Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is Bloomberg business Week inside from the reporters and
Speaker 2: editors who bring you America's most trusted business magazine, plus
Speaker 2: global business, finance and tech news. The Bloomberg Business Week
Speaker 2: Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio.
Speaker 3: Hi, everyone, Welcome to the weekend edition of Bloomberg Business Week. Well,
Speaker 3: the next Trump administration is taking shape as the President
Speaker 3: elect named names for those he would like to hold
Speaker 3: top spots in his administration, including a special role for
Speaker 3: the world's wealthiest individual. More on that in just a moment.
Speaker 4: Plus, the asset that's soaring to record highs, more than
Speaker 4: doubling this year and out performing the stock market could
Speaker 4: get a boost in a Trump White House. At least
Speaker 4: a lot of people are buying it and they think so.
Speaker 4: We're going to talk about that with the CEO of
Speaker 4: the cryptomnor Core Scientific.
Speaker 3: Also a former administration insider, weighs in on the impact
Speaker 3: of Trump's second term for international trade, national security, and
Speaker 3: the US's contentious relationship with China. And speaking of trade policies,
Speaker 3: the Trump agenda may eat into your Thanksgiving dinner plans.
Speaker 5: Next year.
Speaker 4: All that to come, we begin with the tech billionaire
Speaker 4: with another project to run. In the days after the election,
Speaker 4: Donald Trump and Elon Musk seem to be riding the
Speaker 4: world's most intense contact high. Musk camped out with Trump's
Speaker 4: inner circle at mar Lago, showed up in family photos,
Speaker 4: and joined Trump's calls with world leaders. Perhaps that's what
Speaker 4: you get when you pour in at least one hundred
Speaker 4: and thirty two million dollars and counting into the president
Speaker 4: elects campaign.
Speaker 3: Perhaps clearly a front row seat at running Donald Trump's government. Musk,
Speaker 3: along with former Republican presidential candidate and biotech entrepreneur Vivek Ramaswami,
Speaker 3: will lead what Trump calls the Department of Government Efficiency
Speaker 3: or DOGE in a claim to Elon's favorite cryptocurrency. So
Speaker 3: writes Bloomberg Business we correspondent and co host of the
Speaker 3: Elon Inc. Podcast, Max Chafkin. Max breaks it down.
Speaker 6: Trump announced something that he had teased repeatedly on the
Speaker 6: campaign trail, something that Musk had talked about. This idea
Speaker 6: that Musk would be an advisor in the streamlining of government.
Speaker 6: And there's even a catching name for this. This is
Speaker 6: the Department of government efficiency. It's not a department in
Speaker 6: the in the sort of normal sense. And it's also
Speaker 6: unclear like how exactly how efficient they're going to be.
Speaker 6: When Elon Musk has a co chair of Vek Ramaswami,
Speaker 6: that's say, do.
Speaker 3: You know what Tim's been saying, Hey, I'd been saying
Speaker 3: that it's like it's supposed to be a fishion.
Speaker 7: Why are there two of them?
Speaker 6: All?
Speaker 8: Right?
Speaker 6: This is and this is a joke that that that
Speaker 6: Democrats have pointed out and and critics are gonna are
Speaker 6: gonna seize on. And I think that the challenge here
Speaker 6: is that many of the things that Elon Musk has
Speaker 6: talked about wanting to do, cutting two trillion dollars from
Speaker 6: UH from the federal budget, or even if you start
Speaker 6: talking about some of these very specific things that he
Speaker 6: personally thinks is kind of dumb or useless, all of
Speaker 6: that's gonna be politically difficult. When you're talking about gigantic
Speaker 6: cuts two trillion dollars, that's gonna mean Congress, it's gonna
Speaker 6: mean hard choices about important federal programs like Social Security
Speaker 6: that lots and lots of Republicans, you know, that majority
Speaker 6: in the House is going to be very, very narrow.
Speaker 6: But when you even talk about the sort of smaller
Speaker 6: things like you know, some defense thing, you know, a
Speaker 6: lot of this stuff is politically charged.
Speaker 7: Right.
Speaker 6: You have senators, congress people in various states who care
Speaker 6: about the jobs in those states. And Trump is going
Speaker 6: to need to govern and he's gonna need Republicans in
Speaker 6: the House and Senate to do that, even though Republicans
Speaker 6: control those those branches. But what and you know, selection
Speaker 6: of John Thune is as Speaker again, that's kind of
Speaker 6: a bit of a rebuke to Elon and kind of
Speaker 6: the hard right part of this coalition. They had wanted
Speaker 6: Rick Scott. So there's gonna be a lot of challenges here.
Speaker 6: Of course, there are ways that Elon Musk can get
Speaker 6: paid even.
Speaker 4: So one thing we should notice, Elon actually a company
Speaker 4: need the President elect to Washington. He was with lawmakers too.
Speaker 4: They gave him a standing ovation in addition to giving
Speaker 4: the president elect a standing ovation, So certainly gives an
Speaker 4: idea how he's seen in the Republican Party right now. Max,
Speaker 4: the China part of Elon Musk's story I keep coming
Speaker 4: back to because he's got this very close relationship that
Speaker 4: I wonder if it could be, in the words of
Speaker 4: like Jeff Bezos, a complexifier when it comes to Elon
Speaker 4: Musk's relationship with Donald Trump, because he wants to do
Speaker 4: business in China, and he wants to do business easily
Speaker 4: and ja, it's not.
Speaker 6: Just that he wants to do business in China. He
Speaker 6: really needs to do business in China Tesla unless there
Speaker 6: is a dramatic change in strategy. Tesla needs it's China business.
Speaker 6: There's a massive factory, it's the world's largest market for
Speaker 6: electric vehicles. Tesla is trying really hard to compete there,
Speaker 6: and Elon Musk have made that a big part of
Speaker 6: his strategy. Now, I think two things are possible. One is,
Speaker 6: if you know, tensions between the US and China were
Speaker 6: to heat up further, you know, there are are ways
Speaker 6: that Elon Musk could deemphasize his reliance on China. The
Speaker 6: biggest one would be, you know, focusing more on robotaxis,
Speaker 6: which he's starting to do. The other thing is, you know,
Speaker 6: Donald Trump ran as a peacemaker, a negotiator. Yes he
Speaker 6: wants to, Yes, he's gonna you know, put tariffs, he says,
Speaker 6: but remember the last time lots of companies got carve outs,
Speaker 6: were able to negotiate their own their own you know,
Speaker 6: basically ways to to avoid paying those tariffs. So you
Speaker 6: could imagine Elon Musk trying to find, you know, get
Speaker 6: some exceptions carved out for important industrial companies such as,
Speaker 6: you know, Tesla Motors, the company that he uh, you know,
Speaker 6: owns a huge stake in UH. And the other thing
Speaker 6: is like, compared to Joe Biden, I think Trump is
Speaker 6: arguably not as despite the fact that the rhetoric is
Speaker 6: very hawkish. Biden was also quite hawkish on China. So
Speaker 6: I'm not sure that this represents such a huge complexifier.
Speaker 6: But though it is certainly gonna be, you know, it's challenge,
Speaker 6: and it's also of course an opportunity for political opponents
Speaker 6: of Donald Trump, on both the right and the left
Speaker 6: to seize on because he you can, you can talk
Speaker 6: tough on China. But then when one of your partners,
Speaker 6: you know, has this enormous Chinese factory as a good
Speaker 6: close relationship with the Chinese Communist Party, like, that's gonna
Speaker 6: that's gonna lead to criticism.
Speaker 3: I keep thinking about conflicts of interest in this administration.
Speaker 3: You know, here you have Elon advising Donald Trump in
Speaker 3: terms of the efficiency of government. I have a company
Speaker 3: that does a lot has business contracts right SpaceX with
Speaker 3: the government. You talked about how you know Elon can
Speaker 3: get paid. I mean his stock is already up thirty
Speaker 3: percent from the election. I mean it just seems kind
Speaker 3: of complicated in terms of the connections here.
Speaker 6: Absolutely. I mean the thing is, if you were paying,
Speaker 6: if you were watching the campaign, what you understand is
Speaker 6: the conflicts of interests are the point. I mean, Trump
Speaker 6: talked about that as an advantage. That was sold as
Speaker 6: an advantage, and it's going to continue to be sold
Speaker 6: as an advantage. Elon Musk He's not just some egghead.
Speaker 6: He really understands business. In fact, he runs a couple
Speaker 6: of important businesses. Trump talked about, you know, on the
Speaker 6: campaign trail, just essentially like ordering up rockets from Elon Musk.
Speaker 6: So I think that they believe Donald Trump his advisors
Speaker 6: Elon Musk, that basically voters and the Republican Party are
Speaker 6: not going to mind that he's that important. But I
Speaker 6: think that really remains to be seen. And you know
Speaker 6: what happened during the last Trump presidency is that the
Speaker 6: controversy started to bubble up right, and then it became
Speaker 6: harder and harder for people who were kind of in
Speaker 6: Elon Musk's position to stay in that inner circles. And
Speaker 6: that's exactly what happened to Elon Musk, by the way,
Speaker 6: in twenty seventeen, amid all this controversy. It was after
Speaker 6: the sort of Muslim bands and Trump left the Paris
Speaker 6: Climate Accords, Elon Musk backed away. He had been on
Speaker 6: another advisory panel. So I think that is one thing
Speaker 6: what's different this time around, and I think what's going
Speaker 6: to put pressure on Donald Trump and actually put pressure
Speaker 6: on moderating forces within the Republican Party is that Elon
Speaker 6: has all this money that he's going to spend on politics.
Speaker 6: He was tweeting that he's going to play in the midterm,
Speaker 6: including the primaries, and if you look read between the
Speaker 6: lines with that, what he's saying is, if you don't
Speaker 6: go along with my agenda, Senate Republicans, congress people, I
Speaker 6: am ready to dump a huge quantity of money into
Speaker 6: a primary, like are you ready for a primary challenge?
Speaker 6: And I think that is going to be his leverage,
Speaker 6: and we we'll see if it actually works. And I
Speaker 6: think where it works partly depends on what John Donald
Speaker 6: Trump decides to do. Does he does he run as
Speaker 6: this kind of ultramga guy that he presented, or does
Speaker 6: he try to move to the center.
Speaker 4: But I also wonder if Elon Musk lodes his interest
Speaker 4: in this in a few months or in a few years.
Speaker 6: I mean, you know, that is the I think there's
Speaker 6: a conventional wisdom that says he's.
Speaker 7: Got a lot on his plate.
Speaker 6: He's got a tention span that that that drifts easily.
Speaker 6: You know, he's got all these companies, he spends hours
Speaker 6: a day playing video games. He's got a lot going on.
Speaker 7: So if this started to he's got a lot of kids.
Speaker 6: Yeah, he's got a lot of kids, you know, many interests.
Speaker 7: But well, I'll say is though, what I'll say is
Speaker 7: though this is.
Speaker 6: A really great opportunity for him, as a government contractor,
Speaker 6: as somebody who does a lot of things having to
Speaker 6: do with the government, to have influence.
Speaker 7: So I think he's going to ride.
Speaker 6: This train as long as it'll go. And I think
Speaker 6: he does have levers that he can pull that will
Speaker 6: make it harder for Donald Trump to push him away
Speaker 6: than say it was to be able to push away
Speaker 6: these other sort of business leaders who got close to
Speaker 6: Trump the last time around. He has a lot more
Speaker 6: ways to influence Trump than say Anthony Scaramucci, you know,
Speaker 6: who famously lasted ten days as the Press secretary.
Speaker 3: Ma's one thing I'm curious about all that spending that
Speaker 3: Elon Musk did on this campaign. I mean, it wasn't
Speaker 3: just a case of just throwing money. I mean he
Speaker 3: was involved in like creating, you know, hiring companies, getting
Speaker 3: people to do it.
Speaker 5: It was a whole new different.
Speaker 3: Way of campaigning for a candidate.
Speaker 6: Yes, super unusual. So you're talking about really big money.
Speaker 6: You said one hundred and thirty two million. I think
Speaker 6: when all said and done, is going to be closer
Speaker 6: to two hundred million. So kind of up there with
Speaker 6: the biggest contributions of any donor. And then this approach
Speaker 6: that is really different from any other mega donor. You
Speaker 6: know that Sheldon Aedelson was just giving writing big checks
Speaker 6: and staying behind the scenes. That's kind of the model
Speaker 6: Elon Musk, as you said, front and center he's made.
Speaker 6: He made Donald Trump and sort of trump Ism, you know,
Speaker 6: the editorial focus of X, his social network. He was
Speaker 6: on the campaign trail. He's tweeting NonStop. He is, he
Speaker 6: is some he brings things to this that are unquantifiable
Speaker 6: and that are probably worth more than the two hundred
Speaker 6: million he put in.
Speaker 4: Hey, one thing I want to talk about is the
Speaker 4: platform X. And you know we talked. In the two
Speaker 4: years that he's owned it, there have been valuation right
Speaker 4: downs by Fidelity for example, how should we be looking
Speaker 4: at the valuation of X, or how should we be
Speaker 4: looking at X as sort of a platform arm of
Speaker 4: the Republican Party or communications arm.
Speaker 6: Well, it's both a business and it's a loss leader
Speaker 6: media arm for the Elon Ink conglomerate, right, Like, those
Speaker 6: are the two things. Those are the two functions it
Speaker 6: serves as a business. It hasn't gone super well. As
Speaker 6: you said, Fidelity has written down the value massively. Elon
Speaker 6: Musk essentially taking it over, decided he didn't care about advertising.
Speaker 6: He decided that, you know, he was going to be
Speaker 6: okay with not having a vibrant advertising business. He literally
Speaker 6: told advertisers to f off, you know, from the stage
Speaker 6: of a major conference. And what he's done is sort
Speaker 6: of accepted that this is going to be a less
Speaker 6: successful business, but try to maintain its influence and maybe
Speaker 6: even intensified. And I'd argue in that way, it's been
Speaker 6: a huge success. It's been a huge success of political play,
Speaker 6: and even as a community like it may not be
Speaker 6: super vibrant in the way it was before. There are
Speaker 6: a lot of journalists who are you know, currently leaving
Speaker 6: to go to Blue Sky or Threads or these competing
Speaker 6: social networks. They're growing very quickly. But among conservatives, among
Speaker 6: that kind of like base that elected Donald Trump, they
Speaker 6: are on x. This is where they are getting their
Speaker 6: news right now.
Speaker 4: That was Bloomberg Business Week correspondent and co host of
Speaker 4: the Elon Inc. Podcast, Max Chafkin. Check out the Elon Inc.
Speaker 4: Podcast on the Bloomberg Terminal and at Bloomberg dot com,
Speaker 4: slash elon Inc. In anywhere you get your podcasts.
Speaker 3: Coming up, more on the next Trump administration and how
Speaker 3: his mandate may impact future thanksgivings.
Speaker 4: And this justice Turkey prices are actually dropping. You're listening
Speaker 4: to Bloomberg BusinessWeek. This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm. Easter Listen
Speaker 2: on Apple Cardplay and then Broud Auto with a Bloomberg
Speaker 2: business app or watch us live on YouTube.
Speaker 3: Well Thanksgiving, yep, right around the corner. And with that,
Speaker 3: gathering around the table with family, watching football and of
Speaker 3: course eating turkey, though another thing on the menu this year. Politics.
Speaker 4: That's because with such a monumental change in the White
Speaker 4: House looming, people and businesses alike are wondering what the
Speaker 4: implications of new Trump administration will have on their bottom line. Yes,
Speaker 4: that includes the poultry business.
Speaker 3: This time of year, we like to check in on
Speaker 3: the cost of a typical Thanksgiving dinner. Jajanren is the
Speaker 3: CEO of Butterball, which sells yeah, a lot of turkeys, Jtails,
Speaker 3: Tim and Bloomberg's just meant and what a Trump white
Speaker 3: house means for Butterball.
Speaker 9: Well, certainly it remains to be seen exactly how this
Speaker 9: administration will play out. As we you know, from the
Speaker 9: last Trump administration, it didn't have any significant direct impact
Speaker 9: that we saw as a result of any policy at
Speaker 9: that time, and don't expect there will be any significant
Speaker 9: changes again with this administration. But that remains we see.
Speaker 9: We'll see what kind of position he takes to some
Speaker 9: of these issues. But well we'll deal with it as
Speaker 9: it comes, but we don't expect any significant issues at
Speaker 9: this point.
Speaker 8: Does that include deregulation in the poultry industry specifically.
Speaker 9: I wouldn't expect so. From a food safety standpoint, that's
Speaker 9: one of the main things that we pay attention to.
Speaker 9: There is good regulation and there are some things that
Speaker 9: are certainly good about that make sure that we have
Speaker 9: a safe food supply. Regardless of what comes down with that,
Speaker 9: we're going to still make sure that we produce a
Speaker 9: safe product and give the consumers what they need. So
Speaker 9: while there may be some modifications, some changes here, and
Speaker 9: there are some subtle changes, don't expect anything big and
Speaker 9: certainly don't expect any big unwinding of any policies that
Speaker 9: we have to work with and work within.
Speaker 4: Jay, What about the labor side of this, because this
Speaker 4: time the former president and now presidentill Act ran on
Speaker 4: this policy of mass deportations, promising to deport millions of
Speaker 4: people who are here illegally. No question, that's going to
Speaker 4: have profound applications for their workforce if he sees it through,
Speaker 4: and he says he will see it through, and it
Speaker 4: will affect companies that don't employ people who are here
Speaker 4: illegally poultry processing facilities known to employ migrant workers. How
Speaker 4: are you planning for how this could affect your business?
Speaker 9: Well, as it is now and has been, we comply
Speaker 9: with all the regulations that we need to to make
Speaker 9: sure that we're only hiring documented workers, so it really
Speaker 9: shouldn't have any impact on us whatsoever. We've had. Actually,
Speaker 9: our labor situation has been very good and continuing to
Speaker 9: prove over the last couple of years as we get
Speaker 9: out of COVID, which is great news, and I really
Speaker 9: attribute that to the work that we've done on our
Speaker 9: people efforts, the training that we've done for our folks,
Speaker 9: the benefits that we've provide to them, have really put
Speaker 9: us in a really great spot. We're now have a
Speaker 9: labor situation that's much better than it has been for
Speaker 9: at least the last six years. So with regard to
Speaker 9: the immigration policy itself, it really won't have any impact
Speaker 9: because we're not unable to hire those books as it
Speaker 9: is now anyway.
Speaker 4: Yeah, Jay, And don't get me wrong, I'm not implying
Speaker 4: that Butterball employees people who are undocumented. What I'm saying, though,
Speaker 4: is there is this chain reaction in the labor for us,
Speaker 4: when you remove a large portion of people who are
Speaker 4: here illegally but also might be working, then there are
Speaker 4: other people who need to fill those roles that they
Speaker 4: previously worked in. And I'm wondering if that could have
Speaker 4: upward pressure on you on your costs because you'll then
Speaker 4: have to find new people to work in your facilities
Speaker 4: because the people who were there might have gone somewhere else.
Speaker 9: Well, I think the key is to making sure that
Speaker 9: we keep our people happy. Some the feedback that we
Speaker 9: get from our folks, We've talked to them regularly. We
Speaker 9: do a lot of work with surveys and making sure
Speaker 9: that we talk one on one with our people and
Speaker 9: really understand that we're meeting the needs of what they're
Speaker 9: looking for in an employer. And we feel really good
Speaker 9: of our positions. So you know that certainly isn't something
Speaker 9: that we're terribly concerned about. We're just going to make
Speaker 9: sure that we take care of our folks the ones
Speaker 9: that we have, and continue to give them positive opportunities
Speaker 9: to grow with in the organization.
Speaker 8: You export products to more than thirty countries. How are
Speaker 8: you thinking about potential regulatory tariffs?
Speaker 9: Well, we don't see anything directly coming within our categories.
Speaker 9: We haven't in the past, so that's certainly goodness and
Speaker 9: it just really remains to be seen again. You know,
Speaker 9: with the previous Trump administration, there's a lot of effort
Speaker 9: in those areas and from a tariff standpoint, in different
Speaker 9: different categories, we didn't see any retaliatory tariffs as an
Speaker 9: example with our products. Hopefully that will not be the
Speaker 9: case this year, so you know, we've got an open mind.
Speaker 9: We'll continuing to look in a valued situation, but at
Speaker 9: this point, there really is anything that we can do
Speaker 9: until we start seeing how those negotiations start to play out.
Speaker 4: Jay, I'm just just wondering, like, do you have somebody
Speaker 4: at a policy position at the company who can represent
Speaker 4: you in Washington? Does it feel like if you do,
Speaker 4: you have to sort of beef that presence up a
Speaker 4: little bit.
Speaker 9: Our trade organization, National Turkey Federation does a great job
Speaker 9: with regard to that. We've got folks there in DC
Speaker 9: very well connected on the Hill. My company and other
Speaker 9: companies in our industry spend quite a bit of time
Speaker 9: up there as well talking to our legislators. So we
Speaker 9: really make sure that we can take the time to
Speaker 9: give them the topics that are important to us, the
Speaker 9: positions we're looking to take, and hopefully we can end
Speaker 9: up with a positive outcome. But we feel really good
Speaker 9: about a representation there now through the National Turkey Federation.
Speaker 8: I want to get a glean just on the inflation
Speaker 8: question because we've seen it come down so much from
Speaker 8: the rate of change over the last few years. But
Speaker 8: unit labor costs, so for listeners, basically what a business
Speaker 8: pay to employees to produce one unit of output. How
Speaker 8: are you viewing when it comes to how you're paying
Speaker 8: those and are you still feeling a pinch here when
Speaker 8: you're thinking about when everyone's discussing about the trajectory of
Speaker 8: rates and the Federal Reserve.
Speaker 9: Yeah, we've got to be competitive, obviously, and we've done
Speaker 9: a lot over the last couple of years to make
Speaker 9: sure that we've got a good balance for our folks
Speaker 9: on both their working and their home life relationship and
Speaker 9: their income as well. That's a very important piece of
Speaker 9: it for us. We want to make sure that those
Speaker 9: those folks are happy. Inflation overall has definitely hit us
Speaker 9: just like the consumer. You know, we have experienced that
Speaker 9: within our company as have others. So when we talk
Speaker 9: to consumers now we look at this holiday, we know
Speaker 9: that that's a very very important aspect of what they're considering.
Speaker 9: Inflation is certainly top of mind. It was certainly a big,
Speaker 9: a big issue for this election and the consumers total sets.
Speaker 9: So we've been working very, very closely in preparation for
Speaker 9: this holiday to make sure that working with our retailers,
Speaker 9: we can give the best value to the consumers that
Speaker 9: are out there, and I think they're going to be
Speaker 9: pleasantly surprised.
Speaker 4: You guys are privately held, so we don't have a
Speaker 4: ton of information on your numbers, but can you give
Speaker 4: us some ballpark figures about just how much turkey you're
Speaker 4: responsible for selling in the US?
Speaker 9: Sure? Well, we have within the holidays, you know, certain
Speaker 9: leaders we focus on Thanksgiving. About one in three turkeys
Speaker 9: that are sold every year are a butter ball is
Speaker 9: a butterball turkey. So we're really proud of that position.
Speaker 9: We have a large market share, spend a lot of
Speaker 9: time working with our consumers and our customers and make
Speaker 9: sure we deliver what they're looking for and look to
Speaker 9: obviously try to grow that every year. But we are
Speaker 9: we are the largest provider of turkey for the holiday,
Speaker 9: and we're very proud of that.
Speaker 4: How much of your sales is around the Thanksgiving holiday
Speaker 4: versus outside of it?
Speaker 9: It's about a third. When you look at our business overall,
Speaker 9: we have a considerable business and food service as well
Speaker 9: as in retail throughout the year and consumer package goods
Speaker 9: and the holiday itself represent it's about a third of
Speaker 9: our business.
Speaker 4: Is there effort to diversify in terms of timeline here
Speaker 4: and make it so that you see more sales outside
Speaker 4: of this concentrated period.
Speaker 9: It certainly is. Our biggest push right now is on
Speaker 9: our value added growth and our Butterball brand specifically. That
Speaker 9: is where we've been taking the company for the last
Speaker 9: several years. Fortunately, we've seen very good progress and that
Speaker 9: we've seen our Butterball value added business grow. We're also
Speaker 9: looking at growing outside of the US a number of
Speaker 9: initiatives there as well, so we're looking to get the
Speaker 9: brand spread as much as we can. We've actually been
Speaker 9: very happy to see the acceptance of the brand in
Speaker 9: other countries where we distribute, even in countries where we
Speaker 9: haven't had Butterball at all before. As an example, we'll
Speaker 9: have Butterball branded turkeys in the UK this year for
Speaker 9: Christmas for the first time ever. And that's in a
Speaker 9: country where they have very little branded product to begin with.
Speaker 9: Most of it is private label and their grocery stores there,
Speaker 9: the retailers, So that really says a lot for the brand.
Speaker 9: We're really really happy to see that happen.
Speaker 4: So that's what I wanted to talk to you about.
Speaker 4: I've been outside of the US for Thanksgiving a few
Speaker 4: times over my life and it was I mean, this
Speaker 4: was years ago. It was remarkably hard to find a turkey.
Speaker 4: When we could find a turkey. Why is it so
Speaker 4: hard to find a turkey outside the US? Why is
Speaker 4: turkey such an American thing?
Speaker 9: Well, for one thing, it's not an indigenous bird to
Speaker 9: most of the world, and a lot of cultures aren't
Speaker 9: used to consuming turkey. So we've really got an opportunity
Speaker 9: to help grow that and that is a big opportunity
Speaker 9: for it. So try to get outside of the US,
Speaker 9: try to go to countries where little to no turkey
Speaker 9: is consumed. Certainly there's a lot of work on our
Speaker 9: part to educate them and to show the opportunities and
Speaker 9: how they can use the product. There are also barriers.
Speaker 9: There are a number of trade barriers in place right
Speaker 9: now where we can't import or excuse me, export our
Speaker 9: products into certain countries because of various regulations that they've got,
Speaker 9: whether there are somewhat protectionists for their own supply, their
Speaker 9: own manufacturing, or whatever the case may be. So we
Speaker 9: have to be creative in ways that we can look
Speaker 9: to work into those markets to open those markets up.
Speaker 9: Spent a lot of effort through our trade organization that
Speaker 9: I mentioned earlier, a National Turkey Federation, to help try
Speaker 9: to open up these countries and then in some cases
Speaker 9: even look for in country producers to produce a product
Speaker 9: for us. So there are number different ways that we
Speaker 9: can look at that to grow our brand. We just
Speaker 9: have to be creative. But it's a tremendous opportunity for
Speaker 9: us to expand beyond our borders.
Speaker 8: Hey, Ja's something I was thinking about especially the last
Speaker 8: few Thanksgivings, just because of the cost of different items
Speaker 8: that people are eating.
Speaker 6: You know.
Speaker 8: Well, Spargo had an interesting report out recently talking about
Speaker 8: how the price of turkey is down almost twenty percent
Speaker 8: this year compared with a year ago. And actually the
Speaker 8: American Farm Bureau Federation had talked about how the average
Speaker 8: price of a sixteen pound turkey last year was around
Speaker 8: twenty seven dollars. What are you seeing here when it
Speaker 8: comes to those prices, because, as you know, especially over
Speaker 8: the last few years with infleetion, what should people expect
Speaker 8: to spend here on different whether it's turkey or other items.
Speaker 9: Well, compared to last year, we are seeing retails lower. Now,
Speaker 9: we don't set the retails. Our customers certainly do that,
Speaker 9: but we work with them to make sure that we
Speaker 9: can give them the best value to begin with, I
Speaker 9: think what's really important to focus on for the consumer
Speaker 9: is the value of that protein. At roughly a dollar
Speaker 9: a pounds, very very difficult to find any protein that's
Speaker 9: going to be that economical, and especially during the holiday
Speaker 9: when there's a lot of feature activity, a lot of
Speaker 9: discounting going on, it really provides a phenomenal value, particularly
Speaker 9: now as so many things are up and there are
Speaker 9: a number of items on that Thanksgiving table that might
Speaker 9: be more expensive than last year. But the good news
Speaker 9: right now as it looks like turkey is not one
Speaker 9: of those. So we're real happy that we can help
Speaker 9: be a part of the solution in a time when
Speaker 9: folks are really struggling with the impact of inflation.
Speaker 8: What should we expect for maybe the average sort of
Speaker 8: gathering sizes for Thanksgiving celebrations.
Speaker 9: Well, from our report that you referenced earlier, we do
Speaker 9: know that people are celebrating Thanksgiving in pre COVID numbers again,
Speaker 9: which is great. It's about eighty six percent of the
Speaker 9: people that we talked to total say, would be celebrating
Speaker 9: the holiday, and about eighty seven percent of those would
Speaker 9: have turkey at the table. And the gathering sizes is
Speaker 9: an average dying which is which is a great number.
Speaker 9: We're really happy to see that people are able to
Speaker 9: get out again and travel and those that want to
Speaker 9: be close suitor in the holiday and get back to
Speaker 9: those larger gall and gathering. So we were really proud
Speaker 9: to be a part of that.
Speaker 4: That was Jay Jandren CEO of Butterball Our thanks also
Speaker 4: to Bloomberg's Jess Matten for joining us there as well.
Speaker 3: Still ahead on Bloomberg Business Week. She's a former Assistant
Speaker 3: secretary and undersecretary at the Department of Commerce under President
Speaker 3: Trump his first term. She's in touch with the transition
Speaker 3: team and shares what.
Speaker 4: She heard you're listening to Bloomberg Business Week. This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Listen live
Speaker 2: each weekday starting at two pm Eastern on Apple car
Speaker 2: Play and Android Auto with the Bloomberg Business ad. You
Speaker 2: can also listen live on Amazon Alexa from our our
Speaker 2: flagship New York station, jo Say Alexa playing Bloomberg eleven thirty.
Speaker 3: This week, President elect Donald Trump nominated Marco Rubio as
Speaker 3: Secretary of State and Mike Waltz for National Security Advisor,
Speaker 3: two men with track records of harshly criticizing China for
Speaker 3: key hosts in his administration, a sign that ties between
Speaker 3: the two superpowers may deteriorate further in the coming years.
Speaker 4: Meanwhile, Trump has pledged to impose extra large tariffs on
Speaker 4: imports from China and medium sized tariffs for the rest
Speaker 4: of the world.
Speaker 7: But will the so.
Speaker 4: Called tariff Man go through with his campaign promise of protectionism.
Speaker 3: It's a big question. Nazak Nikotar brings over two decades
Speaker 3: of experience in international trade and national security. She served
Speaker 3: as the Department of Commerce's Assistant Secretary for Industry and
Speaker 3: Analysis under then President Donald Trump. That was from twenty
Speaker 3: eighteen to twenty twenty one. Currently, she's a partner and
Speaker 3: chair of the National security law practice at the law
Speaker 3: firm Wileye Rain.
Speaker 10: I don't want to speculate in terms of what the
Speaker 10: political appointments mean generally.
Speaker 5: For very specific policies.
Speaker 10: But the trend that's really important to see is that
Speaker 10: the political appointments are aligning with President Trump's campaign promises
Speaker 10: right much more forward leaning policies to deal with the
Speaker 10: threats that we're seeing in terms of the economic and.
Speaker 5: National security threats.
Speaker 10: So I am personally pleased to see, you know, delivering
Speaker 10: on those promises to take on some of these big
Speaker 10: issues that you're talking about.
Speaker 4: It does seem like the one thread that sort of
Speaker 4: ties all these names together is loyalty to the foreign
Speaker 4: president and the president elect. And I'm wondering what you
Speaker 4: make of that. Much has been made of the whole
Speaker 4: idea of having a quote team of rivals like we've
Speaker 4: seen in past administrations. What do you make of what
Speaker 4: the president elect is doing now tapping people who've defended
Speaker 4: in vigorously on TV over the last four years.
Speaker 10: And it's an excellent question because it really underscores a
Speaker 10: very key point. A really effective administration is going to
Speaker 10: have cabinet members who are like minded and are rowing
Speaker 10: in the same direction. We've seen too many times cabinet
Speaker 10: members who are constantly in disagreement, and that impedes progress.
Speaker 10: China is a big elephant, and China is the national
Speaker 10: security threat of our time.
Speaker 5: It is the big rival, and we really time is
Speaker 5: running out.
Speaker 10: We see what China's doing in the end of Pacific.
Speaker 10: We really need an administration who has like minded cabinet
Speaker 10: members who are going to work and advanced policies in unison.
Speaker 3: But tell us about since you've been on the inside
Speaker 3: and you understand kind of how things work. Many would
Speaker 3: argue it's great to have a leader, but it's also
Speaker 3: good to have, you know, key advisors around him that
Speaker 3: don't all just say yes, but they also challenge. So
Speaker 3: are we not going I mean, I'm assuming you had
Speaker 3: some of that there when you were there. Are we
Speaker 3: not going to have that this time around?
Speaker 5: Absolutely, We're obviously going to see that.
Speaker 10: I think the important thing is that we have cabinet
Speaker 10: members who are all in a great of what the
Speaker 10: threat is. But every single individual is going to have
Speaker 10: a different opinion and had a counter to threats, and
Speaker 10: so it is it's really important to have different opinions and.
Speaker 5: That makes for better policies.
Speaker 10: But we just don't want to be in a situation
Speaker 10: where the cabinet members are not like minded in terms
Speaker 10: of the threat that we really have to counter, which
Speaker 10: is China.
Speaker 7: Okay, let's talk about that a little bit.
Speaker 4: Because the company Byte Dance, it's the parent company of TikTok,
Speaker 4: and in the first Trump administration he signed an executive
Speaker 4: order to that would have banned TikTok. The Washington Post
Speaker 4: of the reporting that the President elect may halt a
Speaker 4: potential ban. It's a campaign promise that he had. He
Speaker 4: wanted to save the app, He even had a presence
Speaker 4: on it. In your view, should TikTok be banned?
Speaker 10: I think there's enough information out there that TikTok, through
Speaker 10: its surveillance capabilities, etc. Is posing a significant national securities
Speaker 10: right in fact, Europe.
Speaker 5: Countries in Europe have.
Speaker 10: Made findings about how children TikTok is miss by Dance
Speaker 10: misusing children's information. That said, it's really important to underscore
Speaker 10: all so that there are so many Chinese companies that
Speaker 10: are in our infrastructure, telecommunications companies with the surveillance software, hardware,
Speaker 10: et cetera. That focusing just on one company is moving
Speaker 10: our eye away from what really we need to focus on,
Speaker 10: which is the big threats to US infrastructure.
Speaker 4: That is a company, though, that has the attention of
Speaker 4: millions of young people here in the US, and it
Speaker 4: has the ability to influence the way that they view
Speaker 4: certain things. So I think that is a unique company
Speaker 4: to be talking about. We can talk about some of
Speaker 4: the other ones. So are you saying that it shouldn't
Speaker 4: be banned because there's too many companies that have a
Speaker 4: presence in our lives in terms of companies that are
Speaker 4: from China.
Speaker 10: Look, I think the best way to assess this is,
Speaker 10: you know, Director Ray did a great job in terms
Speaker 10: of going back and back back to Congress over and
Speaker 10: over again in terms of providing assessments on the national
Speaker 10: security threat. And I actually think Congress ended up exactly
Speaker 10: where they need to be in terms of, you know,
Speaker 10: the proposed ban on TikTok. Once the President and his
Speaker 10: cabinet members are certainly in the office, I think that
Speaker 10: they're going to look at classified information and make the
Speaker 10: right decision. But based on the information that exists today.
Speaker 10: I believe that there are national security threats that TikTok
Speaker 10: fite Dance pose and I do think that Congress, based
Speaker 10: on the information from VIEWISS intelligence community, landed on the
Speaker 10: right outcome.
Speaker 3: You know, I think a lot about global supply change.
Speaker 3: You know, Tim kicked it off talking about the Stanley
Speaker 3: Blackendecker CEO about the inability not to be able to
Speaker 3: make his products here in the United States. Won't mat
Speaker 3: maybe have the labor, it's not going to be cost effective.
Speaker 3: You know, how can learned are you?
Speaker 5: You know about.
Speaker 3: These pending tariffs from a Trump administration and the implications
Speaker 3: that will have on American companies like they're.
Speaker 10: The reality is is that we're not going to be
Speaker 10: able to make everything we need to in the United States.
Speaker 10: But I think the US government is correct in focusing
Speaker 10: on the things that are critical to the defense industrial
Speaker 10: base and the broader industrial base that spill over into
Speaker 10: the defense industrial base. Those things we really need to have,
Speaker 10: whether in the United States or in close proximity to
Speaker 10: the United States in case there's an emergency and we.
Speaker 5: Need access to those supply chains.
Speaker 10: At the same time, you know, I often hear the
Speaker 10: fact that you know tariffs are going to make things
Speaker 10: more expensive, right, Sometimes they do. Sometimes, In fact, Chinese
Speaker 10: China tends to absorb a lot of the tariffs that
Speaker 10: are placed on it because it just doesn't want to
Speaker 10: displace itself from the US market. I think both things
Speaker 10: are true, just depending on the item of the good
Speaker 10: and the tariffs that are imposed. But at the end
Speaker 10: of the day, tariffs aren't intended. The laws that permit
Speaker 10: the imposition of tariffs are intended to provide corrections. So
Speaker 10: it's not just something more expensive than it was yesterday.
Speaker 5: Is sometimes it becoming.
Speaker 10: More expensive is fixing the price a distortion, and that
Speaker 10: then translates to companies making more money, higher wages, et cetera,
Speaker 10: when they're actually able to compete, get back into the
Speaker 10: marketplace and not be displaced from Chinese goods that are
Speaker 10: forty percent of the price that they're offering.
Speaker 5: Right, And it's not just because China is more competitive.
Speaker 10: This is the function of Chinese industrial subselts and range
Speaker 10: of Chinese policies that underprice.
Speaker 3: Now, Zach, So then are you saying the president elect
Speaker 3: he will be much more selective in terms of what
Speaker 3: tariffs are being placed I.
Speaker 5: Think there's two classes of products.
Speaker 10: When the Chinese distortions have affected the global economy, I
Speaker 10: think that there's going to be a case for tariffs
Speaker 10: on a broad range of goods from different countries. But
Speaker 10: I think on the bilateral side, the underpricing is so
Speaker 10: severe from China that we're going to see much more
Speaker 10: significant tariffs on imports directly from China.
Speaker 4: Our thanks to Nazak Nikotar, our partner and chair of
Speaker 4: the National Security Law practice at the law firm Wylie Rain,
Speaker 4: also former Assistant Secretary and Under Secretary at the Department
Speaker 4: of Commerce under President Trump.
Speaker 5: All Right, everybody.
Speaker 3: This past week, billionaire and head of Galaxy Digital, Michael Novograts,
Speaker 3: speaking of Bloomberg Television, suggested it's unlikely the US will
Speaker 3: create a bitcoin strategic reserve, as proposed by President elect
Speaker 3: Donald Trump, though if the US does create a bitcoin
Speaker 3: reserve that the price of bitcoin it could sore up
Speaker 3: to half a million dollars.
Speaker 4: Arcinvest CEO Kathy Woods said it could even hit one
Speaker 4: million dollars by the end of the decade, sticking by
Speaker 4: her prediction from earlier this year. One company with a
Speaker 4: stake in crypto is the AI infrastructure and digital asset
Speaker 4: mining company Core Scientific CEO Adam Sullivan joined us for
Speaker 4: his take.
Speaker 11: When you think about the US government putting bitcoin on
Speaker 11: balance sheet, it's putting a stake in the ground that
Speaker 11: they believe in the future of bitcoin and that bitcoin
Speaker 11: has a future on a global stage amongst governments, which
Speaker 11: I think is probably one of the first times this
Speaker 11: has ever been talked about in history for bitcoin.
Speaker 4: I wonder though, if that bites the USA, Carol, because
Speaker 4: you're essentially saying, okay, are our treasuries are backed with
Speaker 4: the full faith and credit of the US government.
Speaker 7: But if the US then starts to buy bitcoin.
Speaker 5: Then what's what's the faith designed as a hedge as.
Speaker 4: A hedge against its own currency? Then does that affect
Speaker 4: the full faith and credit of the US.
Speaker 5: Right does that make that not as important?
Speaker 3: Which would go for an argument against doing this.
Speaker 5: I don't know.
Speaker 3: I mean, we're living at interesting times.
Speaker 12: Hey.
Speaker 3: I am curious Adam about your outreach you and your
Speaker 3: team at Core Scientific when it comes to either lobbying
Speaker 3: Donald Trump or whether it's reaching out to Howard Lutnik.
Speaker 3: I'm just giving an idea of efforts that you guys
Speaker 3: are doing on your behalf.
Speaker 11: Prior to the election, we were speaking to both sides
Speaker 11: of the aisle. You know, we look towards the new administration.
Speaker 11: We are constant dialogue across not only the federal level,
Speaker 11: but also the local state level and community level as well.
Speaker 11: As we've seen a number of changes across some of
Speaker 11: the jurisdictions that we operate in. So you know, it
Speaker 11: requires constant communication because we don't know all the rules
Speaker 11: or potential regulations that are coming down the pipeline. We
Speaker 11: don't know what's going to be relaxed, and so that
Speaker 11: requires a lot of dialogue and hopefully, you know, them
Speaker 11: taking some of our input about what will drive more
Speaker 11: job growth, what will drive more adoption of data centers,
Speaker 11: bitcoin mining facilities across the United States.
Speaker 3: Hey, one other thing that I think about, like, as
Speaker 3: your universe kind of evolves and with the hosting energy policy,
Speaker 3: you've got to be watching it right in terms of
Speaker 3: you know, we know AI and servers are hosting AI.
Speaker 3: It just eats more and more power. What are your
Speaker 3: expectations around that. What kind of assistance or policy changes
Speaker 3: are you hoping on that front?
Speaker 11: Yeah, I would say it's more firm generation power being
Speaker 11: brought to the grid, and so that that is across nuclear,
Speaker 11: that's across natural gas, that's across all of the firm
Speaker 11: generation power. That actually creates a more stable grid.
Speaker 7: How does that make it more stable grid?
Speaker 11: So renewable power. So let's take wind, for example, at
Speaker 11: the highest rate, it can run about forty five percent capacity,
Speaker 11: factory forty five percent of the day it operates. Solar
Speaker 11: is about thirty five percent. And so as we've taken
Speaker 11: off firm generation power off the grid and replaced it
Speaker 11: with renewables, that's the reason why you're seeing a lot
Speaker 11: more brownouts across the United States and areas that have
Speaker 11: high proliferation of renewable energy. So bringing more firm generation
Speaker 11: power onto the grid reduces that volatility of when capacity
Speaker 11: is actually available because supply is pretty constant. You know,
Speaker 11: it changes throughout the day. It's high in the morning,
Speaker 11: it's high in the afternoon, but that's not necessarily when
Speaker 11: the wind is blowing or the sun is shining, and
Speaker 11: so that's what creates the instability across.
Speaker 7: The US grid. That was Core Scientific CEO Adam Sullivan.
Speaker 3: That wraps up our first hour of the weekend edition
Speaker 3: of Bloomberg Business Week from Bloomberg Radio Head No Our
Speaker 3: next hour, the finance company that's helping military veterans invest
Speaker 3: and grow their wealth.
Speaker 4: Plus Delta CEO At Bastion on flying Private.
Speaker 3: Hmmm, that's interesting, all right. And also we're going to
Speaker 3: get into how Amazon workers are continuously sharing water cooler
Speaker 3: talk with robots, and speaking of Amazon, hey Alexa, Apple
Speaker 3: is finally getting ready to take a step into your world.
Speaker 7: We get that when we come back.
Speaker 3: This is Bloomberg Business Week.
Speaker 7: I'm Carol Messer and I'm Tim Staneveeck. You're listening to
Speaker 7: Bloomberg Business Week. This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Week Podcast. Listen live
Speaker 2: each weekday starting at two pm Eastern on applecar Play
Speaker 2: and Android Auto with the Bloomberg Business App. You can
Speaker 2: also listen live on Amazon Alexa from our flagship New
Speaker 2: York station, Just say Alexa play Bloomberg eleven thirty.
Speaker 3: Plenty ahead in our second hour of the weekend edition
Speaker 3: of Bloomberg Business Week, including a partnership in the Friendly Skies,
Speaker 3: Delta CEO Ed Bastian and Wheels Up CEO George Mattson
Speaker 3: on working together and what a second Trump term means
Speaker 3: for the airline industry.
Speaker 4: Plus, your next Amazon order could be packaged and fulfilled
Speaker 4: by robot meantime, Apple is revving up to offer a
Speaker 4: package of services and a device for your I don't
Speaker 4: know if I need this thing.
Speaker 13: What I don't know?
Speaker 14: You don't know that you need it.
Speaker 15: Oh.
Speaker 3: I can't even turn off the lights without talking to
Speaker 3: somebody at my home. It's driving me crazy.
Speaker 7: I just want to switch to your husband. You say,
Speaker 7: turn out the lights. It's a little crazy, all right.
Speaker 3: First up this hour, we honored veterans on Veterans Day
Speaker 3: this past week, and we spoke to two people who
Speaker 3: are helping those who have served.
Speaker 4: They're over at the financial firm Siebert, Mark Mallick, chief
Speaker 4: investment officer at Siebert, and Cash Larsen, head of Military
Speaker 4: Investing in Communications at the company. Cash also a five
Speaker 4: year active duty Navy seal officer who still serves. Mark
Speaker 4: kicked it all off for us.
Speaker 12: You know, we know that, you know, veterans are very
Speaker 12: much underserved in the investment community, and with the help
Speaker 12: of people like CAJH, we were able to come up
Speaker 12: with things that we think would would resonate more with
Speaker 12: that community in terms of education and in terms of
Speaker 12: specific types of investments that would resonate with them, things
Speaker 12: that they want to see, things that they're comfortable with.
Speaker 12: You know, we have the traditional stuff, but you know,
Speaker 12: focusing on what their needs are, what makes them comfortable,
Speaker 12: is really important to us, and that's how we've designed
Speaker 12: all of our investments around that.
Speaker 7: So Coch, come on in here.
Speaker 4: Because you have a history in the military, active duty
Speaker 4: Navy seal for years, still involved in the military at
Speaker 4: this point, how much did you think about investing when
Speaker 4: you were actually serving.
Speaker 16: Well, not nearly as much as I should have tim right,
Speaker 16: I was more focused on gun slinging at the time.
Speaker 7: Look, that's the answer I was expecting to get.
Speaker 13: Yeah.
Speaker 17: Yeah.
Speaker 16: And now what I'm trying to do as a more
Speaker 16: senior officer is help like young people at the beginning
Speaker 16: of their service members journey be a little more sophisticated
Speaker 16: than I was. Right, And one of the ways we're
Speaker 16: doing it at Siebert is kind of adopting the same model,
Speaker 16: a fusion model that we did in the military. In
Speaker 16: mission planning, we say intel drives operations, and we're using
Speaker 16: that same paradigm at Sebert.
Speaker 12: Right.
Speaker 16: So I have Mark over here, He's the ten thousand
Speaker 16: pound brain, right, I'm the paleolithic knuckler dragger who's going
Speaker 16: to execute all of all of these really interesting and
Speaker 16: dynamic portfolios that we've created. So and that's how we're
Speaker 16: doing it. I think the key here is that the
Speaker 16: veterans community and the military community is not a homogeneous organization.
Speaker 14: Right.
Speaker 16: There's a lot of variety and there are no one
Speaker 16: size fits all solutions. So what's helpful about having someone
Speaker 16: like me with thirteen years of total service, I continue
Speaker 16: to serve in a special operations unit. I understand I've
Speaker 16: walked a mile in the boots of similar to a
Speaker 16: lot of these military members and veterans, And so then
Speaker 16: I can help calibrate, I can help educate and then
Speaker 16: help calibrate appropriately to help build wealth within this community
Speaker 16: that is often left behind by the private wealth community.
Speaker 14: Kus, what are you seeing right now? What are people
Speaker 14: who are currently serving asking about when it comes to
Speaker 14: their finances? Is it more budgeting? Is it what should
Speaker 14: I invest in? Is it money?
Speaker 16: Like everybody else they're asking about bitcoin? Right, And the
Speaker 16: truth is, like the military has actually been leading edge
Speaker 16: on some of this stuff.
Speaker 10: Right.
Speaker 16: Bitcoin itself comes out of a sort of cryptological function
Speaker 16: that was developed in the military, So there actually is
Speaker 16: some interior and intrinsic knowledge that service members have but
Speaker 16: maybe don't necessarily realize that they know that can help
Speaker 16: them in their investing journey. In general. Absolutely, you hit
Speaker 16: the nail on the head first. We have to tickle
Speaker 16: interest in investing, right, and you have to save before
Speaker 16: you can invest. So a huge part of our firm
Speaker 16: and our mission is is devoted just to closing this
Speaker 16: knowledge gap in order to increase the rates of financial literacy.
Speaker 16: We're not the only people that are doing that. There
Speaker 16: are organizations within the Pentagon, the Office of Financial Readiness,
Speaker 16: and then organizations private sector organizations like us outside the
Speaker 16: Pentagon that are doing it. But it really takes a
Speaker 16: village to make a smart marine put his money somewhere good.
Speaker 4: I guess the challenges cash that oftentimes somebody gets done
Speaker 4: with being in the military and they don't necessarily have
Speaker 4: enough money to start to.
Speaker 7: Put to work.
Speaker 4: They're more focused on providing basic necessities and providing basic needs.
Speaker 4: I mean, we talk all the time about the inability
Speaker 4: of this country to serve its veterans.
Speaker 16: Yeah, I would push back on that just a little bit.
Speaker 16: I think in general that principle is right, but contrary
Speaker 16: to popular belief, and this is part of the reason that.
Speaker 12: The military community has been kind of.
Speaker 16: Largely ignored by the street is they always thought that
Speaker 16: the account sizes are too small, they don't have enough money.
Speaker 16: But relative to their socioeconomic peers, actually, service members often
Speaker 16: have quite a lot of discretionary spending, and it's because
Speaker 16: of non calculated things like the cost of healthcare, something
Speaker 16: that a lot of military folks don't have to worry about,
Speaker 16: things like bah basic allowance for housing. Right, So because
Speaker 16: of that, they have more I'm not saying a lot necessarily,
Speaker 16: but more income relative they're socioeconomic peers. Like, yeah, we're
Speaker 16: an old firm at SEBER, but like cutting edge technology, right,
Speaker 16: things like you know, the advent of fractional share investing.
Speaker 16: We say, like, you can start investing with as little
Speaker 16: as a dollar.
Speaker 15: Right.
Speaker 16: The problem for us from the financial education literacy perspective is,
Speaker 16: you know, you still get a lot of young enlisted
Speaker 16: guys in the military going out and buying that new
Speaker 16: Mustang at a twenty one percent interest rate. There's an
Speaker 16: entire predatory industry designed to take service members money, and
Speaker 16: only a few of us focused on building their wealth.
Speaker 14: So, Mark, when you're thinking about where do you actually
Speaker 14: allocate portfolios, do you make veteran specific trades. I'm an
Speaker 14: ETF reporter, and so there's a number of ETFs out
Speaker 14: there that are focused on defense spending, or infrastructure or crypto.
Speaker 14: Is that kind of your approach to investing?
Speaker 12: Partially? I mean, at the core week we stick to
Speaker 12: the standard principles of investing, right, so we try to
Speaker 12: match up portfolios to risk colerances of the clients. We
Speaker 12: also like to put things in there that the clients
Speaker 12: understand and that they would want to invest in themselves.
Speaker 12: And so the idea is to get them to focus
Speaker 12: on more long term investing. When young a lot of
Speaker 12: these young hotshots come out, they want to put it
Speaker 12: all in bitcoin or something like that.
Speaker 7: But we try we would they would, by the way,
Speaker 7: that would have been a good movie.
Speaker 12: Exactly exactly, exactly exactly.
Speaker 7: You caught me, right, you don't see me doing it? Yeah, yeah, similarly,
Speaker 7: but we.
Speaker 12: Try to, you know, teach them that sort of you know,
Speaker 12: long term focus, but still at the end of the day,
Speaker 12: we want them to be able to open up their
Speaker 12: accounts and see ETFs in there that resonate with them, right, So, yes,
Speaker 12: we do put those types of things in there that
Speaker 12: they would say, yeah, I know what that is. I
Speaker 12: get that, I'm happy that I'm putting my money there,
Speaker 12: and so on top of that, you know, we're constantly
Speaker 12: managing them to stick with their risks. So for instance,
Speaker 12: you know you brought it up. You know, if bitcoin
Speaker 12: was in there was in their portfolio. Obviously bitcoin, the
Speaker 12: risk of bitcoin changes as it goes up and down,
Speaker 12: mostly up, and so you know we've got to constantly
Speaker 12: be managing that to make sure that the portfolio is
Speaker 12: still in the right balance for the client.
Speaker 7: Is that part of the portfolio now is crypto? Is
Speaker 7: bitcoin part of it?
Speaker 12: It is not a core part of the portfolio, but
Speaker 12: it is. It is something that can be can be
Speaker 12: added to.
Speaker 4: But it's not the type of thing now that you're saying, Okay,
Speaker 4: if you want to invest in this stuff, you're doing
Speaker 4: it outside of Seabert.
Speaker 12: No, we help them with that as well, right, So
Speaker 12: you know, our hope is to you know, manage to
Speaker 12: manage their core money, right, So we're like the let's
Speaker 12: call it the savings account of yester year for them,
Speaker 12: and then we do encourage them to you know, to
Speaker 12: go out and try other things and we help them
Speaker 12: with that as well. We advise them on that as well.
Speaker 12: But we always like to know that that the core
Speaker 12: portfolio isn't that important you know, set of ETFs that
Speaker 12: is going to you know, provide them with that risk
Speaker 12: adjusted return that's right for them.
Speaker 16: And to underscore marks point, we try and speak to
Speaker 16: our service members in language and metaphors that they understand.
Speaker 16: So we say, just like you wouldn't go to war
Speaker 16: with a single bullet in your magazine, we expect you
Speaker 16: to have a diversified portfolio, many bullets in your magazine,
Speaker 16: and we expect you also, just like admission planning, to
Speaker 16: have contingencies things like a rainy day savings account and
Speaker 16: things like that. So the tried and true principles of
Speaker 16: investing are really good for the military community. With some
Speaker 16: of the additional sidecars that.
Speaker 4: You guys were just discussing, I'm curious what you're hearing
Speaker 4: now from active duty service members that's kind of different
Speaker 4: from when you served earlier in your career.
Speaker 16: In short, what I'm seeing is an increased level of
Speaker 16: sophistication when it comes to financial knowledge and literacy. Whether
Speaker 16: that's actually translated into investment is still to be determined,
Speaker 16: but there certainly is more interest, there's more information, there's
Speaker 16: a more alternative sources for information, and you're starting to see,
Speaker 16: especially with the advent of these alternative assets, service members
Speaker 16: paying more attention than they had in the past. The
Speaker 16: other small thing is that the military retirement system has changed,
Speaker 16: and that's made it that's a forcing function to make
Speaker 16: people be smarter about their Hey.
Speaker 4: So Mark, come on in here, because you are chief
Speaker 4: investment officer over at Siebert Financial. So we'd be remiss
Speaker 4: if we didn't ask you, like we're asking everyone about
Speaker 4: the state of the markets these days, especially given what
Speaker 4: we've seen over the last week after the decisive victory
Speaker 4: by President Trump.
Speaker 12: Yeah, it's it's been an interesting couple of weeks for
Speaker 12: all of us. We had, we had all those great
Speaker 12: earnings just prior to the election, and we haven't even
Speaker 12: had a chance to really sort of look at these
Speaker 12: you know, these this this rash of Max seven stocks
Speaker 12: that we heard from that's been driving the markets higher
Speaker 12: and suddenly get the you know, suddenly we get the elections,
Speaker 12: and now we're focusing you know, not on the max
Speaker 12: seven but the MAGA seven. Right, So you know, we're
Speaker 12: trying to figure out, you know, what of this stuff
Speaker 12: is uh is going to stick?
Speaker 8: What is not?
Speaker 12: A lot of it is a little I would say,
Speaker 12: probably took you know, some of us by a little
Speaker 12: bit of surprise in terms of magnitude, but in terms
Speaker 12: of the things that have been going, you know, the
Speaker 12: handwriting was kind of on the wall. So you know,
Speaker 12: we're seeing as we expected. We we expected a continuation
Speaker 12: of the prior trends, maybe a little bit turbocharged in
Speaker 12: those areas that we you know that Trump was very
Speaker 12: clear that his administration would focus on. But you know,
Speaker 12: in terms of the magnitude, it puts us sometimes in
Speaker 12: a rough position saying, yeah, well, we like this sector,
Speaker 12: but we can't get into this sector now because it
Speaker 12: really played out a little too quickly.
Speaker 14: What specific sectors come to mind when you're thinking about
Speaker 14: now we know who the president is, so we have
Speaker 14: a better idea of what policies are going to be
Speaker 14: in play than we did maybe a few weeks ago.
Speaker 12: Yeah, so I think for us, you know, we we
Speaker 12: expected you know, the financial sector to definitely get a boost,
Speaker 12: you know, increased deal flow, you know, all sorts of deregulations,
Speaker 12: things like we all expected that. And the interest rate environment,
Speaker 12: although that is rapidly changing, that should be an environment
Speaker 12: that should be pretty good for you know, traditional lenders
Speaker 12: and things like that. I think that the markets responding
Speaker 12: much more aggressively than we expected, although we still believe
Speaker 12: that there's there's room, but we have to be a
Speaker 12: little bit more careful with that.
Speaker 3: You know.
Speaker 12: Obviously, something that we've focused a lot on that may
Speaker 12: not be attributed to Trump is you know, we can't
Speaker 12: ignore uh technology, broader technology information technology sector and also
Speaker 12: in you know, tele in the telecom sector of the
Speaker 12: communications sector. You know, we we saw a lot of
Speaker 12: potential there the what I call the AI ecosystem. We
Speaker 12: believe that that is going to continue to move. But
Speaker 12: under a new under under Trump, we have to look
Speaker 12: at things a little bit differently.
Speaker 18: Right.
Speaker 12: So, you know, I've always used the supply chain analysis
Speaker 12: on the Bloomberg, right, and it's becoming a more and more, yeah,
Speaker 12: important part of our life every day as we're looking
Speaker 12: at any company. We're checking GEO exposure from these companies
Speaker 12: and it's part of our It's a factor now in
Speaker 12: our models.
Speaker 4: That was Mark Mallick, chief investment officer over at Seabird,
Speaker 4: and Cash Larsen, head of Military Investing and Communications at
Speaker 4: the firm. Emily Grafe is sticking around a little later.
Speaker 3: In the hour, still ahead. On Bloomberg Business Week, Delta
Speaker 3: CEO Ed Bastian on sticking the landing with a struggling
Speaker 3: private aviation company.
Speaker 7: This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen
Speaker 2: on Apple car Play and then brout Auto with a
Speaker 2: Bloomberg Business act or watch us live on YouTube.
Speaker 4: Last month, Delta Airlines forecast profit in sales that fell
Speaker 4: short of Wall Street's estimates for the final months of
Speaker 4: the year, suggesting a slow recovery from a challenging summer
Speaker 4: travel season. For an update on the business and the
Speaker 4: latest on Delta's partnership with the private on demand aviation
Speaker 4: provider wheels Up, we bring in Ed Basti and CEO
Speaker 4: of Delta Airlines and George Mattson, CEO of wheels Up.
Speaker 4: Both joining us from Atlanta. We should note that Delta
Speaker 4: does own close to forty percent of wheels up. That's
Speaker 4: according to Bloomberg Data. Guys, thanks so much for joining us.
Speaker 4: We're going to get to the wheels Up partnership and
Speaker 4: the exciting news that you guys have when it comes
Speaker 4: to new aircraft. But I wanted to ask each of
Speaker 4: you the same question that I've asked every CEO that
Speaker 4: I've spoken to over the last week, and I want
Speaker 4: to start with you, what does a second Trump administration
Speaker 4: mean for Delta Airlines?
Speaker 17: Well, I think you've seen from the market's reaction there's
Speaker 17: a lot of optimism in the corporate community. I know
Speaker 17: for Delta, specifically in the aviation industry. The president, the
Speaker 17: former president now the current president elect, knows our industry
Speaker 17: quite well, was very supportive as we worked with him
Speaker 17: in his previous administration, particularly as we went through COVID,
Speaker 17: got the support we were the original industry that got
Speaker 17: the Cares Act started and the support to keep our
Speaker 17: employees employed. And we look forward to continuing to work
Speaker 17: with him in a second administration.
Speaker 4: What about ED when it comes to regulation during the
Speaker 4: next administration, Because I think many people would say the
Speaker 4: Biden administration took what some would call it hostile stance
Speaker 4: on airline m Anda, do you expect that to change
Speaker 4: under Trump? Will it lead to a new round of
Speaker 4: airline consolidation.
Speaker 17: I don't know about consolidation. I guess as possible, But
Speaker 17: I can tell you that the Biden ad ministry, particularly
Speaker 17: the Department of Transportation, who we work most closely with,
Speaker 17: we're quite frustrated with the amount of regulatory overreach that
Speaker 17: we saw continuously through the last four years, and we
Speaker 17: hope there's a new sentiment that's pro employee, pro consumer,
Speaker 17: pro business, and a good balance between the three.
Speaker 1: And George, let's ask that same question to you. You
Speaker 1: think about a second Trump administration, what would that mean
Speaker 1: for wheels up?
Speaker 19: Yeah, thanks, Kate.
Speaker 18: I think, as Ed said, the prior administration, we're in
Speaker 18: the prior administration. Obviously, there was a strong support for
Speaker 18: aviation in general, US aviation in particular. What really drives
Speaker 18: our business as much as anything else, is a good, solid,
Speaker 18: strong economy. Obviously, the markets have reacted very positively to
Speaker 18: the results of the election, and the economy appears to
Speaker 18: be quite strong and resilient.
Speaker 19: And I think ultimately that's going to support our business
Speaker 19: plan went forward.
Speaker 1: And let's also talk, of course about the relationship between
Speaker 1: your two companies, Delta and Wheels Up and Ed, I'll
Speaker 1: ask you this question. Delta, according to our data, owns
Speaker 1: more than a third of wheels You've also supported Wheels
Speaker 1: Up with credit and access to capital. Why own so
Speaker 1: much of Wheels Up?
Speaker 5: What is in it for Delta?
Speaker 17: Well, what's in it for Delta is the opportunity to
Speaker 17: create a new level of premium in commercial aviation that
Speaker 17: hasn't previously existed in terms of a partnership, and more
Speaker 17: than just a partnership, it's an ecosystem that's linked between
Speaker 17: private and commercial. We know many of our private aviation
Speaker 17: consumers also fly commercial fly in Delta, and we want
Speaker 17: to make it easier for them to make those choices
Speaker 17: when they have the opportunity to fly private and vice versa.
Speaker 17: When there's private aviation consumers that may occasionally need a
Speaker 17: commercial flight, whether it's going to Europe or some other place,
Speaker 17: we want Delta to be their airline of choice.
Speaker 7: ED, would you consider buying the company completely? No, that's
Speaker 7: not in the carts.
Speaker 17: We deliberately wanted to make certain we had investors with
Speaker 17: us when we made this decision, and I think having
Speaker 17: the external validation of us beyond just Delta was helpful.
Speaker 4: Hey, George, I want to talk about the fleet because
Speaker 4: there was big news last month when Wheel's upset it
Speaker 4: would buy the Embray or Phenom fleet from Grand View Aviation.
Speaker 4: It's one hundred and five million dollar deal. It's part
Speaker 4: of this three year plan to transition to Embraer and
Speaker 4: Bombardier challenger aircraft. You're also though, moving away from Cessna citations.
Speaker 4: What's the thinking behind this apart from just a newer fleet.
Speaker 18: When I arrived here just over a year ago, having
Speaker 18: spent eleven years on the on the Delta board, we
Speaker 18: obviously had a number of first aid priorities, but one
Speaker 18: of the priorities over this first year was building a
Speaker 18: long term strategic plan and a fleet plan that supports
Speaker 18: that plan. We have a significant, loyal, strong member base,
Speaker 18: a really strong brand. Most of our members have been
Speaker 18: individual leisure customers. We are increasingly becoming a provider of
Speaker 18: choice to corporate customers. I think through our Delta partnership
Speaker 18: that's only going to become more important going forward. As
Speaker 18: we looked at our fleet, it was a little older
Speaker 18: than we wanted it to be, and it was a
Speaker 18: little bit more complex than we wanted it to be,
Speaker 18: with four fleet types operating, which we've now distilled down
Speaker 18: to two.
Speaker 19: Fleet types, and in deciding to modernize.
Speaker 18: The fleet, what we did is we basically selected the
Speaker 18: two most popular aircraft types in their respective categories, with
Speaker 18: the deepest install bases the largest secondary markets in order
Speaker 18: to be able to buy those aircraft at fleet scale
Speaker 18: over a period of time.
Speaker 19: This is going to really significantly transform the product offering.
Speaker 18: We're able to deliver the customers the experience, the reliability,
Speaker 18: the efficiency that comes both with the aircraft themselves, and
Speaker 18: also the simplification of the fleet.
Speaker 19: We're going to enhance that fleet with best in class connectivity.
Speaker 18: I think Delta was a real leader in providing free,
Speaker 18: high speed satellite Wi Fi on the air aircraft. We've
Speaker 18: announced a commercial partnership with Go Go to provide a
Speaker 18: similar low Earth orbit satellite Wi Fi capability all of
Speaker 18: our aircraft.
Speaker 19: We're very excited to have been able.
Speaker 18: To jumpstart this fleet transition by acquiring brand View, which
Speaker 18: has the largest fleet of on demand feed on three
Speaker 18: hundred and three hundred e's in the market, and that
Speaker 18: tr transaction is going to close very very soon, and
Speaker 18: we're going to immediately be able to offer that at
Speaker 18: fleet scale to both our charter customers but also our
Speaker 18: programmatic member customers. And I think when you look forward
Speaker 18: at the progress we're making financially in the first year,
Speaker 18: this fleet modernization is an important unlocked for the next
Speaker 18: phase of that of that profitability.
Speaker 19: Journey as well.
Speaker 1: And I also want to talk of course about Delta's fleet,
Speaker 1: and ed we have to talk about Boeing. You're a
Speaker 1: major Boeing customer, and to put it mildly, the company
Speaker 1: has had a lot of problems. They've recently raised new
Speaker 1: capital though they've gotten past the workers strike. But that
Speaker 1: being said, how quickly do you expect Boeing to actually
Speaker 1: get back on a normal production schedule here and are
Speaker 1: you anticipating further delays when it comes to deliveries and certifications.
Speaker 17: Well, we're, as you may know, not anticipating any Boeing
Speaker 17: deliveries because we have none outstanding in the next couple
Speaker 17: of years. So in the immediate term we're not impacted
Speaker 17: at all. But I do believe that they have made
Speaker 17: the right decisions around raising capital to invest in their business,
Speaker 17: around a concertain their employees are properly taken care of
Speaker 17: and compensated, and so they can get back focus on
Speaker 17: delivering high quality airplanes to our industry. I think it's
Speaker 17: going to be a number of years before you see
Speaker 17: a steady stream of airplanes starting to return, and well,
Speaker 17: hopefully sooner, but I think we are all realistic that
Speaker 17: this is going to be a very challenging turnaround still
Speaker 17: to come.
Speaker 4: When you say a number of years, would you count
Speaker 4: that number on one hand or two hands? A couple
Speaker 4: fingers as okay, so a couple.
Speaker 10: I like that.
Speaker 4: Hey, we're speaking with that Bashion, CEO of Delta Airlines
Speaker 4: and George Mattson, CEO of Wheels Up, both joining us
Speaker 4: from Atlanta. Ed, well, we have you give us an
Speaker 4: update on capacity in the market. Here we hear it's improving,
Speaker 4: but is it improving for both premium and economy seats
Speaker 4: right now?
Speaker 17: The market has rationalized. I think this past summer we
Speaker 17: saw in the US marketplace there were a lot of
Speaker 17: seats for sale, had a pretty big impact on pricing.
Speaker 17: A number of the airlines, particularly those on the lower
Speaker 17: end of the price scale have been struggling. They most
Speaker 17: of them have lost money this year, lost money in
Speaker 17: the peak summer even and have had to implement a
Speaker 17: number of self help measures to ensure that they can
Speaker 17: find better balance between supply and demand. On the premium side,
Speaker 17: that's where growth has been in the industry, and Delta
Speaker 17: has led the way. And you know, any of the airlines,
Speaker 17: there's a couple of us out there that are more
Speaker 17: focused on premium have done quite well over the past
Speaker 17: couple of years over those that are more in the
Speaker 17: commodity sense, where price is the principal determinant of the
Speaker 17: consumer purchase. They've struggle and they continue to struggle, and
Speaker 17: that's why you see the supply and being rationalized.
Speaker 1: So that's the view on the commercial airline demand. George,
Speaker 1: give us a peek inside what demand for private air
Speaker 1: space looks like, because you think about coming out of
Speaker 1: the pandemic, we know that there was a big uptick
Speaker 1: when it comes to private jet travel. What are you
Speaker 1: seeing right now, especially as we head into some of
Speaker 1: these peak travel demand periods.
Speaker 18: Yeah, I think in general, I would just say that
Speaker 18: the industry remains quite healthy. We certainly saw a very
Speaker 18: big sort of demand bubble from COVID, and when people
Speaker 18: did start returning to flying, a lot of folks who
Speaker 18: hadn't flown private started to fly private, and so we've
Speaker 18: seen that I would say normalized.
Speaker 19: The industry feels relatively stable.
Speaker 18: Here, but I think when you look kind of medium
Speaker 18: and longer term, has really strong macro headwinds.
Speaker 17: Right.
Speaker 18: I think, you know, the vast majority of aircraft, private
Speaker 18: jet aircraft are.
Speaker 19: Still wholly owned by individuals.
Speaker 18: Or corporations, and so the opportunity for on demand and
Speaker 18: fractional providers to continue to grow, I think remains very strong.
Speaker 18: As as commercial aviation becomes in some ways more challenging
Speaker 18: with congestion and other and other challenges, I think it
Speaker 18: becomes a.
Speaker 19: More interesting alternative.
Speaker 18: And I think one of the really interesting things about
Speaker 18: what we're doing with Delta is really trying to break
Speaker 18: down the barrier that has always historically existed between commercial
Speaker 18: and private aviation into one seamless aviation solution.
Speaker 19: And so I think as we are successful in doing that,
Speaker 19: we're going to draw more.
Speaker 18: Participants into the industry, hopefully through our offering and expand
Speaker 18: expand the market and in the process. But to answer
Speaker 18: your specific question, I think generally things feel quite healthy
Speaker 18: right now.
Speaker 4: Yeah, So George, help us understand the profile for somebody
Speaker 4: who would you know, maybe they're a Delta one customer,
Speaker 4: but they're also able to fly wheels up. What does
Speaker 4: that look like from an income perspective, a net worth
Speaker 4: perspective where they'd actually make the jump and they'd make
Speaker 4: that choice.
Speaker 18: Yeah, Look, there's different there's different cuts at what at
Speaker 18: sort of what level of income or net worth constitutes
Speaker 18: the ability to fly private. I've seen numbers in the
Speaker 18: mid single digit millions of dollars of networth. I've seen
Speaker 18: numbers that are higher. I've seen a study that suggests
Speaker 18: ninety percent of people who can afford to fly private
Speaker 18: under that definition have never flown private.
Speaker 19: And so you know you have if you think about our.
Speaker 18: Partnership with Delta Airlines, a couple of really big pools
Speaker 18: of potential customers. One is the forty five thousand or
Speaker 18: so Delta corporate customers, where Delta is often the leading provider.
Speaker 19: Of travel period to that company.
Speaker 18: And so we're offering this within that framework as an
Speaker 18: additional alternative, as a sleeve, if you will, of an
Speaker 18: existing broad corporate agreement. And then when you look at
Speaker 18: the individual customer, which was sort of the gist of
Speaker 18: your question, you know there are many If you believe
Speaker 18: that ninety percent of people who can afford to fly
Speaker 18: private have never flown private, well where are they?
Speaker 19: They're in the front of the cabin, generally at the
Speaker 19: commercial airlines, and you know there may not be flying
Speaker 19: private every time.
Speaker 18: But again, this idea of a sol that could be commercial,
Speaker 18: or it could be private, or it can be a
Speaker 18: hybrid of the two is where I think we're going
Speaker 18: to find demand from those customers. And I think there's
Speaker 18: a lot of them out there who don't quite know
Speaker 18: how to access our industry quite yet, and we're.
Speaker 19: Trying to that.
Speaker 4: With Boeing's recent strike your turbofan maintenance. Do you see
Speaker 4: a shortage of capacity across the industry or at least
Speaker 4: at your airline.
Speaker 17: I would expect for the next year, though we haven't
Speaker 17: given guidance for next year. Actually, I expect the industry
Speaker 17: is going to move as the economy moves. Is an
Speaker 17: industry that's driven by the economy, not just US, but
Speaker 17: on a global scale. And for those carriers that are
Speaker 17: premium such as Delta. We have the ability to drive
Speaker 17: probably a little higher capacity than the broadct economic growth.
Speaker 4: That was ed Bastian CEO over at Delta Airlines. Also
Speaker 4: George Mattson, CEO of Wheels Up Bloomberg's Katie Gradfeld joining
Speaker 4: me there as well. Check out our podcast feed for
Speaker 4: the full conversation.
Speaker 3: Up next on Bloomberg BusinessWeek, the robots powering your Amazon
Speaker 3: packet deliveries and Apple getting to the core of the
Speaker 3: smart home.
Speaker 4: Two tails from the tech world. When we come back,
Speaker 4: This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm. Easter Listen
Speaker 2: on Apple.
Speaker 7: Car Play and then brout Auto with a Bloomberg.
Speaker 2: Business act or watch us live on YouTube.
Speaker 3: This past week, Reuter's reported that Amazon is working on
Speaker 3: a version of its Echo frames smart glasses for its
Speaker 3: delivery drivers. The glasses would reportedly help their employees move
Speaker 3: to around and within buildings that could potentially shave time
Speaker 3: off each delivery.
Speaker 7: Yeah.
Speaker 4: I guess the whole idea here, Carol, is like you
Speaker 4: have this map come up on your classes so you
Speaker 4: can easily find the home.
Speaker 3: You know, if they've been talking about this kind of
Speaker 3: stuff for a long time.
Speaker 4: Yeah, I mean maybe this is the everybody life heads
Speaker 4: up displays, right, Yeah, exactly. As the e commerce giant
Speaker 4: flirts with smart wearables, one aspect of its delivery operations
Speaker 4: is becoming well a well oiled machine, and that is
Speaker 4: its robotics tech. Since acquiring Kiva Systems back in twenty twelve,
Speaker 4: Amazon has developed, produced, and deployed more than seven hundred
Speaker 4: and fifty thousand robots across its operations network. They've got
Speaker 4: the goal of delivering packages to customers faster than ever.
Speaker 3: Ty Brady is chief technologist for robotics over at Amazon.
Speaker 3: He joined Tim and Bloomberg's Emily Garfeo to talk about
Speaker 3: the growth of the robotics business.
Speaker 13: The age of physical AI is here and it is
Speaker 13: really proving useful for our customers. We have our robotic
Speaker 13: systems inside of our fulfillment centers. We actually just roll
Speaker 13: our next generation fulfillment center down in Louisiana and we're
Speaker 13: seeing a lot of returns and gains on that.
Speaker 4: Is this the Kiva system that Amazon bought over a
Speaker 4: decade ago.
Speaker 13: Wait, it is based on that. That is part of it.
Speaker 13: What we do is that we have robotics that can
Speaker 13: move goods, that's part of the Kiva systems, but also
Speaker 13: robotics to store goods and sword goods and identify all
Speaker 13: the various goods. And we have this in this next
Speaker 13: generation fulfillment center where we have ten times the amount
Speaker 13: of robotics that we've ever had under one roof, and
Speaker 13: we're already that we can process those orders twenty five
Speaker 13: percent faster and also pass along to a lower cost
Speaker 13: to our customers.
Speaker 4: Just proving just so we understand if when when we
Speaker 4: order something on Amazon using the app or using the browser,
Speaker 4: does a robot now pick that item at fulfillment center?
Speaker 4: Is it still a human being?
Speaker 13: Yeah, it's It's an amazing, amazing series of events that
Speaker 13: actually happens. When you go on Amazon dot com. You're
Speaker 13: getting your holiday order redder ready. We of course want
Speaker 13: to have the world's largest selection of good for our
Speaker 13: goods for our customers. We want to process that at
Speaker 13: a low cost and then have the ultimate customer convenience,
Speaker 13: and roboducts is helping all along that way, right, people
Speaker 13: and machines working together. We have AI systems that source
Speaker 13: put the right products in the right area so that
Speaker 13: can be closer to our customers. That helps on our
Speaker 13: delivery times. We have robots that move safely around people
Speaker 13: that we inbound those goods into our buildings where we
Speaker 13: can take on more goods, put more goods in the
Speaker 13: same footprint as we've had as compared to our manual buildings.
Speaker 13: We could store of actually forty percent more goods, and
Speaker 13: then we have robotic systems that help sort and even
Speaker 13: package those items for our customers. All this is so
Speaker 13: that we can just have the ultimate in customer convenience
Speaker 13: and get the right good to right to the customer's door.
Speaker 14: Ty, what is a twenty twenty four robotics system and
Speaker 14: how is that different than the systems that we saw
Speaker 14: ten fifteen years ago. I'm just thinking about how I
Speaker 14: used to watch that show how It's Made, and it
Speaker 14: would show factories and there were always robots working in
Speaker 14: the factories and moving things along conveyor a belt. So
Speaker 14: what is so different about, you know, the twenty twenty
Speaker 14: four robotics.
Speaker 13: That's such a great question. We have really seen just
Speaker 13: huge advancements over the last few years when it comes
Speaker 13: to robotics. This is why we call it physical AI.
Speaker 13: It's really the embodiment of adaptive behavior in our robotic systems.
Speaker 13: But our robotics systems shouldn't viewed as singular and as
Speaker 13: a loon, as just machines. Instead, what we do is
Speaker 13: we build our machines to extend human capability. We build
Speaker 13: our machines to augment folks to do their jobs better
Speaker 13: and create a safer environment for them. We've seen those
Speaker 13: benefits in the last four years with regards to safety
Speaker 13: and also in regards to the efficiencies and the productivities.
Speaker 13: But we also have to I think the big mindset
Speaker 13: is when you reframe your relationship with machines. Yeah, people
Speaker 13: first attitude towards of how we build those machines that
Speaker 13: allows people to do more. And now we are upscaling.
Speaker 13: We put one point two billion dollars into an upscaling
Speaker 13: pledge for our employees. And then, as Tim said, we
Speaker 13: funded this independent study with MIT in order to understand
Speaker 13: the perception of technology and how people adopt machines and
Speaker 13: AI into their work environment.
Speaker 4: So let's talk a little bit about that, because I
Speaker 4: think you hit on a really important point here, and
Speaker 4: it's the idea that I was kind of joking about
Speaker 4: this a little while ago. It was like, can these
Speaker 4: robots be programmed to love? But the fact is is
Speaker 4: you do have to be comfortable being around automated things
Speaker 4: that could look like humanoids, they might not look like
Speaker 4: humanoid robots. What did you find through this collaboration with
Speaker 4: MIT about how people want to interact or need to
Speaker 4: learn how to interact with machines.
Speaker 13: It was a fascinating study. It was actually groundbreaking. The
Speaker 13: MIT enlisted to ipsos to survey more than nine thousand
Speaker 13: people across nine different countries to understand how they perceive technology,
Speaker 13: because perception is really important to adoption, even to innovation. Right,
Speaker 13: as I said, we put people at the center of
Speaker 13: the robotics universe. We really want to understand how people
Speaker 13: and if they will adopt technologies, and broadly we found
Speaker 13: the study found that a majority of people see robots
Speaker 13: having a positive impact on their pay and on their career.
Speaker 13: And there's three key, three key finings that came along
Speaker 13: with that. First of all, if people are asked to
Speaker 13: work at a higher level and can focus on higher
Speaker 13: order tasking, then they're more keen to adopt technology, and
Speaker 13: they're more optimistic when it comes to the use of
Speaker 13: the technology for their own career goals in their own pay.
Speaker 13: The second is if they felt valued by their employer. Right,
Speaker 13: So being valued is both are you working in a
Speaker 13: safe environment and do you have a great benefits in pay?
Speaker 13: And then Amazon, we're really proud of the benefits and
Speaker 13: pay that we offer our employees. And also through automation,
Speaker 13: we're actually reducing the number of recordable injuries significantly over
Speaker 13: the past four years. And then the last part is
Speaker 13: really those that want to learn more and take control
Speaker 13: of their career. So if they want to learn and
Speaker 13: grow in their career, they're more optimistic for technologies. And
Speaker 13: that was really good good news for us as we
Speaker 13: put in one point two billion dollars into upskilling our employees.
Speaker 13: So they're good signals. But we're not done yet because
Speaker 13: this is across many many workers, across many industries, and
Speaker 13: we're going to follow on the study actually a survey
Speaker 13: of our Amazon employees directly because we're always interested in
Speaker 13: the voice of our customer, the voice of our employees,
Speaker 13: and we always want to make this safe for more
Speaker 13: productive environment.
Speaker 4: What's a takeaway that you had from the survey? About
Speaker 4: how you're going to either design or implement robotics across Amazon, Like,
Speaker 4: what's one actionable thing you took away from this?
Speaker 13: The first action that we had is that we actually
Speaker 13: want to fund more studies. We want to fund the study,
Speaker 13: particularly for Amazon employees, so we can hear directly for
Speaker 13: them of their perception and how robotics is really augmenting
Speaker 13: and extending the capabilities. So we are the voice of
Speaker 13: the customers. Our first actual takeaway that we have from
Speaker 13: the study. The second is really validation of our philosophy
Speaker 13: that of putting people the center of the robotics universe. Right,
Speaker 13: It's this validation of augmentation and extension and allowing people
Speaker 13: to do what they do well, thinking with common sense
Speaker 13: and reasoning and really understanding the problem at hand. People
Speaker 13: do this amazingly well. So our job as roboticist is
Speaker 13: to complement that amazing skill that our employees have, that
Speaker 13: people have with machines that can be better designed. So
Speaker 13: very concretely, for example, we have a robot called Proteus
Speaker 13: that is free roaming inside of our fulfillment centers that
Speaker 13: moves goods on demand, and it understands where people want
Speaker 13: to be and people can look at the robot and
Speaker 13: understand what the intent of that robot is. So its
Speaker 13: job is to move these vessels of goods to our
Speaker 13: dock doors safely, and it's fully around people.
Speaker 2: Right.
Speaker 13: So the concrete actual thing is here is that we
Speaker 13: are getting this really strong validation that by extending and
Speaker 13: augmenting human capability, not only can we more and more productive,
Speaker 13: but we can also create a safer environment.
Speaker 4: That was Ty Brady, chief technologist for robotics over at Amazon.
Speaker 4: Our thanks also to Bloomberg News is Emily Graffeo for
Speaker 4: co hosting.
Speaker 3: All right, So, Tim, we are very much an Apple
Speaker 3: home and yet we've got a few Google small our
Speaker 3: home devices. I mean, I feel like, to be quite honest,
Speaker 3: my husband's just kind of waiting for Apple to offer
Speaker 3: up something similar to kind of put it all together.
Speaker 3: Thankfully for my husband. As Bloomberg News Chief technology correspondent
Speaker 3: Mark German reports that device it is coming.
Speaker 15: So the smart home is Apple's next big thing. It's
Speaker 15: actually funny. Ten years ago, or a little over ten
Speaker 15: years ago, Apple introduced home Kit. This was a framework
Speaker 15: for the iPhone to interact with smart home accessories, sprinklers, dishwashers,
Speaker 15: laundry machines, but also things like lights and locks and
Speaker 15: TVs and whatnot, And it was kind of stagnant for
Speaker 15: a while. When they released a home Kit app so
Speaker 15: you can control these things from an application on your
Speaker 15: iPhone and your iPad, eventually brought it to the Mac,
Speaker 15: and then they took it to another level, right they
Speaker 15: started introducing things like the HomePod and making the Apple
Speaker 15: TV part of it, but the home approach really never
Speaker 15: took off. But now they're hoping to change that. In March,
Speaker 15: they're going to announce a new device. It's a home Hub.
Speaker 15: It's about a six inch display like two iPhone side
Speaker 15: by side, so it's square. It has a FaceTime camera
Speaker 15: on it, and you'll basically be able to do anything
Speaker 15: from your wall or from your nightstand or your kitchen table,
Speaker 15: things like video conferencing, intercomming, of reviewing security footage, controlling
Speaker 15: your lights, controlling your media, playback on your speakers and
Speaker 15: TVs throughout the home. So a central place just for
Speaker 15: home stuff. And it's really similar to an iPad, right,
Speaker 15: but something that's going to be a bit cheaper and
Speaker 15: dedicated to home use cases.
Speaker 4: Why not just go with an iPad and instead of
Speaker 4: creating something completely new.
Speaker 15: Yeah, well, obviously they're trying to create new sources of revenue, right,
Speaker 15: So they don't want people who have an iPad to
Speaker 15: use an iPad to control their homes. They want people
Speaker 15: to use their iPads for other stuff, additional device their homes, right.
Speaker 15: And then obviously you can get wall attachments like your friend,
Speaker 15: they have them all over Amazon. But also the cool
Speaker 15: thing there is that this will have a wall attachment
Speaker 15: specific to this device, something Apple designed, Apple made that
Speaker 15: you can buy if you're in the Apple ecosystem. So
Speaker 15: that's really the leg up there. And there's going to
Speaker 15: be a new operating system and user interface optimize for
Speaker 15: home use cases. Obviously, the iPad has the home app,
Speaker 15: but you can't build the device around those home use cases,
Speaker 15: whereas this is going to have a dedicated homescreen for
Speaker 15: your home controls. And the other thing here is that
Speaker 15: this is going to have Apple Intelligence, So this is
Speaker 15: going to be built from the ground up for Apple Intelligence.
Speaker 15: Apple said that about the iPhone complete lie here, it's
Speaker 15: actually the truth. This is a device that's going to
Speaker 15: be controlled entirely by your voice and.
Speaker 3: Your iPhone darn anyway.
Speaker 15: Yes, using a feature called app intents. App Intents means
Speaker 15: you'll be able to have finite, very specific control over
Speaker 15: actions on the device, so you'll be able to manipulate
Speaker 15: the whole thing, telling it scroll there, do this, do that,
Speaker 15: write something you can't really do on your phone today
Speaker 15: or your iPad today. So it's going to be very Siri.
Speaker 15: Apple Intelligence AI focused big presence on home control, but
Speaker 15: the big features are communication, home control, security, and SERI.
Speaker 3: Does Amazon and Google have to be worried?
Speaker 15: I don't think so. I mean they've been in this
Speaker 15: game for five to seven. They have the Nest Hub,
Speaker 15: the Nest Hub Max. The Nest Hubs only one hundred bucks.
Speaker 15: The Nesthub Max is two hundred and thirty bucks, and
Speaker 15: it's going to have much better speakers on a bigger
Speaker 15: display than the Apple device, and it's going to be cheaper.
Speaker 15: Amazon last year launched the Echo Hub, which is a
Speaker 15: very similar dedicated control panel for home use cases. Several
Speaker 15: years ago they launched the Echo Show, which was the
Speaker 15: first Echo with the display. They have an Echo Show
Speaker 15: fifteen now that can actually be pinned to your wall
Speaker 15: as well. So both of those parties have been in
Speaker 15: the game, and all of these companies are really reliant
Speaker 15: on each other at this point when it comes to
Speaker 15: the smart home. That's because there's a new framework called Matter,
Speaker 15: which makes it so all smart hub appliances, regardless if
Speaker 15: they're developed for Apple, Amazon or Google, they can work
Speaker 15: on each other's platforms. So that's going to be a
Speaker 15: cool component of this too.
Speaker 3: What's the price on this puppy?
Speaker 15: I think it's going to be a few hundred bucks.
Speaker 15: I think it's going to be between two hundred and
Speaker 15: four hundred dollars. I would say it's probably going to
Speaker 15: be closer to the three hundred dollars range. I don't
Speaker 15: have a final price point. We're still about four or
Speaker 15: five six months away from this going on sale, but
Speaker 15: it's not going to be cheap. In context of the
Speaker 15: existing home display market, there's going to be a premium
Speaker 15: like there always is for Apple products, but compared to
Speaker 15: something like an iPad, it's going to be a little
Speaker 15: bit less.
Speaker 4: That was Bloomberg News chief technology correspondent Mark German. Is
Speaker 4: it fortunate like you're just gonna be buying more Apple devices?
Speaker 3: Can I tell you it's not that I don't appreciate technology.
Speaker 3: I'm just getting to a point that it's more devices
Speaker 3: that we spend money on, more devices that can break,
Speaker 3: more of my systems that are connected, so that when
Speaker 3: the things don't work, we're kind of like stuck.
Speaker 7: Yeah, what do you do with all this old stuff too?
Speaker 3: I know, right, recycling garbage environment, I don't know. Come on, folks,
Speaker 3: I think we can do better.
Speaker 7: All right.
Speaker 3: That wraps up the weekend edition of Bloomberg Business Week
Speaker 3: from Bloomberg Radio. Thank you so much for joining us.
Speaker 4: Be sure to tune into Bloomberg Business Week Monday through
Speaker 4: Friday starting at two pm Wall Street Time on Bloomberg TV,
Speaker 4: Bloomberg Radio, and Sirius XM Channel one twenty one. You
Speaker 4: can also listen to us on Apple Car Plany and
Speaker 4: Android Auto Free in the Apple app Store or on.
Speaker 3: Google Play, and you can also watch our daily broadcast.
Speaker 3: Check us out on YouTube just search Bloomberg Global News.
Speaker 3: We are simulcast on Bloomberg Originals, available at Bloomberg dot com,
Speaker 3: Slash Originals, and streaming platforms including Roku, Amazon, fireTV, Samsung
Speaker 3: TV Plus and more.
Speaker 4: Find our Bloomberg Businesswek podcast at Bloomberg dot com Apple
Speaker 4: or wherever you get your podcasts, and the latest edition
Speaker 4: of the magazine. It's available on newsstands now, at Bloomberg
Speaker 4: dot com and always on the Bloomberg Terminal. I'm Tim
Speaker 4: Stenebeck and I'm Carol Masser.
Speaker 3: Have a good and safe weekend. Maybe unplug, read a book,
Speaker 3: listen to more of our podcasts. That's kind of cool.
Speaker 7: You're listening to Bloomberg BusinessWeek. This is Bloomberg.
Speaker 15: This is the.
Speaker 2: Bloomberg BusinessWeek podcast, available on Apple, Spotify, and anywhere else
Speaker 2: you get your podcasts. Listen live weekday afternoons from two
Speaker 2: to five pm Eastern on Bloomberg dot com, the iHeartRadio app,
Speaker 2: tune In, and the Bloomberg Business App. You can also
Speaker 2: watch us live every weekday on YouTube and always on
Speaker 2: the Bloomberg Terminale.