WEBVTT - Tesla Provides No Answers On Model 3 Production Issues: Denning 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:32.519 Podcast on Apple Podcasts, SoundCloud and Bloomberg dot com. Turn 0:00:32.600 --> 0:00:34.880 our attention now to Tesla, the shares down a little 0:00:34.920 --> 0:00:36.920 bit more than three and a quarter percent. Here to 0:00:37.080 --> 0:00:40.720 explain all is Liam Denning. He is our energy, mining 0:00:40.760 --> 0:00:44.280 and commodities columnists for Bloomberg Gadfly, and you can of 0:00:44.280 --> 0:00:48.599 course follow him on Twitter at Liam Denning. All Right, 0:00:48.680 --> 0:00:53.360 Liam elon Musk manages to put his cherry red Tesla 0:00:53.440 --> 0:00:58.480 sports car into space aboard the Falcon Heavy rocket. But 0:00:58.640 --> 0:01:02.440 can he get those are all three automobiles into show rooms? 0:01:02.520 --> 0:01:08.679 Tell us the details? Hi him? Yeah? So obviously on 0:01:08.680 --> 0:01:12.480 on Tuesday everyone got very excited about the the Falcon 0:01:12.560 --> 0:01:18.839 Heavy launch. The issue Tesla has is obviously it's great 0:01:18.880 --> 0:01:21.720 marketing to put a car into space, but what they 0:01:21.760 --> 0:01:25.120 really need is something a bit more mundane, which is 0:01:25.120 --> 0:01:27.520 a few hundred thousand Model three is just sitting on 0:01:28.160 --> 0:01:31.320 car lots in in the Bay Area. UM, they're still 0:01:31.360 --> 0:01:35.280 having problems getting production of the Model three up, and 0:01:35.360 --> 0:01:40.880 on last night's call UM they didn't give an answer 0:01:40.920 --> 0:01:44.680 to repeat repeated questions from analysts asking you know, so 0:01:44.800 --> 0:01:48.240 exactly how many are you churning out a week now. 0:01:48.320 --> 0:01:54.120 They are keeping their targets, albeit with a caveat saying 0:01:54.160 --> 0:01:57.520 that you know, these are targets and history has known 0:01:57.600 --> 0:01:59.720 that we've struggled to meet them in the past. So 0:02:00.120 --> 0:02:03.000 it's still you know, there's still a lot of uncertasied 0:02:03.080 --> 0:02:07.000 over this question. And for a company that has UM 0:02:07.040 --> 0:02:09.480 but it's still burning cash, this is this is kind 0:02:09.520 --> 0:02:11.919 of the key question. Now, when can they get production 0:02:11.919 --> 0:02:16.280 of the Model three really ramping? So Liam, last night 0:02:16.320 --> 0:02:20.600 I showed a video of that rocket Tesla, the SpaceX 0:02:20.760 --> 0:02:23.960 rocket shooting up to my eight year old son and 0:02:24.000 --> 0:02:28.240 he said, who's Elon Musk? What is this company? And 0:02:28.400 --> 0:02:31.040 I thought, you know, well, it's a car company, it's 0:02:31.080 --> 0:02:33.320 also a rocket company. It's also a tunnel company. It 0:02:33.320 --> 0:02:36.520 also is a solar company. What is it focusing on 0:02:36.720 --> 0:02:40.200 and how is it's sort of allocating it's uh negative 0:02:40.240 --> 0:02:44.600 cash flow uh and its potential borrowings to it's it's 0:02:44.639 --> 0:02:47.360 it's endeavors that sort of give it the sheen of 0:02:47.400 --> 0:02:49.280 the future, right, I mean, do they give a sense 0:02:49.320 --> 0:02:53.640 of that. Well, you know, if you take a step back, 0:02:54.480 --> 0:02:59.560 it's clear that Tesla, you know, Tesla my fantastic products. 0:02:59.600 --> 0:03:02.800 You know of the models, and if you you only 0:03:02.800 --> 0:03:06.200 have to look at what's happened to all the other 0:03:06.280 --> 0:03:08.920 carmakers in terms of how much money they're now putting 0:03:09.000 --> 0:03:14.640 into electrified vehicles to know that that Tesla has shifted 0:03:14.639 --> 0:03:18.720 the whole industry. It's basically scared them. Um, So there 0:03:18.840 --> 0:03:23.280 is that. The problem Tesla has is that while the 0:03:23.360 --> 0:03:28.560 products are generally favorably received and generate a lot of buzz, 0:03:29.440 --> 0:03:32.240 it's struggling to get it struggling to do what a 0:03:32.280 --> 0:03:35.960 lot of Silicon Valley companies have to do if they're 0:03:36.000 --> 0:03:39.400 going to become profitable businesses. And that's the scale. So 0:03:39.920 --> 0:03:43.720 you know, Tesla's whole plan has been to sell some 0:03:43.960 --> 0:03:48.080 very highly priced luxury electric vehicles and then use that 0:03:48.160 --> 0:03:50.680 momentum and use some of the money from that to 0:03:50.920 --> 0:03:53.560 their become a mass market player. And where it's struggling 0:03:53.680 --> 0:03:56.080 is to become a mass market player and the Model 0:03:56.240 --> 0:03:59.760 three is key to doing that, and thus far it's 0:03:59.760 --> 0:04:04.360 having real problems, um, getting to production levels you know 0:04:04.400 --> 0:04:07.080 that it originally talked about, which were like, you know, 0:04:07.640 --> 0:04:10.720 five hundred thousand vehicles a year. I mean, right now, 0:04:11.720 --> 0:04:15.040 based on inside EV's estimates, it's looking like it's producing 0:04:15.080 --> 0:04:18.080 I don't know, somewhere between five hundred and a thousand 0:04:18.279 --> 0:04:20.880 a week, which is you know, really speed producing five 0:04:20.920 --> 0:04:24.240 thousand to ten thousand a week. Liam, Who's going to 0:04:24.320 --> 0:04:27.640 be doing all this because I basically been looking at 0:04:27.640 --> 0:04:31.680 the higher ranks of Tesla. John McNeil who joined in, 0:04:33.240 --> 0:04:36.640 he was the global sales ahead of global sales and service, 0:04:36.800 --> 0:04:43.400 he's leaving. The former head of business development has left. 0:04:44.080 --> 0:04:48.360 Who is actually going to be doing all of this work? Um? 0:04:48.560 --> 0:04:52.200 I mean, I'm you know, Elon Musk is a capable guy, 0:04:52.400 --> 0:04:56.600 and Tesler does have a lot of brand eck with 0:04:56.800 --> 0:04:59.400 here out in out on the West coast, so you know, 0:04:59.520 --> 0:05:03.039 I'm sure they will attract whomever they need. But to 0:05:03.160 --> 0:05:05.600 your point, it's just another ref flag. I mean, part 0:05:05.640 --> 0:05:08.440 of the problem with Tesla is it does have this 0:05:08.600 --> 0:05:12.359 mystique um and this cult like quality that means even 0:05:12.520 --> 0:05:17.200 you know, flipped results and and um, you know, terrible 0:05:17.200 --> 0:05:20.159 cash burn and miss tearnings and all that sort of 0:05:20.200 --> 0:05:23.440 thing doesn't really affect the stock price too much. But 0:05:23.480 --> 0:05:25.039 at the same time, there are a lot of red 0:05:25.080 --> 0:05:30.000 flags the management turnover, the missed targets. I would say 0:05:30.120 --> 0:05:34.839 last year's Solar City deal looks very questionable to me. Um, 0:05:34.880 --> 0:05:36.680 you know this this is this is kind of the 0:05:36.720 --> 0:05:40.480 balance there. There is always plenty of fodder when Tesla 0:05:40.560 --> 0:05:43.479 reports results for both bulls and bears, which is why 0:05:43.520 --> 0:05:46.520 you see the stock not move a great deal even 0:05:46.560 --> 0:05:50.039 if the results for that are terrible. Yeah, Liam Denning, 0:05:50.040 --> 0:05:51.640 thank you so much for being with us. Liam Denning, 0:05:51.720 --> 0:06:09.520 Energy Mining and Commodities calmness with Bloomberg guard Fly. We've 0:06:09.560 --> 0:06:13.640 seen a market rise in benchmark US rates so far 0:06:13.960 --> 0:06:16.880 this year. Have we just seen the beginning or is 0:06:16.920 --> 0:06:18.880 this the end? Can we expect this to sort of 0:06:18.880 --> 0:06:21.719 be the plateau for a couple of months as people 0:06:21.760 --> 0:06:24.160 reassess their expectations. Here to talk about that with us 0:06:24.440 --> 0:06:27.760 is Leo Groshowski, chief investment officer at b n y 0:06:28.000 --> 0:06:31.880 Melon Wealth Management, which oversees two eight billion dollars. He 0:06:31.960 --> 0:06:34.720 joins us here in our eleven three oh Studios, LEO, 0:06:35.160 --> 0:06:39.400 where are we with respect to the treasury yield rise? 0:06:39.480 --> 0:06:41.600 We do have another third year auction today at one 0:06:41.680 --> 0:06:45.160 pm Eastern. Uh. There was a lot of weakness yesterday 0:06:45.200 --> 0:06:48.640 at the ten year auction. What sort of the ceiling 0:06:48.960 --> 0:06:53.159 for this cycle? Our best guests and at this point 0:06:53.279 --> 0:06:57.359 it's it's it's an educated guess. Um, we've got a 0:06:57.440 --> 0:06:59.839 range of three and a quarter percent on the upside 0:06:59.839 --> 0:07:03.039 for two thou eighteen, which we which we haven't changed, 0:07:03.160 --> 0:07:05.120 so that that was our range going into this year. 0:07:05.160 --> 0:07:07.280 We still think we could get to a three and 0:07:07.360 --> 0:07:09.840 a quarter level. It just to be clear, So ten 0:07:09.920 --> 0:07:12.080 ure yields could go to three and a quarter and 0:07:12.080 --> 0:07:15.160 then stop, we think so we think so that's our 0:07:15.160 --> 0:07:17.800 best gut and again we're we're That seemed like a 0:07:17.920 --> 0:07:20.480 very barish call a while ago, but not as much 0:07:20.520 --> 0:07:25.240 this morning at So I'm amazed though, at the degree 0:07:25.240 --> 0:07:28.040 to which the market seems to think that three percent 0:07:28.120 --> 0:07:30.760 is sort of a magic number, and you know three 0:07:30.840 --> 0:07:34.280 percent would trigger decline in the equity market. I think 0:07:34.800 --> 0:07:38.640 the market is recalibrating right. January was a recalibration for 0:07:38.680 --> 0:07:41.920 the equity market to higher earnings, and now we're seeing 0:07:41.920 --> 0:07:46.120 a market recalibrate to you know, forty basis point to 0:07:46.200 --> 0:07:48.280 fifty basis point increase in the ten year in the 0:07:48.320 --> 0:07:51.680 tenure yield. Okay, So if three is not the magic number, 0:07:52.000 --> 0:07:54.000 have we already passed it? I mean, what when does 0:07:54.000 --> 0:07:57.440 it start to matter how high treasury yields are with 0:07:57.480 --> 0:08:01.640 respect to the equity market performance? It always matters, But 0:08:01.680 --> 0:08:04.440 it's what's driving the yield higher? Okay? So that the 0:08:04.520 --> 0:08:10.960 real driver for um PE multiples, particularly late stage equity 0:08:11.000 --> 0:08:14.120 market PE multiples inflation. Right, So I think the market 0:08:14.160 --> 0:08:17.679 is correct in focusing on inflation. But our work shows 0:08:17.760 --> 0:08:20.440 that if inflation is in a range of zero to 0:08:20.480 --> 0:08:24.000 two percent, a market multiple of just over eighteen times 0:08:24.200 --> 0:08:28.440 is allowable. If inflation moves up to two, to that 0:08:28.600 --> 0:08:31.880 range historically allowed by the market is still around seventeen 0:08:31.880 --> 0:08:35.680 times earnings. So there is a gradual reduction in the 0:08:35.760 --> 0:08:39.720 PE multiple allowed by the market. As inflation begins to rise, 0:08:40.360 --> 0:08:44.120 all eyes focused on next week's CPI number. Right that 0:08:44.120 --> 0:08:47.480 that becomes a big number. Um, it looks like it's 0:08:47.480 --> 0:08:51.040 going to remain below two percent year over year. Um 0:08:51.080 --> 0:08:53.800 If we see that perk above two percent, we already 0:08:53.800 --> 0:08:56.319 have the ten uere break even tips at a two eleven. Right, 0:08:56.360 --> 0:09:00.959 that's up pretty significantly. I think directionally, you're already seeing 0:09:00.960 --> 0:09:04.720 pe multiples get questioned. Now. The market today is trading 0:09:04.720 --> 0:09:08.040 at a multiple of seventeen point five times arreestimate for 0:09:08.040 --> 0:09:11.160 this year's earnings. The good news is all of this 0:09:11.240 --> 0:09:13.959 is happening in the midst of a very very powerful 0:09:14.000 --> 0:09:17.360 learnings reporting season. Right, we're about of the way through, 0:09:18.040 --> 0:09:22.199 and of the companies based on Bloomberg's work, right are 0:09:22.240 --> 0:09:24.800 reporting better than expected earnings last year. At this time 0:09:24.800 --> 0:09:27.640 that number was it looks like we're going to have 0:09:27.640 --> 0:09:30.720 a fifteen percent year over your quarter. And the numbers 0:09:30.720 --> 0:09:33.400 that we put in place post tax reform for this 0:09:33.520 --> 0:09:37.840 year one five for the SMP operating this year are 0:09:37.880 --> 0:09:41.120 actually looking like they might be too conservative. So right 0:09:41.160 --> 0:09:43.640 now that's not been the focus. But the market's trading 0:09:43.679 --> 0:09:46.720 at a seventeen and a half times multiple on earnings 0:09:46.720 --> 0:09:48.839 this year that we think may turn out to be conservative. 0:09:48.960 --> 0:09:54.080 That's not cheap, but it's not overvalued. Leo, I wonder 0:09:54.080 --> 0:09:56.320 if you could just tell us about your day on Friday. 0:09:56.480 --> 0:09:59.920 Where were you last Friday? When the when we s 0:10:00.000 --> 0:10:02.760 some loss two you know, in front of like many 0:10:02.920 --> 0:10:08.559 in front of screens looking at the employment numbers, right 0:10:09.120 --> 0:10:16.080 and feeling feeling the recalibration occur over good news potentially 0:10:16.120 --> 0:10:18.440 being bad news. What does that feel like to a 0:10:18.520 --> 0:10:25.400 professional such as yourself, You immediately fast forward to the clothes, right, 0:10:25.440 --> 0:10:28.120 Where where might this close? Where might this go? Because 0:10:28.160 --> 0:10:32.240 remember him, We've been coming off of an extraordinary period 0:10:32.280 --> 0:10:34.600 of low volatility. I've talked I talked about throughout two 0:10:34.640 --> 0:10:37.760 thousand seventeen. It is not normal to have market returns 0:10:37.760 --> 0:10:40.959 of nearly with volatility. The VIX is now on the 0:10:41.000 --> 0:10:44.400 headlines every day. Right, last year, heads tilted when you 0:10:44.440 --> 0:10:45.960 talked about the VIX, and I had to put it 0:10:45.960 --> 0:10:49.319 in the context of one percent market moves. Last year, 0:10:49.360 --> 0:10:52.240 we had eight days in the entire year where the 0:10:52.240 --> 0:10:54.880 market closed up or down one percent. Right, We've more 0:10:54.920 --> 0:10:58.439 than had that already this year. So I think it's 0:10:58.480 --> 0:11:02.360 about investor reaction. But I'm interested in your reaction because 0:11:02.679 --> 0:11:06.240 you know your pro and your behavior. You know the 0:11:06.360 --> 0:11:11.320 behavior of what pros their behavior. It can be different 0:11:11.360 --> 0:11:15.720 than non professional investors. And I'm wondering, what did you 0:11:15.960 --> 0:11:19.720 feel on Friday and then over the weekend when you 0:11:19.840 --> 0:11:23.040 came in on Monday and we saw that four pc 0:11:23.320 --> 0:11:26.040 drop in the SMP. What was going through your mind 0:11:26.080 --> 0:11:28.200 and what was happening? What kind of energy was there 0:11:28.200 --> 0:11:31.600 in the in the office where you were. Well, Friday 0:11:31.720 --> 0:11:35.000 was a day of of sort of concern and watch right, 0:11:35.840 --> 0:11:40.760 Monday was a day of of action and overreaction. Right, 0:11:41.320 --> 0:11:44.360 and then we you quickly go into what what do 0:11:44.440 --> 0:11:47.240 we do about this? Right? And so Tuesday morning we 0:11:47.360 --> 0:11:49.920 quickly had a call with all of our clients and intermediaries, 0:11:50.400 --> 0:11:53.080 and we drew three to four times the normal audience 0:11:53.080 --> 0:11:54.840 for such a call. In mid December we had a 0:11:54.880 --> 0:11:58.120 standard call outlook two thousand eighteen. Well, the call that 0:11:58.160 --> 0:12:01.400 we hastily arranged on Tuesday more drew more than three 0:12:01.400 --> 0:12:04.160 times the audience that we drew in mid December for 0:12:04.280 --> 0:12:07.960 a market outlook call. So there there's definitely a great 0:12:07.960 --> 0:12:10.160 deal of anxiety. We're looking at a market up three 0:12:10.880 --> 0:12:14.360 actually two from March nine of oh I through last 0:12:14.400 --> 0:12:16.560 night's close. There's a lot of profits to be had 0:12:16.600 --> 0:12:18.920 that investors don't want to see whither away. So what 0:12:19.000 --> 0:12:20.839 was the main concern? What was the main question? What 0:12:20.920 --> 0:12:24.600 did you tell them? So much depends on where you're 0:12:24.760 --> 0:12:28.280 you know, if you haven't rebalanced a portfolio for a while, right, 0:12:28.720 --> 0:12:32.160 and you're you're probably still too overweight equities and this 0:12:32.240 --> 0:12:34.000 is a good wake up call and is it too 0:12:34.080 --> 0:12:36.120 late to sell? No, So hold on a second. So 0:12:36.200 --> 0:12:39.640 you actually did not say what everybody is saying out 0:12:39.640 --> 0:12:43.920 there based on uh Google searches. You didn't say by 0:12:43.920 --> 0:12:46.960 the dip, it's oh, it's like, where do you think 0:12:47.000 --> 0:12:49.720 the market's going? And you hate to answer questions with questions, 0:12:49.880 --> 0:12:52.520 but where you what's your time horizon? If you're making 0:12:52.559 --> 0:12:55.880 acid allocation views on a twelve to eighteen month forward basis. 0:12:56.000 --> 0:12:58.720 One of our conclusions was we're closer to a buying 0:12:58.760 --> 0:13:03.079 opportunity than a selling opportun Broadly speaking, Okay, however, there's 0:13:03.160 --> 0:13:06.040 two point eight trillion dollars sitting on our nation's money 0:13:06.080 --> 0:13:09.160 market mutual funds, according to the Investment Company Institute, two 0:13:09.160 --> 0:13:12.200 point eight trillion. There are a lot of investors who 0:13:12.200 --> 0:13:15.560 have been waiting for opportunities. Now, if you're waiting for 0:13:15.640 --> 0:13:18.360 ten or twenty our advice as you might not get there. 0:13:18.800 --> 0:13:22.880 And this was a sell off that had fundamental underpins 0:13:22.920 --> 0:13:25.880 but was exacerbated by technicals, and it did appear to 0:13:26.000 --> 0:13:29.360 us on Tuesday, right to be getting overdone? Okay, so 0:13:29.480 --> 0:13:31.080 you use it as an entry point if you're sitting 0:13:31.080 --> 0:13:34.760 on cash, use it if you haven't rebalanced, though, and 0:13:34.840 --> 0:13:38.640 you have an equity target that after last year, right, 0:13:38.760 --> 0:13:41.280 you're you're up seventeen or eighteen percent above your target? 0:13:41.559 --> 0:13:43.960 Is it too late to rebalance and use what's happened 0:13:43.960 --> 0:13:47.280 this week as a wake up call? Absolutely not right? 0:13:47.360 --> 0:13:53.040 So the yawns that one might normally get around diversification rebalancing, 0:13:53.040 --> 0:13:54.600 and I tell you I'm in front of clients a lot, 0:13:54.600 --> 0:13:57.720 and throughout last year, some of that gets gets the 0:13:57.760 --> 0:14:00.720 donkey nott and it's time to act. Thanks very much 0:14:00.760 --> 0:14:03.160 for being with us. Leo Groshowski. He is the chief 0:14:03.200 --> 0:14:06.600 investment officer for b N y Melon Wealth Management, helping 0:14:06.640 --> 0:14:09.920 to manage more than two hundred and thirty billion dollars. 0:14:23.120 --> 0:14:25.840 You're driving along, you really feel like you could use 0:14:25.880 --> 0:14:28.720 a cup of coffee, and instead of going to your phone, 0:14:28.760 --> 0:14:31.840 you can just hit your dashboard and then go to 0:14:31.920 --> 0:14:34.280 a store and your coffee will be ready for you. 0:14:34.480 --> 0:14:38.080 That is a vision among some automakers. And Rick Ruskin 0:14:38.200 --> 0:14:41.400 joins us now. He's senior manager for online commerce at 0:14:41.440 --> 0:14:44.280 General Motors and he joins us here my phone to 0:14:44.320 --> 0:14:47.800 talk about this program that started in December. So can 0:14:47.840 --> 0:14:51.520 you please explain to us what is this INCR e 0:14:51.720 --> 0:14:55.040 commerce platform and how has it been received since it 0:14:55.360 --> 0:14:59.760 was rolled out in December. Yeah, sure, good morning. So 0:15:00.080 --> 0:15:03.640 Marketplace is a first of its kind UH commerce platform 0:15:03.720 --> 0:15:08.640 that we've built specifically for on dash interactions and transactions 0:15:08.680 --> 0:15:13.720 and GM vehicles, UM. And it really gives the connected driver, 0:15:14.400 --> 0:15:18.000 uh the opportunity for you know, that sort of connected 0:15:18.000 --> 0:15:21.720 experience with merchants and brands that they use and they love. 0:15:21.800 --> 0:15:25.840 So as you mentioned, think about ordering and paying for 0:15:26.320 --> 0:15:29.280 your morning cup of coffee with the tap of the dashboard, 0:15:29.520 --> 0:15:33.320 or reserving parking, reserving hotel room, were even reserving a 0:15:33.440 --> 0:15:35.880 table at t g I Fridays, again, all from the 0:15:36.000 --> 0:15:39.080 dash So Rick, here's my question. I don't know if 0:15:39.080 --> 0:15:42.680 you use ways, but when I've ever used ways, which 0:15:42.760 --> 0:15:45.440 is a way to tell you the directions to get 0:15:45.440 --> 0:15:48.040 somewhere when you're driving, I'm always shocked by the number 0:15:48.040 --> 0:15:52.760 of Duncan donuts that are highlighted and advertised on the app. 0:15:53.080 --> 0:15:56.280 And I'm wondering, I imagine dalk pays Ways a lot 0:15:56.280 --> 0:15:59.600 of money for that advertising. And I'm wondering, from your perspective, 0:16:00.040 --> 0:16:03.640 do some of these uh stores, these brands pay you 0:16:04.120 --> 0:16:08.920 to be more prominently advertised on the dashboard. Yeah. So 0:16:08.960 --> 0:16:12.000 first of all, it's uh, we we are a for 0:16:12.200 --> 0:16:14.640 profit companies, So we put together a business model that 0:16:14.760 --> 0:16:18.640 really works for GM and for our merchant partners. So 0:16:18.720 --> 0:16:20.800 think of it almost as a media platform the same 0:16:20.800 --> 0:16:23.760 way that weighs. You know, first and foremost is about navigation, 0:16:23.840 --> 0:16:27.320 but they're selling those media placements. We too, give our 0:16:27.720 --> 0:16:33.120 merchant partners an opportunity to you know, build those those experiences, 0:16:33.560 --> 0:16:37.120 uh and have that presence on the dashboard. But then 0:16:37.360 --> 0:16:40.240 you know, like the advertising they buy in many different 0:16:40.240 --> 0:16:44.640 digital uh you know mediums were the same, and so 0:16:44.800 --> 0:16:48.360 they're looking for ways to connect with connected drivers. Rick, 0:16:48.440 --> 0:16:50.040 I just wonder if we could go through some of 0:16:50.080 --> 0:16:52.800 the technology partners that you have brought together for this 0:16:52.840 --> 0:16:56.520 so people can understand that it is a conglomeration of 0:16:56.600 --> 0:17:01.160 talent that is making this happen. UH Seattle area based Zvo. 0:17:01.280 --> 0:17:03.040 Now that you've got a lot of veterans there from 0:17:03.120 --> 0:17:06.560 Microsoft and Amazon, tell us what ZVO is doing in 0:17:06.560 --> 0:17:11.719 this partnership yeah, absolutely so. Um, when you think about 0:17:11.800 --> 0:17:16.159 the ways that merchants can can bring their content onto 0:17:16.160 --> 0:17:19.399 the dashboard, what was really critical for us was to 0:17:19.560 --> 0:17:23.800 find what I'll call middleware technology partners that would have 0:17:24.000 --> 0:17:29.280 that relationship with those merchant partners. They actually bring the 0:17:29.359 --> 0:17:33.720 content from the merchant partner temple at tize it and 0:17:33.960 --> 0:17:37.720 safely and securely bring it onto our dashboard in ways 0:17:37.800 --> 0:17:41.560 that have been sort of first designed and tested by 0:17:41.720 --> 0:17:44.840 our user experience and drive a workload teams. So rather 0:17:44.880 --> 0:17:47.840 than us having a direct relationship with each one of 0:17:47.840 --> 0:17:50.600 the merchants, were able to work with Zevo. Uh. And 0:17:50.640 --> 0:17:53.119 then there's a couple other partners Sonic Mobile down in 0:17:53.359 --> 0:17:57.479 Atlanta and Conversible down in Texas, Austin, Texas. Right. Well, 0:17:57.480 --> 0:17:59.640 I wanted to get to that because the Zvo part 0:17:59.640 --> 0:18:03.720 of it's to be all about machine learning technology. What 0:18:03.800 --> 0:18:09.440 does Conversible add to the picture. Well, so, first and foremost, 0:18:09.680 --> 0:18:12.200 you know, as you look at each one of those partners, 0:18:12.680 --> 0:18:17.280 Conversible was doing a lot of Alexis skill work and 0:18:17.800 --> 0:18:22.120 Facebook messenger work for various partners, and what they realized 0:18:22.160 --> 0:18:26.280 were there was that these A p I s, these uh, 0:18:26.359 --> 0:18:30.360 you know connections they had with the various merchants could 0:18:30.400 --> 0:18:33.840 be applied in a very similar way to Marketplace. So 0:18:33.920 --> 0:18:35.880 what we look to them to do is to bring 0:18:36.000 --> 0:18:40.080 some of those relationships that they had already established to Marketplace. 0:18:40.200 --> 0:18:44.920 So that's where Conversible, very similarly to Zevo and or Psionic, 0:18:44.960 --> 0:18:48.520 are tapping into those existing relationships they have. I just 0:18:48.560 --> 0:18:50.440 want to talk about the experience of it. I mean, 0:18:50.640 --> 0:18:54.320 is there only a certain limited number of stores that 0:18:54.480 --> 0:18:57.760 you can access from your dashboard? Can you talk to 0:18:57.760 --> 0:19:00.040 your dashboard? Is it going to be like uh O 0:19:00.160 --> 0:19:04.000 strider or is it all tapping? And how do you 0:19:04.040 --> 0:19:07.280 make sure that people don't get distracted? Yeah, well so 0:19:07.320 --> 0:19:10.280 a lot of great questions in that roll up. UM 0:19:10.320 --> 0:19:15.080 So first, um the um I've been working on this 0:19:15.160 --> 0:19:18.080 platform since day one, so as we started to develop 0:19:18.119 --> 0:19:20.800 a user experience and testing all, you know through our 0:19:20.880 --> 0:19:24.960 driver workload team, there is a very limited scope to 0:19:25.200 --> 0:19:28.240 the number of partners that you would see on the 0:19:28.320 --> 0:19:32.440 dash at any given time. Then, uh, it's really important 0:19:32.480 --> 0:19:36.520 to understand this is not about establishing a first time relationship. 0:19:36.640 --> 0:19:39.560 This is about expanding a relationship that you might have 0:19:39.600 --> 0:19:43.359 already you know, created with a mobile app. So you know, 0:19:43.520 --> 0:19:45.920 Dunkin Donuts is one of our partners. I have a 0:19:46.000 --> 0:19:50.040 dunkin Donuts account. When I link that account to my dashboard, 0:19:50.080 --> 0:19:53.600 now I'm I'm seeing stuff that's familiar to me. I'm 0:19:53.640 --> 0:19:56.800 seeing my recents, my favorites. My payment method is already 0:19:56.800 --> 0:19:59.439 on file with Duncan. So when I go in and 0:19:59.480 --> 0:20:01.879 I open up marketplace and I want to order that 0:20:01.960 --> 0:20:05.439 cup of coffee, well, look, I'm I'm performing one of 0:20:05.440 --> 0:20:08.119 the rituals I would in the morning. I'm ordering my 0:20:08.200 --> 0:20:10.760 favorite And it really is just a few taps on 0:20:10.800 --> 0:20:13.320 the dash to get it done, about as simple as 0:20:13.400 --> 0:20:16.840 changing the radio station. Well, you know what Lisa really wants, 0:20:16.920 --> 0:20:19.280 rick as she wants someone to hand her the coffee 0:20:19.600 --> 0:20:22.359 in the car when you push the button pick up 0:20:22.400 --> 0:20:26.120 my kids, gives me groceries, want to do it all. 0:20:26.160 --> 0:20:29.280 I think that's called an assistant. But just a question 0:20:29.320 --> 0:20:32.240 though about the payment side of this. Is that something 0:20:32.280 --> 0:20:35.680 that let's say JP Morgan Chase is involved with with 0:20:36.280 --> 0:20:40.760 payments for this. Yeah, so where we are currently is 0:20:40.840 --> 0:20:44.600 that we want the merchant to remain your merchant of 0:20:44.720 --> 0:20:51.119 record again safe, safely and securely through a token ized process. Um, 0:20:51.400 --> 0:20:54.080 you know from my dashboard through that rig partner that 0:20:54.119 --> 0:20:56.960 I mentioned, like Zevo over to the merchant. All of 0:20:57.000 --> 0:21:01.080 the tokens are telling you that yep, you're having an interaction. 0:21:01.160 --> 0:21:03.639 We gotta we gotta press we gotta press the button 0:21:03.760 --> 0:21:05.399 because we're out of time. I want to thank you 0:21:05.520 --> 0:21:08.680 very much. Rick Ruskin, he is the senior manager Online 0:21:08.720 --> 0:21:27.240 Commerce for General Motors. Just how much will automation change 0:21:27.280 --> 0:21:30.800 the workforce over the next fifteen years? Here to talk 0:21:30.840 --> 0:21:33.439 about that with us as Karen Harris, Managing director of 0:21:33.560 --> 0:21:36.320 Macro at Trends at Bain and Company, and she joins 0:21:36.400 --> 0:21:38.920 us by phone. Karen, thank you so much for being 0:21:39.000 --> 0:21:42.280 with us. You just released this report that you authored 0:21:42.600 --> 0:21:48.400 Labor twenty thirty, the Collision of Demographics, Automation and Inequality. 0:21:48.920 --> 0:21:52.520 UM I want you just to start with automation, since 0:21:52.560 --> 0:21:55.160 there's been a lot of discussion about whether that will 0:21:55.160 --> 0:21:59.400 eliminate a lot of jobs and create really a two 0:21:59.440 --> 0:22:02.640 tiered society. How much will that come to fruition over 0:22:02.640 --> 0:22:06.520 the next few decades. Thanks Lisa, I'm really happy to 0:22:06.560 --> 0:22:11.280 be here. It is certainly something that we see having 0:22:11.280 --> 0:22:15.520 a very disruptive effect over the next few decades. We 0:22:15.800 --> 0:22:18.960 see what's happening right now is the labor force. We 0:22:19.000 --> 0:22:22.080 still have to start with demographics, even talking about automation, 0:22:22.200 --> 0:22:25.760 because the question is how that impacts jobs, and how 0:22:25.800 --> 0:22:29.200 that impacts the way we live and work, what we buy. 0:22:29.680 --> 0:22:33.280 The labor force is about to experience a very steep deceleration. 0:22:34.200 --> 0:22:37.320 Even shifting life stages working later take the little of 0:22:37.359 --> 0:22:39.760 the edge off right, living longer, healthier lives, but it 0:22:39.840 --> 0:22:43.639 doesn't compensate for the fact that the population, the working 0:22:43.680 --> 0:22:47.919 population is overall shrinking and in many markets and then 0:22:48.080 --> 0:22:51.400 some in some markets just growing much more slowly, which 0:22:51.400 --> 0:22:53.720 in the short term will push wages up. And in 0:22:53.760 --> 0:22:56.320 fact we're seeing some of that impact today in the 0:22:56.359 --> 0:23:00.520 markets as the with the increased volatility around x dictations 0:23:00.520 --> 0:23:05.439 of rising interest rates. But that natural process of rising 0:23:05.440 --> 0:23:09.280 wages will be short circuited in our view, by automation 0:23:10.040 --> 0:23:13.360 um and that front end automation usage your point will 0:23:13.520 --> 0:23:17.480 feel buoyant in our By our estimates, we see another 0:23:17.560 --> 0:23:20.560 eight trillion dollars in investment needed to build and deploy 0:23:20.680 --> 0:23:24.720 that wave of automation, and that surge will temporarily shield 0:23:24.760 --> 0:23:29.320 workers from the full impact. But beneath that surface and 0:23:29.480 --> 0:23:32.720 what bain is seen is that the majority of workers 0:23:32.760 --> 0:23:36.040 will feel the impact of automation as either jobs are 0:23:36.080 --> 0:23:39.119 lost or new jobs that should have been created don't 0:23:39.119 --> 0:23:42.720 show up, or wages struggle to climb past the point 0:23:42.800 --> 0:23:47.160 where automation alternatives actually become cheaper. And so that sets 0:23:47.240 --> 0:23:49.199 us up for this ebb and flow where you have 0:23:49.840 --> 0:23:54.240 a big wave of automation investments, that feeling of buoyancy 0:23:54.280 --> 0:23:57.240 and growth. But at the end of that, the full 0:23:57.520 --> 0:24:02.400 x of automation laid bears as many as workers may 0:24:02.440 --> 0:24:06.919 become displaced, and that means incomes become skewed even further 0:24:07.359 --> 0:24:10.000 towards the top, towards those are who who are employed. 0:24:10.440 --> 0:24:14.200 That lack of demands as people are unemployed, that pervasive 0:24:14.359 --> 0:24:17.919 economic insecurity, that impact on growth is what leads to 0:24:18.480 --> 0:24:22.159 that boom and bus cycle that we're concerned about, Karen, 0:24:22.440 --> 0:24:25.880 Before we get to labor and wondering, if you could 0:24:25.960 --> 0:24:29.359