WEBVTT - Bloomberg Wall Street Week: Bastian, Spak, Brouillette 0:00:00.160 --> 0:00:03.360 This is Bloomberg Wall Street Week. What's the state of 0:00:03.400 --> 0:00:06.360 corporate governance? The deficit is a real issue. The US 0:00:06.400 --> 0:00:09.800 economy continues to send mixed signals to the financial stories 0:00:09.840 --> 0:00:12.680 that cheap our world fed action to con concerns over 0:00:12.760 --> 0:00:16.239 dollar liquidity and encouraging China data. The five hundred wealthiest 0:00:16.239 --> 0:00:18.360 people in the world. Through the eyes of the most 0:00:18.480 --> 0:00:22.520 influential voices Larry Summers, the former Treasury Secretary, star Ward, CEO, 0:00:22.640 --> 0:00:26.360 Kevin Johnson, sec Chairman J Clayton, Bloomberg wool Street Week 0:00:26.480 --> 0:00:30.480 with David Weston from Bloomberg Radio. When it comes to technology, 0:00:30.480 --> 0:00:33.800 it's not just social media and artificial intelligence and five 0:00:33.880 --> 0:00:36.920 G the United States is competing with China over. It's 0:00:36.920 --> 0:00:39.839 also energy and the race to develop new ways of 0:00:39.920 --> 0:00:44.199 generating energy, ways that go well beyond traditional fossil fuels. 0:00:44.680 --> 0:00:46.840 I talked with the U S Secretary of Energy, Dan 0:00:46.880 --> 0:00:49.720 Briette about the energy race, and he said we should 0:00:49.760 --> 0:00:53.159 be concerned about the competition. The global energy landscape has 0:00:53.240 --> 0:00:57.120 changed dramatically over the last few decades, and our position 0:00:57.160 --> 0:01:00.240 as the United States has changed within that landscape. Eight 0:01:00.760 --> 0:01:03.000 you know, in that time, we've seen a dramatic shift 0:01:03.400 --> 0:01:06.760 in the flow of US resources to developing economies all 0:01:06.800 --> 0:01:09.600 across the world. And I was looking at some statistics 0:01:09.640 --> 0:01:13.520 earlier today. You know, back in nineteen sixty nine of 0:01:13.560 --> 0:01:17.880 the monetary flows back then were categorized as official development 0:01:17.920 --> 0:01:21.880 assistance by the US government, and in two thousand and 0:01:21.920 --> 0:01:26.480 five eight instead came from the private capital market. So 0:01:26.520 --> 0:01:30.280 that's you know, that's that's an intense shift away from 0:01:30.319 --> 0:01:34.000 government resources to the private sector. And that was fifteen 0:01:34.080 --> 0:01:35.920 years ago, so I'm sure that number could be even 0:01:36.000 --> 0:01:39.120 higher than today, but it clearly ended, you know, illustrates 0:01:39.120 --> 0:01:41.160 that the private sector is playing a bigger role in 0:01:41.200 --> 0:01:45.160 the international arena. And one component of our mission here 0:01:45.160 --> 0:01:47.000 at the Department of Energy is to reach out and 0:01:47.040 --> 0:01:52.280 engage with these increasingly important global actors. And with that 0:01:52.360 --> 0:01:55.200 in mind, our department d OE Department of Energy is 0:01:55.280 --> 0:01:57.720 leading some efforts to develop what we think are cutting 0:01:57.800 --> 0:02:01.520 edge public private partnerships and they'll help achieved results in 0:02:01.560 --> 0:02:05.640 the very dynamic energy landscape. And we're doing that with 0:02:05.680 --> 0:02:09.440 our partners and within the inter agency, primarily the UH 0:02:09.639 --> 0:02:13.079 what's known now as the dfc UH, the old OPEC, 0:02:13.200 --> 0:02:17.120 the old Overseas Private Investment corporation. We've been working very 0:02:17.160 --> 0:02:20.080 closely with them. But you know, we're very excited about 0:02:20.080 --> 0:02:24.120 these partnerships because they not only yield economic growth, but 0:02:24.160 --> 0:02:27.120 they enable the US to strengthen its ties to international 0:02:27.160 --> 0:02:30.560 partners and to provide new opportunities all across the world 0:02:30.560 --> 0:02:34.440 for American businesses. And UH. I just talked to a Dr. 0:02:34.480 --> 0:02:38.400 Fatti Barole at the International Energy Agency and he tells 0:02:38.400 --> 0:02:41.600 me that is now set to see the loclent and 0:02:41.760 --> 0:02:46.040 energy investment on record. Obviously due to the pandemic, but 0:02:46.080 --> 0:02:48.360 this is a reduction of roughly one fifth, or almost 0:02:48.400 --> 0:02:51.959 four hundred billion US dollars, and that's in capital spending 0:02:52.000 --> 0:02:56.079 compared to capex as well, as we call it. I 0:02:56.280 --> 0:02:59.120 e A is reported on the opportunity for policy actions 0:02:59.800 --> 0:03:02.520 UH and and we've we've worked closely with them. They're 0:03:02.560 --> 0:03:06.799 targeting energy investments to boot growth, boost growth, to create 0:03:07.080 --> 0:03:11.160 even more jobs, and to continue reducing energy related emissions. 0:03:11.360 --> 0:03:15.400 And even more, there's real potential here to expand energy 0:03:15.440 --> 0:03:18.800 access by nearly two hundred and seventy million people and 0:03:18.840 --> 0:03:21.920 provide cleaner cooking solutions to nearly four hundred and twenty 0:03:21.960 --> 0:03:25.799 million people all across the Globe is my predecessor, Rick Perry. 0:03:25.840 --> 0:03:28.640 Secretary Rick Perry said, you know, there's still so many 0:03:28.639 --> 0:03:32.320 people around the world without access to commercial energy, and 0:03:32.360 --> 0:03:36.320 we want to help fix that problem for them and 0:03:36.360 --> 0:03:40.080 create opportunities for us here in America. But um, you know, 0:03:40.120 --> 0:03:42.080 as we know, and as we've discussed in the past, 0:03:42.160 --> 0:03:46.400 governments alone don't have the resources for all of those investments. 0:03:46.400 --> 0:03:49.880 So we're gonna we're gonna rely upon and it will require, 0:03:49.960 --> 0:03:54.200 you know, very strong public and private partnerships based on it. Well, 0:03:54.280 --> 0:03:56.000 we refer to here in the United States as a 0:03:56.040 --> 0:04:00.280 bottom up energy philosophy, one that supports free markets, It 0:04:00.440 --> 0:04:05.080 funds scientific research, and it honors the choice of producers 0:04:05.120 --> 0:04:09.280 and consumers alike. Um. So, with our private sector counterparts, 0:04:09.280 --> 0:04:13.640 we're gonna be focusing here on things like nuclear technologies 0:04:13.720 --> 0:04:16.760 and working to develop new reactors and new fuels for 0:04:16.800 --> 0:04:20.640 those reactors, fuels that are accident tolerant and non prolifferent. 0:04:21.400 --> 0:04:25.000 We're also focusing on wind and solar technologies, which is 0:04:25.040 --> 0:04:28.600 a priority for our department, and a large portion of 0:04:28.600 --> 0:04:31.279 our R and D budget here at the Department of 0:04:31.360 --> 0:04:33.760 Energy will be spent on the work that's coming out 0:04:33.800 --> 0:04:39.160 of our National Renewable Energy Laboratory in Golden Colorado. In 0:04:39.200 --> 0:04:42.039 that vein, we're gonna be pursuing some new battery technologies, 0:04:42.600 --> 0:04:45.920 and all of our innovators here and entrepreneurs in the 0:04:45.960 --> 0:04:49.760 private sector, we're working lockstep on some new carbon capture, 0:04:49.839 --> 0:04:54.599 utilization and storage process projects. So in short, you know, 0:04:54.640 --> 0:04:59.840 the government and DEWE can and we should play of 0:05:00.040 --> 0:05:02.200 very crucial role in helping to bring all of these 0:05:02.240 --> 0:05:06.200 new projects over the finish line. Um. So, David is exciting. 0:05:06.240 --> 0:05:08.119 It's an exciting time to be in the energy business. 0:05:08.160 --> 0:05:11.320 It's an exciting time to be an energy policy and 0:05:11.640 --> 0:05:15.640 as the world changes, so will we. It was very 0:05:15.640 --> 0:05:18.080 helpful and it's clear you want more energy, and you 0:05:18.080 --> 0:05:19.960 want to achieve, you want more investments, you want some 0:05:20.000 --> 0:05:23.240 private investment in particular. We've talked before, as you said, 0:05:23.320 --> 0:05:25.680 and you tend to say it's all of the above 0:05:25.839 --> 0:05:27.960 when it comes to energy. As I try to get 0:05:27.960 --> 0:05:30.920 a choice between renewables versus fossil fuels, things like that 0:05:31.080 --> 0:05:33.000 give us a sense of what that really means in practice. 0:05:33.160 --> 0:05:35.960 Doesn't the government have to pick some with it winners 0:05:35.960 --> 0:05:39.600 and losers. Well, look, winners and losers or something we 0:05:39.640 --> 0:05:42.360 avoid in the marketplace. We don't as a government, we 0:05:42.400 --> 0:05:46.160 don't want to pick individual players, um, but as technology 0:05:46.520 --> 0:05:49.200 picking winners and losers and technology it's not something that 0:05:49.240 --> 0:05:53.039 we want to engage in either. What we want is 0:05:53.080 --> 0:05:54.880 to pursue as you and I have discussed and all 0:05:54.880 --> 0:05:58.400 of the above strategy and uh, you know the President 0:05:58.440 --> 0:06:01.000 has talked about this publicly and those words mean exactly 0:06:01.040 --> 0:06:05.279 what they are. We're gonna pursue renewable technologies very very aggressively. 0:06:05.360 --> 0:06:07.680 We just announced on the West Coast a brand new 0:06:08.720 --> 0:06:11.520 facility at one of our laboratories there that's gonna allow 0:06:11.600 --> 0:06:15.359 us to develop greer scale storage battery storage. This is 0:06:15.360 --> 0:06:19.279 Tony Mega Watson above. It allows us to develop the 0:06:19.360 --> 0:06:22.440 next generation of battery stores that will allow renewables to 0:06:22.480 --> 0:06:27.200 be integrated into our current electric grid much more easily 0:06:27.200 --> 0:06:31.120 and much more efficiently. That was Dan Briette, US Energy Secretary, 0:06:31.600 --> 0:06:35.040 coming up. Corporate America isn't just looking inward, it's also 0:06:35.080 --> 0:06:37.440 looking at the outside world to see what it can 0:06:37.480 --> 0:06:40.240 do to move us forward on the pressing issues of 0:06:40.240 --> 0:06:44.800 our time. Just ask ed Bastion, the CEO of Delta Airlines. 0:06:45.440 --> 0:06:53.599 That's next on Wall Street Week on doom This is 0:06:53.640 --> 0:06:58.080 Bloomberg Will Street Week with David Weston from Bloomberg Radio. 0:06:58.520 --> 0:07:01.520 The aftermath of the killings of Brianna Taylor and George 0:07:01.520 --> 0:07:04.440 Floyd made all of us face the deep divisions in 0:07:04.520 --> 0:07:07.920 our country and the ways we've fallen short of making 0:07:07.960 --> 0:07:11.840 this a more perfect union. Ed Bastion, CEO of Delta Airlines, 0:07:11.880 --> 0:07:14.560 has been addressing what a major public and traded company 0:07:14.640 --> 0:07:17.720 can and should do to address the need for societal 0:07:17.800 --> 0:07:20.040 change since he first took over as leader of Delta, 0:07:20.240 --> 0:07:23.200 and he was thrust in the controversial issue of gun regulation. 0:07:23.680 --> 0:07:26.160 We spoke to at the Virtual Blue Brig Equalities on it. 0:07:26.440 --> 0:07:29.120 The bottom line on this is that we have a 0:07:29.200 --> 0:07:32.840 responsibility at our company to be not just a great 0:07:32.840 --> 0:07:36.840 airline but also a great steward of our resources and 0:07:36.960 --> 0:07:40.440 help build up our own people opera adoptunes for our 0:07:40.480 --> 0:07:42.960 own team, as well as within our community where we 0:07:43.040 --> 0:07:46.320 fly and where we invest our time. UH And one 0:07:46.320 --> 0:07:49.360 of the things the pandemic has shown to us is 0:07:49.400 --> 0:07:53.680 the vulnerable have become even more at risk and it's 0:07:53.760 --> 0:07:56.400 it's led to their voices being heard. It's been an 0:07:56.400 --> 0:08:00.200 interesting phenomena where has everything has quieted down as the 0:08:00.240 --> 0:08:02.920 world has had to come to us stop. It's allowed 0:08:03.040 --> 0:08:06.960 us opportunity to listen to those people that are actually 0:08:07.200 --> 0:08:09.400 have been speaking to us for some time, and maybe 0:08:09.400 --> 0:08:11.680 we've been too busy to listen. And I know at 0:08:11.680 --> 0:08:14.280 Delta that's been the case. And we've had a renewed 0:08:14.320 --> 0:08:20.000 focus on on racial equality, systemic bias, and injustice and 0:08:20.040 --> 0:08:23.000 all the things that we can do as corporate leaders 0:08:23.040 --> 0:08:26.120 to make a difference in our community. And in your 0:08:26.120 --> 0:08:28.480 statement you actually referred to the need to listen as 0:08:28.520 --> 0:08:31.000 you just said, and talked about having town hall meetings 0:08:31.000 --> 0:08:33.600 and things like that to really learn more from the 0:08:33.640 --> 0:08:36.080 people at Delta. Have you done that yet and what 0:08:36.160 --> 0:08:38.520 have you learned Because you knew about this issue before, 0:08:38.600 --> 0:08:42.640 what perhaps new did you find out from that? We 0:08:42.640 --> 0:08:44.480 we have done a lot of that. We've had regular 0:08:44.559 --> 0:08:48.600 town hall meetings on large company wide tens of thousands 0:08:48.640 --> 0:08:51.920 of people as well as on small scale matters, and 0:08:51.960 --> 0:08:54.719 we're doing it in many, many parts of our company. 0:08:54.840 --> 0:08:58.320 And you're right, David, we've been focused on diversity inclusion 0:08:58.360 --> 0:09:00.560 for a long time and we've got a pretty good 0:09:00.559 --> 0:09:03.400 track record. We've been making progress. But the one thing 0:09:03.440 --> 0:09:06.200 that that I have paid a lot closer attention to 0:09:06.800 --> 0:09:14.520 is disaggregating the information Diversity inclusions abroad umbrella. It includes gender, race, ethnicity, 0:09:14.600 --> 0:09:18.200 and in other areas of opportunity. But when you look 0:09:18.240 --> 0:09:23.400 at the information and you see underneath the specific groups 0:09:23.480 --> 0:09:28.319 that are potentially not keeping up with the broader economy 0:09:28.520 --> 0:09:32.520 or our corporate opportunities, it's been the black community with 0:09:32.679 --> 0:09:35.920 within at least within Delta, we've got twenty percent of 0:09:35.920 --> 0:09:39.600 our employees are are black, yet only seven percent of 0:09:39.640 --> 0:09:42.120 the top leaders in the company are and that's a 0:09:42.120 --> 0:09:47.120 pretty wide gap that we need to commit to close. Well, 0:09:47.120 --> 0:09:49.040 that's something that we see replicating a lot of you 0:09:49.080 --> 0:09:52.280 as industry. I suspect certainly in industry. I know about it. ABC, 0:09:52.440 --> 0:09:55.840 we had those challenges. How is the African American situation 0:09:55.920 --> 0:09:58.080 somewhat different from other people of color? I mean, there's 0:09:58.080 --> 0:10:00.240 an issue for all, but as you said, it's went 0:10:00.400 --> 0:10:03.360 different perhaps because we have four years of slavery. There's 0:10:03.480 --> 0:10:07.400 history of slavery to account for. Yeah, that's this. This 0:10:07.440 --> 0:10:10.400 has been going on for not just decades, but centuries. 0:10:10.960 --> 0:10:14.360 And the thing that we've we've learned here at Delta 0:10:15.040 --> 0:10:17.360 is that we all have a role to play to 0:10:17.360 --> 0:10:20.160 to owning the issue. You know, it's one thing to 0:10:20.320 --> 0:10:22.880 say that we've got to get better. It's one thing 0:10:22.920 --> 0:10:26.240 to to acknowledge the numbers. As we said, it's it's 0:10:26.280 --> 0:10:29.240 important to be transparent about the numbers, but to really 0:10:29.320 --> 0:10:32.280 understand the reasons and the rationale and put yourself in 0:10:32.360 --> 0:10:35.960 someone else's shoes. That's where the listening and the understanding 0:10:36.000 --> 0:10:38.560 and the reflection have coming are coming from. And one 0:10:38.600 --> 0:10:40.240 of the things that we've talked a lot about Delta 0:10:40.840 --> 0:10:44.439 is also being truth tellers, acknowledging the fact that our 0:10:44.520 --> 0:10:47.400 company does not have a great record on this in 0:10:47.400 --> 0:10:49.960 the past and may have some challenges it needs to 0:10:50.280 --> 0:10:53.560 correct for in order to be a more just company 0:10:53.600 --> 0:10:56.400 going forward. And while the leaders of the company may 0:10:56.400 --> 0:10:58.120 not have been here at the time some of those 0:10:58.160 --> 0:11:01.840 inequities were first initiated, we have to go back and 0:11:01.880 --> 0:11:06.200 reconcile and make sure we understand what our company's responsibility is, 0:11:06.200 --> 0:11:09.600 not just our individual responsibilities. And part of the challenge 0:11:09.600 --> 0:11:11.480 we have for all the society, business, I think, and 0:11:11.559 --> 0:11:13.760 perhaps even the Delta is it's not just enough to 0:11:13.760 --> 0:11:16.320 say going forward, we're going to be even we've got 0:11:16.400 --> 0:11:18.320 some history, we have to make up for How do 0:11:18.400 --> 0:11:21.280 you do that without alienating people who are not benefited 0:11:21.320 --> 0:11:24.680 by them by the actions. Well, it's a great question, 0:11:24.720 --> 0:11:27.600 and you're right, there's a lot of people wondering, well, 0:11:27.679 --> 0:11:29.920 what about me, you know, or does that mean I'm 0:11:29.920 --> 0:11:35.800 gonna now be by by implication, disadvantaged relative to to 0:11:35.880 --> 0:11:38.960 an African American colleague. And the answer is no. The 0:11:39.000 --> 0:11:41.720 answers We've got to raise the bar for everybody we 0:11:41.840 --> 0:11:45.080 there are. There are plenty of great talented leaders within 0:11:45.120 --> 0:11:48.400 our African American community that we need to invest more 0:11:48.480 --> 0:11:51.640 time and more understanding in. And when you look around 0:11:51.880 --> 0:11:54.480 the room, you see the room is filled with with 0:11:54.559 --> 0:11:57.000 people that look just like you and me. So it's 0:11:57.040 --> 0:12:00.640 clear that we've had advantages. We may not have uh 0:12:00.960 --> 0:12:04.120 been explicit about it, but implicitly we've had advantages. And 0:12:04.160 --> 0:12:06.959 we've got to bring others along with us too. And 0:12:07.120 --> 0:12:09.520 you've mentioned the numbers a couple of times. How do 0:12:09.559 --> 0:12:12.760 you measure success? How will you know when you've achieved 0:12:12.800 --> 0:12:15.679 what you need to achieve? And is it basically based 0:12:15.679 --> 0:12:20.440 on numbers? It's it's not based on numbers, David. But 0:12:20.800 --> 0:12:23.280 one of the things that I know within Delta and 0:12:23.760 --> 0:12:26.560 as well as within the corporate community. Is when you're 0:12:26.600 --> 0:12:30.400 transparent and you're held accountable, things get done. You know, 0:12:30.480 --> 0:12:33.160 people pay attention. And we never want this to be 0:12:33.160 --> 0:12:35.839 seen as a quota system or or lowering the bar 0:12:36.080 --> 0:12:38.880 as as one would might say, Uh, this is about 0:12:38.920 --> 0:12:42.600 ownership and accountability and being able to measure that the 0:12:42.720 --> 0:12:46.800 success that we're having. So numbers are, it's it's an outcome, 0:12:47.000 --> 0:12:50.080 it's not not the not the driving force. But when 0:12:50.120 --> 0:12:53.720 we do see that gap closed, and in the memo 0:12:53.960 --> 0:12:57.480 you referenced, I've committed to close that gap in half 0:12:57.559 --> 0:13:00.400 over the next five years, so it's not a lot 0:13:00.440 --> 0:13:03.079 of time to make some pretty good difference. That will 0:13:03.120 --> 0:13:06.720 be one measure of success. But when I hear from 0:13:06.800 --> 0:13:12.400 our our black community within Delta that the opportunities, the discussion, 0:13:12.920 --> 0:13:17.600 the sense of of of belonging and opportunity is greater 0:13:17.720 --> 0:13:19.840 than it was, that will tell me that we've really 0:13:19.840 --> 0:13:22.680 made that difference. When you talk about closing the gap 0:13:22.760 --> 0:13:24.760 for those who haven't had the opportunity dis memo and 0:13:24.760 --> 0:13:27.920 I recommend it to people, you disaggregate those numbers as well. 0:13:27.960 --> 0:13:30.240 You have the overall population of the Delta employees. But 0:13:30.240 --> 0:13:32.400 then you have management and then you have a smaller 0:13:32.440 --> 0:13:34.840 group at the very top. Are you committed to closing 0:13:34.880 --> 0:13:39.720 that gap across the entire set of different groups, Yes, 0:13:39.800 --> 0:13:43.560 I am David Uh. In total, we have about of 0:13:43.559 --> 0:13:48.319 our our team are people of color, about thirty percent 0:13:48.440 --> 0:13:52.040 in the in the low thirties are actually UH. In 0:13:52.120 --> 0:13:55.480 the leadership ranks of the company. More broadly speaking, from 0:13:55.520 --> 0:13:58.520 front line leaders on up are people of color, and 0:13:58.600 --> 0:14:01.600 about eighteen percent of our pusers are people of color. 0:14:01.960 --> 0:14:05.280 But when you figure out what the black component, the 0:14:05.280 --> 0:14:10.200 African American component of the same population skill set, is 0:14:10.600 --> 0:14:13.720 half of our people of color black, but only a 0:14:13.800 --> 0:14:16.760 third of our top leaders are black. So you can 0:14:16.800 --> 0:14:20.320 see that there's been even within the designation of people 0:14:20.360 --> 0:14:23.480 of color, there's been some inequity in imbalance there, and 0:14:23.480 --> 0:14:25.200 that's what we've got to focus on how we can 0:14:25.200 --> 0:14:28.760 do better. That was Ed Bastion, CEO of Delta Airlines, 0:14:29.160 --> 0:14:32.560 coming up the Tesla underwhelmed with its battery day and 0:14:32.600 --> 0:14:35.080 the wheels started to come off at Nicola. As its 0:14:35.120 --> 0:14:38.280 chairman stepped down, we talked with Joseph Stack of RBC 0:14:38.480 --> 0:14:42.240 Capital Markets about the tech side of autos. That's next 0:14:42.240 --> 0:14:50.920 on Wall Street Week on Bloomberg. This is Bloomberg Wall 0:14:51.040 --> 0:14:54.920 Street Week with David Weston from Bloomberg Radio. In the 0:14:54.960 --> 0:14:58.480 great tradition of startups, we started Apple because we wanted 0:14:58.520 --> 0:15:02.280 the product ourselves. There is one person or two people 0:15:02.280 --> 0:15:05.960 who are both the creator and the market so that 0:15:06.040 --> 0:15:10.160 they know the marketing requirements intuitively because they're the market themselves. 0:15:10.440 --> 0:15:13.120 So gradually we were pulled into business. It wasn't We 0:15:13.160 --> 0:15:15.080 didn't start out to build a large company. We started 0:15:15.080 --> 0:15:17.040 out to build a few dozen computers for us and 0:15:17.080 --> 0:15:19.760 our friends. That was Apple co founder Steve Jobs back 0:15:19.800 --> 0:15:23.360 in talking about how he came to create computers for 0:15:23.400 --> 0:15:27.520 the masses. This week, another high tech entrepreneur who dropped 0:15:27.520 --> 0:15:30.680 out of college made news, but of a very different sort. 0:15:31.160 --> 0:15:33.920 Trevor Milton didn't come up with his one big idea 0:15:34.040 --> 0:15:37.560 right away. He tried an alarm sales company, an online 0:15:37.600 --> 0:15:41.920 classified website, and an energy storage company before fastening on 0:15:42.080 --> 0:15:46.400 his one true passion, making big trucks with zero emissions. 0:15:47.120 --> 0:15:50.520 He called it Niccola, after Nicola Tesla, who basically invented 0:15:50.560 --> 0:15:54.000 alternating current. Starting only five years ago, Milton built his 0:15:54.040 --> 0:15:57.560 company rapidly, taking a public just last June and seeing 0:15:57.560 --> 0:16:01.800 its market cap briefly exceed at a Ford Motor Company. 0:16:01.840 --> 0:16:05.200 But then, like Icarus, maybe he climbed too close to 0:16:05.280 --> 0:16:07.800 the sun. He made a big deal for GM to 0:16:07.840 --> 0:16:10.560 buy eleven percent of his company, which triggered the short 0:16:10.560 --> 0:16:14.080 seller Hindenburg Research to call it all quote an intricate 0:16:14.160 --> 0:16:18.320 fraud built on dozens of lies, including a claim Nicola 0:16:18.480 --> 0:16:21.560 really was nothing more than a licensee and packager, which 0:16:21.640 --> 0:16:24.960 Mr Milton vigorously denies. Here's the important thing to know. 0:16:25.000 --> 0:16:27.040 We've already built the Badger from the ground up ourselves, 0:16:27.120 --> 0:16:29.640 so everything in it is owned by Nicola. What we 0:16:29.720 --> 0:16:33.560 decided to do is leverage common parts with GM. I'll 0:16:33.560 --> 0:16:35.720 tell you for those who don't know, General Motors has 0:16:35.720 --> 0:16:38.240 the best purchasing power pretty much in the world. They 0:16:38.280 --> 0:16:40.640 their parts are cheaper than When I see cheaper, they 0:16:40.680 --> 0:16:43.040 mean they pay less for their parts than anyone else 0:16:43.040 --> 0:16:45.680 in the world, pretty much with exception to make me Volkswagen. 0:16:46.200 --> 0:16:48.640 So if you think about that, being able to leverage 0:16:48.680 --> 0:16:51.120 all their parts, we can commonize things so like a 0:16:51.120 --> 0:16:54.000 window regulator or an inverter. I mean, why why spend 0:16:54.000 --> 0:16:55.480 two thousand dollars on an in burger if you can 0:16:55.520 --> 0:16:57.560 pay four hundred bucks for it or five for it, 0:16:57.880 --> 0:17:00.920 or whatever it is, that's the value you get with GM. 0:17:00.920 --> 0:17:03.440 It doesn't mean that there that we're that we're not 0:17:03.480 --> 0:17:06.520 doing anything. It means we're commonizing parts and o EAMs 0:17:06.560 --> 0:17:08.920 do this all the time. The SEC and Justice departments 0:17:08.920 --> 0:17:12.399 started investigations, the stock fell, and Mr Milton had to 0:17:12.480 --> 0:17:15.720 quit as chairman. We don't know where this will all end. 0:17:16.119 --> 0:17:18.680 Mr Milton says he'll defend himself against what he calls 0:17:18.880 --> 0:17:23.240 false allegations, and GM insists it did all appropriate due 0:17:23.240 --> 0:17:26.200 diligence before it made the deal, leaving us all the 0:17:26.280 --> 0:17:28.720 wonder whether Mr Milton will ultimately be proven to be 0:17:28.800 --> 0:17:32.680 the revolutionary innovator he claims to be, or an extremely 0:17:32.720 --> 0:17:36.080 good salesman whose marketing prowess got the better of him. 0:17:36.200 --> 0:17:38.680 Nicola's goals have caused it to be compared with Tesla, 0:17:39.000 --> 0:17:41.800 but there are some key differences between the two. We 0:17:41.880 --> 0:17:46.000 asked OURBC Capital Markets analyst Joseph Spack, what exactly Nicola 0:17:46.200 --> 0:17:50.080 is trying to do? Yeah, Nicola is, um, you know 0:17:50.119 --> 0:17:54.320 a little bit. I think of a misunderstood story. Um, 0:17:54.359 --> 0:17:56.679 there's definitely a lot of noise around the name. I 0:17:56.720 --> 0:17:59.720 think the short report brought out a lot of issues 0:17:59.760 --> 0:18:02.480 which um you know, I'm certainly not going to defend here, 0:18:02.760 --> 0:18:05.560 but I think that when you look at the crux 0:18:05.600 --> 0:18:08.359 of what Nicola was trying to do, they were trying 0:18:08.400 --> 0:18:11.480 to bring together a whole bunch of partners from the 0:18:11.520 --> 0:18:16.080 manufacturing side, from the fuel cell and battery side, and 0:18:16.240 --> 0:18:20.080 from the infrastructure side to be able to offer their 0:18:20.119 --> 0:18:26.000 customers a point A two B route that they can 0:18:26.040 --> 0:18:30.000 take over for them, UM, make green and efficient with 0:18:30.240 --> 0:18:34.560 hydrogen fueling technology, uh, and be able to offer a 0:18:34.640 --> 0:18:38.040 fuel cell lease. Now, if you can build out a 0:18:38.080 --> 0:18:40.960 whole bunch of A two B back and forth routes 0:18:41.240 --> 0:18:43.120 where you can get customers to sign up for that, 0:18:43.280 --> 0:18:47.600 slowly but surely, you can build out efficiently hydrogen charging 0:18:47.680 --> 0:18:50.760 infrastructure network and that helps solve the chicken and egg 0:18:50.800 --> 0:18:55.399 problem that exists with hydrogen. But clearly, um you know, 0:18:55.560 --> 0:18:57.080 some of the issues that that have been brought up, 0:18:57.080 --> 0:18:59.320 and not a cloud that surround the company, I think 0:18:59.359 --> 0:19:03.160 he's putting some of these partnerships and potentially customers at risk, 0:19:03.520 --> 0:19:07.320 and it does mean that the whole idea or concepts 0:19:07.680 --> 0:19:10.480 can fall apart. So we've heard in the past about 0:19:10.520 --> 0:19:13.439 the opportunities and hydrogen fuel self for long haul so 0:19:13.520 --> 0:19:15.919 to speak, in the big trucks going in long distances, 0:19:16.119 --> 0:19:18.359 that that might well make sense. So that's not a 0:19:18.400 --> 0:19:21.800 new thought. What is it that's new that Nicola brings 0:19:21.840 --> 0:19:24.840 to the party. Yeah, I think UM. I think first 0:19:24.840 --> 0:19:26.840 of all, you're right, I think you know, battery electric 0:19:26.920 --> 0:19:30.399 vehicles UM for for commercial trucks as it stands today, 0:19:30.480 --> 0:19:33.719 with the current state of battery technology, UM makes a 0:19:33.760 --> 0:19:37.520 little bit less sense for the longer range because of 0:19:37.560 --> 0:19:41.760 a number of issues including recharge times, battery degredation, and 0:19:41.840 --> 0:19:44.520 just the weight of battery. So fuel self seems like 0:19:45.000 --> 0:19:49.280 to get it to work a more ideal solution. UM 0:19:49.680 --> 0:19:54.200 the UM why now or why Nicola? Because I think 0:19:54.200 --> 0:19:57.479 what Nicola was trying to do was come up with 0:19:57.640 --> 0:20:01.160 more of a business model innovation again what they're trying 0:20:01.160 --> 0:20:04.040 to accomplish with their customers. And they had this pilot 0:20:04.080 --> 0:20:07.880 program with Anheuser Busch which is UM, you know, we 0:20:07.920 --> 0:20:11.760 will UM lease, we will sell you this fuel truck's please. 0:20:11.880 --> 0:20:15.320 That includes both the truck, all the fuel and the 0:20:15.359 --> 0:20:17.920 service and maintenance and so the effectively, like I said, 0:20:17.920 --> 0:20:21.000 they take over that that dedicated route, that a tow 0:20:21.040 --> 0:20:23.880 B route for Anteuser Busch and if they know they 0:20:23.880 --> 0:20:26.280 could get a lot of route, put a lot of 0:20:26.320 --> 0:20:29.919 density on that route. Um, it's sort of de risks 0:20:30.000 --> 0:20:34.360 the infrastructure build needed for hydrogen because they can use 0:20:34.400 --> 0:20:36.360 the the proceedge from the fuels at least to help 0:20:36.359 --> 0:20:39.240 build out the infrastructure. That was Joseph's back of RBC 0:20:39.440 --> 0:20:42.399 Capital Markets. Coming up, we wrap up the week with 0:20:42.440 --> 0:20:46.359 our special contributor Larry Summers. This is Wall Street Week 0:20:46.840 --> 0:20:56.280 on Bloomberg. This is Bloomberg Wall Street Week with David 0:20:56.320 --> 0:20:59.840 Weston from Bloomberg Radio. Well, we had a week gre 0:21:00.000 --> 0:21:02.800 going uncertainty about the return of the virus, about whether 0:21:02.800 --> 0:21:05.680 we're gonna get more fiscal siminis, than about the looming election, 0:21:05.920 --> 0:21:08.720 with President Trump adding that we this might not go 0:21:08.840 --> 0:21:10.879 when he was told to go. He might not conceive 0:21:10.960 --> 0:21:13.439 that election that if it goes against him. The more 0:21:13.520 --> 0:21:15.760 uncertainty there is, the more that we help from our 0:21:15.800 --> 0:21:18.679 special contributor Larry Summers of Harvard. So, Larry, great to 0:21:18.720 --> 0:21:20.800 have you here. First of all, start with that election, 0:21:20.920 --> 0:21:23.200 because we have a lot of people now the markets included, 0:21:23.400 --> 0:21:25.040 starting to be concerned about whether we're gonna have some 0:21:25.119 --> 0:21:27.719 chaos after the election. Are you concerned about that? Of 0:21:27.760 --> 0:21:32.280 course I'm concerned, and there's a risk. But my best 0:21:32.320 --> 0:21:35.400 guess is right now that we're gonna know who won 0:21:35.440 --> 0:21:40.000 the election by on election night, because the returns are 0:21:40.000 --> 0:21:42.520 going to come in from Florida and they're going to 0:21:42.600 --> 0:21:46.520 suggest that Joe Biden won Florida. And when that happens, 0:21:46.560 --> 0:21:50.840 there's not gonna be much question about the overall outcome. So, yes, 0:21:50.920 --> 0:21:54.320 it certainly could go close. It certainly could be terrible 0:21:54.359 --> 0:21:58.240 in a variety of ways. But my best guess right 0:21:58.280 --> 0:22:01.720 now is that we're gonna know before we go to 0:22:01.800 --> 0:22:06.200 sleep on Wednesday night, on Tuesday night, what the result 0:22:06.520 --> 0:22:11.439 of uh the election has been. I think things are 0:22:11.520 --> 0:22:15.480 moving uh in that way. So let me ask a 0:22:15.560 --> 0:22:17.600 question that has some travesty to it. We all know 0:22:17.680 --> 0:22:20.520 that you basically are in favor of foreign Vice President 0:22:20.520 --> 0:22:23.280 Biden gett elected. How much difference does it make? I mean, 0:22:23.359 --> 0:22:26.040 does the particular policies we took a president at this 0:22:26.080 --> 0:22:28.199 point make that big a difference? Or are we facing 0:22:28.240 --> 0:22:31.359