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Why Your 2012 Tax Bill May Jump By $8,000Starbucks Corp.'s (NASDAQ: SBUX) reputation as one of the good guys of corporate America may be in jeopardy. The National Labor Relations Board has accused the coffee company of illegal anti-union activity at a store in Michigan, the second such charge it has received in the past month. The company is also on trial in New York on charges of similar union-busting efforts involving the International Workers of the World.
Business Week takes a look at the labor woes circling around Starbucks, and even makes a comparison to Wal-Mart (NYSE: WMT), America's bad boy of labor relations.
And that may be the most damaging thing to come out of this. Starbucks' wild popularity is as much a function of its atmosphere and reputation as it is a function of the quality of its products. Will people want to patronize a store when the newspapers sold there are reporting on labor violations?
Wal-Mart's sales may be suffering from its reputation but, based on the demographic Starbucks appeals to, I would expect that this publicity could be far more damaging.
Starbucks shareholders will want to monitor these stories closely. While the legal costs to the company may not be material, the intangible damage could be very material.
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Reader Comments (Page 1 of 1)
9-23-2007 @ 1:30PM
Cindy Smith said...
Being a starbucks shareholder this anti union story and the potential "kids" menu concern me. Being a dental professional, more sugar and fat for kids is the last think they need. I enjoy the present atmosphere there. I have found a healthier long term energy juice drink with two-four ounces per day of MonaVie with the wild acai berry pulp from the Amazon. There are 25,000 known phytonutrients, anthocyanins and antioxidants which you need to maintain a healthy lifestyle. For more information go to http://www.mymonavie.com/researchhealth or http://www.TheGreatProduct.com/DrinkTheAmazonCruiseToHealth
9-24-2007 @ 1:49AM
Carol said...
screw unions. You make your own security. I gew up in Pittsburgh and saw unions bring down too many companies. There was a need for unions when we didnt' have other avenues to campaign for work conditions. this is not the case. there is no need for unions today. Theyre a dying breed and can't die quick enough. And why Starbucks-- this is a company that treats employees -- part time employees no less -- right. Quit the right to entitlement crap. Make your own security.
9-24-2007 @ 1:48AM
Eric T said...
Unions are "supposed" to focus on fighting to improve upon the working conditions of its members - especially where the treatment is substandard. Starbucks is a company that has consistently treated its employees far better than the majority of service-industry employers. In many cases, in fact, Starbucks treats its employees even better than many unionized companies. This is a company that has actually raised the bar for other businesses as far as work environment, benefits, compensation, etc. It makes zero sense to try to bring a union to this company. Most likely, doing so will not improve upon anything for the employees; rather they will find work conditions deteriorate, morale decline, and far less flexibility from this organization. What a sad move to make.
9-24-2007 @ 11:55AM
Warren said...
One blog today mentioned that Starbuck's stock is down 20% for the year. However, they don't mention that Starbuck's revenue is up and in line with other successful businesses. Obviously, in my opinion, someone is trying to sabotage the value of this fine company's stock. As for me, I will not sell.