Speaker 1: Bloomberg Audio Studios, podcasts, radio news. The investors are awaiting
Speaker 1: the University of Michigan's consumer sentiment data out next hour
Speaker 1: that could shut some weight on how evolving trade policies
Speaker 1: are impacting inflation and household confidence. Matt Miller sat down
Speaker 1: with Tom Wagner, the Nighthead Capitol co founder, in Lela, France,
Speaker 1: and asked him what the FED could be doing to
Speaker 1: stem inflationary pressures.
Speaker 2: I do think the FED needs to cut. Yes, I
Speaker 2: don't think that. I think we're below target inflation, and
Speaker 2: I think that you can make an argument that some
Speaker 2: of the excess spread and rates that we have, you know,
Speaker 2: put inflationary pressures on key consumer products like housing and auto.
Speaker 2: Those are industries that are not doing particularly well at
Speaker 2: the moment, and I think they would benefit from a
Speaker 2: cut and are critically important industries, not just to the
Speaker 2: US economy, to the US consumers.
Speaker 3: Let's go now to Laman for more because Matt Miller
Speaker 3: standing by with the CEO of Hurts. Yeah, thanks very much.
Speaker 4: I do have Gil West here, the CEO of Hurts,
Speaker 4: and Gil great to get some time with you. I
Speaker 4: do want to talk about the business, but first I
Speaker 4: have to ask about your finish last night, Cadillac one
Speaker 4: two Hurts team Yoda locked out the front row for Lamar.
Speaker 3: I mean, how did you do it?
Speaker 5: It's historic stuff, you know. I'm a big gearhead myself
Speaker 5: race vintage and couldn't be happier, couldn't be prouder of
Speaker 5: the team and the partnerships we have. So it's historic
Speaker 5: stuff at the most historic racetrack in the world.
Speaker 4: I always ask CEOs, you know, what's the return on
Speaker 4: investment when it comes to motorsport?
Speaker 3: Because it's fun, So I get why you want to
Speaker 3: do it.
Speaker 4: A lot of people see it maybe as a vanity project,
Speaker 4: but does it really feed down to the bottom line.
Speaker 4: Does your big Hurts logo on that winning Cadillac make
Speaker 4: a difference at the end of the day.
Speaker 5: Yeah, it's racing motorsports, you know, it's part of our heritage.
Speaker 5: Hurts has been involved in motorsports longer than I've been alive.
Speaker 5: You know, me as a customer before I joined Hurts.
Speaker 5: You know sixty five Shelby Hurts GT. You know that.
Speaker 5: You know that drew me to Hurt. So you know,
Speaker 5: we're in the car business and motorsports are central to.
Speaker 4: That in terms of your business, we've had some real
Speaker 4: worries about travel slow down in demand, maybe softer numbers
Speaker 4: than you would have wanted in the first quarter.
Speaker 3: Do you see that picking up now in the second quarter.
Speaker 5: Yeah, I think at an aggregate level, you know, we
Speaker 5: still see your over your growth, you know, as far
Speaker 5: out as we can see. I think the challenge has
Speaker 5: been the mix has shifted. So you know, government travels
Speaker 5: down a bit, but leisure travel, which is our kind
Speaker 5: of highest margin travel, is up. So while the mix
Speaker 5: may shift the US inbound government down, there's other other
Speaker 5: increases in travel as well.
Speaker 4: Herts famously built up its fleet of Tesla's before you
Speaker 4: came on as CEO, and I know you've been working
Speaker 4: to get them down from I think about one hundred thousand.
Speaker 4: How have you worked through that inventory and is that
Speaker 4: part behind you now?
Speaker 5: Yeah? Well, I think the whole industry probably went too
Speaker 5: far too fast with evs. For us, we've rationalized our
Speaker 5: ev fleet and we've reduced it, but more importantly, we've
Speaker 5: rationalized it around where the natural product market fit for
Speaker 5: evs are. So we've got a great partnership with Uber
Speaker 5: and Lyfts, so on the right Hill business that we support.
Speaker 5: There is a lot of demand for ev so we've
Speaker 5: rationalized most of the evs that we have around that.
Speaker 5: We also have them allf airport rentals, which is another
Speaker 5: good product market fit much fewer at the airport.
Speaker 4: You also are one of the biggest sellers of cars,
Speaker 4: and a lot of people don't know that. They think
Speaker 4: obviously of you as a rental car business. But if
Speaker 4: we see car prices go up, does that help your
Speaker 4: business because you can sell cars at a higher price,
Speaker 4: or does it hurt your business because you need to
Speaker 4: replace them at a higher price.
Speaker 5: Yeah, I think we look at the buy in the sell,
Speaker 5: so the difference is what's key for us. Is an example,
Speaker 5: one of our strategies around our fleet is to sell
Speaker 5: more vehicles through retail, which then if you look at
Speaker 5: what we buy vehicles for ultimately what we sell them for,
Speaker 5: you know, it narrows the gap between the two and
Speaker 5: improves our depreciation. So it's a conscious part of our strategy.
Speaker 5: You're right, not a lot of people know that we
Speaker 5: sell cars, but we're one of the largest used car
Speaker 5: dealer ships in the world, so we've grown our capacity
Speaker 5: to sell through retail channels. We do that our seals,
Speaker 5: we digitize the experience, we offer financing, insurance, everything, and
Speaker 5: then we got great partnerships in that space as well.
Speaker 5: But as residual values increase, it certainly helps us in
Speaker 5: the short run.
Speaker 4: In terms of you mentioned the airport locations obviously, and
Speaker 4: then off airport is helpful. You're getting a lot more
Speaker 4: competition right now. What does that do to pricing if
Speaker 4: you have say sixth coming into fifty airports across America?
Speaker 5: Yeah, well, I mean competition will always face competition. You know,
Speaker 5: we're positioned well. We've got an iconic brand, been here
Speaker 5: for over one hundred years for us. We've really focused
Speaker 5: and leaned into what we call back to basics. But
Speaker 5: it's running just a great operational excellence along with enhancing
Speaker 5: our customer experience. So we're differentiated and people want to
Speaker 5: rent from Hurts. And then from a competitive standpoint, we
Speaker 5: positioned ourselves well.
Speaker 4: In terms of investors, we just heard from Tom Wagner,
Speaker 4: you know he at Nighthead.
Speaker 3: They have well over fifty percent stake I think in
Speaker 3: the company.
Speaker 4: And recently we've seen Bill Ackman get involved as well.
Speaker 3: Does Bill want to call you up? Does he get
Speaker 3: you on the phone, Does he give you advice?
Speaker 5: Yeah? Well, first of all, I mean we're really happy
Speaker 5: with his confidence in Hurts and his investment, so we
Speaker 5: welcome an investment, certainly welcome all ideas has included from
Speaker 5: all quarters, you know, as we're looking to transform the business.
Speaker 5: So he's got some great insights, he and his team,
Speaker 5: so we appreciate all the input we can get.
Speaker 3: How do you transform the business?
Speaker 4: I think of a future where we all get into
Speaker 4: a car that drives itself.
Speaker 3: Is that a benefit to you or is that? Is
Speaker 3: that a problem for It's in the future.
Speaker 5: Yeah, we're of course we're a huge fleet manager, right,
Speaker 5: I mean we've got you know, well over half a
Speaker 5: million vehicles. So if you think about large fleets, asset
Speaker 5: heavy footprint to operate them globally, you know, carrying feeding,
Speaker 5: maintenance of all those vehicles. We're one of a few
Speaker 5: in the world that can do this at scale. So
Speaker 5: we're a natural player in the av space.
Speaker 3: And so how soon do you expect that to happen?
Speaker 4: When am I going to go to you know, my
Speaker 4: Hurts location at John Glenn International Airport in Columbus, Ohio
Speaker 4: and get myself a car that can drive me home
Speaker 4: to Granville.
Speaker 5: Yeah, I think it's coming quicker than what we have
Speaker 5: all thought. You know, it's been leading up to the moment,
Speaker 5: but I think right now most major cities in the
Speaker 5: US you're starting to see not just testing but commercial deployment.
Speaker 5: So our aim is to be, you know, one of
Speaker 5: the key players in that mark good space.
Speaker 4: All right, Well, you're certainly one of the key players
Speaker 4: here at the twenty four hours of Little mom It
Speaker 4: was amazing to see.
Speaker 3: You guys qualify in first and second lock out. The
Speaker 3: front row