you think of That Just the idea also of having political Experience yeah well I I think the rules Of engagement for running the United States of America in a global society is Very different than comparing it to Hoover or the current president and when I specifically mean by that is we have Serious problems that we have to address And I think the issues that we are Facing in terms of the dysfunction and The polarization that exists within the Government is really based on a systemic Problem of ideology and I think we need A very different view of how the Government and how the country should be Run and it's been a long time I think a Long time since anyone within government Has really walked in the shoes of the American people and done the things that Would demonstrate the humanity of what Is the values of the country and the Guiding principles of the promise of America Let me ask you a different question one Of the things you said is you're gonna Be writing a book about social Responsibility the new role of CEO Leadership
Yeah the role and responsibility of a Public company and an ever-changing Society well specifically about that you You really were the early champion of This idea of a moral leader and stepping Out On public and social issues it's Something that's become a little bit More fashionable in the last year and a Half for some CEOs but by the way not Without criticism and not without Controversy in that it can put companies In a very difficult situation given the Politics and division in this country And I just want to comment to you and Becky and I got to spend some time with Warren buffett over the over the weekend About a month ago when he did his his Annual meeting and he's made the comment Multiple times that business shouldn't Be in the business of politics Well III agree with Warren and I don't Think Starbucks has been in the business Of politics I think that's been Misconstrued we have been in the Business of creating a very different Type of business model that balances our Fiduciary responsibility to build Shoulder value which is up 21,000 Percent since we went in public in 92 so The price of admission has been met Coupled with a social impact agenda that Speaks to equity in the form of stock Options for our people health insurance
20 years before the Affordable Care Act Free college tuition and an engagement With a hundred million customers a week About what we feel is our responsibility To raise a national conversation about Things that we think are important we Think that is a creative to the equity Of the brand and shareholder value Others have criticized at us for that But I think it speaks to the fact again That the rules of engagement for a Public company and a public CEO are Different today in large part because The government has been so dysfunctional And so polarized and we haven't had a Balanced budget since President Clinton I mean think about that and we're Talking about immigration when we just Try just for a moment Ronald Reagan in 1986 passed an immigration bill as a Republican president so why can't we Come together move the ideology out and Do what's in the interests of American People 70% of the American people want a Good immigration policy 70% of American People want the kind of policy Legislation that takes the the the guns Of war out of the American people's Neighborhoods I mean it's Don't make sense to me but the reason I'm pressing on this is when you think About the leader of a company we have so Many CEOs who are watching right now Thinking about can they step out should
They step out on a particular issue what It does and and the Jeopardy in certain Instances it can put a company in well But III think youyou you just can't jump Into the deep end of the pool overnight You you you're the culture and values of The company have to be skewed towards The right the fact that you have a License to talk about these things Because they are embedded in your Company and as as we talked yesterday The litmus test for me has always been Just one thing does this decision this Policy gonna make our customers and our People proud and if the answer is yes Then we're on the right side of the Debate if it's not and we shouldn't do It but make no mistake we're not in this To be political we're in this to advance To cause a star but let me ask you one Other question it relates to policy Relates to tax policy talked about it You're you've been critical of president Trump's approach the Trump Administration's approach to tax policy And the corporate tax rate goes down and Yet earlier this year you gave the Administration credit for the fact that You were raising wages of employees at Starbucks I'm not sure I gave the Administration credit for that what I Said was and we were we were together in Your conference early on about this what I said very specifically is that I
Really did not believe that the majority Of companies in America we're gonna take A corporate tax cut from from 35 to 21% And do all the things that the Administration was spewing about in Terms of advancing the economy and Creating jobs and doing all these great Things and I said most companies were Gonna give it back to the shareholders And what we decided to do is that almost 50 percent of the benefit that we had we Gave to our people I didn't give credit To the administration for that I gave Credit to the fact that the leadership Of Starbucks the gate did the right Thing and that is success is best when It's shared and also this is very Important that when you're building a Great enduring company not every Business decision should be and is an Economic one and this is very important With regard to the street who has a very Short-term mentality and As a CEO who has run a public company For 26 years trying to communicate to The street we're building a great Enduring company and there will be times It will be cyclical changes a downturn In comps which we've had recently but Over the long term we're gonna be fine How much credit though do you give to The Trump administration for the economy Today you look at the unemployment rate You look at where the market is
Well first off I I think it's very wrong To use the stock market as a proxy for The US economy interest rates are going Up and if I had to make a bet just and I'm I'm not an economist I don't I don't Believe that the stock market is going To continue to grow at the level it has Between now and 2020 you're going to see A a sea change so listen the economy is Is is strong I give President Obama Credit for that I give President Trump Some credit for that but you also have Systemic problems in the country the Likes of which we have not had in a long Time you got a major mental health Crisis you got a major homeless crisis You got an opiate crisis you have racial Divide in the country So and you also have 45 percent of American households that don't have 400 Dollars and you have 67 percent of the Workforce in America among men that are Not in it so there's lots of things that We have to do as a country to address The social issues and are going back to China and trade just one more thing this Deist is this rhetoric about this to do All these trade wars that are now being Engaged with China with Mexico with cut With with Canada and and this might Sound like a trite line but it's Important we should not be in the Business of building walls we should be In the business of building bridges with
Our neighbors with our allies and our Standing in our war in the world today It's not what it should be and we have To advance America's values around Around the world and we have to deal With the systemic domestic issues in the Country and that is about servant Leadership we have not had servant Leadership in government a long time Where we are working in service of the American people I have a handful of Questions about Starbucks but hang on Because I know we have some questions Back in New York guys all right great Thanks Andrew and and Howard I One of the highlights of career I don't Know if you remember that award I gave You at at CNBC do you remember you Somehow I ended up learning what a 2% Veinte no-foam iced latte with cinnamon Instead of just ordering a cup of coffee I found myself saying that and ordering A Miles Davis CD and buying a scone and My bill would come to $22 and was like I Gave you kudos for that because you Changed the world basically I don't know How you did it but I do and I still Order 2% veinte no foam latte with Cinnamon which which is amazing but my Question is when you left last time Something happened with the culture of Starbucks I don't remember exactly what It was the baristas changed something Changed in the stock suffered and then
When you came back it was it's hard to Believe that that the person at the top Can really change an entire company but I think it happened I'm just wondering Are you sure that's not going to happen Again especially when you're trying to Navigate with this open policy of not Having to buy anything that seems like a Tough thing tool it to leave on your Predecessors or I'm sorry on your Successors plate at a time when I think That's going to have to be managed Because it's going to be you know each Each store is going to have to figure Out a way to manage through that that's A tough time to leave well I think Kevin Johnson and the team have been at my Side now for a number of years I feel Very confident in the future leadership Of the company as I said to Andrew there Will always be some cyclical issues but 2018 is not 2008 for Starbucks we're Building a great enduring company we're Opening a store in China every 15 hours We're up to 3,500 stores we have our new Roast reopening in Italy in New York in September and October the future of the Company is very bright will there be Cyclical changes there will be at times But I'm very confident in the long term Progress and value creation for servants How by the way do you think investors Should think about this company by the Way on the announcement of your news
Stock went down about 1% but there's Been questions about almost a hybrid Of this company now there's there's the Us piece where same store sales are Basically growing at 2% at the moment Sure And then there's China which is Continuing to grow wildly yeah Is this a value play is this a growth Play I mean for so many years this was a Growth story what is it now I would bang The table and say we are a growth Company that is experiencing a moment in Time where US comps have slowed but US Comps have slowed in the US before and We will without question through Innovation and disruption really I think Do a number of things that will be Catalytic over time to address the comp Issues but if you just isolate China and The growth of our international business In many ways the value of Starbucks is Undervalued so I'm very bullish long Term on the company and our us comps Overtime will improve I'm quite Confident about that Ken back in New York's got a question how are you Congratulations we've been trying to get Together for something can let's make Sure we do it now Howard well you say You have built a great company you are a Great American story so it's an honor to Be with you Well my honor is to be with you and I'm
Thrilled by the way that you're looking Beyond your current work there's a lot Of work to be done there's two things That strike me one you haven't mentioned In all the things that need to be worked On in America public education that's a National disgrace and it's a it's got Thorny political consequences to it no But we have to push aside if we're going To fix the problem without regard to What those problems are the second thing Is government can't do everything for us A good example you mentioned the Veterans Administration if I took Howard Schultz Bernie Marcus Jamie Dimon and And Jim Senegal and said guys here's the VA fix it I will bet you in 18 months You all have us well on the way to do it As a nation what we should be doing for These people that served us so well and So bravely so I'm excited about somebody Like you given the thought of coming Into public service I think it's going To be good for the country out and You'll be great at it I urge you to do it okay we have to Honestly can't thank you government Can't do everything I completely agree With you and I think what we're really Talking about is leadership authentic Leadership I think the country is want Longing for truth longing for an Opportunity in which is respect and Dignity in how we are talking with one
Another we're all in this together and I Got we have to ask ourselves a very Important question today it is what kind Of country do we want to live in and we Can't we can't live in a country in Which we're divided we have to love our Fellow countrymen and we have to create The kind of leadership in which we are Creating value and opportunity for Everyone we can't do that without Reforming and transforming the education System in America could not agree with You more Howard maybe a final questions One last thing I believe the glass is Half-full I think we are in the greatest Nation on earth we have so much to build On we have issues we have problems but The sooner we address them in a positive Way and stop knocking each other and Stop demeaning each other the better We're going to be to get those problems Solved that's a tall order I don't know how you get there but That's what needs to be done in my Opinion I agree with you can I do you Know I said something in our we had a Company-wide meeting yesterday and at The end I said you know I've had the Privilege and the honor of traveling Around the world carrying the Starbucks Flag but I carried the American flag Wherever I go and there's no other Country I'd rather come home to when I'm On all these trips than come home to the
United States of America where a kid From Brooklyn in the projects has built And been part of something that can only Happen in this country you're right a Couple of just political questions Outside of your own potential future When you look at the field if you will People say you know will Joe Biden run a Will others run or is there anybody that You get excited about I think there's a Lot of people who might run for President I have not focused on that I Will say that it concerns me that so Many voices within the Democratic Party Are going so far To the left and I asked myself how are We going to pay for all these things in Terms of things like single-payer or People espousing the fact that what the Government is going to give everyone a Job I don't think that's realistic and I Think we've got to get away from all of These falsehoods and start talking about The truth and not false promises Question and it really comes from Starbucks investors I saw this on Twitter yesterday yeah if you were to Pursue public service do you worry at All that Starbucks will get wrapped up Into it if you remember when when when Romney ran sure Bain got wrapped up in It quick yeah well I think you know it There is an anomaly here this hasn't Happened very often where if someone
Like me did do this the my connection is Association with the company we'd have To deal with that but I we're a long way From that just got another question gel Yeah just try to focus back on on just Just the whole philosophy of how to Maybe redistribution versus growth and I'm not sure that the stock market is Necessarily the barometer you want to Look at either but it's possible this Year we grow above 3% and there's maybe A lot of reasons why why that's gonna Happen maybe it was set up by the Obama Administration but for eight years we Didn't never had a year we barely got to 2% so there's this never-ending argument About whether growth and letting the Private sector have more capital keeping It in in the private sector and letting That grow the pie or whether Redistribution is the way to go I mean If we end up growing it greater than Three percent this year would you repeal The tax Reform Act would you raise taxes On corporations back to where they were If you were president well I don't want To talk in the hypothetical about Whether what I would do if I was President but let me try and say this in My own way I think the greatest threat Domestically to the country is this 21 Trillion dollar debt hanging over the Cloud of America and future generations And the fact that interest rates are
Going up we're going to be paying close To over 400 billion dollars in interest Expense which i think is the Number one or number two issue in terms Of federal expense to the country the Only way we're going to get out of that Is we've got to grow the economy in my View four percent or greater and then we Have to go after entitlements and again This is where political ideology in the Political class is not facing the truth And not facing a reality and this is About leadership this is about getting People together in a room and talking About the fact that the future of the Country is on a collision course with Time because we must address this It's not about redistribution it's about Facing these hard truths and dealing With significant problems so that we can Put the country in a position where it's Not about trade wars and it's not about China it's not about building a wall it Is about getting our house in order Doing everything we can and I've said This before about walking in the shoes In the American people building what's Right how do you get to 4% growth that's Where that's that's where the rub is is How it's how you get an economy to 4% Growth and the best intentions of a of a Compassionate a you can you can I don't Like philosophy the best intentions Sometimes end up with income inequality
Getting worse for eight years because The Fed state stayed at zero and here we All will make it to 40 well take the Liberal piece out of it let's take a Centrist approach about getting ideology Out we can get the 4% growth we can you Go after entitlements and we can do the Right thing if we have the right people In place who are bit we're talking about What it is to be an American as opposed To being a Republican or a Democrat and Getting all of these issues out of the Way so we can fix the problems of the Country final question you spent nearly 40 years as running Starbucks when I saw Yesterday was an emotional day for you Yeah we're now a day after yeah so how You feeling what are you gonna go you Know some people go to Disney World After the Super Bowl and they win what What are you doing the truth is I'm Going back to work today you know I Still have a number of things to do at Starbucks is a lot number of people I Want to see and talk to it was very Emotional today yesterday You know there was a moment where I've Started to tear up because I was Thinking if only my parents could see This it would have been a wonderful Moment for me and my family and and I Hope I hope they can't see it okay Howard Schultz thank you thank you for Spending time with Grandma answering our
Questions and congratulations on a Remarkable career at Starbucks and we Wish you the best from the future thank You thank you appreciate me hey there Thanks for checking out CNBC on YouTube Be sure to subscribe to stay up to date On all of the day's biggest stories you Can also click on any of the videos Around me to watch the latest from CNBC Thanks for watching
