WEBVTT - Bloomberg Businessweek Weekend - November 12th, 2021 0:00:01.080 --> 0:00:05.440 This is Bloomberg Business Week inside from the reporters and 0:00:05.600 --> 0:00:09.200 editors who bring you America's most trusted business magazine, plus 0:00:09.240 --> 0:00:13.200 global business, finance and tech news As it happened Sloomberg 0:00:13.240 --> 0:00:16.759 Business Week with Carol Messier and Bloomberg Quick Takes Tim 0:00:16.800 --> 0:00:21.280 Stinovic on Bloomberg Radio. Hi everyone, Welcome to the weekend 0:00:21.400 --> 0:00:24.439 edition of Bloomberg Business Week. This week, inflation number stoked 0:00:24.440 --> 0:00:27.840 fear in the markets. Disney slumped after earning showed streaming 0:00:27.880 --> 0:00:30.720 subscriptions cooling off despite a warning by the CEO back 0:00:30.760 --> 0:00:33.760 in September. And then you had Elon Musk unloading five 0:00:33.800 --> 0:00:36.720 billion dollars in stock after taking a Twitter poll. Yeah, 0:00:36.720 --> 0:00:38.839 five billion. That whole thing. Well, we should note that 0:00:38.920 --> 0:00:42.159 Musk made that move to help satisfy tax withholding obligations 0:00:42.200 --> 0:00:45.879 related to the exercising of stock options. Incidentally, he did 0:00:45.880 --> 0:00:48.840 it against the backdrop of Amazon backed Rive in making 0:00:49.000 --> 0:00:52.080 its public trading debut and becoming the largest I p 0:00:52.159 --> 0:00:55.280 O of the year. Amazing week. Yes, a new entrant 0:00:55.280 --> 0:00:57.800 into the electric vehicle market. On the other hand, one 0:00:57.800 --> 0:01:01.000 of the most iconic names in the history of American industry, 0:01:01.080 --> 0:01:04.040 charting a new path forward. General Electric set to break 0:01:04.120 --> 0:01:07.560 up into three separate companies. The conglomerate seems to be 0:01:07.640 --> 0:01:09.959 dead at this point. Yeah, Well, of industry icons and 0:01:10.000 --> 0:01:11.960 e vs, We're going to catch up with the president 0:01:11.959 --> 0:01:14.680 and CEO of Mercedes Benz USA. We're also going to 0:01:14.760 --> 0:01:16.800 get an up close look at the US housing market. 0:01:16.840 --> 0:01:19.399 We're going to do that with the CEO of Invitation Homes. 0:01:19.400 --> 0:01:21.800 Will also take you inside Zillo's half billion dollar home 0:01:21.880 --> 0:01:25.880 flipping flop and legendary venture campist John Dore, stopping by 0:01:25.959 --> 0:01:29.200 unveiling his action plan for solving a climate crisis. Well, 0:01:29.200 --> 0:01:31.320 all of that to come. We begin though, by welcoming 0:01:31.360 --> 0:01:34.320 the editor of Bloomberg Business Week magazine, Joel Weber. Joel, 0:01:34.360 --> 0:01:36.880 it's good to see you this week. It's the Bloomberg 0:01:37.000 --> 0:01:40.840 New Economy Issue ahead of next week's Bloomberg New Economy Forum. 0:01:40.880 --> 0:01:43.120 It's happening in Singapore. So what do we need to know? 0:01:43.440 --> 0:01:46.640 I'm not going. I wish I were. Uh, Singapore is 0:01:46.680 --> 0:01:49.400 open for business and I think everyone there's is really 0:01:49.800 --> 0:01:53.840 excited for the for the conference. Um, the issue, I 0:01:53.880 --> 0:01:56.280 think we've always thought about it through this problems and 0:01:56.360 --> 0:02:00.880 solution lens and there's the developing world and developed world, 0:02:01.000 --> 0:02:03.920 and there's really been a lack of dialogue almost between 0:02:03.920 --> 0:02:07.160 the two. And I think the New Economy Form is 0:02:07.200 --> 0:02:09.600 really meant to be a place where we learned from 0:02:09.639 --> 0:02:13.000 each other, right and boy, there's like kind of a 0:02:13.000 --> 0:02:14.760 lot of problems in the world right now, So what 0:02:14.919 --> 0:02:17.320 can we learn? And that's sort of how we approached 0:02:17.320 --> 0:02:19.960 all those stories in the issues, like big problems, what 0:02:20.080 --> 0:02:24.280 are some big solutions that that business can help provide? 0:02:24.400 --> 0:02:26.400 And we're gonna talk to Christina Lynblad a little bit 0:02:26.440 --> 0:02:29.760 more about it, who oversaw um that section of the magazine, 0:02:29.800 --> 0:02:31.800 so we'll get to her a little bit later. On reminder, 0:02:31.840 --> 0:02:34.680 you can tune into the live stream of Bloomberg New 0:02:34.680 --> 0:02:38.120 Economy Form from Singapore November seventeenth through nineteenth. That's at 0:02:38.120 --> 0:02:42.000 Bloomberg dot com slash Live slash Stream. Joel We touched 0:02:42.000 --> 0:02:44.320 on it at the top General Electric breaking into three 0:02:44.320 --> 0:02:47.360 separate entities, Richard Cloth and Ryan Bean writing about it 0:02:47.360 --> 0:02:50.560 in the Business section this week, CEO Larry colep bringing 0:02:50.600 --> 0:02:54.079 an end of the company as we've known it for decades. Um, 0:02:54.120 --> 0:02:56.320 what are some implications of this? Well, first of all, 0:02:56.320 --> 0:02:57.840 I just think of g E is sort of the 0:02:58.240 --> 0:03:02.440 quintessential American company, right, and a hundred and thirty plus 0:03:02.520 --> 0:03:05.919 years of innovation, and then you know, it all kind 0:03:05.919 --> 0:03:09.120 of started to unravel in the last twenty years. And 0:03:09.200 --> 0:03:11.720 of course Larry Colp, who we've written about before in 0:03:11.760 --> 0:03:16.639 the magazine, steps in first only outsider CEO to take 0:03:16.680 --> 0:03:20.680 over over the company, right, and he inherits this baggage 0:03:20.720 --> 0:03:23.120 that has been left with him and the legacy of 0:03:23.720 --> 0:03:27.959 Jack Welsh of course, and you know big conglomerate that 0:03:27.960 --> 0:03:31.280 that business model is no longer in vogue. And Larry 0:03:31.320 --> 0:03:34.800 Colp is a very strategic business thinker, came from Dana 0:03:34.880 --> 0:03:38.120 Herb maybe the only other conglomerate style company really in 0:03:38.160 --> 0:03:40.920 America at scale like that, and what he decided to do, 0:03:41.040 --> 0:03:43.640 break it into pieces and potentially, you know, hope to 0:03:43.720 --> 0:03:46.160 unlock some more value for investors. What's wild about this 0:03:46.240 --> 0:03:47.840 is I think about the trajectory and it's not been 0:03:47.880 --> 0:03:49.680 such a long time, Like just a few years ago, right, 0:03:49.680 --> 0:03:52.000 we were still looking at g IS like the company 0:03:52.000 --> 0:03:53.520 that you wanted to know what they were doing because 0:03:53.520 --> 0:03:56.080 they had such a great out you know, global outlook 0:03:56.120 --> 0:03:58.200 on so many different in touch, so many different industries 0:03:58.240 --> 0:04:01.200 and Ultimately, what he did was to sell some things 0:04:01.240 --> 0:04:04.200 off and then boil things down right. And when you 0:04:04.240 --> 0:04:07.760 really distilled it, there were three businesses. There's aviation, healthcare, 0:04:07.800 --> 0:04:11.560 and energy. He's going to remain at the aviation side, 0:04:11.560 --> 0:04:14.400 which probably has the best outlook. Both the energy and 0:04:14.400 --> 0:04:17.040 the healthcare have a little bit more of a challenged 0:04:17.080 --> 0:04:20.360 forecast um, but you know, doesn't mean that somebody can't 0:04:20.400 --> 0:04:22.080 turn this around. One of the things that Jim Ellis 0:04:22.120 --> 0:04:23.720 and I were talking about what we worked on this story, 0:04:23.839 --> 0:04:26.800 was like everyone thought HP was going to have this 0:04:26.920 --> 0:04:30.479 great enterprise business and you know, this printer home printer 0:04:30.600 --> 0:04:32.320 business wasn't going to be such a great one, and 0:04:32.320 --> 0:04:34.120 it turned out to be the exact opposite. There was 0:04:34.160 --> 0:04:36.680 a ton of money in a subscription base model at 0:04:36.680 --> 0:04:38.560 a moment time that everybody started to work from home. 0:04:38.640 --> 0:04:41.159 So you know, I can't pre judge this one, but 0:04:41.400 --> 0:04:43.640 Larry Colp proved to be the person who was willing 0:04:43.640 --> 0:04:45.480 to do something that no one else was willing to do. 0:04:45.640 --> 0:04:47.160 YEA certainly the end of an era and a lot 0:04:47.200 --> 0:04:50.039 of symbolism there as well with what's happening right now Joel. 0:04:50.040 --> 0:04:52.360 In the text section our Patrick Clark takes us inside 0:04:52.480 --> 0:04:54.560 Zilla's home, flipping to Boggle. He's going to join us 0:04:54.560 --> 0:04:56.880 a bit later on. We just want to know, though, Um, 0:04:56.920 --> 0:04:59.440 how did this go so wrong so quickly? Wasn't it 0:04:59.440 --> 0:05:01.200 a cover story just a few years ago? What we 0:05:02.200 --> 0:05:03.840 it was not a cover story that we we talked 0:05:03.839 --> 0:05:06.800 about it in the terms of this is a big, big, big, 0:05:06.800 --> 0:05:09.640 big experiment, and you know, there's a lot of interest 0:05:09.680 --> 0:05:11.800 in like what Zilo was attempting to do. I mean, 0:05:11.800 --> 0:05:14.840 this is a company that really means real estate. If 0:05:14.880 --> 0:05:17.039 you you know, thats the z estimate you pull it 0:05:17.080 --> 0:05:18.680 up on your phone to be like how much is 0:05:18.720 --> 0:05:21.640 my house actually worth? And here they were going into 0:05:21.680 --> 0:05:25.160 areas like Phoenix and buying a lot of homes. One 0:05:25.200 --> 0:05:26.920 of the things that Pat sort of I think gets 0:05:26.960 --> 0:05:29.039 too in this story is that they, you know, this 0:05:29.160 --> 0:05:32.800 outgo idea, this I buying idea, really untested, what could 0:05:32.800 --> 0:05:35.120 go wrong? And it was almost like they turned up 0:05:35.160 --> 0:05:38.280 the volume to do things that were maybe a little 0:05:38.279 --> 0:05:42.720 bit beyond their skis, and that seems to have really backfired. Um. 0:05:43.320 --> 0:05:46.240 The bigger implications here for the housing market becomes, Okay, 0:05:46.240 --> 0:05:48.239 we have a lot of these homes that Zilo has bought, 0:05:48.279 --> 0:05:52.040 they're going to offload them. We've already seen institutional investors 0:05:52.080 --> 0:05:55.720 step into single family homes in a big way. That 0:05:55.920 --> 0:05:58.880 used to go to aspiring homeowners and and now we're 0:05:58.920 --> 0:06:02.599 looking at like you living in rentals for forever, and 0:06:02.640 --> 0:06:06.560 that has big economic implications for for the ability to 0:06:06.600 --> 0:06:10.240 grow wealth, and you know, turns institutional investors into landlords 0:06:10.279 --> 0:06:12.000 even more. You do wonder too, how much the current 0:06:12.040 --> 0:06:14.159 environment or the pandemic environment, all of a sudden, like 0:06:14.200 --> 0:06:17.320 home appreciations were off the chart, how much that just 0:06:17.560 --> 0:06:19.440 kind of messed up the algorithms a little bit. And 0:06:19.680 --> 0:06:21.680 you know, and and it's a it's a big test 0:06:21.839 --> 0:06:24.560 for Zillo is not the only person doing this, and 0:06:24.600 --> 0:06:27.320 it means that there will continue to be you know, 0:06:27.360 --> 0:06:29.760 improvements and algorithms. But that also is the big risk 0:06:29.800 --> 0:06:32.400 as more and more of our life gets basically overrun 0:06:32.400 --> 0:06:35.640 by algorithms and our big thank YouTube Business Week editor 0:06:35.720 --> 0:06:37.559 Joel Webber joining us with a look at this week's 0:06:37.560 --> 0:06:39.800 New Economy issue. More from the magazine in just a 0:06:39.839 --> 0:06:42.159 little bit. Coming up, With the global auto market filling 0:06:42.160 --> 0:06:44.480 the strain of supply chain bottlenecks, we're going to check 0:06:44.520 --> 0:06:47.400 in with the CEO of Mercedes Ben's USA talking to 0:06:47.520 --> 0:06:50.760 us about this work around. Demitrius Delaco's talks pricing power 0:06:50.880 --> 0:06:53.960 and the company's electric future. You're listening to Bloomberg Business Week. 0:06:54.200 --> 0:07:07.159 This is Bloomberg. This is Bloomberg Business Week with Carol 0:07:07.200 --> 0:07:11.440 Masser and Bloomberg Quick takes Tim Stinovik from Bloomberg Radio. 0:07:12.840 --> 0:07:15.280 He has a global perspective on the auto industry. Tim. 0:07:15.320 --> 0:07:17.760 He has worked for Mercedes Bens for nearly three decades. 0:07:17.840 --> 0:07:20.520 We're talking about Demitriz de Lachez. He served the company 0:07:20.520 --> 0:07:23.280 in his native Greece and Korea, in Canada and earlier 0:07:23.320 --> 0:07:26.040 this year he was named president in CEO of Mercedes 0:07:26.080 --> 0:07:29.360 Benz USA. He's right now leading it toward what he 0:07:29.440 --> 0:07:31.640 calls an electric vehicle future. I feel like the whole 0:07:31.640 --> 0:07:33.560 week was about e VS in a big way. Well, 0:07:33.600 --> 0:07:37.640 despite supply chain challenges and a tight labor environment, Zelaca says, 0:07:37.680 --> 0:07:40.720 the luxury auto market in North America it's growing. What 0:07:40.840 --> 0:07:44.920 helps a lot in accommodating demand is the flexibility. We 0:07:45.080 --> 0:07:49.360 have enough factories in in accommodating let's say the shortages 0:07:49.400 --> 0:07:53.240 in the best way, so I would say it has 0:07:53.240 --> 0:07:55.560 been challenging but we did the best you could do 0:07:55.640 --> 0:07:58.120 out of it to supply vehicle store customers. So does 0:07:58.160 --> 0:08:01.480 it sound like Tom When we get into twenty two, 0:08:01.520 --> 0:08:03.840 we still might have some supply chain constraints, but as 0:08:03.840 --> 0:08:07.640 you said, stabilizing, so not getting necessarily any worse. This 0:08:07.800 --> 0:08:11.160 is the kind of situation. Yes, Q four is developing 0:08:11.800 --> 0:08:14.680 better than you three, and we see a certain light 0:08:14.760 --> 0:08:18.960 out of the channel. Nevertheless, two, we continue posing challenges 0:08:19.000 --> 0:08:21.080 for all of us in the auto industry. What about 0:08:21.080 --> 0:08:22.880 for workers? And you know that's the other kind of 0:08:22.880 --> 0:08:26.280 flip side of this is that UM companies are competing 0:08:26.280 --> 0:08:28.239 for workers having to pay up. How are you guys 0:08:28.240 --> 0:08:30.240 on the labor front? Certainly for the markets that you 0:08:30.280 --> 0:08:34.440 ever see, I would say we were, well, we have 0:08:34.480 --> 0:08:37.199 a good situation, a stable situation. There were man not 0:08:37.280 --> 0:08:41.000 that flexibly with with our workforce. I'll did. It's also 0:08:41.000 --> 0:08:45.800 on west sides m accommodating the demands also through the 0:08:45.840 --> 0:08:50.920 COVID phase. Who could keep our businesses up and running? 0:08:50.960 --> 0:08:53.880 So all in all, I would say, it's it's manageable. 0:08:53.920 --> 0:08:56.920 It's tough, but it's manageable. We've heard a lot from 0:08:57.160 --> 0:08:59.920 executives around the country who've had to raise prices as 0:09:00.040 --> 0:09:03.600 really as a result to attract and retain talent, or 0:09:03.640 --> 0:09:06.880 to attract and retain talent, how have you had to 0:09:06.920 --> 0:09:08.960 do that? I would say this is this is twofold 0:09:09.080 --> 0:09:11.800 on one on one one hand is adapting to the 0:09:11.840 --> 0:09:15.760 current situation condition. So as you know, have also a 0:09:15.840 --> 0:09:19.880 hybrid working model in the company, and probably in one 0:09:20.040 --> 0:09:24.360 or the other situation, we had yes to to pay 0:09:24.400 --> 0:09:29.480 what the markets is asking. But all in all is falling, 0:09:29.520 --> 0:09:34.240 trends is adjusting, and it's manageable with within our budgets. 0:09:34.480 --> 0:09:36.120 To me, just how are any of this impacting the 0:09:36.200 --> 0:09:39.320 rollout of you guys? You are moving grossly into EVS. 0:09:39.480 --> 0:09:41.680 You've launched your e q S brand already in Europe. 0:09:41.679 --> 0:09:45.080 It's coming from what I understand early two in the 0:09:45.200 --> 0:09:48.640 United States. How does that rollout look? All in all, 0:09:48.800 --> 0:09:54.280 I think we're moving faster into an electric vehicle future 0:09:54.520 --> 0:09:58.000 and muspense is part of this game. You said, quite right. 0:09:58.080 --> 0:10:03.360 So we'll have just long the our first elected vehicle 0:10:03.440 --> 0:10:05.680 in the in the U S, which is the equ S. 0:10:06.840 --> 0:10:10.840 The let's say that the media exports on this product. 0:10:10.920 --> 0:10:17.360 The dealer comments after testing the products are extremely positive. 0:10:17.720 --> 0:10:22.319 So We're looking to a very um positive future for 0:10:22.320 --> 0:10:25.960 for all the vehicles of considered bands. Do you feel 0:10:26.000 --> 0:10:28.520 like you'll be able to meet the demand of the 0:10:28.559 --> 0:10:30.920 new Equs brand of people who want them, who place 0:10:31.040 --> 0:10:32.760 orders here in North America? You'll be able to meet 0:10:32.760 --> 0:10:37.760 that demand in two we have quite a good volume. 0:10:37.840 --> 0:10:41.000 But the issue here is not if we can meet 0:10:41.040 --> 0:10:43.240 the demand. I think the demand is higher than what 0:10:43.679 --> 0:10:46.520 we can all in all produce and deliver. You know, 0:10:46.559 --> 0:10:49.160 Equs is not the product only for the US market. 0:10:49.520 --> 0:10:51.800 It's a product for for for many markets around the world. 0:10:51.800 --> 0:10:54.880 The demand is hide an extraordinary good product. Will happy 0:10:54.920 --> 0:10:58.880 for that, and unfortunately it's going to be some waiting 0:10:59.600 --> 0:11:02.320 line for for this product. So we just tell us 0:11:02.320 --> 0:11:05.679 a bit more about the vision of Mercedes Bands and 0:11:05.720 --> 0:11:08.320 they thoughts about electric vehicles and where it's all going. 0:11:09.040 --> 0:11:11.760 Our vision is very clear. We want to become the 0:11:11.800 --> 0:11:16.600 most desirable electric luxury brands um and this we start 0:11:16.600 --> 0:11:19.559 our error by introducing the q S, an amazing vehicle 0:11:19.880 --> 0:11:25.240 with top technologies, innovations and splendid design. And there is 0:11:25.360 --> 0:11:30.199 much more to come. So we're accelerating our our product 0:11:30.280 --> 0:11:36.640 range towards a carbon neutral let's say a mobility and 0:11:36.720 --> 0:11:40.160 this is by introducing within next year everything. The next 0:11:40.240 --> 0:11:43.840 year the EQUB which is going to be our entry 0:11:44.000 --> 0:11:49.920 suv models, but we continue with the equ Sedan, the 0:11:49.960 --> 0:11:54.280 eq S suv and the equ Suv, which are two 0:11:54.320 --> 0:11:57.400 products which by the way, will be produced in our 0:11:57.400 --> 0:12:02.680 factory in in Alabama. So in the next basically twelve 0:12:02.720 --> 0:12:05.120 to fifteen months, who plan to have a full range 0:12:05.120 --> 0:12:08.520 of five full electric vehicles in the US market? What 0:12:08.640 --> 0:12:10.520 is the price range on these? Because if somebody is 0:12:10.559 --> 0:12:12.160 in the market for an electric vehicle, they're going to 0:12:12.200 --> 0:12:15.600 consider from other companies, and you know, Tesla regardless of 0:12:15.600 --> 0:12:18.160 where it ends up right, UM advertises cars in the 0:12:18.200 --> 0:12:22.959 thirty thousands. I would say at the moment of range, 0:12:23.080 --> 0:12:28.720 what we call the the electric Mercedes, the S class 0:12:28.720 --> 0:12:31.559 of electric which is the EQUS starts at one hundred 0:12:31.600 --> 0:12:35.520 and three thousand dollars, and obviously would the EQUB, which 0:12:35.559 --> 0:12:38.839 is an equivalent to today g LB, will be in 0:12:38.880 --> 0:12:42.840 a much lower range, probably around the sixty thousand dollars. 0:12:42.880 --> 0:12:45.240 So it's it's a lot to come to anticipate a 0:12:45.400 --> 0:12:48.280 time demetrius when we get to a point in the 0:12:48.360 --> 0:12:51.839 United States where the charging network is as ubiquitous, a 0:12:51.920 --> 0:12:55.520 gas station available in every corner. I would not give 0:12:55.559 --> 0:12:58.080 a date for that, but I would say the speed 0:12:58.120 --> 0:13:02.440 of adoption of a mobility is quite impressive in the US. 0:13:02.440 --> 0:13:07.959 That coupled with the let's say the infrastructure subsidies, the 0:13:08.000 --> 0:13:12.920 infrasection subsidies, which are plants, we believe will accelerate the 0:13:13.000 --> 0:13:17.400 rhythm of of of development of charging stations. Don't forget 0:13:17.440 --> 0:13:20.760 also technology helps in this direction since you can basically 0:13:21.040 --> 0:13:25.040 on on on the screen of your vehicle identify h 0:13:25.720 --> 0:13:28.360 which is the closest charging station or plan let's say, 0:13:28.400 --> 0:13:32.480 your your driving route according to two available charging stations. 0:13:32.480 --> 0:13:36.960 So a combination of charging stations and small technology would 0:13:37.000 --> 0:13:43.400 support our customers overcoming the hesitation of the same buying 0:13:43.520 --> 0:13:47.439 or driving an electric vehicle for for for long distances. 0:13:47.440 --> 0:13:49.960 That was Demitrius the laque Sees, the president and CEO 0:13:50.120 --> 0:13:52.720 of Mercedes Bend's USA. I can't wait to get kind 0:13:52.720 --> 0:13:55.199 of into an e Vy. Have you not been in one? Oh? 0:13:55.240 --> 0:13:57.080 I have been in one, but I really haven't driven one. 0:13:57.400 --> 0:13:59.719 And are are you ready for your next card to 0:13:59.760 --> 0:14:02.599 be any? Yes? Okay, all in there you go, And 0:14:02.600 --> 0:14:07.160 I feel like there's more choices. How yeah, well no, no, no, 0:14:07.240 --> 0:14:09.600 because where we park our car, there's no outlet, and 0:14:09.760 --> 0:14:11.959 you know that is the It's gonna be difficult in 0:14:12.040 --> 0:14:14.160 urban environments. I do think about that. I got a 0:14:14.200 --> 0:14:15.920 lot of flak for saying this a few weeks ago 0:14:16.600 --> 0:14:19.880 because people were saying, everybody has garages and they can 0:14:20.240 --> 0:14:22.480 charge in their garages, and I'm saying everybody does not 0:14:22.560 --> 0:14:24.960 have garage exactly. The millions of people like me who 0:14:24.960 --> 0:14:27.040 live in the United States live in apartments and don't 0:14:27.080 --> 0:14:29.160 parking garages. We park on the street and parking lots. 0:14:29.240 --> 0:14:31.360 We don't have access to charging yet, hence the needed 0:14:31.400 --> 0:14:33.800 infrastructure investments to get us up to speed on that. Well, 0:14:33.800 --> 0:14:36.000 it still ahead. On Bloomberg Business Week, we go from 0:14:36.040 --> 0:14:39.400 autos to airplanes and the easing of pandemic travel restrictions. 0:14:39.400 --> 0:14:42.160 It's not the only reason you're seeing more planes in 0:14:42.160 --> 0:14:44.880 the sky. No, that's for sure. Why supply chain chaos 0:14:45.000 --> 0:14:47.880 is fueling demand for freighter aircraft and what the world's 0:14:47.920 --> 0:14:50.840 top two planemakers are doing to meet it. This is 0:14:50.880 --> 0:15:00.680 Bloomberg broadcasting from the financial capital of the world, Bloomberg 0:15:00.720 --> 0:15:03.520 Eleve in Frio in New York to Washington, d C. 0:15:03.720 --> 0:15:08.440 Bloomberg to Boston, Bloomberg one oh six one to San Francisco, 0:15:08.480 --> 0:15:11.960 Bloomberg nine sixty to the Country Sirius XM Jeddo one 0:15:12.000 --> 0:15:15.160 nineteen and around the globe the Bloomberg Business app and 0:15:15.200 --> 0:15:20.480 Bloomberg Radio dot com. This is Bloomberg Business Week. In 0:15:20.520 --> 0:15:22.560 the business section of the magazine. This week, there's a 0:15:22.600 --> 0:15:26.040 story that homes in on big cargo planes. We're talking 0:15:26.160 --> 0:15:29.280 massive planes more in demand than ever because many of 0:15:29.280 --> 0:15:31.880 the goods that used to come to us by sea 0:15:32.040 --> 0:15:34.840 are now being shuttled through the air. These behemoths of 0:15:34.840 --> 0:15:37.640 the sky can quickly transport large amounts of freight while 0:15:37.640 --> 0:15:40.960 bypassing port tie up shortages of ocean containers or rail 0:15:41.000 --> 0:15:43.800 cars and the current shortage of long haul truck drivers. 0:15:43.840 --> 0:15:45.600 This is a story that you and I both learned 0:15:45.600 --> 0:15:48.080 so much. Boeing and Airbus, we know are both developing 0:15:48.080 --> 0:15:50.760 new air freighters that will end up competing for business 0:15:50.840 --> 0:15:54.160 with converted passenger jets. To help explain what that means 0:15:54.200 --> 0:15:57.480 for the world's two dominant planemakers, we turned to Bloomberg 0:15:57.560 --> 0:16:00.320 Business Week editor Joe Weber and Bloomberg News Era Space 0:16:00.320 --> 0:16:05.120 reporter Julie Johnson pre pandemic um more and more. You know, 0:16:05.680 --> 0:16:09.640 uh palettes were being shipped in the bellies of passenger 0:16:09.680 --> 0:16:13.240 aircraft and um so when all those you know, those 0:16:13.240 --> 0:16:17.040 big planes were parked last year, it just created an 0:16:17.080 --> 0:16:20.840 instant shortage right at the point where everybody was, you know, 0:16:20.920 --> 0:16:25.080 heading online to shop and and we were starting to see, 0:16:25.320 --> 0:16:29.160 you know, logistics start to tighten and and you know, 0:16:29.240 --> 0:16:34.240 the situation is just sort of um um snowballed from there. 0:16:35.040 --> 0:16:39.040 So yeah, so it's crazy. So we're um, just about 0:16:39.160 --> 0:16:43.440 every aging freighter that's air worthy I've heard is back 0:16:43.680 --> 0:16:48.280 in the air right now. Um, like some some museum 0:16:48.280 --> 0:16:50.680 pieces have been brought out of the desert and put 0:16:50.720 --> 0:16:55.440 back um. And and there's also just a flood of 0:16:55.520 --> 0:17:00.720 money coming in to convert um older path cinder jets 0:17:00.760 --> 0:17:03.480 into freighters. And these are going to start to come 0:17:03.520 --> 0:17:08.280 online mid decade, right around the point that the passenger 0:17:08.359 --> 0:17:12.000 jets will be flying again, and Airbus first, and then 0:17:12.200 --> 0:17:15.040 we think a couple of years later Boeing will have 0:17:15.119 --> 0:17:17.199 their new jets out and then we'll have a glut 0:17:17.280 --> 0:17:19.600 right so suppled de mand there it is at work alright, 0:17:19.640 --> 0:17:22.720 better a better start adding windows to the cargo planes 0:17:22.760 --> 0:17:25.880 and getting the passengers seats back in there exactly right. 0:17:25.920 --> 0:17:29.200 I mean, is this just a temporary problem because of 0:17:29.280 --> 0:17:31.879 the supply chain loose or what. No, they think this 0:17:32.000 --> 0:17:36.479 is a fundamental shift that the market, the market, you know, 0:17:36.480 --> 0:17:38.800 shipping is always going to be there and it's always 0:17:38.800 --> 0:17:44.560 going to dominate. But with e commerce, UM, you're seeing 0:17:44.800 --> 0:17:47.639 you know what used to this this whole what was 0:17:47.680 --> 0:17:51.600 described to me as fragmentation. So instead of the ships 0:17:51.640 --> 0:17:54.119 coming in these steady waves that you could you know, 0:17:54.200 --> 0:17:57.760 set your watch by from from China so that the 0:17:57.800 --> 0:18:01.760 goods would be on the shelves for Halloween and Christmas, UM, 0:18:02.280 --> 0:18:05.160 we're seeing more and more of that move to palletts 0:18:05.760 --> 0:18:10.680 UM in cargo ships and then also into packages um 0:18:10.760 --> 0:18:14.720 that also traveled by air and maybe in smaller airplanes, 0:18:14.920 --> 0:18:19.439 you know, for Amazon and its counterparts. So I I 0:18:19.960 --> 0:18:24.440 you know, post COVID, I don't think that trend is reversing. UM. 0:18:24.560 --> 0:18:27.160 So there is going to be demand, but there's just 0:18:27.520 --> 0:18:32.640 a crazy amount of of supply being created to meet 0:18:32.680 --> 0:18:35.640 that demand. Okay, there's supply, there's man and then there's 0:18:35.800 --> 0:18:38.960 just good old fashioned rivalries and like Boeing air Bus 0:18:39.040 --> 0:18:41.440 that is like one of the one of the best ones, 0:18:41.880 --> 0:18:44.400 who's got the upper hand in the in the revelry, 0:18:44.440 --> 0:18:48.240 at least in this chapter of it. Boeing. This this 0:18:48.400 --> 0:18:53.320 is Boeing's world. I mean, um, so about of the 0:18:53.960 --> 0:18:59.160 world's air cargo right now travels on Boeing or McDonald Douglas, 0:18:59.200 --> 0:19:04.600 which Boeing bo jets and um and I think Airbus 0:19:05.000 --> 0:19:07.160 has woken up to the fact that Boeing this year 0:19:07.240 --> 0:19:10.600 has been selling a lot of freighters. Airbus really doesn't 0:19:10.640 --> 0:19:13.879 have anything in the market, and so they're going to 0:19:14.040 --> 0:19:17.480 try and crack you know, yet another part of the 0:19:17.520 --> 0:19:19.960 market the Boeing is dominated. Well, I do wonder what 0:19:20.040 --> 0:19:21.960 the play is Julie. Here is it? You know, the 0:19:22.000 --> 0:19:25.280 planes from Airbus and Boeing, the brand new ones or 0:19:25.320 --> 0:19:28.680 I love this line your story. Um uh that talks 0:19:28.720 --> 0:19:32.520 about I guess a big jet a seven seven seven, 0:19:32.520 --> 0:19:35.560 a triple seven three er could cost upwards of a 0:19:35.600 --> 0:19:38.520 hundred fifty million dollars. Knew a decade ago. Now you 0:19:38.520 --> 0:19:40.720 can pick it up for a mere twenty million dollars. 0:19:40.800 --> 0:19:43.639 Sounds like a bargain and then you retrofit it. So 0:19:43.760 --> 0:19:46.520 is it those who are leasing old planes that are 0:19:46.600 --> 0:19:50.000 kind of the investment play here potentially. Yeah, well this 0:19:50.080 --> 0:19:52.199 is we could go on and on, but part of 0:19:52.240 --> 0:19:55.760 the issue is that Boeing and Airbus UM kind of 0:19:56.080 --> 0:20:00.479 got greedy a decade ago and and pushed pumped an 0:20:00.640 --> 0:20:04.840 enormous number of these huge wide bodies out into the 0:20:04.880 --> 0:20:09.199 market and UM, so that market is glutted, prices have 0:20:09.440 --> 0:20:15.320 collapsed and really new you know, in airplane terms, jets 0:20:15.440 --> 0:20:20.159 are being sidelined and either scrapped or um. You know, 0:20:20.200 --> 0:20:23.040 another way to get money out of that airframe is 0:20:23.080 --> 0:20:25.920 to turn it into a freighter. That's Bloomberg News aerospace 0:20:25.960 --> 0:20:28.959 reporter Julie Johnson along with the editor of Business Week magazine, 0:20:29.000 --> 0:20:31.680 Joe Webber. You're listening to Bloomberg business Week up next. 0:20:31.720 --> 0:20:34.359 He backed Jeff Bezos, says he was creating Amazon and 0:20:34.440 --> 0:20:36.919 Larry Page, Sir Gay Brand and Eric Schmidt as they 0:20:36.920 --> 0:20:40.160 were building Google. Now he's setting his sights even higher. 0:20:40.200 --> 0:20:42.520 I couldn't wait to talk to this guy. Legendary venture 0:20:42.520 --> 0:20:45.320 capitalist John dor laying out an action plan to solve 0:20:45.359 --> 0:20:49.439 what maybe the biggest crisis of our lifetime that's coming up. 0:20:49.600 --> 0:21:01.879 This is Bloomberg. Your listening to Bloomberg Business Week with 0:21:02.000 --> 0:21:06.600 Carol Messer and Bloomberg Quick Takes Tim Stinovich from Bloomberg Radio. 0:21:08.440 --> 0:21:11.000 So when you think about the venture capital world and 0:21:11.040 --> 0:21:14.520 those that supported the entrepreneurs that helped build today's high 0:21:14.560 --> 0:21:18.280 tech society and really the world's most influential tech companies, 0:21:18.320 --> 0:21:20.400 then you've got to think of our next guest. John 0:21:20.440 --> 0:21:22.639 Dora went to work for Kleiner Perkins all the way 0:21:22.640 --> 0:21:26.399 back in It's a company where he now serves as chairman. 0:21:26.560 --> 0:21:28.800 He was an original investor in board member at a 0:21:28.840 --> 0:21:34.359 small company called Amazon, another small company called Google. It 0:21:34.520 --> 0:21:37.400 back in the likes of Larry Page, Serge Bryn, Jeff Bezos, 0:21:37.480 --> 0:21:39.080 and many more. He really had a front seat to 0:21:39.160 --> 0:21:41.919 so much that is so substantial in our world today. 0:21:42.119 --> 0:21:45.200 He has seen innovation and disruption up close and personal. 0:21:45.560 --> 0:21:48.320 Now he hopes that same mentality can help us address 0:21:48.320 --> 0:21:51.040 and fix the climate crisis. Door leays it all out 0:21:51.080 --> 0:21:53.760 in his new book, Speed and Scale, An Action Plan 0:21:53.880 --> 0:21:56.800 for Solving Our Climate Crisis Now. He told Carol and 0:21:56.960 --> 0:22:00.680 Bloomberg News cross Asset reporter Katie Greifeld that he set 0:22:00.680 --> 0:22:03.000 out to create this framework way back in two thousand 0:22:03.119 --> 0:22:06.280 six after seeing the documentary An Inconvenient Truth with his 0:22:06.320 --> 0:22:09.480 then teenage daughter Mary. I had gone with some friends 0:22:09.480 --> 0:22:13.760