WEBVTT - Ford Sees $1 Billion in Added Costs 0:00:01.840 --> 0:00:04.480 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.519 --> 0:00:07.320 Bloomberg quick takes, Tim Stanovk. We're here every day bringing 0:00:07.360 --> 0:00:09.840 you the latest news from the worlds of business and finance, 0:00:09.880 --> 0:00:13.680 plus technology, politics economics, all purtnising the power of Business 0:00:13.720 --> 0:00:17.599 Week reporters and editors, not to mention our journalists and analyst. 0:00:17.680 --> 0:00:20.040 In more than one and twenty countries. You can download 0:00:20.040 --> 0:00:23.520 Bloomberg Business Weekend Itunes, soundcloud or Bloomberg Dot Com. You 0:00:23.520 --> 0:00:25.479 can also listen to our radio show at two PM 0:00:25.520 --> 0:00:28.440 eastern time on Bloomberg radio or watch us on Youtube. 0:00:28.440 --> 0:00:32.800 Search Bloomberg Glovel News. The next half hour focusing on 0:00:33.000 --> 0:00:36.040 US automakers. First Up, we want to take a look 0:00:36.040 --> 0:00:38.440 at Ford Shairs, tumbling today the most in seven months, 0:00:38.479 --> 0:00:41.600 at news after the closed yesterday that inflation is pushing 0:00:41.640 --> 0:00:44.559 supplier costs a billion dollars higher than expected in the 0:00:44.560 --> 0:00:47.600 current quarter. Really joining the chorus of major corporations warning 0:00:47.600 --> 0:00:50.080 about challenges rippling through the economy. We're kind of starting 0:00:50.120 --> 0:00:52.120 to hear the same story. The twelve point four percent 0:00:52.159 --> 0:00:54.840 to the downside. The lowest were biggest one day drop, 0:00:54.840 --> 0:00:56.960 I should say, in seven months. Let's get into it 0:00:57.000 --> 0:00:59.800 with Keith non, auto reporter for Bloomberg News. He joins 0:00:59.840 --> 0:01:02.840 us this afternoon on the phone. Hey, Keith, good to 0:01:02.880 --> 0:01:05.560 have you with us. Um, give us an idea of 0:01:05.560 --> 0:01:08.240 why this Cott investor so off guard here. I mean, 0:01:08.400 --> 0:01:11.880 what change for Ford that caused the company to come 0:01:11.880 --> 0:01:14.800 out and say inflation is costing us a billion dollars 0:01:14.800 --> 0:01:17.679 more than we expected. Yeah, I mean there's really two 0:01:17.720 --> 0:01:21.360 aspects of this. There's the inflation piece that's driving costs up, 0:01:21.440 --> 0:01:25.240 but they also have thousands and thousands is very profitable 0:01:25.440 --> 0:01:30.039 suvs and pickup trucks that they're stacking up unfinished because 0:01:30.080 --> 0:01:33.880 they still can't get the parts they need, things like semiconductors. 0:01:33.920 --> 0:01:37.680 So investors had sort of felt like the supply shortage 0:01:37.720 --> 0:01:41.400 issue was over and we've moved on and this is 0:01:41.440 --> 0:01:43.840 a big proof point that that's still a problem. And 0:01:43.880 --> 0:01:46.920 then you can't finish your cars for lack of parts, 0:01:47.520 --> 0:01:50.560 then you can't book those sales and make those profits. So, 0:01:50.640 --> 0:01:54.240 as a result, you know Ford's third quarter, Um, you 0:01:54.280 --> 0:01:57.160 know income there's going to be less than half what 0:01:57.200 --> 0:01:59.320 it was in the second quarter. It's really a big 0:01:59.360 --> 0:02:02.240 bite and that and that took investors by surprise. So 0:02:02.280 --> 0:02:05.000 it's not a demand falling story. It's just a case 0:02:05.320 --> 0:02:07.520 of we don't have all the things we need to 0:02:07.720 --> 0:02:09.760 finish up the trucks and Suvs and get them out 0:02:09.760 --> 0:02:15.160 there right and GM faced a similar situation earlier this year. 0:02:15.200 --> 0:02:17.560 I mean, you can catch up and we'll finish those 0:02:17.560 --> 0:02:21.120 trucks and they expect the fourth quarter to be stronger. 0:02:21.200 --> 0:02:23.880 So they didn't change their guidance for the full year. 0:02:24.520 --> 0:02:26.880 But you know, when you have such a significant profit 0:02:26.919 --> 0:02:30.520 warning for the third quarter, it's just it's unexpected and 0:02:30.840 --> 0:02:34.880 investors don't like those downside sourprieties and, as I said, 0:02:34.880 --> 0:02:40.520 it underscores the negatives in this cyclical industry and investors 0:02:40.560 --> 0:02:45.680 are always wary about those, those issues inflation, demand, supply 0:02:45.960 --> 0:02:49.400 and and if those start rearing your head, they just 0:02:49.919 --> 0:02:54.360 fell off. Hey Keith Um, we had Mario Cordero, the 0:02:54.400 --> 0:02:57.000 executive director at the Port of Port of Long Beach, 0:02:57.080 --> 0:03:00.720 on yesterday. He talked to us about how, at least 0:03:00.720 --> 0:03:03.239 done from his perspective, things seem to be easing a 0:03:03.280 --> 0:03:05.200 little bit. He gave the example of what eleven or 0:03:05.240 --> 0:03:07.480 twelve ships off the coast instead of more than a 0:03:07.560 --> 0:03:12.000 hundred that we saw last in January. Um, what do investors, though, 0:03:12.000 --> 0:03:13.840 when it comes to autos and sort of the higher 0:03:13.880 --> 0:03:16.760 tech components that these autos are waiting for, need to 0:03:16.840 --> 0:03:18.960 understand about where we are in the supply chain? Because 0:03:18.960 --> 0:03:21.960 we have heard, you know, whether it's like Susquehanna or 0:03:22.080 --> 0:03:24.880 you know more about chip lead times coming down a 0:03:24.919 --> 0:03:29.080 little bit. They are absolutely coming down and and that 0:03:29.240 --> 0:03:32.120 situation is improving, but it's not fixed yet. And there's 0:03:32.120 --> 0:03:35.600 another wrinkle to it. You know, the automakers are making 0:03:35.600 --> 0:03:40.520 this transition to electric vehicles. Well, electric vehicles require more chips, 0:03:40.560 --> 0:03:44.720 they're more high tech, they're more electronic, and so, you know, 0:03:44.800 --> 0:03:47.840 to finish an electric vehicle takes more chips than it 0:03:47.880 --> 0:03:51.560 does to finish an internal combustion engine vehicle. So even 0:03:51.600 --> 0:03:54.800 as as some of the shortages begin to ease on 0:03:54.840 --> 0:03:57.040 some of my conductors, and they're not gone, but they've 0:03:57.320 --> 0:04:00.600 begun to improve, you know, you have the vehicles that 0:04:00.760 --> 0:04:03.800 demand more of them. so that creates a new bottom 0:04:04.280 --> 0:04:06.920 and and that's and that's going to be around for 0:04:06.960 --> 0:04:10.640 a while. Hey, Um Keith, I do wonder that these 0:04:10.840 --> 0:04:14.040 SUVs and trucks that they can't Ford, can't finish up 0:04:14.040 --> 0:04:17.800 and get them off the assembly lining out to h customers. 0:04:18.080 --> 0:04:20.560 Is there the chance, because they don't have the components 0:04:20.560 --> 0:04:22.680 they need to finish them up, that by the time 0:04:22.720 --> 0:04:25.520 they are done, that demand will have fallen? Or these 0:04:25.560 --> 0:04:29.159 cars that are already sold? You know, they feel like 0:04:29.520 --> 0:04:34.280 pent up demand from the pandemic still is there. Um, 0:04:34.320 --> 0:04:38.320 they the supply of cars on dealer lot is still 0:04:38.480 --> 0:04:41.960 very scamp. So they really are selling these things as 0:04:41.960 --> 0:04:45.320 soon as they come off the delivery to us. Um, 0:04:45.360 --> 0:04:48.120 you know, will that continue forever? Hard to know, but 0:04:48.320 --> 0:04:51.400 the fact you still are not back up the full 0:04:51.440 --> 0:04:54.520 capacity and they still have a lot of demand for 0:04:54.600 --> 0:04:57.000 the products. So they feel like as soon as they 0:04:57.080 --> 0:04:59.400 finish these things up and believe or not, they roll 0:04:59.480 --> 0:05:02.040 them off in the assembly line and they parked them 0:05:02.040 --> 0:05:04.359 and parking lots waiting to put these chips in. So 0:05:04.440 --> 0:05:07.400 that's that's the situation. But once they can chip them 0:05:07.440 --> 0:05:11.279 up to the dealers, they're confident they have buyers waiting. Yeah, 0:05:11.320 --> 0:05:13.839 I mean my dad's one of those buyers. His Mackie 0:05:13.880 --> 0:05:15.600 that he's been you know, he's ordered for more than 0:05:15.640 --> 0:05:17.840 a year ago, Keith, he got an email a few 0:05:17.839 --> 0:05:21.080 weeks ago. It actually went into production yesterday and I emailed, 0:05:21.200 --> 0:05:23.480 I texted him, I said happy, you know, Macki Production Day, 0:05:23.480 --> 0:05:25.720 and he said we'll see. When, when it actually arrives? 0:05:25.920 --> 0:05:27.520 And what do you think? Is he going to get 0:05:27.560 --> 0:05:28.760 it in the next two weeks or is it gonna 0:05:28.760 --> 0:05:32.160 sit there and wait for a chip? Yeah, I um 0:05:32.200 --> 0:05:35.880 you know, I wouldn't take the over under on that one. Okay, 0:05:36.080 --> 0:05:38.080 I think it could be a while, and that's the 0:05:38.279 --> 0:05:41.719 people are waiting, you know, literally for a year to 0:05:41.760 --> 0:05:44.960 get some of these high demands. You know, electric vehicles, 0:05:45.040 --> 0:05:48.880 the Ford Um F one, gift through lightning, the electric 0:05:48.880 --> 0:05:52.279 pick up truck, had two hundred thousand orders before it 0:05:52.320 --> 0:05:54.600 even rolled the first one off the assembly line. So 0:05:54.800 --> 0:05:57.520 you know on the waiting lists are fast. Great demand, 0:05:57.520 --> 0:05:59.280 good problem to have, but you want to and get 0:05:59.320 --> 0:06:01.599 them in to the hands of customers. Keith non, thank 0:06:01.600 --> 0:06:04.440 you so much. Busy Guy Finding time for us. Bloomberg 0:06:04.440 --> 0:06:07.680 News Auto reporter Keith Nton on the road doing another story. 0:06:08.040 --> 0:06:12.039 This is Bloomberg Business Week with Carol Messer and Bloomberg 0:06:12.160 --> 0:06:16.160 Quick Takes Tim Stinovic on Bloomberg radio to leaders from 0:06:16.160 --> 0:06:18.360 around the world to sending a midtime Manhattan this week 0:06:18.400 --> 0:06:21.280 for the seventy seven session of the UN General Assembly. 0:06:21.360 --> 0:06:24.680 First Day of the High Level General Debate is today us. 0:06:24.720 --> 0:06:28.200 President Joe by now dresses the Assembly tomorrow and we 0:06:28.320 --> 0:06:30.520 certainly have a lot of presents there. Yeah, we've got 0:06:30.600 --> 0:06:33.800 including a Marie hordern. She's Wahington correspondent for Bloomberg News. 0:06:33.880 --> 0:06:35.800 She's up in New York for this. She's live from 0:06:35.800 --> 0:06:37.960 the U N here in New York City. Follow her 0:06:38.240 --> 0:06:40.920 on twitter at Anne Marie emery. Good to have you 0:06:40.960 --> 0:06:42.880 with us this afternoon. It's been a really long day 0:06:42.920 --> 0:06:45.880 for you, so we appreciate you taking the time here. Um, 0:06:45.920 --> 0:06:47.760 what do we need to know? What does our audience 0:06:47.800 --> 0:06:49.640 need to know about what's happened thus far? And then 0:06:50.120 --> 0:06:52.560 what happens when the action goes you know, kicks off 0:06:52.560 --> 0:06:58.080 tomorrow too. Yeah, well, we all know the UN General Assembly, 0:06:58.120 --> 0:07:02.080 the UN in general, really suffers from not being able 0:07:02.120 --> 0:07:05.839 to have jurisdiction over things like a war Ukraine. Russia 0:07:05.960 --> 0:07:08.919 is on the Security Council. They've used the veto card 0:07:09.000 --> 0:07:12.040 more than any other member, we should note, followed just 0:07:12.160 --> 0:07:15.000 under the United States. But really what this is going 0:07:15.000 --> 0:07:17.960 to be facilitating is a number of bilateral meetings on 0:07:17.960 --> 0:07:20.520 the side where leaders can come together, and the two 0:07:20.520 --> 0:07:23.080 big topics right now are obviously Ukraine, especially as we 0:07:23.160 --> 0:07:27.680 might hear from President Vladimir Putin this evening, as he 0:07:27.760 --> 0:07:31.200 is talking about referendums in four regions of Ukraine that 0:07:31.280 --> 0:07:34.880 he will then absorb into the country. These are sham referendums, 0:07:34.880 --> 0:07:38.440 sham votes. And then, of course, the energy crisis. Europe 0:07:38.480 --> 0:07:41.080 is about to enter a very bleak and dark winter 0:07:41.600 --> 0:07:45.280 and with Putin playing politics with natural gas and also 0:07:45.400 --> 0:07:49.120 Europe really cutting off their access or allowing countries to 0:07:49.160 --> 0:07:53.040 access exports from Russia of oil, this winter is going 0:07:53.040 --> 0:07:57.560 to be incredibly challenging. So it's almost a meeting to 0:07:57.600 --> 0:07:59.280 talk about the future of Ukraine and what was going 0:07:59.320 --> 0:08:01.480 on on the ground right down that country, as well 0:08:01.520 --> 0:08:04.000 as an oil and gas sum it well, when it 0:08:04.040 --> 0:08:08.280 comes to Russia and the intentions with Ukraine, you earlier 0:08:08.840 --> 0:08:11.600 and we cut up with the native secretary general, Yain Staltenberg, 0:08:11.720 --> 0:08:13.920 from the UN Rose Garden. Let's listen to what he 0:08:13.960 --> 0:08:19.640 had to say to you. Such sham votes, referendums do 0:08:19.720 --> 0:08:23.280 not have any legitimacy and therefore they don't change the 0:08:23.440 --> 0:08:27.480 nature of the conflict. This remains a war of aggression 0:08:27.640 --> 0:08:31.920 by rusha against the independent sovereign nation in Europe, Ukraine. 0:08:32.600 --> 0:08:38.600 Uh and UH. This will only uh further uh worsen 0:08:38.679 --> 0:08:42.240 the situation and therefore we need to provide more support 0:08:42.360 --> 0:08:45.840 to Ukraine. Very difficult situation. And talking about support, Native 0:08:46.080 --> 0:08:48.959 Secretary General Yan Stealtenberg, I mean and Marie, and your 0:08:49.000 --> 0:08:51.840 conversations you're having, you will have, I mean, what stood 0:08:51.880 --> 0:08:57.200 that for you in that conversation specifically? Well, he's in 0:08:57.320 --> 0:09:01.079 line with I also quickly spoke to two Ukrainian officials 0:09:01.120 --> 0:09:04.959 after this news came out, and they were not surprised, 0:09:05.000 --> 0:09:08.760 because Putin has done this before in Crimea and most 0:09:08.800 --> 0:09:12.800 notably in on top of that, one Ukrainian official said 0:09:12.840 --> 0:09:15.040 to me, well, if I declare myself a prince, so 0:09:15.080 --> 0:09:17.079 what the world is going to recognize me as a prince? 0:09:17.280 --> 0:09:19.720 What they are saying is this is not change the 0:09:19.800 --> 0:09:23.680 actualities on the ground and what they are the Ukrainians 0:09:23.679 --> 0:09:25.640 are here asking for is more weapons. What you hear 0:09:25.640 --> 0:09:28.720 from NATO Secretary General Yan Stoltenberg is that he wants 0:09:28.760 --> 0:09:31.520 to keep this unity within Europe, even though he's very 0:09:31.559 --> 0:09:35.120 well aware of how difficult, especially for our Europe and 0:09:35.120 --> 0:09:37.040 the Western allies. It is going to be this winter. 0:09:37.320 --> 0:09:40.040 He wants to keep this unity and he says that 0:09:40.280 --> 0:09:43.920 they will sustain the weapons and ammunition until the war 0:09:44.040 --> 0:09:47.120 is over, but obviously there's no timeline on that. The 0:09:47.240 --> 0:09:52.320 concerns is that, of course, with Putin, annexing basically uh 0:09:52.440 --> 0:09:55.480 these regions, the Don Bass, as well as Hassan and 0:09:55.600 --> 0:09:58.840 also Zebarigia, would mean that he would use that and 0:09:58.840 --> 0:10:01.760 say to his people I have now a success, after 0:10:01.800 --> 0:10:04.520 we saw that counter offensive from Ukraine. On top of that, 0:10:04.760 --> 0:10:07.800 he would consider the Kremlin as well would consider this 0:10:07.880 --> 0:10:11.880 their legal territory, meaning there are many individuals who are 0:10:11.960 --> 0:10:16.240 concerned about Putin escalating this into the nuclear territory or 0:10:16.280 --> 0:10:19.400 the chemical weapons territory. What is the discussion about how 0:10:19.440 --> 0:10:21.720 to prevent that from happening, not just in the United States, 0:10:21.800 --> 0:10:23.679 but from from world leaders who are here as part 0:10:23.679 --> 0:10:28.320 of the UN General Assembly? They say, and that you 0:10:28.320 --> 0:10:30.840 saw the president say on sixty minutes, there would be quote, 0:10:30.840 --> 0:10:34.000 consequences uh and, but they will not tell you what 0:10:34.120 --> 0:10:37.000 those consequences would be. But I think what they were 0:10:37.040 --> 0:10:39.400 trying to make sure that they also use this too 0:10:39.520 --> 0:10:42.800 when they talk to their partners and their allies, as 0:10:43.040 --> 0:10:45.560 this is the reason why we also need to stick together, 0:10:45.760 --> 0:10:48.400 because for them, they feel as though, especially in Europe, 0:10:48.400 --> 0:10:51.400 on their doorstep. This isn't just a war in Ukraine. 0:10:51.400 --> 0:10:53.439 This isn't just the war in eastern and South Ukraine. 0:10:53.760 --> 0:10:56.800 This could potentially inflict all of us and already is 0:10:56.880 --> 0:10:59.839 changing the landscape of Europe. And really, do you want 0:10:59.840 --> 0:11:01.640 to Asque? It's always key when we've got someone on 0:11:01.679 --> 0:11:04.560 the ground there. What is kind of the scene? The 0:11:04.600 --> 0:11:07.040 mood at the U N? I'm thinking this is it's 0:11:07.040 --> 0:11:09.840 been very different the U N after two years of 0:11:09.840 --> 0:11:12.839 the pandemic. It's much more normal, I guess you could say, 0:11:12.880 --> 0:11:16.640 although we are living in certainly very unusual times. Um 0:11:16.760 --> 0:11:22.040 set the scene for us well. The topics are depressing, right. 0:11:22.040 --> 0:11:24.760 We're talking about a war, we're talking about energy crisis, 0:11:24.840 --> 0:11:27.800 we're talking about food security. I was at a panel 0:11:27.800 --> 0:11:30.080 discussion on the sidelines of the U N Talking About 0:11:30.080 --> 0:11:33.400 Food Security in Latin America, which most countries import all 0:11:33.400 --> 0:11:37.719 these fertilizers. They are dealing with almost deathly inflation in 0:11:37.800 --> 0:11:41.440 Latin America and the Caribbean. But when you talk about 0:11:41.440 --> 0:11:43.719 the fact that all these leaders and their teams are 0:11:43.760 --> 0:11:47.560 able to gather together, as we have really not been 0:11:47.600 --> 0:11:50.680 able to do in terms of massive und gatherings because 0:11:50.679 --> 0:11:53.720 of Covid. It's quite jovial on the sidelines. You see 0:11:53.720 --> 0:11:57.640 individuals being able to come out of their security details 0:11:57.640 --> 0:12:00.319 that have a conversation with journalists or meeting each other. 0:12:00.640 --> 0:12:03.800 So in that sense, uh, there is this expectation that 0:12:03.840 --> 0:12:06.000 they can get some work done on the sidelines of 0:12:06.040 --> 0:12:08.520 this meeting because it is in person and usually things 0:12:08.600 --> 0:12:10.640 get done a lot quicker than Hey Andrie, just in 0:12:10.640 --> 0:12:12.160 the thirty seconds that we have left with you, you've 0:12:12.160 --> 0:12:13.920 got a lot of big interviews coming up. Um, you've 0:12:13.960 --> 0:12:16.800 got another one coming up later today on BTV. Who 0:12:16.800 --> 0:12:21.080 are you talking to? So I'M gonna be sitting down 0:12:21.120 --> 0:12:24.520 with a Foreign Minnesota of cutter, and really at a 0:12:24.559 --> 0:12:28.840 critical moment because we have sholtz of Germany, the German chancellor, 0:12:29.000 --> 0:12:32.560 heading over to Joha this weekend and we know that 0:12:32.559 --> 0:12:36.040 he is trying to secure LN G deals. Again. This 0:12:36.200 --> 0:12:38.959 UN General Assembly is basically coming down to an oil 0:12:39.000 --> 0:12:42.040 and gas conference, because you have European officials trying to 0:12:42.080 --> 0:12:44.679 secure supplies before they go into the den of winter. 0:12:44.960 --> 0:12:46.880 So that'll be one of the main topics we discussed 0:12:46.920 --> 0:12:49.120 and to sit down. All Right, busy day. You're on 0:12:49.240 --> 0:12:52.480 it for us. We appreciate it our own and Marie horden, 0:12:52.559 --> 0:12:54.920 she covers the White House and so much more. She's 0:12:55.000 --> 0:12:57.920 joining us from outside the U. N. This is bluebird. 0:13:01.520 --> 0:13:05.120 You're listening to Bloomberg Business Week with Carol Messer and 0:13:05.200 --> 0:13:10.040 Bloomberg Quick Takes Tim Stinovic on Bloomberg radio. Well, we 0:13:10.280 --> 0:13:13.720 mentioned the Ford News. Uh, and even though we're watching 0:13:13.720 --> 0:13:15.840 that in the Ford stock falling off among our most 0:13:15.920 --> 0:13:18.000 right on the Bloomberg today's one on General Motors and 0:13:18.000 --> 0:13:20.360 how GM wants to be the tortoise, not the hair, 0:13:20.720 --> 0:13:23.400 when it comes to the great ev race. Yeah, this 0:13:23.520 --> 0:13:27.000 excerpt is in the upcoming issue of Business Week magazine. 0:13:27.000 --> 0:13:28.400 You can read it now that it's on the Bloomberg 0:13:28.480 --> 0:13:31.520 Terminal and at Bloomberg Dot Com. Slash Business Week. It's 0:13:31.559 --> 0:13:35.600 adapted from David Welch's new book charging ahead. GM, Mary 0:13:35.679 --> 0:13:39.439 Barra and the reinvention of an American icon. David Welch's 0:13:39.440 --> 0:13:41.640 Detroit Bureau chief for Bloomberg News. He joins us on 0:13:41.679 --> 0:13:44.240 the phone from Detroit. Also with us, as Joel Weber, 0:13:44.280 --> 0:13:46.360 the editor of Bloomberg Business Week. He's with us in 0:13:46.400 --> 0:13:50.120 the Bloomberg Interactive Broker Studio. Joel. When you think about evs, 0:13:50.160 --> 0:13:52.280 we of course think of Tesla, but increasingly we're talking 0:13:52.320 --> 0:13:55.480 about a company like Ford, with the Maki and the 0:13:55.720 --> 0:13:59.280 F one, fifty lightning. Where does GM fall into this? Well, 0:13:59.280 --> 0:14:02.160 they were really right like that. What's interesting by this 0:14:02.200 --> 0:14:03.920 I mean they weren't as early as Tesla, but but 0:14:04.040 --> 0:14:07.600 GM was out early. Mary Borrow, like really was forward 0:14:07.720 --> 0:14:12.720 and telling everyone that GM was going to be big 0:14:12.800 --> 0:14:16.040 on big on EVs. And yet here we are and 0:14:16.120 --> 0:14:19.480 it's like wait, where is GM exactly? And and you 0:14:19.480 --> 0:14:22.200 know what was interesting when David and I started talking 0:14:22.200 --> 0:14:24.760 about his book was sort of that this was actually 0:14:24.800 --> 0:14:28.000 the plan. Like that. Mary borrow said, WE'RE gonna go, 0:14:28.080 --> 0:14:30.160 we're gonna be a little bit slow, but it's all 0:14:30.160 --> 0:14:32.840 going to be worth it. Um So, so, David. What's 0:14:32.840 --> 0:14:37.120 the rational there? GM at its heart is a really 0:14:37.320 --> 0:14:40.680 pragmatic company and one thing people forget about Mary Barrow, 0:14:40.720 --> 0:14:44.600 because they see her as the first email CEO, is 0:14:44.800 --> 0:14:48.960 she's an engineer and her her sidekick, Mark Royce, is 0:14:49.000 --> 0:14:52.720 also an engineer. So for the first time since the sixties. 0:14:52.720 --> 0:14:55.440 The company is run by engineers. They don't go for buzz. 0:14:55.520 --> 0:14:57.520 They don't try to jam a battery in an existing 0:14:57.600 --> 0:14:59.840 vehicle to get on the cover of business week, although 0:15:00.080 --> 0:15:06.720 lightning cover was really, really well done by Kelly. They 0:15:07.960 --> 0:15:10.360 you know, they decide, okay, we're gonna build a battery 0:15:10.400 --> 0:15:12.880 pack that can host everything from a little Chevy Equinox 0:15:13.040 --> 0:15:15.840 and actually even smaller. They're working on subcompacts for global 0:15:15.880 --> 0:15:18.160 markets all the way up to this huge nine thousand 0:15:18.200 --> 0:15:20.880 pound Hummer and everything in between. And they're gonna build 0:15:20.920 --> 0:15:23.720 their battery plants. So, other than Tesla, GM has the 0:15:23.760 --> 0:15:28.400 only battery plant making battery packs and sells. It's in Radstown, Ohio. 0:15:28.520 --> 0:15:30.080 It's going right now. The second one is going to 0:15:30.160 --> 0:15:33.360 open in Spring Hill, Tennessee, near the old Saturn plant, 0:15:33.560 --> 0:15:37.520 next year. Again an engineering mindset. Get your building blocks 0:15:37.520 --> 0:15:39.880 in place, get your plants up, then you spawn this 0:15:39.960 --> 0:15:44.160 huge family of evs and and and that's really where 0:15:44.160 --> 0:15:47.160 they are. One could fault them for relying on the 0:15:47.240 --> 0:15:50.200 Chevy bold, which has been around since two sixteen. It's 0:15:50.200 --> 0:15:53.240 a compact car. Americans Hay compax. I think they rode 0:15:53.280 --> 0:15:55.560 that a little too long before coming up with something else. 0:15:55.960 --> 0:15:57.840 But in a way this really was the plant. So 0:15:58.640 --> 0:16:01.680 it's you know, and just respond to your Zinger. Their 0:16:02.120 --> 0:16:05.200 easy data to to poke fun at at my forward 0:16:05.240 --> 0:16:10.280 cover with Ford tumbling up. Yeah, but but you know, 0:16:10.480 --> 0:16:15.240 the the great thing about Um, what your story really 0:16:15.320 --> 0:16:19.200 injes on, is this ultium, which is the battery platform. 0:16:19.320 --> 0:16:23.040 So what did? What did GM UH? What is Gim 0:16:23.040 --> 0:16:26.080 hoping to accomplish there? And and you know, we'll talk 0:16:26.120 --> 0:16:28.200 a little bit more about where they've been with the vault, 0:16:28.280 --> 0:16:30.400 but like where does it? Where does this potentially allow 0:16:30.440 --> 0:16:35.560 them to go? So right now they've got too luxury 0:16:35.840 --> 0:16:38.560 electric vehicles in production. They've got the Big Hummer and 0:16:38.600 --> 0:16:43.120 they've got a cadillac lyric and this is sort of historic. 0:16:43.200 --> 0:16:45.520 GM goes back to Alfred's phone. Start off with your 0:16:45.520 --> 0:16:47.840 coolest stuff in your luxury brands and then's slowly got 0:16:47.880 --> 0:16:51.240 down on the scale. And next year they'll have chevy 0:16:51.240 --> 0:16:54.000 silverado pickup, which a year behind, but we'll compete with 0:16:54.000 --> 0:16:57.560 the defince. Then they have a Chevy Blazer midsize, I 0:16:57.560 --> 0:16:59.840 should be family car for a lot of people. Not 0:17:00.040 --> 0:17:03.920 Super Cheap but pretty cheap. It's dollars which these days. 0:17:04.040 --> 0:17:07.199 This about what a new car cost. Then, about this 0:17:07.240 --> 0:17:10.919 time next year, the Chevy Equinox, the equinox, now that 0:17:10.960 --> 0:17:13.119 no one buys families and dams anymore, the equinox is 0:17:13.160 --> 0:17:16.159 really Chevy's family car. And they're going to start this 0:17:16.200 --> 0:17:18.680 thing at thirty thousand which, other than the bolt, which 0:17:18.720 --> 0:17:21.680 again compact car Americans still like complex, will be the 0:17:21.760 --> 0:17:24.199 cheapest on the market. And it really to me that 0:17:24.440 --> 0:17:27.639 is it's two things. It's really the fruit of this 0:17:27.680 --> 0:17:30.400 whole all team thing. They believe they've got the scale 0:17:30.760 --> 0:17:34.120 and the platform where they can democratize electric vehicles by 0:17:34.160 --> 0:17:36.639 bringing mass market family car to people who don't have 0:17:36.720 --> 0:17:39.960 three other four expensive vehicles in their garage. And the 0:17:40.000 --> 0:17:41.879 other thing is it really is a litmus test or 0:17:41.960 --> 0:17:45.160 how ready Middle America is to go with battery powered 0:17:45.240 --> 0:17:48.119 vehicles and charge up. And but to me it's what 0:17:48.280 --> 0:17:52.080 really alteam is all about, is if they can sell 0:17:52.160 --> 0:17:55.239 evs to everybody. Um, the secret sauce. Seems to be 0:17:55.280 --> 0:17:59.000 this alterum about it, and you write that it's really 0:17:59.000 --> 0:18:01.480 about changing the way cars are made. So what's different? 0:18:01.560 --> 0:18:05.800 What's different in the process old teams? Basically it's a 0:18:05.800 --> 0:18:07.919 battery pack that makes up the floor of the vehicle 0:18:08.600 --> 0:18:12.240 and then you you you know this is way over 0:18:12.320 --> 0:18:15.399 simplification of the guys and the factories and you're not 0:18:15.440 --> 0:18:17.160 doing that because I'm a girl, are you? I am 0:18:17.200 --> 0:18:19.400 the daughter of an engineer. So you can you can 0:18:19.440 --> 0:18:24.119 go with it from doing it because simply board Um, 0:18:24.359 --> 0:18:27.200 but you're basically bolting whatever vehicle it is on top 0:18:27.280 --> 0:18:30.400 of that skateboard kind of platform. It's not quite a skateboard, 0:18:30.400 --> 0:18:33.960 but close enough, so you can and it's also sort 0:18:34.000 --> 0:18:37.280 of a Lego set. So if you need to build 0:18:37.320 --> 0:18:39.439 it longer or wider or shorter or whatever, you can 0:18:39.440 --> 0:18:41.879 do that. The other thing they can do, and this 0:18:41.920 --> 0:18:43.919 is what they've done with the Hummer, you can actually 0:18:43.920 --> 0:18:45.679 stack them on top of each other. So if you 0:18:45.720 --> 0:18:48.000 have a big, heavy vehicle that has a thousand horse power, 0:18:48.119 --> 0:18:50.240 which the Hummer does, so you need a lot of 0:18:50.240 --> 0:18:52.640 power on board. If you just add more battery, which 0:18:52.680 --> 0:18:56.000 we have, more electricity by stacking these cells on top 0:18:56.040 --> 0:18:58.040 of each other, she can have a big and wide 0:18:58.119 --> 0:19:00.399 and you can stack them up for more energy. Either's 0:19:00.440 --> 0:19:02.440 just it really is kind of like a Lego. Said, 0:19:02.680 --> 0:19:04.119 you know, they're not the only ones. Are gonna do this. 0:19:04.200 --> 0:19:06.840 Volkswagen is starting something very similar right about now. But 0:19:06.920 --> 0:19:10.840 everybody else in the industry, Tesla, is kind of going 0:19:10.880 --> 0:19:13.240 where GM and Volkswagen are headed to get a lot 0:19:13.280 --> 0:19:15.480 of vehicles out quickly and both, and you look at 0:19:15.520 --> 0:19:17.600 a GM and volkswagon are the two who have earmarked 0:19:17.840 --> 0:19:21.200 billions of dollars and many, many vehicles coming. At least 0:19:21.200 --> 0:19:22.959 they the two did it first. Before it has caught up. 0:19:23.000 --> 0:19:25.480 Others are planning on it. But in terms of well, 0:19:25.480 --> 0:19:28.760 what this really is? This is commercializing electrical the battery 0:19:28.760 --> 0:19:31.280 itself doesn't have any special chemistry or special sauce. It's 0:19:31.280 --> 0:19:36.040 a commercialization and an industrial plan and you know, it's interesting. Um, 0:19:36.080 --> 0:19:38.520 you know, in addition to these for the sport news 0:19:38.560 --> 0:19:41.320 that my colleagues broke, our colleagues broke today, we also 0:19:41.359 --> 0:19:43.560 had this hurts news that hurts is going to get 0:19:43.560 --> 0:19:45.960 into this so so clearly to have this scale and 0:19:46.000 --> 0:19:48.919 bring the cost down. Um, uh, you know, hurts is 0:19:48.960 --> 0:19:51.399 liking what they see out of GM. But so how 0:19:51.480 --> 0:19:53.840 does how does that kind of fit into Bara's master 0:19:53.880 --> 0:19:59.200 plan here? So GM's plan is to sell a million 0:19:59.280 --> 0:20:02.800 evs in the US and I think really the only 0:20:02.800 --> 0:20:05.520 one who would be probably doing that by then. The 0:20:05.920 --> 0:20:08.720 Tesla and some manalist a GM could be ahead by 0:20:08.760 --> 0:20:12.520 then and could save the dog plate whatever its all forecasting. 0:20:12.640 --> 0:20:15.200 But it gives them, it gives gm a lot of 0:20:15.200 --> 0:20:17.560 different vehicles and a lot of potential, a lot of 0:20:17.600 --> 0:20:20.880 production in there for potential sales line. So hurts likes 0:20:20.920 --> 0:20:24.760 what they see because they're saying they're gonna buy vehicles 0:20:24.760 --> 0:20:28.040 from five different GM brands. So you would cadillac, Chevroy, 0:20:28.200 --> 0:20:30.719 G M C and also bright drop, which is GM's 0:20:30.760 --> 0:20:33.840 commercial band business. That X has already ordered some some 0:20:33.880 --> 0:20:37.359 electric bands from this bright drop unit that that GM 0:20:37.400 --> 0:20:41.560 has going. And and so clearly hurts seas enough that 0:20:41.680 --> 0:20:45.320 GM has got enough production in their plan where over 0:20:45.359 --> 0:20:47.679 the next five years they can buy a hundred and 0:20:47.680 --> 0:20:50.640 seventy five thousand E V s off. Then they pledged 0:20:50.760 --> 0:20:54.800 by a hundred thousand, a hundred thousands from Tesla. So 0:20:55.040 --> 0:20:57.760 they're they're gonna buy more from GM. So so the 0:20:57.840 --> 0:21:00.240 production is going to be there. All right. Well, all 0:21:00.400 --> 0:21:02.439