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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane along

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Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jailey. We bring you

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Speaker 1: insight from the best and economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com

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Speaker 1: and of course on the Bloomberg Terminent. Right now, what

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Speaker 1: we have to see is the rebuilding of the Hurts brand.

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Speaker 1: Their interim CEO is with Eric Shatzker on the floor. Eric,

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Speaker 1: Good morning, Tom, Good morning to you. I'm down here

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Speaker 1: at Times Square. This is part of the NASDAC and

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Speaker 1: I'm with Tom Wagner nighthead Capital Management, Greg O'Hara, up Sertaris,

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Speaker 1: and Mark Fields, the interim CEO of Hurts. This trio,

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Speaker 1: Tom is responsible for one of the most remarkable corporate

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Speaker 1: turnarounds in American history. Back in May of two thousand twenty,

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Speaker 1: Hurts foiled for bank see last night. It went public

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Speaker 1: again at a share giving the company in market value

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Speaker 1: of some thirteen billion dollars. What are remarkable turnaround? Greg

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Speaker 1: would like to begin with you Hurts stunned not just

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Speaker 1: the auto industry, but the financial markets with this order

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Speaker 1: for one hundred thousand Tesla's. Why make such an early

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Speaker 1: bet on electric vehicles, Why take the risk of being

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Speaker 1: the first mover. As you know, if we're in the

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Speaker 1: travel industry, we've got we've got to investments all across

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Speaker 1: the travel industry and providing people with the products they want.

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Speaker 1: It was an easy decision for us. So we know

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Speaker 1: our corporate travelers want electric vehicles to go visit their

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Speaker 1: clients and and and do business in. We know our

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Speaker 1: leisure travelers want electric vehicles. It's a great way for

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Speaker 1: them to try electric vehicle without committing, And specifically they

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Speaker 1: want Tesla's. They like Tesla's and they'd like to rent Tesla's. So,

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Speaker 1: in combination with understanding the demand is there, and an

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Speaker 1: opportunity to get a very hot product and amazing product

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Speaker 1: that allows us to put it in the hands of

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Speaker 1: people who want it, was an easy decision for us.

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Speaker 1: Tom At the ip O price of twenty nine dollars

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Speaker 1: a share, you've pretty much tripled your money in the

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Speaker 1: space of four months, which in and of itself is remarkable.

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Speaker 1: As you know, there are some skeptics out there, haters,

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Speaker 1: you might call them haters. They don't believe in your story.

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Speaker 1: They say Kerch doesn't have a firm order for Tesla's.

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Speaker 1: They say Elon Musk is dumping model freeze. What can

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Speaker 1: you say right here, right now to address some of that,

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Speaker 1: let's call it confusion. Well, I think that there's no

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Speaker 1: question that there's an incredible amount of demand for our products. Generally,

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Speaker 1: we have a very robust environment for the rental car industry.

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Speaker 1: We expect that to continue. We're very focused on bringing

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Speaker 1: products into our fleet. As Greg mentioned that we know

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Speaker 1: people want to rent. There's no question they want to

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Speaker 1: rent Tesla's, There's no question that they want to rent

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Speaker 1: you know, higher value vehicles from all the O e

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Speaker 1: M s. There's no question. It's a big move a

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Speaker 1: foot to electrifications. So, you know, for the people who

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Speaker 1: doubt what we're doing, um, you know, we we would

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Speaker 1: simply ask if they stay tuned and watch what we

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Speaker 1: have to come because we think that this is just

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Speaker 1: the beginning of an effort to put Hurts at the

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Speaker 1: center of mobility in a way to serve our O

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Speaker 1: e M partners and to serve our customers, to provide

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Speaker 1: a better rental experience and a better corporate partnership with

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Speaker 1: those parties. Mark these other guys here, Tom and Gregg

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Speaker 1: their financial guys. Right, you're a real economy CEO. You

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Speaker 1: ran forward, you know all about operations and execution. One

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Speaker 1: of the biggest challenges Hurts has to overcome in this

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Speaker 1: move to electrification and the transition to what we might

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Speaker 1: call share mobility. Yeah. Well, first off, first off, I

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Speaker 1: don't look at me as challenges. I look at at

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Speaker 1: a huge opportunities because we're really staking ourselves out I

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Speaker 1: think a very important place in as Tom mentioned, this

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Speaker 1: mobility ecosystem, wherever mobility two point oh goes obviously clearly

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Speaker 1: as we look to lead an electrification can sure we

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Speaker 1: get our charging infrastructure in place that's happening as we speak,

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Speaker 1: and then be able to you know, that first mover

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Speaker 1: advantage of learning how to manage these large electrified fleets,

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Speaker 1: I think is going to give us a very big

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Speaker 1: competitive advantage, not only in the near term, as Tom

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Speaker 1: and Greg said, to get customers into these vehicles that

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Speaker 1: they want to drive, but more importantly, you know, in

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Speaker 1: business you have to start looking around the corner. So

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Speaker 1: as you think about autonomy down the road, those are

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Speaker 1: large electrified fleets. I think We're gonna be well positioned

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Speaker 1: to work with a lot of different partners to make

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Speaker 1: that happen. That's an important point. Some people think of

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Speaker 1: this as just an e V play for rental car customers.

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Speaker 1: What what do you mean by these lords? What is

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Speaker 1: what is fleet management and why is it important? Well,

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Speaker 1: first off, it steps back and about our overall corporate strategy.

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Speaker 1: And you mentioned this is not only a turnaround, this

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Speaker 1: is a transformation of hurts. And looking around the corner,

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Speaker 1: you have to look at the big trends, right mobility, Uh,

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Speaker 1: you've got electrification, shared mobility, can at cars, autonomy, and

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Speaker 1: we're positioning the company for the things that we do

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Speaker 1: better than anybody else, which is managed large fleets. We

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Speaker 1: do it economically consistently all around the world. That is

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Speaker 1: going to need that. That the the ability to manage

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Speaker 1: those fleets and mobility two point out, somebody's going to

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Speaker 1: have to do it and we're the best at that,

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Speaker 1: and we want to position ourselves. Avis, as you might know,

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Speaker 1: is trash talking her. It's on the conference call just

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Speaker 1: a few days ago. Knowing what you know, Tom directly

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Speaker 1: from the manufacturers. I might add about the current and

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Speaker 1: future supply of electric vehicles. What are the chances that

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Speaker 1: Avis or maybe enterprise is going to catch up with you.

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Speaker 1: I think that over time, we'll see all of the

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Speaker 1: rental car companies transition to e vs. And I think

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Speaker 1: that that will happen because it's what we believe consumers

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Speaker 1: want Today. There's is certainly a huge percentage of the

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Speaker 1: population that really wants to to drive electric vehicles, and

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Speaker 1: we think that will only happen with increasing speed as

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Speaker 1: time pass us. So I think it's a natural evolution

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Speaker 1: for the industry to to take. And I think you're

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Speaker 1: seeing that on the O E. M side, You're gonna

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Speaker 1: see it on the product delivery side from the rental

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Speaker 1: car companies, You're gonna see it in right hill. So um,

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Speaker 1: I think this is the first step of a large

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Speaker 1: transformation and a process of bringing electric vehicles into mainstream.

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Speaker 1: And you know, we're happy to be, you know, playing

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Speaker 1: our role in it. You know, our goal is to

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Speaker 1: provide our customers with what they want, and we believe

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Speaker 1: that this, you know, this effort really hits the nail

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Speaker 1: on the head in that regard. Now, I want to

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Speaker 1: point out that unless you've been living under a rock,

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Speaker 1: you will have seen that Hurts has a pitchman and

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Speaker 1: its new commercials for these electric vehicles, these Tesla's. He

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Speaker 1: happens to be a super Bowl winning quarterback. His name

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Speaker 1: is Tom Brady. Tom, Here's what I've been wondering. Why

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Speaker 1: would a super Bowl winning quarterback you choose to star

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Speaker 1: in ads for a rental car company? What is it

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Speaker 1: about the Hurt story and the transformation plan that resonates

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Speaker 1: with Tom Brady? Well, first of all, good morning. Uh,

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Speaker 1: nice to see You've got some great guys up there

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Speaker 1: on the stage with you, And wish I could be

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Speaker 1: there in New York, but I got football practice today,

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Speaker 1: so I got to do my job. I think obviously

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Speaker 1: it starts with incredible leadership, and I think Tom, Greg

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Speaker 1: and Mark really provide that. And uh, you know, I've

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Speaker 1: got great faith in the leadership team, and I think

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Speaker 1: they're building and reinventing a great business. I've been someone

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Speaker 1: who's uh been a customer of Hurts for a long time,

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Speaker 1: and I think their move to electrical vehicles is super important.

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Speaker 1: And when Tom talked about what the opportunity was, um,

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Speaker 1: you know, for him in this business, I certainly wanted

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Speaker 1: to do my best to help promote people who are

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Speaker 1: changing the world in a really positive way. So we

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Speaker 1: talked so much about sustainability and actions that you can

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Speaker 1: do on a daily basis that are sustainable for now

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Speaker 1: in the future. And you know, this is one of

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Speaker 1: those areas that you know, I feel really strongly about

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Speaker 1: and I love partnering with you know, a great business,

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Speaker 1: a great business team that has a great mission. So

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Speaker 1: it's a really fun campaign and I hope people really

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Speaker 1: enjoy it. You drive an e v right, Tom, I do,

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Speaker 1: and I have for for quite a few years. Which

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Speaker 1: model and what was it that made you an e

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Speaker 1: Vy convert? Well, I've had a Tesla for about four years.

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Speaker 1: And again I think it's a it's kind of the

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Speaker 1: direction to the world is heading, and I think for me,

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Speaker 1: it was about being really conscious about, obviously the impact

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Speaker 1: that we all have on on our planet and the

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Speaker 1: things that we can do as individuals to make progress

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Speaker 1: in the airs of sustainability. And um, I love the cars. Uh,

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Speaker 1: there's a lot of companies that have followed suit, obviously,

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Speaker 1: and as the guys up there, as Tom greg Mark

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Speaker 1: talked about, that's kind of where where everyone's heading, and

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Speaker 1: you know, it's a really cool time to be a

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Speaker 1: car lover, and I certainly have and Tom always gives

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Speaker 1: me a Nobody loves cars as much as Tom Wagner,

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Speaker 1: believe me, and he always kind of keeps me in

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Speaker 1: tune with what's going on, and he's really on the

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Speaker 1: forefront of the really cool aspects of carmaking. Tom, you're

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Speaker 1: lending the credibility of the Tom Brady brand, so the

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Speaker 1: Hurts brand. What is it about sustainability that resonates with

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Speaker 1: your personal philosophy and are you deliberately trying to raise

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Speaker 1: awareness around topics such as climate change. I think it's

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Speaker 1: absolutely and I think it's um in a really broad,

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Speaker 1: you know, a scheme of things. It's about raising consciousness

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Speaker 1: about you know, what sustainability means that you know, correlate

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Speaker 1: so many of the things that are happening, you know,

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Speaker 1: in my personal life to you know, my business life.

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Speaker 1: And you know, I've thought so much about sustainability of

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Speaker 1: my own body and what I need to do in

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Speaker 1: order to treat my body a certain way so that

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Speaker 1: it can continue to perform at a high level. And

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Speaker 1: I think businesses are doing the same. You know, people

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Speaker 1: want to understand areas in which they can be more sustainable. Um.

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Speaker 1: Certainly to help the environment, and you know, raising consciousness

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Speaker 1: through electric vehicles and you know, things that we do

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Speaker 1: on a daily basis. You know, as we talked about

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Speaker 1: the mobility of where we all are. I'm someone that

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Speaker 1: travels a lot. You know, I'm very mobile. But if

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Speaker 1: I can do that in a more conscious way, um,

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Speaker 1: you know, I think that's a great thing for the future. Tom.

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Speaker 1: A quick question back to Greg O'Hara here. Tom Brady

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Speaker 1: has redefined sustainability. Is it concerns the human body? You

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Speaker 1: guys are now in all of you are in the

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Speaker 1: travel business versus in the Why is sustainability to the

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Speaker 1: new theme, the new mantra and travel. It's not lost

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Speaker 1: on me the dichotomy between me and Tom Brady. Um,

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Speaker 1: uh and and and are sustainable bodies? Um? Mine's more disposable,

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Speaker 1: I think than distinct and sustainable. Um. You know. One

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Speaker 1: of the things that that people don't realize is, you know,

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Speaker 1: Tom said a lot of things about why he does it.

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Speaker 1: One of the things that we can do as financial

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Speaker 1: investors is promote an investment opportunity to people that allows

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Speaker 1: them to invest profitably in in the um environmentally conscious area, right.

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Speaker 1: And if you look at what we've what we've created here,

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Speaker 1: it's an opportunity of a business that creates actual cash

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Speaker 1: flow in the near term. And we can transform hundreds

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Speaker 1: of thousands of vehicles and electrify them. Um not just that,

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Speaker 1: but turn them into robotaxis. Our offer, we believe to

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Speaker 1: two Uber creates better opportunities for Uber drivers. Um uh.

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Speaker 1: And we've got all kinds of things in the in

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Speaker 1: the pipe. Not only that, but you know, the rental

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Speaker 1: car experience has been the same for fifty years, and

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Speaker 1: we're going to try to automate that rental car experience

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Speaker 1: so that when you get to the airport, you just

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Speaker 1: show up, hold your phone to the car and go.

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Speaker 1: Greg O'Hara, Mark Fields, the two Toms, one more recognizable

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Speaker 1: than the other, Tom Waggoner and of course Tom Brady.

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Speaker 1: We thank you all, and back to yet another recognizable Tom,

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Speaker 1: Tom Keane, Eric Chesker, thank you. Sony Cupt you honest

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Speaker 1: with us right now. He's the chief executive officer of Marriott.

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Speaker 1: We're going to dive into an extended conversation here, Tony,

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Speaker 1: I want to talk about Marriott optimism. You're leading to

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Speaker 1: country with construction of a hundred and sixty six thousand,

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Speaker 1: one seventy four rooms right now. I assume that's globally

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Speaker 1: as well. Tell us about the optimism in the middle

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Speaker 1: of a pandemic that gets you to build twelve hundred projects. Yeah,

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Speaker 1: we actually good morning by the way, Tom, it's it's

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Speaker 1: good to be back. We have about over two hundred

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Speaker 1: thousand rooms under construction globally, and I think that optimism

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Speaker 1: is really based on our belief about the long term

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Speaker 1: future of travel and tourism. Because of some of the

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Speaker 1: supply chain issues, we are seeing some delays in construction,

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Speaker 1: so many of these hotels won't open for one to

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Speaker 1: maybe even three years. Are you I don't mean to

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Speaker 1: interrupt the Ford I know John and Lisa have a

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Speaker 1: ton of questions to Lisa's looking for a new Marriott

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Speaker 1: right where she lives. Uh to go in Tony. I'm

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Speaker 1: looking here at your big impediment, which is the US government.

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Speaker 1: How big an impediment has the Biden administration been in

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Speaker 1: their reticence to open up as we improve in this

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Speaker 1: terrible pandemic. Well, while we were disappointed and lobbied the

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Speaker 1: administration hard to get the borders open. Yesterday was a

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Speaker 1: big day for US obviously, seeing international borders open. I've

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Speaker 1: been traveling extensively internationally and there is enormous pent up

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Speaker 1: demand from international travelers to come to the US. So

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Speaker 1: I think today yesterday was a watershed day for the

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Speaker 1: travel on tourism industries. It's Tony, We're all living in

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Speaker 1: the amount is back big time, has being for most

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Speaker 1: of this year. You're aware of that. How are you

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Speaker 1: meeting that at the moment, just in terms of getting

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Speaker 1: the talent on board when you need to where you

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Speaker 1: need them. How difficult is it at the moment signing

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Speaker 1: It's improving, Jonathan, as you as you know one in

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Speaker 1: five of the jobs that were lost in this country

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Speaker 1: during a pandemic, we're in the travel and tourism sector.

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Speaker 1: We've hired more than forty thou folks here in the

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Speaker 1: US since the beginning of the year. The challenge for

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Speaker 1: US is the most acute difficulties we're having are in

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Speaker 1: the markets where demand has come back most quickly. Um.

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Speaker 1: But we think we've got a really compelling offering for

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Speaker 1: future merit associates and we're seeing really good progress both

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Speaker 1: in terms of the increases in the applicant pool and

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Speaker 1: the number of folks that were able to bring on board.

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Speaker 1: Have you had to shift the price to make that happen, Sony,

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Speaker 1: or is that something to time is healed over the

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Speaker 1: last year. Yeah, there's a bit of of wage pressure

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Speaker 1: again in some of the markets that have recovered most quickly,

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Speaker 1: But again a lot of our focus is on UH

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Speaker 1: career growth, training and development opportunities and in some markets

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Speaker 1: some one time incentives to fill those vacancies. How much

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Speaker 1: have you been able to pass along the costs to

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Speaker 1: the end consumer to people renting a room. Well, the

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Speaker 1: really encouraging thing we saw in the third quarter, Lisa,

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Speaker 1: we said that that revenue per available room globally was

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Speaker 1: only twenty six percent behind where we were same quarter nineteen,

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Speaker 1: But interestingly, average daily rate, which really equates to pricing power,

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Speaker 1: was only four percent off where we were in the

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Speaker 1: same quarter of nineteen. So we've seen really strong pricing

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Speaker 1: power through the recovery. When it comes to hiring, Tony,

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Speaker 1: I do wonder how many people just said, who used

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Speaker 1: to work in the industry, I don't want to deal

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Speaker 1: with the hospitality industry anymore. It was really hard for

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Speaker 1: me to be sent home for more than a year.

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Speaker 1: I don't want to have to deal with people, and

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Speaker 1: I'm still worried about a virus. It's going to take

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Speaker 1: more than just a higher salary to get me back.

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Speaker 1: How much is that what you're facing when you try

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Speaker 1: to bring on more people. I spoke at a CEO

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Speaker 1: panel yesterday at the n y U Investment Conference, and

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Speaker 1: as you might expect, this was the most significant topic,

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Speaker 1: and it was really around the work we need to

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Speaker 1: do as an industry deliberately to identify the prospective future employees,

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Speaker 1: the opportunities that exist. I think travel and tourism for

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Speaker 1: many years was viewed as a safe harbor set of industries,

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Speaker 1: and to your point, the impact of the pandemic has

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Speaker 1: shaken some of that confidence. So we've got some real work.

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Speaker 1: I want to talk about the tension that you deal

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Speaker 1: with every day. You've provided leadership with save Venice over

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Speaker 1: the travesty of the boats and the ships right up

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Speaker 1: against the Basilicas and Marco. The view from the Grand

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Speaker 1: Canal room of the St. Regis is pretty good. What's

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Speaker 1: it go for at night? As high as we can go?

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Speaker 1: But um it's uh an extraordinary hotel. I was just

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Speaker 1: there three weeks ago. The renovation is stunning. How do

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Speaker 1: you cut this then? How do you cut all the

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Speaker 1: population you want back? So Venice will sink versus your

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Speaker 1: save Venice efforts. Well, it's it's an interesting dynamic and

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Speaker 1: it's not limited to Venice. There are many cities and

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Speaker 1: tourist destinations around the world that are wrestling with this

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Speaker 1: notion of over tourism. John, I can see you, John

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Speaker 1: and the Grand Canal of the CEO of Mary. This

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Speaker 1: sounds very personal to you, Toh, not to me, because

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Speaker 1: we know there's an annual visit that you make to

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Speaker 1: Venice every single year around Christmas. Just think the St

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Speaker 1: Regis has a certain view of the Grand Canals, sort

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Speaker 1: of caring with Gucci behind it. It works. That's Italy, Tony,

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Speaker 1: let's talk about this and put you on the spot

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Speaker 1: just a little bit. You've been going around the world,

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Speaker 1: looking across geography, is working out who's got this right

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Speaker 1: right now, you're perfectly positioned to talk about it. Everybody's

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Speaker 1: got a different policy. You've got zero COVID over in

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Speaker 1: China's got very different tolerance levels around the world. Who's

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Speaker 1: got it right right now, as far as you're concerned

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Speaker 1: operating a business there, I'm not sure anybody has it perfect.

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Speaker 1: And that's not a criticism. The most challenging thing for

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Speaker 1: all of us that are trying to navigate this there's

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Speaker 1: no playbook. None of us were around for the last

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Speaker 1: great pandemic, and it's so unpredictable. Use you mentioned China

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Speaker 1: during our second quarter earnings call, we talked about the

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Speaker 1: fact that China was back to pre pandemic level. It

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Speaker 1: is not only an aggregate, but in each of our

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Speaker 1: demand segments. You fast forward a quarter, you saw some outbreaks,

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Speaker 1: you saw a hundred and fifty cities lockdown, and that

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Speaker 1: had exactly the impact on demand you would expect. And

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Speaker 1: so I think we're trying to share best practices. We're

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Speaker 1: looking at at cities and countries that seem to have

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Speaker 1: it right, but I'm not sure there's a perfect solution. Tony,

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Speaker 1: good to catch up. Can you take Tom to Venice

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Speaker 1: with you next time? Just give us a break and

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Speaker 1: you enjoy anytime. I'll pay for the boat sounds good

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Speaker 1: to me. Sounds good to have no idea, John, what

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Speaker 1: those boats costs, the power boats, and particularly one to

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Speaker 1: marry I would do those gorges wooden boat things. They

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Speaker 1: got what we feel like we're a template for his

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Speaker 1: planning on vacation. Has nothing to do with a proper

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Speaker 1: interviews and everything to you see me in a gondola,

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Speaker 1: I mean I could see you in the back tell

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Speaker 1: making it happen. I could, I could see it making

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Speaker 1: it happen. Sony. Good to catch up, so as always

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Speaker 1: look forward to catching up soon, Sonny camp Of one

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Speaker 1: of that Thank you, sir. We are thrilled to Claudius

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Speaker 1: Som joins us today Bloomberg opinion columnists, but really one

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Speaker 1: of the most articulate voices in um what I'm gonna

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Speaker 1: call the social policy of the Fed, Claudius, Um, should

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Speaker 1: we pick a FED chairman based on politics and social belief? So?

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Speaker 1: Absolutely not. But the reality is the Federal Reserve is

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Speaker 1: in Washington, d C. And it is impossible to escape

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Speaker 1: politics and all of those positions. And Biden has now

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Speaker 1: got five. He's get to a point. These are political appointees.

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Speaker 1: So I firmly disagree with people who have been advocating

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Speaker 1: for Biden to have his chair, like knocking Powle out

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Speaker 1: just because he was a registered Republican and Trump put

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Speaker 1: him in place. But I mean, you know, if Ide

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Speaker 1: wants to do that, that is his choice. What is

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Speaker 1: so interesting, Claudia, is if you look at the Wikipedia

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Speaker 1: for both Powell and Brainerd, it is absolutely stunning the

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Speaker 1: different path from Wesleyan College or Wesleyan University, I should say,

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Speaker 1: in Princeton University. Have you ever seen a separation of

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Speaker 1: two candidates as we see now? I'm not sure about that.

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Speaker 1: I think that because Greenspan was there so long, I

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Speaker 1: don't What I have been adamant about is that how

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Speaker 1: Embrainered are an amazing team. Like together they do so

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Speaker 1: much more. And I think this could very well be

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Speaker 1: because they come at it from different backgrounds. How has

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Speaker 1: looked to Brainerd for a lot of intellectual leadership. I

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Speaker 1: think they would be in a like a really knock

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Speaker 1: it out of the park palace chair laylis vice chair

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Speaker 1: that's often a chair and waiting position. Uh I just

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Speaker 1: I think it. The vent is navigating the most difficult

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Speaker 1: period in its history since the Vulgar Area, and you

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Speaker 1: era and you absolutely need the US people in all

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Speaker 1: five of those pointed positions, Claudia, one of the difference

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Speaker 1: is that people have pointed to between a Leo Brainard

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Speaker 1: as well as J. Powell, is that Leo Brainard might

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Speaker 1: be willing to look plast inflation and actually increase the

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Speaker 1: target a bit more to allow inflation to run it

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Speaker 1: perhaps a more persistent three percent rather than a two percent.

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Speaker 1: Do you agree with that assessment of her view and

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Speaker 1: the potential for that to really shift FED policy? So

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Speaker 1: I think Jay is is as committed to the new framework,

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Speaker 1: which importantly, and we're going to talk about it a

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Speaker 1: lot more this year, has broad based and inclusive employment.

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Speaker 1: I truly believe Jay is the real deal on that.

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Speaker 1: Leo absolutely is, and I don't think we have a

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Speaker 1: choice now whether we're moving toward a three percent target,

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Speaker 1: that's a completely different discussion. And neither of them is

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Speaker 1: going to I don't think they're going to need to

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Speaker 1: go there, right, but but I think either of them

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Speaker 1: will do what it takes and are committed to really

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Speaker 1: elevate on par the maximum pointment Mandy, And that is

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Speaker 1: really exciting. This is not the FED of even a

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Speaker 1: few years ago. Claudia. We have to leave it. They're

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Speaker 1: too short of visit. We look forward to speaking to

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Speaker 1: you seriously in the coming days, Claudia. So the Jane

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Speaker 1: Family Institute here is front and center, a changing of

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Speaker 1: the guard at the FED. We'll see where that goes.

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Speaker 1: With Powell and Brainers. Joining us from the copy summit

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Speaker 1: is Ola Collonnius, the CEO of Daimla. I want to

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Speaker 1: start right then and then we can indulge you and

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Speaker 1: talk about some of the bigger issues. Where you are

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Speaker 1: right now on the supply chain, are you starting to

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Speaker 1: see things improve and if you are, West specifically said, well,

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Speaker 1: this year we have been mostly affected by the semiconductor situation,

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Speaker 1: and uh, we believe that the quarter three, what's the

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Speaker 1: quarter that was most effective, and we're seeing a gradual

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Speaker 1: improvement in quarter four and going into next year. But

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Speaker 1: there is still an element of uncertainty here, and the

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Speaker 1: main chip suppliers have said that there will be restrictions

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Speaker 1: also throughout the year of two. So we're not quite

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Speaker 1: out of the woods yet, but we like to believe

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Speaker 1: that we're kind of seeing the worst behind us. Mr Colonus,

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Speaker 1: it is the most interesting thing to see Daimler run

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Speaker 1: by a gentleman from the north, and I'm sure that's

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Speaker 1: been culturally fascinating culturally. There's a shift in America as well,

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Speaker 1: led by Mary bar at General Motors. From where you sit,

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Speaker 1: how do you perceive the effort of General Motors, Ford

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Speaker 1: and the other in America to catch up with you

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Speaker 1: on electric vehicle engineering. The whole auto industry is in

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00:23:48,240 --> 00:23:53,359
Speaker 1: a major transformation as we speak, and ultimately we will

430
00:23:53,440 --> 00:23:57,320
Speaker 1: go to a world with zero emission mobility. That is

431
00:23:57,359 --> 00:24:01,240
Speaker 1: what we have Diamler has committed to through our Vision nine,

432
00:24:02,160 --> 00:24:04,720
Speaker 1: more than ten years ahead of the Paris Climate Agreement.

433
00:24:04,800 --> 00:24:07,240
Speaker 1: We want to go see a neutral SEO two, neutral

434
00:24:07,400 --> 00:24:10,480
Speaker 1: not just with the product, but across the whole value chain,

435
00:24:10,960 --> 00:24:16,080
Speaker 1: and we observe old and new competitors moving in the

436
00:24:16,160 --> 00:24:20,120
Speaker 1: same direction. What is the technological constraint? I remember over

437
00:24:20,240 --> 00:24:23,960
Speaker 1: ten years ago the Detroit Auto Show staring in eye

438
00:24:24,080 --> 00:24:26,679
Speaker 1: and what you were doing in power train, and it

439
00:24:26,800 --> 00:24:30,680
Speaker 1: was a nascent part of green What is the industry

440
00:24:31,040 --> 00:24:38,560
Speaker 1: and Daimler's constraint forward to get this done? There has

441
00:24:38,600 --> 00:24:43,280
Speaker 1: been any massive development on the technological side, much better

442
00:24:43,520 --> 00:24:48,000
Speaker 1: energy density on the battery cells, more efficient power trains,

443
00:24:48,480 --> 00:24:51,280
Speaker 1: so that now we're in a we're on the verge

444
00:24:51,840 --> 00:24:56,960
Speaker 1: of having mass electric mobility possible and that's where we're

445
00:24:57,000 --> 00:25:01,640
Speaker 1: making our bet sas Mercedes fence and investing from five

446
00:25:01,760 --> 00:25:06,320
Speaker 1: forward in our new vehicle architectures going electric only for

447
00:25:06,440 --> 00:25:09,840
Speaker 1: the whole market to transfer into a zero mission electric

448
00:25:09,920 --> 00:25:12,840
Speaker 1: only scenario. What needs to go hand in hand with

449
00:25:12,880 --> 00:25:16,239
Speaker 1: this effort on the product side is infrastructure. We as

450
00:25:16,240 --> 00:25:18,479
Speaker 1: an industry are investing a data as well, but this

451
00:25:18,600 --> 00:25:22,080
Speaker 1: is a bigger one where across the industries need to

452
00:25:22,080 --> 00:25:25,159
Speaker 1: work with each other and governments to make commitments to

453
00:25:25,240 --> 00:25:30,080
Speaker 1: build up an infrastructure everywhere for electric mobility. That's the

454
00:25:30,119 --> 00:25:32,879
Speaker 1: one thing that is going to also decide the pace

455
00:25:32,920 --> 00:25:35,720
Speaker 1: of this transformation. In an interview last year at you

456
00:25:35,760 --> 00:25:38,000
Speaker 1: said that in the next ten years you expect the

457
00:25:38,000 --> 00:25:41,520
Speaker 1: biggest growth for your company to be in China. Has

458
00:25:41,600 --> 00:25:44,919
Speaker 1: that changed given some of the COVID policies, given some

459
00:25:44,960 --> 00:25:48,479
Speaker 1: of the infrastructure challenges that the country faces as it

460
00:25:48,520 --> 00:25:55,719
Speaker 1: tries to curb some of the leverage and spending. COVID

461
00:25:55,800 --> 00:25:58,159
Speaker 1: has been a stress test for the whole industry and

462
00:25:58,200 --> 00:26:02,680
Speaker 1: a supply chains as we men before, but we are

463
00:26:03,720 --> 00:26:06,119
Speaker 1: very clear in our belief that China, in terms of

464
00:26:06,280 --> 00:26:12,879
Speaker 1: market growth in this decade, represents the biggest absolute growth potential.

465
00:26:13,359 --> 00:26:15,280
Speaker 1: That does not mean that we're not going to focus

466
00:26:15,320 --> 00:26:17,760
Speaker 1: on the other markets that we have North America, Europe

467
00:26:17,760 --> 00:26:20,959
Speaker 1: and so on, Japan, Korea and other important markets for

468
00:26:21,040 --> 00:26:27,560
Speaker 1: US for luxury mobility, especially sustainable luxury mobility. We see

469
00:26:27,800 --> 00:26:31,840
Speaker 1: UH promising growth potential in this decade, but we have

470
00:26:31,920 --> 00:26:34,840
Speaker 1: to go through this transformation at the same time. So

471
00:26:36,040 --> 00:26:38,800
Speaker 1: the forefront of our investment effort is to put in

472
00:26:39,640 --> 00:26:43,280
Speaker 1: our capital into new innovative technologies, turn the power trains

473
00:26:43,320 --> 00:26:45,880
Speaker 1: CEO two neutral and at the same time build up

474
00:26:46,320 --> 00:26:51,840
Speaker 1: software architectures, the car as a service subscription models, tapping

475
00:26:51,880 --> 00:26:54,960
Speaker 1: into new revenue pools that we haven't had before. Just

476
00:26:55,119 --> 00:26:57,800
Speaker 1: quickly ahead from my good friend and colleague Matthew Miller,

477
00:26:58,000 --> 00:27:00,040
Speaker 1: he wants to hand along the waiting list is to

478
00:27:00,080 --> 00:27:05,560
Speaker 1: the electric g Wagon. Do we know We announced the

479
00:27:05,600 --> 00:27:08,040
Speaker 1: electric g Wagon at the Munich Auto Show and I

480
00:27:08,119 --> 00:27:11,960
Speaker 1: was overwhelmed with messages from friends UH and fans of

481
00:27:12,000 --> 00:27:14,400
Speaker 1: the Mercedes brand. Everybody loves it, they wanted. We're gonna

482
00:27:14,480 --> 00:27:17,640
Speaker 1: launch it in the first half of You better sign

483
00:27:17,720 --> 00:27:19,840
Speaker 1: up early because the line is going to be pretty long.

484
00:27:19,920 --> 00:27:22,600
Speaker 1: I guess I'm sure Matt's already done that. Thank you, sir,

485
00:27:22,800 --> 00:27:26,159
Speaker 1: great to catch up. An he's there, the CEO. John.

486
00:27:26,200 --> 00:27:29,600
Speaker 1: I'm sorry, John. I can see him, and I can

487
00:27:29,680 --> 00:27:32,040
Speaker 1: see Matt in the electric g wagon. Can't you see

488
00:27:32,119 --> 00:27:34,560
Speaker 1: him going around with that one? Lisa? Doesn't he half

489
00:27:34,560 --> 00:27:36,720
Speaker 1: one already? I thought he has one in Berlin? You

490
00:27:36,720 --> 00:27:48,720
Speaker 1: think an electric one? He that's that specifically. Glasgow has

491
00:27:48,800 --> 00:27:51,840
Speaker 1: been more than interesting, a lot of what we expected

492
00:27:51,880 --> 00:27:55,680
Speaker 1: and some surprises along the way, but no one is surprised.

493
00:27:55,760 --> 00:28:00,480
Speaker 1: The immediately following Glasgow and what we do about energy,

494
00:28:00,520 --> 00:28:04,040
Speaker 1: the debate is well in Scotland. If you move from

495
00:28:04,080 --> 00:28:06,680
Speaker 1: Glasgow and you go west of Edinburgh up the shore

496
00:28:06,720 --> 00:28:09,960
Speaker 1: of Aberdeen, and then you go north north north to

497
00:28:10,000 --> 00:28:14,399
Speaker 1: the Shetland Islands, there is an oil field. The First

498
00:28:14,440 --> 00:28:17,959
Speaker 1: Minister of Scotland joins us this morning. Minister, thank you

499
00:28:18,000 --> 00:28:21,200
Speaker 1: so much for joining Bloomberg. This is an oil field

500
00:28:21,200 --> 00:28:24,600
Speaker 1: and I guess the decisions in Westminster in that. Where

501
00:28:24,720 --> 00:28:28,200
Speaker 1: is the common ground and energy that you share now

502
00:28:28,359 --> 00:28:33,960
Speaker 1: with the Prime Minister of the United Kingdom. Well, I

503
00:28:33,960 --> 00:28:36,840
Speaker 1: think the common ground is that we are both very

504
00:28:36,880 --> 00:28:41,160
Speaker 1: committed to the transition to a zero future and as

505
00:28:41,200 --> 00:28:45,200
Speaker 1: part of that to building up the renewable energy capacity

506
00:28:45,400 --> 00:28:49,200
Speaker 1: for Scotland and the UK. Scotland has got massive potential

507
00:28:49,600 --> 00:28:53,920
Speaker 1: in wind energy in particular on shore and offshore, but

508
00:28:54,000 --> 00:28:58,160
Speaker 1: also some real potential in new and emerging technologies carbon

509
00:28:58,240 --> 00:29:02,480
Speaker 1: captured and storage for the example. There's also I think

510
00:29:02,480 --> 00:29:06,000
Speaker 1: an understanding and perhaps the UK government and I don't

511
00:29:06,200 --> 00:29:09,240
Speaker 1: entirely agree on the detail of this, but we must

512
00:29:09,280 --> 00:29:12,960
Speaker 1: accelerate the move away from fossil fuels. We've got to

513
00:29:13,000 --> 00:29:15,960
Speaker 1: do that carefully in a way that protects the people

514
00:29:16,040 --> 00:29:19,240
Speaker 1: who are currently employed in that sector in Scotland around

515
00:29:19,240 --> 00:29:22,040
Speaker 1: a hundred thousand jobs, and do it in a way

516
00:29:22,240 --> 00:29:25,080
Speaker 1: that doesn't see us importing more oil and gas but

517
00:29:25,600 --> 00:29:29,360
Speaker 1: instead moving to the alternatives. But the world and the

518
00:29:29,440 --> 00:29:32,960
Speaker 1: planet demands that we accelerate that transition away from oil

519
00:29:32,960 --> 00:29:35,760
Speaker 1: and gas and fossil fuels generally. First Minister, we had

520
00:29:35,760 --> 00:29:39,080
Speaker 1: a conversation with the Secretary of Energy of the United

521
00:29:39,120 --> 00:29:42,680
Speaker 1: States the other day. In her fallback position was that

522
00:29:42,800 --> 00:29:46,040
Speaker 1: oil is a world price and that here you are

523
00:29:46,160 --> 00:29:50,280
Speaker 1: with shell saying that if you develop this field it

524
00:29:50,320 --> 00:29:55,280
Speaker 1: will allow for direct investment in energy savings in the

525
00:29:55,400 --> 00:30:00,920
Speaker 1: decades ahead, in climate change advantages in the decade ahead,

526
00:30:01,320 --> 00:30:05,240
Speaker 1: can you contain the benefit of these wells to make

527
00:30:05,320 --> 00:30:08,560
Speaker 1: wind firms in the Shetland Islands and so much more

528
00:30:12,080 --> 00:30:15,760
Speaker 1: well in Scotland has enjoyed the benefits of oil and

529
00:30:15,760 --> 00:30:19,600
Speaker 1: gas now for forty fifty years. Some would say we

530
00:30:19,640 --> 00:30:22,480
Speaker 1: haven't enjoyed the economic benefits of that sufficiently, but that's

531
00:30:22,480 --> 00:30:26,560
Speaker 1: another matter. But we have vast potential and renewable energy.

532
00:30:26,640 --> 00:30:29,920
Speaker 1: Our challenge now is to develop the renewable and low

533
00:30:29,960 --> 00:30:33,720
Speaker 1: carbon sources of energy so that we can accelerate the

534
00:30:33,760 --> 00:30:36,920
Speaker 1: move away from fossil fuels, because we see from the

535
00:30:36,960 --> 00:30:41,720
Speaker 1: International Energy Agency and other very respected voices that the

536
00:30:41,840 --> 00:30:45,600
Speaker 1: challenge of limiting global warming, the challenge frankly, of saving

537
00:30:45,600 --> 00:30:48,560
Speaker 1: the planet, means that we cannot simply go on and

538
00:30:48,600 --> 00:30:52,800
Speaker 1: on and on extracting oil and gas forever. Now for

539
00:30:53,000 --> 00:30:55,880
Speaker 1: any government, it's not as simple as flicking a switch.

540
00:30:56,200 --> 00:30:58,680
Speaker 1: There are careful transitions that need to be done, and

541
00:30:58,680 --> 00:31:01,800
Speaker 1: that is an energy to transition. We need to make

542
00:31:01,800 --> 00:31:04,680
Speaker 1: sure that as we wind down dependence on oil and gas,

543
00:31:04,680 --> 00:31:08,640
Speaker 1: we are increasing our reliance on the alternatives and also

544
00:31:08,720 --> 00:31:10,800
Speaker 1: moving the people who currently work in oil and gas

545
00:31:10,840 --> 00:31:15,160
Speaker 1: into alternative jobs as well. So it's complicated. Nobody denies that,

546
00:31:15,280 --> 00:31:17,760
Speaker 1: and we need to get that transition right. But we're

547
00:31:17,800 --> 00:31:20,560
Speaker 1: here in Glasgow in the midst of COP twenty six.

548
00:31:20,840 --> 00:31:24,160
Speaker 1: The warnings about the future, or perhaps lack of a

549
00:31:24,160 --> 00:31:27,400
Speaker 1: sustainable future for the planet if governments across the world

550
00:31:27,480 --> 00:31:30,600
Speaker 1: do not act to limit global warning warming are stark

551
00:31:30,680 --> 00:31:33,360
Speaker 1: and simply cannot be ignored. So its minister, have you

552
00:31:33,480 --> 00:31:36,240
Speaker 1: voiced an opinion on the Campbell oil field that I

553
00:31:36,280 --> 00:31:42,480
Speaker 1: believe Thomas referring to yes, I have and what I've said,

554
00:31:42,480 --> 00:31:44,640
Speaker 1: it is quite clear that just before I tell, well

555
00:31:44,680 --> 00:31:46,640
Speaker 1: before I tell, let me just explain for your viewers

556
00:31:46,640 --> 00:31:51,160
Speaker 1: the background here. The Campbell development already has a license,

557
00:31:51,520 --> 00:31:54,440
Speaker 1: it's had a license for about twenty years. It now

558
00:31:54,520 --> 00:31:57,560
Speaker 1: has to go through a process of permission to develop

559
00:31:57,640 --> 00:32:00,360
Speaker 1: that field, and I have said it should not be

560
00:32:00,480 --> 00:32:04,120
Speaker 1: given that permission unless there is a very rigorous climate

561
00:32:04,160 --> 00:32:08,000
Speaker 1: assessment done. That's currently not the plan of the UK government,

562
00:32:08,000 --> 00:32:09,720
Speaker 1: and I'm pressing them to do that now. There are

563
00:32:09,760 --> 00:32:12,680
Speaker 1: many voices who would say no new oil field whatever,

564
00:32:12,760 --> 00:32:16,320
Speaker 1: plat pass a stringent climate assessment, but at the very

565
00:32:16,400 --> 00:32:20,240
Speaker 1: least it should be subjected to that test, because the

566
00:32:20,320 --> 00:32:22,840
Speaker 1: plan right now to simply give it a green light

567
00:32:23,120 --> 00:32:26,520
Speaker 1: without that climate assessment is not, in my view, consistent

568
00:32:26,640 --> 00:32:29,960
Speaker 1: with our objectives to meet the names of the Paris Agreement.

569
00:32:30,320 --> 00:32:34,720
Speaker 1: So you are concerned about the means end to getting

570
00:32:34,760 --> 00:32:37,920
Speaker 1: to a greener future. We've heard very confusing rhetoric out

571
00:32:37,920 --> 00:32:40,720
Speaker 1: of CAP twenty six and heading into this confab, you

572
00:32:40,760 --> 00:32:42,720
Speaker 1: said you hoped that a century from now people would

573
00:32:42,720 --> 00:32:45,960
Speaker 1: look back and describe Glasgow as the place which really

574
00:32:45,960 --> 00:32:48,400
Speaker 1: took the correct fork in the road for our planet,

575
00:32:48,720 --> 00:32:51,080
Speaker 1: looking back on what's happened. Do you think that we

576
00:32:51,120 --> 00:32:56,360
Speaker 1: can really say that? Well, I don't know yet, and

577
00:32:56,400 --> 00:32:59,880
Speaker 1: we won't know until this COP twenty sixth concludes, hopefully

578
00:33:00,000 --> 00:33:03,320
Speaker 1: on Friday. UM, But yes, I do hope, not just

579
00:33:03,400 --> 00:33:05,960
Speaker 1: for Glasgow's reputation a though, that would be nice. Glasgow

580
00:33:06,200 --> 00:33:09,240
Speaker 1: is often described as the birthplace of the Industrial Revolution.

581
00:33:09,480 --> 00:33:12,080
Speaker 1: It would be nice if future generations look back on

582
00:33:12,120 --> 00:33:15,440
Speaker 1: Glasgow as, as you say, the point in history where

583
00:33:15,440 --> 00:33:18,360
Speaker 1: the world took the correct fork in the road and

584
00:33:18,760 --> 00:33:22,320
Speaker 1: managed to avert climate catastrophe. Are we going to get there?

585
00:33:22,400 --> 00:33:24,200
Speaker 1: There's a lot of work to be done over the

586
00:33:24,240 --> 00:33:26,560
Speaker 1: next few days. I think there was over the course

587
00:33:26,600 --> 00:33:31,360
Speaker 1: of last week are increasing degree of tentative optimism about

588
00:33:31,440 --> 00:33:33,720
Speaker 1: the potential outcome of this summit, but that has not

589
00:33:33,840 --> 00:33:36,880
Speaker 1: yet been delivered. What do we need to see on Friday?

590
00:33:37,360 --> 00:33:40,640
Speaker 1: We need to see action, real action that keeps this

591
00:33:40,760 --> 00:33:44,360
Speaker 1: objective of keeping global warming to one point five degrees alive,

592
00:33:44,640 --> 00:33:47,840
Speaker 1: and that means near term commitments that will have global

593
00:33:47,880 --> 00:33:50,360
Speaker 1: emissions by the end of this decade. It's not called

594
00:33:50,400 --> 00:33:53,680
Speaker 1: a decisive decade for nothing. And secondly, we need to

595
00:33:53,760 --> 00:33:57,160
Speaker 1: see the commitments made more than a decade ago to

596
00:33:57,640 --> 00:34:01,400
Speaker 1: fair climate financing so that the developed what old starts

597
00:34:01,440 --> 00:34:04,160
Speaker 1: to repay its day to the developing what ald twitches

598
00:34:04,360 --> 00:34:06,680
Speaker 1: experiencing the impacts of climate change and of course have

599
00:34:06,800 --> 00:34:10,279
Speaker 1: done so little to cause the problems. So these are

600
00:34:10,560 --> 00:34:13,520
Speaker 1: key tests of success and I really hope that we

601
00:34:13,600 --> 00:34:16,160
Speaker 1: get there. But I don't underestimate the amount of work

602
00:34:16,200 --> 00:34:19,240
Speaker 1: that negotiators have to do over these next few days. Nikola,

603
00:34:19,280 --> 00:34:20,719
Speaker 1: I think this is the first time we've spoken and

604
00:34:20,760 --> 00:34:24,000
Speaker 1: not taught about Brexit. I think that's a success for respect.

605
00:34:24,239 --> 00:34:26,360
Speaker 1: Doesn't that feel good? It feels good for me anyway,

606
00:34:26,400 --> 00:34:29,160
Speaker 1: First Minister, thanks dying with us. Nicholas Turchin net At

607
00:34:29,200 --> 00:34:33,520
Speaker 1: of Glasgow. This is the Bloomberg Surveillance Podcast. Thanks for listening.

608
00:34:33,920 --> 00:34:37,200
Speaker 1: Join us live weekdays from seven to ten am Eastern

609
00:34:37,520 --> 00:34:41,480
Speaker 1: on Bloomberg Radio and on Bloomberg Television each day from

610
00:34:41,600 --> 00:34:46,840
Speaker 1: six to nine am for insight from the best in economics, finance, investment,

611
00:34:47,000 --> 00:34:52,000
Speaker 1: and international relations. And subscribe to the Surveillance podcast on

612
00:34:52,080 --> 00:34:55,920
Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course on

613
00:34:56,040 --> 00:34:59,880
Speaker 1: the terminal. I'm Tom keene In. This is bloom