Worries new recession fears may keep companies from hiring

This is a rush transcript from "Your World," May 23, 2012. This copy may not be in its final form and may be updated.

STUART VARNEY, GUEST HOST: With all this uncertainty, will it keep big companies from hiring more people?

It is a big concern for my next guest, who is the chief executive officer of Heinz, Bill Johnson.

Before we get to hiring or not, you were sitting there when Ed Henry was reading that quote from the president that the president was showing fiscal restraint. You winced.

Explain yourself, sir.

BILL JOHNSON, CHAIRMAN & CEO, H.J. HEINZ COMPANY: Well, B.S. stands for big spender in my view.


JOHNSON: And I think the reality is that you can’t argue with the facts. The facts are, we are pushing $16 trillion in debt. It has created uncertainty in the business community and it’s affecting virtually every decision we make.

VARNEY: He is a big spender, yes no?

JOHNSON: Obviously. I mean, the spending says it all.

I try to stay out of politics in my job, but the reality is, when it goes from $10 trillion or $11 trillion in debt to $16 trillion, something has changed fundamentally

VARNEY: All right, the president wants you, a corporate chief -- you’re the CEO of a very big company -- he wants you to hire people. Why are you -- are you hiring people? And, if not, why not?

JOHNSON: Well, we are certainly not hiring people in the West, either the U.S. or Europe, because of the uncertainty in the environment, the economic conditions.

And I think the whole tax situation is a big concern. I think it was Churchill that once said trying to tax your way to prosperity is like standing in a bucket and trying to lift yourself up by the handles. It just doesn’t work.

And so I think we’re just concerned about the uncertainty. And until we get some clarification on where we’re going, we are sort of sitting on the sidelines.

VARNEY: Are you talking about clarification about the economy is it expanding properly, or are you talking about clarification on regulation, like ObamaCare?

JOHNSON: All of the -- all of the above, Stuart.

I think, from our perspective, I think manufacturing is ready to come back to the States. I think that thing that is holding it back is the concern about the regulatory environment and whether it is going to be allowed to set up the way it should set up, and try to create the number of jobs it possibly could.

We are already starting to see manufacturing migrate back to the West if the West will support it. And I think the regulatory environment is just making it more uncertain and creating a condition by which we feel uncomfortable in making those investments.

VARNEY: How do you feel about ObamaCare?

JOHNSON: Well, I am not a fan. I am not a fan of any time the government gets bigger.

VARNEY: Is it going to raise your costs?

JOHNSON: Absolutely.

VARNEY: A lot?

JOHNSON: Significantly.

VARNEY: And that is a problem for you when it comes to hiring more people?


JOHNSON: Sure it is. If you have 100 people and you are paying $100 and all of a sudden it goes to -- $100 to $150, you can’t keep the 100 people. You have to got the number of people to compensate for the cost difference.

VARNEY: Now, Mitt Romney just said to TIME magazine he has pledged 6 percent unemployment -- that’s a much lower rate -- by -- I forget the time frame -- by the end of his first term, 6 percent unemployment by the end of his first term, a pledge by Mitt Romney to "TIME" magazine.

And you say?

JOHNSON: I say if the conditions are right and the government does the appropriate things and gets out of way of business and lets business hire people and really move ahead with investment, it is doable.

I think the reality is that the number of employed in the country is down to a low since 1981. We need to bring those people back into the work force and we need to create conditions where there is regulatory certainty, where we understand where taxes are going, where the dollar is at a stable position, where we are not concerned about the overhang from Europe, and really then encourage business to be a partner with government, not a foe of government.

VARNEY: All right, now, are you going to get there, the situation you describe, by expanding private enterprise, liberating private enterprise, or are you going to get there by more government? Which is it?

JOHNSON: Oh, you are going to have to liberate private enterprise. You simply do not get there any other way.

VARNEY: That puts you on the right of the political spectrum, and you just made a political statement.

JOHNSON: No, I did not. It puts me on the perspective of what grows business. And that is not a political statement.

It’s a statement in economic fact. And if you look at the emerging world right now, which I certainly wouldn’t call on right of the political spectrum, including China or India, they have created conditions where private equity can thrive. And, as a consequence, employment is going up.

VARNEY: Are you in that CEO club that says President Obama is anti- business?

JOHNSON: I am in the club that says the current conditions in the U.S. are not supportive of business growth.

VARNEY: Not supportive -- current conditions are not supportive of business growth?

JOHNSON: That’s right.

VARNEY: Does that mean the current administration is not supportive of business growth?

JOHNSON: It certainly means that the conditions are not being improved to support the kind of business growth that I would like to see.


VARNEY: I am not trying to put you in a political corner. JOHNSON: No, that’s all right.

VARNEY: Please understand. However, let me raise a pet peeve with you raised by many of our viewers.


VARNEY: The government says there is no inflation. They say there is inflation. Go to the grocery store and look at food prizes.

JOHNSON: Absolutely.

VARNEY: There is inflation. And you feel that. You make soup, for heaven’s sake.

JOHNSON: We make a lot of products.

And the commodity costs have increased substantially, last year almost double-digit increases in inflation in commodity costs. And it’s a function of demand, it’s a function the weak dollar, it’s a function of a lot of things that contribute to a very unstable environment in the commodity world.

So inflation is absolutely a big part of the food business right now. I wish it wasn’t.

VARNEY: So, which would you prefer in America? Spend more or tax less?

JOHNSON: I would prefer tax less.

VARNEY: You would prefer that?


VARNEY: You think you’re going to get it?

JOHNSON: I don’t know. I think it depends on how it turns out in November and where we go going into the future.

VARNEY: All right, Bill Johnson, I press. You have got to admit, I did press, but I think I was fair. Right?


JOHNSON: You were absolutely fair, Stuart.

And I hope people understand my position, which is I’m concerned about business environment.

VARNEY: Got it.

Bill Johnson, CEO Heinz, thanks for joining us, sir. Always appreciate it.

JOHNSON: Stuart, thank you very much.

VARNEY: All right.

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