September 23, 2005


Steakhouse ethics
by Jim Hightower

If you want to see the difference between the ethics of a family-owned company that's grounded in a community, and the ethics of a corporate-owned chain grounded in nothing more solid that maximizing its own profits — look at Ruth's Chris Steak House.

Ruth Fertel is the namesake of this business. In 1965, she mortgaged her house in New Orleans for an $18,000 loan to buy the original Steak House. Just three months later Hurricane Betsy ripped through the area, cutting off power all across the city. Ruth began cooking up steaks over a gas stove and giving them away to victims of the storm and to relief workers.

New Orleans is a tight community and people gratefully remembered her commitment. Besides, she cooked great steaks, so her business flourished and expanded into other cities. But Ruth Fertel died in 2002, and outside shareholders took control of the steakhouses (Ruth’s Chris Steak House has a restaurant on The Plaza in Kansas City, MO), which are now run by bottom-line corporate executives.

In recent weeks, the Corporate Ruth's was hit by Hurricane Katrina. Did the new execs man gas stoves and give away steaks? Ha! The two top honchos bolted from their chain's founding city, jetting away with their spouses to Orlando, where they each own second homes. In this dry and safe haven, they decided to desert New Orleans for good. As the city's poor people were trapped in the unbelievable horror of the flood, the steakhouse moguls were negotiating in Orlando to get tax subsidies for relocating Ruth's headquarters there.

While loyalty is not a virtue in CorporateWorld, it still counts for something in such a family-owned business as New Orleans' Brennan's Restaurant. It took a hit from Katrina, too, but Brad Brennan says they'll soon re-open in the Big Easy.

"When they give you your start," he says "you kind of owe it to the city. Payback is staying your ground and employing the people that want to remain there."

Ruth Fertel would've known exactly what Brad meant.

Jim Hightower is the best-selling author of Let’s Stop Beating Around the Bush, on sale from Viking Press. For more information, visit www.jimhightower.com.


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