TIME Retail

Walmart Managers Average Salary Higher Than Starbucks

Wal-Mart Associate Jeff Parker stocks produce at store #100 in Bentonville, Arkansas on July 2, 2003.
Wal-Mart Associate Jeff Parker stocks produce at store #100 in Bentonville, Arkansas on July 2, 2003. Reuters

Their cashiers, however, make less than the national average of $11.22/hour

Walmart may often get criticized for not paying its workers a living wage, but according to a new working paper, climbing the corporate ladder within the chain can lead to substantial income. In fact, the National Bureau of Economic Research found, Walmart store managers make an average salary of $92,462 per year.

The authors of the new working paper used data from career site Glassdoor and the Census Bureau’s Current Population Survey to analyze and compare average salaries of employees at some of the U.S.’s largest retail chains including Walmart, Costco, Whole Foods, and Starbucks. According to the analysis, Walmart store managers are among the highest paid in the nation, with Costco leading the pack with average manager salaries of $109,000. At Starbucks and Whole Foods, store managers bring home on average $44,632 and $75,775, respectively.

However, while store manager pay ranks high, according to NBER, Walmart cashiers earn about $8.48/hour and are paid less than their counterparts at the other chains. At Starbucks, “baristas” make $8.80 an hour, on average, while those at Whole Foods and Costco make $10.31 and $11.59. Cashiers at three out of four of the retailers make less than the average national hourly cashier rate of $11.22/hour.

The paper also shows a significant gender gap, even among cashiers. While high school educated women in retail make 25% less than their male counterparts, women cashiers make 17% less. Among those with some college education, women make 20% and 21% less than men when they have a high school education and some college, respectively.

TIME Earnings

Facebook Stock Hits All-Time High After Strong Earnings Report

Facebook CEO Mark Zuckerberg speaks during an event at Facebook headquarters on April 4, 2013 in Menlo Park, California
Facebook CEO Mark Zuckerberg speaks during an event at Facebook headquarters on April 4, 2013 in Menlo Park, California Justin Sullivan—Getty Images

Mobile ads made up 62% of Facebook's $2.7 billion in ad revenue

Updated July 23 at 5:53 p.m.

Facebook stock climbed to an all-time high as it once again sailed past Wall Street’s expectations in its second quarterly earnings report of the year. The social network pulled in $2.9 billion in revenue for the quarter, beating analysts’ estimates of $2.8 billion. The company generated a profit of $791 million. Earnings minus some line items were 42 cents per share, blowing past estimates of 32 cents per share. Facebook shares were priced above $74 in after-hours trading.

Facebook now has 1.32 billion monthly active users, an increase of about 40 million from the previous quarter. Mobile usage continues to grow, with the social network now having 1.07 billion monthly active users on mobile devices, up from 1.01 billion in the previous quarter.

With increased mobile usage, mobile advertising continues to make up a bigger share of Facebook’s revenue pie. Mobile ads accounted for 62 percent of the company’s $2.7 billion in ad revenue for the quarter, up from a 59 percent share in the previous quarter and a 41 percent share during the same period last year. It’s a stark turnaround from Facebook’s early days as a public company, when the social network’s stock tanked on fears that it couldn’t convert its growing desktop business to mobile.

During a conference call with investors, Facebook touted its popularity as a public platform. Chief Operating Officer Sheryl Sandberg said 350 million Facebook users made 3 billion interactions related to the World Cup during the event, and the World Cup Final was the most-talked-about Facebook event in Facebook history. Facebook also just launched a new app specifically for celebrities with public pages last week. “Public content will continue to be a growing focus for us over the coming months,” CEO Mark Zuckerberg said.

While Facebook’s revenue has been ramping up quickly, Zuckerberg again emphasized that investors shouldn’t expect significant monetization from newer apps and acquisitions such as Messenger, WhatsApp and Instagram in the near future. He compared their current businesses development to where Facebook was in 2006, two years after it launched.

It’s not yet clear whether Facebook’s latest controversy, in which the company experimented with people’s News Feeds without their knowledge to alter their moods for a scientific study, will have a substantial effect on usage of the social network. The mood study was only widely publicized at the very end of the fiscal quarter.

 

MONEY Workplace

Meet America’s Most Beloved CEO—Too Bad He Just Got Fired

120723_FF_MarketBasket_1
AP

After the wealthy CEO of a supermarket chain was fired, thousands of workers walked off the job in protest—some getting fired themselves. What's up with that?

Workers understandably tend to go on strike or protest for selfish reasons—more pay, better benefits, improved working conditions. Over the last week in New England, however, thousands of employees at Market Basket, a supermarket chain with 71 stores in New Hampshire and Massachusetts, have been sticking their necks out (and in some cases putting their jobs on the line) in support of Arthur T. Demoulas, who was the company CEO until he was fired in June.

Rallies pushing for “Arthur T.” to be given his job back were held at the Market Basket headquarters in Tewksbury, Mass., on Friday and Monday, drawing upwards of 5,000 protestors. Meanwhile, the shelves of many Market Basket locations have gone barren, as there are too few employees still on the job to stock them. At least eight employees were fired over the weekend related to the protests.

“I have no regrets—I would do it all over again, and I leave the company I love with my head held high in the knowledge that there wasn’t a single thing more that I could have done,” said Tom Trainor, a Market Basket district manager who was one of the leaders of the protest, and who was fired, according to Boston Magazine. “I knew the risk but I also knew that I was fighting for something much bigger than myself. I was fighting for my family, for Arthur T. Demoulas, a man that I have tremendous respect, loyalty, and admiration for.”

In an era overrun with CEO hate and 1% bashing, such comments—and the actions of all those who have put their jobs in jeopardy—are nothing short of astonishing. When CEOs are in the news nowadays, it’s often because of things like their astronomical pay packages, or that they’ve insensitively laid off thousands of employees in a memo.

The backstory of how Arthur T. Demoulas was ousted in June, alongside a pair of other experienced high-level executives for the family-owned company, is a complicated tale. The CEO was fired by a board led, believe it or not, by his cousin, Arthur S. Demoulas. Apparently the family has been feuding about control of the business for years, with the battles for power including tactics that seem like they would only be found in fiction—fake identities, secretly taped meetings, and more.

Amid the struggles for control, it’s overwhelmingly clear where employee loyalty lies. Arthur T. was known for treating employees, who were not unionized, particularly well, with good benefits and above-average pay. More important, he was renowned as something exceptionally rare in high-power executive ranks: He’s just a good guy. During the rallies, employees spoke often about Arthur T. always having time for his workers, including frequent attendance at their family weddings and funerals.

“He’s George Bailey,” Trainor explained to the Washington Post, comparing Arthur T. Demoulas to the beloved savings-and-loan manager played by Jimmy Stewart in It’s a Wonderful Life. “He cares more about people than he does about money.”

That’s probably not something they teach in business school. Nonetheless, several academics have been monitoring the Market Basket situation, and they’ve noted that many lessons can be learned about how the controversy is playing out. Michael Roberto, a management professor at Rhode Island’s Bryant University, wrote that “every CEO should wish that his or her employees would stand up so forcefully for them even at great personal risk.”

The board that ousted Arthur T. and fired the employees leading protests, on the other hand, seems to have its priorities wrong, and seems tone deaf to how this plays with the public. “The Board has badly miscalculated by firing managers who objected to the CEO’s dismissal. It only added fuel to the fire,” noted Roberto. They also drastically underestimated the importance of maintaining company values and low employee turnover, Roberto wrote.

Market Basket’s current leadership has defended its actions in a few statements released to the media this week. “The individuals who were terminated took significant actions that harmed the company and therefore compromised Market Basket’s ability to be there for our customers,” read a statement from co-CEOs Felicia Thornton and James Gooch. A later statement urged employees to return to work, according to the Boston Herald:

“We strongly encourage all associates to return their focus to Market Basket’s customers, their needs and expectations,” co-CEOs Felicia Thornton and James Gooch said in a statement. “We understand the strain and emotion facing Market Basket associates. … We are committed to earning the trust and acceptance of our associates and Market Basket’s customers and hope that our associates will judge us not on our promises, but on our actions as we move forward.”

Nonetheless, the situation appears to be damaging Market Basket’s relationship with employees and customers alike, who naturally sympathize with their middle-class peers who have walked off the job to support a beloved good-guy CEO. And one who, Boston columnists have noted, has made sure over the years that groceries are fresh, of good quality, and priced low. As of Wednesday, the Save Market Basket Facebook page, in support of Arthur T., had close to 60,000 Likes, more than double the total one week ago.

“The employees and the customers — they see themselves as the organization,” Daniel Korschum, a marketing professor at Drexel University, explained to the Washington Post. And they therefore feel a sense of ownership and responsibility for Market Basket. “The board and the new CEOs are seen as the outsider. It’s the exact opposite of what you usually see.”

Risking one’s job to save that of your boss, rather than going about your business or even pumping your fist when a high-paid CEO gets canned—that’s also the exact opposite of what we expect to see. But under the current circumstances at Market Basket, things make more sense.

“It’s been a very difficult time for the hard-working associates of the company this past few weeks,” Arthur T. Demoulas said on Monday, after remaining mostly quiet regarding the protests, according to the Boston Globe. He called for the company to rehire the employees who were fired, immediately. “I love these people very much.”

Another rally in support of Arthur T. Demoulas is planned for Friday, again at the company headquarters in Tewksbury, Mass.

TIME Tablets

These 2 Charts Show Why Apple Should Worry About the iPad

Apple's iPad Air tablet on October 22, 2013 in San Francisco, California.
Apple's iPad Air tablet on October 22, 2013 in San Francisco, California. Glenn Chapman—AFP/Getty Images

Apple’s flagship product, the iPhone, is humming along nicely, according to the company’s latest quarterly earnings report, but its newest disruptive device has seen better days.

The iPad, which turned four years old in April, is suffering slowing sales on both a sequential and year-over-year basis. The product line sold 13.3 million units between April and June, down 9 percent from the same period last year. That’s bad news for a relatively new device that was supposed to be “better than a laptop” and eventually devour the PC market.

Here’s a breakdown of the product’s overall trajectory:

In the most recent quarter, the iPad saw its lowest sales since the first quarter of 2012, when it sold 11.8 million units. Many factors explain the slowdown: For one, new iPad rollouts don’t generate nearly the buzz of a new iPhone launch. Why not? The flagship device hasn’t changed dramatically since it launched in 2010—yes, it’s added a fancy retina display and gotten lighter, but those advances don’t compare to the new features that have accompanied launches of new iPhone models, like the App Store or the Siri personal assistant.

On top of that, people generally seem content to hold on to their iPads for longer than they keep their iPhones. According to mobile marketing firm Fiksu, which tracks the use of iOS on active Apple devices, the iPad 2 was still the most popular iPad in use as of April 2014, even though it had already been out for three years. For comparison, the iPhone 5, released in September 2012, is the most-used Apple smartphone.

That’s partially because iPhones are usually cheaper to purchase in the United States. Thanks to subsidies from wireless carriers, the expensive phones typically cost between $100 and $200 for U.S. customers eligible for an upgrade, while the sans-subsidy iPad starts at $399. Combine that price differential with the fact that Americans have been conditioned to seek out phone upgrades every two years when their contracts end, and it’s no wonder that the majority of iPads are now being sold to first-time tablet buyers, according to Apple.

“I don’t see the purchase cycle [for iPads] as fast as 20 to 24 months,” says Ben Arnold, an industry analyst at NPD.

Another problem for Apple is the iPad’s growing number of competitors. When the device launched in 2010, it became the first breakthrough success in the tablet category. Since then, both Amazon and Samsung have launched tablets with similar features and, in some cases, lower prices. Meanwhile, many laptops with functionality similar to an iPad are now cheaper than Apple’s tablet. Arnold attributes some of the iPad’s current woes not only to its direct competitors but also dirt-cheap netbooks like Google’s Chromebook, which is tailored for web browsing and video viewing.

On the other end of the spectrum, smartphones are slowly approaching the size of tablet — Apple itself is reportedly prepping a new iPhone with a 5.5-inch screen, just 2.4 inches off the iPad Mini. Those big phones, sometimes called “phablets,” are eating away at tablet sales across the board.

The convergent functionality of different device types means the tablet market as a whole may not have as much runway to grow as analysts previously thought. Global tablet shipments declined for the first time ever in the first quarter of 2014, according to NPD. The sales-tracking group cited the emergence of large-screen smartphones as one reason for faltering growth. NPD projects tablet shipments will rebound, but that the growth rate will be 14 percent in 2014, lower than in previous years. By 2017, the growth rate is expected to slip to single digits (NPD expects a growth rate of 13 percent for smartphones through 2017, by comparison).

smartphone sales

“The market is kind of settling into this mature phase,” Arnold says of tablets. “The second generation purchases are slower to come.”

So Apple has a product in sales decline in a rapidly maturing market that faces growing competition from every other type of mobile computing device. What’s the solution? Apple believes it’s enterprise. In his conference call with investors, Apple CEO Tim Cook stressed that the iPad would be a key element of the company’s just-announced partnership with IBM to sell Apple products and services to businesses. Currently just 20% of tablet owners use the devices for work-related activities, according to an April survey by JD Power. Apple believes it can change this by creating apps tailored to different industries like insurance, banking and retail.

The iPad certainly isn’t going anywhere, and at more than 225 million units sold, it’s an incredibly successful device. But it’s not the next iPhone, and that’s what investors have been craving since they catapulted Apple to become the most valuable company in the U.S. Cook, who acknowledged that iPad sales were below analysts’ expectations, tried to put his aspirations for the device in perspective: “Our theory that has been there honestly since the first time that we shipped iPad, that the tablet market would eventually pass the PC market. That theory is still intact.”

MONEY 401(k)s

How to Fix the 401(k) and Income Inequality in One Fell Swoop

A top economic adviser wants to cut the tax break for 401(k) savings for high earners and launch a new government plan with a generous match and low fees.

Two hot-button economic issues appear to be colliding: the failed 401(k) plan and growing income inequality. Both have been garnering headlines, and now a noted expert is tying them together through proposed reform.

Gene B. Sperling, a former White House economic adviser in both the Clinton and Obama administrations, wants to cut the tax advantage of 401(k) contributions to top earners. He also wants to create a government-funded universal 401(k) plan that would incorporate all the best parts of these plans—low fees, safety, a generous match, and automatic enrollment.

Presumably, a government-backed 401(k) plan also would offer an option like deferred annuities, which the industry has been resisting, and an easy way to convert some or all of your 401(k) balance to guaranteed lifetime income upon retirement. Both those provisions have had strong backing from the White House.

In a New York Times op-ed, Sperling blamed an “upside-down tax incentive system” for contributing to income inequality in America, adding “it makes higher-income Americans triple winners and people earning less money triple losers” as they save for retirement.

Currently top earners pay a federal tax rate of 39.6%, which makes their tax deduction for 401(k) contributions more valuable than the deduction for contributions of those in lower tax brackets. Top earners also have more tax-advantaged savings opportunities, and they benefit more from employer matches. The upshot, Sperling asserts, is that the top 5% of earners get more tax relief for saving than the bottom 80%. He proposes a flat 28% tax credit for saving, regardless of income.

His universal 401(k) plan also would skew toward lower income households with a dollar-for-dollar match up to $4,000 a year below certain income thresholds. Higher income households would be capped at 60 cents on the dollar—still about double the average match today.

Sperling isn’t the first to champion a universal 401(k) or fret publicly about income inequality. President Clinton floated universal accounts in 1999. Versions of this government-funded plan exist in parts of Europe, and Teresa Ghilarducci, a professor of economics at the New School and author of When I’m Sixty-Four, has been arguing for years for private sector workers to be able to enroll in cost-efficient and professionally managed state-operated retirement programs.

So far the idea hasn’t gotten much traction. The debate in Washington has centered on Social Security and tax reform. Maybe this op-ed from a beltway insider is a sign that 401(k) reform—and income inequality—will heat up as an issue in the coming election cycle.

If so, paying for it all will surely be part of the debate. But not to worry, writes Sperling. Among other possibilities, we could cut the federal estate tax exemption. Currently a married couple can leave $10.7 million to heirs tax-free. Cutting the exemption to $7 million would free up billions to bolster the retirement accounts of lower earners and shore up some of what’s wrong with 401(k) plans today—and take a further whack at income inequality in the process.

Related:

Half of Workers Are on Track to Retire Well—Here’s How to Join Them

Why Your 401(k) Won’t Offer This Promising Retirement Income Option

This Nobel Economist Nails What’s Really Wrong with Your 401(k)

TIME Autos

GM Issues 6 More Safety Recalls

(DETROIT) — General Motors is issuing six more recalls covering a total of almost 718,000 vehicles in the U.S.

The latest recalls bring the total for GM so far this year to 60, affecting a record 29.7 million cars and trucks. GM already has passed the 22 million vehicles recalled by all automakers last year.

The biggest recall announced Wednesday was for just over 414,000 cars and small SUVs for faulty seats. Other problems include incomplete welds on seat brackets, turn signal failures, power steering failures, loose suspension bolts and faulty roof rack bolts.

TIME Business

Pizza Hut Built a Giant, Real-Life Teenage Mutant Ninja Turtle Pizza Thrower

Comic-Con fans will be able to take turns operating it

+ READ ARTICLE

Some publicity stunts are really, really dumb. Other publicity stunts involve building a 12-foot Pizza Thrower and realizing your Teenage Mutant Ninja Turtle dreams. Thank you, Pizza Hut, for providing the latter.

The chain will debut a massive vehicle, complete with a 16-foot rotating cannon to launch pizzas, at Comic-Con in San Diego, which takes place July 24-27.

Comic-Con goers, who probably owned the toy version seen below, will literally eat it up. Well, metaphorically eat it up. Unfortunately the launched pizzas will be fake.

Pizza Hut partnered with Paramount for Michael Bay’s live action Teenage Mutant Ninja Turtles film, out August 8.

TIME China

Think Your Flight Delays Are Bad? Try China, Where the Military Hogs Most of the Skies

Airplanes At The Shanghai Pudong International Airport
Air China aircraft stand parked at Shanghai Pudong International Airport in Shanghai, China, on Saturday, Oct. 26, 2013. Bloomberg—Bloomberg via Getty Images

Even in this era of jam-packed commercial air travel, the armed forces still control most of China’s airspace

Last week, I flew in and out of Shanghai over two days. Both flights idled on the tarmac for more than one hour. I felt rather lucky.

Airport delays are such a constant in China that a mere one-hour wait is practically a gift from the aviation gods. International flight monitors put Chinese cities at the bottom of a list of on-time takeoffs at major airports worldwide. On July 21, nearly 200 flights leaving from Shanghai’s two airports, Pudong and Hongqiao, were cancelled. Around 120 more planes were delayed from takeoff by two or more hours.

The same day, a notice attributed by state media to the Civil Aviation Administration of China warned that a dozen airports in eastern Chinese metropolises would suffer even more serious delays through August 15. The reason? An unnamed “other user” would be hogging the skies. That aerial monopolist is thought to be the Chinese military, which even in this era of jam-packed commercial air travel still controls most of China’s airspace. On July 23, the People’s Daily, the mouthpiece of the Chinese Communist Party, tweeted a picture of dejected looking passengers camped out on the floor of the airport in Dalian, a port city in northeastern China. The cause, according to the paper, was mass cancellations stemming from “planned military activity.”

On Monday, Jiao Xuening, a resident from the southern city of Shenzhen, described on his Chinese social-media account how he had been stranded at a Shanghai airport for almost six hours. “At first I was disgruntled,” he wrote. But then he listened to a stream of flight cancellations over the loudspeaker. “I was told my flight was merely four hours delayed and was not cancelled, so I became happy again.”

On July 22, the Shanghai Daily, the state-controlled newspaper in China’s most populous city noted that Pudong airport’s outbound on-time rate had nosedived to 26% the day before. “Shanghai’s air traffic control authority has refused to explain” the Shanghai Daily complained of the delays. “With the authority remaining tight-lipped about the reasons behind this, speculation has been rife on the Internet.”

Such conjecture, though, can be dangerous. Earlier this month, some people had speculated online that a dragnet around a “high-ranking official” had perhaps prompted the grounding of planes in Shanghai. The Chinese authorities didn’t take kindly to such gossip; nearly 40 “rumor-mongers” were detained or “held” for wondering online about the flight cancellations, according to the Shanghai Daily.

The chronic flight delays are a huge hassle. But the opacity surrounding their circumstances also speaks to the inefficiencies of doing business in China. In the first half of 2014, non-financial foreign direct investment in China dipped, compared to the same period the year before. Government paranoia about social instability is such that Facebook, Google and Twitter are inaccessible within mainland China. Major foreign news websites are also blocked by censors. Basic things overseas businessmen expect to do can’t be done.

Then there’s the suffocating air pollution, which has dissuaded some expatriates from traveling to China, much less living here. Now, with the routine airport delays, it’s no longer practical to, say, fly from Hong Kong to Shanghai in the morning, attend a few meetings and then return to Hong Kong by the evening. A Beijing-Shanghai-Beijing run makes more sense by the punctual high-speed train service. But that still means committing around 10 hours to traveling the rails.

In the meantime, customer-service representatives for Chinese airlines are trying to cope as best they can. Political sensitivities are such that the carriers cannot complain about the Chinese air force’s monopoly of the skies. Employees for Air China and China Southern said they were only informed about the continuing air congestion the day after the latest round of delays began on July 21. Air China says it will send text messages to passengers’ cellphones to update them on the latest scheduling. “Most of our customers understand the situation,” said an Air China customer-service staffer in a somewhat beleaguered tone. To cope with the long waits in airports notorious for meager services, the statement attributed to the Civil Aviation Administration of China dispensed further advice: “Flight passengers please bring with you food and water.”

with reporting by Gu Yongqiang/Beijing

TIME Fast Food

CMO: Chipotle’s Successful Because It’s Been ‘Very Consistent’

Inside A Chipotle Restaurant Ahead of Earnings Figures
Employees prepare lunch orders at a Chipotle Mexican Grill restaurant at Madison Square Park in New York, U.S., on Wednesday, Jan. 29, 2014. Bloomberg—Bloomberg via Getty Images

TIME spoke with Chipotle's chief marketing officer, Mark Crumpacker, about why Chipotle is wrapping up the competition

Chipotle, the food industry’s fastest-rising star, reported earnings Monday that far exceeded Wall Street’s expectations. Despite higher menu prices because of some food supply shortages, Chipotle’s burritos (from the bowl-sheathed varieties to the tortilla-ensconced specimens) and tacos (soft and hard) are flying off the counters. The company’s sales at locations open for at least a year bounced up 17 percent over the last year, an enviable figure for any restaurant. The company’s stock rose 12 percent on Tuesday with the announcement that in three months alone, Chipotle had revenues of over $1 billion. And Chipotle predicted it will open between 180 and 195 stores in 2014. (That’s at least one every 48 hours.)

Founded in 1993 with the opening of its first store in Denver, Colorado, Chipotle was one of the first chain restaurants to move to using naturally raised animals, which meant securing a meat supply that wasn’t — and still isn’t — fed hormones and antibiotics. It got an early boost from McDonald’s, which divested its assets in 2006 when Chipotle went public. Chipotle started serving naturally-raised pork in 2000 and naturally-raised chicken 2002 and continues to refine its food supply.

To find out more about what is making Chipotle so hot, we talked to the company’s chief marketing officer and right-hand man to CEO Steve Ells, Mark Crumpacker.

TIME: I have to ask, because it’s a question I ask myself whenever I go to Chipotle: When is the guacamole going to be free?

Mark Crumpacker: [Laughs] When it costs less than steak. Guacamole is incredibly expensive. I wish it were free because people love it. I think more than half of our orders include guacamole in one form or another.

T: Chipotle raised its menu prices this year, but in-store sales still increased 17 percent. Why are people so into Chipotle despite higher prices?

MC: I wish there were a super-simple answer for it. We haven’t changed a lot about what we’re doing. We’ve been very consistent with what we’ve done over the years. Chipotle doesn’t play the typical marketing game where we add new menu items and try to get people in with gimmicks like that. So I don’t think we’ve changed so much as consumer demand has changed. I have to wonder if maybe consumers aren’t catching up with us, in a way. Frankly, we’re just really positioned well to be where those folks want to go.

T: What are foodies demanding these days, and how does that line up with what Chipotle cooks?

MC: We see a trend toward people wanting higher-quality food. And it comes in a number of different flavors. Some people are interested in health, other people are interested in the impact of the food they eat on the environment. Generally speaking, across most of the different age segments we look at, we’ve seen an increase in people’s propensity to do that. If you’re going to do that, if you’re going to care a little bit more about where your food comes from, and you’re going to eat fast food, your choice is going to get limited pretty fast. There’s not a lot you can do, and Chipotle is quite well-known for having higher quality ingredients.

T: Who does Chipotle compete with? Do you compete with non-chain, mom and pop restaurants, or Taco Bell?

MC: A lot of people talk about doing the things we’re doing, but I don’t think there’s a competitor our scale that’s doing what we’re doing with regards to spending more on our ingredients. Our food costs are just higher than the other guys’ are. We’re spending more on them and there aren’t processed menu items. We do a lot of the cooking by hand in the restaurant. There’s not a lot of that going on [with other chains].

Having said that, we compete with everybody. Our customers definitely go to McDonald’s, some of them go to Taco Bell, they go to a lot of different restaurants.

T: McDonald’s was an early investor and divested its assets in 2006. In what ways did Chipotle overlap with McDonald’s, and then how have the two companies now become different entities?

MC: The companies were always very different entities. McDonald’s had a very hands-off relationship with Chipotle. They provided support where we wanted it and that was largely on real estate, logistics, supply chain issues initially. But it quickly become apparent that we were essentially heading in a different direction and there was really no influence on the food side in the experience we created in our restaurant.

T: Do you have a favorite menu item?

MC: I’m partial to the carnitas. In fact, I snuck out of a meeting today and had that. I visit all these farms and know where all the ingredients come from and that’s the one I’m most proud of. It’s delicious.

Of all the proteins we serve, the difference between commodity pork and naturally-raised pork is the most dramatic. If you’ve ever been to a confinement hog operation, it is absolutely terrifying. It’s brutal, it’s unpleasant for the animals and the people working there. And the difference between that and our hogs which are raised, even if they’re not totally outdoors‚ and just deeply bedded pens, is really, really dramatic. The alternative is very grim.

T: So it feels good to eat it, then?

MC: Yeah. I think if you’re going to eat meat, that’s a pretty good one to eat. Having been to the farms and seen all the animals, I feel best about that one.

T: Does Chipotle’s growth have something to do with the rise in popularity of Mexican cuisine? Would this have been possible 30 years ago?

MC: When Chipotle started 21 years ago, Mexican food in the United States was very, very different. It was a large plate with multiple items, usually something doused in red or green chili sauce and refried beans. Chipotle introduced to the masses the San Francisco-style burrito, which even frankly those San Francisco burritos were smothered in chili sauce. So I wonder how much it’s people more interested in Mexican food, as it is Chipotle introduced them to a different kind of cuisine altogether.

T: What is the most number of times you’ve eaten at Chipotle in one week?

MC: This is probably going to be embarrassing. I’d say five times. I’ve never eaten there every single day. But you know, if you work there and you’re in the restaurant, that’s what you’re going to eat. I know our crews eat our food every day.

T: Any complaints about getting sick of it?

MC: [Laughs] Well, you know, one of the things I learned about Chipotle, which fascinated me when I first started, you need to be very careful about what you order the first time at Chipotle because most people eat that same thing for like, the next decade.

T: What’s Chipotle going to be doing differently five years from now?

MC: Our menu has stayed the same, but underneath that menu we’re constantly striving to improve each individual ingredient. Each one of them is one its own trajectory. If you went through our 25 or so primary ingredients, each one would have a path for some distant goal of where we’d like to go with it. There’s a particular path for chicken, and then for beef and then for pork and all those veggies. We’re almost rid of any ingredients on our menu that are genetically modified. When I look out five years I suspect that the menu will be pretty much the same, but the ingredients underlying will continue to transform as we go.

T: Thanks.

MC: Thank you.

TIME Automakers

Chrysler Recalls Up to 800,000 Jeeps Over Ignition-Switch Problems

A 2005 Jeep Grand Cherokee rolls down the assembly line Wedn
A 2005 Jeep Grand Cherokee rolls down the assembly line Wednesday, Aug. 25, 2004, at Chrysler's Jefferson North Assembly Plant in Detroit, Michigan. John F. Martin—Bloomberg/Getty Images

Older Jeep Grand Cherokees and Jeep Commanders may have a faulty ignition switch

Around 800,000 older Chrysler Jeeps could be affected by a recall due to a problem with the ignition switch, the company said in a statement Tuesday.

The company said it is aware of one reported accident associated with the defect, but no injuries.

The recall will affect a still-undetermined number of model year 2006-2007 Jeep Commanders and 2005-2007 Jeep Grand Cherokees. In vehicles affected by the problem, contact with a driver’s knee or other outside force can move the ignition switch from on to off, causing the engine to stall and cutting power brakes and power steering.

The company said its investigation is ongoing but that around 792,000 vehicles could have faulty switches, including 659,900 in the U.S. and others in Mexico, Canada, and elsewhere. Newer models have been redesigned are unaffected, the company said.

Chrysler’s recalls come as rival automaker General Motors has recalled nearly 28 million automobiles worldwide for similar ignition switch issues. The GM problems have been linked to at least 13 deaths, and the company has faced federal investigation over its handling of the situation.

Chrysler also announced that 21,000 vehicles, including certain 2014 Ram pickups, 2015 Jeep Cherokees and 2015 Chrysler 200 sedans, will be recalled for inspection and, if necessary, have their shocks and struts replaced.

Your browser, Internet Explorer 8 or below, is out of date. It has known security flaws and may not display all features of this and other websites.

Learn how to update your browser