WALL_STREETThe Skinny
WRAL Local Tech Wire Publisher and Editor Rick Smith dishes out tidbits from the local technology sector.

Wake up and smell the latte – in Beijing! Bye, bye more American jobs.

RESEARCH TRIANGLE PARK, N.C. — Wake up and smell the latte – in Beijing. Way to go, Starbucks.

Even as the mega coffee shop operator and creator of all drinks exotic moves to close 600 stores in the U.S. (including one in Chapel Hill and nine others across North Carolina), it is making plans to expand in China.

Twelve thousand Americans will soon be out of work as the Starbucks outlets close. Meanwhile, Starbucks is following the yellow brick road of dollar$ and Chinese yuan to the Middle Kingdom, just as most other American companies are as they look for profits.

Hey, I have nothing against free enterprise. But the media are saying very little about Starbucks’ own version of “off-shoring.”

“Starbucks Corp., the world's largest coffee-shop chain, will expand in China after announcing plans to close underperforming U.S. stores and slash jobs,” Bloomberg reported today. Good for Bloomberg. Note the word “slash.”

Globalization is affecting everything else we buy, and Americans are being tighter with their dollars. Plus, even Burger King and McDonald’s now offer specialty coffee brews.

But I still find it a bit galling that American customers (and dollars) who made Starbucks so successful here have fewer places to buy Starbucks. And a lot of fellow Americans are being thrown out on the street.

And this outsourcing is being done by Seattle-based Starbucks, which has about as liberal a leadership as there is in free enterprise today. (I thought only evil conservatives and Republicans were in business to make a quick buck!)

Wang Jinlong, president of Starbucks “Greater China,” told Bloomberg that his company is going to step up investments as China’s growing middle class develops a hankering for coffee rather than tea.

"There will be more innovation, more new products, more resources, not only investment,” Wang said.

Maybe if that innovation and investment make enough yuan, Starbucks will reopen the Starbucks being closed at 141 Chatham Downs in Chatham County, where it has a Chapel Hill address, plus five in Charlotte, one in Greenville, one in Hickory, one in Wilson and one in Winston-Salem.

Starbucks certainly is an equal opportunity capitalist business when it comes to layoffs and shutdowns. Forty-four states and the District of Columbia are losing shops.

California is losing 88 – tops on the list. The state of Washington is losing 19.

Meanwhile, Starbucks has plans to open another 80 stores across China this year, Wang told Bloomberg. China “has the potential to become the largest market outside the U.S.” Starbucks also has plans to expand in Canada, Japan and the U.K., Bloomberg added.

So the next time you buy a latte or exotic beverage or a plain ol’ decaf, just remember – Starbucks is a business. “Bucks” is part of the name for a reason, and its management sees stars overseas just like all the other corporate giants that continue to chase profits wherever they can be made.

Nothing wrong with that, mind you. Business is business, whether you drink coffee or tea. But don't be fooled into believing that Americans aren't hurt sometimes in the process.

Contact Rick Smith

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