Making All the Wrong Moves

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Doesn’t it make you groan when smart people do dumb things?

I’m thinking of Andrew Puzder, chief executive of CKE Restaurants Inc., the Carl’s Jr. chain. For a smart guy, he’s made some dumb statements lately.

It started with a Jan. 31 article in the Dallas Morning News in which Puzder said he was about to meet with Texas Gov. Rick Perry to discuss the possibility of moving the headquarters of his Carpinteria company and about 500 employees to Dallas, Austin or San Antonio.

“The discussions will get kicked off in the next couple of days on a more serious level,” he was quoted as saying.

He got in a few jabs at the Golden State. Puzder told the paper it’s “easier to open a restaurant in Shanghai than in California,” and that he is drawn to Texas’ business-friendly atmosphere and the prospect of a 10 percent pay raise, thanks to the state’s lack of an income tax.

Now, if you’re an employee at headquarters and you had read those comments by Puzder, you likely looked up, wide-eyed, and announced one of two adrenaline-tinged conclusions: You need to send out resumes, like today. Or you need to sell your surfboard and buy some snakeskin cowboy boots.

After a minute, you might have another thought: Hey, aren’t Puzder’s comments vastly different from those he made less than a year ago? Back then, when the company had accepted a buyout offer, Puzder wrote to local employees that “not much should change in your day-to-day work experience” and that he looked forward to “continuing our great work together for many, many years.”

Hadn’t he sent the signal then that the company wouldn’t move? Or does Puzder think that dodging tornados and Longhorn doggies in Texas is “not much change” from dealing with earthquakes and AB 32 in California?

Well, if you had any doubts, they were pretty much erased by Puzder’s next comments. Shortly after the first article appeared, he and CKE’s president dropped by the San Antonio Business Journal to discuss the company’s possible move to that city.

“Texas has created more jobs (in recent years) than all of the other 49 states combined,” he was quoted as saying. “It has lower taxes, a reasonable regulatory structure and growth – it’s a no-brainer.”

Now, if you’re an employee in headquarters back in Southern California, you’re thinking: “OK, so now we know what specific city in Texas we likely will move to. Hello, River Walk.”

But don’t rent the U-Haul just yet. For the press back home, Puzder’s tone took a turn. An article in the Pacific Coast Business Times had this interesting headline: “Carl’s Jr. Chief Downplays Texas Talk.”

In that story, Puzder admitted that he feels he is being pushed out of the Golden State but that no move is imminent. And the trash talk stopped. “We love California and we’d love to stay,” he was quoted as saying. “Our heart and soul is in California.”

Now, Puzder’s a smart guy. I mean, he was a lawyer who took the reins of a public company that’s in a very competitive business and he successfully differentiated Carl’s Jr. from all the others. But making these back-and-forth comments is dumb.

If he thinks it makes sense, financially and otherwise, to move the company, then fine, move it. But there’s a proper way to do it.

First, you send a signal. It could be as simple as the CEO saying something like, “You know, we’ve got no current plans to move and we sure like where we are. But there may come a time when market forces or financial situations compel us to consider a relocation.” Then follow up later with another signal, preferably a stronger one. The next step is to announce the actual move.

That’s a fair and honest way to do it.

But that’s not the way Puzder’s doing it. He’s trash-talking his home state from another state, playing footsie with a city he may move to, then kissing up to his home state again.

This is demoralizing to vendors and other stakeholders, upsetting to employees, and confusing to everyone else. It makes you groan.

Charles Crumpley is editor of the Business Journal. He can be reached at [email protected].

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