WEBVTT - Brian Schimpf Talks the Political Tensions Between the United States and China

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, and.

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<v Speaker 2>We kick things off with Brian Shimp, CEO of ANDERIL,

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<v Speaker 2>as the first of many conversations. Brian, we're grateful to

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<v Speaker 2>be here at ANDERILL. There has been a lot of

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<v Speaker 2>hype around the company, a deep focus on what it

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<v Speaker 2>is doing, how it is growing, and so as a

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<v Speaker 2>place to start, which you just bring us up to

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<v Speaker 2>speed on where ANDERI is today operationally, revenue, the business

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<v Speaker 2>it is doing with the US government and Western allies.

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<v Speaker 3>Absolutely well, thank you for having me on. Really excited

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<v Speaker 3>to have you here. The Andral has been around about

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<v Speaker 3>eight years, but we've grown incredibly in that time. I

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<v Speaker 3>think this year we're going to be over sixty five

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<v Speaker 3>hundred employees. We've got something like about half of them

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<v Speaker 3>here in Costa Mesa. We're looking to basically double revenue

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<v Speaker 3>this year. So we're about a billion last year, we'll

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<v Speaker 3>go over two billion this year. And we're ramping production

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<v Speaker 3>about four hundred percent. So a lot of the mix

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<v Speaker 3>is switching from one of the earlier stage things we

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<v Speaker 3>were doing, which were you know, kind of experimental, really

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<v Speaker 3>learning what the technology could do, how to integrate it

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<v Speaker 3>with war fighters. This year we're really moving into this

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<v Speaker 3>mode of really producing.

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<v Speaker 2>Brian, forgive me. We've actually got some breaking news that's

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<v Speaker 2>just crossed the Bloomberg terminal. President Trump is saying that

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<v Speaker 2>he was due to meet China's President g in two

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<v Speaker 2>weeks time. He's saying now that he sees no reason

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<v Speaker 2>to do so. The team are going to put some

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<v Speaker 2>of the headlines up on the screen. But Caro, a

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<v Speaker 2>significant piece of news because part of what we wanted

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<v Speaker 2>to discuss today was China, the President saying that he's

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<v Speaker 2>calculating increased tariffs on Chinese products.

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<v Speaker 1>This is a dining up of GPN attentions.

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<v Speaker 2>Brian, bear with us. We are now seeing this quite

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<v Speaker 2>sharp market reaction. Clearly the S and P five hundred

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<v Speaker 2>is changed direction here because I think, well, you know,

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<v Speaker 2>jumping Carra. I think part of the point is that

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<v Speaker 2>we were headed in a different direction, and.

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<v Speaker 1>This brings so many questions around what the TikTok relationship

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<v Speaker 1>had been, and much of that had been sort of

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<v Speaker 1>almost this lynchpin in relationships between President She and indeed

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<v Speaker 1>President Trump, but then been this ongoing narrative about how

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<v Speaker 1>we could rectify and rehabilitate the relationship there've been calls

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<v Speaker 1>from China perhaps wanting yet further relief from some of

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<v Speaker 1>the higher tarists.

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<v Speaker 2>That they've been Sorry, I've just pulled up the true

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<v Speaker 2>social posts, and that's where the President's communicated and he's

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<v Speaker 2>basically saying that China is becoming very hostile. Let's get

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<v Speaker 2>back to the conversation.

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<v Speaker 1>Well, your take, Brian, because in many ways, andrel and

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<v Speaker 1>defense tech as a whole is about the story of

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<v Speaker 1>national security, and it is about US versus China. Is

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<v Speaker 1>that where you see the key risks.

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<v Speaker 3>That is one of the key conflicts. But if you

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<v Speaker 3>look worldwide, I mean you've got land wars in Europe,

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<v Speaker 3>You've got you know, the Red Seas still basically denied.

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<v Speaker 3>Iran doesn't look like it's going to slow down anytime soon. China,

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<v Speaker 3>beyond just the tensions with US, has been constantly aggravating

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<v Speaker 3>with the Philippines, you know, constantly fighting over different islands

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<v Speaker 3>and things like that. So you're in this period of

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<v Speaker 3>just massive geopolitical instability, and China is obviously the focus.

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<v Speaker 3>But I mean they've had a very strategic view to this, right,

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<v Speaker 3>Like they've blocked so they've pump put a significant export

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<v Speaker 3>controls on magnets for high end but rare US.

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<v Speaker 1>For example, we understand the breaking newser today as well

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<v Speaker 1>as China's making harder and harder for rare earth to

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<v Speaker 1>be exploited not just the US.

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<v Speaker 2>But to Europe.

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<v Speaker 3>Yeah, and I think this is part of a long

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<v Speaker 3>term strategic plan they have had, right, they have used

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<v Speaker 3>industrial policy beyond just military power to construct a world

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<v Speaker 3>where they have a lot of leverage over the US

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<v Speaker 3>and their allies. They drive dependence on these things and

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<v Speaker 3>it's a very sophisticated strategy that they're playing. Yes, I

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<v Speaker 3>think this is something that Trump recognizes. I think he

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<v Speaker 3>is a very good negotiator. If he's saying these things,

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<v Speaker 3>he understands what that means and how he is using

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<v Speaker 3>that to position for maximum advantage. And so I think

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<v Speaker 3>it's going to be a long run conflict with China,

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<v Speaker 3>and that's something we've just got to be prepared for.

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<v Speaker 2>Brian, Thank you for rolling with this. The news is

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<v Speaker 2>breaking as we go to air, the markets reacting. One

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<v Speaker 2>of the things that we've just shown on the street

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<v Speaker 2>is the semiconductor index. Yeah. One reason why it's critically

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<v Speaker 2>important to talk to you and Reill is your efforts

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<v Speaker 2>to re ensure the manufacturing base in this country in Ohio.

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<v Speaker 2>But in research for being here today, Caroline and I

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<v Speaker 2>looked a lot at the supply chain for your industry.

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<v Speaker 2>Why everything from why Harness through to GPUs that go

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<v Speaker 2>on board a lot of the weapons behind us. Could

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<v Speaker 2>you just expand on that a little bit, you know

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<v Speaker 2>why arsenal one is so critical in that sense in

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<v Speaker 2>that context absolutely so.

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<v Speaker 3>You know, when you look at defenses one of those

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<v Speaker 3>areas where national security is paramount, pulling these technologies onto

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<v Speaker 3>US and ally and manufacturing is absolutely key. And the

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<v Speaker 3>strategy we've taken with this is there is a lot

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<v Speaker 3>of industrial capacity in the US. There is the ability

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<v Speaker 3>to take advantage of largely commercial industry that can manufacture

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<v Speaker 3>these things. But when you start stepping back, there's things

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<v Speaker 3>that defense alone can solve. Right These are things like

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<v Speaker 3>you know, the rare earth magnets, germanium supply, these are

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<v Speaker 3>things that China has strategically tried to stranglehold. And this

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<v Speaker 3>will require beyond just stating as a policy that you

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<v Speaker 3>have to sources of America. The sources are very very limited.

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<v Speaker 3>This is areas where I've been really encouraged by what

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<v Speaker 3>the Trump administration has done around trying to reignite this

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<v Speaker 3>idea of how do you do smart industrial policy? What

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<v Speaker 3>is it going to look like in the US. It's

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<v Speaker 3>going to look different. It's going to be a combination

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<v Speaker 3>of tariffs, it's going to be a combination of things

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<v Speaker 3>they did with like MP materials guaranteed off take. There's

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<v Speaker 3>just this very different strategy that needs to be taken

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<v Speaker 3>to really solve this on a country level scale. And

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<v Speaker 3>for US, we can be early adopters, right like, we

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<v Speaker 3>can take advantage of all those things, and we're building

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<v Speaker 3>out a mass of manufacturing complex in Ohio to be

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<v Speaker 3>able to take advantage of all of those suppliers in

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<v Speaker 3>the US and build a lot of things here on shore.

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<v Speaker 2>Okay, so the breaking news is that the president has

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<v Speaker 2>taken true social and he is saying that it looks

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<v Speaker 2>like he now won't meet with China's she and things

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<v Speaker 2>are changing. We will discuss that for the next hour

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<v Speaker 2>while we have you. Anderil has been in the headlines

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<v Speaker 2>partly because of the insate website of all kinds of

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<v Speaker 2>investors to be involved. You did a secondary or a

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<v Speaker 2>tender for your employees would you talk about the focus

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<v Speaker 2>you have right now in talent and that mechanism to

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<v Speaker 2>keep people basically.

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<v Speaker 3>No, absolutely, So the defense world has shifted a lot, right, Like,

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<v Speaker 3>a lot of the people in traditional defense industry are

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<v Speaker 3>amazing at things like aircraft design and hypersonics and things

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<v Speaker 3>along those lines. But the next generation of this really

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<v Speaker 3>looks different. It really looks about software. It looks how

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<v Speaker 3>you adopt commercial manufacturing approaches. It's how you mass manufacture

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<v Speaker 3>these capabilities. It's a very different focus. We're moving out

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<v Speaker 3>of an era where we need to make relatively few,

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<v Speaker 3>a very very expensive, high end things. We're moving into

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<v Speaker 3>an era where it's much more about how do we

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<v Speaker 3>have things at scale that are smarter, that are more autonomous.

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<v Speaker 3>And so this ability to attract the best talent into

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<v Speaker 3>this really is coming from tech companies. It's coming from universities.

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<v Speaker 3>It's people who otherwise would have at you know, kind

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<v Speaker 3>of all the tech company brand names. You would know,

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<v Speaker 3>part of that's compensation and liquidity and all the startup economics,

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<v Speaker 3>but honestly a lot more of it is just do

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<v Speaker 3>they get to work on exciting problems with people they like,

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<v Speaker 3>on things that really matter? Right, and I think we

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<v Speaker 3>present this opportunity to be very clear in our purpose

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<v Speaker 3>and our mission, something that's going to be impactful, and

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<v Speaker 3>they get to work on just amazing cutting edge things,

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<v Speaker 3>right like making autonomous fighter jets and you know, these

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<v Speaker 3>reusable miss There's just an absolutely crazy thing to work

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<v Speaker 3>on if you're a young engineer. And that's what we've

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<v Speaker 3>really found is the formula to get the best and brightest.

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<v Speaker 3>Here is an exciting opportunity to actually contribute, give back

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<v Speaker 3>and build something incredible.

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<v Speaker 1>Ron What a joy to have you sat with us

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<v Speaker 1>rolling within Broiking News and be surrounded by all of

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<v Speaker 1>this gear that you are driving innovation on branch and

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<v Speaker 1>appreciate your CEO of Andreill