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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside

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Speaker 1: my co host Matt Miller.

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Speaker 2: Every business day we bring you interviews from CEOs, market pros,

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Speaker 2: and Bloomberg experts, along with essential market moven news.

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Speaker 1: Find the Bloomberg Markets podcast called Apple Podcasts or wherever

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Speaker 1: you listen to podcasts, and at Bloomberg dot com Slash podcast.

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Speaker 1: All Right, the auto strike it is on in a

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Speaker 1: big way off the UAW striking all three big Detroit

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Speaker 1: automakers at the same time, and that is the subject

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Speaker 1: of our Big Take story today. You know, Matt and

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Speaker 1: I love the Big Takes stories because these reporters go.

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Speaker 3: Deep on some really big topics.

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Speaker 1: Today we've got a uaw's bid to up end the

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Speaker 1: auto world. Who begins with a snub of Bill Ford.

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Speaker 1: Joining us is Keith Milton. He covers the auto industry

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Speaker 1: along with David Welch, Gabrielle Coppola, and Josh Idelson, all

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Speaker 1: out in Detroit. Doing great job on this big Take story. Hey, Keith,

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Speaker 1: What's interesting to me at least is the fact that

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Speaker 1: the UAW is striking all three Detroit automakers simultaneously. They

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Speaker 1: haven't done that before have they.

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Speaker 4: That is a first, but they're taking it in small bites.

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Speaker 4: Rather than shutting down all of the factories of the

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Speaker 4: Big Three, they targeted one factory at each company and

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Speaker 4: have threatened to widen that strike if they don't get

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Speaker 4: an agreement.

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Speaker 5: Tes.

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Speaker 2: Well, I just I mean, Keith, you cover Ford especially

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Speaker 2: closely obviously the entire industry, But as far as I

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Speaker 2: understood it, the unions have the best relationship with the

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Speaker 2: Ford Motor Company because they like, you know, the idea

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Speaker 2: of a family owned operation. Ford also didn't take a

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Speaker 2: bailout during during the Great Financial Crisis, and Bill Ford

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Speaker 2: gets personally involved with union leaders, right, So is it

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Speaker 2: especially fascinating that they have really snubbed him and he

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Speaker 2: seems frustrated.

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Speaker 4: Yeah, that's a really keen observation, Matt, because Ford, and

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Speaker 4: Bill Ford in particular, going back to when he first

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Speaker 4: joined the company in nineteen seventy nine, has been involved

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Speaker 4: in every single labor negotiation since then. You know, he's

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Speaker 4: a guy who grew up playing hockey with union workers,

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Speaker 4: so he has kind of I know it sounds odd,

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Speaker 4: but he has a very good rapport with the rank

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Speaker 4: and file from his hockey playing to be honest. And

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Speaker 4: what happened here is he took what Ford says was

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Speaker 4: their best offer ever to the union twenty percent raises,

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Speaker 4: a restoration of cost of living adjustments, you know, five

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Speaker 4: weeks vacation, nineteen personal days, all sorts of goodies. He

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Speaker 4: took it personally to the bargaining table last Tuesday, and

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Speaker 4: he was greeted at the door by UW Vice President

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Speaker 4: Chuck Browning, who said, Sean Fain is not here.

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Speaker 6: The UAW president is not here. Bill Ford's like, why not?

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Speaker 1: Yeah, Hey, Ken and Keith?

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Speaker 5: What crazy Bill Ford? I know, the scion, you know,

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Speaker 5: the Henry Ford family.

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Speaker 1: Well that kind of that kind of goes to my

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Speaker 1: next question, what do we know about this u a

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Speaker 1: W president Sean Feiney seems to really kind of be

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Speaker 1: grabbing the.

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Speaker 2: Spotlight here and he's not in jail. Yes, like like

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Speaker 2: the last last two union leaders.

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Speaker 4: Right, that's correct, and that's you know, that explains the

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Speaker 4: rise of Sean fame, this kind of fiery leader. He

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Speaker 4: was the reform candidate who narrowly defeated, you know, the

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Speaker 4: the incumbent candidate who was from that traditional group which

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Speaker 4: had you know, two previous presidents go to jail for corruption,

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Speaker 4: this using union fund funds on their own lavish lifestyles.

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Speaker 4: Fain is, you know, really a true believer. And I'm

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Speaker 4: not sure the auto executives fully understood that when he

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Speaker 4: first was elected back in March. And he sees this

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Speaker 4: as much more than just an auto contract. He sees

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Speaker 4: this as class warfare, balancing the scales of forty years

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Speaker 4: of kind of the wealthy class, uh, you know, winning

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Speaker 4: over on the middle class.

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Speaker 6: And so he's on a crusade.

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Speaker 4: And that attitude is something that the auto companies haven't

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Speaker 4: dealt with before. They've dealt with pragmatists who, you know,

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Speaker 4: when it came down to it, were able to horse

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Speaker 4: trade and get a deal done.

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Speaker 2: It makes sense because I mean, I don't want to

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Speaker 2: sound like a bleeding heart liberal, but the CEOs used

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Speaker 2: to get thirty to forty times with the guy on

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Speaker 2: the factory floor got and now it's more like two

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Speaker 2: hundred times. Right, And you say wealthy class versus middle class?

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Speaker 2: What middle class? Are auto workers really the middle class anymore?

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Speaker 2: I don't think that's how they feel. And then you know,

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Speaker 2: their demands look outrageous because they throw in four day

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Speaker 2: workweek and define benefit pensions, which you know none of

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Speaker 2: us is going to get that anymore.

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Speaker 5: But the.

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Speaker 2: Wage increases look to be okay and aren't going to

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Speaker 2: bankrupt these companies, are they.

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Speaker 4: Well, I mean these are big way increases. Stilantis up

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Speaker 4: to their offer over the weekend to twenty one percent,

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Speaker 4: but the union is asking for thirty six percent. So

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Speaker 4: there's a pretty wide golf and just one point on

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Speaker 4: those defined benefit pensions. You're right, Matt, none of us

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Speaker 4: get those anymore. But the point that Sean Fain makes

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Speaker 4: is the CEOs.

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Speaker 5: Do well, that's a good point. That's interesting. I did

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Speaker 5: not know that.

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Speaker 2: Well, they also get like twenty to thirty million dollars

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Speaker 2: a year.

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Speaker 5: Yeah, that's nice argue.

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Speaker 2: They up those pensions just as a show of you know,

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Speaker 2: solidarity with the factory floor.

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Speaker 7: Right.

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Speaker 4: Yeah, so so no, they probably won't get the defined

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Speaker 4: benefit pension back.

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Speaker 6: But Fane's trying to make a point.

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Speaker 1: Yep, all right, as we're go into that, I guess

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Speaker 1: the second week here, I don't know. I can't can

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Speaker 1: keep track. Keith, what's the feeling in Detroit about how

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Speaker 1: this thing plays out? Because that's that's a.

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Speaker 5: Today's Big four by the way, Day four, Day four.

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Speaker 1: Okay, a big bid. Ask difference between the union and

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Speaker 1: the companies. What's the feeling in Detroit how this might

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Speaker 1: play out?

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Speaker 4: Well, first off, there's a lot of support in Detroit

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Speaker 4: for these strikers. One of the striking plans is here

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Speaker 4: in suburban Detroit, not far from where I'm sitting right now.

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Speaker 6: So they got a lot of honkers, a lot of support.

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Speaker 4: You know, there's a Gallup poll out that shows that

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Speaker 4: seventy five percent of America is on the UAW side

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Speaker 4: in this dispute.

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Speaker 6: So this is labor's moment. Man. You know, they're an ascendence.

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Speaker 4: There's this feeling that, you know, in the pandemic, they

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Speaker 4: were getting left behind, and there's nervousness about AI and

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Speaker 4: all sorts of things that could replace jobs. So they

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Speaker 4: have support, and it seems like the companies are going

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Speaker 4: to have to try and meet them farther.

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Speaker 6: Than they have in a halfway battle.

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Speaker 4: They have actually met them halfway because the union has

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Speaker 4: for forty percent initially and the companies have offered twenty.

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Speaker 6: But they're going to have to go farther.

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Speaker 2: I was going to ask about Brampton Ontario and the

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Speaker 2: Canadian Union.

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Speaker 5: And because but I just got an email for Dodge.

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Speaker 5: My vehicle has been built.

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Speaker 6: Nice. I mean in Canada, if you care, uniform.

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Speaker 4: Negotiate unifors the union up there, and they're also negotiating

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Speaker 4: a contract. But they're doing it in the traditional way

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Speaker 4: where you pick one company and set a pattern there

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Speaker 4: and then take it to the other two. That's the

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Speaker 4: way it's always been done. They're doing that up in Canada,

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Speaker 4: and the company they have targeted.

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Speaker 7: Is for It.

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Speaker 6: Okay, again, Matt, to.

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Speaker 4: Your point that Ford tends to, you know, have a

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Speaker 4: better relationship with the union and you know, have been

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Speaker 4: able to reach agreements with them through the years. There

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Speaker 4: has not been a national strike at Ford since nineteen

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Speaker 4: seventy six.

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Speaker 1: Okay, all right, good keep that in mind. But here

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Speaker 1: in the US it looks very contentious here. Keith Noughton,

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Speaker 1: thanks so much for joining us. Keith Monton covers Detroit

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Speaker 1: for Bloomberg News and all the auto guys. He's out

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Speaker 1: there and he is one of the authors of the

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Speaker 1: Big Take story.

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Speaker 8: Today you're listening to the team. Ken's a live program

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Speaker 8: Bloomberg Markets Jays at ten am Eastern on Bloomberg dot Com,

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Speaker 8: the iHeartRadio app, and the Bloomberg Business app, or listen

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Speaker 8: on demand wherever you get your podcast.

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Speaker 9: We're welcome now our Bloomberg TV and radio audiences. Today

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Speaker 9: we are focused on oil, as Brent Near's ninety five

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Speaker 9: dollars a barrel. No better guest to discuss that with

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Speaker 9: than Mike Worth, Chevron chairman and CEO joins us now.

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Speaker 10: Mike, it's such a pleasure to see you.

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Speaker 7: Thanks for joining, Alex, It's good to be here.

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Speaker 10: Okay, Hunter hour oil? Is that going to happen?

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Speaker 7: Sure looks like it. We're certainly moving in that direction.

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Speaker 11: The momentum, you know, supply is tightening, inventories are drawing.

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Speaker 11: These things happen gradually concealed building, and so I think

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Speaker 11: the you know, the the trends would suggest that we're

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Speaker 11: we're certainly on our way.

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Speaker 7: We're getting close.

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Speaker 12: Mike, good morning, it's guy in London. What impact do

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Speaker 12: you think a hundred bucks a barrel will have on

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Speaker 12: the US economy? What impact will I have on the

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Speaker 12: global economy?

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Speaker 11: Well, certainly those are higher price is then you know,

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Speaker 11: we tend to see out over the long term, and

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Speaker 11: so I think it will have some effect on the economy,

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Speaker 11: But you know, we've had relatively higher roil prices here

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Speaker 11: now for most of this year and certainly all of

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Speaker 11: last year. The recession that everyone's been talking about hasn't arrived,

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Speaker 11: and so I think the underlying drivers of the economy

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Speaker 11: in the US and frankly globally remain pretty healthy. So

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Speaker 11: I think it's a drag on the economy, but one

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Speaker 11: that thus far, I think the economy has been able

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Speaker 11: to tolerate.

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Speaker 10: Have you adjusted your price deck?

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Speaker 9: Meaning that's my question being like, are these higher prices.

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Speaker 10: Sustainable for the long term?

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Speaker 11: Yeah, we take a very long term view on supply, demand, policy, technology.

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Speaker 11: We haven't changed our long term price but we really

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Speaker 11: don't change that very often, and not in response to

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Speaker 11: it are short and we've been in a volatile market

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Speaker 11: really going back to the pandemic when things came down

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Speaker 11: to the recovery, when it was high the war, this

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Speaker 11: has been a period of time where prices have been unpredictable,

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Speaker 11: involvedle and not what you would call mid cycle.

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Speaker 12: Mike, if I worked for you, if I worked for

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Speaker 12: Mike Worth and I worked for Chefron, would this be

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Speaker 12: my cue to say Mike, can I have a pay

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Speaker 12: rise please?

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Speaker 11: Well, we're certainly seeing I think you're making a reference

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Speaker 11: to what's going on in different parts of the world.

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Speaker 11: We're seeing organized labor, you know, in many different industries

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Speaker 11: now kind of assertively step forward and say, look, we

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Speaker 11: want to be compensated. We see the inflation in the economy,

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Speaker 11: and we've seen companies recover. We've had a very strong

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Speaker 11: pay program last year of our employees. We tried to

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Speaker 11: stay very competitive and I would expect we'll continue to

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Speaker 11: do so.

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Speaker 9: That is Guy's way of getting into the strike action

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Speaker 9: that's happening in Australia with Gorgon and weed Stone.

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Speaker 10: So so far cargoes have not yet been impacted.

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Speaker 9: You're using some non union workers, right, Is there a

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Speaker 9: point where that would change.

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Speaker 11: Well, we certainly hope that what we'll see is a

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Speaker 11: negotiated agreement. Others in Australia have reached agreement with these unions.

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Speaker 11: We've been at the table bargaining in good faith and

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Speaker 11: that's our desired outcome. That said, when we face potential

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Speaker 11: strikes anywhere in the world, we have to prepare to

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Speaker 11: maintain operations. Our products are vital to the global economy

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Speaker 11: and the flow of those commodities, particularly al in g

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Speaker 11: In a world as we've seen last year, where it's

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Speaker 11: important to keep economies going, not just in the region

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Speaker 11: in Australasia, but also in Europe. That's our responsibility, and

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Speaker 11: so we do prepare to maintain operations even during an

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Speaker 11: industrial action, and thus far we've been able to successfully

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Speaker 11: do so in Australia.

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Speaker 12: Do you think if I'm sitting here in Europe I

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Speaker 12: should worry about what's happening here? Is this going to

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Speaker 12: be a problem when we get to winter? Do you think, Mike?

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Speaker 11: Well, last winter Europe came through better than I think

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Speaker 11: most thought.

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Speaker 7: Guy.

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Speaker 11: Now, inventories were high going into the winter because Russian

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Speaker 11: gas had been flowing in, industrial demand really came off,

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Speaker 11: and then it was a relatively mild winter. We certainly

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Speaker 11: can't count on all of those things happening again, but

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Speaker 11: gas inventories in Europe are pretty strong right now relative

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Speaker 11: to history, and so I would say Europe is set

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Speaker 11: up much.

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Speaker 7: Better than it was last year.

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Speaker 11: The weather is always difficult to predict, but I feel

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Speaker 11: like Europe is about as good a place as it

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Speaker 11: could hope to be at this point in time.

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Speaker 9: That's one of the weird things about looking at China

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Speaker 9: growth because obviously Europe wants China growth, but the energy

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Speaker 9: sector probably doesn't want China growth if you're in Europe

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Speaker 9: because of the demand pole, are you what are you

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Speaker 9: noticing in China? Whether it's ellen gear oil demand pole.

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Speaker 7: Well, it's been gradual.

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Speaker 11: It's been slower than people expected it to be, but

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Speaker 11: it is coming back, and I think that's one of

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Speaker 11: the reasons why you've seen crude oil prices tightening.

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Speaker 9: Is that inventory restocking you think, or is that end

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Speaker 9: user demand.

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Speaker 7: Always a little bit hard to tell.

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Speaker 11: The data out of China isn't exactly as transparent as

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Speaker 11: it is in other parts of the world, but I

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Speaker 11: think it's probably indicative of an economy that is finding

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Speaker 11: some traction and is moving forward. We're going to see

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Speaker 11: record oil demand this year, all time record demand, right

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Speaker 11: up a couple million barrels a day versus the prior year.

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Speaker 11: It'll grow again in the year ahead, and so as

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Speaker 11: long as the global economy stays relatively healthy, demand for

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Speaker 11: these products steadily marches forward.

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Speaker 12: Mike, you've mentioned inflation a couple of times already in

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Speaker 12: the conversation. Are you still seeing inflation? Are you starting

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Speaker 12: to see deflation in certain areas? What does the cost

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Speaker 12: side of the equation look like.

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Speaker 11: Yeah, so we've certainly planned for inflation. What we're experiencing

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Speaker 11: is consistent with how we laid out our budgets for

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Speaker 11: this year. I wouldn't say we're seeing deflation anywhere in

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Speaker 11: a meaningful way. Maybe seeing disinflation, right, So, a reduction

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Speaker 11: in the rate of inflation. And it tends to be

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Speaker 11: isolated to certain parts of our supply chain, certain geographies,

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Speaker 11: a little bit more than something you would describe as widespread.

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Speaker 11: I think wage pressure is pretty broadly distributed other things,

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Speaker 11: and our supply chains tend to be focused in areas

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Speaker 11: where there's a lot of activity, like West Texas and

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Speaker 11: in the Permian basin, which has seen a little more

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Speaker 11: pressure than some other parts of the world.

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Speaker 3: Yeah.

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Speaker 9: So to that point, can you increase if you take

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Speaker 9: USHL for a second, the Permian, can you increase productivity

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Speaker 9: enough to offset those costs when a lot of your

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Speaker 9: spending in the next say ten years will be in

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Speaker 9: US AL.

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Speaker 11: That is the big question right now that we're confronting

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Speaker 11: as we're putting our plans together. Going forward thus far,

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Speaker 11: that has been the case, and in fact, productivity at

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Speaker 11: a time when we saw lower inflation was marching for

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Speaker 11: much faster than cost were, which is why we saw

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Speaker 11: cost of production coming down. I think those are coming

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Speaker 11: into more of a balance today, and I think the

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Speaker 11: forward view the question is can you continue to move

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Speaker 11: up that productivity ramp and offset inflation or not.

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Speaker 7: I think it's early to say.

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Speaker 11: The one thing that is sometimes not talked about in

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Speaker 11: this discussion, we've seen a lot of productivity gains on

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Speaker 11: drilling and completions. We're still only recovering about ten percent

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Speaker 11: of the molecules that are in place. If we can

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Speaker 11: improve recoveries, that changes the entire economic equation in a

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Speaker 11: very profound way. We're working hard on that. We expect

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Speaker 11: to see recoveries improve over time. So it's another leg

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Speaker 11: of that equation, which is not necessarily productivity on the activity,

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Speaker 11: but it is on the recovery and the economic equation.

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Speaker 10: What is that is that three plus mile laterals?

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Speaker 9: Is it going to be just different types of enhanced

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Speaker 9: oil recovery, like what's the super supermagic sauce fare.

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Speaker 11: Yeah, we're working a lot of different things we're certainly

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Speaker 11: drilling longer. We're drilling longer laterals. We're working on different

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Speaker 11: completion technology to create different fractured geometry so you can

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Speaker 11: get more flow.

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Speaker 10: Does that all cost more money?

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Speaker 13: Though?

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Speaker 7: To do it does?

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Speaker 11: And so that's why you've got to evaluate the economics

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Speaker 11: of this. We're working on chemicals that can enhance recovery

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Speaker 11: in terms of the interaction right down at a molecular level,

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Speaker 11: and all these things you have to pile them in

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Speaker 11: a lab, you have to pilot them in the field.

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Speaker 11: You have to understand if you can scale them up

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Speaker 11: and if they make economic sense. That's been the history

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Speaker 11: of our industry. The technology tends to solve these things.

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Speaker 11: We got a lot of smart people in our company

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Speaker 11: and in this industry, and a lot of incentive when

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Speaker 11: you know where those molecules are to figure out how

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Speaker 11: to get them to flow in a way that's economic.

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Speaker 12: I said to Alex this morning, Mike that she wasn't

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Speaker 12: allowed to use any technical jog and I think you

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Speaker 12: guys just about skirted around it in that part of

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Speaker 12: the conversation. You were fine, You were fine. You get

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Speaker 12: a pass on that one, Mike. You talk about the

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Speaker 12: fact that you've got lots of smart people. Do you

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Speaker 12: have lots of smart lawyers? One of the things that

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Speaker 12: Alex and I were kicking around before we spoke to

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Speaker 12: you this morning was what is happening with this California

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Speaker 12: case and the fact that increasingly it looks like climate

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Speaker 12: change is going to be litigated. Is litigation the right

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Speaker 12: way of dealing with this?

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Speaker 7: In a word, no, it's not.

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Speaker 11: Look this is one of many such actions that we've

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Speaker 11: seen over the years. Ironically, a number of them on

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Speaker 11: filed on behalf of people who have actually profited from

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Speaker 11: and encouraged energy development. Climate change is a global issue.

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Speaker 11: It calls for a coordinated global policy response, not piecemeal

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Speaker 11: litigation that benefits attorneys and politicians.

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Speaker 7: So will we do have smart lawyers.

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Speaker 11: We will deal with the lawsuits, But more importantly, we're

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Speaker 11: working on finding ways to meet today's energy demand with

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Speaker 11: energy that has less carbon intensity and still is affordable

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Speaker 11: and reliable for the economy, even as we're investing in

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Speaker 11: new technologies like renewable fuels and hydrogen and carbon capture

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Speaker 11: to build a new energy system over time that is

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Speaker 11: inherently lower carbon. That's a constructive approach, that's where we're engaged.

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Speaker 11: That's where most of my attention is focused.

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Speaker 9: Okay, so to this point, you guys are going to

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Speaker 9: become majority owner in what could be the world's largest

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Speaker 9: hydrogen production and storage facility.

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Speaker 10: There's that You do have a huge.

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Speaker 9: Carbon capture facility next to Gorgon in Australia, etc.

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Speaker 10: These things are huge, and they're.

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Speaker 9: Expensive, and some have been around for a while. Hydrogen, though,

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Speaker 9: is new.

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Speaker 10: How do you know how much.

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Speaker 9: Capex to realistically allocate before you're like, this is too

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Speaker 9: big and it's a money suck.

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Speaker 10: How do you see this playing out?

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Speaker 11: Well, it requires a lot of judgment. You have to

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Speaker 11: spend time, you have to really select. There are many

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Speaker 11: opportunities out there.

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Speaker 10: There's a lot of hydrogen.

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Speaker 11: For example, there are a lot of places you can

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Speaker 11: invest in hydrogen. You can invest in blue hydrogen, you

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Speaker 11: can invest in green hydrogen. There's different carbon intensities, there's

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Speaker 11: different technology pathways. We've got an entire organization that spends

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Speaker 11: all its time working on the technical, the commercial, the

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Speaker 11: practical engineering realities of these things and looks to find

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Speaker 11: the best places to start. Certainly in the US, we've

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Speaker 11: seen some policy through the IRA which creates incentives. Those

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Speaker 11: aren't intended to last forever, but they can help prime

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Speaker 11: the pump as we bring the technology costs down. The

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Speaker 11: project you referenced is a project in Utah which is

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Speaker 11: actually very economic today. We'll take surplus renewable power that

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Speaker 11: comes from primarily from wind in the western US, and

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Speaker 11: when it's more than the grid needs, which happens during

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Speaker 11: certain times of the day, we can use that to

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Speaker 11: convert water into hydrogen. We'll store the hydrogen in the

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Speaker 11: underground caverns, and then at other times in the day

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Speaker 11: when you want to bring that power back, we can

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Speaker 11: bring the hydrogen out of the caverns. It can be

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Speaker 11: put into a gasfird power plant along with natural gas.

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Speaker 7: To produce lower carbon electricity.

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Speaker 11: So it's an example of something that's technically feasible, the

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Speaker 11: economics and contract terms on and give us a return

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Speaker 11: on our investments, and it's a platform from which we

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Speaker 11: can then grow.

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Speaker 8: You're listening to the tape Ket's are live program Bloomberg

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00:19:20,920 --> 00:19:24,480
Speaker 8: Markets weekdays at ten am Eastern on Bloomberg Radio, the

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Speaker 8: tune it app, Bloomberg dot Com, and the Bloomberg Business app.

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Speaker 8: flagship New York station, Just say Alexa play Bloomberg eleven thirty.

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Speaker 12: Welcome now are Bloomberg Radio and television audiences to a

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Speaker 12: fantastic conversation with Ala Hollinis. He is the Mercedes Benz CEO.

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Speaker 12: He joins us in New York, as does, of course,

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Speaker 12: Bloomberg's Matt Miller. All great to see you. Thank you

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Speaker 12: very much indeed for taking some time to drop by

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Speaker 12: and see us here at Bloomberg. The story we've been

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Speaker 12: talking about over the last few days has been all

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Speaker 12: about China. We're trying to work out whether Europe is

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Speaker 12: going to start a fire with China that is going

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Speaker 12: to impact Mercedes Benz. Let's talk of tariffs, let's talk

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Speaker 12: of trade wars around auto's and evs.

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Speaker 3: Are you worried?

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Speaker 14: It's great to be with you this morning, guy. No,

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Speaker 14: we're not fundamentally worried. We have a very strong business

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Speaker 14: in China that has grown significantly over the last ten years,

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Speaker 14: and we'll continue to invest in China to make sure

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Speaker 14: that we bring the product that the Chinese customers are

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Speaker 14: expecting for us from US. I think it's important in

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Speaker 14: these types of discussions to not forget what has made

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Speaker 14: are so successful over the last decades. It's been opening

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Speaker 14: up markets, free trade, free competition, but also a level

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Speaker 14: playing field. So as long as all of those frameworks

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Speaker 14: are in place to make sure that we can do

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Speaker 14: business in a sensible way, we're not work well.

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Speaker 2: We have though all an EU inquiry and the Chinese

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Speaker 2: car imports. Don't you expect Beijing to react with countermeasures.

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Speaker 14: We will see how this plays out and what comes

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Speaker 14: out to that. And we like to remind people that

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Speaker 14: open markets is what drives growth and also drives wealth creation.

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Speaker 15: In fact, if you look.

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Speaker 14: At the history of our company, it didn't take Gottlieb

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Speaker 14: Diamer more than fifteen years to figure out that Germany

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Speaker 14: is not the only attractive market in the world. And

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Speaker 14: we've been here in the United States for more than

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Speaker 14: one hundred and twenty years now. So that companies go

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Speaker 14: global and that competition goes global, I think that's natural.

444
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Speaker 14: We had the Japanese come to the United States in

445
00:21:44,760 --> 00:21:47,520
Speaker 14: the eighties and the nineties, then the Koreans, then Tesla came.

446
00:21:47,640 --> 00:21:51,360
Speaker 14: Now when we're going into electrification, so let's keep markets

447
00:21:51,400 --> 00:21:54,560
Speaker 14: open and let the market participants fight it out.

448
00:21:56,800 --> 00:21:59,399
Speaker 12: And Alina Beboch the German format is still speaking to

449
00:21:59,400 --> 00:22:02,880
Speaker 12: our good friend colleague Amriy Hordern. A little bit earlier

450
00:22:02,920 --> 00:22:06,280
Speaker 12: on or she was saying that there's a risk that

451
00:22:06,440 --> 00:22:10,080
Speaker 12: Europe is too exposed to China, that we need to

452
00:22:10,080 --> 00:22:13,440
Speaker 12: be cautious in our approach to China. Do you think

453
00:22:13,480 --> 00:22:18,280
Speaker 12: that European German luxury carmakers are though, at risk of

454
00:22:18,320 --> 00:22:22,119
Speaker 12: being overexposed to China, that that market has become too

455
00:22:22,200 --> 00:22:25,120
Speaker 12: big for you and the politics could get in the way.

456
00:22:25,520 --> 00:22:28,400
Speaker 12: How do you think about it when you get warnings

457
00:22:28,480 --> 00:22:30,400
Speaker 12: like that from German ministers.

458
00:22:31,560 --> 00:22:33,800
Speaker 14: On the one hand, I think we learned a thing

459
00:22:33,840 --> 00:22:39,359
Speaker 14: in the pandemic that supply chains can be fragile, and

460
00:22:39,480 --> 00:22:44,119
Speaker 14: to create some optionality and more resilience into your supply

461
00:22:44,320 --> 00:22:47,359
Speaker 14: chains is generally a good thing for businesses. This is

462
00:22:47,400 --> 00:22:51,160
Speaker 14: something that we have already started, especially on battery materials,

463
00:22:52,080 --> 00:22:54,919
Speaker 14: where we have devised a strategy where we're going to

464
00:22:54,960 --> 00:22:57,359
Speaker 14: try to as best as we can over the next years,

465
00:22:57,960 --> 00:23:01,400
Speaker 14: go into a kind of region for real sourcing. So yes,

466
00:23:01,440 --> 00:23:03,560
Speaker 14: we do look at different commodities to make sure that

467
00:23:03,560 --> 00:23:07,480
Speaker 14: their supply chain is resilient, but it would be a

468
00:23:07,520 --> 00:23:10,800
Speaker 14: complete illusion to think that we can divide the world,

469
00:23:10,960 --> 00:23:15,919
Speaker 14: the automotive world, into individual regions that have nothing to

470
00:23:15,960 --> 00:23:19,320
Speaker 14: do with each other. These supply chains are supply networks

471
00:23:19,400 --> 00:23:22,520
Speaker 14: rather are much too sophisticated. There are five continents in

472
00:23:22,520 --> 00:23:26,280
Speaker 14: every Mercedes that's being sold, and that is the strength

473
00:23:26,280 --> 00:23:28,600
Speaker 14: and market economy that the invisible hand of the market

474
00:23:28,800 --> 00:23:34,280
Speaker 14: figures out what the economic optimum is. So supply chain resilience, yes,

475
00:23:34,760 --> 00:23:38,520
Speaker 14: but keeping the markets open and the market working, I

476
00:23:38,560 --> 00:23:39,960
Speaker 14: think is even more important.

477
00:23:40,080 --> 00:23:43,080
Speaker 2: You have a strike going on here in the US, well,

478
00:23:43,119 --> 00:23:47,159
Speaker 2: not you, the UAW striking on for GM and STILLANTIS.

479
00:23:47,800 --> 00:23:51,200
Speaker 2: You have production here in the US doesn't have UAW workers,

480
00:23:51,200 --> 00:23:53,480
Speaker 2: but you still got to be prepared for supply chain

481
00:23:54,080 --> 00:23:57,720
Speaker 2: issues due to the strike. What are you expecting now

482
00:23:57,760 --> 00:24:00,160
Speaker 2: and how do you expect it to affect your business?

483
00:24:02,240 --> 00:24:06,399
Speaker 14: We don't expect any major impact on our business, and

484
00:24:06,440 --> 00:24:09,080
Speaker 14: of course, Mercedes Benz doing businesses more than one hundred

485
00:24:09,080 --> 00:24:12,520
Speaker 14: and fifty countries and have operations in all major economic regions.

486
00:24:13,040 --> 00:24:15,320
Speaker 14: We tried to make sure that we're competitive, that we're

487
00:24:15,359 --> 00:24:18,919
Speaker 14: an attractive employer, but at the same time we're in transformation.

488
00:24:19,000 --> 00:24:21,959
Speaker 14: The auto industry is getting more competitive, not less competitive.

489
00:24:22,119 --> 00:24:24,920
Speaker 14: So whatever pressures we have on cost is going to

490
00:24:24,960 --> 00:24:27,120
Speaker 14: have to be made up in productivity. So I think

491
00:24:27,160 --> 00:24:30,000
Speaker 14: we have to be very mindful to keep the gain

492
00:24:30,080 --> 00:24:36,040
Speaker 14: on productivity up and make sure that we don't have

493
00:24:36,160 --> 00:24:37,439
Speaker 14: cost that run out of control.

494
00:24:37,480 --> 00:24:40,399
Speaker 2: But don't you expect OLAF if they get a twenty

495
00:24:40,560 --> 00:24:44,000
Speaker 2: twenty five percent increase at UAW plants, You're going to

496
00:24:44,119 --> 00:24:47,480
Speaker 2: have to raise your price your pay at some point

497
00:24:47,560 --> 00:24:50,640
Speaker 2: in Tuscaloosa as well, otherwise you're going to lose workers

498
00:24:50,640 --> 00:24:51,520
Speaker 2: to plants up north.

499
00:24:52,920 --> 00:24:57,000
Speaker 14: We have been in the United States, in the southeast

500
00:24:57,000 --> 00:24:58,919
Speaker 14: of the United States with our plant in Alabama and

501
00:24:58,960 --> 00:25:03,439
Speaker 14: also our commerce van operation in South Carolina now for

502
00:25:04,640 --> 00:25:07,320
Speaker 14: in Alabama more than twenty five years, almost thirty years,

503
00:25:07,720 --> 00:25:10,320
Speaker 14: and we have always kept lockstep with what's going on

504
00:25:10,400 --> 00:25:12,920
Speaker 14: in the economy to make sure that we have attractive jobs.

505
00:25:13,280 --> 00:25:18,000
Speaker 14: So we watch that and we make adjustments as we

506
00:25:18,080 --> 00:25:20,399
Speaker 14: go along. But at the same time we look at,

507
00:25:20,440 --> 00:25:21,880
Speaker 14: you know, how can we do things better, how can

508
00:25:21,880 --> 00:25:25,560
Speaker 14: we do work in a smarter way, get leaner, because

509
00:25:25,640 --> 00:25:28,000
Speaker 14: the cost competition is not going to go anywhere.

510
00:25:28,840 --> 00:25:32,760
Speaker 12: Alo do you think that companies such as yourself these

511
00:25:32,840 --> 00:25:37,200
Speaker 12: companies like Stillantis and Ford should be guaranteeing the workers

512
00:25:37,200 --> 00:25:40,480
Speaker 12: that are working on combustion engines will have a place

513
00:25:40,520 --> 00:25:43,320
Speaker 12: in the new EV world. Should they be guaranteed jobs,

514
00:25:43,560 --> 00:25:46,000
Speaker 12: should they be carried through this transition process.

515
00:25:47,040 --> 00:25:49,199
Speaker 14: I cannot speak for other wader makers, but if I

516
00:25:49,200 --> 00:25:51,640
Speaker 14: look at what's happening at Mercedes Benz around the world

517
00:25:51,720 --> 00:25:56,520
Speaker 14: and primarily in Germany where we have most of our operations, Yes,

518
00:25:56,560 --> 00:26:00,680
Speaker 14: we're investing heavily into the new technologies lie and share

519
00:26:00,760 --> 00:26:04,879
Speaker 14: of our capital allocation goes into electrication and digitalization, and

520
00:26:04,880 --> 00:26:05,960
Speaker 14: we're creating.

521
00:26:05,800 --> 00:26:06,680
Speaker 3: New jobs there.

522
00:26:06,720 --> 00:26:09,320
Speaker 14: But the fact of the matter on the powertrain side

523
00:26:09,320 --> 00:26:12,800
Speaker 14: of things, the net at the end of this transition,

524
00:26:12,880 --> 00:26:16,000
Speaker 14: which is a ten year plus affair, is going to

525
00:26:16,040 --> 00:26:20,679
Speaker 14: be less jobs on powertrain. On vehicle assembly, it's about

526
00:26:20,720 --> 00:26:26,160
Speaker 14: the same. But we will use demography over this ten

527
00:26:26,240 --> 00:26:29,720
Speaker 14: year plus period, our demographics to make sure that we

528
00:26:29,760 --> 00:26:32,359
Speaker 14: can get into a position where we do this in

529
00:26:32,400 --> 00:26:33,200
Speaker 14: a sensible way.

530
00:26:33,640 --> 00:26:39,240
Speaker 2: Although I drove recently the EQS, it's an electric euroelectric suv,

531
00:26:40,080 --> 00:26:44,600
Speaker 2: obviously a very luxurious product as you move even more upscale.

532
00:26:45,760 --> 00:26:48,119
Speaker 2: At the same time, the Tesla Model X and Model

533
00:26:48,240 --> 00:26:50,680
Speaker 2: S are getting kind of long in the tooth. If

534
00:26:50,720 --> 00:26:54,440
Speaker 2: you have lost customers to Elon Musk, are you gaining

535
00:26:54,480 --> 00:26:58,919
Speaker 2: them back with this new push into you know, luxury electrics.

536
00:27:00,080 --> 00:27:03,400
Speaker 14: We have seen with the EQS and the EQUI, both

537
00:27:03,440 --> 00:27:05,760
Speaker 14: on the Sedans and the SUVs, and here you have

538
00:27:05,880 --> 00:27:11,399
Speaker 14: some extremely high tech, luxurious products. We didn't make carbon

539
00:27:11,480 --> 00:27:14,720
Speaker 14: copies of our combustion equivalents, but really tried to create

540
00:27:14,800 --> 00:27:17,800
Speaker 14: a complementary offering. And yes, we have a lot of

541
00:27:17,840 --> 00:27:22,960
Speaker 14: conquest customers coming into those vehicles. People that maybe didn't

542
00:27:22,960 --> 00:27:25,600
Speaker 14: look at Mercedes before that goes like, Wow, Mercedes is

543
00:27:25,640 --> 00:27:28,640
Speaker 14: going electric. This is interesting for me. So so far

544
00:27:28,720 --> 00:27:30,280
Speaker 14: that plan is working out quite well.

545
00:27:31,920 --> 00:27:33,720
Speaker 12: Matt, I have to say, you've got a big smile

546
00:27:33,760 --> 00:27:36,639
Speaker 12: on your face. You look like you're enjoying driving that car.

547
00:27:37,480 --> 00:27:39,360
Speaker 12: Is it as good as a nice engine?

548
00:27:39,520 --> 00:27:39,880
Speaker 3: Are you?

549
00:27:39,960 --> 00:27:42,479
Speaker 12: Are you a convert? Yeah? I've been tracking Matt's history

550
00:27:42,720 --> 00:27:44,520
Speaker 12: as he's worked his way through this process.

551
00:27:44,600 --> 00:27:45,920
Speaker 2: You know what I want to be with they Yet

552
00:27:46,040 --> 00:27:49,400
Speaker 2: this is the one electric vehicle that may be able

553
00:27:49,400 --> 00:27:52,440
Speaker 2: to win me over because of the pedal feel, because

554
00:27:52,480 --> 00:27:54,440
Speaker 2: of I hate to say it, I don't want to

555
00:27:54,440 --> 00:27:56,520
Speaker 2: get flame, but the fake sound, which.

556
00:27:56,400 --> 00:27:57,560
Speaker 5: I absolutely loved.

557
00:27:57,840 --> 00:28:00,040
Speaker 2: It really felt like a big block more than and

558
00:28:00,600 --> 00:28:02,840
Speaker 2: ev And oh are you going for that? I mean,

559
00:28:03,440 --> 00:28:07,199
Speaker 2: are you trying to make these electric vehicles feel like

560
00:28:07,800 --> 00:28:11,000
Speaker 2: you know, the luxury V eights that were so that

561
00:28:11,080 --> 00:28:11,760
Speaker 2: we long for.

562
00:28:12,760 --> 00:28:15,320
Speaker 14: Of course there's a different sound profile, but the way

563
00:28:15,359 --> 00:28:18,439
Speaker 14: a car drives and rides, you know what you expect

564
00:28:18,480 --> 00:28:22,320
Speaker 14: from a Mercedes to safety, the quality, how everything just

565
00:28:22,400 --> 00:28:25,240
Speaker 14: feels right. That is true for an electric vehicle as

566
00:28:25,240 --> 00:28:27,920
Speaker 14: it is for a combustion vehicle. But for you, Matt,

567
00:28:27,960 --> 00:28:30,040
Speaker 14: I got a special coming up next year. I know

568
00:28:30,080 --> 00:28:32,800
Speaker 14: you're a big fan of the G Wagon, the G class,

569
00:28:33,240 --> 00:28:35,119
Speaker 14: and next year we're going to have an electric g

570
00:28:35,280 --> 00:28:37,000
Speaker 14: It's going to blow you away.

571
00:28:37,200 --> 00:28:37,640
Speaker 7: Promise.

572
00:28:38,680 --> 00:28:40,400
Speaker 5: I am absolutely looking forward to that.

573
00:28:40,960 --> 00:28:42,960
Speaker 2: As you know, I have had the V eight version,

574
00:28:43,080 --> 00:28:45,840
Speaker 2: so I'll see what the version.

575
00:28:45,800 --> 00:28:49,040
Speaker 12: That's that's This is a high bar we're talking about here, Ala,

576
00:28:49,160 --> 00:28:51,360
Speaker 12: So I hope you know what you're doing here. That's

577
00:28:51,360 --> 00:28:55,920
Speaker 12: a big promise for Matt Finnal quick question. Champagne sales

578
00:28:55,920 --> 00:29:00,280
Speaker 12: are beginning to fault luxury goods companies like Richma talking

579
00:29:00,320 --> 00:29:03,040
Speaker 12: about the idea that even upper end consumers that begin

580
00:29:03,200 --> 00:29:06,680
Speaker 12: beginning to feel the inflation re effects. Is that going

581
00:29:06,720 --> 00:29:08,400
Speaker 12: to be a challenge for you as well? Are you

582
00:29:08,560 --> 00:29:10,360
Speaker 12: in that kind of bracket? Are you going to be

583
00:29:10,400 --> 00:29:11,880
Speaker 12: affected by those same forces.

584
00:29:13,120 --> 00:29:15,760
Speaker 14: Our top end vehicle sales for the first six months

585
00:29:15,800 --> 00:29:18,920
Speaker 14: of this year were very strong, but at the same time,

586
00:29:18,960 --> 00:29:22,440
Speaker 14: you have to watch the macro picture. In North America

587
00:29:22,480 --> 00:29:25,440
Speaker 14: and in Europe we have higher interest rates. Those higher

588
00:29:25,480 --> 00:29:28,480
Speaker 14: interest rates are probably going to stick around for a while.

589
00:29:29,280 --> 00:29:32,400
Speaker 14: That affects the pricing of capital goods in terms of

590
00:29:32,480 --> 00:29:36,200
Speaker 14: financing and leasing, and that's about fifty percent of our transactions.

591
00:29:36,760 --> 00:29:40,560
Speaker 14: So we have taken a cautious view on the macroeconomic side.

592
00:29:40,680 --> 00:29:43,080
Speaker 14: That is why we have guided for vehicle sales at

593
00:29:43,120 --> 00:29:45,840
Speaker 14: around the same level this year as last year.

594
00:29:46,960 --> 00:29:49,240
Speaker 12: Allah, greatity, see you thanks stopping by thee ask.

595
00:29:50,200 --> 00:29:53,560
Speaker 8: You're listening to the team. Ken's a live program Bloomberg

596
00:29:53,680 --> 00:29:57,080
Speaker 8: Markets weekdays at ten am Eastern on Bloomberg dot com,

597
00:29:57,120 --> 00:30:00,440
Speaker 8: the iHeartRadio app and the Bloomberg Business App as non

598
00:30:00,480 --> 00:30:02,440
Speaker 8: demand wherever you get your podcasts.

599
00:30:04,320 --> 00:30:06,400
Speaker 1: Is our government going to shut down at the end

600
00:30:06,440 --> 00:30:07,880
Speaker 1: of the month. We got to keep that on the

601
00:30:07,920 --> 00:30:08,440
Speaker 1: front burner.

602
00:30:08,520 --> 00:30:08,840
Speaker 5: Kids.

603
00:30:09,080 --> 00:30:12,120
Speaker 1: Nathan Dean senior policy analyst at the US for covering

604
00:30:12,120 --> 00:30:15,520
Speaker 1: the US government for Bloomberg Intelligence. He's based on in Washington, DC.

605
00:30:15,680 --> 00:30:18,440
Speaker 1: He is my go to person for all things DC

606
00:30:18,600 --> 00:30:21,480
Speaker 1: for better or worse, Nathan, where are we now on

607
00:30:21,560 --> 00:30:25,640
Speaker 1: the discussions among the lawmakers about keeping this government open

608
00:30:25,760 --> 00:30:26,240
Speaker 1: or maybe not?

609
00:30:27,040 --> 00:30:29,240
Speaker 16: Yeah, so, just over the weekend, you know, the House

610
00:30:29,280 --> 00:30:32,760
Speaker 16: Republicans came together in tentatively agreed on a package that

611
00:30:32,800 --> 00:30:35,720
Speaker 16: at least would allow them to fund the government.

612
00:30:35,920 --> 00:30:36,680
Speaker 3: We're talking about it.

613
00:30:36,680 --> 00:30:40,440
Speaker 16: I think it was an eight percent reduction in costs

614
00:30:40,480 --> 00:30:44,560
Speaker 16: minus defense and veterans. But you know, this doesn't really

615
00:30:44,640 --> 00:30:47,600
Speaker 16: change the political perception of we are headed for a shutdown.

616
00:30:47,960 --> 00:30:50,840
Speaker 16: We're ascertaining a high percentage around seventy seventy five percent

617
00:30:51,120 --> 00:30:53,760
Speaker 16: that the government shuts down, and you know, this is

618
00:30:53,800 --> 00:30:55,520
Speaker 16: just something that this is one of the steps of

619
00:30:55,560 --> 00:30:57,000
Speaker 16: the process that they're going to have to work out

620
00:30:57,000 --> 00:30:57,920
Speaker 16: over the next few weeks.

621
00:30:58,040 --> 00:30:59,040
Speaker 3: There's going to be a lot more.

622
00:30:58,960 --> 00:31:01,960
Speaker 16: Scary headlines to if there is a shutdown, though we

623
00:31:01,960 --> 00:31:04,160
Speaker 16: don't think it's gonna last long. I mean, look, anything

624
00:31:04,160 --> 00:31:06,520
Speaker 16: can happen to this point, but you're probably looking at

625
00:31:06,560 --> 00:31:08,479
Speaker 16: like a five to seven day even maybe a ten

626
00:31:08,560 --> 00:31:11,120
Speaker 16: day shutdown as opposed to you know, what we saw

627
00:31:11,200 --> 00:31:13,680
Speaker 16: under the Trump administration. I don't think you're getting anywhere

628
00:31:13,680 --> 00:31:15,520
Speaker 16: close to the thirty one day shutdown that occurred in

629
00:31:15,960 --> 00:31:16,640
Speaker 16: twenty nineteen.

630
00:31:16,840 --> 00:31:18,920
Speaker 1: All Right, if there is a shutdown, I guess the

631
00:31:18,920 --> 00:31:21,360
Speaker 1: first thing people will try to do is assign Blaine.

632
00:31:21,560 --> 00:31:24,840
Speaker 1: Would there be any Blane if there were a shutdown?

633
00:31:25,400 --> 00:31:27,640
Speaker 16: Yeah, you know, I think obviously it's the party that

634
00:31:27,920 --> 00:31:31,000
Speaker 16: is pushing for the shutdown that ultimately pays the political

635
00:31:31,000 --> 00:31:34,680
Speaker 16: price here. And you know, when the Senate agreed or

636
00:31:34,680 --> 00:31:37,520
Speaker 16: at least agreed to open up debate on their spending package,

637
00:31:37,640 --> 00:31:39,280
Speaker 16: it was by a vote of ninety one to seven.

638
00:31:39,320 --> 00:31:42,080
Speaker 16: So that's a bipartisan issue over in the Senate. It's

639
00:31:42,120 --> 00:31:44,600
Speaker 16: really the Republicans in the House that are driving this

640
00:31:44,640 --> 00:31:46,840
Speaker 16: at the moment. But what we would say though, is

641
00:31:46,880 --> 00:31:49,240
Speaker 16: that when it comes to a shutdown, the impact can

642
00:31:49,320 --> 00:31:50,920
Speaker 16: really differentiate on who you are.

643
00:31:51,160 --> 00:31:52,680
Speaker 3: If you live in the Washington.

644
00:31:52,280 --> 00:31:55,600
Speaker 16: Area, or if you are exposed to federal contracting, you know,

645
00:31:55,760 --> 00:31:59,239
Speaker 16: or if you're a government deemed non essential employee, you

646
00:31:59,280 --> 00:32:01,800
Speaker 16: may not get paid during that time. Now, government employees

647
00:32:01,840 --> 00:32:05,440
Speaker 16: have always been retroactively played it's those government contractors that

648
00:32:05,480 --> 00:32:07,960
Speaker 16: are furloughed that are not. But when it comes to

649
00:32:08,040 --> 00:32:11,560
Speaker 16: markets and large contractors in terms of their equity share

650
00:32:11,600 --> 00:32:14,240
Speaker 16: prices and so forth, you usually see like a one

651
00:32:14,320 --> 00:32:17,200
Speaker 16: or two day worth a confusion in the markets, but

652
00:32:17,240 --> 00:32:19,840
Speaker 16: then ultimately there's not much of an impact at all.

653
00:32:20,000 --> 00:32:22,000
Speaker 1: All right, So how about it it just as it

654
00:32:22,000 --> 00:32:26,320
Speaker 1: relates to Washington per se getting this stuff done, Speaker McCarthy,

655
00:32:26,640 --> 00:32:30,840
Speaker 1: where are we in his leadership of his party dealing

656
00:32:30,880 --> 00:32:33,600
Speaker 1: with the various factions there, because it feels like there's

657
00:32:33,640 --> 00:32:36,080
Speaker 1: just a relatively small part of the Republican Party that

658
00:32:36,880 --> 00:32:38,080
Speaker 1: may be looking for a shutdown.

659
00:32:38,600 --> 00:32:39,800
Speaker 3: Yeah, I mean that's exactly it.

660
00:32:39,880 --> 00:32:42,600
Speaker 16: I mean, Speaker McCarthy has an extremely difficult position where

661
00:32:42,600 --> 00:32:44,800
Speaker 16: he can only afford to lose five votes. You know,

662
00:32:44,880 --> 00:32:46,560
Speaker 16: we went through this during the debt ceiling and he

663
00:32:46,640 --> 00:32:49,760
Speaker 16: was able to get the you know, the party through

664
00:32:49,880 --> 00:32:52,400
Speaker 16: that issue as well. I mean, he's done on this

665
00:32:52,720 --> 00:32:54,080
Speaker 16: quite a bit, and I think to a lot of

666
00:32:54,120 --> 00:32:57,760
Speaker 16: people in Washington, and he's exceeded expectations in being able

667
00:32:57,800 --> 00:33:00,239
Speaker 16: to corral the Republican Party. But now you've we've got

668
00:33:00,240 --> 00:33:02,440
Speaker 16: different apt factions here. You've got the House Freedom Caucus

669
00:33:02,480 --> 00:33:06,120
Speaker 16: and send, you know, demanding certain cuts. You've got Main

670
00:33:06,160 --> 00:33:08,320
Speaker 16: Street Caucus may say, look, I'm not going to go

671
00:33:08,360 --> 00:33:10,040
Speaker 16: along with those cuts, or I'm not going to go

672
00:33:10,080 --> 00:33:12,920
Speaker 16: along with those changes, especially if you're a Republican in

673
00:33:12,920 --> 00:33:13,960
Speaker 16: a Biden district.

674
00:33:14,160 --> 00:33:15,840
Speaker 3: But he can only afford to lose five votes.

675
00:33:16,040 --> 00:33:18,160
Speaker 16: The Democrats aren't really in a position where they're going

676
00:33:18,240 --> 00:33:20,120
Speaker 16: to want to help him at this. I think eventually

677
00:33:20,160 --> 00:33:22,400
Speaker 16: they will, but you know, there is also an impeachment

678
00:33:22,440 --> 00:33:24,400
Speaker 16: inquiry going on a lot of Democrats, you know, I

679
00:33:24,440 --> 00:33:27,160
Speaker 16: think all the Democrats aren't happy about that.

680
00:33:27,280 --> 00:33:29,440
Speaker 3: So this is something that Speaker McCarthy's going to have

681
00:33:29,480 --> 00:33:30,080
Speaker 3: to work through.

682
00:33:30,480 --> 00:33:32,760
Speaker 16: And he's not going to actually make a decision on

683
00:33:32,840 --> 00:33:35,680
Speaker 16: how to move forward until that exact moment when he

684
00:33:35,760 --> 00:33:37,440
Speaker 16: needs to, and that could be a couple of days

685
00:33:37,440 --> 00:33:38,960
Speaker 16: after the government has shut down.

686
00:33:39,440 --> 00:33:41,120
Speaker 1: So how is the White House going to play this?

687
00:33:41,200 --> 00:33:45,200
Speaker 1: Because there is an election coming up, and I'm sure

688
00:33:45,240 --> 00:33:48,200
Speaker 1: the administration doesn't want to be saddled with any kind

689
00:33:48,240 --> 00:33:50,640
Speaker 1: of blame here, too much blame here. So what are

690
00:33:50,640 --> 00:33:52,880
Speaker 1: we hearing from the President and from the administration.

691
00:33:53,440 --> 00:33:55,160
Speaker 16: So I think the White House is in a position

692
00:33:55,200 --> 00:33:57,720
Speaker 16: of strength going into this because you know, a lot

693
00:33:57,760 --> 00:34:00,000
Speaker 16: of this was already agreed upon during the debt ceiling issue,

694
00:34:00,240 --> 00:34:03,040
Speaker 16: and you know, these funding levels that especially the vote

695
00:34:03,080 --> 00:34:05,880
Speaker 16: in the Senate signifies that there is somewhat bipartisan agreement

696
00:34:06,080 --> 00:34:09,200
Speaker 16: at least over in the Senate, that you know, the funding.

697
00:34:09,040 --> 00:34:10,280
Speaker 3: Issue is somewhat resolved.

698
00:34:10,320 --> 00:34:12,920
Speaker 16: You know, obviously, you know there's always nuances that have

699
00:34:13,000 --> 00:34:14,560
Speaker 16: to be hashed out and so forth like that. But

700
00:34:14,880 --> 00:34:16,200
Speaker 16: I think what you're going to see from the White

701
00:34:16,200 --> 00:34:18,120
Speaker 16: House is essentially just a you know, look, this is

702
00:34:18,160 --> 00:34:20,480
Speaker 16: a congressional issue. This is what Capitol Hill is going

703
00:34:20,560 --> 00:34:21,800
Speaker 16: to have to deal with. It's the other side of

704
00:34:21,840 --> 00:34:25,680
Speaker 16: Pennsylvania Avenue. Once the House comes together and actually can

705
00:34:25,680 --> 00:34:28,080
Speaker 16: figure something out with the Senate, then send it to

706
00:34:28,120 --> 00:34:30,560
Speaker 16: the President's desk. But I think ultimately the President's going

707
00:34:30,640 --> 00:34:33,719
Speaker 16: to try and at least initially, you know, stay.

708
00:34:33,480 --> 00:34:35,399
Speaker 3: Out of this and let Capitol Hill fight it out.

709
00:34:35,480 --> 00:34:37,799
Speaker 1: What seems like there's a ton of risk here for

710
00:34:37,840 --> 00:34:41,200
Speaker 1: the Republican Party because it feels just at this stage,

711
00:34:42,160 --> 00:34:45,040
Speaker 1: as you suggested, that they're the ones kind of pressing

712
00:34:45,080 --> 00:34:47,399
Speaker 1: for it here, and I'm not. I guess they hope

713
00:34:47,400 --> 00:34:50,319
Speaker 1: the calculus is, yeah, but what we're arguing for, less

714
00:34:50,320 --> 00:34:53,120
Speaker 1: spending and the other things are arguing for, that's really

715
00:34:53,160 --> 00:34:55,120
Speaker 1: what the people want, and they'd be willing to deal

716
00:34:55,160 --> 00:34:58,320
Speaker 1: with a government shutdown to get that. Is that their calculus?

717
00:34:58,920 --> 00:34:59,360
Speaker 3: Yeah?

718
00:34:59,400 --> 00:35:01,399
Speaker 16: Absolutely, I mean, like I said before, you know, the

719
00:35:01,440 --> 00:35:03,840
Speaker 16: Speaker McCarthy can only afford to lose five votes. But

720
00:35:03,920 --> 00:35:05,680
Speaker 16: really what it comes down to is that some of

721
00:35:05,719 --> 00:35:08,759
Speaker 16: these Republicans that are insisting, Look, you've heard language saying

722
00:35:08,760 --> 00:35:11,440
Speaker 16: that a government shutdown saves money. That's not entirely true,

723
00:35:11,760 --> 00:35:14,960
Speaker 16: but it plays well in you know, Peoria, Illinois, or

724
00:35:14,960 --> 00:35:17,600
Speaker 16: in Alabama, or in Georgia or in Nevada, and so

725
00:35:18,040 --> 00:35:20,480
Speaker 16: you know a lot of these Republicans you know, are

726
00:35:20,480 --> 00:35:24,279
Speaker 16: thinking of their specific constituents here, and so you know

727
00:35:24,520 --> 00:35:26,480
Speaker 16: it's one of those things where eventually they're going to

728
00:35:26,560 --> 00:35:29,400
Speaker 16: have to work this out, meaning they the Speaker McCarthy

729
00:35:29,480 --> 00:35:31,120
Speaker 16: is going to have to take to make a decision

730
00:35:31,120 --> 00:35:33,000
Speaker 16: at a certain point, you know, do I keep the

731
00:35:33,040 --> 00:35:35,600
Speaker 16: government shut down or do I push for a shutdown,

732
00:35:35,719 --> 00:35:38,400
Speaker 16: or do I try and come up with a bipartisan package.

733
00:35:38,520 --> 00:35:41,040
Speaker 16: If he moves forward with a bipartisan package, you know,

734
00:35:41,120 --> 00:35:41,719
Speaker 16: he could.

735
00:35:41,520 --> 00:35:42,640
Speaker 3: See a motion to vacate.

736
00:35:42,719 --> 00:35:45,560
Speaker 16: You know, he's made he said language last week He's like, look,

737
00:35:45,680 --> 00:35:48,759
Speaker 16: I would welcome a voting motion to vacate me as

738
00:35:48,800 --> 00:35:51,480
Speaker 16: speaker because I think if that would be successful, who

739
00:35:51,520 --> 00:35:53,480
Speaker 16: would take his place. I'm not exactly sure if there's

740
00:35:53,520 --> 00:35:55,719
Speaker 16: anybody they would want the job at this point. So,

741
00:35:56,160 --> 00:35:58,719
Speaker 16: you know, it's just unfortunately, we're gonna have to go

742
00:35:58,760 --> 00:36:01,560
Speaker 16: through this every few months for every few years, where

743
00:36:01,719 --> 00:36:04,400
Speaker 16: you know, there's discussion on whether the government should be

744
00:36:04,440 --> 00:36:07,240
Speaker 16: shut down. It doesn't save any money. It actually doesn't

745
00:36:07,280 --> 00:36:10,200
Speaker 16: really help. The last one cost about three billion dollars

746
00:36:10,200 --> 00:36:13,960
Speaker 16: in GDP output, according to the Congressional Budget Office. But again,

747
00:36:14,200 --> 00:36:17,000
Speaker 16: these policymakers won't make their decision to come to an

748
00:36:17,000 --> 00:36:19,680
Speaker 16: a pipe partisan agreement until their backs are against the wall,

749
00:36:19,840 --> 00:36:22,480
Speaker 16: and those backs won't be against the wall until they

750
00:36:22,520 --> 00:36:25,160
Speaker 16: absolutely are, which probably will be you know, three to

751
00:36:25,200 --> 00:36:26,440
Speaker 16: five days after a shutdown.

752
00:36:26,719 --> 00:36:28,319
Speaker 1: Yeah, yeah, I don't know how you do this, Nathan.

753
00:36:28,320 --> 00:36:30,040
Speaker 1: You got to deal with these people all the time

754
00:36:30,120 --> 00:36:32,720
Speaker 1: in this whole policy all the time. You're our buffer,

755
00:36:32,760 --> 00:36:34,440
Speaker 1: You're the guy we go to we need to really

756
00:36:34,480 --> 00:36:35,799
Speaker 1: figure out what's going on down at DC.

757
00:36:36,239 --> 00:36:39,360
Speaker 8: You're listening to the tape. Cat's are live program Bloomberg

758
00:36:39,400 --> 00:36:43,000
Speaker 8: Markets weekdays at ten am Eastern on Bloomberg Radio, the

759
00:36:43,040 --> 00:36:46,279
Speaker 8: tune in app, Bloomberg dot Com, and the Bloomberg Business App.

760
00:36:46,320 --> 00:36:49,160
Speaker 8: You can also listen live on Amazon Alexa from our

761
00:36:49,160 --> 00:36:53,560
Speaker 8: flagship New York station, Just Say Alexa playing Bloomberg eleven thirty.

762
00:36:54,239 --> 00:36:55,040
Speaker 1: We're talking more.

763
00:36:55,000 --> 00:36:57,359
Speaker 5: Cars, dude, Yeah, it's a great day for cars.

764
00:36:57,520 --> 00:36:58,560
Speaker 1: Is a great day for cars?

765
00:36:58,560 --> 00:37:01,040
Speaker 2: Well, I mean, let's just say there's a lot of news,

766
00:37:01,040 --> 00:37:03,960
Speaker 2: because there is. There are some negative stories right that

767
00:37:04,200 --> 00:37:06,719
Speaker 2: the strike continues to linger on.

768
00:37:06,800 --> 00:37:10,000
Speaker 5: It's only day four. But you've had some big offers

769
00:37:10,000 --> 00:37:10,319
Speaker 5: out there.

770
00:37:10,320 --> 00:37:14,440
Speaker 2: Stilantis, for example, offered a twenty one percent increase in

771
00:37:14,560 --> 00:37:19,160
Speaker 2: wages and the union just batted that away. You've had

772
00:37:19,280 --> 00:37:21,959
Speaker 2: I think twenty percent offers from Ford NGM, but they're

773
00:37:21,960 --> 00:37:25,200
Speaker 2: demanding thirty six percent plus. They want to bring back

774
00:37:25,480 --> 00:37:28,640
Speaker 2: define pension benefits, and they're also pushing for a four

775
00:37:28,719 --> 00:37:29,279
Speaker 2: day work week.

776
00:37:30,040 --> 00:37:32,319
Speaker 3: I'm pushing for a four day workek. Nobody's listening to me.

777
00:37:32,480 --> 00:37:36,319
Speaker 2: We have talked to Ola Colnius today, the CEO of Mercedes,

778
00:37:36,520 --> 00:37:38,920
Speaker 2: and now we've got David Grosso in here the CEO

779
00:37:39,080 --> 00:37:43,279
Speaker 2: of Maserati And Okay, to be fair, obviously you're part

780
00:37:43,320 --> 00:37:45,560
Speaker 2: of a much bigger group Stilantis. And I'm sure you're

781
00:37:45,600 --> 00:37:48,680
Speaker 2: not dealing with the strike yourself, as you're not producing

782
00:37:48,719 --> 00:37:51,560
Speaker 2: cars you'r Maserati's on this side of the Atlantic.

783
00:37:51,880 --> 00:37:54,600
Speaker 5: But does it have an effect on you indirectly?

784
00:37:54,680 --> 00:37:57,200
Speaker 2: I mean, do you have supply chain problems if this

785
00:37:57,320 --> 00:37:57,840
Speaker 2: drags on?

786
00:37:59,000 --> 00:37:59,680
Speaker 5: How do you see it?

787
00:38:00,160 --> 00:38:03,520
Speaker 17: Well, great question that you know directly, as you said,

788
00:38:03,520 --> 00:38:05,600
Speaker 17: we don't have issues because we don't produce it as

789
00:38:05,680 --> 00:38:10,400
Speaker 17: hundred percent made in Italy Maserati. Uh, clearly we're global, global,

790
00:38:10,480 --> 00:38:13,320
Speaker 17: global brand, and you know for us in North America

791
00:38:13,600 --> 00:38:16,719
Speaker 17: is is important market. So uh, you know, we we

792
00:38:16,800 --> 00:38:20,640
Speaker 17: look forward to the resolution of this because longer term

793
00:38:20,840 --> 00:38:23,840
Speaker 17: impacts would be on everybody, I mean, on everybody in

794
00:38:23,880 --> 00:38:26,759
Speaker 17: every sector. So so far we're not we have not

795
00:38:26,840 --> 00:38:29,880
Speaker 17: been impacted, but the long term ripple effects, you know,

796
00:38:30,040 --> 00:38:32,879
Speaker 17: it could be far reaching for everybody.

797
00:38:33,040 --> 00:38:34,839
Speaker 1: All Right, you know I got the new estate down

798
00:38:34,840 --> 00:38:38,520
Speaker 1: on the Jersey Shore, right across the street in the driveway,

799
00:38:38,960 --> 00:38:41,480
Speaker 1: not one, not two, but three Maseratis.

800
00:38:41,719 --> 00:38:45,200
Speaker 5: Wow, Joe Walls exactly.

801
00:38:45,920 --> 00:38:49,160
Speaker 1: They talk to us about your business these days? Where

802
00:38:49,160 --> 00:38:51,879
Speaker 1: are you in terms of your global business and uh

803
00:38:52,040 --> 00:38:53,160
Speaker 1: and in the US.

804
00:38:53,040 --> 00:38:57,239
Speaker 17: Well global business we uh, we are, you know, experiencing

805
00:38:57,360 --> 00:39:00,440
Speaker 17: a nice growth, fueled by the intron action of the

806
00:39:00,480 --> 00:39:03,399
Speaker 17: new product that we launched over the last eighteen months,

807
00:39:03,400 --> 00:39:06,840
Speaker 17: I would say, the Grecala, the suv and now we

808
00:39:07,040 --> 00:39:10,120
Speaker 17: just released the Grand Tourismo which is hitting this market

809
00:39:10,360 --> 00:39:12,960
Speaker 17: in these very weeks. And before that we have the

810
00:39:13,040 --> 00:39:17,200
Speaker 17: MC twenty which was represent a little bit the rebirth

811
00:39:17,280 --> 00:39:19,640
Speaker 17: of the Mazarati brand. As you know, Bazzarati was born

812
00:39:19,719 --> 00:39:22,760
Speaker 17: on the track, so for us having the MC twenty

813
00:39:23,600 --> 00:39:25,960
Speaker 17: going back from the street to the track, and we

814
00:39:26,000 --> 00:39:30,000
Speaker 17: had the GT two program and then recently we we

815
00:39:30,200 --> 00:39:34,200
Speaker 17: just unveiled the extreme version evncent twenty which is called

816
00:39:34,200 --> 00:39:37,520
Speaker 17: the MC Xtrema that we unveiled at Pebble.

817
00:39:37,239 --> 00:39:39,400
Speaker 15: Beach, which as the Beast.

818
00:39:40,000 --> 00:39:44,759
Speaker 17: So you know, all these has generated the rebirth and

819
00:39:45,080 --> 00:39:48,680
Speaker 17: they going back of the brand where it belongs, which

820
00:39:48,760 --> 00:39:52,440
Speaker 17: is epitomizing Italian luxury. The beautiful thing about the Mazarati

821
00:39:52,440 --> 00:39:55,600
Speaker 17: brand is that you know you mentioned three in the byway,

822
00:39:55,920 --> 00:39:58,600
Speaker 17: because you know, you can find the Maserati for you

823
00:39:58,840 --> 00:40:01,840
Speaker 17: like there's a two seater, there's a four seaters grund Aisma.

824
00:40:01,840 --> 00:40:04,759
Speaker 17: By the way, Mazarati invented the SEC the segment of

825
00:40:04,800 --> 00:40:08,160
Speaker 17: Grand Tourismo. It's a trademark world that we we we

826
00:40:08,160 --> 00:40:08,800
Speaker 17: we've had.

827
00:40:08,600 --> 00:40:10,520
Speaker 15: Many seventy five years ago actually.

828
00:40:10,200 --> 00:40:14,239
Speaker 2: And now everybody who's anybody has a GT car, right yeah,

829
00:40:14,320 --> 00:40:15,960
Speaker 2: and that all comes back to you. How do you

830
00:40:16,000 --> 00:40:18,719
Speaker 2: differentiate the g T from the MC twenty because they're

831
00:40:18,760 --> 00:40:22,719
Speaker 2: both you know, two seaters not sports cars, right.

832
00:40:23,040 --> 00:40:25,800
Speaker 15: No, the GT is a four seater. Oh, the GT

833
00:40:25,920 --> 00:40:27,520
Speaker 15: is a for the Grand Chrisma is a four seater.

834
00:40:27,719 --> 00:40:31,360
Speaker 17: I did not and it's very.

835
00:40:30,880 --> 00:40:32,280
Speaker 5: Versus nine to eleven essentially.

836
00:40:33,280 --> 00:40:36,040
Speaker 17: Yeah, there's different type of competitors for the for the

837
00:40:36,239 --> 00:40:39,560
Speaker 17: for the for the Grand Tourismo. I tend not to

838
00:40:39,640 --> 00:40:43,200
Speaker 17: name competition, but by just by you know, having worked, uh,

839
00:40:43,440 --> 00:40:47,720
Speaker 17: you know in previously in different environment including sports.

840
00:40:47,920 --> 00:40:49,319
Speaker 15: You focus on on on our game.

841
00:40:49,360 --> 00:40:53,400
Speaker 17: But it's true you have four seaters as as as

842
00:40:53,400 --> 00:40:56,360
Speaker 17: a competitor for the Grand Arismo. Grand Tourismo actually was

843
00:40:56,400 --> 00:41:00,680
Speaker 17: originated seventy five years ago by the Mazarati activity, if

844
00:41:00,680 --> 00:41:04,520
Speaker 17: you will, uh, and an ingenuity because they basically put

845
00:41:05,320 --> 00:41:08,359
Speaker 17: a coupe a coup but in that you know, with

846
00:41:08,400 --> 00:41:11,680
Speaker 17: the with the spaciousness of of a sedan and the

847
00:41:11,800 --> 00:41:15,600
Speaker 17: driver ability of a sport coup, but with the plush

848
00:41:15,760 --> 00:41:18,640
Speaker 17: comfort of a sedan, and that created the Grand Turisma.

849
00:41:18,800 --> 00:41:21,000
Speaker 2: That's why I mean, I don't mean to compare it

850
00:41:21,000 --> 00:41:22,560
Speaker 2: to a nine to eleven. I'm just saying it's it's

851
00:41:22,760 --> 00:41:25,680
Speaker 2: among those class of cars where you say it's a

852
00:41:25,680 --> 00:41:28,080
Speaker 2: four seater, but we're not putting a couple of adults

853
00:41:28,120 --> 00:41:29,319
Speaker 2: in the back, right, I.

854
00:41:29,280 --> 00:41:31,800
Speaker 17: Mean, no, no, you I'll be happy to drive you

855
00:41:31,840 --> 00:41:33,879
Speaker 17: around and you sit in the back and you'll tell

856
00:41:33,920 --> 00:41:36,440
Speaker 17: me how you feel after two hours drive to the Hampton's.

857
00:41:36,880 --> 00:41:41,560
Speaker 5: Wow, that's a great offer. Well you drive you drop.

858
00:41:41,680 --> 00:41:46,279
Speaker 2: I have driven the the Grecli and the Troo. I

859
00:41:46,320 --> 00:41:49,000
Speaker 2: had the Trofeo version, which I think starts at one

860
00:41:49,000 --> 00:41:53,560
Speaker 2: O three one hundred three grand. Amazing car and for

861
00:41:53,680 --> 00:41:56,760
Speaker 2: me it was kind of a life changing experience because

862
00:41:56,840 --> 00:42:02,200
Speaker 2: I had previously shunned V sixes. This power plant was

863
00:42:02,320 --> 00:42:05,319
Speaker 2: everything in that car to me, and it's I think

864
00:42:05,360 --> 00:42:06,920
Speaker 2: derived from the MC twenty.

865
00:42:06,680 --> 00:42:09,319
Speaker 17: Right it is it is, yeah, And the MCD entry

866
00:42:09,719 --> 00:42:12,919
Speaker 17: is powered by the Netuno engine, which is again made

867
00:42:12,960 --> 00:42:13,680
Speaker 17: in Maserati.

868
00:42:14,040 --> 00:42:17,840
Speaker 2: Again Neatuno is from King Neptune, by the way, you know,

869
00:42:17,880 --> 00:42:19,640
Speaker 2: he carried the Trydent tried it.

870
00:42:19,760 --> 00:42:23,960
Speaker 1: Hence there you know, Okay, it comes together.

871
00:42:24,000 --> 00:42:24,799
Speaker 6: It comes to.

872
00:42:26,560 --> 00:42:27,000
Speaker 3: David Day.

873
00:42:27,040 --> 00:42:30,800
Speaker 1: Who is your customer in in Is there typical customer

874
00:42:30,880 --> 00:42:33,680
Speaker 1: or is it different in Europe versus North America versus

875
00:42:33,760 --> 00:42:34,320
Speaker 1: maybe Asia.

876
00:42:34,400 --> 00:42:35,440
Speaker 15: Oh that's a great question.

877
00:42:35,920 --> 00:42:38,120
Speaker 17: You know, we again as we repositioned the brand and

878
00:42:38,160 --> 00:42:42,520
Speaker 17: we started so the results we're getting and North America

879
00:42:42,600 --> 00:42:45,160
Speaker 17: is on the forefront of this growth because there's a

880
00:42:45,160 --> 00:42:47,319
Speaker 17: critical market for us. But historically we had a great

881
00:42:47,360 --> 00:42:50,560
Speaker 17: position and now we're actually enjoying that history.

882
00:42:50,640 --> 00:42:53,600
Speaker 15: But with new product and new growth perth.

883
00:42:54,000 --> 00:42:57,400
Speaker 17: So you know, we refocus the brand on its values,

884
00:42:57,440 --> 00:43:00,560
Speaker 17: which are you know, Italian luxury and formans.

885
00:43:00,760 --> 00:43:02,160
Speaker 15: So we're focusing on a new.

886
00:43:02,200 --> 00:43:06,640
Speaker 17: Luxury consumer, which is by nature global. So the mindset

887
00:43:07,000 --> 00:43:10,840
Speaker 17: of the consumer is similar, the lifestyle of the aspirations,

888
00:43:10,840 --> 00:43:15,000
Speaker 17: the type of activities are similar. So there's many more

889
00:43:16,760 --> 00:43:24,160
Speaker 17: similarities between New York and Shanghai and London modern luxury customer. Uh,

890
00:43:25,000 --> 00:43:28,400
Speaker 17: the differences right, and then there of course there's different regulations,

891
00:43:28,400 --> 00:43:32,640
Speaker 17: different urban or suburban type of situations. But that's what

892
00:43:32,840 --> 00:43:38,600
Speaker 17: is actually giving us the confidence that this growth path

893
00:43:38,640 --> 00:43:41,440
Speaker 17: we're on it's going to be a long term growth

894
00:43:41,480 --> 00:43:44,960
Speaker 17: that's definitely. It's it's our intention and our plans our

895
00:43:45,080 --> 00:43:48,200
Speaker 17: growth company. The other thing is that global luxury consumer

896
00:43:48,440 --> 00:43:51,879
Speaker 17: is not looking anymore just for super sports cars or

897
00:43:52,160 --> 00:43:55,879
Speaker 17: just for granturismo. But they have a lifestyle for which

898
00:43:55,920 --> 00:43:59,160
Speaker 17: they may need a medium sized suv. But you know,

899
00:43:59,400 --> 00:44:01,960
Speaker 17: just a agree were saying is you know, you have

900
00:44:02,080 --> 00:44:05,440
Speaker 17: certain needs or design in terms of the responsiveness of

901
00:44:05,480 --> 00:44:08,799
Speaker 17: the engine or the type of luxury experience you have

902
00:44:09,000 --> 00:44:11,439
Speaker 17: as a driver or as passenger, not only in terms

903
00:44:11,440 --> 00:44:14,240
Speaker 17: of materials, but also in terms of the digital interaction

904
00:44:14,320 --> 00:44:16,200
Speaker 17: that you have with a car. So we put a

905
00:44:16,200 --> 00:44:20,680
Speaker 17: lot of efforts also and focus on the digital driving experiences.

906
00:44:20,760 --> 00:44:24,560
Speaker 2: So this is a whole new generation essentially completely completely.

907
00:44:25,719 --> 00:44:30,719
Speaker 2: How do you you're you're trading within Stilantis, they own Maserati,

908
00:44:31,160 --> 00:44:34,920
Speaker 2: but you should be trading at a much higher valuation.

909
00:44:35,000 --> 00:44:37,320
Speaker 2: That is, they should be getting a lot more value

910
00:44:37,360 --> 00:44:40,759
Speaker 2: from Masarati than they do inside the company. And they

911
00:44:40,800 --> 00:44:44,719
Speaker 2: break out investment banker now trying to your financials. They

912
00:44:44,719 --> 00:44:47,160
Speaker 2: break out your financials and they don't break out Stilantis

913
00:44:47,160 --> 00:44:49,719
Speaker 2: doesn't break out all their brand's financials, but they do

914
00:44:49,800 --> 00:44:52,839
Speaker 2: for Maserati. If you do well, do you see an.

915
00:44:52,760 --> 00:44:53,960
Speaker 5: I p O in your future?

916
00:44:54,239 --> 00:44:56,359
Speaker 17: It's a question that it's a great questions. The question

917
00:44:56,400 --> 00:44:58,440
Speaker 17: has been asked several times.

918
00:44:58,480 --> 00:45:00,640
Speaker 5: I'm hoping you'll give me a good answer, I know.

919
00:45:00,920 --> 00:45:04,719
Speaker 17: You know, to me, to a CFO and to Carlos

920
00:45:04,760 --> 00:45:07,239
Speaker 17: and Carlos CEO group CEO.

921
00:45:07,360 --> 00:45:09,120
Speaker 15: And the kind of answer is like, right now, it's

922
00:45:09,120 --> 00:45:10,880
Speaker 15: not in the cards. Right now the cards.

923
00:45:11,120 --> 00:45:15,240
Speaker 17: We are focusing totally in in really capturing the growth

924
00:45:15,280 --> 00:45:19,480
Speaker 17: potential long term that Mazarati has in order to deliver

925
00:45:20,120 --> 00:45:25,880
Speaker 17: the high demands that global customer, global customer, luxury customer

926
00:45:25,960 --> 00:45:28,759
Speaker 17: has and we're focused on that. We're very pleased about

927
00:45:28,719 --> 00:45:31,600
Speaker 17: their journey we've had four years ago in a very

928
00:45:31,640 --> 00:45:34,440
Speaker 17: different you know situation as a brand, as a business.

929
00:45:34,840 --> 00:45:36,440
Speaker 15: But we still have a long ways to go.

930
00:45:36,840 --> 00:45:39,200
Speaker 5: So how how much can you grow?

931
00:45:39,280 --> 00:45:43,800
Speaker 2: I mean, aren't you limited to some extent by unit sales?

932
00:45:43,880 --> 00:45:46,560
Speaker 2: Isn't there a ceiling as far as how many you

933
00:45:46,880 --> 00:45:47,719
Speaker 2: can actually sell.

934
00:45:48,320 --> 00:45:50,320
Speaker 17: It's a great question because it allows me to shift

935
00:45:50,360 --> 00:45:53,240
Speaker 17: to build on what you were saying and when you

936
00:45:53,280 --> 00:45:56,600
Speaker 17: when you work in luxury, the focus is not on volume.

937
00:45:57,040 --> 00:45:59,799
Speaker 17: If you want to be healthy and delivering to the

938
00:45:59,800 --> 00:46:02,400
Speaker 17: crustomer needs or the long term, you have to focus

939
00:46:02,440 --> 00:46:08,320
Speaker 17: on profit without and on quality of course, So without quality,

940
00:46:08,320 --> 00:46:12,000
Speaker 17: these are the two fundamental elements of our plan. Without quality,

941
00:46:12,400 --> 00:46:15,680
Speaker 17: you don't have luxury. You know, quality brands and luxury

942
00:46:15,680 --> 00:46:18,400
Speaker 17: brands even in other fields you know, normally are like

943
00:46:18,440 --> 00:46:20,640
Speaker 17: one hundred years old and they were born as a

944
00:46:20,800 --> 00:46:24,040
Speaker 17: high quality brand, right, and over time you become luxury

945
00:46:24,040 --> 00:46:26,560
Speaker 17: because you are very steady in delivering luxury. The other

946
00:46:26,640 --> 00:46:28,320
Speaker 17: thing you need to do is you need to have

947
00:46:29,040 --> 00:46:31,319
Speaker 17: your your added.

948
00:46:31,120 --> 00:46:34,840
Speaker 15: Value recognized by the customer in pricing. Right. So we

949
00:46:34,920 --> 00:46:36,279
Speaker 15: put a lot effort in that and.

950
00:46:36,400 --> 00:46:40,200
Speaker 17: Rebalancing and redefining our business model and we have now

951
00:46:40,280 --> 00:46:46,560
Speaker 17: and nine point two percent AOI just operating and margin.

952
00:46:46,640 --> 00:46:47,960
Speaker 15: And you know, our.

953
00:46:47,840 --> 00:46:50,680
Speaker 17: Goal is there's no need, no, there's no reason why

954
00:46:50,719 --> 00:46:53,560
Speaker 17: we shouldn't be at fifteen percent first, which is like

955
00:46:53,719 --> 00:46:57,319
Speaker 17: benchmark and above fifteen percent, so that's what we're looking at.

956
00:46:57,640 --> 00:47:01,320
Speaker 15: And the volume then is you know, could be a really.

957
00:47:02,560 --> 00:47:07,080
Speaker 17: Dangerous trap to fall in the mindset all I need

958
00:47:07,120 --> 00:47:10,040
Speaker 17: to sell more, I need to sell better. We don't

959
00:47:10,040 --> 00:47:12,680
Speaker 17: want to be much bigger, but we want to be

960
00:47:12,840 --> 00:47:17,480
Speaker 17: recognized as the best in terms of you know, Italian luctory.

961
00:47:17,800 --> 00:47:23,440
Speaker 1: Real quickly, quickly, thirty seconds on your evolution to going electric?

962
00:47:23,520 --> 00:47:24,440
Speaker 3: Where are you guys?

963
00:47:24,880 --> 00:47:31,000
Speaker 17: We're almost ready to actually have Maserati cars electric cars

964
00:47:31,200 --> 00:47:33,360
Speaker 17: driven in the roads, you know. By the now and

965
00:47:33,440 --> 00:47:36,279
Speaker 17: the end of the year, we're gonna introduce in you know,

966
00:47:36,480 --> 00:47:39,879
Speaker 17: launch the Grecala electric and electric version is fol Gore.

967
00:47:40,320 --> 00:47:44,640
Speaker 17: Foll Gore, going back to mythology means lightning and foll

968
00:47:44,680 --> 00:47:49,839
Speaker 17: gray is you know, is the Mazarati The name identifies

969
00:47:49,920 --> 00:47:53,880
Speaker 17: Mazarati Electric and then we also have the Granturism Electric.

970
00:47:54,840 --> 00:47:56,480
Speaker 1: The next time we get you in, I want to

971
00:47:56,520 --> 00:47:59,360
Speaker 1: figure out how you went from the sneaker business m

972
00:47:59,520 --> 00:48:02,040
Speaker 1: hm to the luxury automobile.

973
00:48:01,640 --> 00:48:03,080
Speaker 5: You went and before then let's get you in a

974
00:48:03,120 --> 00:48:03,920
Speaker 5: Maserati yeh.

975
00:48:03,920 --> 00:48:05,680
Speaker 2: Then we'll get me and ride the product before you

976
00:48:05,719 --> 00:48:06,400
Speaker 2: interview the CEO.

977
00:48:06,480 --> 00:48:09,320
Speaker 1: Next Yeah, next time, we'll do that next time, David Grosso,

978
00:48:09,360 --> 00:48:12,320
Speaker 1: thank you so much for joining us, CEO of Maserati,

979
00:48:12,360 --> 00:48:15,080
Speaker 1: joining us live here in our Bloomberg Interactive Broker Studio.

980
00:48:15,120 --> 00:48:16,640
Speaker 3: It's been a great card day for you, man.

981
00:48:16,760 --> 00:48:18,000
Speaker 5: Yeah, I've been enjoying it.

982
00:48:18,080 --> 00:48:18,960
Speaker 3: Yeah, we got it.

983
00:48:19,120 --> 00:48:21,239
Speaker 1: Just I mean you drive everything that's out there on

984
00:48:21,280 --> 00:48:22,200
Speaker 1: the road, you might as well well.

985
00:48:22,239 --> 00:48:24,080
Speaker 5: I had and driven the GT. Yet I gotta drive

986
00:48:24,080 --> 00:48:24,439
Speaker 5: the GT.

987
00:48:24,719 --> 00:48:26,240
Speaker 1: Okay, we'll get you to get you behind.

988
00:48:26,440 --> 00:48:28,239
Speaker 2: I think we know we didn't do the Joe Walsh joke.

989
00:48:28,600 --> 00:48:30,560
Speaker 2: You have you heard the Joe Walsh song Life's been

990
00:48:30,600 --> 00:48:34,240
Speaker 2: good to Me so far? No, he says, my Maserati

991
00:48:34,440 --> 00:48:35,800
Speaker 2: does one eighty five.

992
00:48:36,360 --> 00:48:37,880
Speaker 5: You must know that it's a rockslough.

993
00:48:38,480 --> 00:48:39,560
Speaker 3: Yes, yes, you do know that.

994
00:48:39,560 --> 00:48:40,400
Speaker 5: Okay, okay, good.

995
00:48:40,600 --> 00:48:43,719
Speaker 8: You're listening to the tape. Catch are live program Bloomberg

996
00:48:43,800 --> 00:48:47,360
Speaker 8: Markets weekdays at ten am Eastern on Bloomberg Radio, the

997
00:48:47,440 --> 00:48:50,680
Speaker 8: tune in app, Bloomberg dot Com, and the Bloomberg Business App.

998
00:48:50,680 --> 00:48:53,520
Speaker 8: You can also listen live on Amazon Alexa from our

999
00:48:53,520 --> 00:48:58,600
Speaker 8: flagship New York station, Just say Alexa Play Bloomberg eleven thirty.

1000
00:48:59,440 --> 00:49:04,200
Speaker 1: Kevin Tiny Joints, Senior Automotive analyst for Bloomberg Intelligence. Hey, Kevin,

1001
00:49:04,400 --> 00:49:06,440
Speaker 1: you know I'm thinking about this strike here, and you know,

1002
00:49:06,520 --> 00:49:09,440
Speaker 1: as a Wall Street guy, I'm usually kind of pro business.

1003
00:49:09,480 --> 00:49:13,480
Speaker 1: But boy, the auto workers got some good points here.

1004
00:49:13,520 --> 00:49:15,760
Speaker 1: I mean, they gave up it seems like a lot

1005
00:49:17,040 --> 00:49:19,600
Speaker 1: during the Great Financial Crisis and then the pandemic they

1006
00:49:19,640 --> 00:49:26,040
Speaker 1: came in from the automaker's perspective, what can they really afford?

1007
00:49:27,120 --> 00:49:31,520
Speaker 13: Well, look, I think the issue for the union is that, look,

1008
00:49:31,600 --> 00:49:35,840
Speaker 13: we've seen you make a lot of money over the past,

1009
00:49:36,120 --> 00:49:38,800
Speaker 13: really since that period, since the bankruptcy period two thousand

1010
00:49:38,800 --> 00:49:41,520
Speaker 13: and eight, two thousand and nine, even into twenty ten,

1011
00:49:42,120 --> 00:49:45,359
Speaker 13: and they can't hide that. The manufacturers can't hide that.

1012
00:49:45,920 --> 00:49:48,399
Speaker 13: I think what they're going to try and get out

1013
00:49:48,440 --> 00:49:53,280
Speaker 13: of these negotiations the manufacturers, that is, is that flexibility

1014
00:49:54,239 --> 00:49:58,960
Speaker 13: to adjust capacity and headcount going forward, because even though

1015
00:49:59,440 --> 00:50:03,360
Speaker 13: they've made more money, the production, especially in North America

1016
00:50:03,920 --> 00:50:08,359
Speaker 13: and US specifically is down significantly. So the idea that

1017
00:50:09,320 --> 00:50:13,319
Speaker 13: the manufacturers kind of pay up for their earnings through

1018
00:50:13,440 --> 00:50:18,399
Speaker 13: these contract negotiations also has to include the idea that, hey,

1019
00:50:18,440 --> 00:50:20,759
Speaker 13: if we move to a smaller market, which is what

1020
00:50:20,920 --> 00:50:26,080
Speaker 13: has happened, and especially if electrification means fewer unit unit sales,

1021
00:50:26,880 --> 00:50:29,480
Speaker 13: as that volume declines, you have to have that flexibility

1022
00:50:29,520 --> 00:50:33,240
Speaker 13: to take out headcount or production capacity going forward.

1023
00:50:33,520 --> 00:50:35,839
Speaker 1: So there is a pretty big bit ass spread here.

1024
00:50:35,920 --> 00:50:39,480
Speaker 1: I mean, you know, the I guess the auto companies

1025
00:50:39,520 --> 00:50:41,360
Speaker 1: are talking about a twenty one percent increase, and I

1026
00:50:41,400 --> 00:50:46,080
Speaker 1: think the less proposal from the unions for something like

1027
00:50:46,160 --> 00:50:48,520
Speaker 1: thirty six percent. If you had to guess, I mean,

1028
00:50:48,920 --> 00:50:51,120
Speaker 1: do we just so simple split the difference or is

1029
00:50:51,160 --> 00:50:54,160
Speaker 1: there a level upon which when you have these big

1030
00:50:54,760 --> 00:50:57,719
Speaker 1: folks in Detroit look at Elon Musk and say I

1031
00:50:57,760 --> 00:50:59,960
Speaker 1: can't compete at thirty six percent increase.

1032
00:51:01,760 --> 00:51:03,400
Speaker 15: Yeah, that it is going to be difficult.

1033
00:51:03,400 --> 00:51:08,040
Speaker 13: But again, if they're that flexibility there is to adjust

1034
00:51:08,080 --> 00:51:11,959
Speaker 13: to a market that is, you know, fifteen million unit

1035
00:51:12,280 --> 00:51:15,319
Speaker 13: million units a year going forward, but at fifty two

1036
00:51:15,440 --> 00:51:19,480
Speaker 13: thousand dollars in an average transaction price, the revenue pool

1037
00:51:19,520 --> 00:51:23,520
Speaker 13: is actually larger even though the unit volume is down.

1038
00:51:23,560 --> 00:51:25,680
Speaker 13: So I think what you're going to see is the

1039
00:51:25,719 --> 00:51:28,239
Speaker 13: ability to pay up. You know. So if I had

1040
00:51:28,280 --> 00:51:30,520
Speaker 13: a bed, I would say that the likelihood is that

1041
00:51:30,640 --> 00:51:33,360
Speaker 13: the union gets closer to their number than what the

1042
00:51:33,560 --> 00:51:38,960
Speaker 13: manufactured is willing to give. But again that flexibility on

1043
00:51:39,000 --> 00:51:41,480
Speaker 13: the other side to say, yeah, if this is a

1044
00:51:41,520 --> 00:51:45,320
Speaker 13: fifteen and fifteen to sixteen million unit market going forward,

1045
00:51:45,320 --> 00:51:48,120
Speaker 13: where we're used to seventeen plus. You know, then we

1046
00:51:48,239 --> 00:51:51,399
Speaker 13: have to have the ability to close plants, take out

1047
00:51:51,440 --> 00:51:54,080
Speaker 13: some head count, and adjust to the market going forward.

1048
00:51:54,719 --> 00:51:57,280
Speaker 2: I mean, maybe they'll be able to give a huge

1049
00:51:57,440 --> 00:52:02,439
Speaker 2: raise in wages as cus forgetting that kind of flexibility

1050
00:52:02,480 --> 00:52:06,200
Speaker 2: from the UAW because you know, you hear numbers like

1051
00:52:06,239 --> 00:52:08,160
Speaker 2: twenty percent and you think that's probably going to break

1052
00:52:08,200 --> 00:52:11,919
Speaker 2: these automakers, but it's not because people don't realize how

1053
00:52:12,040 --> 00:52:16,040
Speaker 2: small percentage of the cost labor actually is, right.

1054
00:52:16,680 --> 00:52:20,360
Speaker 13: Right, And again, that twenty percent or forty percent or

1055
00:52:20,360 --> 00:52:22,560
Speaker 13: whatever it ends up being is over the four years

1056
00:52:22,600 --> 00:52:25,480
Speaker 13: of the contract, so it's not immediately all at once.

1057
00:52:26,719 --> 00:52:26,880
Speaker 7: You know.

1058
00:52:26,920 --> 00:52:27,920
Speaker 3: The other one is going to.

1059
00:52:27,840 --> 00:52:30,600
Speaker 13: Be the signing bonus for ratifying the deal, which would

1060
00:52:30,719 --> 00:52:34,200
Speaker 13: which would be a nice number. But really that's what

1061
00:52:34,280 --> 00:52:37,400
Speaker 13: the manufacturers have to give, is to give back some

1062
00:52:37,480 --> 00:52:40,360
Speaker 13: of that profitability they've earned over really the past decade

1063
00:52:40,760 --> 00:52:44,160
Speaker 13: or since the the you know, the bankruptcy period. That's

1064
00:52:44,160 --> 00:52:47,160
Speaker 13: what they're going to be able to do. But ultimately

1065
00:52:47,400 --> 00:52:51,799
Speaker 13: the idea of having too many workers or pensions and

1066
00:52:51,920 --> 00:52:55,879
Speaker 13: legacy costs going forward, that's where the manufacturers, that's where

1067
00:52:55,880 --> 00:52:58,120
Speaker 13: it would hurt them, not so much in the hourly

1068
00:52:59,120 --> 00:53:01,839
Speaker 13: increase in the way age going forward, because you can

1069
00:53:02,480 --> 00:53:05,760
Speaker 13: you can cut costs right, you can, you can increase revenue,

1070
00:53:05,800 --> 00:53:08,680
Speaker 13: you know, which is which is what's happening as mix

1071
00:53:08,760 --> 00:53:12,800
Speaker 13: shifts to truck from car or to electric from internal combustion.

1072
00:53:13,440 --> 00:53:15,359
Speaker 13: But you have to have the ability to right size

1073
00:53:15,360 --> 00:53:16,520
Speaker 13: your business going forward.

1074
00:53:17,200 --> 00:53:20,120
Speaker 1: So do you think I guess just the question I

1075
00:53:20,160 --> 00:53:23,400
Speaker 1: think I would guess if I were an investor considering,

1076
00:53:23,880 --> 00:53:25,799
Speaker 1: you know, any one of these auto companies is just

1077
00:53:26,080 --> 00:53:30,520
Speaker 1: do I think these companies can generate better, worse or

1078
00:53:30,520 --> 00:53:34,840
Speaker 1: the same returns in an electrified world versus internal combustion world.

1079
00:53:35,320 --> 00:53:36,279
Speaker 1: Did you have a view on that?

1080
00:53:37,400 --> 00:53:40,160
Speaker 13: Yeah, I mean, so far it looks like worse.

1081
00:53:40,680 --> 00:53:40,919
Speaker 5: Yep.

1082
00:53:41,560 --> 00:53:43,880
Speaker 13: And I think what we're starting to see is a

1083
00:53:43,920 --> 00:53:45,839
Speaker 13: little bit of pushback on that. You know, and I've

1084
00:53:45,880 --> 00:53:48,960
Speaker 13: been saying this for years, is that the US is

1085
00:53:49,000 --> 00:53:51,880
Speaker 13: behind an EV adoption out because the consumer does or

1086
00:53:51,920 --> 00:53:54,880
Speaker 13: doesn't want it, or it's expensive, or it's just not

1087
00:53:55,000 --> 00:53:58,759
Speaker 13: as profitable as the business that the manufacturers have been

1088
00:53:58,760 --> 00:54:01,560
Speaker 13: doing forever, which is an internal combustion.

1089
00:54:02,440 --> 00:54:05,560
Speaker 2: So then even if they get you know, if they

1090
00:54:05,600 --> 00:54:10,200
Speaker 2: get the development costs behind them, and I mean Tesla's

1091
00:54:10,239 --> 00:54:14,080
Speaker 2: running eighteen percent margins, right, so they're super profitable.

1092
00:54:15,160 --> 00:54:18,160
Speaker 13: Yeah, but you're talking about regulatory credit sales, you're talking

1093
00:54:18,200 --> 00:54:21,799
Speaker 13: about deferred revenue from full self driving, right, And when

1094
00:54:21,840 --> 00:54:25,000
Speaker 13: you look at their gross margins or you know, operating

1095
00:54:25,040 --> 00:54:29,719
Speaker 13: margins even you know they're not as profitable as they're

1096
00:54:29,760 --> 00:54:33,120
Speaker 13: not the most profitable in terms of margin of all

1097
00:54:33,160 --> 00:54:35,480
Speaker 13: the automakers either, Right, they're kind of middle of the

1098
00:54:35,520 --> 00:54:40,520
Speaker 13: pack when you adjust everybody onto the level playing field.

1099
00:54:39,920 --> 00:54:40,120
Speaker 7: You know.

1100
00:54:40,200 --> 00:54:43,200
Speaker 13: So the idea is that you know, you've had things

1101
00:54:43,239 --> 00:54:46,279
Speaker 13: over the years, right, the mixshift to truck from car,

1102
00:54:46,280 --> 00:54:49,160
Speaker 13: which I've been talking about for ten years, that's profitable

1103
00:54:49,160 --> 00:54:53,240
Speaker 13: on day one, right, and that's why that shift has happened.

1104
00:54:53,760 --> 00:54:56,759
Speaker 13: Now what you're looking for is when does this get profitable?

1105
00:54:56,800 --> 00:55:00,680
Speaker 13: Now I've been saying if you look at software and

1106
00:55:00,920 --> 00:55:04,520
Speaker 13: subscription and services, that's profitable on day one, and I

1107
00:55:04,600 --> 00:55:07,000
Speaker 13: think that's going to be your profit bridge going forward

1108
00:55:07,160 --> 00:55:12,440
Speaker 13: until the when if EV is as profitable as internal combustion.

1109
00:55:12,520 --> 00:55:13,880
Speaker 13: And I think that's why you're starting to see a

1110
00:55:13,880 --> 00:55:16,919
Speaker 13: little bit of a hedge in terms of why don't

1111
00:55:16,920 --> 00:55:19,359
Speaker 13: plug in hybrids make more sense? These days, and now

1112
00:55:19,360 --> 00:55:21,640
Speaker 13: we're starting to see some of that come into the market.

1113
00:55:21,960 --> 00:55:24,480
Speaker 13: Toyota Alexis been talking about it for a long time,

1114
00:55:25,880 --> 00:55:28,920
Speaker 13: you know, and even consumers I talk to are asking me, like,

1115
00:55:28,960 --> 00:55:30,800
Speaker 13: why isn't that more of a thing. We don't have

1116
00:55:30,840 --> 00:55:33,759
Speaker 13: to worry about charging infrastructure, We don't have as high

1117
00:55:33,800 --> 00:55:37,120
Speaker 13: a cost as a consumer. So I think the market's

1118
00:55:37,200 --> 00:55:41,280
Speaker 13: kind of taking a step back from from the singularity

1119
00:55:41,320 --> 00:55:44,880
Speaker 13: of either internal combustion or full battery electric to the

1120
00:55:44,960 --> 00:55:45,840
Speaker 13: steps in between.

1121
00:55:46,480 --> 00:55:48,799
Speaker 1: So, but Kevin, I know you're you know, as big

1122
00:55:48,880 --> 00:55:51,799
Speaker 1: or bigger card geek than Matt Miller here, can you

1123
00:55:51,840 --> 00:55:54,919
Speaker 1: tell me what is the demand out there? The real

1124
00:55:54,960 --> 00:55:57,640
Speaker 1: demand out there for EV's. Do people want them? Or

1125
00:55:57,640 --> 00:56:00,000
Speaker 1: do people feel like they're kind of being pushed upon them?

1126
00:56:00,239 --> 00:56:02,560
Speaker 5: I think shoved down their throat is a good way

1127
00:56:02,560 --> 00:56:02,920
Speaker 5: to put it.

1128
00:56:04,200 --> 00:56:07,800
Speaker 13: Well, Look, I mean I go a lot of places,

1129
00:56:07,800 --> 00:56:09,359
Speaker 13: and I talk to a lot of people, you know,

1130
00:56:09,440 --> 00:56:11,960
Speaker 13: and especially at the dealership level, and I have dealerships

1131
00:56:12,080 --> 00:56:14,080
Speaker 13: come to me all the time at these you know,

1132
00:56:14,120 --> 00:56:16,360
Speaker 13: I'll speak at a convention and I have people and

1133
00:56:16,440 --> 00:56:19,160
Speaker 13: I talk about the you know, the average transaction price

1134
00:56:19,239 --> 00:56:22,560
Speaker 13: relative to internal combustion. I have people, you know, from

1135
00:56:22,640 --> 00:56:24,959
Speaker 13: the middle of the country come to me and say, look,

1136
00:56:25,000 --> 00:56:27,880
Speaker 13: my dealership and isn't is in an area where you know,

1137
00:56:27,960 --> 00:56:32,120
Speaker 13: household income just can't afford fifty thousand dollars, never mind

1138
00:56:32,280 --> 00:56:35,759
Speaker 13: sixty sixty five thousand dollars for an EV So what

1139
00:56:36,239 --> 00:56:38,560
Speaker 13: are people supposed to do? So I think there is

1140
00:56:39,040 --> 00:56:40,919
Speaker 13: a little bit of that, but you know, look, I'm

1141
00:56:41,000 --> 00:56:46,280
Speaker 13: one that says the consumer will go where the manufacturers

1142
00:56:46,360 --> 00:56:49,480
Speaker 13: need them to go, because they're the ones producing the vehicles.

1143
00:56:49,719 --> 00:56:53,120
Speaker 13: Right if if we had manufacturers who didn't care about

1144
00:56:53,160 --> 00:56:57,759
Speaker 13: profitability or you know, thought that the idea was to

1145
00:56:57,800 --> 00:57:01,560
Speaker 13: move to electric even if it were on profitable, you know,

1146
00:57:01,640 --> 00:57:03,120
Speaker 13: that's what consumers would get.

1147
00:57:03,360 --> 00:57:04,359
Speaker 15: So right now in.

1148
00:57:04,239 --> 00:57:08,400
Speaker 13: This country, if the government isn't penalizing the manufacturers or

1149
00:57:08,440 --> 00:57:12,480
Speaker 13: subsidizing them, and it falls to where profitability is best,

1150
00:57:12,880 --> 00:57:15,600
Speaker 13: that's what automakers are chasing right now. So from the

1151
00:57:15,640 --> 00:57:19,080
Speaker 13: consumer's perspective, it almost doesn't matter what they want or

1152
00:57:19,080 --> 00:57:22,480
Speaker 13: what they prefer. They can't buy what a manufacturer doesn't build,

1153
00:57:22,840 --> 00:57:25,440
Speaker 13: and a manufacturer is not building what's not profitable.

1154
00:57:26,040 --> 00:57:28,600
Speaker 2: I got to I'm going to go somewhere else real quick.

1155
00:57:29,120 --> 00:57:32,640
Speaker 2: So I had a truck that had some problems and

1156
00:57:33,440 --> 00:57:36,200
Speaker 2: there was a catastrophic event not of my doing, right,

1157
00:57:36,480 --> 00:57:38,640
Speaker 2: And a dealer friend of mine said, ah, you got

1158
00:57:38,640 --> 00:57:39,400
Speaker 2: a Monday truck.

1159
00:57:40,040 --> 00:57:40,520
Speaker 5: So what's that?

1160
00:57:40,680 --> 00:57:43,400
Speaker 2: He said, Well, this is probably built on a Monday

1161
00:57:43,440 --> 00:57:46,240
Speaker 2: when everybody came in hungover and wasn't paying as much attention.

1162
00:57:47,040 --> 00:57:49,040
Speaker 2: Now I pushed back a little and I say, I've

1163
00:57:49,080 --> 00:57:51,400
Speaker 2: met a lot of people on production lines at many

1164
00:57:51,440 --> 00:57:56,640
Speaker 2: different brands, and they tend to be responsible adults, professionals

1165
00:57:56,640 --> 00:57:58,800
Speaker 2: who take pride in their work. So I don't really

1166
00:57:58,800 --> 00:58:01,440
Speaker 2: buy that as much. But I just got my Challenger built.

1167
00:58:01,480 --> 00:58:05,040
Speaker 2: I just got an email. Nice my Dodge Challenger Artie

1168
00:58:05,080 --> 00:58:08,560
Speaker 2: scatpack wide body in fate Green has been built up

1169
00:58:08,600 --> 00:58:11,000
Speaker 2: in Canada and I put it on. I'm so excited

1170
00:58:11,000 --> 00:58:13,080
Speaker 2: to put it on the Challenger for them. And they said, Man,

1171
00:58:13,120 --> 00:58:15,000
Speaker 2: you don't want to buy a car around these strikes.

1172
00:58:15,080 --> 00:58:18,080
Speaker 2: Everybody's in a bad mood. You maybe they're knocking back

1173
00:58:18,120 --> 00:58:20,600
Speaker 2: some beers before work. What do you buy any of

1174
00:58:20,600 --> 00:58:23,760
Speaker 2: that kind of mythology around the wrong time to buy

1175
00:58:23,800 --> 00:58:24,920
Speaker 2: a car or get a car built.

1176
00:58:25,880 --> 00:58:26,080
Speaker 7: You know.

1177
00:58:26,200 --> 00:58:29,600
Speaker 13: Look, I would say there was a period through the pandemic.

1178
00:58:30,080 --> 00:58:32,919
Speaker 13: My son and I he's also a big car guy.

1179
00:58:33,000 --> 00:58:35,200
Speaker 13: We talk about that, like we wouldn't buy a twenty

1180
00:58:35,240 --> 00:58:37,800
Speaker 13: twenty model a year or you know, and I'm not.

1181
00:58:38,560 --> 00:58:42,000
Speaker 13: And look, the whole chip shortage thing, not that it

1182
00:58:42,040 --> 00:58:46,040
Speaker 13: wasn't real, but you know, look, there was issues where

1183
00:58:46,240 --> 00:58:49,480
Speaker 13: vehicles had to be de contented because you just didn't

1184
00:58:49,560 --> 00:58:55,160
Speaker 13: have the chips right, or you know, features or options

1185
00:58:55,200 --> 00:58:58,080
Speaker 13: were just lower just because you're putting if there is

1186
00:58:58,120 --> 00:58:59,960
Speaker 13: a finite amount of chips, you're putting them in your

1187
00:59:00,080 --> 00:59:04,000
Speaker 13: high end vehicles, you know, and then some content gets

1188
00:59:04,080 --> 00:59:07,240
Speaker 13: left off of everything else in the portfolio. So I

1189
00:59:07,240 --> 00:59:11,200
Speaker 13: think there's more that than the actual worker saying, you know,

1190
00:59:11,400 --> 00:59:15,320
Speaker 13: it's Monday, I don't feel like doing this. Well, but yeah,

1191
00:59:15,400 --> 00:59:18,440
Speaker 13: I mean there's there's periods. Look, and I think the

1192
00:59:18,520 --> 00:59:22,040
Speaker 13: other one to note is, you know, I started talking

1193
00:59:22,080 --> 00:59:26,160
Speaker 13: about bankruptcy being inevitable in two thousand and five. You know,

1194
00:59:26,240 --> 00:59:29,480
Speaker 13: so automakers see that now investment kind of stops, right,

1195
00:59:29,520 --> 00:59:32,080
Speaker 13: you get in defensive, like let's save some cash. So

1196
00:59:32,480 --> 00:59:37,120
Speaker 13: you know, for me, that period from five into through

1197
00:59:37,120 --> 00:59:40,360
Speaker 13: the bankruptcy is you know, there wasn't a good investment.

1198
00:59:40,040 --> 00:59:42,560
Speaker 1: Happening all right, Kevin. Thanks as always, Kevin Tyne and

1199
00:59:42,600 --> 00:59:44,560
Speaker 1: senior automotive analysts for Bloomberg Intelligence.

1200
00:59:45,400 --> 00:59:48,520
Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can

1201
00:59:48,560 --> 00:59:52,680
Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever.

1202
00:59:52,400 --> 00:59:55,080
Speaker 5: Podcast platform you prefer. I'm Matt Miller.

1203
00:59:55,360 --> 00:59:58,240
Speaker 2: I'm on Twitter at Matt Miller nineteen seventy three.

1204
00:59:58,720 --> 01:00:01,160
Speaker 1: And I'm fall Sweeney. I'm on Twitter at pt Sweeney.

1205
01:00:01,200 --> 01:00:03,840
Speaker 1: Before the podcast, you can always catch us worldwide at

1206
01:00:03,880 --> 01:00:04,640
Speaker 1: Bloomberg Radio