The Global Economy Needs a ‘Coke’
Eric is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
A few days ago, the CEO of Coca-Cola (NYSE: KO), Muhtar Kent, sat down with Bloomberg's Carol Massar to discuss the world economy. Mr. Kent took the time to emphasize the importance of addressing unemployment within the global economy.
I think [job creation] is the single biggest challenge for governments around the world, for companies around the world, and for civil society around the wrold. If we can not find the calculus for growth as businesses -governments creating better conditions for businesses to invest and grow, social harmony is going to crumble. It is incumbent on business, government, and civil society to work closer together than ever."
Mr. Kent is not the only CEO to point out the unemployment problem. Howard Schultz, the CEO of Starbucks (NASDAQ: SBUX) pointed it out in the open letter he released in September. Mr. Schultz similarly urged both businesses and lawmakers to address the issue of unemployment.
Coke is doing its part to attempt to create growth and foster job creation:
“When 2011 is over, we will have invested $3B in the United States. We invest in the United States, we believe in the future. We will be investing more in 2012 than we did in 2011.”
I hope other companies will follow Coca-Cola’s example, invest in the future, and contribute to a positive spiral of economic growth.
In addition, Coca-Cola is adding staff at a number of their facilities, most notably their Minute Maid facilities in Florida. Minute Maid has become the number one juice brand in China, and has experienced explosive growth in the past few years. When asked about the broader Chinese economic situation, Mr. Kent had this to say:
Mr. Kent’s perspective comes directly from business summits and meetings with top Chinese officials. China’s deliberate push to an import led economy will have notable impacts on world trade, namely in creating a huge new market of middle class Chinese for businesses to begin selling products and experiencing the growth Mr. Kent said was so critical.
All the talk about the necessity of growth in today’s macroeconomic climate stems from the lingering Eurozone crisis that has been weighing on the global economy for the past two years. When asked about the Euro-zone crisis Mr. Kent said: “I think is going to be a long recovery. Long. I think at least three to four years.” He also went on to elaborate that not every country was as challenged as Spain, Italy, and Greece, and that there were bright spots in the area, namely Germany, Scandinavia, Eastern Europe, and Russia that would do well no matter what happened.
Mr. Kent hinted that he thought the United States was in better economic condition than Europe:
“I always say, and have said, and will say, ‘never bet against the United States of America’. This is the only nation in the world that is Western and has really positive demographics. No other western nation has the same positive demographics. It’s a young population, it’s diverse, it’s entrepreneurial-minded and it is dynamic, and it has the most flexible labor laws amongst the whole western world. And therefore, never bet against America, and I believe that the United States of America will come out of this macroeconomic difficulty quicker than Europe certainly, and I think we’re probably seeing some signs of that.”
The demographics of America are something rarely touched on, but Mr. Kent brought it up their strength several times in the interview. If the demographics are as bullish as he thinks, American businesses everywhere will be the benefactors.
To watch the interview in its entirety, click the picture below.
The author hold no financial interst in any of the companies mentioned.