WEBVTT - Surveillance: VW CEO Diess Still Optimistic About Trade 0:00:00.080 --> 0:00:13.040 Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane 0:00:13.480 --> 0:00:17.560 jay Ley. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:34.159 Bloomberg dot Com, and of course on the Bloomberg Now 0:00:34.240 --> 0:00:36.600 joining us, I'm gonna just say this flat out the 0:00:36.640 --> 0:00:39.519 Auto interview of our Davos and that is because I'm 0:00:39.560 --> 0:00:41.800 sure I can speak for those in early morning America. 0:00:42.200 --> 0:00:45.440 Volkswagen is not the Volkswagon that we know. Far more 0:00:45.479 --> 0:00:47.960 than that, it is the auto company of the world, 0:00:48.320 --> 0:00:52.160 path breaking and so many things, including this regulatory mess 0:00:52.200 --> 0:00:56.560 and that regulatory mess called into strained out Herbert's Volkswagen 0:00:56.640 --> 0:01:00.840 chief executive officer and a mechanical engineer from Munich says, uh, 0:01:00.920 --> 0:01:04.680 this morning, I am driving around the World Economic Forum 0:01:04.760 --> 0:01:09.600 in these gorgeous v W eight share vans and busses 0:01:10.400 --> 0:01:13.920 on terrofs to the United States. The United States wants 0:01:13.959 --> 0:01:18.759 to keep your product, your vans, your trucks out of America. 0:01:18.840 --> 0:01:20.880 How are we going to get the advantage of what 0:01:20.959 --> 0:01:24.959 I'm driving around in davoson get more of those trucks 0:01:25.080 --> 0:01:28.280 into America. No, you all, you have all those advantages 0:01:28.360 --> 0:01:31.039 we are exporting. We don't exploit those trucks because the 0:01:31.080 --> 0:01:35.800 market was small. But the next generation electric we call 0:01:35.880 --> 0:01:40.240 it bus I d bus. It goes back to the microbus, 0:01:40.440 --> 0:01:43.480 which was very successful in the sixties, and so we 0:01:43.560 --> 0:01:47.800 were bringing that product coming two thousand, twenty two, twenty three, 0:01:48.840 --> 0:01:51.520 and then you will have a much nicer car than 0:01:51.640 --> 0:01:53.360 than the cars. What do you need from the United 0:01:53.400 --> 0:01:56.280 States on terror relief to get some of your products 0:01:56.320 --> 0:01:59.160 more into the United States. We're still optimistic today. We 0:01:59.200 --> 0:02:03.960 have we have very very low tariffs for for import 0:02:04.040 --> 0:02:07.240 to the United States. We have a manufacturing base in 0:02:07.240 --> 0:02:10.800 the United States, and we are increasing that manufacturing case, 0:02:10.880 --> 0:02:13.840 and we are doing everything to avoid tariffs for importing 0:02:13.840 --> 0:02:16.240 our cars to the US. Even as if we're making progress, 0:02:16.280 --> 0:02:19.600 which has announced a eight hundred million dollar investment in 0:02:19.639 --> 0:02:23.959 our Chattanooga factory. We received a positive tweet from the President, 0:02:24.040 --> 0:02:25.760 so we think we are in the right way. And 0:02:25.760 --> 0:02:28.360 you're one of the very few European chief executives that 0:02:28.400 --> 0:02:30.880 has actually met with President face to face. Do you 0:02:30.919 --> 0:02:34.920 think we'll see more political friction between countries and twenty 0:02:35.000 --> 0:02:40.240 nineteen or less, You know, I don't hope, you know. 0:02:40.320 --> 0:02:43.639 And I'm still optimistic because there is always a lot 0:02:43.720 --> 0:02:46.000 to lose on both sides. And I think the President 0:02:46.120 --> 0:02:49.680 is well. On the other hand, I understand his case, 0:02:49.800 --> 0:02:53.280 you know. And my background is manufacturing, and the United States, 0:02:53.320 --> 0:02:58.080 probably forty fifty years ago was really a strong manufacturing 0:02:58.120 --> 0:03:00.520 base of the world. This machine to linn the streets, 0:03:00.560 --> 0:03:04.000 and a lot of of of this industry came down 0:03:04.160 --> 0:03:07.320 and and and lost ground. So I understand this case 0:03:08.000 --> 0:03:12.600 and building up manufacturing again it is probably a valuable 0:03:12.639 --> 0:03:15.680 approject for every society. So I understand the case, but 0:03:15.720 --> 0:03:18.360 it takes time, and but we want to contribute. We 0:03:18.400 --> 0:03:21.480 see the US as a big market chance. We have 0:03:21.520 --> 0:03:24.239 a small market share with our brands. Still we want 0:03:24.280 --> 0:03:26.560 to grow. We think we can provide the right product 0:03:26.560 --> 0:03:28.720 for the customer. We have a nice heritage in the 0:03:29.280 --> 0:03:31.880 in the United States. Most of the of our potential 0:03:31.960 --> 0:03:35.760 customers know us, know many many have written, have learned 0:03:35.840 --> 0:03:38.400 driving on the folks bag and so Mr He'll talk, 0:03:38.440 --> 0:03:40.040 He'll talk to you about the heritage in a second. 0:03:40.040 --> 0:03:41.880 But I want to ask about China. This is a huge, 0:03:42.000 --> 0:03:44.760 huge market for you, and we saw demand in general 0:03:44.800 --> 0:03:47.520 for cars under pressure also because of the US China 0:03:47.560 --> 0:03:50.840 trade tensions. How do you see China performing this year. No, 0:03:51.040 --> 0:03:54.200 China is for sure is under sread as a market, 0:03:54.320 --> 0:03:57.160 we play a very important role there. We have eighteen 0:03:57.200 --> 0:03:59.560 percent market share with all our brands. We are we 0:04:00.160 --> 0:04:02.840 early to China, so we have perceived kind in the 0:04:03.000 --> 0:04:08.720 country like like a Chinese company grows. We had twenty 0:04:08.800 --> 0:04:12.240 seven years of continuous growth in China. It's also a 0:04:12.320 --> 0:04:14.760 big source of income for US. We're financing a lot 0:04:14.800 --> 0:04:18.720 of investment in future technologies out of China, so it's 0:04:18.760 --> 0:04:21.880 really important. Last year, already, the second half of last 0:04:21.960 --> 0:04:25.919 year was already declining, which is hurting US. We could 0:04:25.960 --> 0:04:28.560 cope because we come with a lot of new products, 0:04:28.640 --> 0:04:31.280 so we could increase our market here. We had a 0:04:31.320 --> 0:04:35.520 slight growth still, but this year will be challenging. And 0:04:35.560 --> 0:04:38.839 I really hope and and trust in the governments that 0:04:39.000 --> 0:04:42.160 they come to arrangements because it's it's a lot, you know, 0:04:43.120 --> 0:04:46.039 economics is a lot about mood of the people, and 0:04:46.040 --> 0:04:49.359 and fegure and and in the right words, and the 0:04:49.480 --> 0:04:51.760 and the few agreements would would help a lot. The 0:04:51.839 --> 0:04:54.239 romance for me is I grew up on a VW Beetle, 0:04:54.360 --> 0:04:56.680 just like in the classic Madman episode, which is the 0:04:56.680 --> 0:04:59.920 first car I learned a drive on. You've moved technologically 0:05:00.000 --> 0:05:02.960 from an engineering standpoint a little bit forward, and you 0:05:03.080 --> 0:05:06.279 have what many in America feel is the Elon Musk killer. 0:05:06.520 --> 0:05:09.600 You've got a tortue automobile. I haven't seen when driving 0:05:09.600 --> 0:05:12.159 around here, is there a tan? Is it coming? Is 0:05:12.160 --> 0:05:14.080 it's coming? It's not up here yet, and it'll be 0:05:14.120 --> 0:05:16.240 here next year in the valley. How are you in 0:05:16.360 --> 0:05:20.520 electric vehicles can kill Ellen Musk and be a Tusla killer. Yeah, 0:05:21.120 --> 0:05:24.720 we really appreciate what what Ellen Musk has been achieving 0:05:24.760 --> 0:05:28.520 and doing and pushing the industry and really promoting electric costs. 0:05:28.560 --> 0:05:30.920 I take him very seriously. Not it's a it's a 0:05:30.960 --> 0:05:35.240 good team, very aggressive team. Uh. But we're seeing when 0:05:35.279 --> 0:05:38.839 it really comes to scaling to exactly to produce all 0:05:38.839 --> 0:05:41.240 over the world, we have a chance to compete. There's 0:05:41.240 --> 0:05:43.840 maybe five people like you have, even put Mary Barr 0:05:43.839 --> 0:05:47.120 in this category that really understand the importance and complexity 0:05:47.200 --> 0:05:50.920 of manufacturing processes. When you look at Tesla in a tent, 0:05:51.320 --> 0:05:54.640 how does a pro manufacturer like you respond, Can you 0:05:54.760 --> 0:05:58.839 get the kind of quality control you need manufacturing in 0:05:58.839 --> 0:06:02.320 a tent. You know, I think this is probably our 0:06:02.360 --> 0:06:05.240 advantage that we are used to scale up plants in 0:06:05.320 --> 0:06:07.719 every other region of the world. We are strong in 0:06:07.800 --> 0:06:11.440 lettin America, strong in China. We can do that. This 0:06:11.480 --> 0:06:13.679 is our advantage that makes us a little bit slower. 0:06:14.080 --> 0:06:17.840 But when we decide when it can become strongly this 0:06:17.920 --> 0:06:21.800 when you look at evaluations, the traditional car manufacturers are 0:06:21.920 --> 0:06:23.920 maybe not seen as the ones that will really deliver 0:06:23.960 --> 0:06:25.880 the electric cars of the future. So do you think 0:06:25.920 --> 0:06:31.200 the number of traditional car manufacturers need to shrink? I 0:06:31.240 --> 0:06:34.480 think all in all, our let's say our industry will 0:06:34.640 --> 0:06:37.320 change a lot in the next ten to twenty years, 0:06:37.360 --> 0:06:40.040 and yes, it will become much more of a let's say, 0:06:40.560 --> 0:06:43.920 it will become more of an Internet logic. No where 0:06:43.920 --> 0:06:46.960 you have let's say, the economies of scale are nearly 0:06:47.040 --> 0:06:51.120 everything because it's all about software computers. So economies of 0:06:51.160 --> 0:06:52.960 scale we play a mat sure all but that is 0:06:53.120 --> 0:06:55.560 that is also an advantage for us because we are 0:06:55.600 --> 0:06:59.200 already big. If we can converge fast into the new 0:06:59.240 --> 0:07:02.640 age of ours, we have a good chance to outperform 0:07:02.680 --> 0:07:06.120 the startups because the startups also have to grow a lot. 0:07:06.200 --> 0:07:07.800 Now they have to invest a lot, they have to 0:07:07.839 --> 0:07:11.440 scale up, and that's why I see that probably the 0:07:11.480 --> 0:07:15.960 startups and and and tech companies are a bit over evaluated, 0:07:16.080 --> 0:07:19.520 and we're probably been unevaluated when it comes to future mobility. 0:07:19.600 --> 0:07:22.360 But doesn't mean I mean how many carmakers are there 0:07:22.360 --> 0:07:24.000 now thirty in the world. Are we going to be 0:07:24.080 --> 0:07:27.640 left for five major ones probably in twenty years. My 0:07:27.840 --> 0:07:30.800 assumption would be that there would be a consolidation process 0:07:30.920 --> 0:07:37.080 because we become more of a let's say tech uh industry. 0:07:37.200 --> 0:07:40.080 Now the economies of scale are even more important than 0:07:40.160 --> 0:07:42.480 to day. In the smartphone world, you have probably four 0:07:42.560 --> 0:07:45.760 or five manufacturers. Now will there be more on the 0:07:45.800 --> 0:07:49.880 car sideeas but as many as today? Probably not. The 0:07:49.880 --> 0:07:53.280 French finance minister told us this morning a Bloomberg exclusive 0:07:53.400 --> 0:07:55.680 we had at first that was going to resigned last night. 0:07:55.680 --> 0:08:00.600 How does that change the automakers? You know how regard 0:08:01.200 --> 0:08:04.800 Carlos I just bought a car from him, uh and 0:08:04.800 --> 0:08:07.960 and he really was a pillar of the industry and 0:08:08.000 --> 0:08:11.800 shape the industry also worldwide, not only the European industry. 0:08:12.120 --> 0:08:14.880 So for sure he's a loss, But there are many 0:08:14.920 --> 0:08:19.560 talented managers which which will probably step in now to 0:08:19.600 --> 0:08:22.160 speak of the sensitivities that Mr Ghan is going under 0:08:22.280 --> 0:08:26.400 right now, the business plan here is the JV the 0:08:26.480 --> 0:08:29.760 relationship that we have between the French and the Japanese. 0:08:30.200 --> 0:08:34.439 What do you learn from this fractured relationship and how 0:08:34.480 --> 0:08:40.400 does it redound over to Volkswagens acquisitions, combinations and joint 0:08:40.480 --> 0:08:44.280 ventures with future companies. I think scale will be even 0:08:44.320 --> 0:08:46.240 more important in the future than it is today, that 0:08:46.720 --> 0:08:50.120 that you have to partner with and you're not only 0:08:50.120 --> 0:08:53.000 have to partner with competitor us, you also you have 0:08:53.080 --> 0:08:56.440 to partner with tech companies and managing such kind of 0:08:56.520 --> 0:08:59.040 network is one of the key skills we need in 0:08:59.080 --> 0:09:01.280 the industry. Are we going to see many more of 0:09:01.320 --> 0:09:04.600 these alliances? I think so? Between what is the truck maker, 0:09:04.679 --> 0:09:06.800 I mean, is it do you have to basically, you know, 0:09:06.840 --> 0:09:10.320 our alliances of two groups that actually you know, complement 0:09:10.400 --> 0:09:14.360 each other or that where you really have synergies. Let 0:09:14.360 --> 0:09:17.880 me just mention what we just agreed with Ford. Now 0:09:17.920 --> 0:09:21.880 we we be partner in the light commercial vehicles segment. 0:09:21.960 --> 0:09:24.520 Now both companies are relatively big. Now we are we 0:09:24.600 --> 0:09:27.600 have enough economies of scale in many segments, but in 0:09:27.679 --> 0:09:32.760 this small segment of commercial light commercial vehicles. We we 0:09:32.480 --> 0:09:36.080 we're not having the enough economies of scale each so 0:09:36.240 --> 0:09:39.560 combining we will be very competitive. And this uh you know, 0:09:39.640 --> 0:09:42.280 this is this is industry, how it works worldwide, a 0:09:42.320 --> 0:09:46.040 global industry, and so partnering makes sense. Where do you 0:09:46.080 --> 0:09:47.959 see that going? I mean, if you look at the 0:09:47.960 --> 0:09:52.120 partnership with Forward, what exactly is the end game? Yeah, 0:09:52.600 --> 0:09:55.560 we know we are we are together with Forward in 0:09:55.600 --> 0:09:59.679 that area to compete against other partnerships. This is an 0:09:59.679 --> 0:10:04.080 open game. Important is that you have, let's add business relation, 0:10:04.160 --> 0:10:06.720 which is a trustful one. Do you have a good 0:10:07.360 --> 0:10:11.280 track record? The advantage of Ford is that we already 0:10:11.280 --> 0:10:14.520 worked with Ford some two or three decades ago in 0:10:14.559 --> 0:10:18.880 Europe together and in Latin America out of Latino. So 0:10:19.000 --> 0:10:22.320 we have a good track record and it just made 0:10:22.320 --> 0:10:24.400 sense for us for Post company in America. When you 0:10:24.440 --> 0:10:26.440 grew up as a kid, you were a Ford family 0:10:26.559 --> 0:10:29.840 or a Chevy family. There was no other day about it. 0:10:29.920 --> 0:10:34.920 Mario Barbs, Marie Bars, trust me, the edgy families at 0:10:34.920 --> 0:10:37.080 a VW beet or with no heat in it for 0:10:37.160 --> 0:10:40.520 the first fifty miles, the romance of the moment and 0:10:40.520 --> 0:10:43.760 trust me, folks we didn't have one was the curming gear. 0:10:43.920 --> 0:10:48.240 It was the definitive design idea. Now now we're getting 0:10:48.240 --> 0:10:50.760 back to design. Now your Porsche product. I'm gonna do 0:10:50.760 --> 0:10:53.640 a shout out to Bentley. It's wonderful to drive down 0:10:53.640 --> 0:11:00.480 Fifth Avenue yesterday. But design is coming back. What are 0:11:00.520 --> 0:11:04.360 you going to do to develop a Volkswagen ethos aesthetic 0:11:04.559 --> 0:11:08.280 worldwide in design as you had with Carmen gear years ago. 0:11:08.840 --> 0:11:12.560 I think we we folks weng remained with an iconic design. 0:11:12.559 --> 0:11:14.880 Now we had that step change between the area of 0:11:15.920 --> 0:11:19.520 the times of people and microbus and then to the golf. 0:11:19.640 --> 0:11:23.120 Golf is is world by our most relevant product, but 0:11:23.320 --> 0:11:27.880 all the design language, all the technical technical package was 0:11:27.960 --> 0:11:30.240 driven by the golf. And now comes another step change, 0:11:30.480 --> 0:11:34.320 the electric change. A step change means that the entire 0:11:34.360 --> 0:11:37.600 design of the car is disrupted. Not from a people 0:11:37.679 --> 0:11:39.960 to a golf. There is a disruption you can see 0:11:40.000 --> 0:11:43.920 that's not evolutionary anymore. And the next disruption will come 0:11:44.000 --> 0:11:47.040 now next year, and of next year we see the 0:11:47.080 --> 0:11:49.640 idea to be launched. It will be similar to the 0:11:49.720 --> 0:11:53.480 disruption from golf, from people to golf. Now it's from 0:11:53.480 --> 0:11:55.800 golf to idea couldn't take it over like it, which 0:11:55.840 --> 0:11:58.120 is a small but highest quality brand of Germany. I 0:11:58.160 --> 0:12:00.240 mean you look at it like a camera, and the 0:12:00.320 --> 0:12:04.719 idea is there's an evolving aesthetic of like through the 0:12:04.800 --> 0:12:06.560 years they got the new fancy one which is all 0:12:06.600 --> 0:12:08.960 stripped down and that do you need to do that 0:12:09.040 --> 0:12:11.360 out of Germany? Do you need to run your global 0:12:11.520 --> 0:12:16.040 platform with the German aesthetic? You know we have Meanwhile, 0:12:16.520 --> 0:12:19.760 and we are a global company means while we're very 0:12:19.760 --> 0:12:22.400 strong in China, very strong Latin America, a bit weaker 0:12:22.440 --> 0:12:26.280 in the U S. Still, but we have design offices 0:12:26.320 --> 0:12:28.760 all over the world because we have to make customer 0:12:28.840 --> 0:12:32.840 happy on the world bad basis, but still it needs 0:12:32.840 --> 0:12:35.520 the ingredients of folks walking design, which has to be 0:12:35.559 --> 0:12:39.560 a bit clean, a bit timeless, not a bit class less, democratic, 0:12:39.960 --> 0:12:42.079 And we're trying to achieve the save in the next 0:12:42.120 --> 0:12:44.960 generation of cars. What are we going to fix Devil's traffic? 0:12:44.960 --> 0:12:47.800 What's the first driverless car coming to Devils. I'm a 0:12:47.800 --> 0:12:51.520 bit conservative on on this. Now I'm driving around with 0:12:51.720 --> 0:12:55.800 lots of prototypes worldwide. There's a lot of investment going 0:12:55.840 --> 0:13:00.000 in there, but really to see their cars then perform 0:13:00.080 --> 0:13:02.840 armbing on the road, not not just being kind of 0:13:03.800 --> 0:13:07.600 a hurdle and and standing around and take time. You 0:13:07.720 --> 0:13:12.199 were correct in that I'm metatoralizing here was a Volkswagen ceo. 0:13:13.600 --> 0:13:19.560 You yeah, I'm in the Volkswagen camp. Will take time. 0:13:19.600 --> 0:13:24.160 Particularly last night at two am outside the piano bar, 0:13:38.320 --> 0:13:41.400 joining us is Jason Board off of Columbia University, out 0:13:41.400 --> 0:13:44.440 of Brown University, long agoing far away. The cool people 0:13:44.960 --> 0:13:48.520 carried Daniel Jurgen's a Prize around campus. And as I've 0:13:48.559 --> 0:13:52.000 told Dr Jurgen, but three people read it at Brown 0:13:52.080 --> 0:13:54.240 University at that time. The only one that read it 0:13:54.280 --> 0:13:57.920 cover to cover was Jason. How big that book? You know, 0:13:58.320 --> 0:14:00.200 I've read it a few times coming. Well, you read 0:14:00.240 --> 0:14:02.160 it cover to cover and you move on from Urgans 0:14:02.200 --> 0:14:04.600 the prize to the Quest, and then you move on 0:14:04.640 --> 0:14:07.840 to the now what for big oil and for national 0:14:07.960 --> 0:14:11.480 and international energy policy? You've got to write the Prize, 0:14:11.520 --> 0:14:14.840 the Quest Volume three. Where are we right now as 0:14:14.880 --> 0:14:17.680 we look forward to the prize? Well that's the conversation 0:14:17.760 --> 0:14:20.520 here in Davos. I think you know, extreme weather, climate 0:14:20.640 --> 0:14:22.480 change top the list of concerns. There's a lot of 0:14:22.480 --> 0:14:25.520 discussion among corporate leaders and abroad recognition of realism in 0:14:25.560 --> 0:14:27.280 a sense that maybe is a little bit new this 0:14:27.360 --> 0:14:30.560 year about just how far away we are, despite the 0:14:30.640 --> 0:14:34.280 tremendous progress and renewable energy, tremendous growth and electric vehicles, 0:14:34.280 --> 0:14:36.800 how far away we are from taking global goals like 0:14:36.840 --> 0:14:39.880 the Paris Agreement to degree target. Seriously, how far away 0:14:39.920 --> 0:14:43.960 we are from achieved is x on here? I am 0:14:44.040 --> 0:14:47.360 sure I'm using many of the big oil here. Yeah, 0:14:47.400 --> 0:14:49.760 of course they're big oils here. But what is their 0:14:49.880 --> 0:14:52.240 future given all that we see? Are they like, yeah, 0:14:52.360 --> 0:14:55.280 climate change go or do it? Forget about it? Or 0:14:55.280 --> 0:14:59.160 are they really listening to corporate leaders and government officials. 0:14:59.320 --> 0:15:02.320 There's a lot of variants within the oil and gas industry, 0:15:02.360 --> 0:15:04.560 but I think at the same time that there's a 0:15:04.560 --> 0:15:06.920 broader recognition we need to move much faster towards clean 0:15:07.000 --> 0:15:09.960 energy transition. There's also a realistic recognition that we are 0:15:09.960 --> 0:15:11.640 going to be using oil and gas for a long time. 0:15:11.680 --> 0:15:13.680 People are paying close attention today to what's happening in 0:15:13.680 --> 0:15:16.520 oil markets, whether it's geopolitical risk like Venezuela or possible 0:15:16.560 --> 0:15:18.800 trade war with China that could slow down growth and 0:15:18.800 --> 0:15:21.760 put put pressure on prices. So companies are thinking about 0:15:21.800 --> 0:15:24.600 what it looks like to transition over time. And they're 0:15:24.640 --> 0:15:27.560 also investing in things like the Oil and Gas Climate Initiative, 0:15:27.560 --> 0:15:29.320 which is meeting here, trying to do things like lower 0:15:29.360 --> 0:15:32.680 the methane emissions profile of oil and gas to try 0:15:32.720 --> 0:15:35.040 to try to start moving it more in the right direction. Jason, 0:15:35.120 --> 0:15:36.440 let me know what you think of this argument. A 0:15:36.520 --> 0:15:38.440 number of years ago, maybe ten years ago, you could 0:15:38.480 --> 0:15:40.800 make an argument that America needs to shift away from 0:15:40.840 --> 0:15:43.440 fossil fuels because we were so dependent on fossil fuels 0:15:43.440 --> 0:15:47.480 from abroad. Ten years later, America becomes the biggest oil producer. 0:15:47.760 --> 0:15:49.520 Does it get harder to make the argument that you 0:15:49.560 --> 0:15:51.840 need to move away from something that you are the 0:15:51.920 --> 0:15:54.640 leader in producing. I think it's harder to build consensus 0:15:54.720 --> 0:15:56.320 towards that now. And so a good example of this 0:15:56.400 --> 0:15:58.000 is the fuel economy standards. When I was in the 0:15:58.000 --> 0:16:00.600 Obama White House, we doubled fuel economy standards. The Trump 0:16:00.600 --> 0:16:03.160 administration wants to roll that back. If you read their 0:16:03.240 --> 0:16:05.080 rationale for why they're doing it, it's because in the 0:16:05.120 --> 0:16:08.920 world where we import almost no oil, uh, there's less 0:16:09.000 --> 0:16:11.960 national security reason to reduce domestic weil consumption. Now there's 0:16:11.960 --> 0:16:13.720 still a huge reason to do it in terms of 0:16:13.720 --> 0:16:16.240 protecting consumers in terms of climate change in the environment, 0:16:16.400 --> 0:16:18.280 but we used to have the ability to build consensus 0:16:18.320 --> 0:16:20.560 across the aisle more that it was both for national 0:16:20.600 --> 0:16:22.680 security reasons and for climate reasons that we needed to 0:16:22.680 --> 0:16:24.520 do this. That breaks down a little bit in the 0:16:24.560 --> 0:16:26.760 world where the US is almost energy independent. When you 0:16:26.800 --> 0:16:28.880 were Brown, did you have to take biology and then 0:16:28.880 --> 0:16:31.440 onto chemistry and all that or do you avoid that pain? 0:16:32.600 --> 0:16:34.720 I took a pretty diverse set of courses, but Brown 0:16:34.760 --> 0:16:41.760 doesn't require the scientists. At one point you said, these 0:16:41.800 --> 0:16:45.360 guys are really smart. How does Davos and how does 0:16:45.400 --> 0:16:48.720 America deal with the president at a good part of 0:16:48.720 --> 0:16:52.840 America which has an a science outlook, they really don't 0:16:53.080 --> 0:16:56.920 want to look at the theoretical and applied constructs of 0:16:57.040 --> 0:17:01.040 modern climate science, do they. I think is certainly a 0:17:01.040 --> 0:17:03.680 piece of this administration and the segment of American society 0:17:03.720 --> 0:17:06.280 and not just American, other countries as well that has 0:17:06.800 --> 0:17:09.879 a challenge accepting what's what's what's broad scientific consensus? You 0:17:09.920 --> 0:17:12.200 consider that a permanence or will that change? I think 0:17:12.200 --> 0:17:13.600 it's going to change, and I think you see that 0:17:13.640 --> 0:17:16.360 already across the aisle and data with the next generation. 0:17:16.480 --> 0:17:18.760 Yale just came out with a study showing rising public 0:17:18.920 --> 0:17:21.960 opinion recognition that climate change is real, it's caused by 0:17:22.040 --> 0:17:24.040 human activity, and and that we need to do something 0:17:24.119 --> 0:17:25.760 John to bring us up because we're gonna do the 0:17:25.920 --> 0:17:29.480 radio remote next week from the western southwestern shore of Greenland. 0:17:29.840 --> 0:17:32.399 Didn't there anymore? Is that the Iceberg cup? We'd be 0:17:32.400 --> 0:17:35.080 on an iceberg, like they'd like us on an iceberthday, 0:17:35.400 --> 0:17:38.680 they would like Ampany from Jersey wants us on an iceberg. 0:17:39.680 --> 0:17:42.000 I mean, we're already seeing impacts of climate change, and 0:17:42.040 --> 0:17:44.600 when you look out ten twenty years the current status quo, 0:17:44.920 --> 0:17:47.360 the impacts of climate change are gonna be pretty unpleasant 0:17:47.359 --> 0:17:48.879 people to deal with. And I don't think a broad 0:17:48.920 --> 0:17:51.000 public is going to accept that. There will be a 0:17:51.040 --> 0:17:53.280 tipping point at some point where people turn around and say, 0:17:53.480 --> 0:17:55.600 we just can't keep functioning in this way. I'm gonna 0:17:55.600 --> 0:17:57.440 try to make this as simple as I possibly can. 0:17:57.680 --> 0:17:59.560 Do you think there are members of the public and 0:17:59.600 --> 0:18:02.320 areas of the public that still needs some form of 0:18:02.400 --> 0:18:05.680 educating to draw a distinction between weather and climates. Absolutely, Yeah, 0:18:05.720 --> 0:18:08.359 it's well, it's really cold here, and and and we 0:18:08.440 --> 0:18:11.119 have cold spells all the time. But but the climate 0:18:11.200 --> 0:18:13.400 is a system, and so what's important is the way 0:18:13.400 --> 0:18:16.159 that system is changing. Average temperatures are rising. We've had 0:18:16.160 --> 0:18:18.960 four of the five hottest years on record in the 0:18:19.040 --> 0:18:22.320 last few years. So people need to understand that this 0:18:22.400 --> 0:18:25.280 is important. There's a new liberal definition coming up in 0:18:25.320 --> 0:18:29.879 the next election. There are progressive there's forty seven presidential candidates. 0:18:30.359 --> 0:18:35.160 You worked within the Democratic Party. Theology of Barack Obama. 0:18:35.480 --> 0:18:39.760 Where is the liberal aesthetic, the liberal ethos moving on 0:18:39.880 --> 0:18:43.040 climate change and environment? Is it shifting or we're going 0:18:43.080 --> 0:18:46.120 to see the same debate in two thousand twenty. There's 0:18:46.200 --> 0:18:49.240 a huge amount of momentum on on the left and 0:18:49.560 --> 0:18:51.840 many people in the Democratic Party that came in with 0:18:51.920 --> 0:18:54.760 the Democratic takeover the House to push for stronger action 0:18:54.760 --> 0:18:57.359 on climate change, and that's great. There is not full 0:18:57.359 --> 0:18:59.520 agreement on what that looks like and how you implement 0:18:59.560 --> 0:19:00.840 it and web or we can achieve that with a 0:19:00.880 --> 0:19:03.080 hundred percent renewable energy, or whether we need a broader 0:19:03.080 --> 0:19:06.560 set of solutions, advanced nuclear power, putting a price on 0:19:06.640 --> 0:19:08.359 carbon and a recognition that there is going to be 0:19:08.359 --> 0:19:10.199 a role for oil and gas in the economy for 0:19:10.240 --> 0:19:12.720 decades to common. Thank you so much for colombiators to 0:19:12.880 --> 0:19:15.160 visit us in our New York studios. It's far away 0:19:15.240 --> 0:19:33.600 from anytime it's comfortable. I have been remiss on this. 0:19:33.720 --> 0:19:36.439 It's really been something one of my weaknesses here. If 0:19:36.480 --> 0:19:39.400 Bloomberg surveillance is to look at the machine of Europe 0:19:39.440 --> 0:19:44.240 and always devolves down to the Spanish economy. There's a vibrancy, there, 0:19:44.520 --> 0:19:47.600 a difference there within all of their domestic cultures as 0:19:47.600 --> 0:19:50.800 you see across all of Europe. Nadia Calvino as Spanish 0:19:50.840 --> 0:19:55.040 Economy Minister and she joins us today. The stereotypes of 0:19:55.080 --> 0:19:57.960 Spain in America and for that and so much of 0:19:57.960 --> 0:20:01.520 the Western world are so much unfounded. Give us an 0:20:01.640 --> 0:20:05.520 update and the cultural solidity of Spain. Right now we 0:20:05.600 --> 0:20:08.880 see this riot, that riot, Barcelona, this I don't even 0:20:08.920 --> 0:20:11.320 know half the places. Give us an update and the 0:20:11.440 --> 0:20:14.680 cultural solidity of Spain. Yeah, but thank you very much. 0:20:14.720 --> 0:20:16.879 First of all, it's a pleasure to be here in Bloomberg. 0:20:17.200 --> 0:20:19.800 I don't know if the prejudice is there or whether 0:20:19.920 --> 0:20:23.320 the opinions are unfounded. What I can tell you is 0:20:23.320 --> 0:20:26.520 that the Spanish economy after a very deep and long crisis, 0:20:26.960 --> 0:20:30.560 has been bouncing back, growing quite significantly in the last years. 0:20:31.000 --> 0:20:34.160 There is a quite stable society, very strong social fabric 0:20:34.280 --> 0:20:37.000 and political stability to so I'm gonna get you in 0:20:37.080 --> 0:20:41.399 hot water at home. What's the distinction between Spain in 0:20:41.560 --> 0:20:45.080 Italy and recovery of this crisis. Well, I mean the 0:20:45.080 --> 0:20:47.920 growth rate is not comparable. We've been having very high 0:20:47.960 --> 0:20:50.720 growth rate. We reached the maximum above three percent in 0:20:50.800 --> 0:20:54.320 twenty fifteen. Our expectation for twenty nine is two point 0:20:54.359 --> 0:20:56.399 two percent, so we will be growing more than the 0:20:56.440 --> 0:21:00.040 rest of the large European economies, significantly more than the 0:21:00.080 --> 0:21:03.920 EU average. Well, there's no comparison. I mean from the 0:21:03.960 --> 0:21:09.040 physical policy dimension. Also, we're really committed to fiscal consolidation, 0:21:09.119 --> 0:21:13.840 reducing the deficit, reducing the debt. Social stability is quite remarkable. Also, 0:21:14.000 --> 0:21:17.840 very open liberal economy, trying to in society, I would 0:21:17.840 --> 0:21:21.480 say welcoming. You know, we really encouraged for an investment. 0:21:21.680 --> 0:21:23.520 I think that there are a number of areas where 0:21:23.560 --> 0:21:25.600 you know, I wouldn't be like to be compared to anybody. 0:21:25.640 --> 0:21:28.520 Of course, a little bit earlier this morning in Dallas, Switten, 0:21:28.600 --> 0:21:31.360 the Dutch Prime minister made some waves he thinks that 0:21:31.640 --> 0:21:34.280 the Italians have been led off lightly for their approach 0:21:34.320 --> 0:21:36.840 towards where is every day of Boomberg surveillance. Do you 0:21:36.880 --> 0:21:39.440 think the Italians are being led off lightly by the EU? 0:21:39.520 --> 0:21:42.520 I'm a bit surprised that the Prime Minister would say that, frankly, 0:21:42.560 --> 0:21:44.919 because last Monday we had the Eurogroup meeting with the 0:21:44.960 --> 0:21:48.560 finance ministers, and the Dutch Finance minister actually asked the 0:21:48.560 --> 0:21:51.480 European Commission what their assessment was of the Italian situation. 0:21:51.960 --> 0:21:54.879 The commissioner explained it and there was no further question. 0:21:54.920 --> 0:21:57.119 So I'm a bit surprised that there's this assessment of 0:21:57.200 --> 0:22:00.680 the situation. I think other people are surprised as also. 0:22:00.840 --> 0:22:02.919 Some people, though, do think the Italians might be right. 0:22:02.960 --> 0:22:05.120 Maybe we do need a bit of fiscal stimulus onto 0:22:05.200 --> 0:22:07.320