Speaker 1: This is Bloomberg Business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news as it happened. Bloomberg
Speaker 1: Business Week with Carol Messier and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. A double issue this week
Speaker 1: as we head toward the Thanksgiving holiday, and a significant
Speaker 1: portion of the issue dedicated to something that is definitely
Speaker 1: on the minds of investors and consumers alike. Tim, we're
Speaker 1: talking about inflation. Special report on the impact of these
Speaker 1: rising costs and how they compare to the stagflation era
Speaker 1: of the nineteen seventies and what we can expect in
Speaker 1: the months and years ahead after a generation of relatively
Speaker 1: stable pricing. We're also going to examine the potential ripple
Speaker 1: effect on fiscal and monetary policy. Ahead this hour, we'll
Speaker 1: take you through the rise and fall of an aviation
Speaker 1: giant and the corporate arrogance that led to a pair
Speaker 1: of fatal Boeing seven thirty seven Max crashes. Will also
Speaker 1: explore different sort of tragedy that befell the Gucci Clan
Speaker 1: fashion sign ma Rizio Gucci's decision to leave his wife
Speaker 1: led to his murder, and the woman he wanted to
Speaker 1: be with instead shares her side of the story for
Speaker 1: the first time. This on the eve of a major
Speaker 1: motion picture release about the family's troubled history, and you'll
Speaker 1: hear from a pair of CEOs, the CEOs of Sonus
Speaker 1: and Wheels Up join us to talk earnings, supply chain constraints,
Speaker 1: and the fight for talent and Go Goes drummer Gina
Speaker 1: Shock presents an all access look at the legendary girl
Speaker 1: band's wild ride to the Rock and Roll Hall of Fame.
Speaker 1: We got to beat this week, all of that to come.
Speaker 1: We begin, though, by welcoming our editor of a Bloomberg
Speaker 1: Business Week magazine, Joel Webber. Hey, Joel, As we mentioned
Speaker 1: this week's double issue, highlighting a special report on inflation,
Speaker 1: it is back. Tell us though, how it all came together,
Speaker 1: and I gotta tell you the cover, tell us what
Speaker 1: was behind that? Thinking as well? Yeah, so you know,
Speaker 1: thinking about the Thanksgiving here. This does feel like it's
Speaker 1: going to be the topic that everyone talks about around
Speaker 1: the Thanksgiving table, because you know, one of those themes
Speaker 1: in in finance for for years now has been what
Speaker 1: happened to inflation? And actually just a couple of years
Speaker 1: ago we did a cover story that was like, is
Speaker 1: inflation dead? And now it's not. It's back and everyone
Speaker 1: wants to know how bad is it? Um? But because
Speaker 1: of the echoes from the you know, the late seventies
Speaker 1: and early eighties, that informs sort of the visual iconography
Speaker 1: that we used throughout the package and on the cover
Speaker 1: where it has sort of a Ghostbusters Poultrygeist theme with
Speaker 1: the big inflation, Um, it's back. The fear is real,
Speaker 1: but as we also establish, you know, the monster might
Speaker 1: not end up being quite as bad as as I
Speaker 1: think we're hearing a lot. So so that informed exactly
Speaker 1: how we kind of approached the package. Once we saw
Speaker 1: those CPI numbers that we could go, we just stopped
Speaker 1: everything we had in the works and that let's let's
Speaker 1: hone in on this and really talk about what it
Speaker 1: means for investors, consumers, companies. And so we put this
Speaker 1: pactice together kind of look at all of those things
Speaker 1: and what does it mean for From Washington, d C.
Speaker 1: The politics of inflation, Josh Green has a piece out
Speaker 1: that really says there's not a lot that Joe Biden
Speaker 1: can actually do to tame inflation, but voters are are
Speaker 1: going to blame him regardless. It's really a conundrum for
Speaker 1: for anybody in the executive branch because there's so little
Speaker 1: that um the president can actually do. And obviously, the
Speaker 1: the historical example of this that we also talked about
Speaker 1: in the package is the Jimmy Carter moment, right where
Speaker 1: every everything went wrong on for Jimmy Carter between Iran,
Speaker 1: the you know, the the pinches that consumers felt were
Speaker 1: really the thing that probably brought Reagan um into power.
Speaker 1: And so Biden is stuck in the same conundrum really
Speaker 1: that was very similar there where he does not have
Speaker 1: that many levers at his disposal, and Republicans we already
Speaker 1: know heading into mid term inflation will be a thing
Speaker 1: that they paint all over Biden. And I just want
Speaker 1: to squeeze in one last story first of all, because
Speaker 1: I love seeing Jim Ellis back in the nineteen eighties,
Speaker 1: uh and a picture of him with his little kids.
Speaker 1: It's adorable, but it's so real, like it reminds us
Speaker 1: of somebody, you know. When it comes down to it.
Speaker 1: It's what we're paying for things, right, well, Americans, what
Speaker 1: it costs to fill up at the pump and stuff.
Speaker 1: And Jim takes us back there and he remembers it
Speaker 1: really well when raiths were so high. Yeah, Jim Melis
Speaker 1: has done with the magazine for actually four years and
Speaker 1: uh he this goes back to when he was actually
Speaker 1: made bureau chief in Atlanta in the early eighties. So
Speaker 1: he gets transferred down there, and then the mortgage that
Speaker 1: he gets is fourteen and a half percent, and he,
Speaker 1: you know, he gets a two percentage point cut when
Speaker 1: mcdraw hill, who owned Business Week at the time, helped
Speaker 1: make it a little bit more palatable. But boy, you know,
Speaker 1: he goes through how how painful it was to suddenly
Speaker 1: have a mortgage rate be that high. I mean, it's
Speaker 1: just unfathomable now when you know we're looking at three
Speaker 1: percent rates feel even thirty year fixed mortgage, right three. Yeah.
Speaker 1: The other thing the legacy here that Jim connects it
Speaker 1: back to is now that he's an older American, inflation
Speaker 1: is really gonna hurt seniors because they're the ones who
Speaker 1: are living on closer to six incomes and and so
Speaker 1: you know, kind of was this thing that when he
Speaker 1: was a young man and now an older man, you know,
Speaker 1: you just can't escape in place. Hey Joel, uh, well
Speaker 1: we have you. We are talking rising prices though, but
Speaker 1: we also want to talk about shares of Ribbean since
Speaker 1: it's I p O and the rising prices were rising
Speaker 1: stock prices, right, we don't that's that's the thing. In
Speaker 1: the dex section, Bloomberg News editor in chief Emeritus Matt
Speaker 1: Winkler explains why this company is one D thirty billion
Speaker 1: dollar valuation and the absence of any actual sales is
Speaker 1: the ultimate validation of Tesla and the e V business. Yeah,
Speaker 1: so this is I found an interesting story because as
Speaker 1: we've seen, Ribbyan just absolutely pop since it's I p O. Uh,
Speaker 1: you know, it actually ends up and that's not right.
Speaker 1: It validates Tesla. Tesla has been out here for ten years,
Speaker 1: and you know, the assignment came from basically like, how
Speaker 1: did Tesla compare when I PO to Ribbyan's IPO. And
Speaker 1: one of the biggest things was that actually, at the
Speaker 1: moment that Tesla IPO and people forget this, they actually
Speaker 1: had product that was generating revenue. Obviously, Ribban a different
Speaker 1: story in that matter. But because of you know, the
Speaker 1: backing of companies like an Amazon having a huge steak
Speaker 1: and Ford it's sort of uh and the fact that
Speaker 1: they're looking at product lines that Tesla has not yet
Speaker 1: quite been in. There's a lot of euphoria for really,
Speaker 1: and that investors who felt like they may be missed
Speaker 1: down on Tesla, here's another chance to get in the game.
Speaker 1: All right, Well, that's a great story. And there's another
Speaker 1: one by Claire Setteth on childcare, the most broken business
Speaker 1: in America. So definitely check out the issue on newsstands, online,
Speaker 1: and of course on the Bloomberg Joel, thank you so much.
Speaker 1: Have a great weekend our thanks to Business Week editor
Speaker 1: Joel Weber joining us with a look of this week's
Speaker 1: double issue and coming up next, an American media powerhouse
Speaker 1: is igniting a startup spark within its vast portfolio of businesses.
Speaker 1: How Comcast NBC Universals bring a new wave of entrepreneurs
Speaker 1: into the fold. You're listening to Bloomberg business Week some
Speaker 1: trends when it comes to media. That's coming up next.
Speaker 1: This is Bloomberg. This is Bloomberg. Bus to this week
Speaker 1: with Carol Messer and Bloomberg Quick Takes Tim Stinovic from
Speaker 1: Bloomberg Radio. Comcast NBC Universal recently announced its fourth Lift
Speaker 1: Labs Accelerated class. If you're not familiar, well, the initiative
Speaker 1: identifies and funds early stage companies that are innovating in
Speaker 1: the digital content and connectivity space. It's part of the
Speaker 1: mass media and entertainment giants effort to capture and nurture
Speaker 1: that startups spark within its own portfolio of businesses. It
Speaker 1: also helps aspiring entrepreneurs to refine their processes and scale faster,
Speaker 1: putting themselves in a position to provide solutions to partner needs.
Speaker 1: It's really cool stuff, to be quite honest him. It's
Speaker 1: about the startups, where contents going, and Comcast wants a
Speaker 1: view into all of that. Daniel Cohne is VP of
Speaker 1: Startup Engagement over at Comcast NBC Universal. Her team fits
Speaker 1: within the Conglomerate Strategic Development Unit. Her goal, well, it's
Speaker 1: all about discovering and cultivating talent that she says is
Speaker 1: quote inventing the future. Yeah, so I'm just for a
Speaker 1: little of a little contact. Startup Engagement, which includes less
Speaker 1: Labs and sports Teck at Comcast NBCU we sit within
Speaker 1: strategic development, which essentially provides an early lens for for
Speaker 1: future growth areas in our company, UM and we bring
Speaker 1: together all parts of our company, Comcast, NBC, Universal, Park, Picture, Sky,
Speaker 1: and our broader family of brands to work side by
Speaker 1: side with strategically aligned global startups UM and it's really
Speaker 1: to drive a startup mindset back into our already innovative business,
Speaker 1: to develop new startup partnerships at the earliest stage with
Speaker 1: companies that are inventing the future, making customers and employees
Speaker 1: lives better. And ultimately those are the people who are
Speaker 1: also making an impact in startup communities in which we
Speaker 1: all live and work UM. The common thread is that
Speaker 1: through these programs and collaborations, we're all kind of spotting
Speaker 1: that potential disruption, emerging technologies, the new platforms, edge opportunities,
Speaker 1: and and all together startups and our ts are gaining
Speaker 1: valuable insights and efficiencies along. So what does that mean
Speaker 1: That every company that participates in the Lift Labs accelerator
Speaker 1: gets an investment from Comcast, So every company and inter accelerators,
Speaker 1: they do get an investment UM. But beyond the investment,
Speaker 1: it's really about building the partnership with these early stage
Speaker 1: companies that are working in media, entertainment, connectivity, or sports.
Speaker 1: Some are at the earliest stage, their steed stage companies,
Speaker 1: and then we actually have programs like lift Off their
Speaker 1: for enterprise ready startups, and our team really helps them
Speaker 1: to get enterprise ready. We help them with business development,
Speaker 1: go to market strategy, how to pitch UH investors. In
Speaker 1: some cases it's even you know, how to deal with
Speaker 1: hr issues that they're having as they build their their
Speaker 1: teams at the earliest stage. I was reading about what
Speaker 1: you guys are up to. It reminded me a few
Speaker 1: years ago I did a story with Johnson and Johnson.
Speaker 1: They something called j Labs out on the West Coast
Speaker 1: and it's basically an olerator biotech incubator, and it's just
Speaker 1: a space where companies individuals who are creating things in
Speaker 1: the healthcare science space, medicine space come in get a
Speaker 1: little spot there, but can work with the company, really
Speaker 1: tap into the expertise and equipment of J and J.
Speaker 1: But it gives J and J a window into the
Speaker 1: future and an ability to invest in it. And it
Speaker 1: sounds like that's what you guys are doing on the
Speaker 1: media space. I love talking about this because it gives
Speaker 1: you an idea of maybe what are going to be
Speaker 1: the trends, the technologies, UH content and so on and
Speaker 1: so forth, media, how we consume it going forward? What
Speaker 1: should we be thinking about, um, Danielle when we kind
Speaker 1: of open up our eyes in terms of where this
Speaker 1: is all going. And I know the folks that j
Speaker 1: labs and they do an amazing job, and we are
Speaker 1: we are similar in in our approach. UM. You know,
Speaker 1: the focus areas for us change all the time because
Speaker 1: they are based on trends that we're seeing both insider
Speaker 1: company and outside. UM. We've recently concluded at our our
Speaker 1: fourth program. As you mentioned, we had a demo day
Speaker 1: a couple of weeks ago, and the two primary trends
Speaker 1: that we saw last year that led to this year's class.
Speaker 1: One was in the future of work, a reoccurring theme
Speaker 1: that everyone every listener is feeling. UM. You know, really
Speaker 1: if you think about hybrid work collaboration tools. So we've
Speaker 1: got a bunch of companies that came through last year's
Speaker 1: class in this year's class. UH company called the Guiche
Speaker 1: from Israel as a mobile app that allows people who
Speaker 1: are deaf and hard of hearing to communicate via phone
Speaker 1: by converting speech to text and text to speech faster
Speaker 1: and more accurately than ever before. Our team's actually using
Speaker 1: them for for doing interviews with people who are hard
Speaker 1: of hearing. Another company think Confluent out of Paris as
Speaker 1: an AI assistant that can analyze free form, open ended
Speaker 1: survey questions that we've all done from employee surveys and
Speaker 1: get sentiment analysis what did someone mean by what they said?
Speaker 1: In second and out of Philadelphia headquarters, they employee Cycle,
Speaker 1: which curates multiple HR tools into one dashboard, making it
Speaker 1: really easier for businesses of all sizes to understand their
Speaker 1: employees concerns and what's going well you were talking about
Speaker 1: or you wanted to mention another theme that you guys
Speaker 1: have been focusing on take it away, Yeah, absolutely, UM.
Speaker 1: As you know, as an innovation company, we're always challenging
Speaker 1: the status quo and looking at new focus areas, and
Speaker 1: our our team is just you know, one part of
Speaker 1: the company's cross company collaborative innovation strategy. And one of
Speaker 1: the themes that came up this year that really stood
Speaker 1: out was interactive and immersive experiences. UM. We're really inspired
Speaker 1: by the creativity of the startups and their enthusiasm and
Speaker 1: building and launching and scaling these very novel solutions like
Speaker 1: Helodia UM, which is a fitness tech company that creates
Speaker 1: incredible VR experiences to enhance your workout at home or
Speaker 1: in the office. I tried it. It's in our fitness
Speaker 1: center at the Comcast Technology Center and it is out
Speaker 1: of this world. And another our company called Zoo, which
Speaker 1: makes it more engaging for grandparents and parents and their
Speaker 1: kids to stay in touch through augmented reality storytelling. And
Speaker 1: those are just two of the themes. We generally have
Speaker 1: about five themes for the year when we start to
Speaker 1: scout for startups UM and you know, over the years
Speaker 1: we have had a real proven track record. We now
Speaker 1: have about fifty companies in our portfolio that have gone
Speaker 1: on to to raise millions. All right, so Tim and
Speaker 1: I are dying to ask you metaverse, how is that
Speaker 1: playing in thinking or interest when or are some of
Speaker 1: the companies that are working uh uh in the accelerator. Yeah? Absolutely,
Speaker 1: I mean I think one of the companies that I mentioned, Helodia,
Speaker 1: is really about immersive experiences and uh, I'm not someone
Speaker 1: who loves to work out and I tried a rowing
Speaker 1: machine for the first time, not alone in that. I'm
Speaker 1: just going to tell you you're not alone. Well try Helodia,
Speaker 1: because I worked out for thirty minutes and I do
Speaker 1: it not realized I had worked out, and I was
Speaker 1: so in awe of the visual and what was happening
Speaker 1: around me. Is it a headset? You know? It's so
Speaker 1: you use a a VR headset, you'll use an oculust,
Speaker 1: but it's sort of agnostic. You can use it with
Speaker 1: any machine. But the more you row, the greater the
Speaker 1: visual experiences. And it made me work out. That was
Speaker 1: Danielle Cone, vice president of startup Engagement at Comcast NBC Universal.
Speaker 1: Still ahead on Bloomberg Business Week, we go from Lift
Speaker 1: Labs to Lift Off, the CEO of Wheels up stops
Speaker 1: by the talk earnings and surprise supply chain trouble. Even
Speaker 1: the private jet industry cannot avoid it. Plus how the
Speaker 1: company is providing incentives to its pilots to keep them
Speaker 1: out of commercial cockpits. This is Bloomberg broadcasting from the
Speaker 1: financial capital of the world, Bloomberg Eleve in Rio in
Speaker 1: New York to Washington, d C. Bloomberg to Boston Bloomberg
Speaker 1: one oh six one does San Francisco, Bloomberg nine six
Speaker 1: to the country, Sirius XM Chamber, and around the globe,
Speaker 1: the Bloomberg Business and Bloomberg Radio dot Com. This is
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes.
Speaker 1: Tim Stinovin on Bloomberg Radio Product claims Tim, it definitely
Speaker 1: felt like it was a luxury that grew into a
Speaker 1: necessity at least for some during the height of the
Speaker 1: COVID nineteam, I mean I feel like luxuries understatement, right,
Speaker 1: this type of flying makes first class look like a
Speaker 1: bargain basement price. I know, listen, perspective, perspective here, folks
Speaker 1: supply jain worries. Though cost pressures are weighing on the
Speaker 1: outlook for wheels Up. It's a business that our next guest, though,
Speaker 1: believes it's still poised for significant growth. He definitely does.
Speaker 1: Kenny Dictor is the founder, chairman, and CEO of wheels Up.
Speaker 1: It's a publicly held private chartering company that reported earnings recently,
Speaker 1: posting a quarterly net loss of fifty nine and a
Speaker 1: half million dollars against a profit more than twenty million
Speaker 1: one year ago, shareholders looked past the fifty year over
Speaker 1: year revenue increase that brought in a company record at
Speaker 1: three million dollars. These are figures that dictor X spects
Speaker 1: to continue as share prices try to bounce back from
Speaker 1: one lows. First up, though, dealing with today's bottlenecks supply
Speaker 1: chain constraints definitely making it more expensive for us to
Speaker 1: deliver for our membership and over deliver for our membership.
Speaker 1: So short term pain here, but I think in the
Speaker 1: long run, this has been just a super supermarket for UH,
Speaker 1: for private aviation, and we see the demand really coming
Speaker 1: strong for you know, an extended period of time. You know,
Speaker 1: a friend of my husband and I well known in
Speaker 1: the airline industry and UH he and his wife both
Speaker 1: are and they've talked about though some of the shortages
Speaker 1: in constraints, whether it's pilots and workers coming back, that's
Speaker 1: some of what you guys experienced as well. Yeah, I mean,
Speaker 1: you know, you have this historic demand level that our
Speaker 1: industry is seeing. In the private aviation side, I think
Speaker 1: the supply chain, third party maintenance. You know, when a
Speaker 1: plane goes down a O g UH, it needs to
Speaker 1: be fixed that return to service time is critical. It's
Speaker 1: a little bit slower than it's been historically pilots as
Speaker 1: the commercial airlines are schooling back up. There's a movement
Speaker 1: around where again, I think that the industry is kind
Speaker 1: of finding its footing as it relates to the cost.
Speaker 1: I think they're they're temporary and transitory in nature for
Speaker 1: the most part. I think from a wheels up perspective,
Speaker 1: we're now giving our pilots equity. We rang the bell
Speaker 1: of the New York Stock Exchange uh July four team
Speaker 1: this year, So our pilots are all our partners now.
Speaker 1: So I think we have a really differentiated program to
Speaker 1: be able to attract the pilots and and keep them
Speaker 1: and again their partners in the business. Hey, Kenny, what
Speaker 1: can you tell us about demand and the way that
Speaker 1: demand has shifted during the pandemic Because this your business
Speaker 1: was around before the pandemic. You know, I've spoken many
Speaker 1: times before. How how did demand shift during the pandemic
Speaker 1: and how do we know that that demand will be
Speaker 1: uh long lasting, that that demand won't be transitory once
Speaker 1: the pandemic is over. Yeah. Well, going into the pandemic,
Speaker 1: our our industry was ramping up the convenience of flying privately. Uh,
Speaker 1: the idea of it you can get from A to
Speaker 1: B to see in one night and still be home
Speaker 1: for dinner. All of that was in play. I think
Speaker 1: technology is the big unlock here. You know, we partnered
Speaker 1: with a couple of former Amazon executives. Greg Realley was
Speaker 1: our chairman of Marketplace and Vanyak head Day, who's now
Speaker 1: our president. Uh. Technology is the big unlock in this space.
Speaker 1: You think about what Open table did for restaurants and
Speaker 1: what Hotel Tonight did for a real time availability in
Speaker 1: the hotel space. You know, nobody has endeavored to become
Speaker 1: the Amazon or the the Uber or the Airbnb of
Speaker 1: the private aviation space. And there's just so much latent
Speaker 1: capacity out there in the airframes. Like Travis Klinik and
Speaker 1: Garrett camp Will figured out that the American car was
Speaker 1: parked twenty three hours and thirty minutes a day. Uh,
Speaker 1: the average business jets parked twenty three hours and forty
Speaker 1: minutes a day. Well yeah right, and think about you
Speaker 1: know that's there. You're losing money just sitting there. Um.
Speaker 1: But I'm wondering, though, I want to go back to
Speaker 1: Kenny if I may the cost equation and the cost
Speaker 1: sight of your business. Total costs and expenses. We're up
Speaker 1: a year over year three sevent million dollars. We talked
Speaker 1: about you know, you guys are having to pay up
Speaker 1: to retain those pilots along with crew. Does that continue
Speaker 1: or how long does that continue into next year? Well,
Speaker 1: I would say the pricing. We have pricing power. Our
Speaker 1: industry has pricing power. We took very gently. We took
Speaker 1: eight on our entry level, the King Air and the
Speaker 1: light jet program. Uh, people will pay more now. We
Speaker 1: have a membership model I think Amazon Prime, think Costco,
Speaker 1: and we want to make sure that our members feel
Speaker 1: like that membership has a lot of value. And I
Speaker 1: would save it the wheels up membership today because of
Speaker 1: our availability and because of our willingness to take care
Speaker 1: of our members in this environment where prices are going up.
Speaker 1: We just want to be super gentle because we know
Speaker 1: how valuable these folks are lifetime value. And uh, again,
Speaker 1: if we took a short term approach, or we were
Speaker 1: a you know, sort of a charter broker or or
Speaker 1: somebody that was doing this one off, we couldn't take
Speaker 1: this long term approach. But we really believe in the
Speaker 1: lifetime value of our membership. That's Kenny Dickter. He's the founder,
Speaker 1: chairman and CEO of private aviation firm Wheels Up. You're
Speaker 1: listening to Bloomberg Business Week. Up next week turn our
Speaker 1: attention from private aviation to the commercial jet industry and
Speaker 1: a much larger company with much larger problems. We're going
Speaker 1: to talk with Bloomberg News Projects and Investigations reporter Peter
Speaker 1: Robison about truly an incredible new book that he's written.
Speaker 1: The title is Flying Blind Then Max Tragedy and the
Speaker 1: fallow Boeing How cost cutting in corporate arrogance at the
Speaker 1: world's largest planemaker led to tragedy in the air and
Speaker 1: a disaster for the company. This is Bloomberg. You're listening
Speaker 1: to Bloomberg Business Week with Carol Messer Bloomberg Quick Takes
Speaker 1: Tim Stinovik from Bloomberg Radio. It was a Bloomberg Big
Speaker 1: Take from the past week. One of our most read
Speaker 1: stories on the Bloomberg when it hit. It's also featured
Speaker 1: in the double issue of Business Week magazine, A chilling
Speaker 1: look inside the aviation giant Boeing. It is packed with details.
Speaker 1: It reads like fiction but we know Tim, it's reality. Yeah,
Speaker 1: a series of tragedies that certainly our listeners are familiar with,
Speaker 1: but new information about a series of missteps and oversights
Speaker 1: that would lead to a pair of major air disasters
Speaker 1: involving its prize seven thirty seven Max jet. The result
Speaker 1: was hundreds of lives lost and lasting reputational damage to
Speaker 1: the world's biggest planemaker. Well. The story is excerpted from
Speaker 1: a new book by Bloomberg News Projects and Investigations reporter
Speaker 1: Peter Robison. It is called Flying Blind, The seven seven
Speaker 1: Max Tragedy and the Fall of Boeing out November. It's
Speaker 1: definitely must read. Peter joined us to provide some important
Speaker 1: context to the piece, and Bloomberg business Week editor Joel
Speaker 1: Webber explained how we chose to feature it in the magazine.
Speaker 1: You know, there's been so much troubling stuff in the
Speaker 1: world over the past couple of years, but if you
Speaker 1: rewind the clock to the before times, this was sort
Speaker 1: of the most troubling big corporate story of that moment
Speaker 1: was when the seven three seven Max started falling out
Speaker 1: of this guy, and it literally felt like, you know,
Speaker 1: here at Bloomberg even like people were looking at what
Speaker 1: planes they were going to be getting on, and people
Speaker 1: were just like, we're not getting on seven thirty seven
Speaker 1: Maxes anymore. Um. And you know, even before that, that
Speaker 1: was basically because of the second incident, which was uh
Speaker 1: a flight that was in Africa, This one that Peter's
Speaker 1: excerpts based on, it was the one in Indonesia that
Speaker 1: really set off all the alarm bells. But as Peter's
Speaker 1: excerpt reveals, this is the time between the Indonesian crash
Speaker 1: and the subsequent one, and it shows this really alarming
Speaker 1: uh conversation or maybe lack of conversation between Boeing and pilots,
Speaker 1: And that was just a deeply fascinating area for me
Speaker 1: as I started reading it. We were just talking about this.
Speaker 1: The extrapt reads like the very very very best storytelling
Speaker 1: you can possibly imagine. It just literally grips you and
Speaker 1: you can't look away from it. So uh, that's why
Speaker 1: we excerpt it. Um, Peter, can you just rewind the
Speaker 1: clock a little bit and and talk to us about, um,
Speaker 1: what you knew going into this book and then what
Speaker 1: you what you learned. Well, I had a long history
Speaker 1: with Boeing because I was the beat reporter on Boeing
Speaker 1: from two thousand two for Bloomberg, and that was a
Speaker 1: period when Boeing was really flying high. It um what
Speaker 1: had about two thirds of the commercial market, and it
Speaker 1: just bought its main competitor McDonald douglas UM. But but
Speaker 1: there were really troubling signs because it also had made
Speaker 1: this self conscious shift to focus more on shareholders. And
Speaker 1: that was also the period when Boeing moved its headquarters
Speaker 1: to Chicago, and that the news release actually explicitly said
Speaker 1: that it wanted to create a leaner corporate center based
Speaker 1: on shareholder value UM. And I know it might seem
Speaker 1: strange to to focus so much on something from twenty
Speaker 1: years ago, but the aircraft industry is such a long
Speaker 1: running industry. The MAX was in development for ten years,
Speaker 1: but in that time the MAX was in development, Boeing
Speaker 1: was returning of its free cash to shareholders. So so
Speaker 1: what was happening was that the improvements that the engineers
Speaker 1: wanted to make to the plane. UH, there was a
Speaker 1: proposal for more sophisticated flight controls that might have prevented
Speaker 1: this tragedy just weren't being made. UM. So, so when
Speaker 1: I came back to this story, I remembered, especially the
Speaker 1: concerns that engineers had. They went on a forty day
Speaker 1: strike in two thousand and it wasn't primarily over wages
Speaker 1: and benefits. It was primarily over company strategy. They said
Speaker 1: at the time that that Boeing was was not making
Speaker 1: the changes needed to compete and and was going to
Speaker 1: suffer and and so I I just felt duty bound
Speaker 1: to to to dig in deeply and try to understand
Speaker 1: what had happened. How much of it, too, was people
Speaker 1: internally saying things and senior management just not listening that
Speaker 1: that's a really good way of describing it. There there
Speaker 1: there were warning signs there. Senior management was being told.
Speaker 1: There's there's an extended scene in in this story where
Speaker 1: pilots are explicitly asking Bowing to ground the plane, telling
Speaker 1: them that they themselves could not have flown the plane
Speaker 1: in those situations, but senior management didn't listen to it. Peter,
Speaker 1: was there a moment where pilots and their interactions with
Speaker 1: kind of the corporate culture at Boeing like it changed dramatically.
Speaker 1: That's that's something else that changed over time. When I
Speaker 1: started covering the company. Uh, there was a group of
Speaker 1: pilots who are the trainer pilots who go out and
Speaker 1: UH talk to pilots at airlines. They fly on the
Speaker 1: line with them. They understand how pilots react to Boeing's designs. UM.
Speaker 1: And those pilots UM twenty years ago were moved into
Speaker 1: a group UH a joint venture with a Warren Buffet
Speaker 1: owned company called Flight Safety Bowing. UH. They were moved
Speaker 1: outside of Bowing. So so those pilots that the communications
Speaker 1: lines between those pilots and the test pilots who work
Speaker 1: with the engineers to design the planes. According to people
Speaker 1: I've told, just eroded over time, the name of this
Speaker 1: training group was changed to Alton at one point, UM,
Speaker 1: that moved to UH Plano, Texas at another point. UM.
Speaker 1: And And so when you when you look at those
Speaker 1: emails that have become famous, there's a there's a pilot
Speaker 1: who learns late in the process that the automated software
Speaker 1: called m CAST is going to be active at at
Speaker 1: lower speed than he realized. And what he says is
Speaker 1: he was left out of the loop. UM And And
Speaker 1: it's because of the the this breakdown in the corporate culture. So, Peter,
Speaker 1: if you boil the story of the Boeing seven seven
Speaker 1: Max down. Ultimately, there was the software decision that Boeing made.
Speaker 1: What Boeing UH decided to do with the software that
Speaker 1: they had and and can you walk us through what
Speaker 1: they decided to do and why it proved to be
Speaker 1: such a catastrophic decision? Right. The software was was meant
Speaker 1: to change the performance of the plane in UM certain
Speaker 1: stall conditions. There was a concern that UM, when the
Speaker 1: plane without m cass if the plane we're stalling, UM,
Speaker 1: the stick is supposed to respond consistently throughout the stall.
Speaker 1: And and the test pilots discovered that it was getting
Speaker 1: mushy at as they call it, at one point in
Speaker 1: the in the stall. So UM, when that happens, there
Speaker 1: are ways of changing, you know, how the plane responds.
Speaker 1: Some of them are hardware changes. UH. You can change
Speaker 1: the size of the tail. Those are all costly expensive changes.
Speaker 1: That the software was was added h one reason being
Speaker 1: because it was it was cheaper, so UH it was
Speaker 1: looked at as a way to UH compensate for a
Speaker 1: cork of the physical design UM and then the in
Speaker 1: the first iteration of the of the design it applied
Speaker 1: only to high speed stalls. UM and there were two
Speaker 1: sensors that UH that would have turned on the software
Speaker 1: UM late in the design process when it was realized
Speaker 1: that that low speed stalls were also affected. The software
Speaker 1: is extended to that area as well. UM. But the
Speaker 1: crucial thing was that that only was tied to one sensor.
Speaker 1: So it meant that during takeoff at a at a
Speaker 1: point when the plane is vulnerable and very low, if
Speaker 1: there is a problem with this sensor, it would set
Speaker 1: off this software, which was also designed to fire repeatedly,
Speaker 1: not not just once. UM and and so UM the
Speaker 1: I mean, the tragic thing is that there were questions
Speaker 1: being raised by engineers at Going at the time, but
Speaker 1: because of the UM problems in communication and the culture
Speaker 1: of the company, those concerns weren't getting through. And ultimately,
Speaker 1: as I described in the story, the the design was
Speaker 1: was certified by the FAA without the f A even
Speaker 1: having knowledge of this late change in the design, which, man,
Speaker 1: that is just shivers when you think about that. Peter,
Speaker 1: what did what did it must have feel like for
Speaker 1: the pilots who were flying of this Indonesia plane in particular,
Speaker 1: because I mean you you actually go through almost second
Speaker 1: by second, what was happening in the cockpit. What what
Speaker 1: were they feeling? It happened right away, so it was
Speaker 1: it was shock. Um, the stalled stick the column started
Speaker 1: shaking in the pilot's hands almost immediately after takeoff, which
Speaker 1: is a very rare thing to have happened. He had
Speaker 1: uh an airspeed um disagree alert go off. He had
Speaker 1: another altitude disagree alert went off. So there are multiple
Speaker 1: conflicting warnings about what's happening. And UM, he's you know,
Speaker 1: simply trying to troubleshoot what's happening in this airplane. Uh
Speaker 1: were crucially without having been told about this automated software
Speaker 1: in what effect it might be having. I'll give away
Speaker 1: a little bit of Peter's magical storytelling here, which is,
Speaker 1: imagine there's like a ghost in the cockpit that you're
Speaker 1: fighting with, right, and that that would have been what
Speaker 1: it would have felt like, like why is the plane
Speaker 1: fighting with me like this? And and Peter, when when
Speaker 1: we learned later how how pilots were basically they felt
Speaker 1: like they were allied to by Boeing right exactly. They
Speaker 1: they they wanted to know everything that was in the
Speaker 1: manual and uh that that had that had been you know,
Speaker 1: part of the unspoken agreement with with Boeing. Pilots would
Speaker 1: say if it ain't bowing, ain't going because they felt
Speaker 1: that Boeing, uh was, was biased toward pilots, that that Boeing,
Speaker 1: you know, wanted pilot to fly the planes and and
Speaker 1: an airbus may have introduced more computerized features, but but
Speaker 1: Boeing wouldn't do that. Um So you in this meeting
Speaker 1: that I described with the American air pilots, it's it's
Speaker 1: a real sense of betrayal. It really comes through. I mean,
Speaker 1: somebody should have told us the damn thing was on
Speaker 1: the airplane? Was was one of the comments. That's Bloomberg
Speaker 1: News Projects and Investigations reporter Peter Robeson, along with the
Speaker 1: editor Bloomberg Business Week toel Webber Peter's new book, Check
Speaker 1: it out, Flying Blind, then Max Tragedy in the Fall
Speaker 1: of Boeing that does come out November. That wraps up
Speaker 1: the first hour of the weekend edition of Bloomberg Business
Speaker 1: Week From Bloomberg Radio, I'm Tim Stentivic and I'm Carol
Speaker 1: mass are heading our next hour. The global chip shortage
Speaker 1: continues to recab it on a variety of consumer goods.
Speaker 1: The CEO of smart speaker maker, so nos on what
Speaker 1: customers can expect ahead of the holiday season. Will we
Speaker 1: get our speakers lads? And while the company has also
Speaker 1: taken shares off the table, so much to talk about
Speaker 1: with him, We'll take you inside the real house of Gucci.
Speaker 1: A voice speaks out for the first time in a
Speaker 1: Bloomberg interview just ahead of Ridley Scott's star studded film
Speaker 1: hitting theaters. Plus price watches and the Go Go Eighties. Tim,
Speaker 1: We're talking expensive, really expensive watches with the CEO of
Speaker 1: a Langen Zona. And then we've got the Go Gos
Speaker 1: drummer Gina Shock, Rock and Roll Royalty. This is Bloomberg.
Speaker 1: This is Bloomberg Business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news as it happened. Sloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi'm Carol Masser and I'm Tim
Speaker 1: stock Lenny Ahead in our second hour of the weekend
Speaker 1: edition of Bloomberg Business Week, Bloomberg News with a never
Speaker 1: before heard account of the Gucci family unraveling. Plus we'll
Speaker 1: speak with the CEO of a rischmon Owen. That watch company.
Speaker 1: It dates all the way back to the forties. We're
Speaker 1: gonna get why it's products command a six figure price tag.
Speaker 1: That's for a I'm peace, Caro, I'm not a watch.
Speaker 1: I'm sorry. What Yeah, six figures? Wait? What that's a wait?
Speaker 1: What not on my well? Actually yeah, I'll put it
Speaker 1: on my Christmas list. We put it on your wrist though. Plus,
Speaker 1: we go inside the nine eighties rock scene with Go
Speaker 1: Go's drummer and newly minted rock and roll Hall of
Speaker 1: Fame Regina's Shock She's got a new book app made
Speaker 1: in Hollywood. First up this hour, though, we got to
Speaker 1: talk about supply chain worries. We talked about it a
Speaker 1: lot this week, once again weighing on the corporate outlook.
Speaker 1: Smart speaker maker so Nos was out with earnings this
Speaker 1: past week. CEO Patrick Spence worriesy shortage of semiconductors could
Speaker 1: last into and he thinks the holiday quarter ahead maybe
Speaker 1: as company's most challenging yet. You know, the most challenging
Speaker 1: thing right now is supply. We have a significant amount
Speaker 1: of demand um you know, the consumer is extremely strong, um,
Speaker 1: and right now we are just working hard to get
Speaker 1: as many products as we can into consumers hands in
Speaker 1: this holiday quarter. We're airshipping, UM, We're out on the
Speaker 1: market buying the chips that we need from other companies
Speaker 1: and workers and all sorts of things. And so our
Speaker 1: team is hard at work doing everything they can to
Speaker 1: make that happen. But we do see that as the
Speaker 1: you know, really, I guess I would say, you know,
Speaker 1: the uh, you know, the the period where it's gonna
Speaker 1: be most challenging before we turn up to the kind
Speaker 1: of growth that we had lined for Physical twenty two
Speaker 1: for this year. So it's most acute in our physical
Speaker 1: key one the December quarter UM, and it should get
Speaker 1: better um as we progress through two. So I gotta
Speaker 1: ask you, Patrick, you know, one of the things we're
Speaker 1: trying to figure out is really understanding our supply chain, right.
Speaker 1: I mean for most Americans it's you're either ordering online
Speaker 1: or go to a shelf and it's there or not there.
Speaker 1: And that's our kind of understanding. We're peeling back the
Speaker 1: layers right as we keep showing ports and how things
Speaker 1: move around. What's your understanding of what broke down in
Speaker 1: terms of our supply chains. Is it because people aren't working?
Speaker 1: What is it? Well, if we go all the way
Speaker 1: back to the pandemic, because really, Karen, we've been dealing
Speaker 1: with this, you know, all the way through twenty one,
Speaker 1: and that's why I'm so proud of our ability to
Speaker 1: really execute over that period and deliver the kind of
Speaker 1: growth we did in fiscal one. But if we go
Speaker 1: back to the beginning of the pandemic, you know, all
Speaker 1: of a sudden, everybody pretty much turned off the tap
Speaker 1: in terms of production. So all of a sudden, everybody
Speaker 1: turned it off overnight as people went into lockdown and
Speaker 1: tried to figure out what the heck was going on.
Speaker 1: And then all of a sudden, with the fiscal stimulus
Speaker 1: and everything happening and people figuring out how to work
Speaker 1: from home, I think not just us, but many in
Speaker 1: many different categories, we saw a much stronger consumer uh
Speaker 1: than anybody had expected, and all of a sudden, all
Speaker 1: those factories and all like that that you know, would
Speaker 1: deliver the hundreds of parts in the son of Speaker,
Speaker 1: plus the manufacturing facility, plus the shippers, you know, plus
Speaker 1: the ports all had to completely adjust and go the
Speaker 1: other way, which is okay, Now we need to really
Speaker 1: gear up because it looks like there's a lot of
Speaker 1: demand there. And throughout the year, I would say from
Speaker 1: everything I've seen, UM, all aspects of the supply chain
Speaker 1: have been trying to catch up. And that's what you know,
Speaker 1: we've been trying to kind of manage back and forth
Speaker 1: and trying to deal with and so that's why you
Speaker 1: see it. And it's been ups and downs throughout the year,
Speaker 1: and it's been through all the chain. One thing I
Speaker 1: want to ask, I'm not asking to get political, but
Speaker 1: can the administration do something to help with the supply chain?
Speaker 1: From your perspective, I do think the push to you know,
Speaker 1: really be supporting um, you know, the offloading of ships
Speaker 1: right and I think they extended the operating hours there.
Speaker 1: I think that's a good thing. So anything to enable
Speaker 1: the flow of goods I think right now is helpful. UM.
Speaker 1: But a lot of these things, uh, you know, do
Speaker 1: take some time just to work through and and you know,
Speaker 1: at least in our case, consumer demand has never been higher. UM.
Speaker 1: So it's kind of like, uh, you know, it's kind
Speaker 1: of hitting UM in a perfect storm in that way. Well,
Speaker 1: let's talk a little bit about that consumer demand. And
Speaker 1: I think back to just a few months ago when
Speaker 1: I ordered a move for my dad for from his
Speaker 1: Father's Day or for his birthday, and I think this
Speaker 1: was back in May UM and it actually didn't chip
Speaker 1: for I think it took a couple of months for
Speaker 1: it to get to him. And if I look at
Speaker 1: the website now for so nos even the move right
Speaker 1: now is expected to ship December sevent So are you
Speaker 1: saying right now that people who order this potentially couldn't
Speaker 1: get it by Christmas? Yeah, Jim, it will depend on
Speaker 1: the products UM or in the country you're in and everything.
Speaker 1: You might be able to go to best Buy or
Speaker 1: cost Go and be able to purchase one UM. But yeah,
Speaker 1: I mean we keep that up to date UM on
Speaker 1: Sons dot com, so you can see it's pretty transparent
Speaker 1: quite frankly, how long it's going to take to get
Speaker 1: some of our products and some you can get tomorrow, um,
Speaker 1: you know, and some of it will be weeks. But
Speaker 1: that's exactly what we're working through. Maybe it does vary
Speaker 1: by products. How concerned are you that somebody might see
Speaker 1: that and say, Okay, well I'm not going to buy
Speaker 1: that I'm going to go with a competitor product rather
Speaker 1: than waiting for it to come in stock and getting
Speaker 1: it after the holiday. This is something that we've been
Speaker 1: very focused on really since the beginning of the supply
Speaker 1: chain challenges last year, and so what we've been watching
Speaker 1: closely are two things. One is UM now that our
Speaker 1: direct to consumer business has grown so much it's a
Speaker 1: quarter of our business and a grip for Scent year.
Speaker 1: Every year, we have a really really good handle on,
Speaker 1: you know, what those orders are, how they're coming in.
Speaker 1: We can watch conversion, we can watch cancelations importantly, and
Speaker 1: that has been very very low, single digits, and it
Speaker 1: has not changed. So it looks like people are continuing
Speaker 1: to stick with UM, you know, our products, and I
Speaker 1: think it makes a lot of sense because this is
Speaker 1: a considered purchase, right, You're not rushing, You're not just
Speaker 1: like haphazardly going to order one of our products. You've
Speaker 1: usually done a little bit of research, You've thought about it, UM,
Speaker 1: and then you're placing your order. That was Patrick Spence,
Speaker 1: the CEO at son Nos full disclosure, we both own
Speaker 1: so you have been a Sons guy for years and
Speaker 1: I kinda tell you what I mean. Almost every year
Speaker 1: it's like ends up on the Christmas list for somebody
Speaker 1: in my family. But we all have snass now, And
Speaker 1: that's the question, how does the company grow for customers
Speaker 1: who already have these products? Right, Like, you can only
Speaker 1: have so many speakers, although my husband would say you
Speaker 1: can have millions of speakers. To know, you can only
Speaker 1: have so many. You can only have so many. All right,
Speaker 1: you're listening to Bloomberg Business Week. Coming up, the woman
Speaker 1: who literally wrote the book on the Real House of Gucci,
Speaker 1: Bloomberg Sarah Fordon joins us with a sensational story of murder, madness, glamour,
Speaker 1: and greed days before a movie based on her book
Speaker 1: hits the silver screen. Looking forward to watching that one.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes. Tim Stinevik from Bloomberg Radio.
Speaker 1: Sheridancloughlin was the romantic partner that gave fashion zion Mauricio
Speaker 1: Gucci the strength to leave his wife Tim. It was
Speaker 1: a decision that would get him killed back. It's a
Speaker 1: story that still resonates in the fashion world and in Hollywood,
Speaker 1: says audiences await the release of the saga retold in
Speaker 1: the Really Scott film House of Gucci. It's due out
Speaker 1: in theaters this coming week, more than two decades after
Speaker 1: the book it's based on was published. Bloomberg Sarah Fordon
Speaker 1: penned The House of Gucci, a sensational story of murder, madness, glamor,
Speaker 1: and greed. Her new piece in this week's Pursuit section
Speaker 1: shares McLoughlin's side of the story for the first time.
Speaker 1: Sarah's team leader for Corporate Influence in Washington and was
Speaker 1: also named to lead our new tech policy Squad earlier
Speaker 1: this year. She joins us along with Bloomberg Pursuits editor
Speaker 1: Chris Rouser. Sarah, it's really great to have you with us.
Speaker 1: Just just take us back and tell us how so
Speaker 1: many years ago you became so immersed in the story
Speaker 1: to begin with. Hi, Well, thanks for having me. I mean,
Speaker 1: this was an incredible story that just really drew me
Speaker 1: in because there were so many twists and turns, and
Speaker 1: this family fashion dynasty over three generations. Um, it was
Speaker 1: a kind of story that if you made it up,
Speaker 1: people wouldn't believe you. Um, it was so so outrageous
Speaker 1: and so many surprising twists and turns. Exactly. There were
Speaker 1: so many twists and turns, and it is something that
Speaker 1: you feel like, Okay, this would be a streaming service,
Speaker 1: but no, it was reality. Um you know, as you
Speaker 1: were putting it together, because it played out in in
Speaker 1: real time, right, there was so much coverage. What is
Speaker 1: it that you wanted to dig into? Well? I was
Speaker 1: really drawn to the story by the figure of Modio Gucci,
Speaker 1: and I was covering him as a as a beat reporter.
Speaker 1: Emmylan and his vision to um pilot his family company
Speaker 1: from sort of an over licensed um, sort of cheapened
Speaker 1: brand to a top tier luxury brand. He wanted to
Speaker 1: make Gucci like Italy's heirmez um So. He wanted to
Speaker 1: be sophisticated, he wanted excellent craftsmanship. He brought in Um,
Speaker 1: you know, American creative director and designer, and his his
Speaker 1: vision was to take it way up market only um.
Speaker 1: As he started putting it into place, he had cut
Speaker 1: off the cash cows. He had um not really given
Speaker 1: consumers a chance to figure out that there was a
Speaker 1: new Gucci and the company was just heading towards bankruptcy.
Speaker 1: And as while this was going on, Sarah, this is
Speaker 1: Chris um. You know, there was this whole personal side
Speaker 1: of the saga where he was going through a divorce
Speaker 1: from his wife, Patrizia Reggiani, who was played by Lady
Speaker 1: Gaga in the film, and where he was at least
Speaker 1: for part of the time in a romantic relationship with Sherry,
Speaker 1: which is what our stories about exactly. So my I
Speaker 1: realized that I was, you know, it's one thing to
Speaker 1: write a business story for um, you know, for for
Speaker 1: a newspaper, UM. But I realized that there was there
Speaker 1: was a narrative here that had the qualities of a novel.
Speaker 1: And it was by blending the family saga with the
Speaker 1: business story that I felt that this story really really
Speaker 1: came to ship to life. And I interviewed more than
Speaker 1: a hundred people for the book. Talked to family members,
Speaker 1: I talked to you know, current and former employees of Gucci.
Speaker 1: But the one person who slipped away was Marizo, Gucci's
Speaker 1: girlfriend at the time, UM well, for seven years. Her
Speaker 1: name was Sherry McLoughlin. She was an American former model
Speaker 1: who worked in the fashion industry. But they actually met
Speaker 1: sailing in Sudenia um as the Italian team was preparing
Speaker 1: for the America's Cup. So, Uh, Sherry didn't want to
Speaker 1: talk to me at the time that I was writing
Speaker 1: the book. She didn't know what kind of book I
Speaker 1: was going to write, and she ducked my phone calls
Speaker 1: and didn't answer my emails. Well, she came out of
Speaker 1: the woodwork, um a few months ago when the stills
Speaker 1: from the movie set started breaking the Internet, and I
Speaker 1: realized as we chatted that she was ready to tell
Speaker 1: her story. All right, so you go up to Chris
Speaker 1: and you go, Chris, I've got the story. Is that? Well, like,
Speaker 1: tell me how this came together. Well, it's Um. It's
Speaker 1: actually really exciting to see it out in pursuit today
Speaker 1: because I was very uncertain whether Bloomberg would be interested
Speaker 1: in the story because it seemed like such a non
Speaker 1: Bloomberg story, right, it was really about the personal side, um.
Speaker 1: And yet Sherry had been you know, at mad to
Speaker 1: side when he was going through some of the toughest
Speaker 1: fights of his of his life, both with his financial
Speaker 1: partner invest Corps and with his family. You know, he
Speaker 1: was battling for you know, the his uncle sent the
Speaker 1: financial police after him. Um. Was an accusation that he
Speaker 1: hadn't signed his father hadn't signed the shares um, you know,
Speaker 1: giving him the control and sent him, you know, escaping
Speaker 1: and a motorcycle across the border into Switzerland where there
Speaker 1: was no extradition. So he was really really grappling with
Speaker 1: a lot at the time, and she was the person
Speaker 1: who who was at his side trying to help him
Speaker 1: the whole time. All right, question for you, Chris, Were
Speaker 1: you like, yeah, of course I'm interested. Well, yeah, I
Speaker 1: think I think maybe Sarah thought it felt a little
Speaker 1: gossipy for Business Week, and I love gossip, especially especially
Speaker 1: because this gossip really actually informed major news events and
Speaker 1: also obviously this crime. And it was a perspective that
Speaker 1: Sarah was really excited about hearing and getting out there.
Speaker 1: And Sherry's not in the movie her She's not portrayed
Speaker 1: in the movie because no one knew her story, and
Speaker 1: so this is really like a missing piece of of
Speaker 1: the saga. And it also includes all these great details
Speaker 1: Sara mentioned the the publicity stills that broke the internet.
Speaker 1: You might remember the first stills that came out were
Speaker 1: of Lady Gagan Adam Driver playing Maurizio and Patrizia, and
Speaker 1: they were in Italy, and it was so like Italian
Speaker 1: and eighties, and he's wearing white ski pants and and
Speaker 1: Sherry told us that he always wore white ski pants
Speaker 1: because he was a terrible skier, so he would fall,
Speaker 1: and but when he would get down to like the
Speaker 1: wine fueled lunch with everybody, no one would know that
Speaker 1: he felt because he was wearing white smart which is
Speaker 1: a great little detail. That's the kind of thing that's
Speaker 1: in this story. Take us back more than twenty years
Speaker 1: ago when you were working on this book and you
Speaker 1: not being actually able to speak to Sherry, because she
Speaker 1: actually did approach you. You right after the book was out.
Speaker 1: Tell us about that interaction. That was really an incredible moment.
Speaker 1: So I had I had really given up on I
Speaker 1: had had to give up on her. My manuscript was
Speaker 1: going into press, and she hadn't responded. So I limited, um,
Speaker 1: you know, my treatment of her just to just a
Speaker 1: few lines in the book. And I knew from other
Speaker 1: people that she had existed, but I didn't really have
Speaker 1: any any contours of the relationship or how how they
Speaker 1: had met, or you know, what time they spent together.
Speaker 1: And the book came out in two thousand and then
Speaker 1: the paperback edition came out in two thousand one, and
Speaker 1: I was in New York presenting the paperback edition at
Speaker 1: the Filarly Bookstore and I'd finished signing books and everybody
Speaker 1: was just about leaving, and I noticed a tall blonde
Speaker 1: woman instead of standing hanging back, looking at me. And
Speaker 1: after the last person left, she came up to me
Speaker 1: with tears in her eyes and she said, Hi, Sarah,
Speaker 1: I'm Sherry McLoughlin. If I had known you were going
Speaker 1: to write such a wonderful book, I would have talked
Speaker 1: to you. And she gave me a big hug and
Speaker 1: we both cried to read the book. Watched the movie
Speaker 1: House of Gucci. That's Sarah Ford, and she's team leader
Speaker 1: for Corporate Influence in Washington for Bloomberg News. She was
Speaker 1: joining us along with Bloomberg Proceeds editor Chris Rouser. Catch
Speaker 1: our full conversation and a conversation. You can find that
Speaker 1: on our podcast feed at Bloomberg dot com, at Apple
Speaker 1: dot com, or wherever you get your podcasts. Still to
Speaker 1: come on Bloomberg Business Week. Timeless time Pieces a watchmaker
Speaker 1: with more than one seventy five years of history and
Speaker 1: the price tags to prove it. The CEO of a
Speaker 1: langon Zona joins us. Next, this is Bloomberg Broadcasting from
Speaker 1: the financial capital of the World, Bloomberg eleven Rio in
Speaker 1: New York to Washington, d C. Bloomberg to Boston, Bloomberg
Speaker 1: one O six one to San Francisco, Bloomberg nine six
Speaker 1: to the country Sirius XM Channel one nine and around
Speaker 1: the globe the Bloomberg Business at and Bloomberg Radio dot Com.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stenovan on Bloomberg Radio. Sometimes a watch
Speaker 1: is more than just to watch. It's a statement. It's
Speaker 1: a symbol of elegance and prestige. And if you're a
Speaker 1: fan of cross and ship for a person's wrist, well,
Speaker 1: our next guest is definitely going to interest you. And
Speaker 1: I'm talking to the guy with no watches. Yeah that's me.
Speaker 1: I'm like holding up my wrist right now. I got
Speaker 1: zero watches, zero time pieces. Are you a watch person?
Speaker 1: I am a watch person. I have an Apple Watch
Speaker 1: on which I really love, but I have something makes
Speaker 1: a real watch person. Just roll over. I have some
Speaker 1: beautiful watches at home. Um and I have to say,
Speaker 1: I still like having a time piece on my wrist. Well,
Speaker 1: the German watchmaker a Langon Zona, dates back to the
Speaker 1: eighteen forties and Wilhelm Schmidt has spent the last decade
Speaker 1: as the company's CEO. In that time, he's overseen the
Speaker 1: launches of an array of six and even some seven
Speaker 1: figure time pieces. Carol, so more than a million dollars
Speaker 1: for some of these watches. Now the company is out
Speaker 1: with its latest masterpiece. Schmid joined our radio on YouTube
Speaker 1: simulcast this week to talk about the release of the
Speaker 1: Zitwork Honey Goal loom In. It's available now, is a
Speaker 1: two piece limited edition and tim it's priced at a
Speaker 1: hundred and how many of those are on your Christmas list? Carol?
Speaker 1: I wish I could put them on my Christmas list.
Speaker 1: Have you been bad? It's not going to bring you
Speaker 1: a six figure time piece? Pretty cool stuff. Let's see
Speaker 1: what he had to say. You know, we've always been
Speaker 1: a successful company and there's nothing more difficult than to change,
Speaker 1: and we had things to change than changing, you know,
Speaker 1: a running engine, and with that sort of stand still
Speaker 1: within weeks, it gave us the time to prepare and
Speaker 1: to accelerate and transform. So it wasn't all bad, even
Speaker 1: of course it was quite tragic for a lot of people.
Speaker 1: I'm not denying this. It's it's fascinating film. You're so great.
Speaker 1: I think everybody thought, okay, that's it, and then all
Speaker 1: of a sudden everybody did pivot. They were already thinking
Speaker 1: either about digital strategies. Did you guys go on on
Speaker 1: in digital or increase with what you were doing? That absolutely,
Speaker 1: because you were supposed to go on watches on one
Speaker 1: does in Geneva. That should have taken place in April,
Speaker 1: and obviously it didn't. We had about three weeks time
Speaker 1: to move from a physical Watchers and Wonders or watch
Speaker 1: exhibition right who it's digital. Um, so we had three
Speaker 1: weeks or four weeks time to prepare. That was a
Speaker 1: good taste bet for our agility and how to to
Speaker 1: get there, and and then we moved on. And you
Speaker 1: know what people need to understand, said, you asked me
Speaker 1: three years ago, can I approach a client that I've
Speaker 1: never met before and tell them, look, we go on
Speaker 1: a zoom and then we'll we'll just chat a little bit.
Speaker 1: They would have refused. You know, these were the days
Speaker 1: where they would expect me to fly in or them
Speaker 1: to come to me and you have a sit down
Speaker 1: and a dinner and all that. But not only had
Speaker 1: we to change, but I also believe that the client's
Speaker 1: behavior and and and the whole expectations have changed. Is
Speaker 1: that continuing, I guess the digital and being able to
Speaker 1: do that with are they now saying, Hey, Bill Helm,
Speaker 1: come on the world's reopening, Come take me for dinner.
Speaker 1: There there's a big appetite for that. I'm not denying it.
Speaker 1: I think in future we will see more hybrid than
Speaker 1: ever before. So we'll get you know, all the administration
Speaker 1: work done through the digital, you know, information and a
Speaker 1: little you know catch up here and there. But it
Speaker 1: all will help us to even more celebrate that moment
Speaker 1: when you just shipped together and you chat and you
Speaker 1: talk and you just see who the other is, how
Speaker 1: he feels, you know, his facial expression, body language and
Speaker 1: all the things you can't see, at least I can't
Speaker 1: see on a zoom. For our audience not familiar with
Speaker 1: the time pieces, what sets them apart from the other
Speaker 1: competitors that are out there? And because and look, we're
Speaker 1: talking about time pieces that are six figures hundreds of
Speaker 1: thousands of dollars, in some cases over a million dollars. Yeah, Kim,
Speaker 1: you know we started about twenty thousand, and then you
Speaker 1: know that's not the sweet spot. The sweet spot is
Speaker 1: a lot higher. Um, it's it's at that part of
Speaker 1: the market. It's a package, and I think our package
Speaker 1: is that Germans. You know it does work. Um, what
Speaker 1: do you mean by that? Well, you can always read
Speaker 1: the time immediately, you see the data mediately. There's a
Speaker 1: prioritization on the diet l which will give you the
Speaker 1: most important information, regardless how complex or complicated they watches
Speaker 1: on the first glimpse, Um go so far. Like you know,
Speaker 1: we have a minute repeater that's really sort of the
Speaker 1: highest complication almost that you can do in a in
Speaker 1: a watch. It gives you the time in an acoustic way.
Speaker 1: So we do that waterproof, which is pretty stupid because
Speaker 1: you know, you don't want to seal something that should
Speaker 1: make a noise, but because we are worried that drop
Speaker 1: of water when you wash your hands with hit the
Speaker 1: crown and we'll go into the movement with damage. So
Speaker 1: these are that's the German thing. Then there is a
Speaker 1: lot of hunt aboute craftsmanship labor in it. That's Wilhelm
Speaker 1: Schmidt's CEO of German watchmaker A Landing Zona. You're listening
Speaker 1: to Bloomberg Business Week. Coming up next, we go back
Speaker 1: in time for the beat of the and in All
Speaker 1: Access Pass with Gogs drummer Gina Shock on herbuck It
Speaker 1: tracks the band's journey through words and lots and lots
Speaker 1: of candid photos. You've got to check it out. This
Speaker 1: is Bloomberg. Wow. You're listening to Bloomberg Business Week with
Speaker 1: Carol Messer and Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio.
Speaker 1: We wind down this weekend edition of Bloomberg Business Week
Speaker 1: with an original member of The Go Goes, the first
Speaker 1: all female rock creep to write their own songs, play
Speaker 1: their own instruments, and reach the top of the Billboard charts.
Speaker 1: I have to say, I remember, uh, spending some time
Speaker 1: at the beach with my older cousins who were really
Speaker 1: into it, and and that's where I got introduced to the
Speaker 1: Go Goes. But they are like the perfect summer beach band.
Speaker 1: Oh and how cool is Gina Shock. She's really cool.
Speaker 1: She's out with her new book Made in Hollywood. All
Speaker 1: access with the Go Goes. This is a person an
Speaker 1: all account of the band that includes a treasure trove
Speaker 1: of photographs and memorabilia collected over the course of her
Speaker 1: forty year career. She took these photos and now they
Speaker 1: are so good. It's like a scrap it is. I
Speaker 1: really had so much fun right looking through it. Well.
Speaker 1: Didna joined us from San Francisco, though she couldn't stop
Speaker 1: thinking about a little ceremony she attended in Cleveland just
Speaker 1: a couple of weeks earlier. I'm still pretty high from
Speaker 1: to the rock and Roll Hall of Things. Things just
Speaker 1: kind of unbelievable. It's it's funny you sort of sort
Speaker 1: of you know your poo poo, and it's like, I
Speaker 1: don't care about this stuff, but then when it happens,
Speaker 1: it's blow. It's mind blowing. It's like, Okay, you know,
Speaker 1: you feel like you're recognized by your fans, don't get
Speaker 1: me wrong, But then this sort of recognition is it's
Speaker 1: a whole different thing because you know, all your peers
Speaker 1: were there all all you know, all the other musicians
Speaker 1: and songwriters and people in my business were all They're
Speaker 1: celebrating this like triumph for the band and it felt
Speaker 1: good to get all those props, all that love and respect,
Speaker 1: and it felt very genuine one as well. It was
Speaker 1: quite an evening, my friend, quite an evening. And you
Speaker 1: accepted the honor from Drew barrymore I know at the ceremony,
Speaker 1: I mean, like all of it, right, yeah, But then
Speaker 1: people are like, what's the deal with Drew Barry? What
Speaker 1: the deal is is that it couldn't have been someone
Speaker 1: better to give us out a word because Drew has
Speaker 1: been a real fan of this fancy. She's been a kid.
Speaker 1: And I was like, you know, in case you don't
Speaker 1: know it, well now the word is out. And and
Speaker 1: after the show, well we were talking with Drew throughout
Speaker 1: the throughout the show, but it was like I didn't
Speaker 1: really realize how much of an impression we had left
Speaker 1: on her, because she said, you know, Gina through the years,
Speaker 1: I mean, we all know that she went through a
Speaker 1: lot of difficult periods in her life. It's just like
Speaker 1: we all had okay, but she I didn't realize that
Speaker 1: we helped her to a lot of stuff. And that
Speaker 1: was I don't know, I just you can't believe it
Speaker 1: when you know you might think that about other people
Speaker 1: when you know, you think, oh, I remember when this
Speaker 1: song happened in how that helped me through this relationship that,
Speaker 1: but when it actually happened to you, it's sort of
Speaker 1: you can't take it all in that feel like you've
Speaker 1: made some that deep of an impression on someone, right,
Speaker 1: It's it's pretty incredible to hear that, Gina, because I
Speaker 1: would imagine that you do hear from fans a lot
Speaker 1: about what it about, what the effect that your music
Speaker 1: has had on that I am these days. But you
Speaker 1: gotta remember, guys, I come home and I'm cleaning up
Speaker 1: my dog's poop and I'm doing dishes, and I'm you know,
Speaker 1: I'm back to my to the real life, which is
Speaker 1: most of the most of my life. And then you
Speaker 1: go out there for a couple of months of the
Speaker 1: year and you're rock starters left you You just you
Speaker 1: sort of you don't think about that all the time.
Speaker 1: Then we's work to your attention. Like I was like,
Speaker 1: oh my god, this is really my job. How cool? Well,
Speaker 1: we have to say, your book really made an impression
Speaker 1: on us. And you, you know, are the unofficial I guess,
Speaker 1: our official photographer, self appointed archivist. I think is how
Speaker 1: somebody described you of the band UM. It really is
Speaker 1: an incredible history, but also the visual story that you tell.
Speaker 1: You know you're taking photos, it sounds like all the time.
Speaker 1: I little did I know that all these years later
Speaker 1: it would it would all surface in the way that
Speaker 1: it has, because you know, back then, I just was
Speaker 1: always drawn to UM. I'm a very visual person. I
Speaker 1: was always drawn to photographs, and you know, uh, in
Speaker 1: my house even I have all of my art is
Speaker 1: all photographs from from various stuff, photographers or something not
Speaker 1: so much, but it's always something that's driven me. And
Speaker 1: so when I started taking photos with the band UM,
Speaker 1: it felt like a very natural thing to do. The
Speaker 1: only differences is that, hey, I happened to be in
Speaker 1: the band, so I'm getting all these candid shots that
Speaker 1: no one else would ever be privy to UM if
Speaker 1: they weren't in the band. And I just had such
Speaker 1: a love for photography and I still do. And I
Speaker 1: can't believe I had my first UM. I had my
Speaker 1: first photo exhibition UM in Los Angeles this past weekend,
Speaker 1: and I was I mean I it was something that
Speaker 1: I only would have dreamt I could do. Your whole
Speaker 1: book is just filter it with all your pictures. Is
Speaker 1: there a favorite picture or a picture that you just
Speaker 1: you really are you just love to talk about. You know,
Speaker 1: it's like favorite child, you guys. I've been asked that
Speaker 1: several times, and it's really difficult for me to give
Speaker 1: you an honest answer because everything in this book I love.
Speaker 1: I love. There's a reason I took this photograph for
Speaker 1: that photograph, this or that, and they all really have
Speaker 1: some very important meaning to me. That is a moment
Speaker 1: in time that I'll never relive that I can look
Speaker 1: at and and and and I just and and then
Speaker 1: I remember everything it all comes back to me. That's
Speaker 1: not how I wound up writing so much. This isntingly
Speaker 1: just gonna be photographs and the boy. When I was
Speaker 1: asked to write some I was, I thought, I can't
Speaker 1: do this, but but but but look at the photographs.
Speaker 1: The worst just started pouring out. Um. There's so many
Speaker 1: photographs in this book, you guys are looking through it
Speaker 1: right now that I love. Um. Of course, the clown
Speaker 1: Family happens to be one of my favorite um of
Speaker 1: the bunch that hosts a segment of photographs because it's
Speaker 1: so insane or ridiculous and just go to show you
Speaker 1: that they would do anything that I asked them to. Two. Well,
Speaker 1: that's what crazy. They had such trust, right, I mean
Speaker 1: you really had front row seat, behind seat, like in
Speaker 1: terms of just catching them, uh, the whole group at
Speaker 1: any moment. Yeah, yeah, I mean, you know, we're just
Speaker 1: basically a group of five girls, a girl a little
Speaker 1: girl gang, just having a great time and living for
Speaker 1: the moment and you know, enjoying ourselves what it should
Speaker 1: have been. You know, blemishes and all. It's it's it's
Speaker 1: it's part of growing and and experiencing life and and
Speaker 1: and through a lens that most people don't ever have
Speaker 1: the opportunity. One of the things that was kind of
Speaker 1: cool going through your book is the bands that you
Speaker 1: opened for the you know, iconic musicians like yourself that
Speaker 1: you guys ran into met. Tell us about some of
Speaker 1: those meetings, some of those things that were just like,
Speaker 1: oh my god, I can't believe I'm me. Well, you know,
Speaker 1: I am the ultimate fan, let me tell you. You know,
Speaker 1: I just adore them. Oh it's music is my whole
Speaker 1: life and it's always been and I feel so lucky
Speaker 1: to be able to contribute. Um. I meeting David Bowie
Speaker 1: was a huge thing in my life. I idolized him
Speaker 1: growing up, and you know, had the utmost respect to
Speaker 1: the The guy was a genius um and I got
Speaker 1: to meet him three times and that was super duper cool.
Speaker 1: It was actually the first time I met him that
Speaker 1: the photo of us in the book is when he
Speaker 1: was doing the serious Moonlight tour and we actually got
Speaker 1: to open for him too, I think. But the first
Speaker 1: time I met him was in nineteen eighty, before the
Speaker 1: Goobers were even signed. We were playing at the Ritz
Speaker 1: in New York City. Checked this out. We didn't have
Speaker 1: a record deal. We had just gotten back from England.
Speaker 1: We had been opening for Manness and the Specials over there,
Speaker 1: so we all had our our boyfriends with us. So Manness,
Speaker 1: we're on our show. But we get done and we
Speaker 1: go to the I P Section and they're like, guess
Speaker 1: who was at your show? Who? Okay, David Bowie and
Speaker 1: his constant companion Coco Peak Townsend and John and Yoko. Now,
Speaker 1: unfortunately John and Yoko left during the encore, and yet
Speaker 1: in a couple of months he was going right um so,
Speaker 1: but the two of them had seen the show. That
Speaker 1: meant a whole lot to me and Pete Towns and
Speaker 1: that meant a lot. And then of course Bowie and
Speaker 1: meeting him and talking to him. He was such a
Speaker 1: gentleman and so generous with his time, and we were
Speaker 1: all getting high and having a great time. But wow,
Speaker 1: what what an incredible night that was for me um
Speaker 1: and of course opening for the Stones. I mean, these
Speaker 1: are things you dream of, you know, And man, it's
Speaker 1: like happening. A little old Gina from Dundock in Baltimore, like,
Speaker 1: it's crazy stuff, guys. It's it's like your dreams do
Speaker 1: can happen? They can really happen if you look. Have
Speaker 1: to stay focused and do the right thing, that's all.
Speaker 1: That's it. Hey, Gina, what what has it been like
Speaker 1: getting back there on the road and doing it at
Speaker 1: a time when we're in the midst of the pandemic.
Speaker 1: How are you doing it? Well? You know, it's been
Speaker 1: rough because the last two years we've had both we've
Speaker 1: had our tours canceled. We had last year we were
Speaker 1: having a tour summer tour this year was canceled. So
Speaker 1: fortunately we are going to be doing some shows at
Speaker 1: the end of the year on the West coast. We're
Speaker 1: all really excited about. And then of course next year
Speaker 1: we're going to be doing shows with Silly Idol uh
Speaker 1: in the UK, UM playing like at Wemley and uh
Speaker 1: Leads Arena, all these fantastic places to play UM, and
Speaker 1: then we're we're going to be doing more shows in
Speaker 1: the States. But on top of that, UM, this year
Speaker 1: it's just been incredible for us because it seems like
Speaker 1: everything is sort of coming to fruition. You know, our
Speaker 1: our documentary really pushed people, i think, to recognize the
Speaker 1: bandon and know the ban in a way that they
Speaker 1: had prior to that. Uh. UM. Also, you know our
Speaker 1: musical but which is out on Broadway a couple of
Speaker 1: years ago, that's coming back. That's the Passadena Playhouse like
Speaker 1: in a week, and it's opening in Australia again head
Speaker 1: over here. That's really cool. UM. And then the induction
Speaker 1: into the Rock and Roll Hall of Fame, and then
Speaker 1: now I'm doing my book tour and and my first
Speaker 1: photo exhibition and like it's wow, well that's great, guys.
Speaker 1: Well it's just you know, it is interesting, and you
Speaker 1: really do think about the impact that you had. I mean,
Speaker 1: there's so many female musicians now and if you think
Speaker 1: about though when you guys went out and did your thing,
Speaker 1: it wasn't commonplace. No, not so much. Go ahead, please,
Speaker 1: you know I'm one. Like I'm checking Instagram out every day.
Speaker 1: There are so many girls that are playing drums now
Speaker 1: and and shredding on guitar. There are so you know
Speaker 1: now that there's the latest statistic is that there are
Speaker 1: more girls learning instruments than there are guys now. But
Speaker 1: you like that one guy. That's incredible. M Yeah, it's
Speaker 1: that's the latest um and it's like really great. I'm
Speaker 1: hoping that we've had an influence on them. I feel
Speaker 1: that we have. I've heard that a lot, and it's
Speaker 1: to me, the best gifts that I could ever leave
Speaker 1: when I closed my eyes on this planet is to
Speaker 1: think that I've inspired someone to step out of their
Speaker 1: comfort zone perhaps and do what they love to do.
Speaker 1: That's legendary drummer Gina Shock, the author of Maide in
Speaker 1: Hollywood All Access with the Go, goes this attribute to
Speaker 1: the trailblazing female rock band and now members of Rock
Speaker 1: Roll Hall of Fame vacations of everyone. You've got to
Speaker 1: go to the Hall of Fame. Yeah, I know, I
Speaker 1: haven't got you said you've got and it's it's really cool.
Speaker 1: You should check it out, and this is the perfect
Speaker 1: time to do it. A go see Gina shock there.
Speaker 1: All right, we'll do that. All right. That wraps up
Speaker 1: the weekend edition of Bloomberg Business Week from Bloomberg Radio.
Speaker 1: Thanks so much for joining us on Carol Massa and
Speaker 1: Tim Stanabe. Could be sure to tune into Bloomberg Business
Speaker 1: Week Monday through Friday starting at two pm Wall Street
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Speaker 1: Have a great weekend. Stay safe everyone. This is Bloomberg