WEBVTT - Silver Supply Expected to Decline While Usage Grows, Krebs Says 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:32.080 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. In 0:00:32.080 --> 0:00:37.560 the past three weeks, silver has plunged almost thirteen percent. 0:00:37.760 --> 0:00:39.280 We have somebody who can give us a sense of 0:00:39.280 --> 0:00:41.879 what the technicals are underpitting, some of the moves, and 0:00:41.880 --> 0:00:45.080 what we can expect looking forward. Mitchell Crebs joins US now. 0:00:45.120 --> 0:00:48.800 He is president and chief executive officer of Core Mining UH. 0:00:48.840 --> 0:00:51.720 He also is the president of the Silver Institute, which 0:00:51.760 --> 0:00:54.720 is based in Chicago, Illinois. He's pumping his fist. I 0:00:54.720 --> 0:00:57.440 expected you to come here like drenched in silver, you know, 0:00:57.520 --> 0:01:00.280 just dripping from everywhere, but but you're not. You're actually 0:01:00.280 --> 0:01:03.280 wearing very little jewelry. Um. So there was a report 0:01:03.320 --> 0:01:04.959 that you put out today that was looking at the 0:01:05.000 --> 0:01:07.480 silver industry, and there was good news and there was 0:01:07.520 --> 0:01:09.959 bad news. So why don't you start with the good news. Yeah? Sure, 0:01:10.040 --> 0:01:12.039 thanks for having me. The good news for sure is 0:01:12.080 --> 0:01:14.880 that silver supply for the first time in fourteen years, 0:01:14.880 --> 0:01:17.800 actually declined last year, So that's a big deal. Not 0:01:17.880 --> 0:01:21.120 by a lot, but it's now declining and it's expected 0:01:21.160 --> 0:01:24.319 to continue to decline, which you know, basic supply and 0:01:24.360 --> 0:01:27.520 demand fundamental suggests that that's a positive tail wind for 0:01:27.600 --> 0:01:30.360 silver going forward. It's the fourth year in a row 0:01:30.400 --> 0:01:32.959 now where we've been in a structural deficit where demand 0:01:33.000 --> 0:01:36.600 has outstripped supply, So that's another positive i'd say. On 0:01:36.640 --> 0:01:40.000 the on the demand side, UH, solar panel demand hit 0:01:40.040 --> 0:01:42.000 an all time high. It was up thirty four percent 0:01:42.200 --> 0:01:44.840 last year. UH, and that's a market that we think 0:01:44.840 --> 0:01:47.119 will continue to grow. You know, silver is very much 0:01:47.160 --> 0:01:52.920 of a technology, green, clean, renewable energy type of metal. 0:01:52.960 --> 0:01:54.960 I think a lot of people think of silver as 0:01:54.960 --> 0:01:58.400 your silverware or your jewelry, which definitely that plays a part, 0:01:58.480 --> 0:02:01.440 but silver is used in every everything with a light switch, 0:02:01.520 --> 0:02:03.600 anything with an on and off switch has silver in it. 0:02:03.840 --> 0:02:07.600 So it's a very diverse UH demand base. And you 0:02:07.640 --> 0:02:09.600 know this is this is an interesting point because silver 0:02:09.760 --> 0:02:12.160 is often thought of as a sister metal to gold, 0:02:12.360 --> 0:02:14.679 precious metal to kind of buy in times when you're 0:02:14.680 --> 0:02:17.440 looking for a haven um, and yet it's got a 0:02:17.520 --> 0:02:20.560 much more prevalent industrial use. Can you give us a 0:02:20.600 --> 0:02:24.880 sense of how much demand has come from stuff that 0:02:24.919 --> 0:02:27.840 you actually use versus jewelry and how much that has 0:02:27.919 --> 0:02:30.480 increased over time. Yeah, that's changed a lot. It used 0:02:30.480 --> 0:02:34.640 to be mostly a precious metals, but as electronics have 0:02:34.639 --> 0:02:38.480 have grown globally, emerging middle classes in places like China 0:02:38.520 --> 0:02:42.400 and India have have grown in consumption GDP per capita 0:02:42.440 --> 0:02:46.400 has grown industrial demand electronics demand for silver has grown 0:02:46.560 --> 0:02:48.760 a lot. It now makes up the majority of demand 0:02:48.880 --> 0:02:53.040 for silver. Can you give us a sense of where 0:02:53.040 --> 0:02:55.359 that was, say two decades ago or a decade ago, 0:02:55.520 --> 0:02:59.960 It would have been more like a decade ago. Fifteen 0:03:00.040 --> 0:03:03.320 years ago, thirty five millimeter film was actually the biggest 0:03:03.320 --> 0:03:07.839 source of demand for silver um. Now so that's gone 0:03:07.840 --> 0:03:10.399 from like thirty five percent a year down to four 0:03:10.440 --> 0:03:14.160 percent as we've all gone to you know, digital and 0:03:14.200 --> 0:03:17.280 that's been all replaced with new uses in the electronics sector, 0:03:17.639 --> 0:03:20.600 predominantly and solar. So, so give us a sense with 0:03:20.639 --> 0:03:23.359 the shifting landscape. There was some not so great news 0:03:23.440 --> 0:03:25.320 in the report that you put out today. Can you 0:03:25.520 --> 0:03:27.760 lay that out for us? Yeah, overall demand was down. 0:03:28.040 --> 0:03:30.000 A lot of that has to do with just slower 0:03:30.080 --> 0:03:33.560 global economic growth UM which has had an impact and 0:03:33.600 --> 0:03:37.640 had a negative impact on some of that electronics driven demand. 0:03:37.920 --> 0:03:41.160 Jewelry demand was down a bit. India was probably one 0:03:41.200 --> 0:03:43.640 of the biggest stories with some of the currency crackdown 0:03:43.680 --> 0:03:45.840 that took place there last year. That had a negative 0:03:45.880 --> 0:03:49.560 effect on silver demand, uh, coming out of out of India. 0:03:50.120 --> 0:03:52.160 But the beauty of beauty of having such a diverse 0:03:52.200 --> 0:03:54.240 demand bass you know, every year you're gonna have some 0:03:54.320 --> 0:03:56.640 things that are down and and some markets that are 0:03:56.920 --> 0:03:58.880 that are up. But overall last year it was down 0:03:59.720 --> 0:04:01.880 a little bit. Yeah. Yeah, Well, I mean as I 0:04:01.960 --> 0:04:05.520 was thinking as you said this, so global demand is 0:04:05.640 --> 0:04:09.440 down partly because the economy is slowing, and yet typically 0:04:09.440 --> 0:04:12.440 when things are slowing, they would people would go into 0:04:12.480 --> 0:04:15.160 precious metals to sort of offset the risk of a 0:04:15.160 --> 0:04:18.440 potential downturn. So it's sort of trying to square those 0:04:18.480 --> 0:04:21.480 two sides is a little bit hard. And that's the 0:04:21.600 --> 0:04:25.080 duality of silver. You know, it is highly correlated to gold, 0:04:25.240 --> 0:04:27.919 So everything that moves gold in terms of safe haven 0:04:28.000 --> 0:04:30.760 investment risk off. You know a lot of people are 0:04:30.760 --> 0:04:33.359 looking at precious metals these days, more with these higher 0:04:33.440 --> 0:04:37.679 valuations in the broader equity markets, UM, expectation of higher 0:04:37.800 --> 0:04:41.720 of inflation. Those types of things that drive gold definitely 0:04:42.279 --> 0:04:45.280 UM have a big impact on on silver. But I 0:04:45.320 --> 0:04:47.800 always think of silver as having a good it's it's 0:04:47.839 --> 0:04:50.960 underpinned by all of this good, solid, diverse industrial demand. 0:04:51.240 --> 0:04:54.800 But what moves silver higher is the investment demand in 0:04:54.800 --> 0:04:58.039 in times when typically that's more favorable to things like gold. 0:04:58.279 --> 0:05:00.560 So for something that is so stable and has these 0:05:00.600 --> 0:05:06.000 sort of competing uh dynamics of affecting its price, why 0:05:06.080 --> 0:05:08.839 is it down more than twelve percent in the past 0:05:08.880 --> 0:05:12.760 three weeks. Well, silver is a very volatile metal. It 0:05:12.880 --> 0:05:16.680 makes gold look like, uh, you know, looks boring. It 0:05:16.680 --> 0:05:18.840 makes gold look very boring. Silver goes up and down 0:05:18.880 --> 0:05:22.880 a lot. It's a small market, it's flashy. So the 0:05:22.920 --> 0:05:25.640 total demand every year for silver's like a billion ounces. 0:05:25.680 --> 0:05:27.680 So that's you put today's price on that, that's a 0:05:27.720 --> 0:05:32.240 fifteen billion dollar global annual market. That's chump change, uh, 0:05:32.360 --> 0:05:35.040 compared to gold is you know, ten times that size 0:05:35.040 --> 0:05:38.040 copper for example, oil you know, much much bigger. So 0:05:38.360 --> 0:05:41.159 silver gets moved around a lot without you know, a 0:05:41.200 --> 0:05:43.680 lot of capital and so silver can go up and down. 0:05:43.800 --> 0:05:47.520 Last year, the price of silver varied between thirteen dollars 0:05:47.520 --> 0:05:49.800 an ounce and I think twenty one dollars announced, which 0:05:49.839 --> 0:05:53.880 is huge volatility. So in the last uh last four 0:05:53.920 --> 0:05:56.320 weeks three weeks, a lot of what we've seen in 0:05:56.320 --> 0:06:00.279 silver's not that unusual. Um Us in the in the 0:06:00.320 --> 0:06:03.560 industry have pretty strong stomachs, and that's why it's so 0:06:03.600 --> 0:06:06.080 important to be you know, as a mining company like us. 0:06:06.320 --> 0:06:08.560 It's all about costs. It's all about trying to you know, 0:06:08.640 --> 0:06:12.800 have a diverse, uh diverse portfolio of operations that have 0:06:12.920 --> 0:06:16.920 low costs, conservative balance sheet to try and withstand that 0:06:17.080 --> 0:06:21.039 inherent volatility, especially in silver. So with silver, you were 0:06:21.080 --> 0:06:25.000 talking about how supply is expected to be down. Is 0:06:25.040 --> 0:06:28.840 this because companies and mining companies like your yours, Is 0:06:29.160 --> 0:06:31.760 they're running out of places to go? Or is it 0:06:32.279 --> 0:06:36.760 something else? Over the last five years, exploration in our 0:06:36.800 --> 0:06:40.760 industry has absolutely plummeted. So peak prices were back in 0:06:40.760 --> 0:06:44.440 two thousand and eleven when silver hit nearly fifty dollars announced, 0:06:44.880 --> 0:06:47.680 so to go from fifth almost fifty dollars announced down 0:06:47.760 --> 0:06:51.479 to think get hit thirteen dollars announced people slash their 0:06:51.480 --> 0:06:54.880 exploration budgets, so there's no new discoveries, so there's no 0:06:54.920 --> 0:06:57.479 new projects being built. And at the same time, a 0:06:57.480 --> 0:06:59.240 lot of the bigger projects are a lot of the 0:06:59.279 --> 0:07:01.359 bigger minds the world. They're starting to get to the 0:07:01.480 --> 0:07:03.599 end of their lives, so those are expected to be 0:07:03.680 --> 0:07:06.200 mined out and and go away. So you were kind 0:07:06.200 --> 0:07:07.960 of caught in this perfect storm of a lot of 0:07:08.000 --> 0:07:11.200 the older minds going away and and not a lot 0:07:11.280 --> 0:07:13.800 of new minds there to offset that. Where do you 0:07:13.800 --> 0:07:17.640 think is going to be the biggest new vein discovered? Oh, well, 0:07:18.160 --> 0:07:22.440 the new the next new deposit. I would probably put 0:07:22.440 --> 0:07:25.520 my money on Mexico, just because Mexico is the world's 0:07:25.600 --> 0:07:28.960 largest silver producing country. There's a lot of metal there, 0:07:29.040 --> 0:07:31.800 so the odds of finding more usually find more metal 0:07:31.840 --> 0:07:35.080 where there already is metal found, So I'd bet on Mexico. 0:07:35.240 --> 0:07:39.080 Peru's the second largest silver producing country. Those would be 0:07:39.080 --> 0:07:41.640 my bets. But you know the places that haven't had 0:07:41.640 --> 0:07:46.600 as much exploration historically, Africa UM, even in Asia UM, 0:07:46.640 --> 0:07:49.960 there's probably more uh large deposits out there that just 0:07:50.000 --> 0:07:54.000 have not yet u UM gotten on anybody's radar screen. 0:07:54.160 --> 0:07:56.520 Mitchell Crebs, thank you so much for joining us. Mitchell 0:07:56.560 --> 0:07:59.480 Crabs as president and chief executive officer of Core Mining. 0:07:59.480 --> 0:08:03.040 He's all so the president of the Silver Institute, uh 0:08:03.080 --> 0:08:17.320 and he is based in Chicago. We're gonna we want 0:08:17.320 --> 0:08:19.760 to dig into some shares it also are thinking into 0:08:19.800 --> 0:08:23.440 the red Surprisingly, because the war is over, Verizon did 0:08:23.600 --> 0:08:25.960 beat out A T and T to buy a straight 0:08:26.000 --> 0:08:29.640 Path in other words, by five G capabilities for three 0:08:29.840 --> 0:08:33.400 point one billion dollars. To understand why everyone's just down 0:08:33.520 --> 0:08:36.160 on this news, John Butler is here to make sense 0:08:36.200 --> 0:08:38.880 of it all. John Butler is senior Telecom Services and 0:08:38.920 --> 0:08:44.559 Equipment Analyst for Bloomberg Intelligence. So John, what do you what? Why? 0:08:44.559 --> 0:08:47.080 Why is everyone down? Including Straight Path, which is down 0:08:47.160 --> 0:08:51.880 more Well, that all comes down to price. But this 0:08:52.120 --> 0:08:55.600 was interesting in terms of how it all unfolded. I 0:08:55.640 --> 0:08:58.280 think we'll start at the ten thousand foot level, which 0:08:58.360 --> 0:09:02.880 is this is a big win for Verizon because their 0:09:03.280 --> 0:09:06.680 bet on the near future in terms of returning to 0:09:06.720 --> 0:09:10.480 growth is all on five G. We're mostly on five G, 0:09:10.920 --> 0:09:13.920 I should say, and A T and T S big bet, 0:09:14.040 --> 0:09:16.840 as you know, is on content. They bought Direct TV 0:09:17.160 --> 0:09:21.000 and they're buying Time Warner both carriers have their eyes 0:09:21.040 --> 0:09:25.120 set on five G services, which are to put it 0:09:25.160 --> 0:09:30.280 in perspective, it's the next generation wireless technology, the next evolution. 0:09:30.320 --> 0:09:33.600 As we moved from two G to three G, we're 0:09:33.640 --> 0:09:37.600 now at four G LT, which people probably recognize. The 0:09:37.640 --> 0:09:41.120 next step is five G. It promises to be ten 0:09:41.200 --> 0:09:44.600 times faster than where we are today. But you need 0:09:44.640 --> 0:09:48.160 new spectrum bands to deploy that service. And so the 0:09:48.240 --> 0:09:53.880 FCC initially licensed a number of bands, including twenty eight 0:09:53.920 --> 0:09:58.000 and thirty nine Gigga Hurts, and this little unknown company 0:09:58.040 --> 0:10:03.160 called Straight Path had nation wide licenses for thirty nine 0:10:03.200 --> 0:10:05.920 Giga Hurts and twenty eight Giga Hurts and some big 0:10:05.960 --> 0:10:10.880 markets like New York. So suddenly, you know, the carriers 0:10:10.920 --> 0:10:12.719 woke up to the fact that we're going to need 0:10:12.800 --> 0:10:17.160 this spectrum potentially down the road, and the bidding war 0:10:17.280 --> 0:10:20.240 began for Straight Path. So while we're at the twenty 0:10:20.720 --> 0:10:25.880 foot level, how did straight Path get that spectrum? Well 0:10:27.160 --> 0:10:31.920 that's a long story, but basically the backstory behind it 0:10:32.000 --> 0:10:37.240 is they really, to their credit, understood they skated to 0:10:37.280 --> 0:10:39.480 where the puck was going, if you will, you know, 0:10:39.559 --> 0:10:42.440 they understood that there would be a need for these 0:10:42.520 --> 0:10:48.160 high band spectrum frequencies, because high frequencies don't travel very 0:10:48.200 --> 0:10:51.280 far and so they never had much value. But they 0:10:51.400 --> 0:10:54.880 carry a lot more data than those lower bands. And 0:10:54.960 --> 0:10:58.680 so the carriers are now building networks a lot closer 0:10:58.720 --> 0:11:02.679 to you and me, the wireless networks, and they don't 0:11:02.760 --> 0:11:05.800 need that long haul distance anymore, but they want that 0:11:05.880 --> 0:11:09.520 big fat pipe. And so straight Path saw that they 0:11:09.520 --> 0:11:13.040 bought the licenses from the f c C. And where 0:11:13.040 --> 0:11:16.320 they came into violation is they squatted on them, as 0:11:16.360 --> 0:11:19.960 they say, they sat on those licenses and they didn't 0:11:19.960 --> 0:11:22.840 put them to use, and the f c C came 0:11:22.880 --> 0:11:25.080 back at them and they find them a hundred million 0:11:25.120 --> 0:11:29.079 dollars the most of what most of those proceeds, by 0:11:29.080 --> 0:11:32.079 the way, can be paid from the sale of the spectrum. 0:11:32.200 --> 0:11:36.239 So they're they're forced to sell the spectrum now. Um, 0:11:36.320 --> 0:11:40.800 which is which is how this whole bidding war began. Well, so, 0:11:40.800 --> 0:11:43.480 so is there going to be a six G? I mean, 0:11:43.559 --> 0:11:47.040 can you go higher frequency? At this point? Uh? Number one? 0:11:47.080 --> 0:11:49.959 And number two? Is this sort of really bad news 0:11:49.960 --> 0:11:52.000 for a T and T because they are going to 0:11:52.040 --> 0:11:57.520 be behind in the speed wars. Well to the first question, Um, 0:11:57.559 --> 0:11:59.920 with five G, you can put it over any spec 0:12:00.040 --> 0:12:05.880 from that's allocated for uh use some wireless communications, so 0:12:05.960 --> 0:12:08.560 it's not like you have to use the up these 0:12:08.640 --> 0:12:12.079 higher frequencies. But again I go back to their these 0:12:12.240 --> 0:12:15.440 multi lane highways if you will. They're big fat pipes 0:12:16.000 --> 0:12:18.520 then can carry a lot more data than some of 0:12:18.520 --> 0:12:21.439 the lower frequencies that we use today for four G, 0:12:22.160 --> 0:12:25.680 and so therein lies the value there for a T 0:12:25.800 --> 0:12:28.679 and T. They have options. Actually, you know, Dish owns 0:12:28.720 --> 0:12:31.400 a lot of spectrum in the higher frequencies. They own 0:12:31.480 --> 0:12:35.199 something called the AWS which is not nearly as higher 0:12:35.200 --> 0:12:38.640 frequency as straight paths, but it's it's pretty good stuff 0:12:39.320 --> 0:12:42.840 and they could look to Dish to license that potentially. 0:12:43.000 --> 0:12:47.120 And also I think the FCC is going to auction 0:12:47.160 --> 0:12:50.120 off some of the bands around the twenty eight and 0:12:50.120 --> 0:12:52.960 the thirty nine gig hurts in the future, although no 0:12:53.120 --> 0:12:55.960 dates are set. And so there in lies the uncertainty 0:12:56.040 --> 0:12:59.000 for a T and T. But they see behind a 0:12:59.120 --> 0:13:01.560 curtain that you and I don't. I'm sure they've talked 0:13:01.600 --> 0:13:03.439 to the f c C and they have a better 0:13:03.520 --> 0:13:06.560 grasp on their options than we do. So let's get 0:13:06.559 --> 0:13:09.240 to the price. Because straight path is down more than 0:13:09.880 --> 0:13:13.000 although to be fair, they are up dramatically on the year, 0:13:13.240 --> 0:13:16.240 dramatically by four fourth, So it's not you know, this 0:13:16.360 --> 0:13:21.080 is nothing compared to what we've seen. Why, real quick, 0:13:21.080 --> 0:13:24.520 why didn't A T and T fight this bid again? 0:13:24.559 --> 0:13:26.440 I think it goes back to what we were just 0:13:26.520 --> 0:13:30.199 talking about. I think they have options outside a straight path, 0:13:31.000 --> 0:13:33.560 and everything comes at a price. And I think if 0:13:33.600 --> 0:13:36.040 they look down the road and saw another auction coming, 0:13:36.080 --> 0:13:39.240 maybe they wanted to keep dry powder for that because 0:13:39.280 --> 0:13:41.600 three point one bagan is a lot of dough. You know, 0:13:42.000 --> 0:13:43.640 it's a it's a lot of dough. That is the 0:13:43.679 --> 0:13:46.480 technical term. And you've heard it from John Butler. Uh, 0:13:46.600 --> 0:13:48.760 it is a lot of dough three point one billion 0:13:48.800 --> 0:13:52.559 dollars that Verizon is paying to buy straight paths. Thank 0:13:52.600 --> 0:13:55.720 you so much. John Butler is senior Telecom Services and 0:13:55.840 --> 0:13:59.200 Equipment Analyst for Bloomberg Intelligence, and he joins us in 0:13:59.200 --> 0:14:05.359 our Bloomberg eleven three oh studios here in New York. 0:14:10.600 --> 0:14:12.120 We want to take a moment to let you know 0:14:12.200 --> 0:14:15.559 about something new from Bloomberg. Starting right now, you can 0:14:15.720 --> 0:14:18.880 use our io s app or our new Google Chrome 0:14:18.920 --> 0:14:23.200 extension to scan any news story on any website instantly. 0:14:23.240 --> 0:14:26.480 Revealing relevant news and market data from Bloomberg and other 0:14:26.560 --> 0:14:30.640 sources related to companies and people you're reading about. So 0:14:30.720 --> 0:14:32.880 no matter where you're reading the news, you can bring 0:14:32.880 --> 0:14:35.680 the power of Bloomberg's news and data with you. It's 0:14:35.720 --> 0:14:39.000 pretty amazing. Download our io s app or search for 0:14:39.000 --> 0:14:41.520 the Bloomberg extension on the Chrome Store to try it out. 0:14:41.960 --> 0:14:50.840 Learn more at Bloomberg dot com slash lens Well. I 0:14:50.880 --> 0:14:53.160 am honored to bring in Craig Bouchard, who's chairman and 0:14:53.240 --> 0:14:56.800 chief executive officer of Brady Industries, which is based in Kentucky, 0:14:56.840 --> 0:15:01.400 not Chicago. Apologize for miss speaking, Craig, Thank you for 0:15:01.400 --> 0:15:04.200 for coming first. Before we talk about your one point 0:15:04.200 --> 0:15:06.200 three billion dollar investment. At first, can you just give 0:15:06.280 --> 0:15:08.800 us a sense of what Brady Industries is. Well. Brady 0:15:08.840 --> 0:15:13.080 Industries was created for the purpose of bringing jobs and 0:15:13.120 --> 0:15:15.680 a great company to the Appellation, to the to the 0:15:15.720 --> 0:15:19.680 northeast part of Kentucky UM and we're building what will 0:15:19.760 --> 0:15:24.680 be um the highest quality, lowest cost producer of aluminium 0:15:24.680 --> 0:15:27.640 in the United States. So, with this one point three 0:15:27.640 --> 0:15:31.160 billion dollar investment in uh An Aluminum rolling mill to 0:15:31.280 --> 0:15:35.320 create more eco friendly and very thin aluminiums that can 0:15:35.360 --> 0:15:38.360 be used for for example, for making cars. Yes, so 0:15:38.440 --> 0:15:40.760 you would think of Brady as making the sheet the 0:15:40.800 --> 0:15:44.480 exterior of automobiles that aluminum, as well as the plate 0:15:44.520 --> 0:15:46.720 aluminum that would be in the wings of airplanes, in 0:15:46.720 --> 0:15:50.400 the interiors of airplanes. And then with an acquisition that 0:15:50.480 --> 0:15:52.680 we'll be announcing here in a couple of weeks, making 0:15:52.800 --> 0:15:57.000 ultra high strength parts, lightweights, high high strength parts for 0:15:57.120 --> 0:16:00.280 the inside of cars and airplanes. So why has there 0:16:00.360 --> 0:16:06.040 been a plant of this size in the US before? Well, actually, 0:16:06.160 --> 0:16:08.320 I wouldn't say there hasn't been one before. There hasn't 0:16:08.360 --> 0:16:12.680 been one in at least thirty years. So, UM, the competitors, 0:16:12.720 --> 0:16:17.920 which are all great companies, Arconic, Nobela, Solaris, Constallium, Kaiser, 0:16:18.320 --> 0:16:20.720 they all have plants, but they're older plants that have 0:16:20.880 --> 0:16:25.720 had recent new additions to them, but they're they're older facilities. UM, 0:16:25.760 --> 0:16:29.800 it's hard to say why there hasn't been one because, UM, 0:16:29.840 --> 0:16:34.280 it's clear that greenfield is where advanced manufacturing is going. 0:16:34.760 --> 0:16:37.080 It's the it's the only way to create the low 0:16:37.120 --> 0:16:40.360 cost producer. UM. And I think in the case of 0:16:40.360 --> 0:16:42.880 the metals companies, you know, they haven't had lots of 0:16:42.880 --> 0:16:46.320 capital to spend because of you know, some tough years 0:16:46.400 --> 0:16:49.040 over the last many years, and so this is an 0:16:49.040 --> 0:16:53.160 opportunity to kind of change that change the whole mold. Actually, well, 0:16:53.480 --> 0:16:55.240 you know, some people would say that the reason why 0:16:55.280 --> 0:17:01.280 companies have created overseas factories because the labor is cheaper, 0:17:01.880 --> 0:17:04.240 UH and you have to pay people more in the US. 0:17:04.480 --> 0:17:06.240 Is that what you're finding And how much does that 0:17:06.280 --> 0:17:08.639 contribute to the issue. Well, that was a real reason. 0:17:08.960 --> 0:17:11.760 You know, ten years ago people outsourced a lot to China, 0:17:12.800 --> 0:17:15.680 Vietnam and other places. But the wage rates in those 0:17:15.720 --> 0:17:19.119 countries have gone way up in that time period, whereas 0:17:19.119 --> 0:17:21.480 wage rates in the United States have stagnated and even 0:17:21.560 --> 0:17:24.639 gone down. Even very skilled labors like exist in the 0:17:24.680 --> 0:17:28.600 Ashland in the in the Northeast Kentucky area, so the 0:17:28.680 --> 0:17:32.520 wage equation has flip flopped. Um, we're going to the 0:17:32.560 --> 0:17:37.520 place that has an abundance of very skilled labor that's underutilized. 0:17:37.520 --> 0:17:39.399 It's one of the main reasons that we went to 0:17:39.400 --> 0:17:42.480 eastern northeastern Kentucky. And so these laborers and just to 0:17:42.520 --> 0:17:46.320 be clear that this mill UH would create up to 0:17:46.359 --> 0:17:48.800 a thousand construction jobs and that it would be that 0:17:48.800 --> 0:17:50.800 these would be more, as you were saying, high skilled 0:17:50.840 --> 0:17:53.960 jobs that would be better paid. Where where were these 0:17:54.000 --> 0:17:59.280 workers employed previously? They were very skilled labors in workers 0:17:59.359 --> 0:18:03.359 in coal mine. Uh. Big layoffs at companies like A 0:18:03.440 --> 0:18:05.680 K Steel shut up plant down in that area recently. 0:18:05.680 --> 0:18:09.359 Those are highly skilled workers. Ashland Oil was a Fortune 0:18:09.400 --> 0:18:11.919 five company in that area many years ago and left. 0:18:12.000 --> 0:18:14.480 And you know, it's been a it's been a troubled 0:18:14.480 --> 0:18:17.840 twenty years in the appellations. We're about to change it. So, 0:18:18.320 --> 0:18:20.200 given the fact that it's been about twenty years and 0:18:20.359 --> 0:18:22.400 that a lot of people talk about brain drain from 0:18:22.400 --> 0:18:25.080 certain areas that you know, have been in trouble for 0:18:25.119 --> 0:18:27.439 a while, do you think that there will be a 0:18:27.480 --> 0:18:32.919 sufficient stock of of qualified employees. So, Lisa, here's a 0:18:33.000 --> 0:18:35.679 really good answer to this one. When we announced at 0:18:35.720 --> 0:18:38.520 the press conference with Governor Bevan, who's, by the way, 0:18:39.040 --> 0:18:41.640 one of the best governors in the United States, if 0:18:41.680 --> 0:18:45.240 not the best, um we announced to a crowd of 0:18:45.240 --> 0:18:50.400 three people under a tent um that um Brady was beginning. 0:18:50.480 --> 0:18:52.960 We made the whole press release, and we we put 0:18:52.960 --> 0:18:55.600 our website live at that moment with the press release 0:18:55.640 --> 0:18:58.600 on it. In a career section, to click on on 0:18:58.640 --> 0:19:02.240 the website where any individual could send us their resume, 0:19:02.359 --> 0:19:05.800 tell us exactly what kind of a advanced manufacturing job 0:19:05.840 --> 0:19:09.560 they're looking for, um, and get in a queue. Um, 0:19:09.600 --> 0:19:12.399 it's been ten days. We've had two thousand, two hundred 0:19:12.480 --> 0:19:16.960 applications already for those five and fifty jops. Well, it 0:19:16.960 --> 0:19:20.000 seems like there's plenty of demand. Um. The one point 0:19:20.000 --> 0:19:22.840 three billion dollars, how are you financing that? Yeah, so 0:19:22.960 --> 0:19:26.520 or financed in the normal Wall Street way, UM, with 0:19:26.720 --> 0:19:31.560 banks and investors and strategic investors. UM. Roughly one third 0:19:31.600 --> 0:19:34.400 of that is equity and roughly two thirds will be debt. 0:19:34.480 --> 0:19:38.720 That's priced pretty attractively given given our background. So we're 0:19:38.720 --> 0:19:41.720 happy with how that's gone. Uh. The equity was done, 0:19:41.800 --> 0:19:44.040 is done in two pieces. One of them has already 0:19:44.080 --> 0:19:47.320 completed in way over subscribed, the other one coming up shortly. 0:19:47.400 --> 0:19:49.679 So we're we're headed right down the path to breaking 0:19:49.720 --> 0:19:53.119 ground in the first quarter. The eco friendly aluminum that 0:19:53.160 --> 0:19:56.000 you were talking about, is it typically more expensive than 0:19:56.640 --> 0:19:59.959 the other the other stuff out there. Well, first, aluminum 0:20:00.160 --> 0:20:02.679 is the only commodity of all of the medals that 0:20:02.800 --> 0:20:06.760 is one recyclable, so it's eco friendly from from the start, 0:20:07.440 --> 0:20:10.120 and of course we're not a smelter, we're a rolling mill, 0:20:10.200 --> 0:20:14.600 so we're using less carbon in general than, for instance, 0:20:14.640 --> 0:20:20.480 the smelting industry, which is heavily heavily energy dependent. Um. Thirdly, 0:20:20.800 --> 0:20:24.160 we're completely brand new, the best machines in the world, 0:20:24.320 --> 0:20:28.240 coming in from the very best suppliers. Our emissions are 0:20:28.240 --> 0:20:32.359 almost nothing for having three million square feet under roof 0:20:32.400 --> 0:20:35.320 on the Ohio River. So it's a really good This 0:20:35.400 --> 0:20:38.040 isn't the smoke stacks of our of our prior generation. 0:20:38.080 --> 0:20:40.600 This is five fifty people walking around with an iPad 0:20:40.640 --> 0:20:42.879 in their hands. Thank you so much for joining us. 0:20:42.920 --> 0:20:46.280 Really interesting Craig Bouchard, chairman and chief executive officer of 0:20:46.359 --> 0:20:49.879 Brady Industries, based in Kentucky, talking about the one point 0:20:50.000 --> 0:20:53.840 three billion dollar investment that his company is making in 0:20:54.000 --> 0:20:58.040 a new aluminum rolling mill that should create up to 0:20:58.080 --> 0:21:01.720 a thousand construction jobs. Really interesting about the job dynamic. 0:21:01.760 --> 0:21:03.919 And I do wonder how many other firms are going 0:21:03.960 --> 0:21:07.240 to follow your your footsteps and really move into some 0:21:07.320 --> 0:21:09.840 of these areas where you have seen companies move out 0:21:09.880 --> 0:21:24.320 and people are unemployed. Well, there's some drama today over 0:21:24.440 --> 0:21:27.359 in Detroit and Keith noton is going to explain it 0:21:27.400 --> 0:21:30.199 to us. Keith Noon as the auto editor at large 0:21:30.440 --> 0:21:34.600 for Bloomberg News located in Detroit, and Keith, we're talking 0:21:34.640 --> 0:21:38.280 about Ford. Ford shareholders are really angry and they had 0:21:38.359 --> 0:21:41.639 a call not an actual in person meeting or virtual 0:21:41.680 --> 0:21:44.760 meeting I suppose, I should say, with the leadership of 0:21:44.800 --> 0:21:47.760 the company today and it was it was pretty heated. 0:21:47.840 --> 0:21:51.280 Can you first just lay out what some of the 0:21:51.480 --> 0:21:55.320 issues were that these shareholders were so upset about. Well, Lisa, 0:21:55.359 --> 0:21:58.440 the big issue is the stock. That's what they vented 0:21:58.480 --> 0:22:01.760 their spleen on today in the Search annual meeting. It's 0:22:01.880 --> 0:22:06.520 down thirty six percent since Mark Fields became CEO in 0:22:06.560 --> 0:22:10.199 the summer of he followed, as you might recall, the 0:22:10.280 --> 0:22:14.159 rock star CEO, Alan Moalley. And although he has generated, 0:22:14.359 --> 0:22:19.080 you know, really strong profits, the US auto market is 0:22:19.200 --> 0:22:21.840 at its peak and starting to head down. So investors 0:22:21.840 --> 0:22:25.080 are fleeing, uh, the auto stocks for the most part, 0:22:25.200 --> 0:22:28.119 US auto stocks UM, though Ford has taken it on 0:22:28.200 --> 0:22:31.320 the chin more than others, and the shareholders are are 0:22:31.359 --> 0:22:35.400 pretty fed up. So they hit UM executive chairman Bill 0:22:35.480 --> 0:22:37.800 Ford and Mark Fields with a lot of tough questions 0:22:37.840 --> 0:22:40.560 today in this annual meeting. You know, I just just 0:22:40.640 --> 0:22:43.639 point out in your story you noted that Ford's shares 0:22:43.680 --> 0:22:47.240 have traded down, traded down by about thirty six percent 0:22:47.640 --> 0:22:51.040 since Mark Fields took the helm as chief executive officer 0:22:51.440 --> 0:22:54.159 in July of two fourteen. So what were some of 0:22:54.160 --> 0:22:57.920 the questions that shareholders wanted to know? Where were they focusing? Yeah, well, 0:22:57.920 --> 0:23:00.320 they wanted to know essentially what management was going to 0:23:00.400 --> 0:23:02.760 do about what they called the pathetic performance of the 0:23:03.320 --> 0:23:08.800