Former McDonald's USA CEO: Robots to Replace People in the Service Industry Going Forward

Faced with rising labor costs, fast-food giant Wendy's has announced a plan to replace employees with self-ordering kiosks in 1,000 stores by the end of the year. Former McDonald's USA CEO Ed Rensi says Wendy's move is a direct response to the push for a minimum wage increase to $15-an hour, and he believes automation is here to stay.

“No question about it, Rensi told the FOX Business Network’s Stuart Varney. "It’s not only the minimum wage, it’s the work rules, it’s the joint employment requirement, now the franchisors are responsible for the labor practices of franchisees. It’s all nonsense, it’s over-regulation."

Rensi says the industry will ultimately invest in robots over workers, which he believes will be cost-effective in the long term. “I have said that robots are going to replace people in the service industry going forward," Rensi said. "And a self-service kiosk is nothing more than automation taking over people.”

Asked about President Trump's address to a joint session of Congress, Rensi said it was "a CEO speech." Citizens, he said, are the board and Trump is the CEO "and he delivered a magnificent speech, strategic, very carefully stated, hit the points of things that need to get done.”

But Rensi warned if Republicans and Democrats don’t get behind Trump and begin implementing his agenda, then American business’ support of Trump’s policies will quickly turn sour. “They’re falling in love with his strategic direction and his intent. But if the Republicans and the Democrats don’t get their stuff together and start executing, they will fall away just as quickly as they climbed on board.”

Rensi described Trump’s meetings with CEOs from a wide range of industries is a smart way to get an idea of the economic environment American businesses are facing. “Who’s better to tell you what’s going on than Harley-Davidson (NYSE:HOG) motorcycle, the motorcycle of the people. And they can’t sell their bikes outside the U.S. because of the tariffs.  But Honda is coming in here every day.  What are we going to do about it?”

Rensi is a supporter of a controversial border-adjustment tax proposed as part of a potential Republican tax reform plan. “If our products are going to get taxed going into China, then China’s products ought to get taxed coming into here.  And currencies will catch up in time.”