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Speaker 1: Good morning. It's one day, the eighth of January here

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Speaker 1: in London. This is the Blue Big Day baq At podcast.

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Speaker 1: I'm Caroline HIPKIF and.

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Speaker 2: I'm Stephen Carroll coming up today. More than one hundred

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Speaker 2: Boeing jets are taken out of service after a section

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Speaker 2: of a seven three seven Max nine plane blows off.

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Speaker 1: US congressional lead is announce a deal on government spending

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Speaker 1: worth almost one point six trillion dollars.

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Speaker 2: Plus why the transition to electric vehicles is threatening Europe's

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Speaker 2: car making powerhouses.

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Speaker 1: Let's start with a round up of our top stories.

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Speaker 2: Boeing seven three seven Max nine planes are being grounded

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Speaker 2: across the globe after an accident caused a gaping hole

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Speaker 2: in a brand new craft operated by Alaska Airlines at

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Speaker 2: sixteen thousand feet. This was the moment the pilot declared

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Speaker 2: an emergency landing wherein ten thousand I will need.

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Speaker 3: A return back to Parland.

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Speaker 2: Yes, we are emergency, we are declutsurized. I do need

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Speaker 2: to return back to We have on our company from passers.

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Speaker 4: Eight.

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Speaker 2: Now more than one hundred and seventy planes are out

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Speaker 2: of action while an investigation looks into the cause. Jennifer Homendi,

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Speaker 2: the head of America's National Transportation Safety Board, is leading

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Speaker 2: the inquiry.

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Speaker 5: We are very very fortunate here that this didn't end

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Speaker 5: up in something more tragic. No one was seated in

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Speaker 5: twenty six A and B where the where that door

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Speaker 5: plug is. The aircraft was around sixteen thousand feet and

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Speaker 5: only ten minutes out from the airport when the door blew.

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Speaker 2: As Amendi notes, nobody was seriously injured in the Alaska

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Speaker 2: Airlines incident. The grounding, though, is a major setback for

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Speaker 2: Boeing's CEO, Dave Calhoun, as he tries to stabilize the

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Speaker 2: company in the wake of manufacturing defects and costly repairs

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Speaker 2: in recent years.

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Speaker 1: Now to US politics, the US Congress has announced a

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Speaker 1: deal on spending for the current fiscal year. The proposed

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Speaker 1: one point five to nine trillion dollar cap makes a

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Speaker 1: US government shut down less likely when deadlines approach later

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Speaker 1: this month, but the bipartisan agreement could still be blocked

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Speaker 1: as lawmakers debate how to allocate those funds.

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Speaker 2: Days of travel Chaos and London have been avoided after

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Speaker 2: industrial action on the Tube was called off at the

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Speaker 2: last minute. Bloomberg's Teawa at a bio has the details.

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Speaker 6: The strike on the London's underground, threatened for the first

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Speaker 6: full working week of twenty twenty four, is off this

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Speaker 6: after RMT union made last minute progress in its discussions

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Speaker 6: with Transport for London on Sunday. The dispute is overpay,

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Speaker 6: with the union demanding more than the five percent pay

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Speaker 6: increase offered by TfL. According to RMT General Secretary Mick Lynch,

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Speaker 6: more funding for a deal has now been made available

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Speaker 6: and negotiations can quote take place on an improved basis.

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Speaker 6: London's Mayor Sadeke Khant welcome the news, saying it shows

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Speaker 6: what can be achieved through engagement with trade unions. In

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Speaker 6: a post on X in London, te what ad a

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Speaker 6: bio Bloomberg radio.

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Speaker 1: Elon Musk's drug use is worrying executives at TESLA and SpaceX.

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Speaker 1: According to a Wall Street Journal report, The article sites

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Speaker 1: unidentified people familiar with the matter, saying the billionaire has

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Speaker 1: used LSD, cocaine and ecstasy often. The news comes after

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Speaker 1: Bloomberg reported in twenty nineteen that the Pentagon reviewed the

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Speaker 1: federal security clearance tied to Musk's role as CEO of

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Speaker 1: Space Exploration Technologies after he smoked marijuana during a twenty

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Speaker 1: eighteen podcast appearance. Alex Spiro, an attorney for the billionaire,

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Speaker 1: told the journal that his client is regularly and randomly

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Speaker 1: drug tested at SpaceX and has never failed a test.

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Speaker 1: Musk did not respond to a request for comment from

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Speaker 1: Bloomberg News.

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Speaker 2: The US Secretary of Status warned that the Israel Hamas

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Speaker 2: war could quote easily become a wider conflict on his

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Speaker 2: fourth Middle East trip since the war broke out. Speaking

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Speaker 2: during a news conference in Doha, Anthony Blincoln said the

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Speaker 2: region is facing a moment of profound tension. Age remains

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Speaker 2: a focus for the US diplomat, who out of there

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Speaker 2: is a lack of basic provision for civilians in Gaza.

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Speaker 7: Too many partisan civilians are suffering from insufficient access to food,

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Speaker 7: to water, to medicine, to other essential supplies children most

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Speaker 7: of all. We continue to raise with Israel the need

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Speaker 7: to do everything possible to facilitate the provision of humanitarian

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Speaker 7: need to Gaza, and I will do so again when

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Speaker 7: I'm there later this week.

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Speaker 2: That's Anthony Blink and the US Secretary of State, qatar

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Speaker 2: as Prime Minister speaking alongside Blink and called for a

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Speaker 2: broader ceasefire that would end the violence.

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Speaker 1: China has attained the head of an overseas consulting firm,

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Speaker 1: saying that they are a British spy. The Ministry of

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Speaker 1: States Securities official we chat account said that the alleged

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Speaker 1: spy provided the UK state secrets and intelligence. Bloomberg has

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Speaker 1: learned that a recent purge of top military leaders was

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Speaker 1: an attempt by President she to prepare on forces for

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Speaker 1: combat Eurasia groups. China Managing director Rick Waters says that

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Speaker 1: that might actually be a positive.

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Speaker 3: China's lack of military readiness kind of underscore is a

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Speaker 3: key point here. I don't think we're on the verge

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Speaker 3: of a fire with Taiwan. I think it's just more

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Speaker 3: of what Beijing has been doing for a while now.

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Speaker 1: For Waters, he expects coercion and soft power to be

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Speaker 1: China's tools and engaging with Taiwan. In another side of

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Speaker 1: the country's heightened focus on national security, China also issued

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Speaker 1: fresh sanctions on five US defense industry companies. Now in

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Speaker 1: a moment, we'll be getting the latest on the investigation

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Speaker 1: into that midair incident aboard a Boeing airplane. Pretty terrifying

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Speaker 1: for the passengers on board. Fortunately nobody injured, but obviously

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Speaker 1: this leading to well an enormous event really for Boeing

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Speaker 1: and a full plane for aircraft carriers for airlines around

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Speaker 1: the world. We'll talk about that story in a moment.

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Speaker 1: But something else that caught on right today.

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Speaker 2: Yeah, this is a survey by Bloomberg Intelligence finding that

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Speaker 2: workers in Hong Kong say they'd need a six percent

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Speaker 2: pay rise to give up hybrid working arrangements. This is

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Speaker 2: part of a survey carried out that also looks at

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Speaker 2: hot that might mean for the commercial re estate sector

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Speaker 2: and particularly in terms of rents, Bloomberg Intelligence saying that

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Speaker 2: it could lead to rents falling by about six percent

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Speaker 2: and twenty twenty four. Hong Kong at the moment has

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Speaker 2: a record over sixteen percent of office space is vacant

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Speaker 2: at the end of last year, so that's according to CBRE.

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Speaker 2: This has residents of course for workers elsewhere as well.

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Speaker 2: Here in London, for example, a December survey from BI

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Speaker 2: said that London's employers may need to return some form

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Speaker 2: of working from home or pay staff more because of

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Speaker 2: the battle for talent and amazing three quarters of employees

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Speaker 2: surveyed by Bloomberg Intelligence. So they either change jobs to

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Speaker 2: secure flexible working or ask for a pay rise. So

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Speaker 2: this is still something very high on workers agendas as

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Speaker 2: we consider how that might affect the broader commercial restate market.

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Speaker 1: Yeah, it's still very bullish, isn't it from employees? I

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Speaker 1: suppose given the high employment rate in the UK. Perhaps

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Speaker 1: you know the power that employees have. Is there? Okay,

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Speaker 1: interesting stories and on the Blueberg terminal.

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Speaker 2: Let's turn to the latest from the Middle East Now

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Speaker 2: and the US Secretary of State's tour of the region.

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Speaker 2: Anthony Blincoln says the war in Gaza could easily spill

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Speaker 2: over into a full blown regional conflict, amid warnings from

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Speaker 2: Israel that it could escalate its conflict with Hasbula and Lebanon.

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Speaker 2: OURMEA News director Roslind Malson joins us with the latest

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Speaker 2: now ras Good morning, Anthony Blincoln trying to contain the

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Speaker 2: rising tangions across the Middle East. How serious are the

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Speaker 2: warnings that he's giving.

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Speaker 8: Well, these are obviously very serious comments from Anthony Blincoln

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Speaker 8: on this trip, and he's been echoing the concerns for

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Speaker 8: weeks now that this could yet spill over that so

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Speaker 8: far has not happened, but it does remain a risk,

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Speaker 8: and he's been taking the temperature around the regionalist slidest trip.

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Speaker 8: He's been everywhere Turkey, Kata, Jordan, Sally rabah Ue and

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Speaker 8: getting the mood from those places, and also the latest

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Speaker 8: thinking from Israel about how determined Israel is to continue

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Speaker 8: with its war in Gaza. So far, again that's not

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Speaker 8: spiraled outward. We do have hu Thees attacking shipping in

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Speaker 8: the Red Sea, but that's sort of a lower level

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Speaker 8: activity despite the pick up in it, it's mostly sort

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Speaker 8: of disruption around shipping, causing shipping to divert. We had

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Speaker 8: Hezbolah again, another Iranian proxy unleashing rocket attacks from Lebanon

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Speaker 8: into the north of Israel, but still not using its

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Speaker 8: full arsenal despite the rising rhetoric. There's a sense in

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Speaker 8: that really that these Iranian proxies at least to appreciate

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Speaker 8: the risk to themselves if it really blows up further.

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Speaker 8: So obviously, you know, with these conflicts there's the risk

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Speaker 8: of something unintended happening for starters, and that has to

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Speaker 8: remain a concern, but so far it's not been happening.

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Speaker 1: Yeah, absolutely, In terms though, of the latest rhetoric from

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Speaker 1: Israel around escalation with Hazel All. What do we know

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Speaker 1: about Israeli thinking.

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Speaker 8: On this, Well, we have those comments from the Prime

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Speaker 8: Minister Benjamin Netanya, who's saying that Israel's determined to enable

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Speaker 8: residents who live near the border with Lebanon to return

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Speaker 8: to their homes. If we can, we will do that

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Speaker 8: through diplomacy, he said. If not, we'll act in other ways. That's,

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Speaker 8: of course, after the resumption of some of those rockets

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Speaker 8: from Hesbelah into northern Israel, because of course they blame

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Speaker 8: Israel for a drone strike on boy Route that killed

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Speaker 8: a senior leader of Hamas, and that was one of

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Speaker 8: the largest rocket attacks from Hesbela so far. But they're

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Speaker 8: certainly not using their arsenal, which is sort of the

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Speaker 8: high end missiles and someone. So you can see there

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Speaker 8: that you know, Israel is warning Lebanon and really Hasbellah further.

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Speaker 8: But we're not seeing that spiral in the way that

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Speaker 8: some are concerned it would. We're also seeing, of course,

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Speaker 8: increase violence in the West Bank, which is another challenge

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Speaker 8: for the Israelis. Reports from Iranian media that Israeli forces

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Speaker 8: killed six Palestinians and a drone strike there. So you've

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Speaker 8: got sort of three fronts in a way. For Israel,

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Speaker 8: You've got Gaza, the West Bank, and Lebanon to contend with.

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Speaker 2: At the same time, the attacks on the ships and

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Speaker 2: the Red Sea are presenting another dilemma for the United

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Speaker 2: States thinking about anstley Blincoln's tour of the region. What

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Speaker 2: is the likelihood of further intervention from the US on

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Speaker 2: that issue.

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Speaker 8: Well, we know the US is considering its options there.

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Speaker 8: They've got this coalition to protect shipping, but the attacks

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Speaker 8: are continuing and major shippers are saying they have to

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Speaker 8: skirt the area, which means significant diversions and delays as

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Speaker 8: a result, and that's adding at least to premium to

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Speaker 8: market pricing for things like oil, and so for the US,

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Speaker 8: the consideration is whether just to continue with that coalition

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Speaker 8: and hope things fade off, or whether they should conduct

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Speaker 8: targeted strikes into Yemen or something further I get US

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Speaker 8: troops back on the ground in Yemen, or how to

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Speaker 8: pressure the Huthi is really to stay and down and

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Speaker 8: none of those are particularly good options for the US.

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Speaker 8: What they do is pushing things into that wider conflagration

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Speaker 8: that they've been warning about or during the US in

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Speaker 8: more militarily than it wants to be right now. So

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Speaker 8: there is the prospect of some sort of further intervention,

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Speaker 8: although none of those options, again are particularly good for

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Speaker 8: the US.

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Speaker 1: Roz, thank you so much for being with us this morning.

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Speaker 1: That is Bloomberg's EMEA News director Roslyn Matheson Well.

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Speaker 2: Investigations are continuing into an incident on a Boeing seven

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Speaker 2: three seven Max nine plane on Friday, which saw a

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Speaker 2: section of the fuselage blow out during a flight. In

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Speaker 2: the United States. Airlines and many parts of the world

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Speaker 2: have withdrawn the model from service pending safety checks. The

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Speaker 2: US Safety Agency has been giving an update on their

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Speaker 2: investigations this morning, saying that a key piece of that

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Speaker 2: Alaska Airlines plane has been discovered. Let's get the latest

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Speaker 2: from our Asia aviation reporter Danny Lee. Danny, great to

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Speaker 2: have you with us on the program. What have we

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Speaker 2: heard from the NTSB about this incident involving the Alaska

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Speaker 2: Airlines flight.

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Speaker 4: So from the US Federal Safety Investigators, the Air Safety Investigators,

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Speaker 4: the latest development in the last how is that they

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Speaker 4: have found the key missing piece of evidence, the door

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Speaker 4: plug that was blown out of this Alaska Airlines flight

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Speaker 4: one eight two planes. So it's critical because they can

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Speaker 4: start to glean clues of the coming days, of any deformities,

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Speaker 4: any stress in the particular door and around the aircraft,

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Speaker 4: so they can start to build a body of evidence

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Speaker 4: into what exactly happened. But there are still a long

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Speaker 4: way to go for investigators because they want to look

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Speaker 4: at a whole range of factors, whether it be to

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Speaker 4: do with the door, inside the aircraft, the pressurization system.

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Speaker 4: We also actually heard that this pressurization system actually had

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Speaker 4: i want to say, malfunctioned over three previous flights, and

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Speaker 4: so Alaska Airlines did take steps to mitigate this, but

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Speaker 4: it was an auto pressurization fail light which had been

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Speaker 4: turning on, had been checked and so therefore they couldn't

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Speaker 4: find anything Alaska Airlines, so they were able to put

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Speaker 4: the plane back into service.

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Speaker 1: Okay. So then what has been the response from regulators

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Speaker 1: and airlines to all of this?

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Speaker 4: So for the regulators, what we did see over the

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Speaker 4: weekend was fairly swift. From the US Federal Aviation Administration.

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Speaker 4: They have grounded one hundred and seventy one of two

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Speaker 4: hundred and fifteen Boeing seventy seven Max nine jets, and

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Speaker 4: with other regulators such as from China to making an

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Speaker 4: emergency meeting. You had India also instructing checks and then

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Speaker 4: into US, into Europe and in the UK. They all

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Speaker 4: noted and accepted what the US FAA has said. Fortunately

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Speaker 4: for all these jurisdictions they don't operate the Max nine

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Speaker 4: jets in their part of the world.

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Speaker 2: How damaging is all of this for Bowing.

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Speaker 4: Yeah, for Boeing, this is a reputational issue once again

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Speaker 4: because after the global grounding in twenty nineteen, which was

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Speaker 4: off the back of two fatal crashes, we have seen

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Speaker 4: in the last several months manufacturing and quality control lapses

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Speaker 4: which have impacted Boeing, and that stems from one of

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Speaker 4: its key supplies, in particular Spirit Aerosystems, and so therefore

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Speaker 4: seeing something like this happening again and to the point,

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Speaker 4: we have actually not heard from Spirit yet since this

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Speaker 4: accident took place, So it'd be really key to hear

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Speaker 4: from the likes of them, the key suppliers to Boeing

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Speaker 4: about potentially their role in all of this, and clearly

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Speaker 4: Foreboeing a lot to think about when it comes to

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Speaker 4: damage limitation and also just the fallout to the reputation.

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Speaker 1: Absolutely, I mean the images you know, so circulating around

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Speaker 1: the world of the damage and the sort of passengers

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Speaker 1: on board. What do you think the next steps might

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Speaker 1: be then that we should be watching out for in

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Speaker 1: this story.

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Speaker 4: Yeah, for Wowing, it's their communication to the airlines about

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Speaker 4: what they can do to make checks to their aircraft,

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Speaker 4: and clearly that's going to be happening in conjunction with

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Speaker 4: the US FAA, who actually earliest said in the Asia

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Speaker 4: hours today that the grounding of the seventy seven next nine,

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Speaker 4: they would not allow it to fly again until they

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Speaker 4: know it's absolutely safe. So clearly the regulator in the

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Speaker 4: US has taken a very firm and decisive view. But

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Speaker 4: it's the communication about getting that plane back on in

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Speaker 4: the air, because as long as this plane is on

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Speaker 4: the ground, for particularly the airlines like Alaska and United,

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Speaker 4: there will be disruption to flight schedules that will continue

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Speaker 4: to happen for days, maybe weeks to come.

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Speaker 2: Okay, Danny Lee, Asia Aviation Reporter, thank you very much

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Speaker 2: for joining us with the latest on that story this morning.

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Speaker 1: Yeah, we'll continue to follow that now let's move on

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Speaker 1: and talk about a story here in Europe. The Czech

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Speaker 1: Republic and Slovakia, the former Czechoslovakia, make more cars per

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Speaker 1: capita than anywhere else in the world. But now the

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Speaker 1: transition to electric vehicles is putting a vast supply chain

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Speaker 1: of hundreds of companies across these two countries in jeopardy.

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Speaker 1: Joining us how to discuss from Prague is Bloomberg's senior

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Speaker 1: reporter for Economy and Government, Andrea Duditch. Thank you so

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Speaker 1: much for being with us. This is a long piece

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Speaker 1: that you've done, Andrea and colleagues. How dependent are these

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Speaker 1: two economies then on car making?

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Speaker 9: The two economies are hugely dependent on car making. Both

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Speaker 9: Czech Republic and Slovakia have attracted a number of investments

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Speaker 9: into the car industry since the nineteen nineties. The industry

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Speaker 9: now it counts for at least a quarter of experts

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Speaker 9: in both countries, in the case of Slovakia for as

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Speaker 9: much as forty percent. It's been the main driver of

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Speaker 9: foreign investments. Companies such as Volkswagen or Kia have invested

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Speaker 9: billions of years here and created thousands of jobs here.

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Speaker 9: That trend has continued and with Volvo now being the

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Speaker 9: company that's building an electric plant in the Slovakia.

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Speaker 2: Andrea, how much is the transition to electric vehicles I

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Speaker 2: suppose upsetting that trajectory with the competition coming from other places.

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Speaker 9: A lot of that is still to be seen, but

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Speaker 9: there are some risks that are already showing. The main

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Speaker 9: concern is coming from the vast network of autoparts makers

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Speaker 9: who are key to the industry. Some have already started

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Speaker 9: to lay off staff and others have warned that they

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Speaker 9: will not be able to keep all their workers in

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Speaker 9: the years to come. This could put pressure on the

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Speaker 9: job was rade, especially in regions away from the capital cities.

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Speaker 9: According to one study, in the worst case scenario for Slovakia,

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Speaker 9: as many as four point five percent of jobs in

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Speaker 9: the industry could disappear with the switch to evs.

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Speaker 1: So then what are the big makers saying. I mean,

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Speaker 1: as you mentioned, if they've invested so much.

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Speaker 9: The automakers seem to be well prepared and way ahead

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Speaker 9: of the game. Volkswagen or Volvo are heavily investing to

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Speaker 9: make this a smooth switch switch, and for example, the

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Speaker 9: Czech based got A Auto, which is part of Folkswagen

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Speaker 9: Group plans to invest five queen six billion euros by

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Speaker 9: twenty twenty seven, so the worry the problem is probably

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Speaker 9: more going to come from the partsmakers and not the

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Speaker 9: automakers themselves.

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Speaker 2: How much are the Czech Republic and Slovakia preparing for

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Speaker 2: this transition or adapting to it?

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Speaker 9: Both countries are trying to prepare as much as they can.

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Speaker 9: The Czech Prime Minister, for example, has made this phenomenon

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Speaker 9: his priority. Both countries are also trying to attract potential

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Speaker 9: investors to build battery plans here, but neither is anywhere

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Speaker 9: near Hungary and Poland, the neighboring countries of Slovakia and

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Speaker 9: the Czech Republic which have made I managed to track

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Speaker 9: the number of battery plans here.

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