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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Well, amid all of the optimism about a pro business

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Speaker 2: Trump administration taking over in late January, there's a lot

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Speaker 2: of uncertainty when it comes to corporate America, and you

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Speaker 2: have tools tightened. Snap On, which mainly services professional mechanics,

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Speaker 2: of course, calls on nearly a million vehicle mechanics every

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Speaker 2: week and periodically calls about three hundred thousand businesses and

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Speaker 2: as such has a pretty unique view into the grassroots economy.

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Speaker 2: So let's get to that now with CEO Nick Pinchuck,

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Speaker 2: who joins us. Nick, first of all, happy new year,

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Speaker 2: it's great to speak to.

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Speaker 1: You again, and happy new year. Katie.

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Speaker 2: Let's talk about this uncertainty because in your notes that

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Speaker 2: you sent over to us, you talk about smaller mechanics

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Speaker 2: and factory workers. Amid all this optimism, there's still a

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Speaker 2: lot of question marks heading into twenty twenty five. Walk

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Speaker 2: us through some of the main points there.

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Speaker 3: Wow, Look, I think the thing is that you know

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Speaker 3: that I always said there was the financial and physical economy.

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Speaker 3: The physical economies like manufacturers and the people who work

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Speaker 3: in those places, and that's even mixing now if you

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Speaker 3: talk to the individual technicians, the mechanics, the guys in

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Speaker 3: the factory, the guys who twirl the wrenches and push

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Speaker 3: the keys and stuff like that on diagnostic units. They're

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Speaker 3: still pretty uncertain because their economy has been fairly positive

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Speaker 3: all along, and so they recognize that.

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Speaker 1: But what they are affected by.

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Speaker 3: Mores by their feelings of the general environment. The two

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Speaker 3: wars that keep continuing, the Southern border, which is, you know,

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Speaker 3: kind of in chaosity.

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Speaker 1: They got a little better now, but it's still a problem.

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Speaker 3: The idea that tit for tat for China, the closing

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Speaker 3: of the Red Sea that could lead to inflation, the

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Speaker 3: idea that okay, I'm looking at the prices and milk

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Speaker 3: is still four bucks over four bucks, that's up thirty

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Speaker 3: percent versus pre pandemic levels, and gases up eighteen percent,

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Speaker 3: not year over year, but versus pre pandemic, and so

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Speaker 3: and then the election. I don't think anybody knows what

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Speaker 3: the president elect's going to do.

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Speaker 1: At their level, they keep seeing it.

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Speaker 3: I think it's like I said one time, welcome to

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Speaker 3: the Manhatter's tea party. This is more like a roller coaster,

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Speaker 3: and you're in the front seat and you're blindfolded, you

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Speaker 3: don't know where you're going. And so I mean he's

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Speaker 3: mentioned things like Greenlands, this is the hits just keep

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Speaker 3: on coming. And so for that group, they are still uncertain,

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Speaker 3: got to buy it in.

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Speaker 1: So there's not much change.

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Speaker 3: If you look at if you look at the more

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Speaker 3: organized people, the managers of the garages, the manufacturers, they're

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Speaker 3: more positive. They've moved The National Association of Manufacturer's outlook

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Speaker 3: has moved upwards. It moved down in the third quarter

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Speaker 3: around the election time. Now it's moved upwards.

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Speaker 1: And I think it's because they think.

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Speaker 3: That there's a hope that this administration would be positive

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Speaker 3: toward business.

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Speaker 4: Hey, I want to ask about your sales specifically, Nick.

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Speaker 4: We were talking about teslaw because they delivered fewer vehicles

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Speaker 4: in twenty four than they did in twenty three, and

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Speaker 4: I was just thinking about tool sales. Do you do

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Speaker 4: better automatically when more vehicles are sold outright, or do

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Speaker 4: you do better when fewer vehicles are sold because we're

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Speaker 4: working more to keep the used vehicles on the road.

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Speaker 4: How does your revenue relationship work with the auto industry.

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Speaker 3: Actually, it's like this matt Our revenue is driven by

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Speaker 3: the cars on the road. So to put it in perspective,

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Speaker 3: this year, the American auto industry is going to be

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Speaker 3: about sixteen million cars sold. The cars on the road's

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Speaker 3: almost two hundred and ninety million. So the effect of

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Speaker 3: the cars sold in any one year is a knit

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Speaker 3: in our business. It can't affect other pieces of our business,

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Speaker 3: you know, because in some cases we sell to the

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Speaker 3: OEMs directly associated with launches of cars, and if they're

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Speaker 3: more successful, then it works a little bit more for us.

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Speaker 3: But the main business sell into that one million mechanics.

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Speaker 1: It won't make any difference over the long term.

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Speaker 3: Of course, it'll make some difference, and so that's the effect.

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Speaker 3: But Tesla's view is whatever Tesla does doesn't really make

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Speaker 3: much difference.

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Speaker 1: Would make a difference.

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Speaker 3: If I think I've seen some of the analysis that

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Speaker 3: I think some of this is true, is that there's

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Speaker 3: a rise in the popularity of plug in hybrids over

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Speaker 3: electric vehicles.

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Speaker 1: Even in China.

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Speaker 3: The Chinese are starting to make hay with those vehicles

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Speaker 3: because they're not dependent on a charging infrastructure, and so

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Speaker 3: therefore they move up over the long term. That introduces

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Speaker 3: two different platforms into the cars on the road is

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Speaker 3: you have electric vehicles and plug in hybrids, which are

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Speaker 3: both internal combustion.

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Speaker 1: And electric vehicles.

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Speaker 3: So eventually that drives our business upwards because the changing

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Speaker 3: of the vehicles is what makes our business go because

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Speaker 3: every time they change, people new new tools, and that's

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Speaker 3: music to our ears.

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Speaker 5: I want to also talk about what the sentiment looks

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Speaker 5: like under the hood for smaller and mid size companies,

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Speaker 5: because you're seeing this exuberant of course among the largest

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Speaker 5: of companies on a lot of levels, the comeback of

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Speaker 5: m and A, the idea of lighter regulations. But if

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Speaker 5: you're a small to mid size company and you're maybe

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Speaker 5: concerned about labor or about inflation on average, do you

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Speaker 5: think that the mood is better or worse?

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Speaker 3: Wellcenale, look, I think the mood is clearly somewhat better.

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Speaker 3: Remember I said mixed, and you can see this in

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Speaker 3: the National Association Manufacturers indexes.

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Speaker 1: They're moving upwards. It's a situation like this.

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Speaker 3: They look at the administration as having focused on positive

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Speaker 3: things for America. You know, if you're a CEO, small

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Speaker 3: or large, you like to see emphasis.

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Speaker 1: On your strengths.

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Speaker 3: What you want to do is build your strengths, not

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Speaker 3: necessarily worry too much about your weaknesses or your flaws.

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Speaker 3: And so you could say, look, what is the administration

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Speaker 3: talking about writ large, It is talking about reducing the

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Speaker 3: weight of government on businesses, small and large manufacturers, and

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Speaker 3: even small manufacturers because small manufacturers are paying a bigger penalty.

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Speaker 3: The National Association Manufacturers again says that the average manufacturing

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Speaker 3: group pays twenty five thousand dollars per employee per year

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Speaker 3: year on a regulation. Now you can believe that number

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Speaker 3: or not. I think it's pretty accurate, but small ones

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Speaker 3: pay fifty thousand. So they like to hear that. They

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Speaker 3: like to hear the idea that they manufacture, that the

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Speaker 3: administration might make the most of a great American strength,

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Speaker 3: that is the American worker and emphasize manufacturing. They like

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Speaker 3: to hear the idea, believe it or not, that they

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Speaker 3: restore the strength that immigration has always been, or restore

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Speaker 3: immigration as a strength for our common power. They like

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Speaker 3: that because they use those workers a lot. What they

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Speaker 3: worry about, though, is things like the detail. There's tremendous

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Speaker 3: windage in this. For example, you have the idea of, well,

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Speaker 3: how are you going to actually promote manufacturing? Are you

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Speaker 3: going to be able to do the tax what's going

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Speaker 3: to happen in the tax cuts as the taxes expire.

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Speaker 3: Now there's a talk about corporate rates, So me personally,

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Speaker 3: I don't think they need to lower to corporate rates

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Speaker 3: very fine right now where they are, they're about equal

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Speaker 3: to other places for big companies. But small companies, which

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Speaker 3: ninety three percent of manufacture are under one hundred people

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Speaker 3: and so there are a lot of them are passed throughs.

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Speaker 1: So you raise.

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Speaker 3: The individual rates, that goes up. And if you eliminate

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Speaker 3: the one ninety nine a deduction twenty percent reduction on

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Speaker 3: the e on there even then that's a big impact

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Speaker 3: for them.

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Speaker 1: So they worry about that.

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Speaker 3: They worry about the idea, well, how are we going

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Speaker 3: to what's going to happen with TIFFs? Right?

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Speaker 1: Tariffs are a big question, right, huge question. So you

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Speaker 1: can do it two ways.

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Speaker 3: You can you can have a tariff program which reacts

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Speaker 3: to other countries which do bad things, you know, subsidize

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Speaker 3: and promote their state owned industries, or you can do

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Speaker 3: blanket tariffs. I think the former is the positive one.

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Speaker 1: But they worry about the blanket tariffs.

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Speaker 4: Yep kind and they kind of trade war that may

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Speaker 4: kick off, and then the turn to China that you

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Speaker 4: can see. We've been talking about that in this program

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Speaker 4: the last couple of days. Nick. It's never enough time

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Speaker 4: with you. I hope we can get you in the

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Speaker 4: studio next time you're in New York City. Snap On

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Speaker 4: CEO Nick Pinchuk talking to us.

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Speaker 1: Happy New Year to you,