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[Nervous Wreck]

CEO of Papa John's says employees' hours will likely be cut due to ObamaCare


The CEO of popular pizza chain Papa John's says his employees may face reduced hours and he expects his business costs to rise because President Obama's re-election most likely insures the president's health care reform law will be implemented in full.

NaplesNews.com reports John Schnatter made the remarks to a small group at Edison State College's Collier County campus the day after the election.

Schnatter, who supported Mitt Romney in the election, said all Americans having health insurance under ObamaCare is a good, but estimates the change will cost Papa John's $5 million to $8 million annually.

Schnatter estimated that these rising costs could adversely affect his workers. Since only full-time employees working 30 hours or more must be covered under the new law, he said he expects franchise owners will be forced to cut employees' hours because they can't afford the costs of health insurance plans.

"That's probably what's going to happen," he said according to NaplesNews.com. "It's common sense. That's what I call lose-lose."

The comments were not Schnatter's first statements on ObamaCare. He made headlines in August for telling shareholders the law may lead to increases in the price of his pizza.

In addition, the Applebee’s family restaurant chain is under public attack, including the threat of boycotts after New York-area franchisee Zane Tankel told Fox Business Network that cost increases related to implementing ObamaCare might result in no expansion or additional hiring. Critics appear to have interpreted Tankel’s comments to mean he will layoff customers as a result of ObamaCare.

Read more: http://www.foxnews.com/us/2012/11/11/ce ... z2Bvd4xEJR

[E_]

Yeah, the Liberals are already spinning this as he is a horrible selfish person. How dare he create all those jobs and do well and build a nice big house. He should live in a shack instead of his nice big home that created god knows how many jobs building and maintaining it.

[JLA]

I read about other companies doing this as well. I'm afriad this is going to be the wave of the future. Full time workers are an endangered group of people.

[JLA]

Recieved this in an Email today

Last night's victory for the President marks the first time since its inception that Obamacare is no longer a what-if; it is the future of health care in America.
It also means a near immediate impact on the economy. With 20 or so new or higher taxes set to be implemented, ranging from a $123 billion surtax on investment income, through the $20 billion medical device tax, all the way down to the $600 million executive compensation limit, Obamacare will be a nearly unbearable tax burden on the economy.
Who will pay? The middle-class workforce, of course.
So with another four years for President Obama to look forward to, and the obvious inevitability of Obamacare that this entails, let's examine the very real jobs that will be lost, and the very real lives that will be affected.
Welch Allyn
Welch Allyn, a company that manufactures medical diagnostic equipment in central New York, announced in September that they would be laying off 275 employees, or roughly 10% of their workforce over the next three years. One of the major reasons discussed for the layoffs was a proactive response to the Medical Device Tax mandated by the new healthcare law.
Dana Holding Corp.
As recently as a week ago, a global auto parts manufacturing company in Ohio known as Dana Holding Corp., warned their employees of potential layoffs, citing "$24 million over the next six years in additional U.S. health care expenses". After laying off several white collar staffers, company insiders have hinted at more to come. The company will have to cover the additional $24 million cost somehow, which will likely equate to numerous cuts in their current workforce of 25,500 worldwide.
Stryker
One of the biggest medical device manufacturers in the world, Stryker will close their facility in Orchard Park, New York, eliminating 96 jobs in December. Worse, they plan on countering the medical device tax in Obamacare by slashing 5% of their global workforce - an estimated 1,170 positions.
Boston Scientific
In October of 2009, Boston Scientific CEO Ray Elliott, warned that proposed taxes in the health care reform bill could "lead to significant job losses" for his company. Nearly two years later, Elliott announced that the company would be cutting anywhere between 1,200 and 1,400 jobs, while simultaneously shifting investments and workers overseas - to China.
Medtronic
In March of 2010, medical device maker Medtronic warned that Obamacare taxes could result in a reduction of precisely 1,000 jobs. That plan became reality when the company cut 500 positions over the summer, with another 500 set for the end of 2013.
Others
A short list of other companies facing future layoffs at the hands of Obamacare:
•Smith & Nephew - 770 layoffs •Abbott Labs - 700 layoffs •Covidien - 595 layoffs •Kinetic Concepts - 427 layoffs •St. Jude Medical - 300 layoffs •Hill Rom - 200 layoffsBeyond the complete elimination of a significant number of American jobs is another looming problem created by the health care law - a shift from full-time to part-time workers.
Sean Hackbarth of Free Enterprise explains:
A JP Morgan economist "points out that 8.3 million people are working in part-time jobs even though they'd prefer full-time work. Unfortunately, because of President Obama’s health care law, the Patient Protection and Affordable Care Act (PPACA), workers in the hotel, restaurant, and retail industries could be pushed into part-time jobs working less than 30 hours per week."
"Under the health care law, if a company has more than 50 “full time equivalent” workers, a combination of full and part-time employees, but doesn’t offer “affordable” coverage that meets the government’s minimum value standard, the company will have to pay a penalty. This penalty is determined by the number of full-time employees minus 30 full-time employees. So to reiterate a very important point: part-time workers are not part of the penalty formula. The health care law creates a perverse incentive to hire part-time versus full-time workers."
Tangible examples of Obamacare causing a reduction in full-time workers:
Darden Restaurants
According to the Orlando Sentinel, Darden Restaurants, a casual dining chain best known for their Red Lobster, Olive Garden and LongHorn Steakhouse restaurants, is "experimenting with limiting the hours of some of its workers to avoid health care requirements under the Affordable Care Act when they take effect in 2014".
JANCOA Janitorial Services
The CEO of JANCOA, Mary Miller, testified to Congress that Obamacare was a "dream killer", adding that one option she had to consider "is reducing the majority of my team members to part-time employment in order to reduce the amount that I will be penalized."
Kroger
The American retailer in Cincinnati, Ohio recently was reported to be planning a significant slashing of their hourly workers. Doug Ross writes:
Operative Faith (a mid-level manager with the company) reveals that Kroger will soon join the ranks of Darden Restaurants and slash the hours of its non-exempt (hourly) workers to avoid millions in Obamacare penalties.
According to the source, Obamacare could result in tens of thousands of Kroger employees being limited to working 28 hours per week.
Summary
This is by no means, meant to be an exhaustive list. But it is meant to provide examples of real companies, real jobs, and real names, soon to be added to the growing list of employment casualties provided by the inevitable implementation of Obamacare.
Last night, America voted for four more years of President Obama and his destructive economic and health care policies. By extension, America last night voted their approval of the aforementioned layoffs and overall work reduction.
Now we must accept the inevitable. Welcome to mourning in America

[Nervous Wreck]

Well, I didn't add up ALL the job loses here. But I will say...this country is in deep chit now!

And this dumb a$$ claims he CREATED how many jobs?

UNBELIEVABLE!

[imaposer]

Schnatter, who supported Mitt Romney in the election, said all Americans having health insurance under ObamaCare is a good, but estimates the change will cost Papa John's $5 million to $8 million annually.

$5-8 million annually? How many pizzas do you think they sell a year? That has to be something less than a dime a pizza in price increase to cover the added cost of actually providing health insurance to the people who work there now without laying anyone off. But instead, he'll make speeches and statements like this where cutting hours and screwing over the employees is the only solution. Or, better yet, he could take a 5% or so a year paycut and cover the costs himself. I'm sure the 40K square foot mansion with a 22 car garage he has is already paid for.
http://www.bing.com/maps/?v=2&cp=qcbsyz ... orm=LMLTCC


No more papa johns for my family.

[JLA]

Do you plan on avoiding all successful businesses or just Papa John's?? Since when did being successful become a crime? Papa is an American dream success story, he started with nothing and built his business into the success it is today. Don't be a hater.

[imaposer]

Do you plan on avoiding all successful businesses or just Papa John's?? Since when did being successful become a crime? Papa is an American dream success story, he started with nothing and built his business into the success it is today. Don't be a hater.

papa johns joins a short list of places I won't support due to their actions. Becoming successful is great. I'm all for it. But, at some point, you have to draw the line between trying to eek out the last bit of that 1.1 BILLION a year your company makes that you to keep for yourself, and when it's time to say I've got enough, I'll let the workers make a little more as well. With his recent public statements, he crossed the line and shows his true colors.
What I don't get is, every other pizza chain is facing the exact same thing. It's not like he is being singled out. What will most likely happen is they will all raise their prices twice what is needed to cover it, then the A-hole ones like papa johns will still cut workers hours to make sure they don't actually have to pay for it and he will pocket the entire amount they raised prices to cover it. While he's crying about what Obamacare is doing to his poor employees, he'll be fattening his personal take twice over.

[Soak-up-the-Sun]

I work for a Kentucky based restaurant chain, with 20 stores scattered about the southeastern US.... they are already planning on reorganizing the full service dining experience into a few employees taking orders at a counter and seat yourselves or carryout, with a small kitchen staff, and fewer mgmt, to offset the 80000.00 per year per store cost projections if staffing stayed at current levels, when Obamacare kicks in. It's a no brainer for the restaurant industry, whether it's fast food, pizza plus delivery, or full service. The restaurant industry is going to suffer with low profit margins already squeezed. People just flat out refuse to pay more for prepared food, they want lotsa free bread, extra sauces and dressings for free, happy hour specials galore or they will not eat at that location. Get prepared to fork over alot more money per meal and per drink, and carry your own stuff to your table that will sit next to a trash bin where you'll stash your trash and stack your tray. There will be a few full service places left, but you'll pay dearly for the experience. Just sayin.....

[Lock5]

I work for a multi-billion dollar a year company based out of Ohio that is 100% self insured. Upper management has already hinted that they may just pay the fine per employee and we would all be on the government plan. Something like 8% of employee wages is the fine, and they say our own insurance plan is more than that.

[Pinnacle]

Schnatter, who supported Mitt Romney in the election, said all Americans having health insurance under ObamaCare is a good, but estimates the change will cost Papa John's $5 million to $8 million annually.

$5-8 million annually? How many pizzas do you think they sell a year? That has to be something less than a dime a pizza in price increase to cover the added cost of actually providing health insurance to the people who work there now without laying anyone off. But instead, he'll make speeches and statements like this where cutting hours and screwing over the employees is the only solution. Or, better yet, he could take a 5% or so a year paycut and cover the costs himself. I'm sure the 40K square foot mansion with a 22 car garage he has is already paid for.
http://www.bing.com/maps/?v=2&cp=qcbsyz ... orm=LMLTCC


No more papa johns for my family.

Actually, 5 to 8 million is @10% of this company's income. It is a publicly traded company, which means it has many "owners". Not sure what Papa John makes now but perhaps when he built his company into the worldwide size it is, when it went public I am sure he made enough to buy his big house and garage.
This is from the last yearly report I could find:
Item 6. Selected Financial Data
The selected financial data presented for each of the fiscal years in the five-year period ended December
25, 2011, was derived from our audited consolidated financial statements. The selected financial data
should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and the “Consolidated Financial Statements” and Notes thereto included in Item 7
and Item 8, respectively, of this Form 10-K.
(In thousands, except per share data)
Dec. 25, Dec. 26, Dec. 27, Dec. 28, Dec. 30,
2011 2010 2009 2008 2007
Income Statement Data
North America revenues:
Domestic Company-owned restaurant sales $ 525,841 $ 503,272 $ 503,818 $ 533,255 $ 504,330
Franchise royalties (2) (3) 73,694 69,631 62,083 60,592 56,278
Franchise and development fees (2) 722 610 912 1,722 4,767
Domestic commissary sales 508,155 454,506 417,689 431,650 401,081
Other sales 50,912 51,951 54,045 61,415 61,820
International revenues:
Royalties and franchise and development fees (2) (4) 16,327 13,265 11,780 11,858 9,310
Restaurant and commissary sales (5) 42,231 33,162 28,223 25,849 20,860
Total revenues 1,217,882 1,126,397 1,078,550 1,126,341 1,058,446
Operating income (6) 87,017 86,744 95,218 65,486 53,072
Investment income 755 875 629 848 1,446
Interest expense (1,497) (5,338) (5,653) (7,536) (7,465)
Income before income taxes 86,275 82,281 90,194 58,798 47,053
Income tax expense 26,888 26,856 28,985 19,980 13,293
Net income, including noncontrolling interests 59,387 55,425 61,209 38,818 33,760
Income attributable to noncontrolling interests (7) (3,732) (3,485) (3,756) (2,022) (1,025)
Net income, net of noncontrolling interests $ 55,655 $ 51,940 $ 57,453 $ 36,796 $ 32,735
Basic earnings per common share $ 2.22 $ 1.97 $ 2.07 $ 1.31 $ 1.10
Earnings per common share - assuming dilution $ 2.20 $ 1.96 $ 2.06 $ 1.30 $ 1.09
Basic weighted average shares outstanding 25,043 26,328 27,738 28,124 29,666
Diluted weighted average shares outstanding 25,310 26,468 27,909 28,264 30,017
Balance Sheet Data
Total assets $ 390,382 $ 415,941 $ 393,726 $ 385,464 $ 400,885
Total debt 51,489 99,017 99,050 130,654 142,706
Total stockholders’ equity 218,222 207,200 185,037 138,238 134,938

[Pinnacle]

My company just announced my whole division is being dissolved. Around 500 jobs. Probably with an "economic impact" of around 1500 factory jobs. I am sure the unaffordable care act had a big impact on the decision as it hits my industry from both sides: The insurance costs for the employees and the new taxes currently incurred (400 million this year alone) just to participate in selling our products in the medical arena when this all kicks in 2017.

[katie]

Do you plan on avoiding all successful businesses or just Papa John's?? Since when did being successful become a crime? Papa is an American dream success story, he started with nothing and built his business into the success it is today. Don't be a hater.

I agree with you JLA, it is absolutely nobody's responsibility to take a hit because our president demanded it so! Sorry Imaposer.... I know you're a lefty and thats all fine with me, but this is wrong thinking. Like JLA said... this guy earned every damned dime and there is no good reason to be MADE to part with it. Have you ever seen some of the people that work at these joints?? They probably couldn't commit to full time if it was offered! These people can rant and rave all they want, but in my 35 yrs of business, I have see all... The "majority" has spoken by their vote.

[JLA]

Thanks Katie, we missed you!!

Here's another point to ponder, what do you think is going to happen to the cost of all, yes all, products and services for those that will bite the bullet and provide Obummercare to their workforce? Do you think they will eat that cost? Not if they plan on staying in business. Everyday we are hearing about more layoffs, plant closures, and companies reducing the number of hours to combat the full time requirement of Obummercare. It is going to be a bumpy ride.

[imaposer]

Sorry Imaposer.... I know you're a lefty and thats all fine with me, but this is wrong thinking.

Sorry, I just play a lefty on this forum. On some other forums, I'm considered a righty. It has to do with the makeup of the forums. This place is decidedly far right. That's why I appear to be a lefty here. I just like to point out opposing views. It's what I do when I'm bored.
Now, If I was given a choice between only Romney and Obama, yes, I would have voted for Obama as I felt Romney was a complete snake that should not be trusted. Thankfully, we had plenty of other choices on our ballot, and I maintained my perfect record of never voting for the winner in a presidential election.

Here's another point to ponder, what do you think is going to happen to the cost of all, yes all, products and services for those that will bite the bullet and provide Obummercare to their workforce? Do you think they will eat that cost? Not if they plan on staying in business.

That's my point with Papa Whiner. He says his only solution is to cut workers, and reduce hours. That's BS. He's going to raise the price to cover it, just like every other pizza maker out there. Level playing field for all. He's just decided he needs to use his employees as pawns in his own political game. I personally think it's going to bite him in the a$$. Papa Johns is a bottom tier food. He survives by having a low price per serving. Who is his clientele? The only thing dumber he could do is come out and directly insult the 47%.....

[E_]

lol, if you would vote for Obama you have to be a far lefty. I'd write Hoffa in first.

[Islander_212]

It sucks to be a conservative... I mean, we want really awful things... A balanced budget, lower debt, fewer taxes, fewer regulations, personal responbility, people to work hard, smaller government and all our Liberties back. Yep, just terrible I tell you, terrible!

[Nervous Wreck]

It sucks to be a conservative... I mean, we want really awful things... A balanced budget, lower debt, fewer taxes, fewer regulations, personal responbility, people to work hard, smaller government and all our Liberties back. Yep, just terrible I tell you, terrible!

[E_]

I think they both suck. Both vote for nafta/cafta etc. Both spend too much, too much pork, etc.

They all vote for nanny type laws.

I think we need a new party or no parties at all.

[Islander_212]

I think they both suck. Both vote for nafta/cafta etc. Both spend too much, too much pork, etc.

They all vote for nanny type laws.

I think we need a new party or no parties at all.

Noticed I said Conservative and not Republican... Today we have the two major partys... The Big Government Party (R) and the Really Big Government Party (D). The Tea Party is where it is at and with the help of the ultra Liberal Lamestream media we are considered racists and we hate old people, women, old people and dogs... Libertarian is not bad, tut their lack of moral virtues in some areas will harm society (as it already has) in the long run.

[imaposer]

It sucks to be a conservative... I mean, we want really awful things... A balanced budget, lower debt, fewer taxes, fewer regulations, personal responbility, people to work hard, smaller government and all our Liberties back. Yep, just terrible I tell you, terrible!

I agree with every bit of this, with possible exception to the fewer regulations. It depends what regulations you want to see removed.

I think they both suck. Both vote for nafta/cafta etc. Both spend too much, too much pork, etc.

They all vote for nanny type laws.

I think we need a new party or no parties at all.

Noticed I said Conservative and not Republican... Today we have the two major partys... The Big Government Party (R) and the Really Big Government Party (D). The Tea Party is where it is at and with the help of the ultra Liberal Lamestream media we are considered racists and we hate old people, women, old people and dogs... Libertarian is not bad, tut their lack of moral virtues in some areas will harm society (as it already has) in the long run.

The tea party? They are what caused the republicans to lose the election. Sorry, too far off center for any chance at success.

I don't classify myself with any party, but if I had to, Libertarian is what I would claim. What you call lack of moral values, I call keeping the government out of personal business. The tea party loves nanny type laws, telling people how to live.

[Islander_212]

The fact that Romney was leaning too far left kept the Conservatives (especially the Tea Party) from coming out to vote and that is what cost him the election. The other guy was down considerably in his electorate from the 2008 election. The Tea Party is about personal freedom with little input as to what the states do from that perspective. It is the Left's position that they must dictate what is and what is not acceptable. I love how the Left says stay out of the bedroom, but now the rest of you need to not eat _____________ (fill in the blank) should not drive certain vehicles and you have to burn ethanol in you gas, etc... It is hypocritical at best and is likely criminal.

[imaposer]

The fact that Romney was leaning too far left kept the Conservatives (especially the Tea Party) from coming out to vote and that is what cost him the election.

Well, if Romney was too far left, and the R's continue to go further right for their next candidate, I would say its a safe bet there won't be another repub in the white house for 20 years. There's just not enough votes further right to keep going that way.

It is the Left's position that they must dictate what is and what is not acceptable. I love how the Left says stay out of the bedroom, but now the rest of you need to not eat _____________ (fill in the blank) should not drive certain vehicles and you have to burn ethanol in you gas, etc... It is hypocritical at best and is likely criminal.

Yeah, I'm sure it's the left who is always behind the dry votes throughout Kentucky. It's not only the left, it's both parties. I don't care for either parties agenda of leave me alone to do this, but keep everyone else from doing that mentality. If someone else is doing something you don't agree with, bite your tongue and move along. It's not for me to decide what they do.

[imaposer]

Wait! Wait! Wait! That's not what I said!


Mr. Papa has started backpedaling on this now.

Reading what has been written about statements I made on the effect of the Affordable Care Act on our franchisees reminds me of a quote from Lewis H. Lapham, former editor of Harper's magazine: "People may expect too much of journalism. Not only do they expect it to be entertaining, they expect it to be true."

Many in the media reported that I said Papa John's is going to close stores and cut jobs because of Obamacare. I never said that. The fact is we are going to open over hundreds of stores this year and next and increase employment by over 5,000 jobs worldwide. And, we have no plans to cut team hours as a result of the Affordable Care Act.

Clearly there was some misunderstanding somewhere. The remarks that generated the headlines were made during an entrepreneur class I was asked to speak to at a Florida college. I was asked to share my experience as an entrepreneur and to provide the students with real-life small business situations. Unbeknownst to me, until she identified herself, a reporter was there.

Here is the part of the interchange that was the genesis of the news:

Reporter: "Do you think your -- you know -- franchise owners... are going to cut people hours back to make them part time instead of full time?"

Me: "Well, in Hawaii there is a form of the same kind of health insurance and that's what you do, you find loopholes to get around it. That's what they're going to do."

Reporter: "My understanding is that if you're a full time employee, which is 35 hours or over, you'd be covered. Or if you're part time then you wouldn't be. So wouldn't some business owners just cut people down like 34 hours a week so they wouldn't have to pay for health insurance?"

Me: "It's common sense. It's what I call lose-lose."

The reporter asked what I believed Papa John's franchisees would do in response to Obamacare, not what Papa John's would do. In fact, her question was "wouldn't some business owners just cut people down like 34 hours a week so they wouldn't have to pay for health insurance?"

My answer: "It's common sense."

Companies like Papa John's are largely a collection of small independent businesses. The average Papa John's franchisee owns three to four stores. Since our franchisees own the restaurants they operate, who they hire, how many hours they give each employee and what they pay each employee is up to them, not me or Papa John's. Like any small business in these economic times, our franchisees are under a tremendous amount of pressure on costs.

During that same interview, talking about Obamacare I said, though it wasn't widely reported:

"The good news is 100% of the population (full-time workers) is going to get health insurance. I'm cool with that."
"We're all going to pay for it. There's nothing for free."
"And this way I get to provide health insurance and I'm not at a competitive disadvantage ... our competitors are going to have to do the same thing."

Papa John's, like most businesses, is still researching what the Affordable Care Act means to our operations. Regardless of the conclusion of our analysis, we will honor this law, as we do all laws, and continue to offer 100% of Papa John's corporate employees and workers in company-owned stores health insurance as we have since the company was founded in 1984.

link

So, uh, all of ya'll who thought what he said he was going to do was good are left with nothing.

[E_]

I never said it would do any good. I just supported his RIGHT to do that if he felt it necessary. I also support the people that work for him to find other jobs if they don't like it.

[Pinnacle]

Wait! Wait! Wait! That's not what I said!


Mr. Papa has started backpedaling on this now.

So, uh, all of ya'll who thought what he said he was going to do was good are left with nothing.

Some might ask: Were you actually there to hear what he said? Or did you just read what others say about what others have said they heard from someone who was actually there, and then report it here? Sorry, couldn't help myself after I looked at the blog reference- straight from the horses mouth

[imaposer]

I never said it would do any good. I just supported his RIGHT to do that if he felt it necessary. I also support the people that work for him to find other jobs if they don't like it.

Oh, I support his right to say it, but also expressed I was going to use might right to not buy his pizza any more because he said it.
Kinda like when the Dixie Chicks spouted off about George Bush at a concert. I was done with them at that point. Just sing your dang music, and hold the political crap. I just wanted to hear purty girls sing, not a political lesson.

Hold the anchovies and political $h1t slinging, Papa.

[E_]

I think they both suck. Both vote for nafta/cafta etc. Both spend too much, too much pork, etc.

They all vote for nanny type laws.

I think we need a new party or no parties at all.

Noticed I said Conservative and not Republican... Today we have the two major partys... The Big Government Party (R) and the Really Big Government Party (D). The Tea Party is where it is at and with the help of the ultra Liberal Lamestream media we are considered racists and we hate old people, women, old people and dogs... Libertarian is not bad, tut their lack of moral virtues in some areas will harm society (as it already has) in the long run.

LIBS.jpg (33.76 KiB) Viewed 13816 times

[re3too]

There's them skeery Pelosi/Feinstein eyes again!

[katie]

There's them skeery Pelosi/Feinstein eyes again!

OMG!! LMAO!
(now, excuse me while I clean the coffee off of my desk!)