Wednesday, June 19, 2013

Carl's Jr. CEO: ObamaCare Means Kiosks to Replace Workers & No Expansion in California

  • Expects fast-food restaurants to deal with ObamaCare by replacing workers with kiosks.
  • It takes 60 days to open a Carl's Jr. in Texas, 63 in Shanghai, and 125 in Novosibirsk, Russia. In Los Angeles, it's 285.

This is from Allysia Finley writing for the Wall Street Journal:
...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.... 
"The ones who don't sign up are the young guys and gals who feel that they are healthy and if they get sick, they just go to the emergency room," Mr. Puzder says. Under ObamaCare, "people who were worried about getting stuck without insurance can still go to the emergency room for free and no longer have the incentive of catastrophic illness to sign up for insurance. . . . So the incentives to sign up for the plan just disappeared." 
About 40% of Mr. Puzder's employees are part-time and therefore exempt from ObamaCare's coverage mandates. "That percentage of employees will probably go up. Everybody is hiring more part-time employees," he says, though he is quick to add that "we're not firing anyone to hire" part-time workers. "Through attrition, three full-time employees go away and you hire four part-time employees who basically have the same hours." 
Mr. Puzder also expects fast-food restaurants to deal with ObamaCare by replacing workers with kiosks. "You're going to go into a fast-food restaurant and order on an iPad or tablet instead of talking to a person because we don't have to pay benefits for any of those things."... 
These days, California is one of the few states where the company isn't looking to expand. "Like many businesses, we love California and would love to build more restaurants," he says. But "California is not interested in having businesses grow," even though many multinational companies, including CKE, have headquarters there. 
Consider how long it takes for one of his restaurants to get a building permit after signing a lease. It takes 60 days in Texas, 63 in Shanghai, and 125 in Novosibirsk, Russia. In Los Angeles, it's 285. "I can open up a restaurant faster on Karl Marx Prospect in Siberia than on Carl Karcher Boulevard in California," he says. 
Then there are California's cumbersome labor regulations, which appear designed to encourage litigation. The company has spent $20 million in the state over the past eight years on damages and attorney fees related to class-action lawsuits....