News of Starbucks' (NASDAQ:SBUX) brand-new corporate jet certainly isn't a high point for the company's public image.
Last week, news broke that Starbucks has gotten the new jet in mid-December, costing the company $45 million. The Seattle Times also reported that CEO Howard Schultz had apparently taken his family to Hawaii on the plane during the holidays. (The company declined to specify who had taken the jet during that period and said it was a trip that combined personal and business use.)
Corporate jets are a perfect symbol of the corporate excess that is quickly losing favor in these days of dwindling profits and government bailouts. There was quite an uproar when the CEOs of General Motors (NYSE:GM), Ford (NYSE:F), and Chrysler took private jets to Washington to appeal for an automaker bailout. (Some of us would have rather seen them hitchhike.) Meanwhile, the financial companies that have received bailout money apparently aren't forcing their employees to fly coach either. AIG (NYSE:AIG), for example, has a fleet of seven planes; although a company spokesman said they are being used "sparingly" now, he wouldn't go so far as to say they're not being used at all.
The Starbucks story isn't quite as awful as it may sound (and it certainly isn't looking for a bailout), but that probably depends on how forgiving you want to be. A company spokesperson was quoted by the Seattle Times as saying that the new plane was ordered three years ago, and cancelling it would have been too expensive. Meanwhile, Starbucks does require executives to reimburse the company for any personal use of the jet.
Still, a brand-new, $45 million jet looks pretty bad when Starbucks annual per-share profit dropped 51% in the last year. It also looks downright hideous when you consider the fact that Starbucks has been closing stores and cutting workers.
In having the jet, Starbucks may not be doing anything any differently than a multitude of companies did during the go-go times. Still, given our troubled economy, and how much decadence and waste there has been, I have a feeling such symbols of excess are quickly becoming a thing of the past. There's going to be plenty of public backlash, and I don't blame anybody for thinking such perks are wasteful, if not insulting, to shareholders.
At the very least, Starbucks' new jet seems to be an expensive, anachronistic symbol of a time when Starbucks was certainly flying a heck of a lot higher than it is today. And that is sad on several different levels.
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