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Hugh Hewitt Book Club

Howard Schultz on “From The Ground Up” And His Presidential Campaign

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Howard Schultz joined me this morning to discuss his new book, From the Ground Up, and his new campaign for the presidency:

Audio:

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Transcript:

HH: I am so pleased to welcome for the first of what I hope are many conversations Howard Schultz, former Starbucks chairman, CEO, author of the brand new book, From The Ground Up, and of course, a presidential candidate. Good morning, Howard Schultz. Welcome to the program. It’s great to talk to you.

HS: Good morning. I’m glad to be on the show. And I’ve been a long admirer of you and what you’ve had to say.

HH: Well, I have, I’ve got a place for you on my show because of your work with veterans. And I’m going to cut to the quick here. When you and, I love her name, Virginia, whatever her last name is, the funny penny name, decided to have 10,000 veterans as a metric, and included military spouses in it, you won me over. Do you, did any other companies follow Starbucks in that modeling?

HS: I think there were a few. I think Jamie Diamond at J.P. Morgan was one. By the way, we’re over 20,000 now, veterans and spouses, that we’ve hired. My family foundation and I now have built 18 transitional training centers on bases. Starbucks has built 50 stores that are adjacent and close to military installations. And just last week, only because you brought it up, I had a town hall of veterans and families in San Antonio, and I toured the Intrepid Hospital. And I must say, I had a sobering experience as I walked through the burn unit and was once again reminded of the valor and bravery and sacrifice of veterans. And I, you know, one thing I’d say is that the role and responsibility of the commander-in-chief is not only the very difficult decision to send extraordinary men and women who are wearing the cloth of the nation into harm’s way, but to take care of them when they come home. And when I look at the VA, and I know there’s good people working at the VA, but for a national budget of $200 billion dollars, when I hear the stories of post-9/11 veterans share with me what’s happened to them when they’ve come home, if I should run for president and be fortunate enough to be elected, I can tell you one thing. That VA would be reporting directly to me, and I would be personally accountable to once and for all turn that around and exceed the expectations of the extraordinary men and women who have served.

HH: They deserve nothing less than that. It’s a great promise to make, and it’s one to campaign on. I also want to talk about, you got to my heart with your work in East Liverpool. And it’s not your work. It’s the fact that American Mug And Stein had endured, and Starbucks came to them with the kind of order, and then the kind of financial support to take, I’m from Northeastern Ohio, so I know East Liverpool. That’s kind of a leap of faith, and it’s the sort of entrepreneurial evolution that we need from the top down all along the supply chain.

HS: Well, you know, it concerns me that for some reason right now, the far left Democratic Party is starting to vilify businesses and capitalism. And when you look at what many, many companies have done in creating innovation, creating jobs, East Liverpool, I think, is a perfect example of a company, and not only Starbucks, other companies doing things to try and restore manufacturing in this country, trying to restore communities. And when I went to East Liverpool and saw the despair in that community as a result of manufacturing leaving, I knew we had to do something to try and be of help. And you know, that’s a great story. I’m really proud of it. And…

HH: It’s well told in From The Ground Up. Let me go to a few interesting details. My favorite line in the book, and I read it on the flight back from Hong Kong, so it’s very fresh.

HS: Thank you.

HH: My very favorite line is on Page 58 when your father-in-law says to you, son, you need to get a job.

HS: Oh, God, that was, well, that story has, what happened was my wife, Sheri, was 8 months pregnant with our first child. She was still working and earning a salary. I was trying to start Starbucks. I had no salary, and he took me for a walk and said respectfully, I think you need to get a job. You’ve got a hobby, and you’re not taking any money in, and I literally started to cry.

HH: Yeah.

HS: I was so embarrassed. I came home that night and when I told Sheri what happened later that night, and by the way, my wife is from Lima, Ohio.

HH: Oh, you bet. I noticed that. You had the good sense to marry a Buckeye.

HS: Yes, exactly. We’ve been married 36 years, and she said to me that night there’s no way we’re going to give up on this dream. If it wasn’t for her, there’d be no Starbucks. And you’d be talking to somebody else this morning.

HH: Well, it’s an incredible story to succeed, leave in 2000, come back in 2008. We’ll get into that. But you’re in breaking news this morning, Howard Schultz. The Washington Post got some oppo dumped on you. They said you didn’t grow up in that poor of a place. Hey, let me tell you, I grew up in Warren, Ohio. I’m a couple of years younger than you. I wouldn’t have changed places with you. It sounds like a housing project. It sounds like your dad, in fact, this might shock you a little bit, Howard Schultz. Your family dynamic sounds exactly like Richard Nixon’s. His father was a serial, I don’t want to call him a loser, but a serial non-performer. Mr. Horizontal, your mom called your dad on the couch. Your mother is a saint, but she suffered from depression and cycled down. It sounds like a very tough childhood, I mean, a very tough childhood. And yet, in the Washington Post this morning, they’re saying that it was the country club of projects. How do you respond to this?

HS: Well, I’ve got to tell you, when I saw the headline of country club of projects, I knew they weren’t talking about the place that I grew up in. But you know, I told a very personal story of the dysfunction and the pressure that I was under living in that apartment, and what I experienced as a young boy. And in the book, I reveal stories I’ve never told before. But my parents could not make the $96 dollars a month rent. And so you know, I look at that story, and it’s consistent, unfortunately, with other stories that have been written about me in the last few months since I decided to consider running for president as a centrist independent outside of the two party system. Any time that you are going to try and break the status quo and go against the grain, the forces of nature are against you. But I’m here standing tall because of my love of the country, my profound concern about where we are. This president, I believe, has brought a level of incitement to America and dishonored the Oval Office. And I think he needs to go. At the same time, the two parties are involved in revenge politics every day. And the Democrats are shifting so far to the left that if something, unless there’s some sense brought into the party, we’re going to end up with socialism in America if a Democrat should win. I don’t want to see that happen.

HH: So Howard Schultz, why do you think President Trump won in 2016? Everyone was surprised. I was on NBC News set all night long. Everybody left, right, center, every political pro, every prognosticator, every pollster, we were all wrong, wrong, wrong. We did not see it coming. Why do you think he won?

HS: Well, I think there’s a number of reasons. First off, we should mention that approximately 100 million Americans did not vote in 2016. Probably apathy and also they looked at the two choices, and they didn’t see anything affirmative. President Trump is a symptom and a manifestation not only of the last two, three years, but a long history right now of false promises, of people in American who have lost faith in the American dream and the promise of the country. And President Trump did a masterful job of igniting them. Now he ignited them with fear and hate and incitement and things that I think are inconsistent with the values of the country. And those are the things that I want to see brought back. But I don’t think the country can take six years of President Trump. I don’t think our standing in the world, the lack of values. And this president, in my view, is not the kind of leader in character that should set the tone for the United States of America at home and abroad.

HH: It’s going to take a long conversation, Howard Schultz, to get people to listen to you. And I want to make an offer to you. You are welcome every week at this time on this show, because I believe American media is tilted towards the extremes. And I am a consultant for MSNBC, so I’m glad that there’s an MSNBC primary. But the cable channels and their impact on American politics is nothing short of poisonous and disastrous, and therefore talk radio is where I think you ought to live. And you’re welcome here every Thursday if you want to come and talk to Americans. Because of your commitment to veterans, I’ll make that commitment to you. But do you agree with me it’s almost impossible to find someone to talk to you about policy? We’re about to talk about China, but I’ve seen you again and again out there, and no one talks to you about why you’re running. They talk to you about your effect on running.

HS: I think that’s true. I think the level of toxicity has risen, unfortunately, to a level of such extreme. You know, what I’m trying to talk about is common sense solutions. We have $22 trillion dollars of national debt. We have an immigration system that’s not working. We have a health care crisis. K-12 in this country is not what it should be. And so I’m trying to bring to the public conversation and national discourse this great need we have of bipartisan solutions and common sense solutions. And really, the elephant in the room is leadership. I have a long history at Starbucks of doing things that have never been done before – free college tuition for every employee, ownership for every employee.

HH: Medical coverage for everyone at 20 hours or more. I actually spent a lot of time making notes on that part, because it seems to me maybe a legislative fix there, because you know, your shareholders were on your back about that. But it does make great business sense to offer health care to 20 hour plus.

HS: Yeah, we did that over 20 years before the Affordable Care Act. None of this was done in advance of me thinking of running for president. It was done because of my deep sense of humanity and also understanding that I came from the projects. I came from a family that did not have health insurance. In so many ways, I was trying to build the kind of company my father never got a chance to work for. And these are the kind of programs – entrepreneurship, imagination, that I think need to be restored. And also, I think that businesses in America have a much larger role to play, because the government’s not going to be able to solve all our problems.

HH: Let me also talk to you a little bit about your life going from the projects in Brooklyn to Northern Michigan. I think you went there expecting to play your way onto a football scholarship. It didn’t arrive, so you worked your way through college. Then you went to Xerox, which is the great training ground of America’s sales force, then Hammarplast, then to Starbucks, then you started your own company. These are skill sets, and I look at Beto O’Rourke. He seems like a fine, young man. Don’t get me wrong. But he’s running as a two-term congressman with no life experience. I liked Mitt Romney. I voted for Donald Trump. One of the reasons you appeal to me is that you’ve actually done things that is more than talking on a television set.

HS: Well, I think if you look at all of the candidates that are running for president today on the Democratic side, I don’t think, with maybe the exception of Hickenlooper, I don’t think anyone has ever made a payroll. I don’t think anyone has had employees. I don’t think anyone’s really done anything other than make promises about what they would do. I have built a global enterprise in 77 countries, including 4,000 stores in China, and stores, and 30,000 stores all over the world, did it profitably, and gave all of these benefits to our people. And Fortune Magazine just rated Starbucks the fifth most admired company in the world.

HH: And that’s after the Philadelphia incident. That’s amazing. Let me talk to you a little bit about gettable Republicans, because there are two issues that keep Republicans like me away from Democrats. One is national security, and you do have experience in China, which I think is really tantamount to having experience with our global competitor, and judges. Yesterday, you said you would not nominate anyone who couldn’t get two-thirds. That’s actually, it’s the beginning of a good idea, but I’d talk you out of it. Maybe you want 10% of the other party who has to support it, but to give that many people a veto over a Supreme Court nominee…but do you get the conservative worry about judges, Howard Schultz?

HS: I do. I mean, I understand more than any other time in my life an understanding that I want to listen to the ideas and the thoughts of both sides of the aisle. I think that this is a time in America where Republicans and Democrats, they do have good ideas, just not talking to one another. I want to be the kind of person that will listen objectively to both sides and see if we can find common ground. What I said yesterday about, that the judicial system in terms of the Supreme Court, I think for that court to be so politicized, I think is emblematic more than any other time of what is wrong in terms of our politics. And I think demonstrating a willingness to create bipartisanship on every level is the beginning of creating a level of trust and confidence and trying to bring people together. And I think the American people are so exhausted, and if I might say, disgusted by what they are witnessing every day in Washington, and we have a moral obligation to provide the American people with true leadership and truthfulness.

HH: Yeah, we’re playing nursery school games with each other. I mean, I have not seen a lick of evidence of collusion. I know you don’t like the President, but for two and a half years, we’ve been stuck on this. Meantime, China is eating our lunch. And let’s turn to China. Well, first, have you seen any evidence of collusion between the President and the Russians, Howard Schultz?

HS: No, but I’m not engaged in any of that, obviously. But no, I have not.

HH: All right. So let’s go to China, which is actually, Hong Kong was so dizzying an experience for me. Then I was reading about your travels through China. People told you not to go into China. It’s a tea country, not a coffee country. And today in the Wall Street Journal, Starbucks fights hot start up in China. So it’s a continually competitive country. How do you view them on the world stage, because they moved to a new system with President Xi from the president that you knew and from the time that you went in there.

HS: This is a very important question. And I want to be very thoughtful in my answer. I don’t view China as an enemy of America. What I view is China as a fierce competitor whose goal right now is to displace us as the number one economic power in the world. And if we continue to do the things that we are doing under President Trump, which is leaving TPP, and engaging in a trade and tariff war that I believe is not strategically in our interest, we’re going to find ourselves in deep trouble. Now the difference is China takes a 20, 30, sometimes 50 year view on long-term planning. They are building something called One Belt, One road. If you think about it, think about it as a, in a metaphor as a super, super infrastructure that is going to tie the entire Asia Pacific and African countries into an opportunity in which China is going to create significant opportunities on trade. We also need China as a partner to help us navigate through the problems in North Korea. I think what happened in the last month with President Trump meeting with Kim Jung Un was a sham, a charade. I don’t believe this guy is ever going to give up his weapons. But if we continue on this path and don’t invest in our future, we’re going to find ourselves in deep trouble. And we will not maintain our economic power. This goes to the $22 trillion dollar national debt. And for all the Republicans who are listening, let me just say two things. One, for eight years under Obama, Republicans banged on Obama – McConnell, Boehner, Ryan, about the national debt and the deficit. Now two years into a Republican presidency, we don’t hear a word from any Republican. We’ve added a trillion dollars of debt each year. And this is a threat to our national security as well as our inability to invest in the future o the next generation.

HH: Now Howard Schultz, you’ve got an advantage over all of the other Democrats in that Bob Gates was on your board. I don’t know if he’s still on your board, but he’s obviously one of the most admired men in the United States and an expert on national defense. Do you consider yourself competent to run the American military?

HS: Yes, I do. I probably have spent more time in the last decade certainly than anyone running for president with the military. I’ve given, I’ve been to Okinawa. I’ve been to Kuwait. I’ve, with Marines, with the Army. I’ve been to the national training center in Mojave Desert. I have become great friends with Admiral McRaven, General McChrystal. And I have a four star general, General Pete Chiarelli, who is heading up the initiative of me considering running for president. But the deep respect I have for the military, and it goes beyond what I can even describe in words.

HH: Well, you just mentioned one of my very favorite guests. He’s spent a lot of time on the show, General Stanley McChrystal. If you persuade Stanley McChrystal to be your running mate, I think you’re going to have to be taken seriously by everyone. Have you given any consideration to who is going to be your running mate? And will you announce it before the debates in the fall and before you try to get qualified in all the ballots?

HS: Well, one, if we decide to proceed, we will be on all 50 state ballots. In over 30 states, I have to name a vice president. So we are starting to think about that. It’s too early to talk about that publicly, but I clearly understand the seriousness of that decision. The kind of person that I would select, but this is all about leadership. It’s all about…

HH: Have you talked about running with McRaven and McChrystal, who are, you know, just great, great Americans?

HS: What’s the question? I’m sorry.

HH: Have you discussed the whole idea of a third party candidacy with those men?

HS: No, no, not directly. But I know them well. I have my respect for them. It’s above reproach.

HH: Okay, I want to conclude by talking, the most memorable character, well, your mom and your dad are pretty memorable characters, and you’re a pretty memorable character. But I must say my esteem for Bill Gates, Sr. went through the roof when you told the story about him taking on the guy who was going to try and steal Starbucks from you. And I mean, he just didn’t have to do that. That is the intervention of a third party with which you have no association. To what do you attribute that? And please tell the story.

HS: The story is incredible. I was about to lose the opportunity of my dream, and that was to acquire Starbucks coffee when it had six stores, and a titan in Seattle was about to steal it from me. A young lawyer said to me you must meet the head of our firm. I had never heard the name before. His name was Bill Gates, Sr. I went to his office in the morning. I told him the story. And two hours later, he said let’s take a walk. And we literally walked across the street to this man’s office. So I said it was a titan in Seattle. We walk in, Bill Gates, Sr. stands over him, and he said you should be ashamed of yourself. There’s no way you’re going to steal this kid’s dream. We’re going to walk out of here. You’re going to stand down. And I walked out just wondering exactly what just happened. And Bill Gates, Sr. said to me, Howard, I’m going to help you acquire the company. The story, though, is even beyond that. 30-plus years, Bill Gates, Sr. did not tell a soul, not even Bill Gates himself, what he had done for me. He never sent me a bill. It was a lesson in having my back. He was an angel, and such humility. And I maintain my deep love and respect for Bill Gates, Sr. all these years. And I had an opportunity to tell that story at the Microsoft CEO summit about a year and a half ago, and talked to Bill Gates about it. And without Bill Gates, Sr. and my wife, Sheri, there would be no Starbucks.

HH: Well, let me ask you to conclude our first conversation, Howard Schultz, suffering seems to me to do one of two things to people. It either makes them hard, impenetrable and indifferent to other people’s suffering, or it creates in them empathy and a desire to pay it forward. In your case, it’s clearly the latter. But suffering is still something that leaves its scars. And you really laid it out here in From The Ground Up. How’s the reaction been to that? I mean you get the oppo research dump in the Post this morning. It must be disappointing when people just don’t take seriously what is a heartfelt tale to be told.

HS: Well, the good news is that I’ve been on the road now for five weeks, and in every meeting, in every speech, and every crowd I’ve been in, the response has been overwhelmingly positive. The book has been on the New York Times bestseller list since it came out. I expected this kind of backlash, because that’s the world we live in. But I’m resolute in my conviction about what I’m trying to do. And my conviction is very simple. I want to make a positive difference in the lives of Americans, especially those people who are being left behind and feel as if the promise of America is not available to them.

HH: When is your decision date on going forward?

HS: Probably late spring, early summer. And I’d love an opportunity to continue to talk to you whenever you would invite me on. I really enjoyed the opportunity.

HH: Well, thank you for joining me. Again, that’s an offer I don’t make lightly, but you come any Thursday you want, and we’ll talk policy. We won’t talk, we won’t talk garbage. We’ll talk policy. Howard Schultz, thanks for coming in today. And the book, From The Ground Up, is a terrific read. Congratulations.

HS: Thank you so much, sir.

End of interview.

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