WEBVTT - Surveillance: EV Transformation With GM CEO 0:00:09.840 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 0:00:13.960 --> 0:00:17.560 we bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.360 Bloomberg dot Com, and of course on the Bloomberg Right 0:00:27.360 --> 0:00:30.160 Now joining us David Balan. He is a city group 0:00:30.200 --> 0:00:32.800 that global head of Investment's David, I want to cut 0:00:32.800 --> 0:00:35.400 to the chase and take from your note you focus 0:00:35.440 --> 0:00:39.760 on gridlock. Is the gridlock forward than the different than 0:00:39.800 --> 0:00:44.880 the gridlock of recent years? Well, in terms of economic policy, Tom, 0:00:44.920 --> 0:00:47.280 probably not. I mean what we're gonna see, I think 0:00:47.400 --> 0:00:49.720 is some level of stimulus package. It won't be what 0:00:49.800 --> 0:00:51.760 it would have been, um, you know, had there been 0:00:52.280 --> 0:00:55.520 a control by the Democrats, but there will be a package. 0:00:55.760 --> 0:00:58.040 And if you think about the trifecta from a stock 0:00:58.080 --> 0:01:01.200 market standpoint, you have the FED, you know, holding rates 0:01:01.320 --> 0:01:03.080 very low for the next two and a half years. 0:01:03.480 --> 0:01:06.200 You've got some level of stimios in January, and perhaps 0:01:06.240 --> 0:01:10.240 most importantly, you have four different vaccines that could basically 0:01:10.240 --> 0:01:13.560 be announced between the end of November and January, and 0:01:13.600 --> 0:01:16.479 they're being made in hundreds of millions of doses by 0:01:16.480 --> 0:01:19.360 each of the country, each of the companies. The combination 0:01:19.520 --> 0:01:21.520 of knowing that there would be an end of the 0:01:21.560 --> 0:01:26.440 pandemic in you know, stimulus in the market sometime in January, 0:01:26.800 --> 0:01:29.160 and the known who the president is is quite a 0:01:29.760 --> 0:01:32.160 you know, a bollus of news that can propel the 0:01:32.200 --> 0:01:34.800 market higher. And I believe that that's a combination of 0:01:34.800 --> 0:01:37.440 those things that's actually happening right now. The market not 0:01:37.480 --> 0:01:39.520 really competent in nature of this rally. Well, yeah, and 0:01:39.520 --> 0:01:41.120 that's where I wanted to go, David. The market is 0:01:41.160 --> 0:01:43.520 not a monolith, and right now we're seeing is a 0:01:43.520 --> 0:01:46.320 doubling down on the growth stocks and the tech stocks 0:01:46.400 --> 0:01:49.080 and not the reflation trade that people have been hoping for. 0:01:49.440 --> 0:01:52.320 The neat narrative that we were talking about is the 0:01:52.320 --> 0:01:54.440 FETE is going to have to provide more support. Rates 0:01:54.440 --> 0:01:56.920 are going to stay low, and that necessarily we're not 0:01:56.960 --> 0:01:59.320 going to get that faster growth from a higher fiscal 0:01:59.360 --> 0:02:02.240 support pack. It is the neat narrative. Correct Or are 0:02:02.280 --> 0:02:04.800 we going to get that stimulus in the form of 0:02:04.840 --> 0:02:08.960 just economic growth and recovery as the vaccine gets implemented. Yeah, 0:02:09.120 --> 0:02:12.080 I think that that narrative is actually wrong. We'll talk 0:02:12.080 --> 0:02:14.000 a little bit about the rotation too. But but the 0:02:14.000 --> 0:02:15.840 reason that the narrative is wrong is that you've got 0:02:15.840 --> 0:02:18.320 an enormous sort of you know, tail wind here. You've 0:02:18.360 --> 0:02:21.359 got basically between twelve and fifteen percent of the global 0:02:21.360 --> 0:02:26.399 economy shut down in terms of travel, leisure, retail, education, healthcare, 0:02:26.639 --> 0:02:28.440 all of it shut down. You take a look at 0:02:28.440 --> 0:02:30.520 consumer demand in the the United States, it's higher than it 0:02:30.560 --> 0:02:33.320 was in December of two thousand and nineteen before we 0:02:33.440 --> 0:02:35.799 turn that back on. So there's quite a bit of 0:02:35.840 --> 0:02:38.440 a tail wind in that way, and also in terms 0:02:38.480 --> 0:02:40.600 of the actual amount of velocity of money which will 0:02:40.600 --> 0:02:43.320 actually take place when everyone leaves their house. Um. And 0:02:43.560 --> 0:02:46.560 that's where you get to this whole rotation of the market. Um. 0:02:46.760 --> 0:02:48.959 It's shocking to me that, you know, the Nasdaq is 0:02:49.040 --> 0:02:51.960 up this way, but that is the defensive trade rates down, 0:02:52.280 --> 0:02:55.160 technology up, and that's what tells me that people actually 0:02:55.160 --> 0:02:57.880 are still scared. Um. Once we see that change, I 0:02:57.880 --> 0:02:59.880 think that will be an indicative of what will have 0:03:00.040 --> 0:03:01.880 been over the next couple of years as the as 0:03:01.880 --> 0:03:04.320 the regular market, uh, you know, comes to comes to 0:03:04.360 --> 0:03:08.560 bear it. David Gratz, as always David Baiden, that a 0:03:08.680 --> 0:03:18.520 city group this is a joy. Rick Michigan joins us 0:03:18.520 --> 0:03:22.680 now Frederick Michigan of Columbia University, a former Federal Reserve governor. 0:03:23.040 --> 0:03:26.399 And we can wax philosophical about the FED, about our 0:03:26.400 --> 0:03:30.240 central Bank. Forget about that. Let's wax philosophical about his 0:03:30.320 --> 0:03:34.800 wonderful textbooks on policy. He has thought more than anyone 0:03:34.840 --> 0:03:39.240 I know about policy and linking it into the American 0:03:39.320 --> 0:03:44.320 good Rick Michigan. Does Mr Biden run a traditional Democratic 0:03:44.400 --> 0:03:48.760 Party Democratic president policy or does he have to carve 0:03:48.880 --> 0:03:52.560 a new path if he's elected? Who knows? It's it's 0:03:52.600 --> 0:03:57.200 so complicated, uh, and uh that what's happened has been 0:03:57.520 --> 0:04:00.880 a real polarization, not just in terms of Americans but 0:04:01.000 --> 0:04:04.480 the parties themselves. So we've seen, uh the right in 0:04:04.520 --> 0:04:08.960 the Republican Party go uh to quite extreme positions, and 0:04:09.000 --> 0:04:11.480 we've seen the left in the Democratic Party doing the 0:04:11.520 --> 0:04:14.880 same thing. Uh. And Biden is is a centrist. But 0:04:14.920 --> 0:04:19.080 it's going to be very complicated, particularly uh that that 0:04:19.560 --> 0:04:24.240 the Senate will almost surely be the the Republican Senate, 0:04:24.960 --> 0:04:27.080 So getting anything done is going to be very difficult. 0:04:27.720 --> 0:04:29.520 I do think that there will be some stimulus that 0:04:29.560 --> 0:04:32.000 will put you put in place because it's really clear cut. 0:04:32.080 --> 0:04:34.400 I think from both parties that something needs to be done. 0:04:35.200 --> 0:04:37.479 But it certainly won't be what the Democrats would have 0:04:37.480 --> 0:04:39.479 liked if, in fact it was a Democratic Senate and 0:04:39.480 --> 0:04:43.440 a Democratic president, because this is certainly not going to 0:04:43.520 --> 0:04:46.560 be the kind of money going to the States that 0:04:46.600 --> 0:04:50.040 the Democrats have initially initially wanted. So it's a very 0:04:50.040 --> 0:04:53.400 complicated environment for him. I think it's gonna be very 0:04:53.400 --> 0:04:56.599 tough for for for for Biden, who's you know, I 0:04:56.600 --> 0:05:01.320 don't necessarily think that he's a super strong u A person. Uh. 0:05:01.720 --> 0:05:04.160 He's got a tough, tough shop to do and and 0:05:04.320 --> 0:05:06.520 uh and of course it's not absolutely sure that he's 0:05:06.520 --> 0:05:08.960 going to win the election, but it looks increasingly likely 0:05:10.160 --> 0:05:12.479 the accounting continues. He has his nose in front just 0:05:12.560 --> 0:05:15.360 about at the moment. Brick, the choreography this morning and 0:05:15.400 --> 0:05:17.960 the Unted Kingdom was phenomenal. The bank offing the make 0:05:18.000 --> 0:05:20.960 six cal pulls the decision early. They chance that the 0:05:21.000 --> 0:05:24.400 Treasury follows up. They work hand in glove almost perfectly 0:05:24.600 --> 0:05:26.800 over the last several hours, Rick Doy, You assume that 0:05:26.839 --> 0:05:30.200 the Federal Reserve and the person leading that institution is 0:05:30.200 --> 0:05:32.840 going to be much much closer to the president and 0:05:32.880 --> 0:05:35.039 whoever that president might be, not just through the next 0:05:35.080 --> 0:05:38.400 four years, but over the next several decades. Well. I 0:05:38.480 --> 0:05:40.920 think that that there's clearly an issue in terms of 0:05:40.960 --> 0:05:44.800 the relationship between j Powell and Donald Trump. Is was 0:05:44.880 --> 0:05:48.600 not good at all. We've never seen quite the vociferous 0:05:48.680 --> 0:05:53.320 tax that we've seen from President Trump. In fact, uh 0:05:54.440 --> 0:05:57.320 mentioned by textbook in a new addition coming out, I 0:05:57.360 --> 0:06:00.480 have a whole new section on presidential attacks on on 0:06:00.520 --> 0:06:04.120 the FED and how unique these are. There always been 0:06:04.160 --> 0:06:07.440 some attacks, but these are really very unique. So I think, certainly, 0:06:08.120 --> 0:06:13.920 uh uh, if Joe Biden is elected, that the relationship 0:06:13.920 --> 0:06:17.120 between the FED and the the president will be much 0:06:17.160 --> 0:06:19.359 better than it will have been before. In fact, I 0:06:19.400 --> 0:06:21.279 think that Joe Biden will just leave the FED alone 0:06:21.279 --> 0:06:24.200 and let it do it do its job. Now. In practice, 0:06:24.360 --> 0:06:26.400 it really hasn't influenced very much what the FED has 0:06:26.440 --> 0:06:30.400 done the criticisms of Donald Trump, but it does politicize 0:06:30.440 --> 0:06:34.000 the FED. So hopefully the little less politicization of the FED, 0:06:34.240 --> 0:06:36.599 I think that would be a good thing, but we'll 0:06:36.600 --> 0:06:38.440 have to wait and see. I think the FED has 0:06:38.480 --> 0:06:40.760 a very tough job right now. They're Basically you're out 0:06:40.760 --> 0:06:44.680 of tools that the action really has to come from 0:06:44.720 --> 0:06:48.279 from from federal government spending. Uh, and that's something that 0:06:48.320 --> 0:06:51.719 FED can control. They clearly want more expansionary and policy 0:06:51.760 --> 0:06:54.680 from the from the federal government, but who knows exactly 0:06:54.680 --> 0:06:56.400 how much that will be. Well, when you say that 0:06:56.440 --> 0:06:59.080 they're basically out of tools of profession Michigan, this is 0:06:59.120 --> 0:07:01.760 really important to people are saying they aren't a tools, 0:07:01.800 --> 0:07:03.400 but doesn't mean they're not going to act further, whether 0:07:03.400 --> 0:07:06.840 it's expanding the balance sheet or playing around with other 0:07:07.320 --> 0:07:10.360 ways of stimulating the economy. Do you expect them to 0:07:10.480 --> 0:07:13.560 double down on their existing policies even if they are 0:07:13.600 --> 0:07:17.160 not proving to be effective and actually stimulating economic growth. Well, 0:07:17.160 --> 0:07:19.120 it's a key issue is is what do you mean 0:07:19.120 --> 0:07:21.720 by effective That you're supposed to do what you what 0:07:21.840 --> 0:07:24.200 you can to help. It's just that you have to 0:07:24.240 --> 0:07:27.480 be aware that that the tools are not sufficient at 0:07:27.520 --> 0:07:29.880 this point. UH. This is one of the problems that 0:07:29.920 --> 0:07:32.520 occurs when we hit what we call the zero lower 0:07:32.560 --> 0:07:36.680 bound or effective lower bound on policy rates. You can't 0:07:36.680 --> 0:07:39.560 go much below zero. In fact, countries have tried to 0:07:39.600 --> 0:07:41.800 go below zero zero. It's not all clear that that 0:07:41.800 --> 0:07:44.840 actually even helps. So the FED has a has an 0:07:44.840 --> 0:07:48.560 issue to conduced things through suiciassi and purchases and its lending. 0:07:49.160 --> 0:07:52.560 In fact, I thought that the FED performed brilliantly uh 0:07:52.600 --> 0:07:56.240 in the early phase of the of the coronavirus pandemic, 0:07:57.120 --> 0:08:00.000 but to make sure that we didn't have another depression, 0:08:00.440 --> 0:08:03.600 to be honest, that things were very scary right then. 0:08:03.720 --> 0:08:07.280 Luckily the FED had basically done more games by actually 0:08:07.280 --> 0:08:09.480 figuring out what to do. It took about eighteen months 0:08:09.480 --> 0:08:13.080 in total to do everything during the global financial crisis. 0:08:13.240 --> 0:08:14.920 They were able to basically do it in two weeks, 0:08:14.920 --> 0:08:17.120 so that was very helpful. But all that could do 0:08:17.160 --> 0:08:21.440 is stabilize the situation, getting u uh the economy to 0:08:21.480 --> 0:08:24.320 bounce back when the coronavirus seems to be getting worse. 0:08:24.400 --> 0:08:27.200 I mean, my view is right now, it's happened economy, 0:08:27.280 --> 0:08:31.600 it's all about the coronavirus. Coronavirus pandemic. Uh. Clearly we 0:08:31.640 --> 0:08:34.480 have not handled this particularly well UH and it has 0:08:34.520 --> 0:08:37.280 actually uh we're now at at record level cases. I 0:08:37.280 --> 0:08:39.880 think it's gonna get much worse in the winter. Just 0:08:39.920 --> 0:08:42.520 think about people getting together Thanksgiving and then not being 0:08:42.520 --> 0:08:45.040 able to go outside when it gets really cold. I 0:08:45.080 --> 0:08:46.839 think it's gonna be pretty grim and that's gonna be 0:08:46.840 --> 0:08:49.800 a real problem for the economy. And the FED basically 0:08:49.880 --> 0:08:52.720 is gonna do what it has to do. But on 0:08:52.760 --> 0:08:55.160 the other hand, h it can't solve the problem, and 0:08:55.160 --> 0:08:58.040 that's why we we actually need action from the from 0:08:58.120 --> 0:09:00.960 the Federal Gun. We would love to get you back 0:09:01.000 --> 0:09:02.880 on the program soon. We appreciate your time this morning, 0:09:02.880 --> 0:09:06.920 Sir Frederick Misganet, formerly of the Federal Reserve Board of Governors. 0:09:11.120 --> 0:09:13.720 Always with questions for the feed is Peter Hooper. He 0:09:13.800 --> 0:09:16.880 is the Deutsche Bank and their global head of economic research. 0:09:16.920 --> 0:09:19.240 What a thrill to speak on one day to David 0:09:19.280 --> 0:09:23.280 Fulkers Lando and now to his colleague Dr Hooper. Peter Hooper, 0:09:23.280 --> 0:09:25.720 There's so much to talk about, but I need to 0:09:25.760 --> 0:09:30.800 immediately go to the cautious view Deutsche Bank has had 0:09:31.040 --> 0:09:34.439 on the American economy. Do you reaffirm that within this 0:09:34.480 --> 0:09:40.240 political moment, yes, Tom uh near term, certainly things are 0:09:40.240 --> 0:09:42.720 there are studding slow. We have had a very good September, 0:09:43.800 --> 0:09:47.040 but but the data for October have hadn't begun to soften. 0:09:47.840 --> 0:09:49.559 And what we're seeing in the labor market right now, 0:09:49.600 --> 0:09:52.040 I think agrees with that. This morning's number certainly don't 0:09:53.040 --> 0:09:55.520 in line with the sense that the labor market is 0:09:55.559 --> 0:10:00.040 not improving further ADP number yesterday three six five. We 0:10:00.040 --> 0:10:04.199 we may get some downward surprise, downward drift in in 0:10:04.520 --> 0:10:08.240 payroll games on Friday as well. So our sense is 0:10:08.360 --> 0:10:13.120 the economy is slowing too noticeably below the consensus expectation. 0:10:13.480 --> 0:10:16.679 Consensus still around something like three and a half four 0:10:16.720 --> 0:10:19.640 percent growth in the fourth quarter. We put it a 0:10:19.679 --> 0:10:24.240 bit under one percent, perhaps given what we're seeing now 0:10:24.520 --> 0:10:28.880 as some slowing in consumer spending. We had a drop 0:10:28.920 --> 0:10:32.400 off in auto sales. UH, some high frequency numbers on 0:10:33.120 --> 0:10:37.720 apparel purchases also pointing in this direction. What's happening here 0:10:37.960 --> 0:10:43.040 is that the drop in support the unemployment unemployment benefit, 0:10:43.120 --> 0:10:48.200 the extra unemployment benefits came off in October. Household income 0:10:48.320 --> 0:10:52.280 growth is slowed substantially. We're starting to take it out 0:10:52.320 --> 0:10:54.920 of saving. So yes, we do think the economy is 0:10:54.960 --> 0:10:59.480 flowing near term, and the election results UH certainly at 0:10:59.480 --> 0:11:03.040 this point have taken out the upside risk on on 0:11:03.280 --> 0:11:06.880 substantial fiscal stimulus next year. Peter, what is the nature 0:11:07.160 --> 0:11:09.640 of grid luck right now? When you talked to Matt 0:11:09.679 --> 0:11:14.240 Lozetti about an American Deutsche Bank view. Does a grid 0:11:14.360 --> 0:11:21.160 luck get us closer to stimulus salvation? Good luck getting 0:11:21.160 --> 0:11:24.320 a stimulus salvation. I suppose Ben's Ben is on your 0:11:24.320 --> 0:11:26.120 point of view, but but certainly we're not going to 0:11:26.240 --> 0:11:30.120 be getting anything like the two two, two, three, four 0:11:30.160 --> 0:11:33.880 trillion dollar packages that people were dreaming about under a 0:11:33.920 --> 0:11:37.880 blue wave. Uh misch. McConnell came out yesterday he said, 0:11:38.120 --> 0:11:40.200 we have to put high priority and getting something done 0:11:40.240 --> 0:11:43.679 before the end of the year. The Republican Senate had 0:11:43.720 --> 0:11:46.880 been talking, had been talking about a five billion dollar 0:11:47.000 --> 0:11:51.959 support package. I think, uh, it's it's with the election 0:11:52.080 --> 0:11:55.040 results we're seeing at this point. My sense is and 0:11:55.160 --> 0:11:58.920 with a present if if, if the things turn out 0:11:58.920 --> 0:12:01.040 the way they seem to be right now, if if 0:12:01.320 --> 0:12:05.280 Biden as president, a president that's going to be trying 0:12:05.320 --> 0:12:08.280 to do something to bring the country together to get 0:12:08.280 --> 0:12:11.760 something done here. Yes, you have a bridlock, you have 0:12:11.840 --> 0:12:15.760 a Republican Senate and a a Democratic House with a 0:12:15.840 --> 0:12:18.559 democratic administration, but you're going to have, I think, an 0:12:18.600 --> 0:12:21.280 effort to try to get things done. So I'm not 0:12:21.440 --> 0:12:26.520 quite as pessimistic. Peter's still a lot of ivs. The 0:12:26.600 --> 0:12:29.040 counting continues. One thing we can look at is the 0:12:29.040 --> 0:12:32.240 economic data, the hard data claims we have the I 0:12:32.520 --> 0:12:35.840 m out yesterday services, the employment component, a little bit 0:12:35.840 --> 0:12:37.960 of sluggishness in the mix their page. I just wanted 0:12:37.960 --> 0:12:40.000 from your perspective, how you think the Federal Reserve when 0:12:40.040 --> 0:12:43.240 they meet today will actually pour through the job stats 0:12:43.320 --> 0:12:46.360 we've seen in the last couple of weeks. I think 0:12:46.400 --> 0:12:49.040 they'll be seeing economy that was starting a slow and 0:12:49.120 --> 0:12:52.760 this certainly tells you why Pal has been upfront saying 0:12:52.800 --> 0:12:57.000 we need more physical stimulus at this juncture. It's it's 0:12:57.000 --> 0:13:00.880 an economy that's still herding from the show that it's 0:13:00.880 --> 0:13:03.360 that it's faced, and the support coming off is going 0:13:03.400 --> 0:13:06.400 to be giving us a significant slowing of growth. It's 0:13:06.440 --> 0:13:09.839 not enough to get them to do anything today. I 0:13:09.920 --> 0:13:13.720 expect to see something, Uh if if, if the numbers 0:13:13.760 --> 0:13:16.200 come in the way we're anticipating, I wouldn't be surprised 0:13:16.200 --> 0:13:20.200 to see some action by the December meeting, in in 0:13:20.200 --> 0:13:23.920 in terms of balance sheet increasing, the maturity of purchases, 0:13:24.000 --> 0:13:25.880 this sort of thing. Wait, let's build on that, bitter 0:13:25.960 --> 0:13:28.400 How much do you expect the Fed to potentially expand 0:13:28.400 --> 0:13:34.200 their balance sheet if there is no promise of fiscal support. Um, 0:13:34.240 --> 0:13:37.160 you know, on on on balance sheet. The first thing 0:13:37.200 --> 0:13:42.280 I expect is in increasing the maturity of their purchases, 0:13:43.160 --> 0:13:45.880 on actually expanding from the pace of a hundred and 0:13:45.880 --> 0:13:49.240 twenty billion per month. Uh. They told us that they 0:13:49.280 --> 0:13:51.679 would continue at at least that pace. So certainly, if 0:13:51.679 --> 0:13:54.160 the economy is flowing, we could see some pick up 0:13:54.200 --> 0:13:56.640 on that. How much we haven't made a we haven't 0:13:56.640 --> 0:14:00.720 made a forecast on that yet, but be surprised to 0:14:00.720 --> 0:14:04.319 see some something. Uh. If we don't get any more 0:14:04.400 --> 0:14:06.800 fiscal support before the end of the year, If the 0:14:06.840 --> 0:14:12.040 economy is slowing to well below, well below current expectations, yes, 0:14:12.120 --> 0:14:14.240 I think the fetch steps in and because it begins 0:14:14.240 --> 0:14:16.520 to do something there all right. So how big is 0:14:16.520 --> 0:14:19.400 the spread between the streets expectation currently of growth in 0:14:19.440 --> 0:14:23.800 the US versus Deutsche banks house view of growth given 0:14:23.840 --> 0:14:27.960 where we are politically, given where we are with the virus. Okay, 0:14:28.000 --> 0:14:32.040 our our current forecast is in the range of half 0:14:32.080 --> 0:14:35.120 a percent for the annual growth in the fourth quarter. 0:14:35.600 --> 0:14:39.520 I think the the latest Bloomberg survey that I've seen 0:14:39.720 --> 0:14:41.960 is in the in the neighborhood of three and a 0:14:42.040 --> 0:14:45.720 half to four percent, so well above the numbers we're 0:14:45.840 --> 0:14:48.640 putting in there. We do see growth picking up next 0:14:48.720 --> 0:14:51.160 year too, between three and a half and four percent, 0:14:51.800 --> 0:14:55.640 even without the extra UH. I mean we we had viewed, 0:14:56.280 --> 0:14:59.920 we had viewed the possibility of a large stimulus package 0:15:00.040 --> 0:15:02.720 next year as an upside risk to our baseline forecast. 0:15:04.080 --> 0:15:06.320 At this point, we're looking at something in the in 0:15:06.360 --> 0:15:10.120 the half half a trillion to one trillion range of 0:15:10.360 --> 0:15:14.040 fiscal emaulists next year, which supports that growth picking up 0:15:14.040 --> 0:15:17.000 into the three and a half four percent range, along 0:15:17.040 --> 0:15:20.360 with the assumption that we will get released through vaccination 0:15:20.480 --> 0:15:25.200 and better testing. Peter Hope, great to catch up you, sir. 0:15:25.560 --> 0:15:36.760 Thank you Deutsche Bank ahead of global economic research. Right 0:15:36.800 --> 0:15:39.360 now we need to consider Michigan. We need to consider 0:15:39.680 --> 0:15:42.720 the state of the Michigan economy, in the state of 0:15:42.800 --> 0:15:45.240 General Motors, and there was no one more qualified to 0:15:45.280 --> 0:15:49.280 do that. David Weston here with Ms Barr. David, thank 0:15:49.320 --> 0:15:51.680 you so very much, Tom Keane. We now welcome the 0:15:51.720 --> 0:15:54.680 General Motors Chairman and CEO. She is Mary Barrows. So Mary, 0:15:55.160 --> 0:15:56.720 thank you for being with us. Do you have your 0:15:56.720 --> 0:15:59.479 earnings at just a short time ago? I think congratulations 0:15:59.480 --> 0:16:02.040 are in order or you exceed the expectations people thought 0:16:02.080 --> 0:16:04.320 you'd come back. You'd come back more than people thought. 0:16:04.680 --> 0:16:07.040 Give us your perspective on what drove that. How much 0:16:07.080 --> 0:16:09.200 of that was general motors and what you're doing general 0:16:09.400 --> 0:16:11.160 was how much of that was the economy and some 0:16:11.280 --> 0:16:16.040 of the massive stimulus that's going to the pockets of Americans. Well, 0:16:16.080 --> 0:16:18.560 thanks David, it's great to be here. And you know, really, 0:16:18.640 --> 0:16:20.880 when you look at one of the key reasons was 0:16:21.000 --> 0:16:23.640 the GM team members. Uh, they have done just a 0:16:23.680 --> 0:16:27.800 phenomenal job across all areas of our business, working and 0:16:27.880 --> 0:16:32.320 demonstrating their commitment to the business. Also priced prioritizing safety 0:16:32.320 --> 0:16:35.280 and following our safety protocols, and that has been a 0:16:35.360 --> 0:16:38.640 key ingredient to driving this very successful quarter. I would 0:16:38.640 --> 0:16:41.720 also say it's on the strong demand for trucks. A 0:16:41.760 --> 0:16:43.760 couple of years ago, as we started to roll out 0:16:43.760 --> 0:16:45.720 our new full size trucks, we talked about the fact 0:16:45.760 --> 0:16:48.240 that we were going to cover the whole market um 0:16:48.280 --> 0:16:51.280 both from a value perspective but also from a feature perspective. 0:16:51.520 --> 0:16:54.360 That strategy is working out extremely well, and we see 0:16:54.480 --> 0:16:58.240 very high demand for our full size pickups at all levels, 0:16:58.240 --> 0:17:00.960 but especially in those high end pickups with the A 0:17:01.040 --> 0:17:04.160 T four for example. With the GMC, we also continue 0:17:04.160 --> 0:17:07.080 to have very strong cost performance, not only the specific 0:17:07.080 --> 0:17:10.439 austerity measures that we took because of the pandemic, but 0:17:10.520 --> 0:17:12.520 also the work we've already been doing as part of 0:17:12.560 --> 0:17:17.120 the transformation. And then finally g MFU performed extremely well. 0:17:17.200 --> 0:17:21.480 So all of that coming together, I think our products, 0:17:21.720 --> 0:17:24.919 the discipline of the team, and are just our focus 0:17:24.920 --> 0:17:27.160 on costs is what allowed us to have this strong quarter. 0:17:27.720 --> 0:17:29.560 As you say, I looked at your Waterfall truck there 0:17:29.600 --> 0:17:31.840 carefully and so it was price and some of was 0:17:31.920 --> 0:17:34.520 cost saving. So well done. You have a balance. Let's 0:17:34.520 --> 0:17:37.240 talk about tracks. They clearly powered you. You've talked about 0:17:37.280 --> 0:17:39.600 them for some time. Now your pickup trucks. Do you 0:17:39.680 --> 0:17:41.479 have enough of them? Can you produce enough? What are 0:17:41.480 --> 0:17:46.159 you seeing in demand? We're seeing a strong and growing 0:17:46.240 --> 0:17:49.160 demand and right now we're building every truck we can 0:17:49.200 --> 0:17:52.800 make that. I think very shortly you'll hear us taking 0:17:52.840 --> 0:17:57.400 action to how we're going to further our capability to 0:17:57.400 --> 0:17:59.880 to build more trucks, because what we see is the 0:18:00.000 --> 0:18:02.479 man continues to grow. We think the shift to trucks, 0:18:02.800 --> 0:18:05.800 especially with the luxury trucks, the premium trucks that we're 0:18:05.840 --> 0:18:09.800 offering for both GMC and Chevrolet, that that is going 0:18:09.840 --> 0:18:13.040 to be a continuing trend. So, Mary, you talked about 0:18:13.040 --> 0:18:16.159 the safety of your colleagues at General Motors. Is the 0:18:16.200 --> 0:18:19.040 coronavirus at this point inhibiting at all your ability to 0:18:19.119 --> 0:18:23.560 produce enough product, enough trucks. Well, you know, we've worked 0:18:23.560 --> 0:18:25.359 hand in hand, not only with all of the GM 0:18:25.359 --> 0:18:27.160 team members, and I'm just so proud of the way 0:18:27.200 --> 0:18:30.080 everyone is following the safety protocols and staying safe. And 0:18:30.119 --> 0:18:32.200 I think there are even in many cases taking them home. 0:18:32.440 --> 0:18:34.600 Our employees tell us they feel safer at work than 0:18:34.640 --> 0:18:36.600 they do at a grocery store, and I think that's 0:18:36.920 --> 0:18:40.400 that speaks to um what we're doing and their commitment 0:18:40.480 --> 0:18:43.280 to to following the protocols that we jointly developed with 0:18:43.400 --> 0:18:46.840 the U a W and our peers across the industry. 0:18:47.040 --> 0:18:50.000 We've shared all that with the supply base and that 0:18:50.160 --> 0:18:53.359 is allowing us to continue to make sure we have 0:18:53.400 --> 0:18:56.919 the parts necessary. It's it's a very dynamic situation and 0:18:56.960 --> 0:18:59.680 we just worked to address each situation as it occurs, 0:18:59.720 --> 0:19:03.120 but right now really pleased with how the team is 0:19:03.240 --> 0:19:06.800 being creative to keep keep our ability to build as 0:19:06.840 --> 0:19:09.760 many trucks as we can looking out into the future. 0:19:09.920 --> 0:19:12.359 You have been consistent in saying an important part of 0:19:12.400 --> 0:19:15.960 the GM strategy is electric vehicles and autonomous vehicles. Give 0:19:16.040 --> 0:19:18.480 us a little bit of insight of that, particularly as 0:19:18.480 --> 0:19:20.639 we are now waiting for a result on the election. 0:19:20.920 --> 0:19:23.960 Does it make a material difference to your strategy whether 0:19:24.000 --> 0:19:26.119 we have a Democrat or Republican in the White House 0:19:26.160 --> 0:19:28.880 because they have very different approaches to things like fossil 0:19:28.920 --> 0:19:34.520 fuels and green energy. We are committed to e V 0:19:34.720 --> 0:19:38.399 s and we're working to accelerate our our e V transformation. 0:19:38.800 --> 0:19:40.879 I think some of the examples of that are the 0:19:40.920 --> 0:19:43.760 GMC hummery V, the Catalect Lyric, and then the bolt 0:19:43.960 --> 0:19:47.920 Um e V as well. We also just recently announced 0:19:47.920 --> 0:19:51.959 a multibillion dollar manufacturing commitments at Factory zero and Detroit 0:19:52.000 --> 0:19:56.000 ham Tramic, the ulti um cell Um LLC in Lordstown, Ohio, 0:19:56.119 --> 0:19:58.520 and then just most recently at our spring Hill assembly 0:19:58.560 --> 0:20:01.840 plan in Tennessee. So we've got the manufacturing capability, we 0:20:01.880 --> 0:20:04.960 have great vehicles, and we've got the expertise and the 0:20:04.960 --> 0:20:08.439 technology with ultium speed is vitally important as well, and 0:20:08.480 --> 0:20:11.399 that's why we're working so quickly. So regardless of who 0:20:11.480 --> 0:20:14.440 wins the election, we're going to continue on a rapid 0:20:14.520 --> 0:20:18.119 pace to transform to two E vs. Mary, you mentioned 0:20:18.119 --> 0:20:20.000 the Hummer EV. A lot of people out there are 0:20:20.040 --> 0:20:23.040 excited about that Hummer V. How many orders pre orders 0:20:23.040 --> 0:20:26.960 have you got so far? Are The demand has well 0:20:27.000 --> 0:20:29.360 exceeded our expectation. As you know, this is a very 0:20:29.440 --> 0:20:33.280 premium um entry, So we're incredibly pleased at the strong 0:20:33.359 --> 0:20:35.960 demand and uh, you know, we'll continue to monitor that 0:20:36.040 --> 0:20:39.040 as we go forward. And so Mary, it's not just 0:20:39.119 --> 0:20:41.960 electric vehicles, it's also fuel cell. You announced the deal 0:20:42.000 --> 0:20:44.119 with nicola As. I understand that there's a deadline on 0:20:44.200 --> 0:20:46.800 that deal in December. Where are you on that right now? 0:20:46.840 --> 0:20:48.719 Do you expect to go through it and will there 0:20:48.760 --> 0:20:52.280 be material changes in the terms of the deal. So 0:20:52.400 --> 0:20:55.400 right now we are in ongoing discussions with nicola Um 0:20:55.720 --> 0:20:58.879 regarding the transaction. That transaction has not closed and so 0:20:59.040 --> 0:21:02.240 we'll provide for their updates at the appropriate time. But 0:21:02.280 --> 0:21:05.879 I think what's important to note is our fuel cell technology, 0:21:05.920 --> 0:21:08.959 the hydro tech hydrogen fuel cells that we've developed with Honda. 0:21:09.480 --> 0:21:13.760 They they are industry leading, and that's from external sources, 0:21:13.880 --> 0:21:16.480 and so we're going to continue to look for ways 0:21:16.480 --> 0:21:20.000 to not only UM commercialize our fuel cells, but also 0:21:20.080 --> 0:21:23.000 the ultium battery platform because I think that continues to 0:21:23.080 --> 0:21:26.840 advance our zero emission future. Finally, very briefly, do you 0:21:26.880 --> 0:21:31.640 expect a continued rebound? One? What are you looking at? Uh? 0:21:31.640 --> 0:21:35.159 You know, a lot depends on UM. If we across 0:21:35.200 --> 0:21:38.800 the globe, get the coronavirus under control, and we know 0:21:38.840 --> 0:21:41.359 what we need to do from a safety protocol perspective, 0:21:41.440 --> 0:21:45.040 so we're hopeful that will start to make some progress there. 0:21:45.359 --> 0:21:47.760 Obviously in the United States were monitoring if they're what 0:21:47.840 --> 0:21:52.399 will happen with additional stimulus. But if those factors UH 0:21:52.640 --> 0:21:55.239 stay uh, if we get the virus under control and 0:21:55.440 --> 0:21:58.360 other elements stay on track, we think we can continue 0:21:58.440 --> 0:22:01.720