WEBVTT - Surveillance: Gen. Milley Warns On China 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 0:00:09.240 --> 0:00:13.080 with Jonathan Ferroll and Lisa Brownowitz Jay Ley. We bring 0:00:13.119 --> 0:00:17.159 you insight from the best and economics, finance, investment, and 0:00:17.280 --> 0:00:23.280 international relations. Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg 0:00:23.360 --> 0:00:30.240 dot Com, and of course on the Bloomberg Tournament we 0:00:30.440 --> 0:00:34.159 sharply digressed. David Rubinstein joins us the Carlisle grew up 0:00:34.159 --> 0:00:36.479 on fire with some recent interviews of course peer to 0:00:36.600 --> 0:00:39.960 peer conversations with Mr Rubenstein, and I really want to 0:00:40.000 --> 0:00:42.720 focus on the hockey player from Belmont Hill for those 0:00:42.760 --> 0:00:45.080 of you that are in the know, that is really 0:00:45.120 --> 0:00:49.000 good prep school hockey, and then onto Princeton and r OTC. 0:00:49.479 --> 0:00:53.320 David Rubenstein. The path of General Miley to the top 0:00:53.400 --> 0:00:57.200 of the Pentagon pecking mortar was most original, wasn't it. 0:00:58.240 --> 0:01:01.560 It was We've never had a person service Chairman of 0:01:01.560 --> 0:01:04.120 the Joint Chiefs of Staff who had an undergraduate degree 0:01:04.120 --> 0:01:06.640 from an Ivy League school. Um, he didn't expect to 0:01:06.680 --> 0:01:09.080 spend his entire career in the military, but it worked 0:01:09.120 --> 0:01:12.840 out that way, and he's from a military family. But interestingly, 0:01:12.880 --> 0:01:15.160 his father did not want him to go into the military. 0:01:15.440 --> 0:01:18.120 His father really tried to keep him out of the military. 0:01:18.360 --> 0:01:21.880 How has he colored in his service colored and infantry 0:01:22.000 --> 0:01:24.480 by the fact that his father truly was on the 0:01:24.560 --> 0:01:29.160 shores of yo Jima. Well, his father was a real 0:01:29.200 --> 0:01:32.319 combat veteran in the South Pacific in World War Two. 0:01:32.520 --> 0:01:35.320 But his father knew the horrors of military combat and 0:01:35.400 --> 0:01:38.200 he tried to keep his son from going to West Point. Uh. 0:01:38.280 --> 0:01:42.800 He went to Princeton on a Hockey scholarship effectively hockey scholarship, 0:01:43.319 --> 0:01:46.160 and but he got into r OTC and ultimately say 0:01:46.360 --> 0:01:49.560 stayed in the military. It's an unusual story. And he's 0:01:49.600 --> 0:01:52.360 obviously become one of the most visible of all the 0:01:52.440 --> 0:01:54.320 chairmans of Joint Chiefs of Staff because of things that 0:01:54.400 --> 0:01:57.360 happened during the Trump administration. David China was very much 0:01:57.360 --> 0:01:59.680 front and center with his interview, as it rightly should 0:01:59.720 --> 0:02:02.080 be a ringing too many people out there. What is 0:02:02.080 --> 0:02:05.840 the different nature of this rivalry, of this potential cold 0:02:05.880 --> 0:02:10.000 war given the fact that the strategic nature is China 0:02:10.040 --> 0:02:13.280 frankly provides so much the United States by way of goods. 0:02:14.680 --> 0:02:17.400 General Milly said that the biggest security threat to this 0:02:17.440 --> 0:02:20.120 country is China now Historically, when I was growing up, 0:02:20.120 --> 0:02:22.400 it was Russia, and Russia is still a threat, he said, 0:02:22.400 --> 0:02:24.680 In the course, there's North Korea. But in the end, 0:02:24.800 --> 0:02:28.840 China has the the money and the manpower and the 0:02:28.880 --> 0:02:31.720 technology skills to really be a complete rival to us. 0:02:31.720 --> 0:02:34.799 And he was very worried about the hypersonic missile, for 0:02:34.880 --> 0:02:37.400 which there was a test not long ago. Now we 0:02:37.440 --> 0:02:40.440 probably presumably are developing our own hypersonic sonic missile. It's 0:02:40.440 --> 0:02:43.119 not been discussed publicly, but this is a missile which 0:02:43.160 --> 0:02:46.239 could um launch a nuclear weapon on us without any 0:02:46.280 --> 0:02:49.680 real defense that we currently have. So how separate are 0:02:49.680 --> 0:02:52.560 the military concerns that the United States has with respect 0:02:52.560 --> 0:02:55.440 to China from the business concerns, especially as a growing 0:02:55.520 --> 0:02:59.040 number of corporations in America are trying to increase their 0:02:59.040 --> 0:03:03.760 footprints in Beijing in the mainland. While the business community, 0:03:03.800 --> 0:03:06.320 I think is interested in getting all those customers and 0:03:06.560 --> 0:03:09.320 developing relationships in China. But we have to be very 0:03:09.360 --> 0:03:12.160 careful in the business community because we recognize that China 0:03:12.320 --> 0:03:15.440 is now making more difficult for American companies to invest 0:03:15.480 --> 0:03:18.400 there or operate there, certainly more difficult than it was 0:03:18.440 --> 0:03:20.960 a couple of years ago. The military is more concerned 0:03:20.960 --> 0:03:24.040 about China as a threat and less interested in getting 0:03:24.080 --> 0:03:26.720 into China than making certain that China doesn't get into 0:03:26.760 --> 0:03:29.880 the United States. David, and talking to the general and 0:03:29.919 --> 0:03:33.919 also within your own international view, one of the great 0:03:34.080 --> 0:03:37.200 mis calls that you and I and everyone else had 0:03:37.440 --> 0:03:41.440 was our dearth of intelligence on Russia when the Soviet 0:03:41.560 --> 0:03:46.360 Union collapsed. Do we actually have good intelligence on the 0:03:46.440 --> 0:03:51.600 Chinese military? I think our intelligence is probably not as 0:03:51.640 --> 0:03:54.120 good as people would like it to be. I don't 0:03:54.120 --> 0:03:57.720 really know the intelligence communities assessment. I think our ability 0:03:57.720 --> 0:04:00.000 didn't know what's going on North Korea is very very limited. 0:04:00.360 --> 0:04:01.760 I think our ability to know what's going on in 0:04:01.840 --> 0:04:05.640 China is probably better, but not necessarily with the Chinese military, 0:04:05.680 --> 0:04:08.040 because it's difficult to infiltrate, and so you have to 0:04:08.080 --> 0:04:11.840 rely on on technology and things like that, and sometimes 0:04:11.920 --> 0:04:14.120 it's hard to get technology that's going to pick up 0:04:14.120 --> 0:04:16.320 exactly what's going on in China. As you point out, 0:04:16.520 --> 0:04:20.080 we underestimated exactly some things that were happening in Russia, 0:04:20.120 --> 0:04:22.520 and we overestimated other things are happening in Russia. And 0:04:22.520 --> 0:04:25.360 we've had a lot of technology failures in in in 0:04:26.080 --> 0:04:28.000 the Middle East, with the are in ability to know 0:04:28.040 --> 0:04:30.440 what was really going on in Iraq for example. And David, 0:04:30.520 --> 0:04:32.960 it's so important that Tom asked that question because it 0:04:33.040 --> 0:04:35.839 really dovetails the two issues of the business community and 0:04:35.880 --> 0:04:38.720 the military community. How do you get visibility? Well, there 0:04:38.720 --> 0:04:41.320 are people who are represent the United States in some way, 0:04:41.440 --> 0:04:44.320 shape or form on the ground there. How much is 0:04:44.320 --> 0:04:46.920 this a concern for business executives you speak with in 0:04:47.040 --> 0:04:50.560 terms of how much surveillance they're under, what type of 0:04:50.880 --> 0:04:53.640 regulation there might be from the United States government because 0:04:53.680 --> 0:04:56.440 of that suspicion that they are the note of information 0:04:56.520 --> 0:04:59.880 one way or another. While the business community has been 0:05:00.040 --> 0:05:03.159 warned that it as it operates in China, everything could 0:05:03.200 --> 0:05:06.080 be bugged and everything could be stolen away in terms 0:05:06.120 --> 0:05:09.520 of intellectual property, the Business Committee is wary about dealing 0:05:09.680 --> 0:05:11.560 in things in China. But on the other hand, there 0:05:11.560 --> 0:05:12.960 are a lot of customers there and there's a lot 0:05:12.960 --> 0:05:15.800 of businesses there, So people are warned. They try to 0:05:15.839 --> 0:05:18.200 be careful, but nobody can be perfect in terms of 0:05:18.279 --> 0:05:22.200 our ability to protect certain information. David, with your success 0:05:22.400 --> 0:05:24.840 and I and I mentioned this, folks, because this peer 0:05:24.880 --> 0:05:28.320 to peer conversation occurs in front of our three most 0:05:28.400 --> 0:05:32.560 important documents at the National Archive. David, you brought the 0:05:32.640 --> 0:05:37.599 Magna Carta to America, the twelve nineties seven document itself. 0:05:38.080 --> 0:05:40.919 Tell us a little bit about that quickly, What was 0:05:41.000 --> 0:05:45.719 it like to give to America the Magna Carta. While 0:05:45.760 --> 0:05:48.600 they're seventeen extant copies of the Magna Carta fifteen in 0:05:48.640 --> 0:05:51.599 British institutions, one of the Australian Parliament, this was the 0:05:51.680 --> 0:05:54.680 only one in private hands, and I put it there 0:05:54.760 --> 0:05:58.919 on permanent display and permanent loan. And essentially it's a 0:05:59.000 --> 0:06:01.880 document that was a warm runner of the Declaration of Independence, 0:06:02.080 --> 0:06:04.279 so it really in many ways had more impact in 0:06:04.320 --> 0:06:07.160 this country than ironically it did in England. That's why 0:06:07.160 --> 0:06:09.560 I thought it should stay here. Unbelievable to see that 0:06:09.600 --> 0:06:11.720 at the National Archive, and of course, folks, you can 0:06:11.760 --> 0:06:14.240 see it at the British Library. John, I know you've 0:06:14.240 --> 0:06:18.679 done that, the British Library Museum. Just extraord wonderful. Love it, David, 0:06:18.720 --> 0:06:21.600 Thank you, Thank you so much, David Rubinstein. That catch 0:06:21.680 --> 0:06:24.920 the full interview, A fascinating interview with the General Milly 0:06:25.000 --> 0:06:33.520 on the David Rumistice Show, Pit to pit conversations. But 0:06:33.640 --> 0:06:36.440 the Democrat a Republican. One thing I know for certain 0:06:36.680 --> 0:06:40.680 is later in the Trump administration all agreed that the gentleman, 0:06:40.760 --> 0:06:43.920 the movie producer from Goldman Sex rose to the occasion. 0:06:44.240 --> 0:06:46.480 He is the former Chancellor of the Exchequer of the 0:06:46.560 --> 0:06:49.800 United States and he is in Rio. Yusuf Kamal l 0:06:49.880 --> 0:06:54.279 Dean joins us now with a conversation with Chancellor Minution 0:06:54.600 --> 0:06:57.120 usef good morning, Hey Tom. I mean, for once, it's 0:06:57.120 --> 0:06:59.840 not all happening in New York. People all around the 0:07:00.040 --> 0:07:02.520 old CEOs and government officials come out here to read. 0:07:03.160 --> 0:07:05.320 And one of them, of course is Steven Newts, and 0:07:05.400 --> 0:07:09.040 he's the founder at Liberty Strategic Capital. Thank you very 0:07:09.080 --> 0:07:11.000 much for joining us. It's a secretary. Give me a 0:07:11.040 --> 0:07:13.080 bit of an overview then, all the kind of meetings 0:07:13.120 --> 0:07:14.960 you've been having and what have you been able to 0:07:14.960 --> 0:07:17.760 secure any new deals. Well, first of all, it's great 0:07:17.840 --> 0:07:19.600 to be with you, and it's great to be back 0:07:19.600 --> 0:07:22.880 in the region. Uh. My focus here is really to 0:07:22.960 --> 0:07:27.400 be supportive to the economic transformation in the region. Uh. 0:07:27.600 --> 0:07:31.320 It's it's very important, I think for economic stability that 0:07:31.400 --> 0:07:35.760 all these countries transform their economies and expand them away 0:07:35.760 --> 0:07:39.000 from just energy. You raised two point five billion dollars 0:07:39.000 --> 0:07:42.560 in private equity investments. Did some of it come from 0:07:42.600 --> 0:07:45.920 the likes of the public Investment Fund? Well, I can't 0:07:45.920 --> 0:07:50.080 really comment on our raising of funds. What I can 0:07:50.200 --> 0:07:53.160 comment on is what we're focused in doing. So our 0:07:53.200 --> 0:07:56.680 real focus is right now on technology, with a big 0:07:56.720 --> 0:08:00.320 emphasis on cybersecurity, national security, and data priv to see, 0:08:00.360 --> 0:08:02.920 which was an area I focused on when I was 0:08:03.000 --> 0:08:06.760 Treasury Secretary. I was responsible for cyber for all the 0:08:06.760 --> 0:08:09.440 financial services, and it's a very big risk. So we 0:08:09.480 --> 0:08:12.600 want to make sure that companies and governments are are 0:08:12.720 --> 0:08:15.320 taken care of and protected. Let's get to the macro 0:08:15.480 --> 0:08:19.720 story for a moment, because the last time you discussed inflation, 0:08:20.000 --> 0:08:22.840 you said you were worried. Now quite a bit more 0:08:22.920 --> 0:08:26.880 data has come through. How has that view evolved since? Well, 0:08:26.920 --> 0:08:29.840 I was worried because I thought we'd see inflation. We 0:08:29.960 --> 0:08:32.640 have seen it. I think you know, we're we're running 0:08:32.679 --> 0:08:35.640 probably in the four to five percent inflation. My guesses 0:08:35.679 --> 0:08:38.880 will stabilize closer to three and a half, but that's 0:08:38.920 --> 0:08:42.520 that's still a significant issue. For a long time, the 0:08:42.520 --> 0:08:45.960 Federal Reserve was concerned that we couldn't get inflation up 0:08:45.960 --> 0:08:49.240 to two percent, but now, just given the enormous amount 0:08:49.320 --> 0:08:53.400 of fiscal and monetary support, I am very concerned that 0:08:53.440 --> 0:08:55.640 we're going to see higher interest rates and the impact 0:08:55.679 --> 0:08:59.560 on consumers and antenue it treasury yields those still go 0:08:59.640 --> 0:09:01.400 to three point five because that's what you said last 0:09:01.440 --> 0:09:05.320 That's that's still my prediction. Okay. What about the ability 0:09:05.679 --> 0:09:08.319 of the United States to grew itself out of three 0:09:08.360 --> 0:09:12.480 and post pandemic debts and the massive amounts of money 0:09:12.600 --> 0:09:16.880 that it's borrowed. Well, look, there's no question that during 0:09:16.920 --> 0:09:21.360 this crisis we needed to have massive support. And I'm 0:09:21.400 --> 0:09:23.320 most proud of the fact that we passed to the 0:09:23.320 --> 0:09:27.400 two Cares bills to zero and a hundred to zero 0:09:27.679 --> 0:09:31.439 in the Senate. That was pretty extraordinary. Uh, we spend 0:09:31.480 --> 0:09:34.280 four trillion dollars. I never thought I'd be saying those 0:09:34.320 --> 0:09:37.760 words four trillion dollars. I think we needed to spend 0:09:37.800 --> 0:09:40.839 that money where we would have had a global depression, 0:09:40.960 --> 0:09:45.720 not recession. But the new administration has continued to spend 0:09:45.880 --> 0:09:49.880 another two trillion dollars, now more money. I'm very concerned 0:09:49.920 --> 0:09:53.079 about the size of the national debt at twenty a 0:09:53.080 --> 0:09:55.280 half trillion today, I worry it could go up to 0:09:55.360 --> 0:09:58.439 thirty two trillion on a twenty three trillion dollar economy. 0:09:58.640 --> 0:10:01.040 It's quite concerning. I want to stay with the fiscal 0:10:01.080 --> 0:10:03.840 sign of things for a moment because the Democratic tax 0:10:03.920 --> 0:10:07.959 plan has been controversial to some. Uh the billionaire taxes, 0:10:07.960 --> 0:10:11.080 it's also called. Do you think that the it's a 0:10:11.120 --> 0:10:13.840 good plan with a pass Congress. Well, let me just 0:10:13.880 --> 0:10:16.520 first say, I think now is the wrong time to 0:10:16.640 --> 0:10:21.000 raise taxes on anybody, whether it's billionaires or average consumers 0:10:21.000 --> 0:10:24.280 and spend. I think we've done plenty of spending. I 0:10:24.320 --> 0:10:27.840 think the problem with the billionaire taxes one, it probably 0:10:27.880 --> 0:10:30.360 won't raise much money since a lot of this money 0:10:30.400 --> 0:10:33.559 will be given away to foundations. Uh, so it won't 0:10:33.559 --> 0:10:37.320 be taxed. The other issue is it's probably unconstitutional. And 0:10:37.360 --> 0:10:41.199 the third issue is it creates very very bad incentive. 0:10:41.800 --> 0:10:45.160 How do you tax public securities and not private securities? 0:10:45.679 --> 0:10:49.400 Think about this. It's a complete disincentive to grow your business. 0:10:49.440 --> 0:10:52.040 To basically say every year the government will take a 0:10:52.080 --> 0:10:55.040 little bit more of your business away. That's not the 0:10:55.120 --> 0:10:58.760 right incentive for long term investing. A shout out to 0:10:58.800 --> 0:11:02.080 Tom Keene for this quest, and he is looking to 0:11:02.120 --> 0:11:04.839 find an answer on whether there's gonna be an opportunity 0:11:04.840 --> 0:11:09.280 for Republicans in twenty four to reassert a calmer policy 0:11:09.600 --> 0:11:15.120 out of the prison camps, out of what the present chaos. Well, uh, 0:11:15.160 --> 0:11:17.960 you know, well, we'll see. It's uh, it's it's politics, 0:11:18.160 --> 0:11:20.080 you know. My guess is a lot of things will 0:11:20.160 --> 0:11:22.720 change over the next couple of years. Again, my biggest 0:11:22.720 --> 0:11:26.280 concern right now is we need less spending and we 0:11:26.320 --> 0:11:29.400 need to worry about making sure we don't have inflation 0:11:29.480 --> 0:11:33.400 out of control and the national debt is sustainable. We've 0:11:33.440 --> 0:11:35.960 seen a US bend on a on a China telco 0:11:37.080 --> 0:11:39.400 in many ways. One would have thought that some of 0:11:39.400 --> 0:11:42.079 the tension between China and the United States would ease 0:11:42.120 --> 0:11:44.280 a little bit with a new administration and a new 0:11:44.280 --> 0:11:47.440 approach community. That hasn't happened as fast, was not happening 0:11:47.440 --> 0:11:51.680 at all. Have you been surprised about how this is evolved. Well, 0:11:51.760 --> 0:11:54.880 let me just say, Ambassador Leidheiser and I spent a 0:11:54.920 --> 0:11:57.120 lot of time going back and forth to China. I 0:11:57.160 --> 0:12:00.960 think we probably had twenty different meetings with the Vice Premier, 0:12:01.000 --> 0:12:02.960 and I think we're proud of the work we did 0:12:03.000 --> 0:12:06.080 on the Phase one trade agreement. My own opinion is 0:12:06.080 --> 0:12:09.319 a lot work, more work needs to be done, that 0:12:09.360 --> 0:12:13.240 there should be more dialogue as it relates to telecom. Look, 0:12:13.280 --> 0:12:16.600 I think there's certain areas that are national security areas 0:12:17.320 --> 0:12:20.160 at least as it relates to certain telecom equipment, and 0:12:20.200 --> 0:12:22.880 I'm not commenting on the specific of this. We want 0:12:22.880 --> 0:12:27.280 to make sure that our data integrity. On the other hand, 0:12:27.320 --> 0:12:30.480 these are two large economies that have to coexist, and 0:12:30.520 --> 0:12:33.000 I think the work work needs to continue to be done. 0:12:33.040 --> 0:12:36.960 On trade. China has always had the opportunity to have 0:12:37.040 --> 0:12:39.560 the US markets open, and we need to make sure 0:12:39.600 --> 0:12:42.480 we have the same reciprocal opportunities. We have to do 0:12:42.559 --> 0:12:44.880 it there. Thank you very much for the time. That's 0:12:45.000 --> 0:12:48.600 Steven Newton is the founder of Liberty Strategic Capital TAM 0:12:48.720 --> 0:12:51.560 and the rest of the team. Thank you, sir, Thank 0:12:51.559 --> 0:12:53.560 you very much as always, catching up with the fulm 0:12:53.600 --> 0:13:02.640 of trenchery. Secretary that step yeah, to find out what 0:13:02.720 --> 0:13:07.480 Industrial America is doing and what is so advantageous here 0:13:07.520 --> 0:13:09.440 is David Weston and I. We didn't look at the 0:13:09.480 --> 0:13:13.719 first generation corvette. We looked at the second generation corvette 0:13:14.160 --> 0:13:17.720 and said someday we'll own one of those. And there's 0:13:17.760 --> 0:13:23.480 a new one to you that I'm sitting at home. 0:13:23.720 --> 0:13:25.840 Thank you so much. To Tom Keane, we're delighted if 0:13:25.840 --> 0:13:28.040 you joined right now. By General Motors chair and CEO, 0:13:28.160 --> 0:13:31.360 Mary Barrow, they had their third quarter earnings out today, Mary, 0:13:31.400 --> 0:13:33.839 thank you for joining us. First of all, congratulations, you 0:13:33.880 --> 0:13:35.520 did a lot better than most people thought you'd do. 0:13:35.760 --> 0:13:37.640 I don't want to take anything away from that, but 0:13:37.760 --> 0:13:39.400 can you give us some sense how much of its 0:13:39.400 --> 0:13:42.800 core operations I don't have some financing because of used 0:13:42.800 --> 0:13:45.320 car sales that really were on a tear, and also 0:13:45.600 --> 0:13:49.960 reimbursement for that bolt recall. Well, I think it was 0:13:50.120 --> 0:13:51.840 it was all of those things. I mean, g MF 0:13:51.920 --> 0:13:54.800 is performed very strongly. We also saw, you know, in 0:13:54.920 --> 0:13:58.480 light of the current environment China, our China earning equity 0:13:58.520 --> 0:14:00.920 earnings were strong. But I think what the real story 0:14:01.080 --> 0:14:03.880 is is how how well we perform from trucks and 0:14:03.920 --> 0:14:07.040 full size SUVs. We're selling every vehicle we can make, 0:14:07.120 --> 0:14:10.520 and I think that along with uh uh, you know, 0:14:10.559 --> 0:14:13.240 the overall environment is what allowed us to have a 0:14:13.280 --> 0:14:15.520 beat for the quarter. And you know, I think it 0:14:15.600 --> 0:14:19.000 shows the strength of our underlying business. So I'm really 0:14:19.040 --> 0:14:21.320 proud of the team and everything that they accomplished. So 0:14:21.440 --> 0:14:23.880 the magic words there for me where everyone you can 0:14:24.000 --> 0:14:26.280 make because you can't necessarily make all the ones you'd 0:14:26.320 --> 0:14:28.360 like because of the supply chain problems. We've talked about 0:14:28.360 --> 0:14:31.240 it before. I know that it's continuing into next year. 0:14:31.520 --> 0:14:33.600 I guess my key question for you, Mary is is 0:14:33.600 --> 0:14:36.280 there anything at this point that can be done to 0:14:36.680 --> 0:14:38.880 speed up the time that you can get the microchips 0:14:38.880 --> 0:14:43.040 that you need. Well, you know, we're seeing improvements in 0:14:43.120 --> 0:14:46.400 fourth quarter. We had indicated that Q three would be 0:14:46.680 --> 0:14:48.920 the toughest for us, which is and that it was 0:14:48.960 --> 0:14:53.480 further impacted by COVID, But we're seeing strong, stronger performance. 0:14:53.520 --> 0:14:55.720 Now we'll have a Q one will be better than 0:14:55.800 --> 0:14:58.440 Q four. It will linger into next year and we're 0:14:58.920 --> 0:15:01.040 right now are are feeling as will be UH in 0:15:01.080 --> 0:15:04.400 a much better shape in the second half of two. 0:15:04.720 --> 0:15:07.760 And we're also taking steps over the medium term to 0:15:07.800 --> 0:15:10.160 make sure we're never seeing this kind of constraint, not 0:15:10.200 --> 0:15:12.320 only with chips, but with other you know, whether it's 0:15:12.320 --> 0:15:15.920 critical materials or just the overall supply chain. Because we 0:15:15.960 --> 0:15:18.280 have an aggressive growth strategy in front of us, and 0:15:18.320 --> 0:15:20.120 we're going to make sure that we can execute it. 0:15:20.200 --> 0:15:22.760 So it's a very it's a near term problem. Um 0:15:22.920 --> 0:15:25.040 that will work through in the meantime, Marerea, are there 0:15:25.040 --> 0:15:26.720 places you can save some costs? Let me give you 0:15:26.720 --> 0:15:29.240 one example advertising. If you can't sell as many vehicles, 0:15:29.280 --> 0:15:32.600 maybe you don't need to advertise as much. Well, you know, David, 0:15:32.600 --> 0:15:36.080 it's a great point. We are saving across the board. Uh. 0:15:36.200 --> 0:15:39.480 You know, we're we're seeing a strong pricing environment. Obviously 0:15:39.560 --> 0:15:42.360 we're adjusting what we're doing to match. Uh, you know 0:15:42.400 --> 0:15:44.880 the fact that we're selling over every vehicle that we can. 0:15:45.160 --> 0:15:49.720 But also through COVID and and through this crisis with semiconductors, 0:15:49.920 --> 0:15:52.040 we have found ways to make the business more efficient. 0:15:52.080 --> 0:15:55.240 We're working with our dealers to uh to drive an 0:15:55.240 --> 0:15:58.440 increase in profitability for them as well as improving our costs. 0:15:58.480 --> 0:16:01.920 And so across the word, we are always driving efficiencies 0:16:01.920 --> 0:16:05.040 and that that's an underlying, underlying strength of our organization 0:16:05.120 --> 0:16:07.640 and that supports the strong earnings. Mary, Let's talk about 0:16:07.640 --> 0:16:10.800 the perhaps longer term. That's electric vehicle something you've really embraced. 0:16:10.800 --> 0:16:13.600 You have some very aggressive goals for General Motors going 0:16:13.600 --> 0:16:16.520 out electric vehicles. We had some big news this week 0:16:16.560 --> 0:16:19.520 from arrival starts with a T won't necessarily name it. 0:16:19.560 --> 0:16:22.680 With some big fleet sales, particularly to HURT. I know 0:16:22.760 --> 0:16:24.640 in the past you've been I think a little dubious 0:16:24.640 --> 0:16:27.720 about fleet sales because the margins get down. Where are 0:16:27.720 --> 0:16:30.360 you on fleet sales for electric vehicles? Are they different 0:16:30.440 --> 0:16:32.760 because you really want to get broad acceptance? Are you 0:16:32.800 --> 0:16:35.960 looking at fleet sales for electric vehicles? Well, you know, 0:16:36.040 --> 0:16:39.400 if you look at bright Drop, you know the commercial fleet, uh, 0:16:39.440 --> 0:16:42.200 and what we can do from a light commercial vehicle 0:16:42.440 --> 0:16:45.840 perspective with bright Drop and and the whole ecosystem that 0:16:45.840 --> 0:16:48.360 will support I think is a huge opportunity, and that's 0:16:48.400 --> 0:16:52.200 some of the most profitable of fleet sales. We're looking 0:16:52.280 --> 0:16:55.480 at many different opportunities because with electric vehicles you can 0:16:55.520 --> 0:17:00.760 really kind of re reframe how the sales will be, 0:17:01.160 --> 0:17:04.119 and so we're looking at a number of opportunities. But 0:17:04.160 --> 0:17:06.880 I think you know what we've announced is around bright Drop. 0:17:06.920 --> 0:17:09.040 I'm very excited about that because that's just pure growth 0:17:09.040 --> 0:17:11.280 for us. But as I understand, we shouldn't rule out 0:17:11.280 --> 0:17:13.280 the possiblity that down the road, General Motors might have 0:17:13.320 --> 0:17:16.359 a deal similar Hurts deal. Well, you know, in the 0:17:16.359 --> 0:17:19.160 past we have limited our rental cars because that generally 0:17:19.280 --> 0:17:23.399 was the least profitable type of fleet sales. As UM, 0:17:23.520 --> 0:17:26.760 we reimagine how the business will look. We're not ruling 0:17:26.800 --> 0:17:29.040 anything out, okay. And finally, Mary, we've talked a lot 0:17:29.080 --> 0:17:31.399 about back to the office. Since we talked last, there 0:17:31.440 --> 0:17:34.359 have been more and more vaccine mandates. Is that affecting 0:17:34.400 --> 0:17:38.280 General Motors operations? Do you anticipate it will? I don't 0:17:38.280 --> 0:17:40.640 think it will. You know what will work? We continue 0:17:40.680 --> 0:17:43.360 to encourage our employees to get the vaccine we encourage, 0:17:43.400 --> 0:17:46.080 We continue to provide them the information, uh you know, 0:17:46.160 --> 0:17:50.160 from CDC and other UM like organizations around the globe. 0:17:50.320 --> 0:17:53.000 And we're going to work UM to understand how to 0:17:53.080 --> 0:17:56.480 implement the executive order from the President, but to do 0:17:56.600 --> 0:17:59.560 so in a way that our employees and our unions 0:17:59.800 --> 0:18:02.560 of agree to. So once we know the details, will 0:18:02.640 --> 0:18:05.600 work the execution plan. But I don't foresee it being 0:18:05.640 --> 0:18:09.040 an issue for General Motors as we look at our 0:18:09.400 --> 0:18:12.360 overall labor availability. You do have a obviously a very 0:18:12.400 --> 0:18:14.560 important relationship with the U A w C. I oh, 0:18:14.920 --> 0:18:17.200 as you talk with them, do you see resistance coming 0:18:17.200 --> 0:18:21.680 from the union side to vaccine mandates? Well, I think 0:18:21.720 --> 0:18:23.560 that's a better question to ask a S the U 0:18:23.640 --> 0:18:26.520 A W. We're just working with them to provide information 0:18:26.680 --> 0:18:29.919 and encourage encourage all of our employees to make the 0:18:29.960 --> 0:18:33.040 decision with the right information. And that's what we'll continue 0:18:33.040 --> 0:18:35.000 to do. And then again we'll look at what the 0:18:35.040 --> 0:18:37.639 specifics are of the mandate and figure out how to 0:18:37.720 --> 0:18:39.840 how to implement. At this point, we don't know where 0:18:39.840 --> 0:18:41.680 we are in the pandemic, but it seems like it's 0:18:41.680 --> 0:18:43.600 getting better again in the United States. Is it affecting 0:18:43.640 --> 0:18:48.800 GM operations either on the sales side or the production side. Actually, uh, 0:18:48.840 --> 0:18:52.040 you know we're the biggest impact. That's UH that's gating 0:18:52.119 --> 0:18:54.399 us right now. Is we talked about his semiconductors, but 0:18:54.800 --> 0:18:59.000 we've we've seen recovery from the impact in Q three 0:18:59.080 --> 0:19:01.360 from some of our supply eye base that caused UH 0:19:01.600 --> 0:19:06.159 a little bit deeper impact. So I'm I'm optimistic that 0:19:06.200 --> 0:19:08.560 we are through the worst of it. UM. We've shared 0:19:08.600 --> 0:19:11.200 our safety protocols with our supply base around the world, 0:19:11.520 --> 0:19:13.800 So that's what gives me confidence that we're going to 0:19:13.880 --> 0:19:16.119 see a stronger Q four and then a stronger Q 0:19:16.320 --> 0:19:19.399 one and even UH as we get to the second 0:19:19.400 --> 0:19:22.639 half of next year. UH continued improvement as you have 0:19:22.680 --> 0:19:24.639 that gating function as you refer to it, Mary, with 0:19:24.680 --> 0:19:28.040 the semiconductors, are you seeing inflation either in the cost 0:19:28.119 --> 0:19:31.560 you're paying for inputs or costs you can pass along 0:19:31.760 --> 0:19:36.480 the consumers. Well, we definitely are seeing commodity prices increasing 0:19:36.520 --> 0:19:38.720 as well as the cost of logistics, which I think is, 0:19:39.000 --> 0:19:42.400 you know, impacting almost every industry. We're working in managing 0:19:42.440 --> 0:19:46.080 that right now. And again because our product portfolio is 0:19:46.119 --> 0:19:49.320 so strong, I really believe it's the strongest car strucks 0:19:49.320 --> 0:19:51.960 and crossovers we've had in my forty year career here 0:19:51.960 --> 0:19:54.399 at General Motors, and that's that's what is allowing us 0:19:54.440 --> 0:19:56.720 to also have very strong pricing and because we have 0:19:56.720 --> 0:19:59.920 strong receptivity from the customers. Okay, very really appreciate you 0:20:00.000 --> 0:20:02.280 spend time and say that's Mary bar She's the General 0:20:02.280 --> 0:20:12.000 Motors chair and CEO. David thinks so much. We are 0:20:12.040 --> 0:20:17.920 looking at advanced goods trade balances that we've never imagined. 0:20:18.040 --> 0:20:21.879 We're out to a nineties six negative nineties six billion 0:20:21.920 --> 0:20:26.520 dollar statistic which I would respectively suggest Diane Swonker myself 0:20:26.560 --> 0:20:31.200 have never framed. Let's begin there. She is with Grant Thornton, Diane, 0:20:31.280 --> 0:20:36.639 we have not talked about net exports, exports, imports, but 0:20:36.760 --> 0:20:44.720 we have a goods trade balance unimaginable. What does that signal, Well, 0:20:44.760 --> 0:20:47.399 it's really strong demand in the United States relative to 0:20:47.440 --> 0:20:49.240 the rest of the world. That's just where we're at. 0:20:49.320 --> 0:20:51.679 And I think one of the interesting things is, of 0:20:51.720 --> 0:20:54.200 course that will subtract from growth in the third quarter, 0:20:54.359 --> 0:20:57.440 even as durable goods add to growth. In her investment 0:20:57.760 --> 0:21:00.080 that we're seeing out there is really the strongest and 0:21:00.480 --> 0:21:04.159 technology intellectual property that we've seen since the nineteen So 0:21:04.160 --> 0:21:06.679 we'll get some productivity growth, but it really is going 0:21:06.720 --> 0:21:08.640 to be the weakest growth of the quarter, which we'll 0:21:08.640 --> 0:21:11.760 get out tomorrow, will be the third quarter, the weakest 0:21:11.800 --> 0:21:14.960 growth since the onset of the pandemic recovery. But of 0:21:14.960 --> 0:21:18.240 course we're now starting to gain more traction again as 0:21:18.320 --> 0:21:21.199 the delta wave fades, and we're seeing that already in 0:21:21.240 --> 0:21:23.080 some of the credit card data coming in for the 0:21:23.119 --> 0:21:25.960 month of October and as we go into November. Of course, 0:21:26.000 --> 0:21:28.040 the biggest constraint we're going to face out there is 0:21:28.040 --> 0:21:32.040