WEBVTT - Bloomberg Surveillance TV: April 28th, 2026

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

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<v Speaker 2>This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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<v Speaker 2>with Lisa Bromwitz and Amrie Hordert. Join us each day

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<v Speaker 2>for insight from the best in markets, economics, and geopolitics

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<v Speaker 2>from our global headquarters in New York City. We are

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<v Speaker 2>live on Bloomberg Television weekday mornings from six to nine

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<v Speaker 2>am Eastern. Subscribe to the podcast on Apple, Spotify or

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<v Speaker 2>anywhere else you listen, and as always on the Bloomberg

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<v Speaker 2>Terminal and the Bloomberg Business app. Here's the latest. This morning,

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<v Speaker 2>Bren climbing back above one eleven. As President Trump ways

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<v Speaker 2>Around's latest proposal to end the war, the Treasury Secretary

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<v Speaker 2>Scompston saying the US blockade is forcing the Rand's oil

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<v Speaker 2>industry to shut with gasoline shortages to follow. Join us

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<v Speaker 2>now to discuss I'm very pleased to say the US

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<v Speaker 2>Energy Secretary Chris Rai joined us for more. Mister Secretary,

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<v Speaker 2>you are in Croatia. I believe we can talk about

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<v Speaker 2>the relationship between the US and Europe and just a

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<v Speaker 2>moment we have to lead with Iran. This morning, missus

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<v Speaker 2>secapy in your mind, how much storage capacity does Iran

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<v Speaker 2>have left? And what's informing that conclusion at the moment.

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<v Speaker 3>Well, look, there's monitoring of storage tanks that carg islanded

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<v Speaker 3>around the nation of Iran. But yeah, they don't have

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<v Speaker 3>a huge amount of storage capacity, and they've got old

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<v Speaker 3>reservoirs that are low pressure, which means it's much more

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<v Speaker 3>destructive if they have to shut in their production.

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<v Speaker 4>Kepler, mister secretary is talking about twelve to twenty two

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<v Speaker 4>days left that Iran has in terms of storage before

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<v Speaker 4>they have to shut in. Do you see the President

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<v Speaker 4>making any sort of decision on Iran's proposal before that

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<v Speaker 4>time period is up?

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<v Speaker 3>Again, the President's focused on getting the right deal that

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<v Speaker 3>could be independent of their storage. But obviously that puts

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<v Speaker 3>great heat on Iran. If we can get the right resolution,

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<v Speaker 3>that could be tomorrow, that could be two weeks from now,

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<v Speaker 3>But the key thing is the right resolution Iran.

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<v Speaker 5>And let me just put the context again.

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<v Speaker 3>Iran has roughly one thousand pounds of sixty percent enriched uranium.

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<v Speaker 3>There's no commercial, peaceful use for that. That's bomb material

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<v Speaker 3>and that's ten days two weeks tops to turn that

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<v Speaker 3>into highly enrich uranium for bombs.

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<v Speaker 5>So this is an existential crisis.

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<v Speaker 3>I'm very proud of the President to stand up and

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<v Speaker 3>put an end to Iran's efforts to get a nuclear bomb.

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<v Speaker 4>Well, so it doesn't sound like the President would take

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<v Speaker 4>this off ramp from Iran, which is reopening the straight

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<v Speaker 4>up her moves. Obviously the US blockade would have to end,

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<v Speaker 4>and then kicking the can down the road when it

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<v Speaker 4>comes to talks on nuclear.

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<v Speaker 3>Yes, again, the critical outcome here is that we end

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<v Speaker 3>the ability for Ran to have a nuclear weapon. There's

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<v Speaker 3>many ways that deal can be structured, but the compromise

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<v Speaker 3>will not be made on the.

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<v Speaker 5>Principle no nuclear armed Iran.

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<v Speaker 4>We see gasoline prices on average rising again this morning.

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<v Speaker 4>They're above four dollars a gallon. You recently said the

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<v Speaker 4>administration plans to do more to bring down US gas.

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<v Speaker 4>We saw the waiver on the Jones Act extended. What

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<v Speaker 4>else are you thinking about when you.

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<v Speaker 3>Also saw announcements on the EPA for blending requirements this

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<v Speaker 3>summer that allows our refineries to produce a lot more gasoline. Unfortunately,

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<v Speaker 3>a few states foolishly did not go along with it,

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<v Speaker 3>So California is still going to have outrageously high gas

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<v Speaker 3>prices New York State. I don't know why also did

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<v Speaker 3>not go along with the federal regulations, but we're doing

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<v Speaker 3>everything we can to increase refinery throughput. American oil production

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<v Speaker 3>is at record high, American oil exports, store allies are

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<v Speaker 3>broader at record high. So look, we're going through a

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<v Speaker 3>purity of discomfort to solve a forty seven year crisis,

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<v Speaker 3>and gasoline prices are still a dollar a gallon cheaper

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<v Speaker 3>than they were during the middle of the Biden administration.

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<v Speaker 5>Well, I'm hearing that.

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<v Speaker 4>The administration is also considering an export ban on US products.

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<v Speaker 5>Is that accurate? Absolutely not, Absolutely not.

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<v Speaker 3>Here I am in Dubruvnik, in Croatia signing multi billion

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<v Speaker 3>dollar deals to sell American energy exports. That is the

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<v Speaker 3>fastest growing export out of our country. We're selling American

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<v Speaker 3>natural gas, American oil, American jet fuel, diesel, and gasoline

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<v Speaker 3>all around the world. We're not going to stop those exports.

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<v Speaker 3>We're going to grow those exports.

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<v Speaker 6>Secretary, how much are you trying to ameliorate some of

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<v Speaker 6>the price considerations and traditional allies of the United States

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<v Speaker 6>As this does potentially.

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<v Speaker 5>Drag on for a longer period. Of time.

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<v Speaker 6>I mean, how much does cost a big part of

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<v Speaker 6>some of these exports.

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<v Speaker 3>Yes, everyone understands, particularly over here in Central and Eastern Europe.

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<v Speaker 3>People understand the existential threat from Iran. Everybody wants to

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<v Speaker 3>see that the United States successful in ending Iran's nuclear

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<v Speaker 3>weapon ambitions. Nobody likes, of course, high prices in the

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<v Speaker 3>short term, but they understand increased American energy exports in

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<v Speaker 3>increased energy addition policies lean into more energy production. That's

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<v Speaker 3>what President Trump is all about. We've got to get

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<v Speaker 3>away from those Western European policies of making intentionally making

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<v Speaker 3>hydrocarbons expensive and energy subtraction policies. The future of Europe,

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<v Speaker 3>the dynamic growth of Europe, is going to be in

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<v Speaker 3>these Central and Eastern European nations that lean into the

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<v Speaker 3>President Trump's American agenda of more energy, more economic growth,

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<v Speaker 3>more opportunities for citizens.

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<v Speaker 6>Amrie was alluding to this idea, this idea of potentially

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<v Speaker 6>having restrictions on exports, and this has been deployed before

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<v Speaker 6>in part because prices were going up and it increased

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<v Speaker 6>the price when we were exporting a significant part of

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<v Speaker 6>resources in the United States. How do you plan to

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<v Speaker 6>have exports continue to increase to US allies will not

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<v Speaker 6>necessarily having the ramifications of much higher prices here.

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<v Speaker 3>Because the refinery capacity we have in the United States

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<v Speaker 3>now is greater than all of consumption.

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<v Speaker 5>In the United States.

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<v Speaker 3>If we didn't export our diesel and jet fuel, we'd

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<v Speaker 3>have to turn down our refineries. Who would want to

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<v Speaker 3>turn down their refining capacity.

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<v Speaker 5>In today's world? We want them.

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<v Speaker 3>The higher utilization they run, the higher throughput they run on,

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<v Speaker 3>the more efficient they are, they produce more products. That

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<v Speaker 3>puts a downward pressure on prices, not just in the United.

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<v Speaker 5>States, but for everyone abroad.

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<v Speaker 3>That's what America is about, bringing more energy to the

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<v Speaker 3>world and pushing prices down.

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<v Speaker 4>Mister Secretary, and you're announcing today Trump Peace pipelines, will

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<v Speaker 4>it be something that all of our allies in Europe

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<v Speaker 4>can get a handle of.

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<v Speaker 3>Absolutely. This Trump Peace pipeline agenda is to grow the

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<v Speaker 3>connection between the nations of Europe.

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<v Speaker 5>Where I'm standing right here in Croatia.

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<v Speaker 3>These nations were at the end of Russian Soviet Union

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<v Speaker 3>energy system. They were at the behest they were beholden

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<v Speaker 3>to Russia. That's not a good place to be. What

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<v Speaker 3>we're doing here is expanding this pipeline network so they

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<v Speaker 3>can import oil and natural gas from the United States

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<v Speaker 3>and then transported among the nations in this region, so

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<v Speaker 3>their economies can grow and they can realize lower prices

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<v Speaker 3>for their citizens in greater economic futures. I think the

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<v Speaker 3>idea of the Trump Peace pipeline, Peace pipelines, there's many

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<v Speaker 3>of these are huge. We'll announce today a couple of

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<v Speaker 3>historic agreements in this regard.

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<v Speaker 2>Stay with us Mulbloomberg surveillance coming up. After this, let's

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<v Speaker 2>talk about some earnings. General Motors reporting better than expected

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<v Speaker 2>first quarter earnings and raising it's full yet guidance. The

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<v Speaker 2>General Motors CFO Paul Jacobson joins us now for more. Paul,

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<v Speaker 2>Welcome to the program. The bus word disc earning season

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<v Speaker 2>appears to be resilient. I think it would be unfair

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<v Speaker 2>just to call this resilient. It looks strong, Sir Paul.

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<v Speaker 2>Where is that strength coming from?

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<v Speaker 7>Hell out, Good morning, John, Thanks thanks for having us.

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<v Speaker 7>You know, this quarter was a really strong one for us.

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<v Speaker 7>But I think that resiliency word works really well. It's

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<v Speaker 7>something that we've demonstrated for the last several years, whether

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<v Speaker 7>it was the chip crisis or tariffs or inflation. I

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<v Speaker 7>think the teams responded really well, and this quarter was

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<v Speaker 7>no exception when you look at some of the challenges

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<v Speaker 7>that we faced around inventory levels. The go to market

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<v Speaker 7>team did an outstanding job dealing with the traffic that

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<v Speaker 7>we saw in the stores, which continue to be strong

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<v Speaker 7>and steady and has continued through April. So we feel

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<v Speaker 7>good about the quarter, and you know, we're able to

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<v Speaker 7>take up our guidance as a result of the IEPA tariff,

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<v Speaker 7>a crewle that we took in the quarter, and you know,

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<v Speaker 7>so far it looks like we're able to handle some

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<v Speaker 7>of the pressure that we've seen in inflationary items, primarily

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<v Speaker 7>resulting from energy prices.

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<v Speaker 2>Well, Paul, let's talk about that.

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<v Speaker 5>It's an important topic.

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<v Speaker 2>Your supply chains have been battle tested, batsle hardened, the pandemic,

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<v Speaker 2>the tariffs, and now this what challenge is he working

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<v Speaker 2>through as a team at the moment?

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<v Speaker 7>Well, I think right now, obviously the team's done a

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<v Speaker 7>really strong job of maintaining it through even some of

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<v Speaker 7>the dram memory chip issues that we saw in the

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<v Speaker 7>middle part.

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<v Speaker 5>Of last year.

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<v Speaker 7>I think a lot of that has calmed down. But

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<v Speaker 7>what we're really seeing across the board right now is

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<v Speaker 7>inflationary effects and raw materials aluminum steel, just overall transportation

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<v Speaker 7>and logistics costs. We're calling out about five hundred million

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<v Speaker 7>dollars of pressure that we've added to our forecast for

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<v Speaker 7>the year. So despite our beat, we're not taking up

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<v Speaker 7>our guidance by nearly as much as that beat, primarily

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<v Speaker 7>because we're continuing to adjust the business. But we feel

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<v Speaker 7>good that we're a little bit out of it right now,

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<v Speaker 7>but we are cautious about how long this might.

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<v Speaker 6>Last, how much we're able to pass along those extra

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<v Speaker 6>costs Paul to consumers in the face of already relatively

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<v Speaker 6>high prices but a very strong consumer demand.

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<v Speaker 7>Yeah, so we came into the year saying that price

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<v Speaker 7>was only going to be up by about a half percent,

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<v Speaker 7>which really was the annualization of model year twenty six

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<v Speaker 7>price increases. We haven't built any significant price increases into

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<v Speaker 7>our models. In fact, what we're seeing is the industry

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<v Speaker 7>discounting a little bit more. There's some competitive pressure out there,

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<v Speaker 7>but our teams held up well. I think when you

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<v Speaker 7>look at the GM portfolio, we've really got a vehicle

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<v Speaker 7>for every consumer out there. We're known for our trucks

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<v Speaker 7>and our SUVs, but we sold over seven hundred thousand

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<v Speaker 7>vehicles last year with a starting price of approximately thirty

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<v Speaker 7>thousand dollars or less, so we've got that portfolio. The

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<v Speaker 7>Chevy traxis hitting record levels for us last quarter, so

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<v Speaker 7>we feel like we're in a good spot depending on

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<v Speaker 7>where the consumer might be.

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<v Speaker 6>Has there been any pushback against some of the large vehicles,

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<v Speaker 6>the SUVs, the pickups in the face of higher gasoline prices,

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<v Speaker 6>or have you seen no ramifications whatsoever?

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<v Speaker 7>You know, we really haven't seen any changes. In fact,

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<v Speaker 7>our light duty pickup sales were up about eight percent

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<v Speaker 7>year over year in the quarter. On like I said,

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<v Speaker 7>traffic has been strong. If anything, we probably were a

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<v Speaker 7>little bit light on inventory coming into the quarter because

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<v Speaker 7>we had such a strong December and with the weather

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<v Speaker 7>in January and so on, we had difficulty making up

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<v Speaker 7>those inventory levels. So we're down quite a bit from

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<v Speaker 7>where we were a year ago. It gives us an

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<v Speaker 7>opportunity to replenish that stock and make sure that we've

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<v Speaker 7>got product in the stores at our dealers.

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<v Speaker 5>For customers when they come.

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<v Speaker 7>But so far, traffic has remained steady.

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<v Speaker 4>Well when it comes to the tariffs, how is it

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<v Speaker 4>going in terms of getting the refunds back from the

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<v Speaker 4>US government.

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<v Speaker 7>So, you know, we're exposed a lot differently. I think

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<v Speaker 7>many companies out there are principally focused on IEPA. Many

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<v Speaker 7>of our tariffs are under Section two thirty two, and

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<v Speaker 7>there's been a pretty robust process. We haven't had any

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<v Speaker 7>challenges with the offsets and making sure that we're getting

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<v Speaker 7>the accounting right with the government to make sure that

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<v Speaker 7>the cash is flowing efficiently with IEPA. With Theupreme Court

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<v Speaker 7>decision that was somewhat unexpected, we took the accrual. We

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<v Speaker 7>have not moved our free cash flow guidance like we

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<v Speaker 7>did our EBIT because we're not sure when that refund

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<v Speaker 7>is going to come. We haven't applied for anything yet.

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<v Speaker 7>But you know, we're going to work through that with

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<v Speaker 7>the government in partnership, because I think that partnership has

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<v Speaker 7>worked really well as we've adjusted and tried to benefit

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<v Speaker 7>the US auto industry the best we can.

0:12:23.200 --> 0:12:24.640
<v Speaker 5>Well how deep is this partnership.

0:12:24.679 --> 0:12:26.920
<v Speaker 4>A few weeks ago there was a report that the

0:12:26.960 --> 0:12:31.640
<v Speaker 4>Pentagon is talking to General Motors and other auto companies

0:12:31.640 --> 0:12:34.920
<v Speaker 4>about making munitions and helping in the war effort. Is

0:12:34.920 --> 0:12:37.240
<v Speaker 4>that accurate and where are those conversations now?

0:12:38.559 --> 0:12:41.120
<v Speaker 7>Well, I can't comment on anything specific, but we do

0:12:41.200 --> 0:12:44.520
<v Speaker 7>have a growing GM defense business, particularly with the infantry

0:12:44.559 --> 0:12:48.480
<v Speaker 7>squad vehicle, which has been great for the troops and

0:12:48.880 --> 0:12:53.319
<v Speaker 7>for the Department as well. But this is taking advantage

0:12:53.360 --> 0:12:56.600
<v Speaker 7>of really strong US manufacturing and that's where we lead

0:12:56.640 --> 0:12:59.720
<v Speaker 7>the way I think as automakers and do a great job.

0:12:59.800 --> 0:13:02.560
<v Speaker 7>So you know, while we would rather not be paying

0:13:02.600 --> 0:13:06.680
<v Speaker 7>tariffs across the board, we understand the environment that we're

0:13:06.679 --> 0:13:08.920
<v Speaker 7>in and we're making sure that we can pivot the

0:13:08.960 --> 0:13:12.200
<v Speaker 7>business the best we can to adjust to that reality.

0:13:12.320 --> 0:13:14.280
<v Speaker 7>And I think the team's done a good job. When

0:13:14.280 --> 0:13:16.199
<v Speaker 7>you look at the consistency of our earnings over the

0:13:16.280 --> 0:13:16.960
<v Speaker 7>last several years.

0:13:17.120 --> 0:13:19.480
<v Speaker 2>The unly space for them salves poll at a difficult time.

0:13:19.720 --> 0:13:22.720
<v Speaker 2>We talked all throughout this interview about the challenges on

0:13:22.760 --> 0:13:25.120
<v Speaker 2>the horizon. How does that inform your approach to capital

0:13:25.160 --> 0:13:26.560
<v Speaker 2>returns for the year ahead.

0:13:27.960 --> 0:13:31.240
<v Speaker 7>Well, you know, our capital allocation policy starts with investing

0:13:31.280 --> 0:13:33.959
<v Speaker 7>in the business. We'll put ten to twelve billion dollars in.

0:13:34.040 --> 0:13:37.240
<v Speaker 7>Much of that this year is actually on shoring work

0:13:37.520 --> 0:13:40.400
<v Speaker 7>that was previously done internationally, and we're bringing that in

0:13:40.440 --> 0:13:43.800
<v Speaker 7>as a result of our teriff response. The second pillar

0:13:43.840 --> 0:13:46.040
<v Speaker 7>of our capital allocation is making sure we've got a

0:13:46.080 --> 0:13:48.480
<v Speaker 7>strong balance sheet. And when you look at where our

0:13:49.000 --> 0:13:52.160
<v Speaker 7>balance sheet is, how funded our pension plans are, we're

0:13:52.200 --> 0:13:54.480
<v Speaker 7>in a really, really strong position. And what that's allowed

0:13:54.559 --> 0:13:56.800
<v Speaker 7>us to do is take some of that free cash

0:13:56.800 --> 0:14:01.360
<v Speaker 7>flow and allocate it back to shareholders to reward them

0:14:01.400 --> 0:14:04.360
<v Speaker 7>for their confidence in the GM's story and make sure

0:14:04.360 --> 0:14:07.480
<v Speaker 7>that they're generating the returns for their customers as well.

0:14:07.559 --> 0:14:09.959
<v Speaker 7>During the quarter, we were able to repurchase about eight

0:14:10.000 --> 0:14:12.880
<v Speaker 7>hundred million dollars worth of stock at about seventy five

0:14:12.960 --> 0:14:15.800
<v Speaker 7>dollars a share, taking advantage of some of that dip

0:14:15.800 --> 0:14:19.120
<v Speaker 7>and continuing to be very very consistent about the way

0:14:19.160 --> 0:14:20.560
<v Speaker 7>we apply our capital allocation.

0:14:20.840 --> 0:14:23.520
<v Speaker 6>Well, when you look forward and at the potential priorities

0:14:23.640 --> 0:14:25.080
<v Speaker 6>of General Motors, how.

0:14:25.040 --> 0:14:27.440
<v Speaker 5>Much do you see evs.

0:14:26.920 --> 0:14:29.840
<v Speaker 6>As playing a bigger part just because of some of

0:14:29.840 --> 0:14:34.120
<v Speaker 6>the questions around oil as well as of course autonomous driving.

0:14:35.440 --> 0:14:38.440
<v Speaker 7>So while we did take a number of charges special

0:14:38.520 --> 0:14:41.920
<v Speaker 7>item charges last year and even in the quarter, as

0:14:41.920 --> 0:14:45.560
<v Speaker 7>we continue to right size our EV footprint as a

0:14:45.600 --> 0:14:49.240
<v Speaker 7>result of the new regulatory environment. Unlike many of our competitors,

0:14:49.280 --> 0:14:52.280
<v Speaker 7>we're sticking with our models. We discontinued the Bright drop

0:14:52.360 --> 0:14:56.200
<v Speaker 7>van for very specific reasons, but we're not impairing any

0:14:56.240 --> 0:14:59.160
<v Speaker 7>of other EV programs. Like some of our competitors, we

0:14:59.200 --> 0:15:02.880
<v Speaker 7>continue to believe that we can make EV's work through

0:15:02.880 --> 0:15:06.280
<v Speaker 7>our winning platform. They're not affordable, are not profitable at

0:15:06.280 --> 0:15:09.280
<v Speaker 7>these levels right now, and that's something that we've got

0:15:09.320 --> 0:15:11.560
<v Speaker 7>to work on. So we've got a number of battery chemistry,

0:15:11.680 --> 0:15:14.440
<v Speaker 7>architecture initiatives coming in over the next couple of years

0:15:14.840 --> 0:15:16.880
<v Speaker 7>that are going to get the costs down and where

0:15:16.880 --> 0:15:19.480
<v Speaker 7>we think we can take and continue our leading role.

0:15:19.520 --> 0:15:22.680
<v Speaker 7>We're already number two in the US in EV's and

0:15:22.800 --> 0:15:24.840
<v Speaker 7>I think we can continue that and to continue to

0:15:24.880 --> 0:15:26.360
<v Speaker 7>grow it in the future.

0:15:26.760 --> 0:15:29.440
<v Speaker 2>Before we go, inquiring minds want to know the corvette

0:15:29.480 --> 0:15:31.680
<v Speaker 2>behind you. What kind of money do we need to

0:15:31.680 --> 0:15:32.120
<v Speaker 2>come up with.

0:15:34.640 --> 0:15:36.320
<v Speaker 7>It's definitely in your price range.

0:15:36.400 --> 0:15:38.440
<v Speaker 2>John, We'll have a whip around around at tame Pool.

0:15:38.480 --> 0:15:40.120
<v Speaker 5>Thank you, Paul Brat, thank you.

0:15:40.880 --> 0:15:44.360
<v Speaker 2>Stay with us. Mult Bloomberg Surveillance coming up after this.

0:15:53.720 --> 0:15:55.960
<v Speaker 2>So here's the laces this morning, President Donald Trumps tind

0:15:56.000 --> 0:15:58.920
<v Speaker 2>of advice is he's not satisfied with the Rounds proposal

0:15:59.000 --> 0:16:01.560
<v Speaker 2>to reopen the straight ofform was General Karen Gibson of

0:16:01.560 --> 0:16:04.720
<v Speaker 2>Accountby Securities writing for US, reopening this straight is a

0:16:04.760 --> 0:16:08.360
<v Speaker 2>matter of urgency, and Around knows it. I suspected Ran

0:16:08.760 --> 0:16:11.960
<v Speaker 2>is gambling. It cannot lost US here, General Gibson joins US.

0:16:12.000 --> 0:16:14.240
<v Speaker 2>Now for more, General Gibson that last line, is there

0:16:14.280 --> 0:16:17.360
<v Speaker 2>good reason to believe that Around can outlast the US?

0:16:18.360 --> 0:16:21.200
<v Speaker 1>Well, I think it's a matter of political fortitude on

0:16:21.280 --> 0:16:24.640
<v Speaker 1>our part, and if we want to achieve the objectives

0:16:24.640 --> 0:16:27.800
<v Speaker 1>of this campaign, which were, as we've just heard, to

0:16:27.920 --> 0:16:32.560
<v Speaker 1>impose very strict limits on Iran's ability to gain nuclear weapons,

0:16:32.760 --> 0:16:36.120
<v Speaker 1>then this key leverage is something that we need to sustain.

0:16:36.560 --> 0:16:37.200
<v Speaker 5>I think it's.

0:16:37.080 --> 0:16:40.600
<v Speaker 1>Telling the actions that iron is taking right now and indicating,

0:16:40.640 --> 0:16:45.000
<v Speaker 1>as you said, that the combination of previous sanctions, of

0:16:45.040 --> 0:16:49.479
<v Speaker 1>the wartime, infrastructure damage and now essentially a maritime blockade,

0:16:49.600 --> 0:16:53.080
<v Speaker 1>our interdiction efforts are probably beginning to take a toll

0:16:53.360 --> 0:16:57.200
<v Speaker 1>on a regime that has previously proved very resilient to

0:16:57.360 --> 0:16:58.440
<v Speaker 1>economic pressure.

0:16:58.480 --> 0:17:01.280
<v Speaker 4>Well, if the Ironians are so resilient, do you see

0:17:01.280 --> 0:17:05.320
<v Speaker 4>the United States doing anything before they reach their maximum

0:17:05.640 --> 0:17:08.879
<v Speaker 4>capacity on storage in the oil industry called tank tops.

0:17:10.520 --> 0:17:14.119
<v Speaker 1>I think that the strategy that we have now really

0:17:14.200 --> 0:17:18.840
<v Speaker 1>this post kinetic phase of using our military assets mutually.

0:17:18.880 --> 0:17:22.119
<v Speaker 1>Iran is doing the same thing to exert economic pressure

0:17:22.160 --> 0:17:26.240
<v Speaker 1>on one another. Iran preventing essentially the flow of traffic

0:17:26.280 --> 0:17:29.320
<v Speaker 1>in and out of the Strait and the US Navy

0:17:29.359 --> 0:17:32.560
<v Speaker 1>preventing the flow of traffic in and out of Iranian

0:17:32.600 --> 0:17:36.479
<v Speaker 1>ports is proving to be pretty successful. Again, I think

0:17:36.520 --> 0:17:39.600
<v Speaker 1>when we look at Iran's negotiating strategy at this point,

0:17:39.640 --> 0:17:46.360
<v Speaker 1>trying to decouple the economic pressure from the nuclear discussions,

0:17:46.600 --> 0:17:51.119
<v Speaker 1>I think they're seeking economic relief, they want military relief

0:17:51.160 --> 0:17:54.520
<v Speaker 1>in terms of sustaining the ceasefire, and then that would

0:17:54.520 --> 0:17:59.120
<v Speaker 1>allow them to postpone drag out or negotiate at least

0:17:59.200 --> 0:18:01.919
<v Speaker 1>on the nuclear ASPI from a position of a less

0:18:01.960 --> 0:18:04.640
<v Speaker 1>coercive position, a trade or advantage to them.

0:18:04.680 --> 0:18:07.240
<v Speaker 4>If Trump cannot open up the trader for moves diplomatically,

0:18:07.280 --> 0:18:09.960
<v Speaker 4>will he do so with the military.

0:18:10.440 --> 0:18:12.640
<v Speaker 1>I think in terms of opening it with the military,

0:18:12.680 --> 0:18:16.240
<v Speaker 1>that would really mean escorting tankers.

0:18:15.480 --> 0:18:17.240
<v Speaker 5>And other vessels. As we've talked.

0:18:17.080 --> 0:18:20.639
<v Speaker 1>About before, it's certainly a feasible military option, and I

0:18:20.760 --> 0:18:25.040
<v Speaker 1>don't think that Iran would be in a position to

0:18:25.119 --> 0:18:29.720
<v Speaker 1>really strongly contest that they could strike take pot shots.

0:18:29.440 --> 0:18:30.600
<v Speaker 5>At vessels that are going through.

0:18:30.640 --> 0:18:32.520
<v Speaker 1>But I think if they did that, they would be

0:18:32.560 --> 0:18:35.600
<v Speaker 1>inviting more of those very punishing air strikes that we've

0:18:35.680 --> 0:18:36.600
<v Speaker 1>levied in the past.

0:18:36.840 --> 0:18:39.000
<v Speaker 6>General, what do you make of the comments we've heard

0:18:39.000 --> 0:18:42.040
<v Speaker 6>from both the administration and other analysts that there really

0:18:42.080 --> 0:18:45.359
<v Speaker 6>isn't any kind of cohesion in the Iranian leadership, that

0:18:45.440 --> 0:18:48.520
<v Speaker 6>there isn't anyone like the former Ayatola who could have

0:18:48.560 --> 0:18:50.040
<v Speaker 6>come out and said this is the route that we're

0:18:50.040 --> 0:18:52.119
<v Speaker 6>going to take. The poison Tellice that we're going to

0:18:52.200 --> 0:18:52.720
<v Speaker 6>drink and.

0:18:52.680 --> 0:18:53.960
<v Speaker 5>We're going to come to this agreement.

0:18:54.080 --> 0:18:56.160
<v Speaker 6>Do you think that that's an accurate reflection of things

0:18:56.200 --> 0:18:56.719
<v Speaker 6>on the ground.

0:18:58.000 --> 0:19:00.159
<v Speaker 1>Well, I certainly think it's fair to say that the

0:19:00.240 --> 0:19:05.240
<v Speaker 1>current Iotolia does lacks the strength of his father to act,

0:19:05.440 --> 0:19:09.040
<v Speaker 1>you know, certainly with greater authority. But I think that

0:19:09.200 --> 0:19:13.640
<v Speaker 1>the IRGC is really the Iranian Revolutionary Guard core remains

0:19:13.720 --> 0:19:17.480
<v Speaker 1>probably pretty cohesive. I've often heard there are no real

0:19:17.600 --> 0:19:20.440
<v Speaker 1>moderates among those who are in charge. It's just various

0:19:20.440 --> 0:19:24.200
<v Speaker 1>factions of hardliners. And I'm not sure we see yet

0:19:24.480 --> 0:19:30.479
<v Speaker 1>concrete evidence that there's significant friction within the Iranian the

0:19:30.520 --> 0:19:32.280
<v Speaker 1>Islamic Republics leadership.

0:19:32.560 --> 0:19:34.800
<v Speaker 6>Donald, what do you make of reports that there is

0:19:34.960 --> 0:19:38.119
<v Speaker 6>some dissension from the rank and file that aren't getting

0:19:38.119 --> 0:19:41.280
<v Speaker 6>paid because of a lack of cash coming into the regime.

0:19:42.840 --> 0:19:45.240
<v Speaker 1>So I think that's where we would probably be more

0:19:45.359 --> 0:19:47.920
<v Speaker 1>likely to see some friction. Some of the indicators I

0:19:47.960 --> 0:19:52.640
<v Speaker 1>would look for would be defections or units that are

0:19:52.680 --> 0:19:55.320
<v Speaker 1>no longer willing to carry out orders. But now that

0:19:55.359 --> 0:19:59.720
<v Speaker 1>we're not conducting kinetic operations and Iran is not responding

0:19:59.840 --> 0:20:03.040
<v Speaker 1>in kind, that's a little harder to detect. But those

0:20:03.040 --> 0:20:05.080
<v Speaker 1>are some of the indicators I would look for that

0:20:05.160 --> 0:20:07.560
<v Speaker 1>would lead me to believe that there was a growing

0:20:07.640 --> 0:20:10.320
<v Speaker 1>friction within the security establishment.

0:20:11.119 --> 0:20:14.680
<v Speaker 2>This is the Bloomberg Surveillance Podcast, bringing you the best

0:20:14.680 --> 0:20:18.000
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0:20:18.040 --> 0:20:21.000
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