WEBVTT - Infrastructure, Ukraine, Tech, and Lamborghini (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.720 at Bloomberg dot com slash podcast. But one of the 0:00:22.880 --> 0:00:27.840 I guess results of the pandemic has been a migration move. 0:00:27.840 --> 0:00:29.560 I mean a lot of folks leaving like New York 0:00:29.600 --> 0:00:32.200 City and they're going and the other and the coasts 0:00:32.240 --> 0:00:34.800 and the high cost, high tax areas and go into 0:00:34.840 --> 0:00:39.400 places like I don't know, Nashville, Tennessee, Austin, Texas, and 0:00:39.800 --> 0:00:42.480 the great state of North Carolina has been a beneficiary 0:00:42.840 --> 0:00:44.440 of that as well, and we want to break that down. 0:00:44.520 --> 0:00:46.760 We're gonna do that today. We're fortunate to have here 0:00:46.800 --> 0:00:50.200 in our Bloomberg Interactive Broker Studio Michelle Baker Sanders, North 0:00:50.200 --> 0:00:53.720 Carolina Secretary of Commerce, and Mike Fox, President and CEO 0:00:53.720 --> 0:00:58.160 of the Piedmont Triad Partnership. Uh So, Michelle and Mike, 0:00:58.200 --> 0:00:59.800 thanks so much for joining us here. Michelle talked to 0:00:59.840 --> 0:01:02.600 us about the state of North Carolina and what you 0:01:02.640 --> 0:01:06.360 guys have experienced from a commerce perspective, a business perspective 0:01:06.760 --> 0:01:10.319 over the last several years. Thank you. Over the last 0:01:10.360 --> 0:01:14.039 several years, what we have experienced is at UM booming 0:01:14.080 --> 0:01:19.040 growth and a momentum with some I believe attraction UH 0:01:19.160 --> 0:01:23.039 bringing an in migration of people, families, and jobs. As 0:01:23.080 --> 0:01:26.679 you mentioned, UM over the past couple of years, despite 0:01:26.760 --> 0:01:30.720 the pandemic and UH concerns about a recession and the 0:01:30.800 --> 0:01:34.240 labor sup wild market, we have broken records when it 0:01:34.280 --> 0:01:38.440 comes to the number of job creation creation created and 0:01:38.680 --> 0:01:42.959 the capital investment into the state. UM. I'd specifically her 0:01:43.000 --> 0:01:46.600 at highlight the Carolina Core, which we're gonna hopefully talk about. 0:01:47.200 --> 0:01:50.800 So the Carolina Core UM is a region of North 0:01:50.800 --> 0:01:54.720 Carolina Central Region which is anchored by UM high Point 0:01:55.040 --> 0:01:59.559 Winston Salem and then with Greensboro. And within that region 0:01:59.600 --> 0:02:04.440 they have seen UM extraordinary success, especially in the e 0:02:04.640 --> 0:02:08.880 V space and semiconductor space, all the advancing technology and 0:02:08.919 --> 0:02:12.720 advanced manufacturing and so over the past year or so, 0:02:13.200 --> 0:02:18.640 they have UM attracted over fifteen billion dollars billion dollars 0:02:18.720 --> 0:02:22.079 in capital investment and as a result of that created 0:02:22.600 --> 0:02:27.280 UM sixteen thousand jobs, and so, as you just mentioned, 0:02:27.320 --> 0:02:29.560 people are looking for a great place to live, a 0:02:29.600 --> 0:02:31.680 great place to start business, and a place where they 0:02:31.680 --> 0:02:34.919 can thrive. And that's what we have found in North Carolina. 0:02:35.080 --> 0:02:38.760 And the example I'm highlighting the Carolina Core is definitely 0:02:38.760 --> 0:02:42.000 a place that it's experienced in that you have and 0:02:42.040 --> 0:02:44.280 you have a lot of experience manufacturing as well. Right, 0:02:44.320 --> 0:02:46.320 you come from Biogen, You were working at a number 0:02:46.360 --> 0:02:50.119 of different manufacturers, global manufacturers before this UM and we're 0:02:50.160 --> 0:02:53.920 just appointed Secretary Commerce kind of smack dab in the 0:02:53.919 --> 0:02:59.200 middle of the pandemic right February. Has that driven you think, 0:02:59.240 --> 0:03:02.000 more manufacts acturers as we kind of unwind these global 0:03:02.000 --> 0:03:04.520 supply chains or at least try and produce more locally. 0:03:04.520 --> 0:03:08.040 Has that driven a migration to your state? Um? I 0:03:08.120 --> 0:03:11.240 believe that that might. The migration that we experience and 0:03:11.280 --> 0:03:14.840 has been building over a number of years because of 0:03:14.880 --> 0:03:18.800 many visionaries across the state and the great investments that 0:03:18.880 --> 0:03:22.200 have been made by the state as well as other 0:03:22.280 --> 0:03:25.799 partners across the state like the university, community college system 0:03:25.840 --> 0:03:28.880 and business owners in the state. UM, you're correct. I 0:03:28.960 --> 0:03:33.200 spent about thirty years in the biotech life science industry. 0:03:33.320 --> 0:03:37.040 So I connect deeply with manufacturing, and as you know, 0:03:37.200 --> 0:03:40.600 that's a core competency for North Carolina. We have the 0:03:40.680 --> 0:03:46.160 largest manufacturing UH talent pool in the southeastern US, and 0:03:46.280 --> 0:03:51.400 advanced manufacturing, which I missioned earlier UM has been UM 0:03:51.640 --> 0:03:54.720 something that we have leveraged and built on that strength. 0:03:54.960 --> 0:03:57.880 We're continuing to see it grow and we're expecting to 0:03:58.040 --> 0:04:01.920 and anticipate in even more growth an advanced manufacturing. So, Mike, 0:04:01.960 --> 0:04:04.880 you're the CEO of the Piedmont Triad Partnership. When I 0:04:04.920 --> 0:04:08.800 think of the Piedmont Tried, I think Winston, Salem, Burlington 0:04:08.840 --> 0:04:10.960 and all those kinds of stuff. I think, you know, 0:04:11.240 --> 0:04:14.600 making furniture, textiles and things like that. How was that 0:04:14.680 --> 0:04:17.920 part of the state kind of tobacco of course, how 0:04:18.000 --> 0:04:19.600 is that part of the state kind of evolved over 0:04:19.600 --> 0:04:22.480 the last decade or so, so we've really made a 0:04:22.520 --> 0:04:25.479 great transition to advanced manufacturing. We have a history of 0:04:25.520 --> 0:04:29.560 manufacturing in that area, particularly with the textiles and the furniture, 0:04:30.120 --> 0:04:33.239 and we've seen those industries shrink or go off shore. 0:04:33.440 --> 0:04:35.920 That's sad because it's some of the greatest furniture you 0:04:35.960 --> 0:04:38.279 can buy. It's still is some of the best furniture 0:04:38.279 --> 0:04:40.320 you can source in the country. And we still have 0:04:40.400 --> 0:04:43.400 a thriving furniture industry. The world's largest furniture market is 0:04:43.440 --> 0:04:45.840 in High Point twice a year every year. So what 0:04:45.880 --> 0:04:49.600 we've seen is more niche manufacturing there. Uh. At the 0:04:49.640 --> 0:04:53.400 same with textiles, those have moved to more medical specialty garments, 0:04:53.440 --> 0:04:58.480 not just the commodities. But this advanced manufacturing has really 0:04:58.960 --> 0:05:01.880 taken hold. We You've had the foresight to develop some 0:05:02.040 --> 0:05:08.880 large sites to attract large transformational projects like Toyota, then 0:05:09.000 --> 0:05:13.280 fast Wolf Speed and Boom Supersonic at our airport. And 0:05:13.360 --> 0:05:16.000 so we started we were sitting you know, a year 0:05:16.040 --> 0:05:20.479 ago literally with four legitimate mega sites, you know, with 0:05:20.520 --> 0:05:23.560 a lot of interest but no tenants. And within the 0:05:23.560 --> 0:05:27.600 space of a year we've had four large announcements of 0:05:27.839 --> 0:05:31.920 tenants that the Secretary mentioned that total those fifteen billion 0:05:32.279 --> 0:05:37.160 investment and you know, approximately twenty thousand new jobs. What's 0:05:37.200 --> 0:05:39.599 driven I mean, secretary points out this has been developing 0:05:39.640 --> 0:05:42.320 for years and we I think Paul and I both 0:05:42.320 --> 0:05:47.880 have seen North Carolina really develop UM. But the pandemic 0:05:48.160 --> 0:05:52.240 coupled with you know, the money UM that was pushed 0:05:52.240 --> 0:05:54.680 into the economy and the Chips Act have to be 0:05:54.800 --> 0:05:58.040 huge drivers. They are, and you know, quite simply, I 0:05:58.040 --> 0:06:00.520 think one of the answers is the rest of the 0:06:00.560 --> 0:06:03.320 world is realizing what we've known for a long time 0:06:03.360 --> 0:06:06.039 that North Carolina is a great place to live, to work, 0:06:06.080 --> 0:06:09.280 to play. It's also got an incredible business climate. Thanks 0:06:09.279 --> 0:06:12.400 to Secretary Sanders, Governor Cooper, and our legislature, we have 0:06:12.839 --> 0:06:16.520 very favorable uh, you know, business laws and and a 0:06:16.520 --> 0:06:22.680 tax situation. But primarily to your point, with the pandemic, 0:06:22.800 --> 0:06:27.479 I think reshoring has become a lot more of a focus. Uh. 0:06:27.680 --> 0:06:30.680 The supply chain dynamics going from just in time to 0:06:30.760 --> 0:06:34.359 just in case have become important, and I think manufacturers 0:06:34.400 --> 0:06:36.840 want to be able to have their supply chain closer 0:06:36.880 --> 0:06:39.240 to them and not worry about is it sitting on 0:06:39.240 --> 0:06:42.120 a container somewhere in the Pacific Ocean exactly. And so 0:06:42.400 --> 0:06:45.400 Secretary representing the state of North Carolina, when you are 0:06:45.800 --> 0:06:48.359 courting business, when you're saying to a you know, a 0:06:48.400 --> 0:06:50.320 Toyota or so many, you need to really think about 0:06:50.360 --> 0:06:53.600 coming to our state. Who do you find yourself competing against? 0:06:53.920 --> 0:07:00.280 Most often we find ourselves competing against, uh, the global market. Um, 0:07:00.320 --> 0:07:03.279 there are certain states I'm sure that companies tend to 0:07:03.680 --> 0:07:07.320 have an attraction to but we are competing against the 0:07:07.320 --> 0:07:10.480 global markets. So that's why it's so important for us 0:07:10.720 --> 0:07:14.400 did not only highlight our assets such as the university 0:07:14.400 --> 0:07:17.720 of the community college system, the quality of life UM, 0:07:18.120 --> 0:07:21.960 the cost of doing business in North Carolina UM, as 0:07:22.000 --> 0:07:25.760 well as UM the talent pool, the diverse and skilled 0:07:25.760 --> 0:07:28.880 talent pool. It's important for us to highlight those assets, 0:07:28.880 --> 0:07:33.120 but it's also important for UH those companies to experience 0:07:33.240 --> 0:07:39.000 North Carolina, to visit us and experience the people, the culture, UM, 0:07:39.360 --> 0:07:42.520 you know, experience what their employees with experience when they 0:07:42.560 --> 0:07:46.520 come to North Carolina. And so that's what we UM 0:07:47.120 --> 0:07:51.400 enjoy and and like to show and give that experience. UM. 0:07:51.600 --> 0:07:55.000 We also, you know, we're courting companies to come to 0:07:55.080 --> 0:07:58.320 North Carolina and businesses. But I believe what's unique is 0:07:58.360 --> 0:08:01.040 that we are with those kind companies not only in 0:08:01.160 --> 0:08:05.600 that initial period, that courtship period. Once we marry, once 0:08:05.640 --> 0:08:09.640 we bring them to North Carolina, we are intend and 0:08:09.680 --> 0:08:12.360 we work with them and partner with them throughout the 0:08:12.440 --> 0:08:15.960 longevity of their business. Talk to us about infrastructure in 0:08:15.960 --> 0:08:18.600 the state. For example, when I was a duke, the 0:08:18.680 --> 0:08:21.680 Raleig Durham Airport was like a grass grass strip. Now 0:08:21.720 --> 0:08:25.720 it's this huge airport modern I mean is that? I 0:08:25.720 --> 0:08:27.600 mean it seems like the infrastructure in the state is 0:08:27.640 --> 0:08:30.240 getting better and better and better. How much of the 0:08:30.400 --> 0:08:32.760 requirement is that when you're talking to against some of 0:08:32.800 --> 0:08:37.160 these big corporations. North Carolina has invested deeply in infrastructure 0:08:37.200 --> 0:08:40.960 and because of that we have been successful, as we've discussed, 0:08:41.360 --> 0:08:46.200 with economic development and building more resilient communities across the 0:08:46.280 --> 0:08:49.960 state UM, and the airports are surely a part of 0:08:50.000 --> 0:08:53.640 that UM. You know, within the Carolina core, we have 0:08:54.160 --> 0:08:58.319 access to airports in the areas you know Charlotte Greensboro 0:08:58.400 --> 0:09:01.160 has airport ore I do you UM. We also have 0:09:01.400 --> 0:09:05.480 ports that are part of our transportation infrastructure, and we 0:09:05.600 --> 0:09:10.520 invest heavily in communities to to build a sewer and 0:09:10.600 --> 0:09:14.360 water systems that are required to support these businesses. As 0:09:14.400 --> 0:09:19.760 you know, UM for semiconductor industry and advanced manufacturing utilities, 0:09:20.480 --> 0:09:24.280 the cost of energy, the cost of doing business matters 0:09:24.440 --> 0:09:27.920 and it's very important and so within North Carolina we 0:09:28.000 --> 0:09:31.800 prioritize that UM to attract and to retain and help 0:09:31.800 --> 0:09:35.360 businesses grow for those for those people who haven't spent 0:09:35.480 --> 0:09:39.040 much time in North Carolina. Let's define the core or 0:09:39.080 --> 0:09:42.439 the Piedmont Triad. What exactly is that. So it's roughly 0:09:42.559 --> 0:09:46.959 add twenty miles stretch that runs from Greensboro, Winston Salem 0:09:47.080 --> 0:09:49.439 and high Point, which is traditionally known as the Triad 0:09:49.440 --> 0:09:51.960 down up in the north, down to Fayetteville and kind 0:09:52.000 --> 0:09:54.840 of the southeast, and it follows roughly Highway for twenty one, 0:09:54.880 --> 0:09:57.920 which has recently received designation as a future industry that 0:09:57.960 --> 0:10:02.040 would connect the Triad and points west all the way 0:10:02.080 --> 0:10:06.880 to uh Wilkesboro and potentially Boon down to Fayettville. And 0:10:06.920 --> 0:10:09.959 of course Fayetteville is the nation the home of the 0:10:10.040 --> 0:10:13.960 nation's largest military base in Fort Bragg. And those retiring 0:10:14.120 --> 0:10:18.959 service members who regularly you know, decide they want to 0:10:19.000 --> 0:10:21.080 stay in North Carolina, those are a great source of 0:10:21.120 --> 0:10:24.080 talent for our employers, and so being able to have 0:10:24.200 --> 0:10:28.000 that connection to that area, to the Triad and also 0:10:28.040 --> 0:10:30.240 to Charlotte and Raleigh is important for us in terms 0:10:30.280 --> 0:10:32.679 of developing our workforce. See I think of North Carolina 0:10:32.760 --> 0:10:34.600 just been a student there. I got the eastern part, 0:10:34.640 --> 0:10:37.760 which is kind of the beach. Are close to the beach, 0:10:37.960 --> 0:10:41.800 then the west is amazing mountains Asheville, North Carolina, one 0:10:41.800 --> 0:10:44.040 of my favorite places to go exactly. The music scene, 0:10:44.080 --> 0:10:46.280 the culture of the arts amazing there. And then you 0:10:46.360 --> 0:10:48.199 got everything in the middle, which I call the middle, 0:10:48.280 --> 0:10:49.679 but now you guys call the cord and all that 0:10:49.800 --> 0:10:51.439 kind of stuff. But that's kind of where a lot 0:10:51.440 --> 0:10:56.480 of development is taking place. Real quick, Secretary urtp Research 0:10:56.559 --> 0:10:59.400 Triangle Park that's been there for decades generations, is that's 0:10:59.400 --> 0:11:03.160 still a for technology restarts Triangle part is still a 0:11:03.280 --> 0:11:05.960 thing for technology in North Carolina. Al Right, that's good 0:11:06.000 --> 0:11:08.400 stuff because I think of North Carolina State, University of 0:11:08.400 --> 0:11:12.320 North Carolina, Chapel Hill Boo and Duke University. Um, you 0:11:12.360 --> 0:11:14.439 put those two and plus you got Wake Farcet close by. 0:11:14.480 --> 0:11:17.280 It's that's kind of been the source of research, tronical parks, 0:11:17.600 --> 0:11:20.760 I think stuff. So it's just been awesome, so good 0:11:20.800 --> 0:11:22.839 to talk about it. We had some Chicago pm MY 0:11:23.000 --> 0:11:25.240 data came in a little bit weaker today, but it 0:11:25.280 --> 0:11:26.800 just goes to show kind of where some of the 0:11:26.960 --> 0:11:30.920 Chicago Chicago very far away from Charlotte exactly. So good 0:11:31.280 --> 0:11:34.600 North Carolina discussion here. Michelle Baker Sanders, North Carolina Secretary 0:11:34.600 --> 0:11:37.280 of Commerce and Mike Fox, president CEO of Pete Montrey, 0:11:37.360 --> 0:11:39.440 is there by the way, a rivalry with South Carolina 0:11:39.440 --> 0:11:41.840 at all, because I always think of Spartanburg being a 0:11:41.880 --> 0:11:44.840 gear head, you know, uh, the BMW plant down there 0:11:45.360 --> 0:11:47.960 is there is a little bit of we compete with 0:11:48.000 --> 0:11:51.120 South Carolina and um so they're a part of the 0:11:51.160 --> 0:11:54.600 Southeastern family. But let's be clear, we do compete. Yeah, 0:11:55.400 --> 0:11:57.840 that's what I was wondering about their their sec these 0:11:58.240 --> 0:12:04.679 North Carolina's acc all right, I want to switch gears 0:12:04.720 --> 0:12:07.559 because we had a trade that happened in m and 0:12:07.600 --> 0:12:09.000 A trade over the last couple of days. I got 0:12:09.000 --> 0:12:12.679 my attention because A it's involves banks, uh and be 0:12:12.800 --> 0:12:14.319 it's M and A and I like M and A fees. 0:12:14.600 --> 0:12:17.079 So I'm gonna get Paul Goldberg in here. Paul's the 0:12:17.120 --> 0:12:20.199 senior equity research channels with Boomberg Intelligence. He covers the 0:12:20.240 --> 0:12:23.800 banks talk to us about this deal. Bank of Canada 0:12:24.679 --> 0:12:28.880 is buying h species Canadian unit. So the biggest investment 0:12:28.920 --> 0:12:32.520 bank in Canada is getting even bigger. Yeah, thank you 0:12:32.559 --> 0:12:35.520 for having me, Paul. This is absolutely correct. RBC is 0:12:35.960 --> 0:12:39.800 the largest bank in Canada in cross retail in many 0:12:39.840 --> 0:12:44.439 cases across business landing, so you look at different categories, 0:12:44.720 --> 0:12:48.640 they have in some cases more than that of the market. 0:12:49.000 --> 0:12:52.120 So they are buying the number seven bank. And this 0:12:52.200 --> 0:12:55.679 is an extremely unique opportunity in Canada because most of 0:12:55.720 --> 0:12:59.400 the Canadian loans and deposits have basically distributed between the 0:12:59.440 --> 0:13:03.720 six banks. So, and we were just hearing about higher, 0:13:03.840 --> 0:13:09.160 stronger net interest margins um in terms of some US banks, 0:13:09.200 --> 0:13:11.800 I assume the situation is the same there. Right as 0:13:11.800 --> 0:13:14.080 we see rates pick up around the world, banks start 0:13:14.160 --> 0:13:19.440 to recover those margins. It's actually very interesting and very similar, 0:13:19.600 --> 0:13:23.040 but it's shifting already in the US and Canada. RBC 0:13:23.120 --> 0:13:26.960 actually reported their fourth quarter earliest this morning, so the 0:13:27.040 --> 0:13:30.920 rates momentum was running out. It's been very strong for them. 0:13:31.040 --> 0:13:33.560 They probably still going to see another ten fifteen basis 0:13:33.640 --> 0:13:35.720 points in the first half in terms of net interest 0:13:35.760 --> 0:13:39.920 margin expansion, but that will slow down throughout the year 0:13:40.520 --> 0:13:43.240 and a lot of the banks are starting to hedge 0:13:43.400 --> 0:13:47.560 for slowdown and interesting already already. Well. RBC was a 0:13:47.600 --> 0:13:50.480 case in point this morning. They owned City National Bank 0:13:50.679 --> 0:13:53.960 in the US, so they're heading out both the US 0:13:54.040 --> 0:13:57.920 and Canada. They not They're not position into rates, turning 0:13:57.960 --> 0:14:01.400 over and go next going the addit direction. But they 0:14:01.440 --> 0:14:04.439 are trying to hedge out that upside, not negative, hopefully 0:14:04.440 --> 0:14:08.120 never negative again, well not negative. But I hear you, 0:14:08.160 --> 0:14:11.400 I hear instead of jacking up seventy five or fifty 0:14:11.440 --> 0:14:13.680 basis points and meeting, at some point, they're gonna start 0:14:13.679 --> 0:14:15.520 to cut. And even Gina Martin Adams, I think we 0:14:15.520 --> 0:14:17.559 were just hearing from critious think thinks the next year 0:14:17.600 --> 0:14:20.440 we'll see fifty basis points of cuts. That'd be nice. 0:14:20.520 --> 0:14:22.800 That's got to be good for the markets. My bullish call, 0:14:22.920 --> 0:14:25.320 I mean, hopefully they get some build up, some dry 0:14:25.320 --> 0:14:27.880 powder before that, right exactly? Yeah, alright, So Paul, we 0:14:27.960 --> 0:14:31.760 got you know, Royal Bank of Canada, quality quality player, 0:14:32.360 --> 0:14:35.880 doubling down on investment banking. They're in Canada. What's their 0:14:35.920 --> 0:14:39.000 bullish call on Canada? Do you think we're If I'm 0:14:39.040 --> 0:14:40.760 in a banker, how do how do I make money 0:14:40.760 --> 0:14:43.680 in Canada over the next five years? Well, it's kinda 0:14:43.720 --> 0:14:46.680 there's a closed ecosystem right in terms of the banking. 0:14:46.720 --> 0:14:48.920 They're only a handful of banks. They're fifty banks in 0:14:48.960 --> 0:14:52.880 total in Canada, okay, uh, and six of them essentially 0:14:52.880 --> 0:14:56.920 around the market. So whatever the banks can do and 0:14:57.000 --> 0:14:59.440 whenever they can get their hands and they expending the 0:14:59.480 --> 0:15:03.120 market here in that very unique asset, they do it. 0:15:03.200 --> 0:15:05.880 So why why does the Hong Kong Shanghai Banking Corporation 0:15:05.880 --> 0:15:09.760 want to sell? Well, I will defer to our European 0:15:09.760 --> 0:15:12.400 analysts who cover it, but I will mention that they 0:15:12.400 --> 0:15:14.600 did no, no no, no, But they will mention that that 0:15:14.640 --> 0:15:18.400 they did have came down to their lower end of 0:15:18.440 --> 0:15:22.200 the capitol range where they wanted to be, and that 0:15:22.320 --> 0:15:25.880 transaction what John Tye said in this note added about 0:15:25.920 --> 0:15:28.760 a hundred thirty basis points of c to one capital. 0:15:29.360 --> 0:15:31.520 So that puts them in a very good position in 0:15:31.600 --> 0:15:34.920 terms of capital potentially by bags. All right, talk to 0:15:35.000 --> 0:15:39.240 us about the Canadian residential housing market. That's different there 0:15:39.320 --> 0:15:42.760 than it is here. It's a bigger part of the 0:15:43.040 --> 0:15:45.560 you know, a consumer's total net worth than it is. Well, 0:15:45.560 --> 0:15:47.800 and it was on fire for a while, right. I 0:15:47.800 --> 0:15:49.920 don't know what are the banks saying about the real 0:15:50.040 --> 0:15:54.240 estate market up there. It's slowing down very dramatically. It's 0:15:54.280 --> 0:15:55.960 not just the band what the banks they're saying. We've 0:15:56.000 --> 0:16:02.440 seen that in the numbers. Uh, But RBC, for example, 0:16:02.560 --> 0:16:05.280 just this morning they see and it's still growing in 0:16:05.240 --> 0:16:08.120 the mid single digits. Not the prices, not the sales, 0:16:08.200 --> 0:16:11.400 but the mortgage loans because people still need to refinance. 0:16:11.480 --> 0:16:13.720 Can this slightly different market. They don't have the thirty 0:16:13.760 --> 0:16:17.560 year mortgages. The mortgages refinance every five years, so there's 0:16:17.600 --> 0:16:20.360 a lot of turnover. That's right, That's what I was 0:16:20.360 --> 0:16:22.800 thinking about. Yeah, they have much more interest rate risk 0:16:22.920 --> 0:16:25.760 than we. They have more interest rate risk, but that 0:16:26.000 --> 0:16:28.600 a lot of the interest rate risk on the customer, 0:16:28.680 --> 0:16:31.640 not on the not on the bank cooking refinance. All right, 0:16:31.960 --> 0:16:34.280 good stuff, Paul Goldberg, He covers a lot of the 0:16:34.320 --> 0:16:37.760 banking stuff, including Canada for Bloomberg intell just just want 0:16:37.800 --> 0:16:39.200 to get the latest on what was a pretty big 0:16:39.320 --> 0:16:41.200 m and a trade up in kinda Royal Bank of 0:16:41.240 --> 0:16:45.800 Canada acquiring HSPCs Canadian unit, doubling down on their investment banking. 0:16:48.680 --> 0:16:53.280 Lamborghini is unveiling its latest twoundred seventy thousand dollars supercar 0:16:53.640 --> 0:16:56.280 that apparently is ready to take drivers off the highway 0:16:56.920 --> 0:16:59.920 and onto the dirts. We welcome now are Bloomberg Televi 0:17:00.120 --> 0:17:03.640 an audience, our radio and listeners because we're joined by 0:17:03.640 --> 0:17:08.359 Stephan Winkelman, he is the Lamborghini CEO and chair joining 0:17:08.440 --> 0:17:12.439 us as well a very excited Bloomberg's Matt Miller um Stefan, 0:17:12.640 --> 0:17:15.520 thank you very very much, indeed your time. Why are 0:17:15.560 --> 0:17:22.280 you taking Lamborghini off road? Can Serrato is our last 0:17:23.240 --> 0:17:27.160 internal combustion engine car only, so it's the last launch 0:17:27.200 --> 0:17:28.639 we are going to do with a car like this. 0:17:29.520 --> 0:17:32.800 And I think that the Lamborghini always was easy and 0:17:32.880 --> 0:17:36.480 wars and expected unexpected. It will continue to be so. 0:17:37.119 --> 0:17:40.359 So I think to have an old in car is 0:17:40.400 --> 0:17:43.720 something which is incredible and it's really fun to drive, 0:17:43.840 --> 0:17:47.679 and it's very much sticking to our DNA and all. 0:17:47.760 --> 0:17:50.480 We have a permanent bob we drive system on this car. 0:17:50.840 --> 0:17:54.399 There's more ground clearance, so it's very easy to drive 0:17:55.640 --> 0:17:58.880 on the on the normal roads, on the race sick, 0:17:59.320 --> 0:18:03.560 but also of on on gravel road. So it's fun, 0:18:03.720 --> 0:18:06.399 it's performing, but it's also a life cycle for the 0:18:06.440 --> 0:18:08.840 for big sit. Stephen Guy was asking me yesterday like 0:18:08.840 --> 0:18:12.000 why would I need an off road Lamborghini um and 0:18:12.280 --> 0:18:14.480 I pointed out that we have, you know, six to 0:18:14.520 --> 0:18:18.160 eight inch potholes in the major highways around New York City. 0:18:18.400 --> 0:18:21.840 That's the same in all of the major cities around 0:18:22.040 --> 0:18:24.520 well in Europe at least, and here in the US. 0:18:24.680 --> 0:18:27.320 Is that part of the draw, like if I'm driving 0:18:27.320 --> 0:18:30.560 at a Venta door um I drove on recently around 0:18:30.640 --> 0:18:34.320 Barcelona and it's kind of terrifying with such low ground clearance. 0:18:34.400 --> 0:18:35.639 Is that part of the draw of one of these 0:18:35.680 --> 0:18:39.760 lifted Lambos. But I think we always tried to do 0:18:39.880 --> 0:18:43.560 something which is new and which was never there before, 0:18:44.240 --> 0:18:48.879 and already years back we were looking into an opportunity 0:18:49.000 --> 0:18:52.440 to do it. Seems it seemed very difficult to achieve. 0:18:53.080 --> 0:18:56.400 But then when I came back to Lamborghini a couple 0:18:56.440 --> 0:19:00.359 of years ago, we refocused on it and we made it. 0:19:00.400 --> 0:19:04.360 And for sure it's a car which is very much 0:19:04.400 --> 0:19:09.080 fitting into our environment because the situation of the infrastructure, 0:19:09.119 --> 0:19:11.840 as you said, no in Europe, but also yeah, in 0:19:11.880 --> 0:19:14.680 the US, is not the best one when it comes 0:19:14.720 --> 0:19:17.640 to to the to the to the streets, so it's 0:19:18.080 --> 0:19:21.400 very easy to drive, also with the roads which are 0:19:21.440 --> 0:19:24.399 not in the best condition. Definitely strikes me that Folkswagen 0:19:24.440 --> 0:19:26.639 may have brought you back to Lamborghini, not just because 0:19:26.680 --> 0:19:28.919 you know the business and you're a great operator. But 0:19:29.560 --> 0:19:32.040 because they may want an I p O the brand, 0:19:32.080 --> 0:19:34.520 they just did it very successfully with Porsche, even in 0:19:34.520 --> 0:19:39.439 a tough market. Have you prepared Lambeau for an IPL No, 0:19:39.640 --> 0:19:42.000 there's nothing which we are doing to prepare an IPO, 0:19:42.119 --> 0:19:46.320 So this is not on our agenda timing. Okay, okay, 0:19:46.400 --> 0:19:50.920 But but your margins, Stefan are looking phenomenal. You've got 0:19:50.920 --> 0:19:53.520 margins that the bit margins that are better than Ferraris 0:19:53.680 --> 0:19:57.720 right now. I'm assuming that the new car as well 0:19:58.000 --> 0:20:01.880 will only improve those margins. Are these martins as high 0:20:01.960 --> 0:20:04.920 as they are because you you are sending this message 0:20:05.119 --> 0:20:07.200 that this is a business that people would want to buy. 0:20:08.840 --> 0:20:12.840 But I think that what we're doing is to work 0:20:12.880 --> 0:20:15.320 on the product, to work on the brand, to do 0:20:15.720 --> 0:20:19.679 the best we can with all the opportunities we have 0:20:19.800 --> 0:20:22.040 on our base models and all the events and or 0:20:22.440 --> 0:20:25.520 the hula can and the urdles to create very rates 0:20:25.560 --> 0:20:28.960 and the brand is very young and fresh. So it's 0:20:29.000 --> 0:20:34.520 also inviting us to to attempt new territories and to 0:20:34.680 --> 0:20:39.920 launch things like the Serato and the results are very positive, 0:20:40.119 --> 0:20:43.919 not only in the United States but all over the world. 0:20:44.000 --> 0:20:48.879 And we're always selling more cars so far then we 0:20:48.880 --> 0:20:51.280 are able to produce and this is creating already an 0:20:51.320 --> 0:20:54.399 order bank which is exceeding creating months, and this is 0:20:54.480 --> 0:20:57.920 very positive. Also looking into the future, which is going 0:20:57.960 --> 0:21:01.359 to be hybrid from twenty onwards and which will be 0:21:01.440 --> 0:21:06.120 then concluded by the end of four So we now 0:21:06.200 --> 0:21:10.200 have the Starato, we also have the the nine eleven Tacca, 0:21:10.960 --> 0:21:15.359 and I understand there has been some cooperation conversations between 0:21:15.359 --> 0:21:18.600 you and Posta as as these cars have evolved. How 0:21:18.640 --> 0:21:23.960 close is that relationship right now, Stefan. We are big groups, 0:21:23.960 --> 0:21:28.280 so when we speak, when the brands come together, for 0:21:28.400 --> 0:21:31.520 sure there are there is a clear positioning of the 0:21:31.640 --> 0:21:35.639 different brands and of the cars. But everybody is proud 0:21:36.320 --> 0:21:39.200 on doing his own product and he's trying to do 0:21:39.560 --> 0:21:43.199 and to create the best out of what he has 0:21:43.240 --> 0:21:47.160 in his doors. And I think that this is very good. 0:21:47.240 --> 0:21:50.280 Then they set out towards just approved on how how 0:21:50.359 --> 0:21:53.280 much our engineers and also our marketing people in the 0:21:53.680 --> 0:21:57.840 in general, our people in the Stageta Bolognese are passionate 0:21:57.920 --> 0:22:01.920 about what we're doing. Stephan. I'm lucky enough to bend 0:22:01.920 --> 0:22:05.600 the Santa Aguta a few times. I've senior production facilities, 0:22:05.640 --> 0:22:08.840 recommend everyone who gets a chance goes and tours the factory. 0:22:09.000 --> 0:22:11.040 How much is that going to change when you go 0:22:11.119 --> 0:22:14.520 to hybridization or electric cars. Are you going to have 0:22:14.560 --> 0:22:19.200 a new infrastructure footprint? For sure? We are in fact 0:22:19.280 --> 0:22:23.760 now we are the super sports car factory with the 0:22:23.760 --> 0:22:27.959 Hohoda Can and the event of follower is now changing 0:22:28.000 --> 0:22:32.359 a lot. We are building a new assembly line which 0:22:32.520 --> 0:22:35.160 when the new Hooda Can is a hybrid is coming 0:22:35.160 --> 0:22:38.200 at the end of four will not be too as 0:22:38.280 --> 0:22:40.920 it today, but there will be then one line which 0:22:41.040 --> 0:22:45.040 is being able to produce both of the super sports guys. 0:22:45.080 --> 0:22:46.919 So we're doing a lot. It's not only about the 0:22:46.960 --> 0:22:50.840 product and let's say the marketing, but it's also a 0:22:50.880 --> 0:22:54.159 lot about what we're doing our factory and how we 0:22:54.200 --> 0:22:58.480 work also without supplies, also changing all the people with 0:22:58.600 --> 0:23:05.320 the new types of a job descriptions, a different intelligence, 0:23:05.440 --> 0:23:09.320 and all the things which are going around the hybridization, 0:23:09.400 --> 0:23:12.640 electification with battery technology. So when you get I mean 0:23:13.359 --> 0:23:19.679 massive margins, everybody loves these limited edition vehicles. Are you 0:23:19.720 --> 0:23:22.639 planning on producing more of those before you change the 0:23:22.680 --> 0:23:28.600 production facilities? But you know by the beginning of next year. 0:23:28.640 --> 0:23:34.640