McDonalds’ Jim Skinner: ‘We Are Hiring Everywhere’

McDonald’s (MCD) CEO Jim Skinner spoke with FBN’s Liz Claman about the growing McDonald’s brand saying “we are hiring everywhere” and that they will be opening the most restaurants in China next year. He also discussed the company’s successful business model and that the expiration of the Bush tax cuts would hurt the “federation of small businesses” that make up McDonald’s.

Here are the key highlights from the interview, courtesy of FOX Business Network:

On where the company will open the most restaurants next:
“That will be in China. We will open 175 restaurants this year. We expect to be on a pace of about 300 by 2014.”

On hiring:
“Yes, we’re hiring because as we said our business model has allowed us to be successful pre-recession, during the recession and as the recovery comes along we’ll do even better.  We are in the business where we have to hire to serve more customers. That’s an immediate job creation in the marketplace in our restaurants and certainly in support of all of those restaurants has to be from the center. And we have a number of regional offices in the United States around the world and those offices are supported by a number of staff…and so we are hiring everywhere.”

On McDonalds being affected by the expiration of the Bush tax cuts:
“We are a federation of small businesses. It would have an impact on those business because they are small business men and women…“My personal viewpoint is that I don’t believe we should be increasing taxes at a time when the economy is in the straights that we are in today. That’s just one CEO’s opinion and observation and one personal consumer’s observation as a businessman.”

On the need to hire abroad:
“Next year, $7 trillion dollars of consumer spending is going to come from the emerging world and emerging market, outside of the United States. So job creation, in order for us to be competitive around the world, we have to be able to create jobs where we find them and not just isolate ourselves to creating jobs here in the United States, because that dog won’t hunt as they say.”

On hiring in the US:
“When you think about job creation in the United States, the way we make more money in the US these days is not by hiring more people, but by becoming more efficient. Because of the technology and equipment and all of the learnings we have over the years about being more productive. So this is why some of the skills that have to be developed for people that want to go a different way in the workforce to be able to take advantage of some of those learnings and technologies.”

On competition:
“I go to competitions restaurants I wouldn’t suggest that I admire any of them. But we do what we do well, there’s no need to be looking over our shoulder. We really pursue consumer insights on a very vigorous basis to understand what our customer’s needs and wants our and then deliver, what I call the moment of truth, at the front counter and drive thru. And that is the experience between the customer.”
On rising price of coffee:
“We don’t price based on any one particular commodity. We price across the menu on a basket of goods. And we sell a lot of coffee, but it’s not our primary menu item…We price according to where we find ourselves in the economic environment, not against to any one particular commodity.”

On consumer confidence being low:
“In the US the economy is beginning to recover, but when you look at consumer confidence, which is the one thing I pay most attention to. That confidence continues to be low. So that’s negative relative to the overall environment.”

On McDonald’s morning business:
“Morning business grew in 08 and in 09…but on an overall basis our business at breakfast has continued to grow in 09 and is growing in 2010. The pace of growth is still up, not as much as it was in 06 or 07, but breakfast for us is an opportunity for consumers and the morning has grown every year since its inception in 1973…And we do the best work doing breakfast.”

On the barbell pricing business model:
“It’s important to remember that we did well in robust times and we continued to do well in the recession because our business model stayed the same during that time. That everyday affordability in that business model has served us well.”

On price increases:
“We don’t take price increases, for example over the past few years, anywhere beyond the going rate relative to the communities are and indexing around food and food away from home.”

On the economic outlook for the United States:
“Very optimistic. I am particularly optimistic for America, I think America is going to do just fine…but cautiously optimistic about what will be the job creation in America. I think we are off to a slow start but we have to do some things to get that going. But I am particularly optimistic about McDonalds. The McDonalds business model has done extraordinary well during this particular time and when the recover comes we will do even better.”

On instituting a share buyback”
“We will continue to buy back shares. After investment in the business, all cash flow will be returned to shareholders through dividends and share buybacks.”

On new menu items:
“It’s interesting because food is our business so new business is important to the pipeline of growth for the future. It’s interesting to know that the growth in the next 3-5 years, 80 percent of those items are in test somewhere in the world. I don’t know what they are. Oatmeal is the next thing coming out.”

On the best McDonald’s menu idea in the past 10 years:
“The snack wraps were terrific. The current combined beverage initiative is terrific with the McCafés, coffees and smoothies, and beverages of all kinds and sizes because we have created a destination for beverage drinkers at McDonald’s.”

On critics saying McDonald’s contributes to the obesity epidemic:
“It’s important to right size the problem. To hold McDonald’s or any other company responsible for the obesity in society would be a mistake. When you get up this morning in New Jersey, you have 900,000 choices of where to eat. 80 percent of meals are still taken at home. The people that visit McDonald’s the most come four times a month. There are 90 some other meals they are eating somewhere else.

“To be a part of the solution, how do we do that? Choice across the menu. We’ve done more around fruits and vegetable and milk and those other items for our kids particularly than anybody else in the industry.”

On what he orders when he goes to McDonalds:
“I used to be a plain quarter pounder guy because I’m from Iowa, just the meat and the bun. Now, one of my favorites is the grilled chicken snack wrap with no sauce. It’s under 300 calories and it’s delicious. It’s almost like a full entrée, if you look at the Angus snack wrap. I also like the grilled chicken on the Caesar salad. I am not an apple pie guy, but I wouldn’t say never.”

On the opening of the 300th Ronald McDonald House:
“This is a replication of the original idea 300 times over. We have 53 countries with Ronald McDonald Houses and 53 chapters around the world…I wouldn’t say they have gone up because of the economy. Unfortunately the demand has been there throughout.”

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