WEBVTT - GDP, UAW, Morgan Stanley, and UPS 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:05.240 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.600 and Bloomberg experts, along with essential market moving news. 0:00:14.160 --> 0:00:17.279 Find the Bloomberg Markets Podcast on Apple Podcasts or wherever 0:00:17.400 --> 0:00:20.480 you listen to podcasts, and at Bloomberg dot com slash podcast. 0:00:21.160 --> 0:00:24.040 I'm going to get to these markets here. The store's been. 0:00:24.560 --> 0:00:27.639 It feels to this simple investor over here that the 0:00:27.760 --> 0:00:30.479 interest rates out there in the marketplace have really been 0:00:30.480 --> 0:00:33.640 impacting stocks. And that's my take. Vince Signorella, he joins us. 0:00:33.640 --> 0:00:36.919 He's a pro global macro strategist for Bloomberg News. New 0:00:36.960 --> 0:00:41.440 knee or just a repaired knee replacement replace harsh, replacing 0:00:41.479 --> 0:00:44.080 the He's walking just fine. He found his way into 0:00:44.080 --> 0:00:46.800 the Bloomberg and Director Broker studio. We left from crumbs 0:00:46.840 --> 0:00:48.599 out for him. Vince, what do you make of these 0:00:48.600 --> 0:00:49.120 markets here? 0:00:49.520 --> 0:00:49.600 Uh? 0:00:49.920 --> 0:00:52.120 You know, the equity market's looking really sick. I mean 0:00:52.159 --> 0:00:54.280 if you look at longer term charts. 0:00:53.840 --> 0:00:57.640 Sick as in bed like the kids say, look ill, 0:00:58.440 --> 0:01:02.320 not like beastie boys ill, but like unwell unwell. 0:01:02.400 --> 0:01:05.319 Yes, there's a level to watch it around forty one 0:01:05.360 --> 0:01:08.200 to fifty. It's a TD sequential level. If that breaks, 0:01:08.480 --> 0:01:11.399 it actually opens up a major move down of four thousand. 0:01:12.160 --> 0:01:15.800 We're looking at a potential major move lower inequity markets 0:01:15.800 --> 0:01:18.039 if these levels don't hold, and we're gonna need to 0:01:18.040 --> 0:01:20.880 see some help from probably Amazon and the like going 0:01:20.920 --> 0:01:23.520 forward to lift this higher, because it's not going to 0:01:23.560 --> 0:01:24.400 come from interest rights. 0:01:24.600 --> 0:01:27.320 I look, Abigail, do little yesterday it showed me. Oh 0:01:27.160 --> 0:01:29.679 y no, no, not rs high. 0:01:29.959 --> 0:01:32.800 That is back. That is awesome. Look at the rs 0:01:32.840 --> 0:01:35.320 I for SPX. We are right there. You buy him 0:01:35.400 --> 0:01:38.040 right here, unless, as you say, it breaks through that 0:01:38.120 --> 0:01:40.720 little green lines colors and everything. Get me a break. 0:01:40.720 --> 0:01:43.720 I'll tell you what, though it did. It did move 0:01:43.720 --> 0:01:45.440 below the two hundred the SMP move below the two 0:01:45.480 --> 0:01:47.520 hundred day moving average, and the last time we've seen 0:01:47.560 --> 0:01:50.360 it that blow you know, in that in those terms, 0:01:50.480 --> 0:01:51.920 was March, and. 0:01:51.840 --> 0:01:53.720 It's well below the two hundred day, which is around 0:01:53.720 --> 0:01:55.720 forty two to thirty five, so we're well below that. 0:01:56.920 --> 0:01:59.960 So forty one seventy interestingly enough, is the average closing 0:02:00.080 --> 0:02:02.640 price for the last year, So between this forty one 0:02:02.720 --> 0:02:04.920 fifty forty one seventy level. I'd love to see it 0:02:04.960 --> 0:02:08.000 hold and maybe catch a bid, but so far it's 0:02:08.040 --> 0:02:10.120 looking a little bit of a dead cat bounce here. 0:02:10.160 --> 0:02:12.960 If I see rates up, as Paul said, you know, 0:02:13.200 --> 0:02:15.960 rates have been a huge driver. I feel like if 0:02:15.960 --> 0:02:18.200 I see rates up, if I see dollar strength, if 0:02:18.240 --> 0:02:21.320 I see oil up, that's all bad for equities, right yeah. 0:02:21.240 --> 0:02:24.880 Yeah, And you know what rates aren't really there's not 0:02:25.000 --> 0:02:27.840 much of an infinite impetus for rates to go substantially lower. 0:02:27.880 --> 0:02:32.000 You know, we need to see really super low inflation 0:02:32.080 --> 0:02:35.520 numbers to turn rates at the moment. You know, we're 0:02:35.520 --> 0:02:37.760 saying a little bit of a reprieve in the treasury market. 0:02:38.240 --> 0:02:40.600 You know, Acman's trade helped a little bit. 0:02:40.639 --> 0:02:43.040 It got some Americans want to buy treasures, but who else? 0:02:43.720 --> 0:02:44.720 Pretty much there. 0:02:44.919 --> 0:02:47.680 Is Japanese foreign buyers. They don't want to hold this paper. 0:02:47.760 --> 0:02:50.520 No, no, what else. 0:02:50.400 --> 0:02:50.959 Are you gonna buy? 0:02:51.440 --> 0:02:53.400 Well, yeah, that's actually a good point though, But the 0:02:53.520 --> 0:02:55.600 upside for it, you know, you're just buying if you're yield, 0:02:55.800 --> 0:02:57.000 you're not looking at for a capital. 0:02:57.000 --> 0:02:58.959 Well, it's the first time in almost a generation you 0:02:59.000 --> 0:02:59.600 could get yield. 0:02:59.639 --> 0:03:01.160 Oh no, I mean a lot of people loving and 0:03:01.160 --> 0:03:03.079 you're looking at see these at five and a half percent. 0:03:03.240 --> 0:03:05.680 I mean, that's these are great rates, especially for fixed 0:03:05.720 --> 0:03:09.480 income or or seniors on a on a fixed income. 0:03:09.520 --> 0:03:11.280 A lot of folks out there doing that. I mean 0:03:11.800 --> 0:03:13.720 I've done a little bit myself. I'm kind of a 0:03:13.760 --> 0:03:17.240 senior actually these days. But you know, I mean I 0:03:17.280 --> 0:03:20.600 could see rates staying here. You know, I'm not really 0:03:20.600 --> 0:03:22.440 going down a lot, not really going up a lot. 0:03:22.480 --> 0:03:24.200 But that's not going to help the equity market. It's 0:03:24.200 --> 0:03:25.360 going to need it from somewhere else. 0:03:25.480 --> 0:03:28.760 So when a guy like Bill Ackman says I closed 0:03:28.800 --> 0:03:32.440 my short in the treasury markets, a does that mean 0:03:32.480 --> 0:03:33.560 anything to pros out there? 0:03:33.639 --> 0:03:36.240 Is not just a name, And if you think about it, 0:03:36.240 --> 0:03:37.920 the size of his fund it was like a one 0:03:37.960 --> 0:03:38.480 percent game. 0:03:38.600 --> 0:03:41.040 So he was long too, right, wasn't he talking about. 0:03:40.800 --> 0:03:43.360 A thirty year Yeah? Yeah, yeah, but he had a 0:03:43.360 --> 0:03:46.200 one percent gain on the assets under management. 0:03:46.240 --> 0:03:48.440 I mean he wasn't the only bill. You know Bill 0:03:48.480 --> 0:03:52.080 Gross also what is he long or short? Going long treasuries? 0:03:52.080 --> 0:03:52.240 Now? 0:03:52.240 --> 0:03:54.240 Well, so's Warren Buffet closing short at least? 0:03:54.280 --> 0:03:54.480 Yeah? 0:03:54.480 --> 0:03:57.400 Okay, yeah, you know they put a position on a 0:03:57.440 --> 0:03:59.560 Monday and tell you on Wednesday what they did. So 0:03:59.640 --> 0:04:01.440 you'll goin in and money. 0:04:01.280 --> 0:04:05.560 Do those names. The other day, our producer Eric Molo, 0:04:05.760 --> 0:04:07.839 he had a mask on and I said, hey, dude, 0:04:07.840 --> 0:04:11.400 where's Tonto. He had no idea what I was talking about, 0:04:11.400 --> 0:04:12.920 and I was I said, you know what, like the 0:04:12.920 --> 0:04:15.280 Lone Ranger? And he was like, no, sorry, don't get it. 0:04:15.720 --> 0:04:17.839 He did not know who the Lone Ranger was. And 0:04:18.080 --> 0:04:21.599 do these kids today do they know Bill Gross? Do 0:04:21.680 --> 0:04:24.440 they know Warren Buffett? Like in a real way? 0:04:24.680 --> 0:04:27.600 I mean, you know the program the the Algo programmers 0:04:27.680 --> 0:04:30.080 do because they take those names and they program it 0:04:30.120 --> 0:04:33.039 into their into their trading venues. But you know, actually, 0:04:33.120 --> 0:04:36.120 the only iconic name from from that era that is 0:04:36.160 --> 0:04:40.680 actually incredibly well known Lassie. Everyone knows who Lassie is. 0:04:41.640 --> 0:04:43.880 This is not in the markets, yeah, well, in the 0:04:43.880 --> 0:04:46.560 world in general, yeah, markets I mean, but yeah, I 0:04:46.640 --> 0:04:47.960 mean in the all the years I trade. 0:04:48.000 --> 0:04:49.800 Do you think Eric Molo knows who Lassie was? 0:04:49.880 --> 0:04:51.479 I think so we'll have to test him on the 0:04:51.480 --> 0:04:52.480 way out, check him out. 0:04:52.600 --> 0:04:54.640 All right, what's the most interesting trade for you out there? 0:04:54.720 --> 0:04:57.440 Just in the markets? I know, you look at currency, stocks, bonds, 0:04:57.480 --> 0:04:59.000 all kinds of stuff out there. What are you looking 0:04:59.000 --> 0:04:59.760 at it to me? 0:05:00.160 --> 0:05:02.560 You know, going back to interest rates, I still like 0:05:02.640 --> 0:05:06.440 the short term. I still like two year treasuries. I mean, 0:05:06.480 --> 0:05:08.240 that's the one that's really going to catch a bid 0:05:08.560 --> 0:05:10.679 when the FED decides to turn or the FED says 0:05:10.760 --> 0:05:13.880 I stopped because you could, you would more likely than 0:05:13.920 --> 0:05:17.200 not see the yield curve steepend if inflation expectations remain, 0:05:17.560 --> 0:05:19.520 that's not going to affect the short end as much. 0:05:19.800 --> 0:05:21.440 So if you see steepening, it's going to be a 0:05:21.480 --> 0:05:23.920 sell off in the back end. I think the short 0:05:24.040 --> 0:05:27.400 end is the place to be because inevitably that's got 0:05:27.400 --> 0:05:28.279 to come your way the FED. 0:05:28.400 --> 0:05:30.760 You know, Matt's been telling me not to crowd into 0:05:30.760 --> 0:05:32.560 that two year because I gonna have an interest rate 0:05:32.760 --> 0:05:36.640 risk reinvestment reinvestments. Now the thirty year five point zero seven, 0:05:36.680 --> 0:05:38.560 you were right negative by. 0:05:39.080 --> 0:05:41.880 I'm not saying, first of all, I don't give investment advice. 0:05:42.600 --> 0:05:44.400 I loaded up on them, and if I do, you 0:05:44.440 --> 0:05:47.839 should run the other direction. But no, I'm not saying 0:05:48.080 --> 0:05:51.160 you want duration right now. I'm just I just look 0:05:51.200 --> 0:05:54.960 at the interest as sorry, the reinvestment risk as something 0:05:54.960 --> 0:05:58.080 that is better dealt with by you know, you have 0:05:58.200 --> 0:06:03.160 like very sophisticated advisors. I just look at an ETF. 0:06:03.240 --> 0:06:04.760 I would rather T bill and chill. 0:06:04.960 --> 0:06:08.440 You know, T build chill. I get Yankee tickets, and 0:06:08.480 --> 0:06:10.840 you do T bill and chill. All right, So what 0:06:11.200 --> 0:06:13.960 are we doing here, Vince? I mean, is the next 0:06:13.960 --> 0:06:17.800 move for this Federal Reserve to just stay or to 0:06:18.480 --> 0:06:21.120 still talk tough? We hear Christine Lagard to ECB today, 0:06:21.279 --> 0:06:22.159 still talking tough. 0:06:22.520 --> 0:06:24.080 You know, I take that with a grain of salt. 0:06:24.120 --> 0:06:26.080 They're saying what they have to say. I mean, the 0:06:26.080 --> 0:06:28.000 guard's been You know, if you go back ten years 0:06:28.040 --> 0:06:30.920 when inflation in the Eurozone was below one percent, well 0:06:30.960 --> 0:06:34.960 you heard from the ECB central bankers was HRCP inflation 0:06:35.080 --> 0:06:37.360 is moving towards target. It didn't move for five years, 0:06:37.400 --> 0:06:39.360 but they said that at every meeting. So now at 0:06:39.360 --> 0:06:41.279 every meeting they're going to say we can still raise, 0:06:41.440 --> 0:06:43.920 but they have no real intention of raising. Neither does 0:06:43.920 --> 0:06:46.120 the Fed. I think, I mean, the Federal talk a 0:06:46.160 --> 0:06:49.880 tough book potentially raising one more. I have absolutely no 0:06:49.920 --> 0:06:52.200 idea why there's really no reason to raise at this point. 0:06:53.680 --> 0:06:57.480 Isn't moving down quickly enough? Well, what's counter fiscal spending? 0:06:57.520 --> 0:06:59.520 I mean, it needs to be two like last week. 0:06:59.440 --> 0:06:59.599 You know. 0:06:59.720 --> 0:07:02.200 But I would argue this, the idea of getting inflation 0:07:02.240 --> 0:07:05.600 to two percent goal is ridiculous. The two percent goal 0:07:05.960 --> 0:07:07.680 was at a time when there was a balance sheet 0:07:07.720 --> 0:07:10.040 of what a trillion now we have Now we have 0:07:10.080 --> 0:07:14.120 a federal deficit of thirty three trillion. The balance sheet 0:07:14.120 --> 0:07:16.600 at the Fed is off the charts. You're not going 0:07:16.680 --> 0:07:18.480 to see two percent inflation. You're going to see two 0:07:18.480 --> 0:07:19.920 percent inflation if you have a disaster. 0:07:19.960 --> 0:07:21.040 You don't think they're going to get there. 0:07:21.160 --> 0:07:24.240 No, I think that if they're lucky, they get to 0:07:24.280 --> 0:07:26.120 three three and a half and they should be happy 0:07:26.160 --> 0:07:26.520 if they do. 0:07:26.600 --> 0:07:28.560 So I'm in that camp. I don't know what's so 0:07:28.600 --> 0:07:30.280 special about two percent. They made it up? 0:07:30.400 --> 0:07:34.600 Yeah, they would all be made up. But the point 0:07:34.720 --> 0:07:38.520 is inflation is just thievery right. You're just robbing from savers. 0:07:38.560 --> 0:07:42.400 So it's their duty to get it down to near 0:07:42.440 --> 0:07:43.280 as damn it to zero. 0:07:43.400 --> 0:07:44.520 I would say, well, I mean. 0:07:44.400 --> 0:07:46.920 You're robbing savers if you don't have real interest rates higher. 0:07:46.920 --> 0:07:49.720 But we now have real interest rates starting to come 0:07:49.760 --> 0:07:52.640 to the positive. If you get inflation down to three 0:07:52.720 --> 0:07:54.120 three and a half percent, you're not going to see 0:07:54.120 --> 0:07:56.200 a ten ure yield of three percent, so you're still 0:07:56.200 --> 0:07:59.760 going to have a positive, positive carry and people are 0:07:59.760 --> 0:08:01.520 going to be earning. I mean the other side of 0:08:01.560 --> 0:08:03.080 the corner is you get inflation into three three and 0:08:03.080 --> 0:08:05.040 a half percent. Where does that put the SMP? Probably 0:08:05.040 --> 0:08:07.560 around forty five forty eight hundred, So you're gonna have 0:08:07.640 --> 0:08:09.720 a positive return somewhere. It's just a matter of where 0:08:09.760 --> 0:08:09.920 you go. 0:08:10.640 --> 0:08:13.000 All right, what do we do? I mean, all right, 0:08:13.000 --> 0:08:15.000 I think my fed's gonna stay put next time. 0:08:15.080 --> 0:08:16.600 I think so too. And I think I look at 0:08:16.600 --> 0:08:19.320 tech and I'm always the one where I joke with people. 0:08:19.440 --> 0:08:21.000 So you're not going to get your next iPhone from 0:08:21.040 --> 0:08:24.120 Campbell's soup. So you know, whatever they're selling whenever they 0:08:24.200 --> 0:08:27.200 sell tech disaggressively, to me, it looks like an opportunity. 0:08:26.720 --> 0:08:27.960 To buy the big tech. 0:08:28.040 --> 0:08:29.800 I would buy the big tag. But you know, just 0:08:29.920 --> 0:08:32.200 get my feet wet here and there my toes. 0:08:32.679 --> 0:08:34.920 Buying the iPhone fifteen my daughter. I just looked at 0:08:34.920 --> 0:08:36.959 it yesterday. It's got a new plug. You got to 0:08:37.000 --> 0:08:42.480 replace all your plugs. I thought, my plug is strategically 0:08:42.520 --> 0:08:46.360 located everywhere. None is more than an arm length away. Dude, 0:08:46.360 --> 0:08:48.720 I feel now I got to replace everything. I feel 0:08:48.720 --> 0:08:51.920 you that you explain the European sect. 0:08:51.800 --> 0:08:53.800 Because they made Apple bye by their. 0:08:53.920 --> 0:08:57.320 Yeah, a regulation move, but I'm happy they finally got 0:08:57.320 --> 0:08:57.480 to it. 0:08:57.559 --> 0:08:58.320 But you're right, we have to. 0:08:58.320 --> 0:09:01.120 Buy all new cables and it's all right. 0:09:01.160 --> 0:09:03.000 Vincey Garell. Thank you so much. We appreciate it. 0:09:03.920 --> 0:09:07.319 You're listening to the teenth Ken's Are Live program Bloomberg 0:09:07.360 --> 0:09:10.720 Markets weekdays at ten am Eastern on Bloomberg dot com, 0:09:10.840 --> 0:09:13.960 the iHeartRadio app and the Bloomberg Business app, or listen 0:09:14.040 --> 0:09:16.480 on demand wherever you get your podcast. 0:09:17.880 --> 0:09:20.800 I want to get to the end of the strike. 0:09:20.880 --> 0:09:22.560 I mean I want to get to it. I'm sure 0:09:22.559 --> 0:09:24.520 the union members want to get to it. I know 0:09:24.559 --> 0:09:28.320 the car makers want to get to it. Let's talk 0:09:28.400 --> 0:09:31.360 on the telephone on Zoom actually with Keith Noughton. 0:09:31.400 --> 0:09:32.480 He covered on Zoom. 0:09:32.480 --> 0:09:34.199 Look at him going on Ford in the Big three 0:09:34.320 --> 0:09:37.280 for US at a motor city, and it looks like 0:09:37.320 --> 0:09:40.760 at least Ford has got a tentative agreement with the UAW. 0:09:40.880 --> 0:09:41.840 Keith walk us through it. 0:09:43.320 --> 0:09:47.040 Yeah, so it's an agreement that includes a twenty five 0:09:47.520 --> 0:09:52.800 percent raise and the restoration of cost of living allowances. 0:09:53.320 --> 0:09:57.040 Those two combined mean that the actual pay increase for 0:09:57.160 --> 0:10:01.080 the top way journers is actually thirty three percent and 0:10:01.320 --> 0:10:05.520 means they'll be making over forty dollars an hour. There's 0:10:05.840 --> 0:10:08.360 improvements especially. 0:10:07.880 --> 0:10:08.640 For new workers. 0:10:08.679 --> 0:10:13.440 They're getting even larger raises. Temp workers are being converted 0:10:13.480 --> 0:10:19.240 to full time, they're doing increasing the multiplier on pensions 0:10:19.240 --> 0:10:21.920 and four one ks. So there's a whole bunch of 0:10:21.920 --> 0:10:27.800 of good economic enhancements that are in the agreement. 0:10:28.040 --> 0:10:30.040 Now you have you used the murder. 0:10:30.000 --> 0:10:34.440 Pensions Keith, I imagine you're talking about people who already had pensions, 0:10:34.440 --> 0:10:38.320 who what have been working there since pre two thousand 0:10:38.360 --> 0:10:41.480 and seven. Because I know that Sean Fain, you know 0:10:41.520 --> 0:10:45.080 he wanted a pay increase. He also wanted pensions for 0:10:45.160 --> 0:10:48.280 all the union workers to find benefit pensions. 0:10:48.320 --> 0:10:49.480 And he wanted. 0:10:49.160 --> 0:10:51.240 A four day work week or a thirty two hour 0:10:51.280 --> 0:10:51.720 work week. 0:10:51.800 --> 0:10:54.560 So did he get two out of three? 0:10:54.720 --> 0:10:57.400 Yeah, I just if you want to talk about this stuff, 0:10:57.400 --> 0:10:59.960 he didn't. He didn't get Matt, He did not get 0:11:00.080 --> 0:11:02.760 at the thirty two hour work week of the four 0:11:02.800 --> 0:11:05.760 day work week. He did not get a return to 0:11:05.840 --> 0:11:09.719 traditional pensions. What he got instead is a larger contribution 0:11:09.880 --> 0:11:12.400 from the company to your four h one k or 0:11:12.440 --> 0:11:14.800 to your pension. All those before, as you said two 0:11:14.840 --> 0:11:17.840 thousand and seven, do have traditional pension, so it's the 0:11:18.320 --> 0:11:21.600 it's the workers hired in the last fifteen years that don't. 0:11:21.640 --> 0:11:25.040 So they instead are going to have a greater contribution, 0:11:25.640 --> 0:11:26.560 greater multiplier. 0:11:26.720 --> 0:11:30.760 All right, So I'm guessing this puts the pressure really 0:11:30.800 --> 0:11:33.720 on GM and Stalantis. What's the how does this playoff 0:11:33.720 --> 0:11:34.080 from here? 0:11:35.520 --> 0:11:35.720 Yeah? 0:11:35.840 --> 0:11:38.840 I mean, you know, so the analysts are already crunching 0:11:38.880 --> 0:11:43.200 the numbers, and the Emmanuel Rosner over at Dolja Bank 0:11:43.320 --> 0:11:47.800 is saying that this would cost Ford six point two 0:11:47.840 --> 0:11:49.920 billion over the life of the contract, but it actually 0:11:49.920 --> 0:11:53.200 would cost GM and Stillantis more GM and be over 0:11:53.240 --> 0:11:57.320 seven billion, Stalantis higher in the six billions because they 0:11:57.360 --> 0:12:00.760 have more temporary workers, so there's more temps to give 0:12:00.840 --> 0:12:05.080 raises to, there's more tempts to convert to full time. 0:12:05.520 --> 0:12:08.600 So you know, by going first, Ford was able to 0:12:08.640 --> 0:12:12.520 tailor the agreement to their specific situation. They only have 0:12:13.559 --> 0:12:16.280 two to three percent of the workforce that is temps, 0:12:16.520 --> 0:12:20.600 whereas GM and Stlantis are gms close to closer to 0:12:20.640 --> 0:12:22.120 ten and Stilantis's origin. 0:12:23.320 --> 0:12:26.439 Interesting, so does this mean, I mean Ford workers are 0:12:26.440 --> 0:12:30.080 going to go back to the Kentucky plant. They're going 0:12:30.160 --> 0:12:32.760 to start building the bronco again. In Michion and Dearborn. 0:12:34.440 --> 0:12:38.080 They're gonna, they're gonna, they're gonna put the pressure, in 0:12:38.120 --> 0:12:40.720 that sense, further pressure on GM and Stilantis. 0:12:40.760 --> 0:12:42.520 Do you expect agreements from the other two by the 0:12:42.640 --> 0:12:43.120 end of the day. 0:12:44.600 --> 0:12:47.320 I don't, actually, I think there's still work to be done. 0:12:47.440 --> 0:12:50.959 And that's an important point that you just made. That 0:12:51.559 --> 0:12:55.360 because back in twenty nineteen when the UAW struck GM, 0:12:55.840 --> 0:12:58.440 when they reached a tentative agreement, the workers did not 0:12:58.800 --> 0:13:02.240 go back to the plants. They didn't open the plants 0:13:02.240 --> 0:13:05.280 again until after that agreement had been ratified by the 0:13:05.280 --> 0:13:09.120 full membership, which took weeks. But in this case, the 0:13:09.160 --> 0:13:12.800 OW is sending the workers forward back to the plants immediately. 0:13:12.840 --> 0:13:16.760 The plants are cranking up today because they want to 0:13:16.760 --> 0:13:21.120 do put pressure on GM and Stillantis. You know, the 0:13:21.240 --> 0:13:24.760 losses for each of those companies just from this strike 0:13:24.840 --> 0:13:29.000 are approaching a billion dollars. So and just this week 0:13:29.240 --> 0:13:31.440 the two of them, GM and Stillants had their most 0:13:31.480 --> 0:13:34.480 profitable plants go out on strike. So the costs are 0:13:34.520 --> 0:13:36.800 going to escalate more rapidly. 0:13:36.880 --> 0:13:39.800 Now, Oh, so catch us up, Keith, catch us up 0:13:39.800 --> 0:13:42.880 on who's so the Bronco is made of the truck 0:13:43.040 --> 0:13:45.240 assembly plant right in Wayne, Michigan. 0:13:45.280 --> 0:13:48.920 Actually, yeah, so what's coming back online? Is that what 0:13:48.920 --> 0:13:49.560 you're asking you at? 0:13:50.160 --> 0:13:52.400 And what's still off? Because I know on Tuesday they 0:13:52.440 --> 0:13:56.520 struck the GM plant that makes like the Escalade and 0:13:56.600 --> 0:13:59.160 the Tahoe, right at least one of them, right. 0:13:59.720 --> 0:14:03.000 Yep, yeah at GM. The big plant struck this week 0:14:03.040 --> 0:14:06.240 as the Arlington, Texas plant that makes all the big SUVs, 0:14:06.320 --> 0:14:10.360 Suburban Tahoe, Yukon and Escalade, and that at Stalantis. This 0:14:10.400 --> 0:14:14.960 week it was the RAM pickup truck plant in Sterling Heights, Michigan, 0:14:14.960 --> 0:14:17.480 and that is their most profitable plant for Ford. The 0:14:17.520 --> 0:14:20.160 ones coming back are the Bronco and the Ranger plant. 0:14:20.160 --> 0:14:22.680 That was the one that went down immediately. The one 0:14:22.680 --> 0:14:25.120 that was more recently taken down on October eleventh is 0:14:25.200 --> 0:14:28.440 Kentucky Truck that makes the biggest F series trucks and 0:14:28.480 --> 0:14:32.080 the biggest SUVs, the Lincoln Navigator and the Ford Expedition 0:14:33.000 --> 0:14:33.640 super Duties. 0:14:33.840 --> 0:14:36.080 You know, twenty five percent seems like a lot to me, 0:14:36.120 --> 0:14:38.200 even though it's over a number of years. What are 0:14:38.200 --> 0:14:40.280 the auto companies getting here. 0:14:41.720 --> 0:14:45.120 Well, they're getting labor peace, which you know costs something, 0:14:46.000 --> 0:14:48.400 but they're getting richer contracts and they already had the 0:14:48.480 --> 0:14:52.320 highest labor costs, you know, in the industry. So what 0:14:52.480 --> 0:14:56.440 GM said, Mary Barrow, the CEO of GM said during 0:14:56.480 --> 0:14:58.920 their earnings call this week, is they're going to try 0:14:58.960 --> 0:15:01.600 and find offset. They're going to try and do cost 0:15:01.640 --> 0:15:05.160 cuts to you know, make up for this. But you 0:15:05.200 --> 0:15:10.920 know it's, uh, these are expensive deals and and you 0:15:10.960 --> 0:15:13.080 know they're going to have to find a way. So 0:15:13.160 --> 0:15:14.840 what's their costs competitive? 0:15:14.920 --> 0:15:15.440 That makes me. 0:15:15.400 --> 0:15:16.560 Worry about the vehicles? 0:15:16.680 --> 0:15:18.960 Ouch, you're going to start So what putting in like 0:15:19.400 --> 0:15:21.040 lower quality parts? 0:15:21.160 --> 0:15:22.600 Is that? That's what I worry about. 0:15:22.680 --> 0:15:25.640 That's what everyone who's buying these cars and trucks. Keith 0:15:25.720 --> 0:15:27.880 I spend a lot of time on the forums right 0:15:28.760 --> 0:15:31.480 of many different brands and they're all like, oh, stay 0:15:31.480 --> 0:15:32.160 away from that. 0:15:32.160 --> 0:15:33.400 Company because they're going to strike. 0:15:33.440 --> 0:15:35.440 And even if they didn't strike, maybe they will and 0:15:35.680 --> 0:15:38.160 workers are going to be unhappy and not do it 0:15:38.240 --> 0:15:41.600 as screw it up. Yeah, but if they cut cost, 0:15:41.680 --> 0:15:45.240 does that mean we're going to have lower quality components. 0:15:47.320 --> 0:15:51.000 Uh, not necessarily. I mean in companies as large as these, 0:15:51.560 --> 0:15:55.000 there's all kinds of waste and redundancy that you can 0:15:55.040 --> 0:15:57.640 work on. I mean they cut by the billions when 0:15:57.680 --> 0:16:00.680 they're cutting costs, and obviously people is one of the 0:16:00.680 --> 0:16:04.240 ways they cut costs. Let's not forget Jim Farley said 0:16:04.480 --> 0:16:08.240 just a year ago that Ford had twenty five percent 0:16:08.320 --> 0:16:13.120 more engineers than its competitors. He's been cutting salaried staff 0:16:13.160 --> 0:16:16.520 by the thousands, so you know there's still probably people 0:16:16.720 --> 0:16:20.080 that he will cut as they continue to move into 0:16:20.120 --> 0:16:24.480 their ev future from their internal combustion engine present. 0:16:24.800 --> 0:16:28.600 So I know, Keith for the unions, you know, one 0:16:28.640 --> 0:16:31.200 of the ass or demands was something nebulous to me 0:16:31.200 --> 0:16:33.920 at least, which is, hey, can you guarantee you we're 0:16:33.920 --> 0:16:36.680 going to still have the same number of positions in 0:16:36.720 --> 0:16:39.040 an evy world that we have in an ice world. 0:16:39.840 --> 0:16:41.520 Did they get any language to that effect? 0:16:42.840 --> 0:16:44.960 There is some job security in this and Ford had 0:16:45.000 --> 0:16:47.680 told them that they would not lay off anyone during 0:16:47.720 --> 0:16:50.920 the term of this contract, which is four years and 0:16:50.960 --> 0:16:54.520 eight months. In fact, would add to workers, but it's 0:16:54.560 --> 0:16:57.240 not an idle concern by the union. It takes forty 0:16:57.280 --> 0:17:00.360 percent less labor to assemble the power rain of an 0:17:00.360 --> 0:17:03.600 electric vehicle. Then it does an internal combustion engine vehicle, 0:17:03.600 --> 0:17:06.359 which has thousands of parts versus about twenty in an 0:17:06.359 --> 0:17:09.480 electric vehicle. So you know that is coming and they 0:17:09.520 --> 0:17:11.879 got to figure out how that's all going to work out. 0:17:12.680 --> 0:17:14.920 What do you think this deal looks like to non 0:17:15.040 --> 0:17:18.840 union shops, Keith? Yeah, I think of you know, the 0:17:20.080 --> 0:17:23.320 the BMW plant in Spartanburg or the Tesla plants. My 0:17:23.440 --> 0:17:25.440 X ray was made, your X three was made in 0:17:25.480 --> 0:17:27.520 Spartan Work. Yes, okay, in fact it was very good, 0:17:28.520 --> 0:17:30.720 very cool plant and cool truck. 0:17:30.800 --> 0:17:31.720 I like it a lot. 0:17:31.560 --> 0:17:34.159 But what do you think about those shops? Are they 0:17:34.200 --> 0:17:35.679 going to look at this deal and say, you know, 0:17:36.240 --> 0:17:38.320 we should have a union too, We should be in 0:17:38.359 --> 0:17:39.040 the UAW. 0:17:40.600 --> 0:17:43.159 That is what the UAW is counting on. So it 0:17:43.200 --> 0:17:45.040 depends on when you say what does it mean for 0:17:45.040 --> 0:17:47.359 those plants? It depends on who you're talking about. If 0:17:47.400 --> 0:17:50.640 you're talking about the companies themselves, the CEOs, I think 0:17:50.680 --> 0:17:52.639 what it means to them is the price of poker 0:17:52.760 --> 0:17:55.560 just went up, and the way they've kept unions out 0:17:55.560 --> 0:17:59.439 of their plants is they've offered you know, equivalent wages 0:17:59.480 --> 0:18:02.040 and benefits. So if the CEOs want to keep the 0:18:02.160 --> 0:18:03.760 unions out of their plans, they're going to have to 0:18:03.800 --> 0:18:06.400 give everybody a raise of those non union plants. If 0:18:06.440 --> 0:18:09.399 they don't, the UAW has a big opening to go 0:18:09.440 --> 0:18:10.440 in and organize them. 0:18:11.119 --> 0:18:13.199 All right, Very good, Keith Anton, thanks so much. We 0:18:13.280 --> 0:18:16.480 appreciate that. Keithnton. He is a reporter for Bloomberg News 0:18:16.600 --> 0:18:20.480 in Detroit. He is our go to voice there, and 0:18:20.520 --> 0:18:22.680 again we get a deal from Ford and presumably Matt 0:18:22.720 --> 0:18:24.920 That means Stalantis and GM a little pressure on them 0:18:24.920 --> 0:18:27.639