WEBVTT - Employers Must Be Flexible or Face Worker 'Revolt': Deloitte 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.799 at Bloomberg dot com slash podcast. Well, we do have 0:00:23.079 --> 0:00:28.200 this economy gradually reopening, and the discussion is shifting more 0:00:28.280 --> 0:00:32.120 and more about how people will come back to work. 0:00:32.200 --> 0:00:34.519 Will they come back to the office, is to what degree, 0:00:34.920 --> 0:00:38.600 under what schedule? Lots of different models out there being discussed. 0:00:38.720 --> 0:00:43.240 Erica Volini, Gloomal, Global Human Capital leader at Deloitte, joins 0:00:43.280 --> 0:00:45.760 us on the phone from Phoenix. Erica, thanks so much 0:00:45.800 --> 0:00:48.880 for joining us. I'd love to get your thoughts about 0:00:49.040 --> 0:00:52.600 what your clients are telling you about how they plan 0:00:53.000 --> 0:00:56.520 to bring their employees back to work as this economy 0:00:56.760 --> 0:01:03.160 gradually reopens. Thanks that. I think the keyword is flexibility. 0:01:03.400 --> 0:01:08.080 UM employers are thinking very carefully about how to set 0:01:08.200 --> 0:01:12.160 a flex way of working. We're seeing this across the board. UM. 0:01:12.200 --> 0:01:14.600 The question is the degree of flexibility that's going to 0:01:14.640 --> 0:01:18.959 be offered, whether it's a finite you can come back, 0:01:19.080 --> 0:01:21.160 you know you work from home X number of days 0:01:21.160 --> 0:01:23.760 a week, or whether it's going to be ultimate flexibility, 0:01:23.959 --> 0:01:26.560 do your job as you think it's best to do it. 0:01:27.040 --> 0:01:29.080 I think are the questions that are out there. But 0:01:29.160 --> 0:01:33.760 there is definitely a recognition that workers want more choice 0:01:33.880 --> 0:01:36.399 in terms of how they do their work, um, and 0:01:36.480 --> 0:01:39.440 where they do their work. I'd love to be in 0:01:39.480 --> 0:01:42.840 Phoenix to tell you the truth, Erica. Do you see 0:01:43.440 --> 0:01:47.119 so many people talked about at least a move to Florida, 0:01:47.640 --> 0:01:51.480 going down to Texas, to Arizona, to California. Do you 0:01:51.560 --> 0:01:56.920 see big business hubs actually spreading out a little bit? 0:01:58.440 --> 0:02:02.440 I think there's a recognition that geography, especially in a 0:02:02.480 --> 0:02:07.360 world of more remote work, becomes less critical. Right. Office 0:02:07.400 --> 0:02:10.880 proximity is not a defining factor in terms of whether 0:02:10.919 --> 0:02:13.320 you can get a job. I think we're seeing migration 0:02:13.400 --> 0:02:17.840 to other other areas, um for sure. But there are 0:02:17.960 --> 0:02:22.400 tax implications, UM. There are benefit implications right that employers 0:02:22.440 --> 0:02:24.840 have to work through, and I think we're gonna see 0:02:24.880 --> 0:02:28.360 that over the next few months lash years as employers 0:02:28.360 --> 0:02:31.359 try to figure out exactly how much flexibility they want 0:02:31.400 --> 0:02:34.360 to give. But the benefit is huge. Think about the 0:02:34.400 --> 0:02:37.560 ability to tap into labor markets that have historically not 0:02:37.680 --> 0:02:41.959 been available to these organizations. UH, fresh labor pools UM 0:02:42.000 --> 0:02:44.840 individuals who want to be reskilled and retrained and be 0:02:44.919 --> 0:02:47.560 able to enter into the to the workforce in different 0:02:47.560 --> 0:02:50.480 types of jobs. So I think we will see UM 0:02:50.760 --> 0:02:54.360 much more flexibility in organizations saying you don't have to 0:02:54.400 --> 0:02:58.080 be geographically close to where the office is. What are 0:02:58.120 --> 0:03:02.560 you hearing from employee ease erica? Are they going to 0:03:02.680 --> 0:03:05.800 revolt if they're told to come back into the office after, 0:03:05.960 --> 0:03:10.200 you know, twelve plus months of working from home. I 0:03:10.200 --> 0:03:12.359 think revolts is a strong word, and I don't think 0:03:12.360 --> 0:03:14.600 it's necessarily just about can I work from home or 0:03:14.840 --> 0:03:17.440 can't I. I think what workers are going to say 0:03:17.560 --> 0:03:20.120 is you need to be caring for me. You need 0:03:20.160 --> 0:03:23.600 to focus on my well being. You know, our global 0:03:23.639 --> 0:03:26.720 Human Capital Trends report at Deloitte is showing us that 0:03:26.840 --> 0:03:31.200 well being is the number one trend. UM. Workers are 0:03:31.200 --> 0:03:34.639 expressing they need their well being cared for. UM. They 0:03:34.680 --> 0:03:37.200 need to know they have flexibility to deal with what 0:03:37.240 --> 0:03:39.840 they have in their lives, and so what they're asking 0:03:39.880 --> 0:03:44.520 for from employers is understand my needs and give me 0:03:44.680 --> 0:03:47.000 the ability to flex as I need to to be 0:03:47.000 --> 0:03:49.560 able to make those meet those needs and also be 0:03:49.640 --> 0:03:51.800 productive at work. And I think what we've learned in 0:03:51.840 --> 0:03:55.280 the past year is that is possible. Um, you know, 0:03:55.440 --> 0:03:59.720 with the right um leadership, with the right programs and 0:03:59.760 --> 0:04:02.800 pray placed, the right policies, and frankly, with a degree 0:04:02.840 --> 0:04:05.400 of trust and empowerment for workers. And I think that's 0:04:05.440 --> 0:04:08.240 the main theme we're hearing from workers right now. What 0:04:08.280 --> 0:04:11.000 do you think we're gonna see in terms of female employees? 0:04:11.040 --> 0:04:15.320 I mean, um, I've heard so many stories about bankers, 0:04:15.360 --> 0:04:18.760 women who are paid a lot, and they were forced 0:04:18.800 --> 0:04:24.560 to decide between childcare and going into work. They chose 0:04:25.040 --> 0:04:28.560 childcare and gave up those big paychecks. I myself just 0:04:28.640 --> 0:04:30.480 had a baby. My wife took a year off to 0:04:30.520 --> 0:04:33.680 take care of the kid. I took a month um 0:04:33.720 --> 0:04:37.760 because I'm lazy. Her job is so much harder than mine. Um, 0:04:37.800 --> 0:04:40.479 are we gonna see big changes there? We just saw 0:04:40.560 --> 0:04:44.320 Volvo USA, for example, getting twenty four weeks two men 0:04:44.480 --> 0:04:48.120 or women when they have a baby. I think so. 0:04:48.240 --> 0:04:49.560 I mean, I have a two and a half year old, 0:04:49.600 --> 0:04:54.559 so I completely understand being a working woman. Listen, I think, um, 0:04:54.600 --> 0:04:56.839 you know, Kamala Harris called it a crisis, the number 0:04:56.839 --> 0:04:59.680 of women that are leaving the economy. I think it 0:04:59.839 --> 0:05:06.160 is organizations recognize that having a diverse workforce is critical 0:05:06.240 --> 0:05:09.479 to innovation and creativity. So I think employers are gonna 0:05:09.680 --> 0:05:11.520 lean in. I think it's going to be in the 0:05:11.560 --> 0:05:13.839 form of, you know, we're going to take a closer 0:05:13.880 --> 0:05:17.719 look at childcare, at benefits, giving that level of flexibility. 0:05:18.120 --> 0:05:20.080 I also think we're going to see and have seen 0:05:20.120 --> 0:05:24.680 deliberate efforts by organizations to hire women UM and to 0:05:24.960 --> 0:05:28.200 create programs to hire women into positions to make sure 0:05:28.720 --> 0:05:30.599 UM that we are getting that kind of equity in 0:05:30.600 --> 0:05:33.560 the workplace. So that's absolutely going to be UM an 0:05:33.640 --> 0:05:36.360 uptick in what we're seeing. What we have to realize 0:05:36.400 --> 0:05:38.960 is it's not just about hiring though, it's also about 0:05:39.000 --> 0:05:43.640 reskilling and retraining. You know, UM, the majority of employers 0:05:43.680 --> 0:05:47.640 are staying their biggest issue is having the right workers 0:05:47.640 --> 0:05:49.880 with the right set of skills and capabilities to be 0:05:49.920 --> 0:05:51.800 able to do the jobs of the future. And we're 0:05:51.800 --> 0:05:54.480 going to need to see massive investments in reskilling and 0:05:54.520 --> 0:05:57.120 retraining to be able to make all of this happen. 0:05:57.360 --> 0:05:59.279 And I think that can't be lost. As I look 0:05:59.320 --> 0:06:01.600 at the you know, Biden's latest plan, I see a 0:06:01.640 --> 0:06:05.279 hundred billion dollars for worker training. Is that enough? Um? 0:06:05.320 --> 0:06:07.280 You know, do we need to invest more? What's the 0:06:07.360 --> 0:06:09.640 role of organizations playing? And that? I think those are 0:06:09.680 --> 0:06:13.960 all big questions that need to be answered. So it's interesting, Erica. 0:06:14.160 --> 0:06:16.240 You know, in the beginning of this pandemic, we heard 0:06:16.240 --> 0:06:18.839 from some of the technology companies that said, okay, folks, 0:06:18.839 --> 0:06:21.560 if you want to leave Silicon Valley and work remotely 0:06:22.080 --> 0:06:25.520 and you know, from Boise, Idaho or something, we're gonna 0:06:25.520 --> 0:06:28.480 have to adjust your compensation for the different costs of living. 0:06:28.680 --> 0:06:31.520 What are we seeing from corporate America as they think 0:06:31.560 --> 0:06:36.760 about a remote workforce. Absolutely, I mean geographic pay differentials 0:06:36.800 --> 0:06:39.000 I think are a hot topic right now. I think 0:06:39.040 --> 0:06:42.080 we will, on the whole start to see adjustments. If 0:06:42.080 --> 0:06:44.720 people are living in lower cost locations, their pay will 0:06:44.760 --> 0:06:49.400 be adjusted accordingly to reflect costs of living. And I 0:06:52.600 --> 0:06:56.640 wouldn't accept that, Erica, You know what, because no, you 0:06:56.640 --> 0:06:58.840 you gotta pay me what I'm worth. Don't worry about 0:06:58.839 --> 0:07:00.960 where I live. If I'm del ever ring, then I 0:07:01.000 --> 0:07:03.200 want the money. You know, it doesn't matter if I 0:07:03.240 --> 0:07:08.240 am in Sun Valley or in Silicon Valley. UM, I've 0:07:08.240 --> 0:07:09.720 been hearing this for a while, and I hope they 0:07:09.720 --> 0:07:12.280 I hope they pushed back a little. I think this 0:07:12.400 --> 0:07:14.280 is gonna be This is going to be the debate 0:07:14.520 --> 0:07:17.239 UM that's to be had, and you know, we're seeing 0:07:17.320 --> 0:07:20.880 organizations on both sides of defense around this. Again. I 0:07:20.920 --> 0:07:24.360 think it comes down to UM. You know, the ability 0:07:24.400 --> 0:07:27.240 to tap into talent UM. I think it's going to 0:07:27.360 --> 0:07:31.640 come down to UM, how critical it is for that 0:07:31.800 --> 0:07:34.960 employee to be able to come in and collaborate with 0:07:35.040 --> 0:07:37.200 their teammates, and how that's going to be done to 0:07:37.320 --> 0:07:40.160 drive the work that they're doing. UM. And then to 0:07:40.200 --> 0:07:42.400 your point, it's going to come down to fairness and 0:07:42.400 --> 0:07:44.800 and how to help employees get the best out of 0:07:44.840 --> 0:07:48.240 their lives right. And these are all factors that are 0:07:48.240 --> 0:07:49.840 going to go into this debate. I don't think there 0:07:49.880 --> 0:07:51.480 is an easy answer to any of this. I think 0:07:51.560 --> 0:07:53.520 this is a debate that's being had at every C 0:07:53.680 --> 0:07:56.440 suite and every board level right now. Erica, do you 0:07:56.480 --> 0:07:58.480 have any have you seen any companies that just said 0:07:59.000 --> 0:08:00.640 screw it, we're going back of the way it was. 0:08:00.720 --> 0:08:04.680 Everybody in the office I mean, certainly we've seen a 0:08:04.680 --> 0:08:07.960 couple of CEOs from the major banks that come out 0:08:08.040 --> 0:08:10.200 and say, we think you need to come back to 0:08:10.240 --> 0:08:12.240 the office. But I think that's going to be the exception, 0:08:12.320 --> 0:08:15.320 not the rule. UM. I think most employers are saying, 0:08:15.720 --> 0:08:19.960 we've seen flexibility work. UM, we know we need to 0:08:20.000 --> 0:08:21.800 focus on well being. I go back to that point 0:08:21.800 --> 0:08:24.200 because I think it can't be understated, and I think 0:08:24.240 --> 0:08:26.760 they know this is what workers are asking for. But 0:08:26.840 --> 0:08:29.440 we have to keep in mind also that it's going 0:08:29.480 --> 0:08:32.079 to be hybrid. You know, seventy percent of employers that 0:08:32.120 --> 0:08:33.600 we surveyed said they're going to go back to some 0:08:33.679 --> 0:08:37.040 type of hybrid model. I don't think the majority of 0:08:37.040 --> 0:08:39.960 employers are going to be all in on site or 0:08:40.000 --> 0:08:43.120 all remote, right. Those extremes don't work because that's not 0:08:43.160 --> 0:08:45.880 what we've learned during pandemic. What we've learned is we 0:08:45.920 --> 0:08:49.600 need flexibility and choice, we need trust and empowerment. That 0:08:49.679 --> 0:08:52.360 we don't need managers looking at a worker every single 0:08:52.480 --> 0:08:54.880 minute of every single day to make sure they're producing. 0:08:55.280 --> 0:08:58.640 That productivity can still be gained in a remote work environment. 0:08:58.760 --> 0:09:00.840 That's what we've learned. And so the question is how 0:09:00.840 --> 0:09:04.480 do we start to embrace that flexibility and craft policies 0:09:04.520 --> 0:09:07.320 that allow for that level of flexibility and empowerment for 0:09:07.360 --> 0:09:11.160 the worker. I think that's where we're talking about the revolt, right. 0:09:11.240 --> 0:09:13.720 It's are you going to force me to do things 0:09:13.840 --> 0:09:17.720 in this one way or are you going to trust 0:09:17.920 --> 0:09:20.240 that I have the ability to still produce the output 0:09:20.559 --> 0:09:23.320 without being managed every minute of every day. And I 0:09:23.360 --> 0:09:25.560 think that's the major shift that we're seeing right now. 0:09:26.080 --> 0:09:29.120 Just quickly, Bob Prince said he thinks the US is 0:09:29.160 --> 0:09:32.760 in a new environment of state capitalism. I live in Berlin. 0:09:32.840 --> 0:09:35.480 We have thirteen months of parental leave, we have seven 0:09:35.880 --> 0:09:39.480 six weeks, seven weeks of vacation. This is all enforced 0:09:39.480 --> 0:09:41.559 by the state. Do you think the state is gonna 0:09:41.720 --> 0:09:44.360 bring new regulations to how we work in the US? 0:09:46.840 --> 0:09:49.960 You know, I don't know. Um, I'm not sure it's 0:09:50.000 --> 0:09:53.400 the case. I think um. I think we will see 0:09:54.040 --> 0:09:58.480 um different entities, communities, organizations, possibly at the state level 0:09:58.880 --> 0:10:00.920 trying to do what they need to do to attract 0:10:01.000 --> 0:10:02.959 people to where they live. I think that's going to 0:10:03.040 --> 0:10:05.200 be the big factor, right. I mean, these states want 0:10:05.200 --> 0:10:07.560 people to move there, they want the talent to be there, 0:10:07.960 --> 0:10:10.680 and so it's not unreasonable to think that they'll start 0:10:10.679 --> 0:10:13.200 putting in policies to be able to attract workers, and 0:10:13.240 --> 0:10:15.679 hopefully that's going to start to influence the government at 0:10:15.679 --> 0:10:18.559 a federal level. I mean, that's that's ultimately I think 0:10:18.559 --> 0:10:21.400 would be beneficial to everyone. Erica, really important to get 0:10:21.440 --> 0:10:24.160 your perspective. Really appreciate you joining us today. Erika Volini 0:10:24.280 --> 0:10:30.520 is the global human capital leader at Deloitte. Let's take 0:10:30.640 --> 0:10:33.760 a look at the global oil market. Brent crude is 0:10:33.800 --> 0:10:36.760 up about seven tenths of one percent todays of barrel 0:10:36.840 --> 0:10:40.680 sixty three dollars nineteen cents a barrel. Here, that says 0:10:40.679 --> 0:10:43.920 OPEC plus is meeting today, and the headlines coming out 0:10:43.960 --> 0:10:46.360 on the Bloomberg terminal leading with pet plus agrees to 0:10:46.440 --> 0:10:50.120 gradually increase output over the next three months. Let's get 0:10:50.120 --> 0:10:52.880 a sense of what that means for these energy markets. 0:10:52.880 --> 0:10:55.640 We turn to our expert, and that its Dr ellen Wald, 0:10:55.720 --> 0:10:59.640 president of Transversal Consulting and also a Bloomberg Opinion contributor. 0:11:00.360 --> 0:11:02.520 Ellen thanks so much for joining us here. What are 0:11:02.559 --> 0:11:04.800 some of the highlights that takeaways from what you're hearing 0:11:05.280 --> 0:11:08.400 coming out of the OPEQUE plus meeting today. Yeah, This 0:11:08.520 --> 0:11:12.280 is UH kind of an interesting plot twist, you could say, 0:11:12.400 --> 0:11:16.400 because going into the meeting, it seemed like everyone UH 0:11:16.400 --> 0:11:19.960 and including even UH from the Saudi Oil Minister, seemed 0:11:20.000 --> 0:11:23.840 to be focused on rolling over the current production rates 0:11:23.920 --> 0:11:26.959 UH and not really UM having much guidance. But it's 0:11:27.000 --> 0:11:31.240 emerged that it seems that the group is interested in 0:11:31.280 --> 0:11:35.040 doing a gradual increase of production. They're looking at increasing 0:11:35.080 --> 0:11:38.439 total production UH three hundred and fifty thousand barrels a 0:11:38.520 --> 0:11:40.559 day in May and then again in June, and then 0:11:40.559 --> 0:11:44.680 an even larger jump in July. But what's even more 0:11:44.720 --> 0:11:48.839 interesting is that Saudi Arabia is also indicating that UH 0:11:48.840 --> 0:11:52.440 it is it's it's currently holding an extra million barrels 0:11:52.480 --> 0:11:54.920 a day off the market, that it's going to start 0:11:54.920 --> 0:11:57.280 putting that back on the market at the same time, 0:11:57.600 --> 0:12:00.840 also in a gradual sense, so we're really actually looking 0:12:00.880 --> 0:12:04.800 at it not an insignificant amount of oil coming back 0:12:05.240 --> 0:12:08.800 online in May, June and July. I think what's really 0:12:08.840 --> 0:12:12.600 notable though, is that OPEC is actually giving a guidance 0:12:12.640 --> 0:12:14.760 for for the next three months of what it plans 0:12:14.800 --> 0:12:17.520 to do, and recently they're really only be making decisions 0:12:17.559 --> 0:12:19.560 on a month by month basis. I think this will 0:12:19.640 --> 0:12:23.280 be very helpful also for U S. Crewde producers which 0:12:23.280 --> 0:12:25.080 have kind of been left in the dark as to 0:12:25.320 --> 0:12:29.280 what's going on in terms of the big national producers 0:12:29.720 --> 0:12:31.680 have the US, Well, first of all, why aren't we 0:12:31.679 --> 0:12:35.880 seeing prices fall? Well, I think it's not all that 0:12:36.000 --> 0:12:39.120 much oil that they're they're putting back on the market 0:12:39.200 --> 0:12:41.920 to UH and they kind of telegraphed this a little bit. 0:12:41.920 --> 0:12:44.440 We did see Brent kind of go up and down 0:12:44.480 --> 0:12:46.520 a bit as the meeting was going on and weeks 0:12:46.520 --> 0:12:49.600 were coming out. UM, but I think that in general, 0:12:49.880 --> 0:12:53.640 some of the global economic news is more positive these days, 0:12:53.640 --> 0:12:57.080 and so we're not seeing Brent react so much to 0:12:57.679 --> 0:13:00.400 the Opeque meeting. So in terms of the U. S. 0:13:00.400 --> 0:13:04.760 Shale producers, have they been disciplined and what does the 0:13:05.200 --> 0:13:07.880 what does the output look like? From them? Well, that's 0:13:07.880 --> 0:13:11.520 really interesting because production is really stabilized in the US 0:13:11.600 --> 0:13:14.800 around the ten point nine to eleven million barrel per 0:13:14.880 --> 0:13:18.360 day rate, and that's down from last year where they 0:13:18.360 --> 0:13:21.199 were producing thirty million barrels a day, and a lot 0:13:21.200 --> 0:13:25.079 of producers it's interesting. They responded to a survey from 0:13:25.080 --> 0:13:28.960 the Dallas Fed saying that they are very hesitant to 0:13:29.400 --> 0:13:32.480 put out to increase production, to drill more wells, even 0:13:32.559 --> 0:13:35.280 though at at w t I right now is around 0:13:35.320 --> 0:13:39.360 sixty dollars barrel, they could very profitably do so, but 0:13:39.400 --> 0:13:43.120 they're very hesitant. Both the constant kind of going back 0:13:43.160 --> 0:13:45.839 and forth from OPEC is giving the pause, but also 0:13:45.880 --> 0:13:49.440 there's a lot of concern about the Biden administration where 0:13:49.440 --> 0:13:54.000 they're going with these regulations on federal leasing and and 0:13:54.040 --> 0:13:56.080 so forth, and that that's really causing a lot of 0:13:56.120 --> 0:14:00.840 hesitancy among them and not really wanting to band production 0:14:00.920 --> 0:14:04.320 even though they could profitably do so. So I'm just 0:14:04.360 --> 0:14:06.600 looking at Brent crude. You know, recently I got up 0:14:06.600 --> 0:14:08.959 to around seventy two barrel, we've now pulled back to 0:14:09.080 --> 0:14:13.400 sixty three. Is that a function of maybe European reopening, 0:14:13.760 --> 0:14:17.320 you know, slower than maybe the market initially anticipated. Gives 0:14:17.320 --> 0:14:20.640 a sense of kind of what's driving the market right now, Well, 0:14:20.640 --> 0:14:23.840 the market has recently really been kind of fluctuating, going 0:14:23.880 --> 0:14:26.080 up and down a lot, and I do think that, um, 0:14:26.200 --> 0:14:29.520 there was a pullback. I think Brent kind of overdid 0:14:29.560 --> 0:14:32.880 itself and so there was a pullback in positioning h 0:14:32.960 --> 0:14:37.320 and so really the sixty three range stars barrel is 0:14:37.680 --> 0:14:41.320 probably a better place for it than into the mid seventies. 0:14:41.480 --> 0:14:45.880 But absolutely the information from Europe about further lockdowns and 0:14:45.920 --> 0:14:50.240 travel restrictions is definitely having a damper on prices, though 0:14:50.440 --> 0:14:53.240 there is a positive information coming out from the United 0:14:53.240 --> 0:14:57.160 States in terms of travel, uh that really should offset this. 0:14:58.720 --> 0:15:01.480 I want to ask you. You wrote a book Saudi inc. 0:15:01.840 --> 0:15:07.200 And you studied UM Middle East, Middle East Energy, and 0:15:07.280 --> 0:15:10.800 Middle East History, Prince, and you taught Middle East UM 0:15:11.040 --> 0:15:14.640 history as well at Jacksonville. What do you think about 0:15:14.680 --> 0:15:20.480 the Biden administration's approach to the kingdom. Will it change? Well, 0:15:20.480 --> 0:15:23.160 it's it's very interesting because they're calling it a reset, 0:15:23.240 --> 0:15:25.560 but really, if you look at what they're doing, it's 0:15:25.600 --> 0:15:29.200 not all that different from what the previous administration did. 0:15:29.240 --> 0:15:32.320 It's not all that different from from Trump's approach. They 0:15:32.360 --> 0:15:36.640 aren't taking a particularly different approach with Saudi Arabia. UM. 0:15:36.720 --> 0:15:39.760 You know, both Trump and the Biden administrations have been 0:15:39.880 --> 0:15:43.080 very specific about wanting to say, deal with the King 0:15:43.160 --> 0:15:45.600 of Saudi Arabia as opposed to the Crown Prince of 0:15:45.640 --> 0:15:49.360 Saudi Arabia, which definitely, UM, you know that that's that's 0:15:49.480 --> 0:15:51.760 very similar. I don't really see a whole lot of difference, 0:15:51.800 --> 0:15:56.400 other than very specifically in terms of the weaponry that 0:15:56.560 --> 0:15:59.440 was being sold that was being used in the Yemen 0:16:00.000 --> 0:16:02.440 more so so, I think there are some minor differences, 0:16:02.440 --> 0:16:05.200 but in general, they really do seem to be staying 0:16:05.240 --> 0:16:07.960 the course. But they won't will they speak with the 0:16:08.080 --> 0:16:11.760 king instead of MBS. I think that was intimated well. 0:16:12.280 --> 0:16:15.600 The Trump administration had the same the same line actually 0:16:15.840 --> 0:16:20.280 almost to the exact same uh wording that they that 0:16:20.360 --> 0:16:22.400 Trump would say, you know, I spoke to the king, 0:16:22.800 --> 0:16:25.320 to to King Salmon. I think, um, you know, they 0:16:25.360 --> 0:16:28.520 will have to deal with NBS at some point, but 0:16:28.880 --> 0:16:31.480 I do think there's a very strong desire to deal 0:16:31.560 --> 0:16:35.480 with the guy on top. All right, Ellen, I'm excited 0:16:35.480 --> 0:16:37.200 to dig into your book. So it was great that 0:16:37.240 --> 0:16:40.320 we had you on as well. Ellen wald Um, she 0:16:40.360 --> 0:16:43.600 wrote Saudi Inc. And she's a senior fellow at the 0:16:43.640 --> 0:16:50.600 Atlantic Council, President of Transversal Consulting. Now, let's bring in 0:16:50.600 --> 0:16:54.400 Timothy fire as the chairman of the Manufacturing Business Survey 0:16:54.440 --> 0:16:59.400 at the Institute for Supply Management and tim the US 0:16:59.440 --> 0:17:04.680 manufact xturing expansion was the fastest we've seen since three 0:17:05.840 --> 0:17:09.960 um was this expected, this kind of rebound, Well, you know, 0:17:10.040 --> 0:17:12.639 what a fantastic report. I don't think I expected anything 0:17:12.680 --> 0:17:14.280 this strong. I mean, the last time we saw p 0:17:14.520 --> 0:17:17.159 my number this strong, I was just starting my career 0:17:17.240 --> 0:17:20.879 forty years ago. So a really good number. Had seven 0:17:21.040 --> 0:17:24.439 or seven of the ten sub indectis all set modern 0:17:24.560 --> 0:17:27.520 day records, if not all time records. So I really 0:17:27.560 --> 0:17:30.200 led by the demand side new orders records. Since June 0:17:30.560 --> 0:17:34.520 four we had customer inventories that we're all time records, 0:17:34.560 --> 0:17:37.679 the lowest level ever, empty shells everywhere we had, and 0:17:37.720 --> 0:17:40.199 we ended up with the backlog at record lows at 0:17:40.200 --> 0:17:42.920 the sixty seven point five. So demand is kind of 0:17:43.000 --> 0:17:46.119 leading the way here, and manufacturing is leading the country 0:17:46.160 --> 0:17:49.320 out of this, you know, this bad situation. You know 0:17:49.320 --> 0:17:52.359 it's all systems go. We ended the quarter really well, Yeah, 0:17:52.359 --> 0:17:55.080 this is extraordinary. I like your comment him about manufacturing 0:17:55.200 --> 0:17:58.560 leading the way. We that's certainly been the case here. 0:17:58.920 --> 0:18:03.320 Is this a case of um our economy gearing up 0:18:03.359 --> 0:18:07.000 for what is expected to be a real reopening as 0:18:07.040 --> 0:18:09.119 we progress that the year, is this kind of priming 0:18:09.160 --> 0:18:13.080 the pump for expected demand? Well, you know we talked 0:18:13.160 --> 0:18:15.240 last year in the April May time from about a 0:18:15.280 --> 0:18:18.800 v Shape recovery. Manufacturing absolutely saw the shape recovery. We 0:18:18.880 --> 0:18:21.240 shut down in in April May, and we bounced back 0:18:21.240 --> 0:18:24.520 in July and we're fully running by August. So and 0:18:24.560 --> 0:18:27.480 we've continued to climb out since then. And it's it's pure, 0:18:27.520 --> 0:18:30.920 it's demand driven. We're still constrained by labor, not only 0:18:30.920 --> 0:18:33.840 had our paneless companies, but out their suppliers. We've got 0:18:33.880 --> 0:18:37.640 transportation constraints because of all the confusion and the expected 0:18:37.720 --> 0:18:39.800 phrase that has to occur to keep factories running. But 0:18:40.080 --> 0:18:42.760 I think we're into a pure demand driven expansion here 0:18:43.280 --> 0:18:45.040 where I don't really see any end in sight. And 0:18:45.119 --> 0:18:47.840 even when the new order levels start to ease, we've 0:18:47.840 --> 0:18:49.560 got to refill all this inventory. I mean, we have 0:18:49.600 --> 0:18:52.640 customer inventories way low, our own inventories are way low, 0:18:53.040 --> 0:18:54.560 and we got a bunch of backplot we have to 0:18:54.560 --> 0:18:57.440 burn off. So Q two looks really good. Two three, 0:18:57.520 --> 0:19:00.119 I would say this time, how difficult is it can be? 0:19:00.280 --> 0:19:04.000 Too catch up? I saw that um Ford has been 0:19:04.040 --> 0:19:06.720 idling some plants that make the F one fifty. My 0:19:06.800 --> 0:19:10.160 heart kind of skipped to beat there. Um They have 0:19:10.320 --> 0:19:12.960 a chip shortage that we all know about. But I mean, 0:19:12.960 --> 0:19:15.879 this is a product that people depend on. How much 0:19:15.880 --> 0:19:18.800 of a problem is it. Well, I think you're really 0:19:18.800 --> 0:19:21.280 gotta take your hats off with the manufacting people across 0:19:21.280 --> 0:19:24.840 the country. They're really struggling. They're working very hard. This 0:19:25.000 --> 0:19:28.000 is not an easy job, is blocking intact? When every 0:19:28.040 --> 0:19:31.040 minute of the day new things keep popping up, it's 0:19:31.080 --> 0:19:33.440 like whack them all. You to show up the next morning, 0:19:33.440 --> 0:19:35.600 you fix the problem. The next day, there's another problem 0:19:35.720 --> 0:19:38.480 that's going to continue for probably another four to six months. 0:19:39.240 --> 0:19:41.560 And they do a great job at it, so product 0:19:41.560 --> 0:19:43.880 continues to flow. I mean, we've gotten that customer inventory 0:19:43.920 --> 0:19:46.680 down way too low, But the manufacturing people are out 0:19:46.720 --> 0:19:48.880 there trying to get you what you need and they're 0:19:48.920 --> 0:19:52.400 pretty good at it. So just be a little patient, absolutely, Tim, 0:19:52.440 --> 0:19:56.560 and talk to us about the uh the transportation we've 0:19:56.600 --> 0:19:59.439 we've we've seen lots of stories about ports, backs up, 0:19:59.480 --> 0:20:03.800 backup at ports, rail traffic kind of sitting idle, uh, 0:20:03.880 --> 0:20:07.560 containers going back empty. Gives just give us a sense 0:20:07.600 --> 0:20:11.400 of kind of the transportation infrastructure and how that's impacting 0:20:11.440 --> 0:20:15.359 manufactured leaving canals aside. Yes, yeah right, yeah, I'll leave 0:20:15.400 --> 0:20:18.280 this so that's the European problem pripparently not a US problem, 0:20:18.280 --> 0:20:21.280 but generally, when the manufacturing economy starts to heat up, 0:20:21.320 --> 0:20:23.720 you see it first in transportation, and the reason is 0:20:23.840 --> 0:20:27.000 the factories need need product, but they can't wait a 0:20:27.000 --> 0:20:28.720 week for the product to show up in a full truck, 0:20:28.760 --> 0:20:30.919 so they tell the transporter go and pick up a 0:20:30.920 --> 0:20:32.879 half a truck. Well, that really means need to trucks 0:20:32.920 --> 0:20:35.360 for one delivery, and then it's just kind of compounds 0:20:35.440 --> 0:20:38.240 from there. Since the month of November, we've had increasing 0:20:38.280 --> 0:20:42.960 comments about transportation difficulties. We're now running somewhere around my 0:20:43.040 --> 0:20:46.760 general comments are transportation related, and they're up from last month, 0:20:47.040 --> 0:20:48.960 so we definitely have not peaked yet. It's going to 0:20:49.000 --> 0:20:52.399 continue into April, probably into May. The indications on the 0:20:52.440 --> 0:20:55.680 port issue. Initially we're around May or June. Now it's 0:20:55.680 --> 0:20:58.360 looking like maybe Midsummer. But that's all good. It's all 0:20:58.400 --> 0:21:01.160 it's all means that we have supply chain constraints because 0:21:01.200 --> 0:21:03.560 we have an abnormal amount of demand. That's all positive. 0:21:04.119 --> 0:21:07.520 What kind of pricing comments are you getting inflation? Well, 0:21:07.600 --> 0:21:09.879 we only had half a percent of our entire panel 0:21:09.880 --> 0:21:13.639 that said prices were down half, so that's that's like 0:21:13.720 --> 0:21:15.760 zero and this is like the third month of that, 0:21:15.920 --> 0:21:17.439 so we you know, we have some of them are 0:21:17.520 --> 0:21:21.840 reporting same. The steel prices continue to grow. The plastics, 0:21:22.240 --> 0:21:25.360 all the petro chemical and plastics areas really impacted by 0:21:25.359 --> 0:21:29.000 the weather that hit the Gulf coast back in February 0:21:29.040 --> 0:21:32.040 March about eighteen or some of my general comments were 0:21:32.280 --> 0:21:35.320 weather related back to that event, because it was so 0:21:35.359 --> 0:21:38.120 severe on the equipment of machinery that, uh, it takes 0:21:38.160 --> 0:21:40.919 a little while to repair. So prices are gonna continue 0:21:40.920 --> 0:21:44.360 to go up. Aluminiums skyrocketing, copper, brass, name things. As 0:21:44.359 --> 0:21:47.560