WEBVTT - Surveillance: Lighthizer Is The Serious Negotiator, Alden Says 0:00:00.080 --> 0:00:12.960 Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm term Keene 0:00:13.480 --> 0:00:16.960 Jay Lee. We bring you insight from the best in economics, finance, 0:00:17.040 --> 0:00:23.520 investment and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:31.920 Bloomberg dot Com and of course on the Bloomberg And 0:00:32.000 --> 0:00:34.320 pleased to say joining us here in the studio is 0:00:34.360 --> 0:00:38.639 in Shepherdson Pantheon macro Economics, Chief Economist. And we've got 0:00:38.640 --> 0:00:40.479 to say a quick word on the Prime Minister in 0:00:40.479 --> 0:00:43.400 the UK as she delivers her speech um at the 0:00:43.440 --> 0:00:45.720 Conservative Annual Party Conference with a little bit of a 0:00:45.800 --> 0:00:49.440 dance to begin to app a dancing queen. Um, what 0:00:49.479 --> 0:00:51.320 are we expecting from the Prime Minister? And are you 0:00:51.360 --> 0:00:54.320 expecting anything that really changes anything at all? I think 0:00:54.320 --> 0:00:56.520 the speech will be undering the condensity here, but the 0:00:56.520 --> 0:00:58.840 speech essentially is going to be a please don't find 0:00:58.880 --> 0:01:02.480 me um that really she has no great vision. She 0:01:02.640 --> 0:01:06.080 just wants to remain as prime minister for the country. 0:01:06.080 --> 0:01:08.200 She's speaking to the part she's speaking to a few 0:01:08.200 --> 0:01:10.240 thousand old white people. I mean, that is the Conservative 0:01:10.240 --> 0:01:14.360 Party and it's so unrepresentative, but they're the ones. Ultimately 0:01:14.400 --> 0:01:16.000 you determine whether she gets to keep the job. She 0:01:16.000 --> 0:01:18.200 seems to want the job very badly. I can't think why. 0:01:18.240 --> 0:01:19.920 I think it's the worst job in the world, but 0:01:20.000 --> 0:01:22.399 she wants it very badly. Other people wanted as well. 0:01:23.000 --> 0:01:25.400 In and in the meantime, of course, Britain is dealing 0:01:25.400 --> 0:01:28.520 with the chaos and confusion of Brexit because the government 0:01:28.560 --> 0:01:30.840 can't make its mind up about what it wants, and 0:01:30.880 --> 0:01:33.920 the EU is just standing watching all this in astonishment. 0:01:33.959 --> 0:01:35.760 There is only one of the man I'm less excited 0:01:35.760 --> 0:01:37.800 about this speech than than you and I Ian, and 0:01:37.840 --> 0:01:43.800 it's Tom King. Um, Tom very abrupt. I mean we 0:01:43.800 --> 0:01:48.160 we usually don't talk like that about our politics in America. Um. 0:01:48.600 --> 0:01:50.400 When I look at the see and I go back 0:01:50.440 --> 0:01:55.440 to Barry Ikon Green of Berkeley, who was heated about 0:01:55.520 --> 0:01:59.200 the negative ramifications of Brexit, and he also said for 0:01:59.400 --> 0:02:02.880 London as well, do you share even a tinge of 0:02:02.920 --> 0:02:07.480 Professor I Congreen's concerns? Oh? Absolutely, it's it's terrifying. You 0:02:07.480 --> 0:02:10.440 know that the British economy over the last forty years, 0:02:10.480 --> 0:02:14.800 as in reinvented itself as a services economy, and and 0:02:14.919 --> 0:02:19.040 services aren't covered by the Canada Agreement that that keeps 0:02:19.040 --> 0:02:21.720 being talked about. And the danger is that that the 0:02:21.800 --> 0:02:23.840 UK services sector is left out in the cold in 0:02:23.880 --> 0:02:25.880 the event of a of a Brexit without a proper deal, 0:02:26.360 --> 0:02:29.280 which would be an absolute disaster. So I lose a 0:02:29.280 --> 0:02:31.120 lot of sleep over this. But let me saying. I 0:02:31.160 --> 0:02:33.840 have to say, spending some time in the city last week, 0:02:33.919 --> 0:02:36.639 I had a lot more people concerned about socialist Corbin 0:02:36.760 --> 0:02:39.880 taking over the government than they were about Brexit. Yeah, 0:02:39.880 --> 0:02:42.359 the people you're talking to probably weren't massively representative of 0:02:42.360 --> 0:02:44.200 the country as a whole, to be fair, now they've 0:02:44.200 --> 0:02:48.400 represented the city, not the country. Indeed, indeed, the country 0:02:48.480 --> 0:02:51.239 has had ten years of conservative austerity for no reason 0:02:51.280 --> 0:02:54.240 other than that they were the religious dogma, and I 0:02:54.280 --> 0:02:55.920 think in the country as a whole people are kind 0:02:55.960 --> 0:02:57.760 of sick of it. Which is not to say that 0:02:57.800 --> 0:03:01.800 what Corbin is offering is a seriously attractive alternative, but 0:03:02.080 --> 0:03:04.079 there's a lot of people would like something different, that's 0:03:04.080 --> 0:03:07.320 for sure. Can I guess a sophisticated country do whatever 0:03:07.360 --> 0:03:09.880 you like. This is your shot. We're watching folks on 0:03:10.000 --> 0:03:14.040 Bloomberg Radio the television feet you know, you make a 0:03:14.080 --> 0:03:17.239 joke about Prime Minister make coming out and dancing all 0:03:17.280 --> 0:03:21.160 I did was seeing within the obligatory clapping the knives up. 0:03:21.639 --> 0:03:24.840 Is it like the crown? Is it like McMillan hates 0:03:24.919 --> 0:03:30.000 Churchill and people? It doesn't, folks, It doesn't look like America. 0:03:30.280 --> 0:03:33.600 It's different. You know, we hate you Mr Trump, or 0:03:33.639 --> 0:03:36.440 we love you Mr Trump. There's a British way here. 0:03:36.480 --> 0:03:39.760 That was frankly, just like in the first and second season, 0:03:40.000 --> 0:03:41.880 and all a lot of people in that in that room, 0:03:41.960 --> 0:03:43.640 and a lot of those people who were smiling and 0:03:43.680 --> 0:03:46.640 clapping because they're on TV would very much like somebody 0:03:46.640 --> 0:03:49.040 else to be prime minister. But you know, it's not 0:03:49.120 --> 0:03:52.240 like an American political convention, which is a stage managed 0:03:52.320 --> 0:03:55.680 to cheer leader event. This is this is real politics, 0:03:55.920 --> 0:03:58.320 read and tooth and claw live on stage. John. How 0:03:58.360 --> 0:04:00.960 about those Yankees? How about those Thankees? Big game tonight? 0:04:01.080 --> 0:04:04.680 Is that right? I believe so? Yes? Against Oakland? Yes, 0:04:05.400 --> 0:04:08.560 at Yankee Stadium. Yes, I look forward to that. Okay, 0:04:08.720 --> 0:04:11.440 let's go back to England. Let's get away from Brexit, 0:04:11.520 --> 0:04:13.760 Let's get to em. Why don't you we set the show. 0:04:14.520 --> 0:04:16.840 We set the show. Good morning, good morning to our 0:04:16.880 --> 0:04:20.680 audience worldwide from New York City. Forget the previous five minutes, 0:04:21.000 --> 0:04:23.719 let's do Brexit. No, we're not going to do that. Ian. 0:04:23.800 --> 0:04:26.200 Let's talk about what's handing an emerging markets, because it's 0:04:26.279 --> 0:04:30.599 quite interesting. Turkish inflation is surging, the Indian rupee is 0:04:30.600 --> 0:04:33.400 a record low. The pockets of pain is still there. 0:04:33.440 --> 0:04:35.680 Walk me through what you're looking at at the moment. Well, 0:04:35.720 --> 0:04:38.120 these pockets are pain aren't going to go away anytime soon. 0:04:38.200 --> 0:04:39.400 And I think for quite a lot of these e 0:04:39.640 --> 0:04:42.680 m s Turkey obviously as the poster child, but but 0:04:42.760 --> 0:04:47.200 also India, increasingly South Africa, Indonesia, countries that have got EM, 0:04:47.240 --> 0:04:50.760 countries that have got inflation problems, that have got current 0:04:50.800 --> 0:04:53.680 account deficits, that are reliant on oil imports. Because I 0:04:53.880 --> 0:04:56.440 was now becoming a big deal everyone's talking about these 0:04:56.440 --> 0:04:59.040 countries are vulnerable anyway. Then you've got the FED raising 0:04:59.120 --> 0:05:01.760 rates and giving all these investors an alternative. They don't 0:05:01.760 --> 0:05:03.840 have to put their money into EM to chase yield anymore. 0:05:03.960 --> 0:05:06.520 They can they can be more inclined to be at home. 0:05:07.000 --> 0:05:09.440 So what happens is that the pressure on EM builds 0:05:09.480 --> 0:05:11.800 as the FED as raising rates, and the pressure builds 0:05:11.839 --> 0:05:14.760 in proportion to how dim a view markets take of 0:05:14.760 --> 0:05:17.080 the way you've been conducting the economy. So in Turkey, 0:05:17.080 --> 0:05:19.720 we've got an authoritarian leader, we've got a guy who 0:05:19.760 --> 0:05:22.000 wants to run honittory policy as well as the country. 0:05:22.279 --> 0:05:24.680 We've got an inflation problem, we've got a current account deficit. 0:05:24.800 --> 0:05:27.039 It's an awful mess, but it's not going to go 0:05:27.120 --> 0:05:29.599 away and the store stop. You'd have to assume the 0:05:29.600 --> 0:05:32.880 oil story just exacerbates the current accounts deficit issues in 0:05:32.920 --> 0:05:36.320 places like Turkey and like India. Absolutely, if you are 0:05:36.360 --> 0:05:39.680 an oil importer, substantial oil importer, this is about as 0:05:39.800 --> 0:05:41.680 as bad as things get. You know, you've got interest 0:05:41.800 --> 0:05:44.920 rate pressure from the Fed, you've got pressure from from 0:05:44.960 --> 0:05:47.280 oil now, which you know, six months ago we weren't 0:05:47.279 --> 0:05:49.680 really worrying about. And now suddenly brents at eighty five, 0:05:49.839 --> 0:05:51.840 w t I is at seventy five. And this is 0:05:51.880 --> 0:05:54.640 a really big problem for these countries that that are 0:05:54.680 --> 0:05:57.200 already running these current account deficits. And it just makes 0:05:57.279 --> 0:06:00.800 markets more inclined to run away, and it becomes self 0:06:01.400 --> 0:06:04.440 some interesting relative trades within emerging markets. I've heard a 0:06:04.480 --> 0:06:08.279 lot of people starting to talk about long Russia short 0:06:08.400 --> 0:06:10.800 Turkey off the back of this crude story. Does that 0:06:10.839 --> 0:06:12.839 kind of make sense to you. I mean from a 0:06:12.839 --> 0:06:14.839 trading proposition, it does. I mean, you know, from a 0:06:14.839 --> 0:06:17.600 big picture perspective, Russia doesn't really have an economy. Um, 0:06:17.640 --> 0:06:21.039 you know, Russia's Russia is a small economy, but it 0:06:21.080 --> 0:06:23.039 does have a lot of oil and a lot of gas. 0:06:23.080 --> 0:06:25.080 So yes, I mean that makes perfect sense to me 0:06:25.080 --> 0:06:27.000 as an entra em trade. And of course there are 0:06:27.120 --> 0:06:29.000 there are winners and losers and other em Some of 0:06:29.000 --> 0:06:32.159 the Latin American ems are in are in rather better 0:06:32.200 --> 0:06:36.159 shape obviously Argentina, Venezuela accepted, but they're in better shape 0:06:36.160 --> 0:06:39.560 than than the Turkeys and South Africa's and India's. So 0:06:39.640 --> 0:06:41.559 it's a it's a shifting game, and it does depend 0:06:41.680 --> 0:06:44.200 enormously on exactly where oil prices go. You know, if 0:06:44.240 --> 0:06:47.040 oil continues to rise and Brent gets up to say, 0:06:47.080 --> 0:06:49.080 and it hits the hundred dollar mark, then you're looking 0:06:49.120 --> 0:06:52.040 at much more widespread em pain and much more currency weakness, 0:06:52.279 --> 0:06:54.479 and you'll get you'll get markets calling on the Fed 0:06:54.520 --> 0:06:56.880 to take a breather. The problem is looking at the 0:06:56.920 --> 0:06:59.160 three point nine domestic unemployment rate, I don't think J. 0:06:59.279 --> 0:07:01.599 Powell can afford. I'm just wondering where the circuit breaker 0:07:01.680 --> 0:07:03.560 comes from because the markets might call on the FED 0:07:03.600 --> 0:07:05.680 to take a breather at some point, maybe next year. 0:07:05.960 --> 0:07:07.760 The President of the the United States is staging a bit 0:07:07.760 --> 0:07:10.680 of an intervention with the with the saudis ramping up 0:07:10.680 --> 0:07:13.120 the pressure again in the last twenty four hours. Do 0:07:13.120 --> 0:07:15.560 you see any response coming from OPEC and Saudi Arabia 0:07:15.600 --> 0:07:18.440 to this, Well not really. I mean then they're not 0:07:18.480 --> 0:07:20.000 the swing players that they used to be in the 0:07:20.080 --> 0:07:22.360 US is not the swing player. But the bizarre thing 0:07:22.440 --> 0:07:25.240 is that actually the US is now an economy which 0:07:25.280 --> 0:07:28.920 which benefits from higher oil prices net because although it 0:07:29.000 --> 0:07:31.720 raises gas prices, which consumers don't like, but it raises 0:07:31.760 --> 0:07:34.760 capital spending the oil business faster. So just in the 0:07:34.840 --> 0:07:37.960 last few years, the way you think you need to 0:07:38.000 --> 0:07:39.760 think about the U S and oil prices has flipped 0:07:39.760 --> 0:07:42.240 add degrees. He used to be we consume a lot 0:07:42.240 --> 0:07:44.320 of oil, the price goes up, it's bad. But that's 0:07:44.360 --> 0:07:46.200 not the case anymore. Now We're still consume it, but 0:07:46.200 --> 0:07:48.320 we produced an awful lot of it, and we've got 0:07:48.320 --> 0:07:51.320 this whole economic infrastructure that's built around oil extraction. The 0:07:51.320 --> 0:07:54.640 shale business is enormous and growing very rapidly still, So 0:07:54.680 --> 0:07:57.360 now higher oil prices actually are a plus for growth. 0:07:57.480 --> 0:08:00.360 What's the ramifications of a blended dollar in X like 0:08:00.480 --> 0:08:03.440 d x Y breaks out the new highs in this 0:08:03.480 --> 0:08:07.800 case ninety four to present ninety five point five, And 0:08:07.800 --> 0:08:11.000 if we get a ninety seven print and dollars stronger dollar, 0:08:11.840 --> 0:08:14.560 I mean, what does the president do? What does chairman 0:08:14.640 --> 0:08:16.560 to Paul do? You're gonna tell me they're going to 0:08:16.600 --> 0:08:18.760 ignore it. I don't buy it. Ah, Well, if depend 0:08:18.800 --> 0:08:20.200 how how it goes. You know, quite a lot of 0:08:20.240 --> 0:08:22.400 the CPI is sensitive to the dollar. The goods compons 0:08:22.480 --> 0:08:25.000 the CPI are sensitive to the dollar, and the things 0:08:25.000 --> 0:08:28.600 like imported clothing and furniture and TVs and gadgets are 0:08:28.640 --> 0:08:31.880 all quite dollar sensitive. So as sustained further uplifting the 0:08:31.880 --> 0:08:35.000 dollar from here, would other things equaled mean a bit 0:08:35.040 --> 0:08:38.200 lower domestic inflation. And that might be what gives the 0:08:38.200 --> 0:08:41.520 Fed the ability to pause, provided that at the time 0:08:41.559 --> 0:08:43.800 this is happening, the labor market isn't scaring the pants, 0:08:43.840 --> 0:08:46.880 which I'm sorry, dovetails right into EM weakness, Joan Ferrell. 0:08:47.240 --> 0:08:51.360 Dovetails right into EM weakness and into you know, maybe 0:08:51.400 --> 0:08:54.920 oil dynamics as well, yeah, there's a toxic mix right now, 0:08:55.160 --> 0:08:58.640 higher crude, stronger dollar, toxic mix and yields just kind 0:08:58.640 --> 0:09:01.839 of bleeding heart slowly lovely. I refused to play Abba, 0:09:02.200 --> 0:09:05.200 I did Williams. Come on, come on, come on, come 0:09:05.200 --> 0:09:07.680 on a bit of abber dancing Queen, just to set 0:09:07.760 --> 0:09:10.520 up a Brexit conversation later on. You know you want 0:09:10.559 --> 0:09:12.920 to do it? You do. I can see your smiling 0:09:12.960 --> 0:09:16.640 Tom smiling therapy, can see that you wanted to five 0:09:16.720 --> 0:09:21.679 step surveillance therapy. Who's put you through therapy? Are you kid? 0:09:21.760 --> 0:09:26.040 They got a car from Washington yesterday, even trumpell big 0:09:26.040 --> 0:09:30.480 trouble expenses. No, no, well that's a separate story, was 0:09:30.520 --> 0:09:34.400 the caller? Now this came from you know, come on, people, 0:09:35.280 --> 0:09:37.720 just don't just like the radio. You'll tell me that 0:09:38.080 --> 0:09:41.880 the I m F aren't happy with you. Yeah, with us, 0:09:41.720 --> 0:09:57.959 m c A everybody, Bloomberg's very own Annah Redwards joining us. Now, 0:09:58.200 --> 0:10:01.640 Anna did you dance? Did I? When dancing Queen came 0:10:01.679 --> 0:10:05.800 I, I I just stood up and and sort of threw 0:10:05.840 --> 0:10:09.080 my arms in the air, And it was a spontaneous 0:10:09.200 --> 0:10:13.320 response to her phenomenal visual experience, guessing that's not what 0:10:13.440 --> 0:10:16.680 happened today in Birmingham, and I walked me through who 0:10:16.720 --> 0:10:19.200 this speech was for, who the audience was, and the 0:10:19.200 --> 0:10:21.960 big takeaways in the last hour. Well, as always, she's 0:10:21.960 --> 0:10:24.280 talking to the preaching to the converted, but she does 0:10:24.320 --> 0:10:26.199 have a divided party, so she did have to win 0:10:26.240 --> 0:10:28.600 the room over to some extent. She had a thing 0:10:28.679 --> 0:10:30.440 to do today, didn't she, And that was to rally 0:10:30.800 --> 0:10:33.240 the troops behind her vision of Brexit because she'd been 0:10:33.320 --> 0:10:37.440 challenged yesterday very directly by her former Foreign Secretary Boris Johnson, 0:10:37.440 --> 0:10:39.280 who had a very different view of Brexit. So her 0:10:39.280 --> 0:10:42.160 ad mission today was to rally the troops around Brexit. 0:10:42.240 --> 0:10:43.960 She she can come to some of the detail if 0:10:43.960 --> 0:10:45.959 you like, but she did seem to manage to do that, 0:10:46.320 --> 0:10:49.199 and she took on Boris Johnson a little bit. And 0:10:49.240 --> 0:10:51.280 she also wanted them to rally against the big enemy 0:10:51.320 --> 0:10:53.240 that she sees, and that's Jeremy Cowin, leader of the 0:10:53.320 --> 0:10:55.800 Labor Party. And I don't care. What I care about 0:10:56.040 --> 0:10:58.040 is in the movie, in the movie The Crown, the 0:10:58.040 --> 0:11:01.240 TV show of The Crown, then lives are out. I 0:11:01.280 --> 0:11:04.520 think for Americans we were shocked and how Churchill was 0:11:04.559 --> 0:11:07.880 treated or McMillan and all the other players. I saw 0:11:07.920 --> 0:11:10.920 that in the faces of the people in the audience. 0:11:11.240 --> 0:11:14.240 It's totally different than in America. How much do they 0:11:14.280 --> 0:11:18.959 hate each other, well, the different parts of the party. Yeah, yeah, 0:11:19.000 --> 0:11:21.120 I mean they're quite quite. I mean, I don't know, 0:11:21.120 --> 0:11:23.839 I hates the wrong. Excuse me, I'm an American. I 0:11:24.280 --> 0:11:26.880 just love the way you frame UK politics through tonight. 0:11:27.320 --> 0:11:29.839 Just I'll just throw in on the chance of the 0:11:29.880 --> 0:11:32.480 Exchequers there with eight guys I don't know who they are, 0:11:32.840 --> 0:11:35.400 and Anna knows them all, and they all look like 0:11:35.600 --> 0:11:39.440 they look like the TV show The Crown. Yeah, I mean, 0:11:39.480 --> 0:11:41.120 there's a there's a lot of falling out now. She 0:11:41.160 --> 0:11:44.160 did say, in typical British understatement, I might have given 0:11:44.160 --> 0:11:45.800 you a little bit of that just then. But she 0:11:45.800 --> 0:11:47.920 she said, you'll be aware that there are some different 0:11:48.000 --> 0:11:50.240 views within the party on Brexit. You know, she said, 0:11:50.320 --> 0:11:52.400 she sort of nods to to that. But what she 0:11:52.480 --> 0:11:55.800 did when she said, um, she did she did have 0:11:55.840 --> 0:11:57.880 some strong messages which will appear to the Brexity is 0:11:57.960 --> 0:11:59.920 she delivered, you know, right down the barrel of the 0:12:00.040 --> 0:12:03.000 of the camera. She said, I want respect from Europe, 0:12:03.200 --> 0:12:06.720 similar to what she said after the Salzburg disaster meeting recently, 0:12:06.760 --> 0:12:08.600 so she's trying to appeal to that side of her party. 0:12:08.760 --> 0:12:11.200 But on the other side, she had a really interesting line. 0:12:11.240 --> 0:12:13.679 She in answer to Boris and all those hard Brexities, 0:12:13.720 --> 0:12:16.079 you'd rather see a hard break, She said, we can't 0:12:16.080 --> 0:12:18.720 have a Brexit that delivers in fifty years. That's no 0:12:18.800 --> 0:12:20.640 good to somebody who lives on a boarder and wants 0:12:20.679 --> 0:12:24.160 frictionless trade or and cited all these other examples. And 0:12:24.160 --> 0:12:25.679 I thought that was really interesting because that he is 0:12:25.720 --> 0:12:28.119 trying to take on the message of the hard Brexities 0:12:28.160 --> 0:12:30.040 who just say, let's rip it up, let's walk away. 0:12:30.320 --> 0:12:33.400 Interesting away from Brexit Anna that she starts talking about 0:12:33.480 --> 0:12:37.200 promising to end austerity. Is this a Conservative party in 0:12:37.240 --> 0:12:40.719 some ways positioning for a potential election? Yeah? Well, I mean, 0:12:40.840 --> 0:12:42.240 you know, in theory the election is not supposed to 0:12:42.240 --> 0:12:44.439 be till twenty two, but you know, who knows. But 0:12:44.480 --> 0:12:47.079 there's a lot of unpredictability in UK policies, so that 0:12:47.320 --> 0:12:50.360 this ending austerity was really trying to take away one 0:12:50.400 --> 0:12:52.640 of Labour's trump cards. They've been able to associate the 0:12:52.679 --> 0:12:55.360 Tories with austerity over recent years. She said, that the 0:12:55.360 --> 0:12:58.280 British people need to know that hard work has paid off. 0:12:58.320 --> 0:13:00.360 She was careful also though to say that the debt 0:13:00.360 --> 0:13:04.319 to GDP number we'll keep dropping. So of course here 0:13:04.320 --> 0:13:06.880 at Bloomberg was were you know, all watching for reaction 0:13:06.920 --> 0:13:09.480 in markets, and there wasn't really very much. And somebody 0:13:09.520 --> 0:13:11.439 I n G saying, maybe the market is going to 0:13:11.520 --> 0:13:15.240 focus more on well, on the promise. You know, then 0:13:15.240 --> 0:13:17.080 we need to have growth, of course, but focus more 0:13:17.080 --> 0:13:19.080 on any fiscal giveaways that we might get in connection 0:13:19.320 --> 0:13:21.760 any quickly you're a saying are you there for another four? 0:13:21.920 --> 0:13:24.880 Is it five days? No, I'm actually back in London. Sorry, 0:13:24.880 --> 0:13:26.440 I heard I heard you say right at the beginning 0:13:26.440 --> 0:13:28.440 that I was in Birmingham. I have been in Birmingham, 0:13:28.440 --> 0:13:30.480 was there until very but I had to get back 0:13:30.480 --> 0:13:32.800 to London to anchor a program this morning. So one 0:13:32.800 --> 0:13:38.600 of your properties of properties and Anna Edwards. You hear 0:13:38.640 --> 0:13:41.440 her in America, folks, you hear her on Bloomberg Radio 0:13:41.600 --> 0:13:46.560 early early in the American morning, and she's fantasistic. She 0:13:46.640 --> 0:13:49.600 anchors the market open show in Europe. Now I'm happy 0:13:49.640 --> 0:14:02.720 to say, right now I want to rip up the 0:14:02.760 --> 0:14:06.600 script and talk about something that's basically off the radar 0:14:06.800 --> 0:14:12.160 of all our distractions of the Amazon, Apple, Italy, Turkey, 0:14:12.840 --> 0:14:15.119 on and on. Of course everything going on in Washington 0:14:15.640 --> 0:14:18.920 is well, you can do this with Craig Trudell working 0:14:18.920 --> 0:14:22.600 out of our Detroit operation on the Automobiles of America. 0:14:22.720 --> 0:14:25.600 And you can do this because he was at Michigan 0:14:25.640 --> 0:14:29.520 State University exactly five miles from the Grand River Assembly 0:14:29.600 --> 0:14:33.640 of General Motors in Lansing, Michigan. And Craig, that means 0:14:33.680 --> 0:14:37.800 you are qualified to talk about the quiet automobile disaster 0:14:37.920 --> 0:14:42.320 out there, not Tesla. The collapse of the Ford Motor 0:14:42.360 --> 0:14:45.880 Company down forty seven percent from the peak of four 0:14:45.960 --> 0:14:48.800 or five years ago. That brought in Mr Hackett. Is 0:14:48.840 --> 0:14:51.160 he going to be shown the door like Mr Flannery 0:14:51.160 --> 0:14:54.920 of General Electric? You know, the the person to be 0:14:54.960 --> 0:14:57.680 asking that Tom is going to be Bill Ford. Um. 0:14:57.720 --> 0:15:01.960 So he is. He is Bill Ford's guy. Um. He 0:15:02.080 --> 0:15:05.560 certainly has raised a lot of questions in terms of 0:15:05.880 --> 0:15:09.640 what is his plan um, and he's not really answered 0:15:09.680 --> 0:15:11.760 those questions to this point, and a lot of people 0:15:11.760 --> 0:15:15.680 are getting very frustrated. The last the last earnings call, uh, 0:15:15.760 --> 0:15:19.520 some sparks really flew between him and analysts at Morgan 0:15:19.600 --> 0:15:23.320 Stanley when they canceled their investor day that was going 0:15:23.400 --> 0:15:26.880 to to be uh some time in September. Uh. And 0:15:26.920 --> 0:15:29.360 when they canceled at the analyst asked, do you think 0:15:29.400 --> 0:15:31.400 you're still going to be around whenever you guys are 0:15:31.400 --> 0:15:35.360 ready to have that investor day? So people are very frustrated. Uh. 0:15:35.400 --> 0:15:37.760 There's some new product on the way, some some new 0:15:37.880 --> 0:15:41.280 SUVs that are desperately needed, but they're late, and the 0:15:41.320 --> 0:15:44.720 company is really struggling in this market. Well, well explain, 0:15:44.800 --> 0:15:46.560 And I want to say, full disclosure. I've got a 0:15:46.560 --> 0:15:49.760 great affinity for Mr Ford. He and I talked pond hockey, 0:15:49.800 --> 0:15:51.880 among other things. He goes up north every year and 0:15:51.920 --> 0:15:54.880 does the whole Midwest pond hockey thing. And I think 0:15:54.880 --> 0:15:57.560 he had a cameo on Wayne's World is Well, Craig, 0:15:57.880 --> 0:15:59.920 when I look at this, I want to know. I'm 0:16:00.000 --> 0:16:02.400 how you explain your car guy? And you know all 0:16:02.440 --> 0:16:05.400 the other guys who got out in Detroit explained to 0:16:05.440 --> 0:16:09.000 me how we got from Alan to Jim. I mean, 0:16:09.920 --> 0:16:15.800 Ford Management was sainted one Ford, Alan Lally, everything was wonderful. 0:16:16.440 --> 0:16:21.200 What happened well one of his big jobs towards the 0:16:21.280 --> 0:16:24.480 end of his tenure. Alan Lally was was to pick 0:16:24.560 --> 0:16:27.800 his successor and played a big role in that. And 0:16:28.560 --> 0:16:32.800 you know, there was really it was between Mark Fields 0:16:33.480 --> 0:16:39.000 and uh, you know another insider within the company, Joe Henrickson, 0:16:39.240 --> 0:16:42.720 and the company went with Mark Fields, and Mark struggled. 0:16:42.920 --> 0:16:47.200 Um I think you know, he uh did not do well. 0:16:47.320 --> 0:16:51.080 The the share price, uh, you know, like really lagged. 0:16:51.520 --> 0:16:54.320 They had some real trouble with with making sure that 0:16:54.400 --> 0:16:58.720 they kept the product lines up to date. And and 0:16:58.920 --> 0:17:02.920 he was shown the door very quickly. So uh, you 0:17:02.960 --> 0:17:06.280 know it was from there we we go back outside 0:17:06.280 --> 0:17:08.080 and it really seemed like Bill Ford was kind of 0:17:08.119 --> 0:17:11.840 trying to pull another Relally. He went outside his company. 0:17:12.240 --> 0:17:16.280 Let's bring in somebody who hasn't been at Ford. Uh. 0:17:16.320 --> 0:17:19.400 And you know, we we can recall that Milally came 0:17:19.400 --> 0:17:22.919 from boeing um and and Hackett was viewed as a 0:17:23.000 --> 0:17:25.439 sort of a turnaround guy. He came from Steelcase, the 0:17:25.440 --> 0:17:28.280 furniture company, and there was some thought that okay, you know, 0:17:28.320 --> 0:17:30.800 I can I can bring in somebody with a fresh perspective. 0:17:31.440 --> 0:17:34.840 Alan obviously brought a fresh perspective to this company and 0:17:35.160 --> 0:17:38.240 that paid huge dividends. But so far we have not 0:17:38.320 --> 0:17:40.679 at all seen this sort of level of success that 0:17:40.760 --> 0:17:44.080 we saw from from Alan mulally. Uh you know when 0:17:44.119 --> 0:17:46.480 he was at Ford. But the new business plan, you know, 0:17:46.560 --> 0:17:49.119 my study of this is and if you're just joining us, 0:17:49.119 --> 0:17:52.159 so it's Craig Trugel with us, he's with Bloomberg and 0:17:52.240 --> 0:17:55.600 just definitive on not so much the gossip of Detroit, 0:17:55.720 --> 0:18:00.240 but just the the leadership and the human condition of Detroit. White. 0:18:00.359 --> 0:18:03.080 Come on, it was one Ford Miley at a five 0:18:03.119 --> 0:18:06.239 am meeting. Everybody got on board. Everybody was on the 0:18:06.280 --> 0:18:11.199 same page. Per the Mortgage Stanley conference call. Is anybody 0:18:11.240 --> 0:18:13.320 on the hack at page? Because I don't you know, 0:18:13.640 --> 0:18:15.439 not that I'm an expert, but I don't see it. 0:18:15.520 --> 0:18:19.920 He's he is original to be kind, moving from Steelcase 0:18:20.160 --> 0:18:22.639 and Craig, you know what everybody's saying, how can you 0:18:22.680 --> 0:18:26.000 move from making file cabinets over to running a global 0:18:26.040 --> 0:18:29.920 automobile company was seven thousand parts per car? How can 0:18:29.960 --> 0:18:32.720 you do that? Yeah? Well, I I think I think 0:18:32.720 --> 0:18:35.719 it's really a question of whether you know whether this 0:18:35.800 --> 0:18:38.920 was the right guy to bring in when the company 0:18:38.960 --> 0:18:41.359 had some real sort of nuts and bolts issues of 0:18:41.560 --> 0:18:46.040 product being behind schedule, needing needing to update to the 0:18:46.200 --> 0:18:49.360 SUV lineup, deciding on whether or not to to play 0:18:49.359 --> 0:18:51.760 in the car business. Obviously they've decided not to do 0:18:51.800 --> 0:18:54.720 that going forward, at least at least here in North America. Okay, 0:18:54.720 --> 0:18:57.520 but what's it's not there? What's a two thousand nineteen Fusion, 0:18:57.800 --> 0:19:00.760 What's a two thousand eighteen CI Max, a two thousand 0:19:00.880 --> 0:19:03.320 nine Mustang? I mean they say they're not in the 0:19:03.320 --> 0:19:05.960 car business, but they are in the car business. Well, 0:19:06.119 --> 0:19:09.240 everything except the Mustang is going to be going away. 0:19:09.520 --> 0:19:12.760 So those those uh, the Sedans and the lineup, with 0:19:12.840 --> 0:19:16.200 the exception of the Mustang muscle car will be phased out. 0:19:16.440 --> 0:19:19.320 They've even you know, started to phase out the advertising 0:19:19.359 --> 0:19:21.000 of some of the models that to your point, are 0:19:21.040 --> 0:19:23.760 still going to remain on the market. But really they're 0:19:23.760 --> 0:19:26.800 turning their attention to mtvs. But but really with Hackett, 0:19:26.840 --> 0:19:29.359 I mean he came in and his background to the 0:19:29.400 --> 0:19:31.159 event that he had when with Ford was with their 0:19:31.200 --> 0:19:34.040 smart mobility unit, and that is really sort of a 0:19:34.400 --> 0:19:37.600 big think, uh you know, sort of what is the 0:19:37.640 --> 0:19:40.680 future going to look like? Uh, you know, play on 0:19:40.680 --> 0:19:43.000 on Ford's part, and you can guess what. No one 0:19:43.080 --> 0:19:46.880 cares right, right, well, and he's continued to to sort 0:19:46.880 --> 0:19:50.400 of take this you know, big sort of universal back 0:19:50.480 --> 0:19:52.280 look at where the future is going to be in 0:19:52.400 --> 0:19:58.439 terms of mobility and and scared autonomous. But you're I 0:19:58.520 --> 0:20:01.600 do the interview, you don't, Craig Listen, It's real simple. 0:20:01.640 --> 0:20:04.320 Shields was fancy. He did all the fit and finish. 0:20:04.359 --> 0:20:06.840 Malally was the god that came out with a flex 0:20:06.880 --> 0:20:08.719 which is the only Ford I see in the island 0:20:08.720 --> 0:20:12.080 of Manhattan. As you said, they desperately need an SUV 0:20:12.560 --> 0:20:16.160 and they got a CEO doing tech babble right. Yeah, 0:20:16.359 --> 0:20:18.800 that that I think gets to it and cuts to 0:20:18.840 --> 0:20:21.560 the chase. I mean when when Jim Hackett made an 0:20:21.600 --> 0:20:23.800 appearance at c S earlier this year, I think a 0:20:23.840 --> 0:20:26.360 lot of people just sort of left his presentation scratching 0:20:26.400 --> 0:20:28.800 their heads. And so if that's any indication of the 0:20:29.119 --> 0:20:31.919 kind of leader he is internally at Ford, that has 0:20:31.960 --> 0:20:33.920 a lot to do with the problem. Now from New 0:20:34.000 --> 0:20:36.960 Jersey just emails in and could you please ask him 0:20:37.000 --> 0:20:40.199 what Mr Hackett's reception is going to be at the 0:20:40.240 --> 0:20:44.040