WEBVTT - Bloomberg Businessweek Weekend - September 23rd, 2022 0:00:01.040 --> 0:00:05.400 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 --> 0:00:12.600 Global Business, finance and Tech News. As it happened. Miss 0:00:12.600 --> 0:00:16.440 Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes 0:00:16.520 --> 0:00:20.640 Tim Stinovic on Bloomberg radio. Hi Everyone, welcome to the 0:00:20.680 --> 0:00:24.440 weekend edition of Bloomberg Business Week. I'm Tim Stanovic. Carol 0:00:24.480 --> 0:00:27.480 Master will be back next week. The Federal Reserve firing 0:00:27.480 --> 0:00:30.640 its latest salvo in the fight against inflation on Wednesday, 0:00:30.920 --> 0:00:34.839 announcing a third consecutive jumbo interest rate hike. The FMC 0:00:35.120 --> 0:00:37.600 raised its policy interest rate by three quarters of a 0:00:37.600 --> 0:00:41.960 percentage point, and we anticipate that ongoing increases will be appropriate. 0:00:42.159 --> 0:00:44.960 We are moving our policy stance purposefully to a level 0:00:45.000 --> 0:00:49.320 that will be sufficiently restrictive to return inflation to two that, 0:00:49.400 --> 0:00:51.440 of course, was the voice of Fed share j Powell. 0:00:51.640 --> 0:00:54.720 The question is whether continued tightening will prove to be 0:00:54.760 --> 0:00:57.720 too much too soon. We'll discuss that prospect with our 0:00:57.720 --> 0:01:01.200 business week team. Also ahead on the program optimism about 0:01:01.240 --> 0:01:04.120 the Labor picture at a critical US trade hub. We'll 0:01:04.160 --> 0:01:06.960 talk with the executive director at the port of Long Beach, 0:01:07.200 --> 0:01:09.399 and then we'll go beyond our borders for a look 0:01:09.400 --> 0:01:13.280 at China's decades long effort to build the ultimate surveillance state, 0:01:13.560 --> 0:01:15.800 and a business week reveals its annual ranking of the 0:01:15.800 --> 0:01:19.520 world's top NBA programs, and our cover story explores the evil, 0:01:19.560 --> 0:01:23.240 genius and incredible success of Apple's air pods. All of 0:01:23.280 --> 0:01:25.760 that to come, though. We begin with the Global Monetary 0:01:25.800 --> 0:01:29.000 Policy Picture. The economic section this week has a piece 0:01:29.000 --> 0:01:31.480 about the big gamble that central banks around the world 0:01:31.560 --> 0:01:34.440 are following the Fed's lead and raising rates. For More 0:01:34.640 --> 0:01:37.119 Carol and I spoke with Business Week editor Joe Weber 0:01:37.360 --> 0:01:40.120 and Bloomberg's rich Miller. You know, it's incredible. When you 0:01:40.160 --> 0:01:42.760 look through it. It's like nineties central banks of you know, 0:01:42.880 --> 0:01:45.080 hiked and you know like more than half of them 0:01:45.080 --> 0:01:46.759 have hiked by pre court as some of the more 0:01:47.160 --> 0:01:49.200 more than that, as you say, like everybody's trying to 0:01:49.200 --> 0:01:52.760 out Haaulk each other, right, and there are some people worried, 0:01:52.840 --> 0:01:55.280 you know, with everybody going in the same direction, the 0:01:55.360 --> 0:01:58.920 boat's going to tip over into global recession. Right. So 0:01:59.520 --> 0:02:01.280 that's one thing and the other thing is when the 0:02:01.440 --> 0:02:03.720 raise rates, you first see it in the stock market, 0:02:03.840 --> 0:02:06.320 stock market weekends. Then you sort of see it in, 0:02:06.720 --> 0:02:09.320 you know, the housing market, the Housing Market Solce, and 0:02:09.400 --> 0:02:11.880 it comes at the very end, it comes into inflation. But, 0:02:11.919 --> 0:02:15.919 as you say, if they're myopically, you know, focusing on inflation, 0:02:16.320 --> 0:02:18.760 that means they're probably going to Overdo it and that's 0:02:18.800 --> 0:02:22.400 gonna push us into a recession, maybe your recession. You know, 0:02:22.480 --> 0:02:25.800 all all around the globe rich and we're talking millions 0:02:25.800 --> 0:02:27.920 of jobs here. As you write in your piece, analysts 0:02:27.919 --> 0:02:30.200 at black rock reckon that bringing inflation back to the 0:02:30.200 --> 0:02:33.440 feds two goal would mean a deep recession and three 0:02:33.600 --> 0:02:36.720 million more unemployed, and then also hitting the ECBES target 0:02:36.880 --> 0:02:39.960 would require an even bigger contraction. All that, right now 0:02:40.080 --> 0:02:44.280 is is spelling out a global recession, something that affects 0:02:44.320 --> 0:02:46.200 the entire globe. So what does this look like when 0:02:46.240 --> 0:02:50.760 it comes to economic growth? Translating that three million unemployed 0:02:50.800 --> 0:02:53.079 into like growth, you you probably have two, two, and 0:02:53.080 --> 0:02:57.800 a contraction in the economy, in the U S economy. Uh, 0:02:57.840 --> 0:03:00.680 an actual contraction as opposed to sort of, you know, 0:03:00.760 --> 0:03:03.040 the sort of phony contraction that we got earlier this 0:03:03.160 --> 0:03:06.320 year when it was mainly because we were importing more. 0:03:06.400 --> 0:03:08.400 But you know, this would be actual contraction and you 0:03:08.400 --> 0:03:10.360 know pain, the pain would be in the labor market. 0:03:10.400 --> 0:03:12.680 And you know, one of the questions is, you know, 0:03:13.760 --> 0:03:16.320 you know the politicians now, with the most part except 0:03:16.360 --> 0:03:20.080 for UH senator war, and they're sort of cheering the 0:03:20.120 --> 0:03:23.160 Fed on. Yeah, inflations bed. Go ahead, fed, raise the race. 0:03:23.320 --> 0:03:26.680 But you know, once, once you start seeing some pain, 0:03:27.480 --> 0:03:30.000 j Powell has promised us, you you wonder whether the 0:03:30.040 --> 0:03:32.840 politicians will change their tune, which were already saying pain. 0:03:33.200 --> 0:03:36.120 And it made me want to ask you about lag effect. 0:03:36.200 --> 0:03:38.840 What is it really I mean we're seeing it already 0:03:38.840 --> 0:03:43.240 on housing, but the successive and cumulative interest rate hikes 0:03:43.240 --> 0:03:45.600 by global central banks right all of a sudden, I 0:03:45.600 --> 0:03:47.400 feel like it's like when you know you've got a 0:03:47.480 --> 0:03:50.520 clog and you're pushing through, nothing's happening and then all 0:03:50.520 --> 0:03:52.960 of a sudden it comes flying through. I'm waiting for that. 0:03:53.080 --> 0:03:55.360 Is that what's going to happen? I mean, that is 0:03:55.400 --> 0:03:58.720 the danger and that's in the past why the central 0:03:58.760 --> 0:04:01.040 banks would when they did race rates, they'd go in 0:04:01.160 --> 0:04:04.640 small steps, like basis points. So you go, you go 0:04:04.800 --> 0:04:07.320 slowly and you see that you know you have a 0:04:07.360 --> 0:04:09.880 little more time to see what they impact your rates 0:04:09.880 --> 0:04:12.560 were having. You know so, but when you're going and 0:04:12.560 --> 0:04:16.680 when you're galloping ahead in like seventy five basis point chunks, 0:04:16.920 --> 0:04:19.400 you know, you don't have as much time to sort 0:04:19.400 --> 0:04:24.120 of gauge how how the earlier hikes were are affecting growth. And, 0:04:24.120 --> 0:04:26.760 as you say, housing is kind of in the crosshairs here. 0:04:27.320 --> 0:04:30.640 But you know, if housing weekends and you know, people 0:04:30.640 --> 0:04:35.919 are buying lesser appliances, people Um feel that their house 0:04:36.000 --> 0:04:39.440 prices are going down and they're gonna save more and 0:04:39.480 --> 0:04:42.719 that just has ripples. So it just takes time. But 0:04:42.920 --> 0:04:46.280 you know, as you say, it could sort of be like, 0:04:46.680 --> 0:04:51.039 you know, an exploding toilet right could splash right into 0:04:51.040 --> 0:04:53.799 our faces. But I don't want to be graphic here. 0:04:58.040 --> 0:05:01.560 Joe was known for some gracy. No, I know the 0:05:01.600 --> 0:05:04.360 bar bag was the favorite. Might need to dust that 0:05:04.400 --> 0:05:07.640 one off. Look for the you know, your passenger next 0:05:07.680 --> 0:05:10.640 to you. You can get there. Back to Um rich. 0:05:10.839 --> 0:05:13.240 One of the things that I thought was a little 0:05:13.279 --> 0:05:17.000 bit frightening, that I hadn't totally appreciated was um the 0:05:17.080 --> 0:05:21.679 growth forecast charts in your story US goes down pretty 0:05:21.760 --> 0:05:25.039 dramatically when you start to look out euro area worse. 0:05:25.279 --> 0:05:29.320 UK Man, that looks really bad from the sense of 0:05:29.360 --> 0:05:31.159 the folks that you talked to in the daddy that 0:05:31.160 --> 0:05:33.240 you're looking at it is it starting to feel like 0:05:33.279 --> 0:05:35.440 there's that pit in the stomach that's like, Oh God, 0:05:35.440 --> 0:05:37.799 this is going to get really bad. Truth be told, 0:05:38.279 --> 0:05:40.880 the U S we you know, we've held up surprisingly well. 0:05:41.360 --> 0:05:44.520 The Labor markets held up pretty well. The problem in 0:05:44.560 --> 0:05:47.880 the US is we've got this you know, embedded inflation problem. 0:05:48.080 --> 0:05:50.479 That the strongest the economy is, it means probably the 0:05:50.480 --> 0:05:52.320 Fed's going to have to work that much harder to 0:05:52.400 --> 0:05:54.960 slow things down, and that's when you know, you you 0:05:55.000 --> 0:05:57.240 get risk that they slow it down too much and 0:05:57.440 --> 0:05:59.680 we go slip in into a recession rich real quickly. 0:05:59.680 --> 0:06:04.760 Just Kinda at here. Is Inflation still a supply problem 0:06:05.040 --> 0:06:08.640 or is it now kind of more demand problem, and 0:06:08.640 --> 0:06:12.760 that's where the Fed can do something. I think in 0:06:13.120 --> 0:06:15.880 the US it's probably becoming more and more demand problem, 0:06:15.920 --> 0:06:18.360 particularly in the labor market with, you know, wages are 0:06:18.360 --> 0:06:21.680 going up about five six percent a year and to 0:06:21.760 --> 0:06:24.200 be consistent with the Fed's target they have to be 0:06:24.200 --> 0:06:26.560 going up three and a half percent. So I got 0:06:26.560 --> 0:06:29.080 a long way Togo that's why people think unemployment's gonna 0:06:29.120 --> 0:06:30.680 have to go up a lot. So workers finally get 0:06:30.680 --> 0:06:33.640 a break and now it's like, yeah, I'm sorry about that, 0:06:34.560 --> 0:06:36.400 it's not a good thing. We won't blame you, rich 0:06:37.520 --> 0:06:40.479 or we can all started here, because the rich Miller 0:06:40.560 --> 0:06:43.600 is excellent reporting. He's in DC, so there's nothing you 0:06:43.600 --> 0:06:48.359 can do directly. That was Bloomberg Economic Editor Rich Miller, 0:06:48.440 --> 0:06:51.640 along with business week editor Joel Weber, and coming up 0:06:51.640 --> 0:06:54.680 optimism on the Labor front and on supply chains at 0:06:54.680 --> 0:06:59.039 America's second busiest port. Mario Cordero, executive director of the 0:06:59.040 --> 0:07:01.640 port of Long Beach, joins US next. You're listening to 0:07:01.640 --> 0:07:12.760 Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business 0:07:12.880 --> 0:07:16.560 Week with Carol Messer and Bloomberg Quick Takes Tim stinnoby 0:07:16.800 --> 0:07:21.880 from Bloomberg radio. It's the second busiest port in North America, 0:07:22.120 --> 0:07:25.240 generating some two point six million jobs across the US, 0:07:25.760 --> 0:07:28.760 with some seventy five shipping lines connecting long beach to 0:07:28.840 --> 0:07:32.360 two hundred and seventeen seaports. So just how healthy do 0:07:32.400 --> 0:07:34.880 our supply chains look right now, with a smaller backlog 0:07:34.920 --> 0:07:38.240 and fading concerns about potential work stoppages at our docks 0:07:38.400 --> 0:07:40.960 and on the nation's rail system. With more on the 0:07:40.960 --> 0:07:43.600 state of our shipping in cargo industry, we welcome back 0:07:43.640 --> 0:07:46.560 the executive director of the port of Long Beach, Mario Cordero. 0:07:46.640 --> 0:07:49.200 When you look at the metrics here, currently we have 0:07:49.480 --> 0:07:52.040 in the San Peter Bay Complex twelve vessels backed up 0:07:52.240 --> 0:07:54.920 trying to get into the ports. So if you go 0:07:55.040 --> 0:07:57.080 back to January, that number was one hundred and nine. 0:07:57.560 --> 0:08:00.120 So just on that alone it's a tremendous progress is 0:08:00.120 --> 0:08:02.560 being made. Is Any of that seasonal? You know we're 0:08:02.560 --> 0:08:04.960 in peak season right now and I think we're at 0:08:05.000 --> 0:08:07.840 the peak, so to speak. Again you're looking at the 0:08:07.920 --> 0:08:11.320 numbers of the consumer demand or some softening on that. 0:08:11.640 --> 0:08:13.400 So for the third and fourth quarter of the year, 0:08:13.400 --> 0:08:16.560 I think we're looking to diminish demand turns on the 0:08:16.600 --> 0:08:18.480 consumer front. I feel like you have such a great 0:08:18.520 --> 0:08:20.280 vantage point when it comes to you what's going on 0:08:20.280 --> 0:08:21.960 on an economy and we're all kind of on pins 0:08:22.000 --> 0:08:24.240 and needles trying to figure out what comes next. What 0:08:24.480 --> 0:08:26.640 is your read on the state of the U S 0:08:26.680 --> 0:08:29.080 economy right now? I think we have a strong economy. 0:08:29.120 --> 0:08:31.600 We certainly have a strong labor market and keep in 0:08:31.640 --> 0:08:35.560 mind where we were two years ago. I think part 0:08:35.600 --> 0:08:38.840 of the two years was terrible, right, the outlier. So 0:08:38.880 --> 0:08:41.920 are we pre pandemic levels? Are Like? How do you 0:08:42.720 --> 0:08:44.400 in terms of in terms of the job market? I 0:08:44.400 --> 0:08:46.679 think we're approaching pre pandemic levels in terms of the 0:08:46.760 --> 0:08:49.719 jobs that have been added since then. But I think 0:08:50.000 --> 0:08:52.480 the point is we've had a very fast recovery from 0:08:52.480 --> 0:08:55.600 a worse scenario that we experience. So in that regard 0:08:55.840 --> 0:08:58.400 the economy was real hot and now, of course, what 0:08:58.440 --> 0:09:00.400 we're trying to do as a nation is kind of 0:09:00.600 --> 0:09:03.079 soften that. When you look at the activity at the port, 0:09:03.280 --> 0:09:05.880 and it's really just fascinating about just the the amount 0:09:05.960 --> 0:09:11.079 of flow through there and what the imports of the 0:09:11.160 --> 0:09:15.000 exports moving through your port. Largest trading partner country is China, 0:09:15.240 --> 0:09:19.000 which accounts for so much of it. Does recession come 0:09:19.040 --> 0:09:21.520 to your mind a lot in terms of the activity 0:09:21.559 --> 0:09:24.560 you're seeing? A good friend of mine, economist Paul Bingham, 0:09:24.600 --> 0:09:27.320 who has been following this industry for many, many years, 0:09:27.360 --> 0:09:29.840 once said tell me how many containers go through the 0:09:29.840 --> 0:09:31.600 Poort Long Beach and I'll tell you how good the 0:09:31.640 --> 0:09:37.600 economy is. So so far good. Is Inflation a concern? Yes. However, again, 0:09:38.240 --> 0:09:40.760 if you look at the latest plan of action by 0:09:40.800 --> 0:09:43.520 the Federal Reserve, they believe they may be able to 0:09:43.520 --> 0:09:46.520 control this. Will wait to see what that decision is, uh, 0:09:46.559 --> 0:09:49.360 in the coming week, whether that's point seven, five or one, 0:09:49.400 --> 0:09:52.200 oh increase. But I think it's safe to say that 0:09:52.559 --> 0:09:56.800 again we went through an unusual quick recovery. The consumer 0:09:56.880 --> 0:09:59.599 demand has really been extraordinary in the last year and 0:09:59.600 --> 0:10:03.480 a half. Energy prices have gone down. Admittedly, grocery prices 0:10:03.520 --> 0:10:06.320 have gone up. So I think what we're looking to 0:10:06.640 --> 0:10:11.880 is again a very good job market, good consumer demand, considerably, uh, 0:10:12.120 --> 0:10:15.720 considerable in terms of what we experienced puriously. But again 0:10:16.000 --> 0:10:19.000 we are looking at some economic growth, certainly in the 0:10:19.040 --> 0:10:21.640 global arena and at the United States. I think we're 0:10:21.640 --> 0:10:24.160 going to feel some of that also. So it sounds 0:10:24.160 --> 0:10:27.120 like you're saying we're not in a recession right now. Today. 0:10:27.200 --> 0:10:30.520 We're not. I mean, you know, is it removing towards 0:10:30.520 --> 0:10:34.360 your recession? Fore? I mean there's a debate. I know 0:10:34.559 --> 0:10:37.720 that all this is uh highlights. How many like do 0:10:37.840 --> 0:10:40.840 people book? Help me out with, like the shipping understanding shipping, 0:10:41.120 --> 0:10:43.720 having recently been at the Panama Canal fascinating to just 0:10:43.880 --> 0:10:47.119 understand it. Same thing with your report. Do our companies 0:10:47.160 --> 0:10:50.559 booking for December? Are they booking for November? Like, how 0:10:50.640 --> 0:10:53.920 much visibility or how much forward looking visibility do you 0:10:53.920 --> 0:10:56.080 actually have to get an idea of? Wow, things are 0:10:56.120 --> 0:10:58.320 going to slow down. Well, what I can tell you 0:10:58.559 --> 0:11:00.800 is part of the problem that we variance here in 0:11:00.840 --> 0:11:04.880 the nation's largest, most strategic gateway is the advancing of 0:11:04.920 --> 0:11:07.880 that inventory. So, looking forward, some of these companies were 0:11:07.920 --> 0:11:10.080 advancing the inventory, but they certainly didn't want to put 0:11:10.160 --> 0:11:12.840 us back to where we were in the second half 0:11:12.880 --> 0:11:17.760 of uh so I think, uh, it's interesting to watch. 0:11:17.840 --> 0:11:20.360 You know, there's some bigger company to start looking at 0:11:20.400 --> 0:11:23.720 their labor force. Uh. But at this point I will 0:11:23.760 --> 0:11:26.960 say that in terms of the coming holiday Christmas season, 0:11:27.679 --> 0:11:30.760 we're gonna be very well established in terms of that 0:11:30.800 --> 0:11:34.319 inventory because much of that has been advanced already. It's 0:11:34.360 --> 0:11:36.679 already it's already where it needs to be. Right I 0:11:36.679 --> 0:11:38.200 mean for the poor lamumage. If you look at the 0:11:38.200 --> 0:11:41.640 first eight months of this year, we've superseded the numbers 0:11:41.679 --> 0:11:44.439 of our record year last year at this point by 0:11:44.440 --> 0:11:47.559 four point six percent. So that's kind of an indicator 0:11:47.600 --> 0:11:50.600 in terms out of continued volume. But again, it's gonna 0:11:50.600 --> 0:11:52.760 be interesting to see how we end the third and 0:11:52.800 --> 0:11:54.720 approach the fourth quarter, because it doesn't make me feel 0:11:54.760 --> 0:11:56.480 like people are pulling a lot of stuff forward because 0:11:56.480 --> 0:11:58.200 they just don't want to be caught off guard like 0:11:58.240 --> 0:12:00.560 things can get it more expensive, so they're buying now. Yeah, 0:12:00.640 --> 0:12:03.240 or empty shelves, and you don't want that in Christmas rights, 0:12:03.240 --> 0:12:06.680 but especially if you're a retailer. Correct, and I firmly 0:12:06.679 --> 0:12:09.079 believe we're not going to see that scenario for sure. Hey, 0:12:09.080 --> 0:12:11.120 tell us a little bit about what you're saying based 0:12:11.160 --> 0:12:14.200 on where poor traffic is coming from and what that 0:12:14.200 --> 0:12:16.640 says about economies around the world. I know you guys 0:12:16.640 --> 0:12:19.360 have a really good view on Asia. Is there any 0:12:19.400 --> 0:12:22.480 softness there? What we see in Asia, more specifically China? 0:12:22.520 --> 0:12:25.800 You are seeing a slowdown there. UH, in China. So 0:12:26.000 --> 0:12:28.320 that is the domino effect. But is that? Is that 0:12:28.360 --> 0:12:31.440 based on lockdowns in China? Is it based on the 0:12:31.480 --> 0:12:33.840 covid zero policy, or is it is it all tied 0:12:33.880 --> 0:12:37.679 to that? It's all tied to what precipitated these times, 0:12:37.720 --> 0:12:42.040 that is, the covid nineteen pandemic. So I think again, Um, 0:12:42.320 --> 0:12:44.319 we'll see how China handles this. I mean the good 0:12:44.360 --> 0:12:45.680 news is I don't think you're going to see the 0:12:45.720 --> 0:12:47.480 kind of lockdowns in China and we saw in the 0:12:47.520 --> 0:12:50.520 past because they're also watching their numbers in terms of 0:12:50.559 --> 0:12:54.520 their economic growth. So there'll be a softening and as 0:12:54.559 --> 0:12:57.720 we approach three I believe that the good news the 0:12:57.760 --> 0:13:00.840 supply change. Certain United States. I think we're now seeing 0:13:00.920 --> 0:13:05.080 some semblance of normalization and moderation and supply change, so 0:13:05.120 --> 0:13:07.840 that's very good news. Why is it still such a 0:13:07.920 --> 0:13:10.680 lag or such a problem and not back to what 0:13:10.720 --> 0:13:12.839 it should be? I think a lot has to do 0:13:12.920 --> 0:13:16.040 at the congestion in the inland in the model yards. 0:13:16.040 --> 0:13:19.200 I mean this goes back to Chicago in the hubs there. 0:13:19.240 --> 0:13:22.120 I think the class one railroads have been rather challenge. 0:13:22.520 --> 0:13:24.679 They have their own challenges, would be regard to shortage 0:13:24.679 --> 0:13:28.360 of labor and equipment issues. So I think unfortunately we've 0:13:28.360 --> 0:13:30.440 been the victims of the lack of that rail car 0:13:30.920 --> 0:13:34.040 which in my view, should not happen at the world's 0:13:34.240 --> 0:13:38.640 most strategic, significant gateway. I am disappointed on that point 0:13:38.679 --> 0:13:40.960 that it's happened. We're talking with Mario Coudero. He's executive 0:13:40.960 --> 0:13:42.959 director of the port of Long Beach. As we said, 0:13:43.320 --> 0:13:45.760 it is the second busiest port in North America and 0:13:45.840 --> 0:13:47.840 so a great way to get a feel of what's 0:13:47.840 --> 0:13:50.120 going on in the economy. Do you feel like, based 0:13:50.160 --> 0:13:54.400 on what happened and the supply chain problems and just 0:13:54.520 --> 0:13:57.320 it wasn't just port issues, but it was trucking, it 0:13:57.360 --> 0:13:58.920 was just kind of all along the line, that we 0:13:58.960 --> 0:14:02.440 will ultimately see in some ways, more automation potentially come 0:14:02.480 --> 0:14:04.840 into this industry? I think the good news for those 0:14:04.840 --> 0:14:09.000 of us in this industry people finally saw the importance 0:14:09.160 --> 0:14:12.280 and witness the importance of a supply chain. We all 0:14:12.320 --> 0:14:15.000 found out that the supply chain is not as resilient 0:14:15.080 --> 0:14:17.080 as some people may have thought. We took it for granted. 0:14:17.200 --> 0:14:20.239 We took it for granted. So you know, the essential workforce, 0:14:20.640 --> 0:14:23.320 which includes obviously our safety officers, are people in the 0:14:23.400 --> 0:14:26.040 health industry during this pandemic, but also are people who 0:14:26.120 --> 0:14:28.200 work in goods movement, people who work, men and women 0:14:28.200 --> 0:14:31.200 who work on the docks, the truckers, the railroad workers, 0:14:31.680 --> 0:14:35.280 essential workers who moved commerce, which has a great impact, obviously, 0:14:35.280 --> 0:14:38.480 on our GDP, our economy. So I think the good 0:14:38.480 --> 0:14:41.440 news for us is. It's not just about talk of 0:14:41.440 --> 0:14:44.320 how importance this industry is. We've seen it, particularly from 0:14:44.320 --> 0:14:47.320 this administration, in terms of the investment, the funding in 0:14:47.360 --> 0:14:50.360 this industry in America Sports. That was Mario Cordero. He's 0:14:50.400 --> 0:14:53.280 the executive director at the port of Long Beach. Still 0:14:53.360 --> 0:14:55.720 had on Bloomberg Business Week. We go from ships to 0:14:55.760 --> 0:14:58.480 cars and the US auto giant playing the long game 0:14:58.520 --> 0:15:00.440 when it comes to winning the race to the top 0:15:00.680 --> 0:15:09.240 of the E V food chain. This is Bloomberg Broadcasting 0:15:09.280 --> 0:15:12.760 from the financial capital of the world, Bloomberg Eleven, trio 0:15:13.120 --> 0:15:17.040 in New York, to Washington, D C, Bloomberg to Boston, 0:15:17.160 --> 0:15:20.520 Bloomberg one, Oh six one, to San Francisco, Bloomberg nine, 0:15:20.600 --> 0:15:23.800 six to the country Sirius Xm, Channel One ninety and 0:15:23.880 --> 0:15:28.160 around the globe the Bloomberg business and Bloomberg radio DOT COM. 0:15:28.320 --> 0:15:32.320 This is Bloomberg Business Week with Carol Messer and Bloomberg 0:15:32.440 --> 0:15:37.800 quick takes. Tim Stenovan on Bloomberg Radio. The iconic American 0:15:37.840 --> 0:15:40.920 automaker General Motors wants to be the tortoise, not the hair, 0:15:41.200 --> 0:15:44.800 in the great electric vehicle race. That's according to Bloomberg News. 0:15:44.840 --> 0:15:47.960 Detroit Bureau Chief David Welch the story in the business 0:15:47.960 --> 0:15:50.040 section of this week's issue of the magazine, and it's 0:15:50.040 --> 0:15:53.880 adapted from David's newly released book charging ahead. GM, Mary 0:15:53.920 --> 0:15:56.920 Barra and the reinvention of an American icon. And the 0:15:56.960 --> 0:15:59.200 company is betting that a slew of e V models 0:15:59.240 --> 0:16:02.000 due next year will prove the wisdom of its deliberate pace. 0:16:02.320 --> 0:16:04.880 So Business Week editor Joe Webber, Carol and I asked 0:16:04.960 --> 0:16:08.320 David White. GM has trailed the competition despite being an 0:16:08.320 --> 0:16:11.440 early mover in the e V space. GM at its 0:16:11.440 --> 0:16:14.800 heart is a really pragmatic company and one thing people 0:16:14.800 --> 0:16:18.280 forget about Mary Barrow, because they see her as the 0:16:18.320 --> 0:16:22.320 first email CEO, is she's an engineer and her sidekick, 0:16:22.400 --> 0:16:24.520 Mark Royce is also an engineer. So for the first 0:16:24.560 --> 0:16:28.200 time since the sixties the company is run by engineers. 0:16:28.480 --> 0:16:30.360 They don't go for buzz. They don't try to jam 0:16:30.360 --> 0:16:32.480 a battery in an existing vehicle to get on the 0:16:32.480 --> 0:16:35.040 cover of business week, although that lightning cover was really, 0:16:35.040 --> 0:16:41.240 really well done by my tellings. They you know, they decide, okay, 0:16:41.240 --> 0:16:43.080 we're going to build a battery pack that can host 0:16:43.160 --> 0:16:45.800 everything from a little Chevy Equinox and actually even smaller 0:16:45.840 --> 0:16:48.720 they're working on subcompacts for global markets all the way 0:16:48.760 --> 0:16:51.040 up to this huge nine thousand pound Hummer and everything 0:16:51.080 --> 0:16:53.640 in between. And they're going to build their battery plants. So, 0:16:54.040 --> 0:16:56.600 other than Tesla, GM has the only battery plant making 0:16:56.640 --> 0:16:59.960 battery packs and sells. It's in Orangetown, Ohio. It's going 0:17:00.120 --> 0:17:01.560 right now. The second one is going to open in 0:17:01.600 --> 0:17:05.720 Spring Hill, Tennessee, near the old Saturn plant, next year. Again, 0:17:05.800 --> 0:17:08.320 engineering mindset. Get your building blocks in place, get your 0:17:08.320 --> 0:17:11.160 plants up, then you spawn this huge family of evs. 0:17:11.440 --> 0:17:14.880 What your story really injes on is this ultium, which 0:17:14.960 --> 0:17:17.840 is the battery platform. So what is Jim Hoping to 0:17:17.920 --> 0:17:20.399 accomplish there and where does this potentially allow them to go? 0:17:20.720 --> 0:17:25.000 Right now they've got too luxury electric vehicles in production. 0:17:25.040 --> 0:17:27.240 They've got the Big Hummer and they've got a cadillac lyric, 0:17:28.080 --> 0:17:31.639 and this is sort of historic. GM goes back to Alfredson. 0:17:31.840 --> 0:17:34.040 Start off with your coolest stuff in your luxury brands 0:17:34.040 --> 0:17:36.760 and then slowly got down the scale. And next year 0:17:36.880 --> 0:17:40.159 they'll have chevy silverado pickup, which the year behind, but 0:17:40.240 --> 0:17:42.840 we'll compete with the fine fifty lightning. Then they have 0:17:42.880 --> 0:17:45.520 the Chevy bloody midsize. That should be family car for 0:17:45.560 --> 0:17:47.760 a lot of people. Not Super Cheap but pretty cheap. 0:17:47.840 --> 0:17:51.679 Then about this time next year the Chevy Equinox. The Equinox, 0:17:51.840 --> 0:17:54.119 now that no one buys families and dams anymore, equinox 0:17:54.200 --> 0:17:56.560 is really Chevy's family car. And they're going to start 0:17:56.600 --> 0:17:58.879 this thing at thirty thousand which, other than the bold, 0:17:58.880 --> 0:18:02.040 which again compact, are Americans still like complex, will be 0:18:02.040 --> 0:18:04.359 the cheapest on the market. And it really to me 0:18:04.520 --> 0:18:07.240 that is it's two things. It's really the fruit of 0:18:07.240 --> 0:18:09.280 this whole Al team thing. They believe they've got the 0:18:09.320 --> 0:18:13.200 scale and the platform where they can democratize electric vehicles 0:18:13.200 --> 0:18:15.760 by bringing mass market family card to people who don't 0:18:15.800 --> 0:18:19.040 have three other four expensive vehicles in their garage. And 0:18:19.080 --> 0:18:20.920 the other thing is it really is a litmus test 0:18:21.000 --> 0:18:23.679 or how ready Middle America is to go with battery 0:18:23.720 --> 0:18:26.080 powered vehicles and charge up the secret sauce. Seems to 0:18:26.080 --> 0:18:28.720 be this ultimum about it, and you write that it's 0:18:28.720 --> 0:18:32.359 really about changing the way cars are made. So what's different? Ultimate? Basically, 0:18:32.359 --> 0:18:34.159 it's a battery pack that makes up the floor of 0:18:34.160 --> 0:18:37.960 the vehicle. This is way over simplification of the guys 0:18:37.960 --> 0:18:40.080 and the factories. And you're not doing that because I'm 0:18:40.119 --> 0:18:42.200 a girl, are you? I am the daughter of an engineer, 0:18:42.320 --> 0:18:45.640 so you can. You can go with it. I'm doing 0:18:45.640 --> 0:18:49.879 it because assembly board, but you're basically bolting whatever vehicle 0:18:50.160 --> 0:18:52.840 it is on top of that skateboard kind of platform. 0:18:52.920 --> 0:18:55.960 It's not quite a skateboard, but close enough, so you 0:18:56.000 --> 0:18:58.480 can and it's also sort of a Lego set. So 0:18:58.480 --> 0:19:02.000 if you need to build it longer or wider or 0:19:02.000 --> 0:19:03.679 shorter or whatever, you can do that. The other thing 0:19:03.720 --> 0:19:06.080 they can do, and this is what they've done with 0:19:06.080 --> 0:19:08.240 the Hummer, you can actually stack them on top of 0:19:08.280 --> 0:19:10.119 each other. So if you have a big, heavy vehicle 0:19:10.200 --> 0:19:12.560 that has a thousand horse power, which the Hummer does, 0:19:12.800 --> 0:19:14.720 so you need a lot of power on board, you 0:19:14.760 --> 0:19:17.040 can just add more battery, which we have more electricity 0:19:17.040 --> 0:19:19.879 by stacking these cells on top of each other. She 0:19:19.960 --> 0:19:22.240 can have a big and wide and you can stack 0:19:22.320 --> 0:19:24.719 them up for more energy. There's just really is kind 0:19:24.720 --> 0:19:26.560 of like a Lego said, but this really is. This 0:19:26.640 --> 0:19:30.119 is commercializing electric the battery itself doesn't have any special 0:19:30.200 --> 0:19:33.200 chemistry or special sauce. It's a commercialization and an industrial 0:19:33.240 --> 0:19:35.919 plan and you know, always interesting. We also had this 0:19:36.000 --> 0:19:38.199 hurts knows that. Hurts is going to get into this. 0:19:38.560 --> 0:19:40.600 So so clearly to have the scale and bring the 0:19:40.600 --> 0:19:43.120 cost down. You know hurts is liking what they see 0:19:43.160 --> 0:19:45.119 out of GM. But so how does how does that 0:19:45.280 --> 0:19:48.760 kind of fit into bars master plan here? GM's plan 0:19:48.880 --> 0:19:52.399 is to sell a million evs in the US and 0:19:52.440 --> 0:19:55.240 I think really the only one who would be probably 0:19:55.240 --> 0:19:58.399 doing that by then Tesla and some Manoa sta. GM 0:19:58.440 --> 0:20:02.000 could be ahead by then because dog fleet. But it 0:20:02.040 --> 0:20:04.399 gives them, it gives gm a lot of different vehicles 0:20:04.440 --> 0:20:06.560 and a lot of potential, a lot of production in 0:20:06.560 --> 0:20:09.600 their for potential sales line. So hurts likes what they 0:20:09.600 --> 0:20:13.320 see because they're saying they're going to buy vehicles from 0:20:13.359 --> 0:20:17.440 five different GM brands, so Buick, Cadillac, Chevy, GMC and 0:20:17.520 --> 0:20:20.359 also bright drop, which is GM's commercial band business. And 0:20:20.400 --> 0:20:23.600 so clearly hurts seas enough that GM has got enough 0:20:23.760 --> 0:20:27.200 production in their plan where over the next five years 0:20:27.400 --> 0:20:30.439