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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day, we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. Let's go Switch Gears

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Speaker 1: to Big Farm. Another deal. There's a lot of things

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Speaker 1: I want to talk about here, but this deal came

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Speaker 1: out today. Fiser potentially looking at a company by the

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Speaker 1: name of Segan. I have no idea what's going on

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Speaker 1: here other than bankers are going to get paid. Lawyers

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Speaker 1: are going to get paid. So I want to break

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Speaker 1: in with Sam Fizzelli, he said, of the European research

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Speaker 1: and farmer analyst for Bloomberg Intelligence. So Sam talk to

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Speaker 1: us about what is it Segan and Fiser and what's

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Speaker 1: going on there? Yeah, Hi, Paul, So I think this is,

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Speaker 1: you know, not a surprise that Fiser's looking at companies,

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Speaker 1: because you know they in their four QUE results they

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Speaker 1: had a slide which showed twenty five billion dollars of

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Speaker 1: risk adjusted sales from deals to be done in twenty

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Speaker 1: twenty twenty twenty thirty, got that right, ye? So you know,

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Speaker 1: and that's a lot of money risk adjusted, which means

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Speaker 1: that when you look at a company company, their pipeline

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Speaker 1: drugs will have to be taking a notch down. And

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Speaker 1: to get twenty five billion dollars with risk adjusted sales,

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Speaker 1: you need something like, I don't know, thirty billion, thirty

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Speaker 1: five billion of sales. So the point is they need

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Speaker 1: to do big deals. And here, although Season is not

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Speaker 1: necessarily a big company, today they say two or three

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Speaker 1: billion dollars of sales. Expectations on consensus have it going

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Speaker 1: up to about nine in twenty thirty. So you know,

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Speaker 1: does Fiser need to do this? Yes, something like this anyway,

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Speaker 1: does fi Fiser need to do some of the several

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Speaker 1: of these years bill fits in? You know, Sam, I'm

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Speaker 1: looking at the FA function for Fiser and it just

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Speaker 1: blows me away away. And this is obviously a complete

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Speaker 1: COVID call. Here. You know, this company had forty billion

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Speaker 1: in sales and then in twenty twenty one it doubled

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Speaker 1: to eighty billion, and then you know they had one

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Speaker 1: hundred billion in twenty twenty two, and then I'm looking

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Speaker 1: at the forecast on the FA function, consensus is back

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Speaker 1: down to like seventy billion. Run right here. How does

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Speaker 1: this company pivot from three year surge in sales and

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Speaker 1: profitability from COVID and again, thank them and Moderna very

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Speaker 1: very much for the work they did. How does this

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Speaker 1: company kind of reset itself in a post COVID world? Yeah,

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Speaker 1: with difficulty pulled. If you look at the share price chart,

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Speaker 1: you'll see that it's come back all the way down.

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Speaker 1: So basically they're not getting a huge amount of credit

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Speaker 1: for the cash they generated, because it's very difficult to

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Speaker 1: know what is the value of cash. At the end

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Speaker 1: of the day, it's all going to be down to

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Speaker 1: how good are they going to be in terms of

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Speaker 1: the deals they do, And I think a lot of

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Speaker 1: people worry that they might overpay and do deals that

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Speaker 1: perhaps look optically nice today but they don't actually deliver

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Speaker 1: in the long term. So you know, it's much easier

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Speaker 1: to value and be interested and have an investment positive

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Speaker 1: investment view on a company where top line is growing

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Speaker 1: organically and then anything they do is in addition to

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Speaker 1: that um But so that that's difficult. I don't know

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Speaker 1: how you how people get around this subject. You can

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Speaker 1: put certain you know numbers in your model that suggests

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Speaker 1: sure if they use the cash right, they can have

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Speaker 1: a great story going forward. Well, Sam, you know, it's

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Speaker 1: it's interesting. I mean, I know you've been covering these

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Speaker 1: farmer companies for decades. You know how much of the

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Speaker 1: new drugs that come onto market are Fiser's scientists discovering

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Speaker 1: something in their lab versus buying it? Good question? Yeah,

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Speaker 1: so it is a good question. And you know what

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Speaker 1: they all farmer companies have pretty much a state to

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Speaker 1: daim You know, I have very big business development teams

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Speaker 1: of trying to get thirty to forty percent of their

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Speaker 1: pipelines out sourced externally because they've realized this is a

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Speaker 1: huge amount of innovation that goes on externally. And here's

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Speaker 1: a little statistic. I'm preparing for a presentation in about

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Speaker 1: ten days time. I looked at the biggest drugs in

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Speaker 1: twenty twenty two. Seven out of top ten we're from

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Speaker 1: where biotech companies. They were unlicensed Bionte. You know, the

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Speaker 1: Fiser COVID vaccine came from Bionte. Moderna's vaccine key Truda

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Speaker 1: that America's got twenty two billion of sales potentially this year,

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Speaker 1: or twenty four billion that came from an acquisition of

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Speaker 1: a small biotechy farmer biofarma company in Europe called organ On.

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Speaker 1: Which one is that key Truda y Truda, Yeah, twenty

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Speaker 1: four billion. Says it is a magic drug for cancer.

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Speaker 1: So hopefully you never need it, but if you do

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Speaker 1: and it works in you, it works like magic that

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Speaker 1: it turns your immune system onto the cancers. Yeah, so

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Speaker 1: that's why it's doing twenty four point So that that's interesting.

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Speaker 1: So basically seventy percent of the big home runs were

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Speaker 1: made by third parties, not the big giant pharma conglomerates, no,

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Speaker 1: but but Matt, they did do a lot of the

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Speaker 1: work that got them to market. Of course, that's why

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Speaker 1: that's why biotech investing sam, I mean, it really is

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Speaker 1: not for the faint of heart, right, I mean it

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Speaker 1: this drug works and the stock goes crazy, or it

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Speaker 1: doesn't work and it does the act exact opposite. Yeah,

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Speaker 1: So you need to be able to withstand that that

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Speaker 1: risk and also have a proper correct portfolio approach and

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Speaker 1: be disciplined, you know, have your rules about what it

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Speaker 1: is you like to invest in and why you invest

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Speaker 1: in them, stick with them, and then stick with them.

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Speaker 1: You know, when you look at the long term, the

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Speaker 1: best returns come from companies which perhaps wasn't their first

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Speaker 1: drug that got to market. Maybe it was the second

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Speaker 1: or third that really made the difference. By the way, Sam,

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Speaker 1: in terms of M and A, how much of that

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Speaker 1: are we seeing in this high and rising interestate environment?

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Speaker 1: I would imagine less. On the other hand, these big

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Speaker 1: companies surely have huge war chests of cash and maybe

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Speaker 1: don't need to finance everything. Yeah. I mean, remember farma

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Speaker 1: is massively cash generative, and you know they can pay

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Speaker 1: They can pay equity if needed, right, so their equity

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Speaker 1: is pretty much not that different to paying by cash.

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Speaker 1: But of course it depends on the target shareholder. So yes,

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Speaker 1: you're right, there is there is. The calculation is a

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Speaker 1: bit different now, but there's a lot of need. There's

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Speaker 1: about two hundred billion dollars of drug sales that are

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Speaker 1: coming off patent by twenty thirty. Wow, Sam, what's the

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Speaker 1: next biggest i mean post pandemic role. What's the next

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Speaker 1: big area for biotech? Do you think to really make

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Speaker 1: a difference. Oh, I think it has to be to

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Speaker 1: really make a difference. It would be great if they

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Speaker 1: can get the more and more of the immune system

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Speaker 1: tuned into treating your disease and obviously manages side effects.

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Speaker 1: And there's a lot of that going on, and of

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Speaker 1: course there's this gene editing going on, so there's a

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Speaker 1: lot of work there that could help us. So long

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Speaker 1: as we can get the side effects and their safety

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Speaker 1: risk under control, that could really revolutionize medicine. See Sam

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Speaker 1: goes to these conferences. They're not like the conferences I

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Speaker 1: go in the desert or Data Miami where wire we

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Speaker 1: plague off and stuff. He goes to these conferences where

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Speaker 1: you actually have to work during the weekend. What's the

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Speaker 1: next conference coming up? Sam, Well, there's one that I'm sad,

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Speaker 1: not sad not to go to on the one hand,

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Speaker 1: and that's the American Association for Cancer Research. I think

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Speaker 1: that's where I'm guessing here. MODERNA will show us the

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Speaker 1: RANNA merc their mRNA vaccine for cancer, which has headlined

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Speaker 1: positive data. So let's look at the detail. And the

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Speaker 1: next big one would be asking in one of my

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Speaker 1: favorite cities. Cha go there, you go? I mean, and

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Speaker 1: these guys they actually go work the entire weekend. I mean,

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Speaker 1: who does that? Sam Fazzelli held He's head of European

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Speaker 1: research for Bloomberg Intelligence. He's our senior farmer analyst who's

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Speaker 1: been doing it in the city of London for decades.

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Speaker 1: One of the absolute best in the business for Bloomberg Intelligence.

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Speaker 1: We're gonna have more coming up. This is Bloomberg, right.

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Speaker 1: This is a little awkward. And Matt, you're a CEO

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Speaker 1: of a company announced that you're going to step down.

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Speaker 1: Your stock goes up ten percent. It happens quite often.

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Speaker 1: It is awkward, and yeah, I always feel for the

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Speaker 1: incumbent when that happens. But it's a part of market

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Speaker 1: life because it does happen all the time. You know.

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Speaker 1: Early in my career, I was a star I mean

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Speaker 1: star research assistant covering the railroad and trucking industries. And

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Speaker 1: I worked for a guy by the name of Tony Hatch.

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Speaker 1: He's a consultant and analysts at ABH Consulting. Tony, I know,

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Speaker 1: you know these railroad companies inside and out. Tell us

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Speaker 1: what's going on Union Pacific. Why would the stock surge

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Speaker 1: ten percent when the CEO says he's going to step down? Well,

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Speaker 1: first of all, I want to confirm the Yeah, you

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Speaker 1: were a star assistant, but what does that mean by

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Speaker 1: the way, to being a star research assistant? Means he

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Speaker 1: was good to bring on golf forsoms or what. Well,

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Speaker 1: since I don't golf, I'm assuming he took my place

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Speaker 1: and I was really I would say his number one

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Speaker 1: skill exactly there, you figured, I'm kidding Union Pacific, you know,

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Speaker 1: on a Sunday, right. The company tried to say this

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Speaker 1: was part of a regularly planned issue they've been discussing

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Speaker 1: going back in the early last year. So that if

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Speaker 1: it's regularly planned, and you have a task force assigned,

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Speaker 1: and you've hired and outside, you know, a recruiting firm,

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Speaker 1: why would you release this on Sunday. The answer is

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Speaker 1: because one of their largest shareholders demanded that they do

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Speaker 1: and put out an incredibly sharp letter that talked about

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Speaker 1: how Union Pacific, despite having what's well known to be

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Speaker 1: the best franchise in the industry, has underperformed all of

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Speaker 1: his peers in just about every category. Echo to mention,

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Speaker 1: um UP has had a long history of allowing great

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Speaker 1: patience for its leadership. Paul. You can remember back to

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Speaker 1: the UPSP merger when when that you know, there was

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Speaker 1: a disaster, but the management team stayed intact. This time,

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Speaker 1: I guess they've made it, made a decision to change.

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Speaker 1: It's the second time we've seen the board step in

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Speaker 1: over the actions of the CEO of Lance Fritz. They

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Speaker 1: did this when they announced they were going PSR. He

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Speaker 1: did not make that announcement, really, the board did. And

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Speaker 1: then they brought in Jim Venna from Canadian National Fame

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Speaker 1: to be the COO to basically supervise their transition to

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Speaker 1: this new operating philosophy. It was expected that Venna might

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Speaker 1: be making a play for the top job then then,

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Speaker 1: being twenty nineteen, he did. He then left and Lance stayed,

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Speaker 1: making me think Lance was a pretty good political infighter.

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Speaker 1: Now a major shareholder, sor Avna is saying that Jim

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Speaker 1: Venas should take the job after all. So it's a

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Speaker 1: little of a replay, only this time with a Sunday

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Speaker 1: morning surprise that the board has agreed that if not

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Speaker 1: coming not taking the advice of their their shareholder too

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Speaker 1: with the person they picked, but to make a change.

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Speaker 1: It's it's unusual. If you looked at the track record,

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Speaker 1: maybe you wouldn't be surprised if you looked at Union

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Speaker 1: Pacific's performance. But given the history of this company and

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Speaker 1: their longstanding patients and unwillingness to listen outside advice, this

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Speaker 1: is highly unusual. So what what can be done at

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Speaker 1: a Union Pacific? What are some of these shareholders want

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Speaker 1: this company to change and perhaps improvement performance and shareholder returns.

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Speaker 1: We well, that's a really interesting thing that you ask

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Speaker 1: right now. You know, the the this PSR that that

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Speaker 1: precision scheduled railroading has has become a nasty phrase after

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Speaker 1: all the labor negotiations. It's even been related to the

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Speaker 1: accident in Ohio, though it has of course nothing to

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Speaker 1: do with that. But but the idea of bringing in

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Speaker 1: an operating guide to solve problems here at Union Pacific,

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Speaker 1: and all the railroads had service issues over the last

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Speaker 1: eighteen months, although they were almost entirely labor related. That

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Speaker 1: is not having enough cruise. This is a gesture where

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Speaker 1: Union Pacific is sort of ignoring the wishes of its regulator,

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Speaker 1: the Service Transportation Board, which has painted the target of

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Speaker 1: all railroad badness, if you will, on Up's back. And

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Speaker 1: so if you were to bring in a c OO

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Speaker 1: as CEO, you would in essence be saying we are

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Speaker 1: a inefficiency driven way to get to share all the

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Speaker 1: value rather than a growth driven lance didn't represent really

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Speaker 1: either side of this ongoing philosophical debate, and jim Na

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Speaker 1: as a person might not want to say he represents

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Speaker 1: the operations side, but his resume suggested that. And then

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Speaker 1: when he was brought up as the attack guy coming

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Speaker 1: at Canadian National a year ago, when Children's Investment Fund

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Speaker 1: highlighted him as the successor, they got a lot of

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Speaker 1: what they wanted. TCI did, but they did not get

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Speaker 1: Jim Venna. One of the thing the TCI allowed to happen,

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Speaker 1: as have analysts say, this was a move to pivot

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Speaker 1: from growth to back to margin and that is really

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Speaker 1: not what shippers want to hear, certainly not what the

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Speaker 1: regulators want to hear. What Union Pacific needs to do

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Speaker 1: is really take advantage of the many gifts it has.

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Speaker 1: It's incredible franchise. It's seemingly never put it all together.

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Speaker 1: There isn't a single you know, silver bullet. Oh, if

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Speaker 1: they just fix this, they're back. But as you may remember, Paul,

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Speaker 1: they you know they have the biggest franchise. You know

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Speaker 1: that the connections to Mexico, widely diverse, all of the

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Speaker 1: great chemical franchise. Not not that that's a great topic

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Speaker 1: for these days, but they really control Texas. I want

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Speaker 1: to ask about that, not Texas obviously, but Ohio. First

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Speaker 1: of all, for those of us who don't cover the

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Speaker 1: railroads for a living, how many big railroad companies are there?

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Speaker 1: I mean, it seems to me that there are only

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Speaker 1: a handful of them anyway, that operating all of North America,

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Speaker 1: so that you are correct, they are essentially you could

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Speaker 1: say seven or maybe eight. But in the US there

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Speaker 1: are the Big four War in the west, B and

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Speaker 1: SAFT that's Berkshire's company, Union Pacific in the east, and

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Speaker 1: Norfolk Southern and the Canadians go Transcon up in the

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Speaker 1: top and they both drop down through the center. CP

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Speaker 1: soon to acquire Kansas City. Southern will go all the

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Speaker 1: way to Mexico City. CN goes all the way to

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Speaker 1: New Orleans. You have another railroad of some size in Mexico.

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Speaker 1: That's really it. But keep in mind you have a

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Speaker 1: highly developed highway system. So the rails are often thought

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Speaker 1: to be they're called duopolies, and the STBs often used

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Speaker 1: the monopoly word, but this is a duopoly that is

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Speaker 1: losing share at present in a rising freight market, you know,

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Speaker 1: forgetting today's economy, but over the last five years, and

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Speaker 1: that shows you the importance of the highway. So yes,

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Speaker 1: there are many fewer railroads, but there's the competition for

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Speaker 1: freight is stronger rather than weaker. So what needs to

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Speaker 1: happen from a regulatory perspective to make sure something that

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Speaker 1: we saw in East Palestine, Ohio doesn't happen again? I mean,

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Speaker 1: if it's possible or was there lax regulation that led

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Speaker 1: to the Norfolk Southern derailment that now seems to have

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Speaker 1: poisoned an entire region. So it appears highly and usually

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Speaker 1: the National Safety Board and TSB released a preliminary report

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Speaker 1: that's unusual, but there was so much heightened demand for

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Speaker 1: some kind of answer. That report says that although this

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Speaker 1: was a you know, a completely solvable problem, they didn't

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Speaker 1: exactly say how. And it appears in Norfolk Southern you

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Speaker 1: did all. You played by all of the rules that

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Speaker 1: they're supposed to have, including stopping the train when they

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Speaker 1: heard there. There will be some changes, most of which

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Speaker 1: will not have had any impact had they occurred before

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Speaker 1: this accident. In other words, ECB breaks. I'm getting into

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Speaker 1: the weeds here, but a new kind of breaking system

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Speaker 1: is one of the things some have proposed that has

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Speaker 1: no impact. That would have had no impact on this.

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Speaker 1: Changing how you label trains likely would have had no

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Speaker 1: impact on this. It's not clear the solution of this

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Speaker 1: highly unlucky set of circumstances is either letting railroads not

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Speaker 1: carry this. Remember they're not allowed to carry these goods,

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Speaker 1: they're compelled to carry these goods. So allowing railroads the

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Speaker 1: opportunity to say no, to change how the supply chains

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Speaker 1: for vinyl chlorider move to, that's some possibility. You know,

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Speaker 1: it's not necessarily on the railroad here, since they appeared

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Speaker 1: to have played by the regular rules. There is technology

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Speaker 1: coming that will have a better system for understanding when

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Speaker 1: bearings failed. This was a bearing in a single wheel

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Speaker 1: set in one hundred and forty nine car train that failed.

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Speaker 1: They were aware it failed just before the accident. New

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Speaker 1: technology could come that may allow them to have an

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Speaker 1: earlier look at this. But in many cases, I think

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Speaker 1: we're going to find this is just a set of

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Speaker 1: completely unlucky circumstances, and the crew did the right thing. Afterwards,

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Speaker 1: the responders did the right thing. We had no injuries,

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Speaker 1: no fatalities, and I think, actually, what will ultimately be

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Speaker 1: a solvable although reasonably expensive cleanup process Tony thirty seconds. Here,

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Speaker 1: I'm looking at Norfolk Southern. They spend a couple billion

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Speaker 1: dollars a year in capital expenditures. There is there a

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Speaker 1: credible argument that they don't as an industry spend enough

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Speaker 1: on safety. No, the idea here that they they never

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Speaker 1: spend enough for people talk about their buybacks and their

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Speaker 1: dividends is really kind of it's like it's a populist

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Speaker 1: propaganda here. The rail system in the United States got

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Speaker 1: a B plus, the freight rail system a B plus

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Speaker 1: grade from the American Society Civil Engineers. Highways got a D.

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Speaker 1: The alternative of moving these goods you take them off

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Speaker 1: the railroad, will they go on the highway? On that

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Speaker 1: D rated system by by engineers? Where the railroad spend

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Speaker 1: you know, massive amounts on a consistent basis on their network.

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Speaker 1: The cars in this case are owned by shippers, but

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Speaker 1: they were mostly the newer type of cars. You know,

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Speaker 1: there really isn't a case that this was a greed

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Speaker 1: over people right issue that's just populism. I just wouldn't

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Speaker 1: carry it. Yeah, well, you know, not a choice. Plastics

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Speaker 1: is not the key to the It's an option right there.

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Speaker 1: All right, Tony, thank you so much. Tony Hatchi is

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Speaker 1: a consultant analyst for the transportation industry at ABH Consulting.

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Speaker 1: He's been doing it for decades, covering the railroad stocks,

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Speaker 1: at trucking stocks, the shipping stocks. Good to get that

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Speaker 1: voice on, Jill. Thanks much for joining us here talk

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Speaker 1: to us about the why wca's Women's Empowerment ETF sounds fascinating. Sure, sure,

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Speaker 1: thanks for having me. Yeah. I was formerly the chief

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Speaker 1: Innovation Officer for WYDBCA Metropolitan Chicago and now I'm working

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Speaker 1: as an advisor with WYDBC A USA to continue to

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Speaker 1: work on the exchange traded fund that we launched in

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Speaker 1: twenty eighteen with partnership with Impact Shares, which is a

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Speaker 1: nonprofit investment manager. The goal here was to create so

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Speaker 1: hang on, Jill, just to be clear, the YWCA itself

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Speaker 1: released this ETF. We're the Impact partner, so we eat

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Speaker 1: Impact Shares released the ETF. There, the investment manager WYDBCA

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Speaker 1: is sort of the consultant on the criteria that are

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Speaker 1: used to evaluate the companies m that are focused on

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Speaker 1: women's empowerment, policies and practices that companies can can impose

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Speaker 1: in their workplace. UM and you know, with with over

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Speaker 1: one hundred and sixty years of experience and women's issues,

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Speaker 1: the y to BCA lends their leadership, voice, data, knowledge,

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Speaker 1: our networks, you know, to really make this an impactful

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Speaker 1: investing product. While we use this as an opportunity to

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Speaker 1: engage corporations on you know, what policies and practices they

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Speaker 1: can implement that will really impact women in the workplace,

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Speaker 1: and as a tool to educate UM investors in the

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Speaker 1: general public just you know, people in general on the

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Speaker 1: importance of these different criteria and how you can make

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Speaker 1: an impact with your money. I would guess that number one,

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Speaker 1: by a long shot, is having decent maternity leave policies,

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Speaker 1: and then I would guess that number two is on

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Speaker 1: site daycare and that everything else is way far behind that.

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Speaker 1: A am I onto something here? Those are definitely things

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Speaker 1: we would like to see corporations and all businesses implement

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Speaker 1: in their workforce. But we look at the product itself,

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Speaker 1: uses equip research and Equilipe is a gender equity research

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Speaker 1: company in the Netherlands and they look at over four

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Speaker 1: thousand publicly traded companies. They look at nineteen different criteria

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Speaker 1: that empower women in the workplace, and then that information

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Speaker 1: is used by morning Star to create the Women's Empowerment Index,

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Speaker 1: which is used by Impact Shares for the product itself.

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Speaker 1: So the Equilipe criteria look at gender balance in leadership

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Speaker 1: in the workplace, equal compensation and work life balance, and

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Speaker 1: policies promoting gender equality, as well as an overall commitment

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Speaker 1: to women's empowerment and their transparency in that area and

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Speaker 1: their accountability in that area. Be nice to see, I mean,

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Speaker 1: it will be nice to see the performance because I

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Speaker 1: imagine companies that pay closure attention, that do a better

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Speaker 1: job of UM, you know, keeping talented and experienced women

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Speaker 1: on staff, do better at business. Absolutely. I mean what

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Speaker 1: we see through the data is that, you know, companies

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Speaker 1: that are inclusive and they incorporate these different criteria, UM

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Speaker 1: have great you know, they're they're more they're much more successful. UM,

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Speaker 1: they have lower turnover, they have the higher employee satisfaction. UM.

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Speaker 1: You know, it's just all the way around. UM and

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Speaker 1: and things like, um, you know, we look at paid sickly,

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Speaker 1: the gender pay gap, the living wage. I mean, these

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Speaker 1: are all things that not only strengthen the women in

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Speaker 1: the workforce, but then also have the knock on effect

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Speaker 1: to strengthening the companies. Hey, Joe, give us an example

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Speaker 1: of one of your holdings and why from your perspective,

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Speaker 1: it's in the ETF UM. Well, okay, we have uh,

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Speaker 1: let's say, um Ndidia Uh is one of the top

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Speaker 1: holdings right now. UM. And you know, if they they

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Speaker 1: go out of their way. UM, well, we don't think

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Speaker 1: it should be out of their way, but we uh,

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Speaker 1: you know, to to really implement um, to be very

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Speaker 1: transparent about their pay. Um, their pay Uh, they pay

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Speaker 1: a living wage, UM, they have great um uh leaves

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Speaker 1: and work options. UM. So these are things that we

395
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Speaker 1: would like to see more companies adopting and employees being

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Speaker 1: more informed about so they can you know, ask their

397
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Speaker 1: companies to provide these um these things. We see these

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Speaker 1: criteria as sort of a roadmap for both corporate America

399
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Speaker 1: and employees. People. You know, if you're looking for a job,

400
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Speaker 1: these are the things you might want to think about

401
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Speaker 1: a company having in place. It's I mean, it's so

402
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Speaker 1: interesting because I come from I've been in Berlin for

403
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Speaker 1: the last six writers, right, and there they have what

404
00:22:58,320 --> 00:23:03,400
Speaker 1: seems to me um to be good maternity leave policy

405
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Speaker 1: and paternity leave and how long is that? Uh, it's

406
00:23:06,680 --> 00:23:11,280
Speaker 1: thirteen or fourteen months? Really, and then you know at

407
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Speaker 1: that age m a kid is allowed to go to

408
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Speaker 1: daycare what they call quita. Right. But here in America,

409
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Speaker 1: where we have the worst maternity leave policies, it's like

410
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Speaker 1: one or two weeks, and then then then you still

411
00:23:26,080 --> 00:23:28,719
Speaker 1: can't send a kid to daycare or any kind of

412
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Speaker 1: free education or or babysitting for like five years. It's

413
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Speaker 1: like the worst of both worlds in this country. And

414
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Speaker 1: I just imagine that big companies could take advantage of

415
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Speaker 1: that and outperform others. I see. Second among your holdings

416
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Speaker 1: is Amazon, which is interesting because they've had this kind

417
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Speaker 1: of anti unionist slant. Um, why do you include them

418
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Speaker 1: so highly? Well, there, it's it's based on their score

419
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Speaker 1: that they received from a relief on the specific criteria.

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Speaker 1: And you know, we we know they're there shoes with

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Speaker 1: all companies, and not all of them are doing the

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Speaker 1: most that they can do. In some situations. You know,

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Speaker 1: I hate to say they're the best of the worst

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Speaker 1: because they have the highest score among their peers in

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Speaker 1: their particular sector for these issues. And that doesn't mean that,

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Speaker 1: you know, we let up on those companies that we

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Speaker 1: don't want to see them do more. But the way

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Speaker 1: the index is or the way the products is constructed, now,

429
00:24:26,400 --> 00:24:29,639
Speaker 1: if they're in the top of their sector based on

430
00:24:29,680 --> 00:24:34,080
Speaker 1: these different criteria, they become a holding. All right, great stuff,

431
00:24:34,119 --> 00:24:39,240
Speaker 1: really appreciated. Jill O'Donovan, chief Innovation Officer the YWCA, I

432
00:24:39,240 --> 00:24:42,080
Speaker 1: think USA now she's advising on that. And they've got

433
00:24:42,960 --> 00:24:44,919
Speaker 1: the name of the name of the ETF is the

434
00:24:44,920 --> 00:24:48,960
Speaker 1: Impact Shares YWC Women's Empowerment ETF and the ticker is

435
00:24:49,119 --> 00:24:52,880
Speaker 1: WOMN wo MN, so it's pretty easy to remember. And

436
00:24:53,200 --> 00:24:55,160
Speaker 1: if you go on the Bloomberg you can find out

437
00:24:55,160 --> 00:24:56,639
Speaker 1: a lot about it as well. Just type d E

438
00:24:56,960 --> 00:25:00,240
Speaker 1: S and then you can click on the hold things

439
00:25:00,240 --> 00:25:02,480
Speaker 1: tab to see which companies they are involved in and

440
00:25:02,520 --> 00:25:04,760
Speaker 1: you can see how they've done against other ETFs. I

441
00:25:04,800 --> 00:25:09,800
Speaker 1: think it's a really important tool, you know, in the end,

442
00:25:09,880 --> 00:25:13,479
Speaker 1: to see how companies do that treat workers better. Yeah, exactly,

443
00:25:13,560 --> 00:25:15,600
Speaker 1: And I'll be interesting to see post pandemic, when people

444
00:25:15,680 --> 00:25:18,480
Speaker 1: have had a chance to work from home for multiple

445
00:25:18,560 --> 00:25:21,800
Speaker 1: years and maybe a hybrid type of arrangement or maybe

446
00:25:21,840 --> 00:25:25,320
Speaker 1: just working from home period. Will that put additional pressure

447
00:25:25,359 --> 00:25:28,680
Speaker 1: on companies to up their game in terms of fraternity care,

448
00:25:28,840 --> 00:25:31,360
Speaker 1: healthcare and you know just that type of thing right well,

449
00:25:31,400 --> 00:25:34,359
Speaker 1: and hopefully at the end of the day, companies that

450
00:25:34,400 --> 00:25:38,040
Speaker 1: do a better job of employing women do a better

451
00:25:38,119 --> 00:25:41,280
Speaker 1: job of making money, yes, and that puts incentive into

452
00:25:41,280 --> 00:25:43,000
Speaker 1: the others, right, So I'll have to see how that

453
00:25:43,000 --> 00:25:45,440
Speaker 1: plays out. But certainly getting a lot of interest here,

454
00:25:45,760 --> 00:25:51,399
Speaker 1: maybe even more so post pandemic. Everybody who's interested in

455
00:25:51,400 --> 00:25:53,359
Speaker 1: the investment banking business, and you can count me at

456
00:25:53,359 --> 00:25:55,280
Speaker 1: the top of that list. It's going to be paying

457
00:25:55,280 --> 00:25:57,520
Speaker 1: close attention to what we hear from our good friends

458
00:25:57,520 --> 00:25:59,239
Speaker 1: at Goldman sax To Markets are having one of their

459
00:25:59,320 --> 00:26:02,439
Speaker 1: rare investor days where they trot their management teams out

460
00:26:02,480 --> 00:26:05,399
Speaker 1: in front of investors in analyst and our very on

461
00:26:05,520 --> 00:26:10,200
Speaker 1: Alison Williams will be there. She's a senior global banks manager,

462
00:26:10,520 --> 00:26:14,000
Speaker 1: asset manager analyst at Bloomberg Intelligence. Alison, you've been covering

463
00:26:14,040 --> 00:26:17,879
Speaker 1: these big investment banks for decades, you know, you know

464
00:26:18,560 --> 00:26:21,119
Speaker 1: Goldman Sachs first as a competitor to them when you

465
00:26:21,160 --> 00:26:25,040
Speaker 1: were at Morgan Stanley, now as an analyst at Bloomberg Intelligence.

466
00:26:26,000 --> 00:26:28,960
Speaker 1: What do you think this management team needs to get

467
00:26:29,000 --> 00:26:32,280
Speaker 1: across to investors tomorrow. What's their strategy for having this

468
00:26:32,359 --> 00:26:35,520
Speaker 1: investor day. I think a big part of the investor

469
00:26:35,600 --> 00:26:39,960
Speaker 1: day will be trying to put some detail behind how

470
00:26:40,000 --> 00:26:44,320
Speaker 1: they're going to achieve their medium term targets. So Goldman Sachs,

471
00:26:44,400 --> 00:26:48,320
Speaker 1: along with some other banks, last year, after a very

472
00:26:48,359 --> 00:26:52,879
Speaker 1: strong twenty twenty one, raised their profitability targets. Obviously, it

473
00:26:52,960 --> 00:26:58,960
Speaker 1: was a much different landscape last year, many challenging areas.

474
00:26:59,480 --> 00:27:03,400
Speaker 1: Fixed in trading was an area of strength, especially for Goldman,

475
00:27:04,240 --> 00:27:09,840
Speaker 1: and I would say that the cost ratio is really

476
00:27:10,359 --> 00:27:12,320
Speaker 1: I think where there's going to be a lot of focus.

477
00:27:12,359 --> 00:27:14,240
Speaker 1: That's that's an area they said they were going to

478
00:27:14,280 --> 00:27:17,119
Speaker 1: miss last year. There's a lot of concerns about what

479
00:27:17,160 --> 00:27:21,159
Speaker 1: they're spending on comp what they're spending to invest, and

480
00:27:21,200 --> 00:27:24,240
Speaker 1: so I think from a metrics standpoint, we're going to

481
00:27:24,280 --> 00:27:27,199
Speaker 1: want to hear, you know more about is the sixty

482
00:27:27,240 --> 00:27:31,520
Speaker 1: percent still a goal and what does that look like

483
00:27:31,560 --> 00:27:38,720
Speaker 1: for this year? And this unit, the AWM unit, which

484
00:27:38,760 --> 00:27:41,200
Speaker 1: is I guess their asset and wealth management unit. Is

485
00:27:41,240 --> 00:27:45,080
Speaker 1: it so awesome? I mean, is it totally better than

486
00:27:45,440 --> 00:27:48,800
Speaker 1: everybody else's asset and wealth management units. I think it's

487
00:27:48,880 --> 00:27:51,639
Speaker 1: it's very different, and I think that is an area

488
00:27:51,960 --> 00:27:55,919
Speaker 1: where they've executed well, sort of against their plan and

489
00:27:56,280 --> 00:27:59,800
Speaker 1: obviously in the context of the environment. So you know,

490
00:28:00,160 --> 00:28:04,440
Speaker 1: the last investor Day they focused on a few big opportunities,

491
00:28:05,760 --> 00:28:08,480
Speaker 1: or the last investor day was the first investor day, right,

492
00:28:08,680 --> 00:28:10,920
Speaker 1: the last investor day was the first investor day. It's

493
00:28:10,960 --> 00:28:13,520
Speaker 1: only the second ever investment day that Goldman Sachs has

494
00:28:13,520 --> 00:28:16,760
Speaker 1: been too good previously to have an investor day. If

495
00:28:16,800 --> 00:28:20,280
Speaker 1: you want to buy the stock, you don't have them

496
00:28:20,359 --> 00:28:22,560
Speaker 1: tell you why. You figure out why you should buy

497
00:28:22,560 --> 00:28:24,199
Speaker 1: the stock. But now they're doing the work for you.

498
00:28:24,240 --> 00:28:27,040
Speaker 1: That should be a sign enough. Well, I think they're

499
00:28:27,080 --> 00:28:29,520
Speaker 1: trying to give a little bit more detail and to

500
00:28:29,560 --> 00:28:32,119
Speaker 1: your point, like when when things are going well and

501
00:28:33,280 --> 00:28:37,280
Speaker 1: steady state, there's less of a need to sort of

502
00:28:37,400 --> 00:28:39,520
Speaker 1: put yourself out there in front of investors. I think

503
00:28:39,600 --> 00:28:42,480
Speaker 1: when they wanted to talk about some of these pivots

504
00:28:43,040 --> 00:28:46,200
Speaker 1: and give some detail around their strategy. I think that's

505
00:28:46,280 --> 00:28:49,080
Speaker 1: that's what sort of led to the first Investor Day.

506
00:28:49,120 --> 00:28:53,240
Speaker 1: So ironic, Alison, you and Paul Shirley. Remember in Liar's Poker,

507
00:28:54,240 --> 00:28:56,760
Speaker 1: there's a trader at Goldman Sachs who's doing so well

508
00:28:56,760 --> 00:28:58,640
Speaker 1: that he can come to work without wearing a suit

509
00:28:58,680 --> 00:29:01,440
Speaker 1: and tie. He comes in with jeans and cowboy boots

510
00:29:01,560 --> 00:29:03,640
Speaker 1: and he's allowed because he's doing so well. But at

511
00:29:03,680 --> 00:29:05,520
Speaker 1: some point he stops making money for the firm and

512
00:29:05,520 --> 00:29:07,760
Speaker 1: they're like, dude, put on a tire. You're out of here.

513
00:29:08,760 --> 00:29:11,600
Speaker 1: This is like the investor Day. So so, Alison, And

514
00:29:11,640 --> 00:29:13,240
Speaker 1: that's by the way, So I mean, I think that

515
00:29:13,280 --> 00:29:16,520
Speaker 1: happens across Wall Street when people go towards more as

516
00:29:16,520 --> 00:29:19,240
Speaker 1: casual when things are going well, and then everybody's got

517
00:29:19,240 --> 00:29:20,959
Speaker 1: to get the suit and tie. Everybody's going to come

518
00:29:21,000 --> 00:29:24,160
Speaker 1: into the office. And you know, when performance is good,

519
00:29:24,280 --> 00:29:27,480
Speaker 1: a lot of things can can be ignored. Right, So, Alison,

520
00:29:27,720 --> 00:29:32,120
Speaker 1: how about Marcus their consumer banking effort. I'm not sure

521
00:29:32,160 --> 00:29:35,560
Speaker 1: if it's deemed a failure, but it's defertainly underperformed. Where

522
00:29:35,600 --> 00:29:38,080
Speaker 1: are they completely pulled the plug on that? If not,

523
00:29:38,560 --> 00:29:41,280
Speaker 1: how do they position it? So I think there are

524
00:29:41,320 --> 00:29:44,760
Speaker 1: elements of the you know, consumer strategy there. I think

525
00:29:44,800 --> 00:29:48,760
Speaker 1: that they're going to continue the main product which was

526
00:29:48,760 --> 00:29:51,680
Speaker 1: always sort of a head scratcher that you know, what

527
00:29:51,680 --> 00:29:53,920
Speaker 1: what what why why they thought it was so special?

528
00:29:53,920 --> 00:29:56,600
Speaker 1: I don't think anyone else thought it was a unique strategy.

529
00:29:57,240 --> 00:30:00,440
Speaker 1: I mean it was basically you know, rolling up bounds transfer.

530
00:30:00,560 --> 00:30:02,760
Speaker 1: This is something that a lot of it UM card

531
00:30:02,760 --> 00:30:06,320
Speaker 1: companies did in the nineties, and so it seemed like

532
00:30:06,960 --> 00:30:10,680
Speaker 1: not really um, you know, it was a little puzzling

533
00:30:10,880 --> 00:30:12,880
Speaker 1: how they thought that was going to be sort of

534
00:30:12,880 --> 00:30:16,080
Speaker 1: a differentiator or give them any kind of competitive advantage.

535
00:30:16,160 --> 00:30:19,040
Speaker 1: And so I think, you know, moving away from that

536
00:30:20,160 --> 00:30:23,280
Speaker 1: and um and then there are some environmental factors. I

537
00:30:23,320 --> 00:30:25,520
Speaker 1: get it, by the way, Allison, because at the time

538
00:30:25,560 --> 00:30:29,200
Speaker 1: I thought, wow, Goldman Sacks. If I bank with Goldman Sacks,

539
00:30:29,200 --> 00:30:31,320
Speaker 1: then I must be the very best. Like if I

540
00:30:31,360 --> 00:30:34,120
Speaker 1: pull out a Goldman Sacks card when we're all vying

541
00:30:34,200 --> 00:30:37,120
Speaker 1: over who pays for dinner, then I'm the man. You've

542
00:30:37,120 --> 00:30:39,680
Speaker 1: made it right and and and that and that's that

543
00:30:39,800 --> 00:30:42,239
Speaker 1: was the idea behind the Apple card as well, Like

544
00:30:42,360 --> 00:30:46,000
Speaker 1: it's just the cache of having it correct, and that

545
00:30:46,200 --> 00:30:48,480
Speaker 1: I think is that's something that I think they're going

546
00:30:48,520 --> 00:30:52,280
Speaker 1: to hold on to, right because in the credit card business,

547
00:30:52,320 --> 00:30:54,280
Speaker 1: as we said, as I just said, balance transfer is

548
00:30:54,320 --> 00:30:58,120
Speaker 1: one strategy. Another strategy is to offer, you know, to

549
00:30:58,280 --> 00:31:01,760
Speaker 1: provide some sort of cache behind the card. You know,

550
00:31:02,040 --> 00:31:03,880
Speaker 1: when we look at things like the Platinum card or

551
00:31:03,880 --> 00:31:05,880
Speaker 1: the staff Are card, there's a lot of benefits, but

552
00:31:05,920 --> 00:31:09,080
Speaker 1: it's also sort of the cachet of having those types

553
00:31:09,120 --> 00:31:13,080
Speaker 1: of cards or other types of affinity cards, which kind

554
00:31:13,080 --> 00:31:16,240
Speaker 1: of I think goes to Apple, where banks will try

555
00:31:16,240 --> 00:31:20,280
Speaker 1: to leverage off of a strong name or something that

556
00:31:20,760 --> 00:31:23,800
Speaker 1: you know, the consumers have a strong affinity towards. Hey, Alison,

557
00:31:24,240 --> 00:31:27,400
Speaker 1: David Solomon, the chairman and CEO of Goldman SAX. How

558
00:31:27,440 --> 00:31:31,959
Speaker 1: secure is his position, would you say these days? I

559
00:31:32,000 --> 00:31:37,080
Speaker 1: think that he has to instill some confidence again in

560
00:31:37,600 --> 00:31:41,960
Speaker 1: some of the strategy he can't. There are certain things,

561
00:31:42,160 --> 00:31:44,600
Speaker 1: you know, the investment banking business you can't. You certainly

562
00:31:44,600 --> 00:31:47,760
Speaker 1: can't blame him for you know the fact that the

563
00:31:47,840 --> 00:31:50,520
Speaker 1: industry had a significant slide of fees. There were almost

564
00:31:50,560 --> 00:31:56,000
Speaker 1: no IPOs last year. But I do think that you know,

565
00:31:56,240 --> 00:31:58,960
Speaker 1: you can manage to the cost side of things, You

566
00:31:59,000 --> 00:32:01,720
Speaker 1: can manage terms of your investments, and keep in mind

567
00:32:01,720 --> 00:32:04,280
Speaker 1: that the consumer business was not hit. You know, that's

568
00:32:04,320 --> 00:32:08,800
Speaker 1: something that he inherited as a CEO. So um, even

569
00:32:08,800 --> 00:32:11,280
Speaker 1: though that you know, a lot of fingers point to

570
00:32:11,360 --> 00:32:16,000
Speaker 1: him that that wasn't necessarily sort of his um, you know,

571
00:32:16,360 --> 00:32:19,160
Speaker 1: that wasn't that wasn't necessarily his initiative. He sort of

572
00:32:19,200 --> 00:32:22,080
Speaker 1: came into that. But I do think that, you know,

573
00:32:23,160 --> 00:32:26,400
Speaker 1: in terms of managing the cost, managing the investments going forward,

574
00:32:26,920 --> 00:32:29,040
Speaker 1: he does need to have a bit a little bit

575
00:32:29,080 --> 00:32:32,640
Speaker 1: more credible path and you know, they do have to

576
00:32:32,680 --> 00:32:35,840
Speaker 1: think about what they're going to say. Most people, I

577
00:32:35,920 --> 00:32:39,640
Speaker 1: don't think expect a change in our return targets. It

578
00:32:39,680 --> 00:32:41,840
Speaker 1: would be a little silly a one year later to

579
00:32:42,520 --> 00:32:44,720
Speaker 1: reduce those. But I think he does need to provide

580
00:32:44,720 --> 00:32:47,600
Speaker 1: a credible path. Um, what about a change at the

581
00:32:47,600 --> 00:32:50,160
Speaker 1: helm of Goldman when you meet up with all the

582
00:32:50,240 --> 00:32:54,200
Speaker 1: other super bank analysts, do you guys have like a

583
00:32:54,200 --> 00:32:57,840
Speaker 1: betting pool on how much longer Solomon's got? I mean,

584
00:32:57,880 --> 00:33:01,280
Speaker 1: I think that's that's probably not you know, I don't

585
00:33:01,320 --> 00:33:03,719
Speaker 1: think that's really the main focus at Goldman Sachs. I

586
00:33:03,760 --> 00:33:07,880
Speaker 1: think that you know, he's there are very good stories

587
00:33:07,960 --> 00:33:10,200
Speaker 1: going on there if you look at their trading business,

588
00:33:10,320 --> 00:33:12,120
Speaker 1: I mean, they really have knocked the cover off the

589
00:33:12,120 --> 00:33:15,400
Speaker 1: ball in terms of gaining revenue share there. The investment

590
00:33:15,440 --> 00:33:17,400
Speaker 1: banking too, they've done a good job even though it

591
00:33:17,440 --> 00:33:19,760
Speaker 1: was a bad year for the industry. The M and

592
00:33:19,840 --> 00:33:23,120
Speaker 1: A franchise, which is you know, that sort of very

593
00:33:23,120 --> 00:33:26,120
Speaker 1: associated with the Goldman brand. I mean, I think that's

594
00:33:26,240 --> 00:33:29,280
Speaker 1: very strong. I think when people think about the leadership

595
00:33:29,320 --> 00:33:32,560
Speaker 1: across the global investment banks that that's not really the

596
00:33:32,600 --> 00:33:37,560
Speaker 1: one that people are, you know, necessarily betting on a change.

597
00:33:37,560 --> 00:33:40,440
Speaker 1: I think people are looking more towards some of the

598
00:33:40,480 --> 00:33:43,320
Speaker 1: other banks where there's been long standing leadership and wondering

599
00:33:43,360 --> 00:33:45,120
Speaker 1: when there's going to be a shift at those banks.

600
00:33:45,280 --> 00:33:48,120
Speaker 1: All right, Alison, good stuff. I know you'll be downtown

601
00:33:48,240 --> 00:33:50,480
Speaker 1: at the Goldman Sachs headquarters tomorrow with all the other

602
00:33:50,800 --> 00:33:54,000
Speaker 1: financial analysts and investors waiting to hear what we're gonna

603
00:33:54,000 --> 00:33:56,880
Speaker 1: hear from Goldman Sachs with their investor day. Alison Williams.

604
00:33:56,880 --> 00:33:59,840
Speaker 1: She's a senior global banks and Asset Managers analysts for

605
00:34:00,000 --> 00:34:02,760
Speaker 1: Bloomberg Intelligence. She's been doing that for decades. He's got

606
00:34:02,800 --> 00:34:09,800
Speaker 1: great perspective. Read her stuff on bi Go. A couple

607
00:34:09,800 --> 00:34:13,240
Speaker 1: of months ago, thanks to Matt Miller's contacts at Ford,

608
00:34:13,280 --> 00:34:15,359
Speaker 1: I was able to test drive a Ford F one

609
00:34:15,560 --> 00:34:18,319
Speaker 1: fifty electric truck and boy was it awesome. I was

610
00:34:18,360 --> 00:34:20,920
Speaker 1: really impressed. But now we've got a Big Take story

611
00:34:20,960 --> 00:34:24,040
Speaker 1: here that tells you, boy, there's some big issues with

612
00:34:24,120 --> 00:34:26,680
Speaker 1: where the aluminum comes in this truck, and that's the

613
00:34:26,719 --> 00:34:29,480
Speaker 1: subject of a Big Take story and a Big Take podcast.

614
00:34:29,800 --> 00:34:31,560
Speaker 1: So let's go to West Kasova. He's the host of

615
00:34:31,560 --> 00:34:34,440
Speaker 1: Bloomberg's Big Take podcast. So West, I just kind of

616
00:34:34,600 --> 00:34:39,399
Speaker 1: going through this article. It's fascinating reporting as always, fascinating photography,

617
00:34:39,560 --> 00:34:44,000
Speaker 1: as always, great graphics, and it absolutely warrants being a podcast.

618
00:34:44,040 --> 00:34:47,560
Speaker 1: Tell us about how Ford makes or gets the aluminum

619
00:34:47,560 --> 00:34:52,360
Speaker 1: Forward's F one fifty pickup trucks. Yeah, this story is

620
00:34:52,880 --> 00:34:56,800
Speaker 1: reported by Jessica Price Bryce in South Holli, Brazil and

621
00:34:56,880 --> 00:35:01,359
Speaker 1: Sherd Impress in the US. And they looked at was

622
00:35:01,680 --> 00:35:05,960
Speaker 1: where does the aluminum on this rock of the future,

623
00:35:06,320 --> 00:35:09,640
Speaker 1: as Ford describes it, the F one fifty lightning? Where

624
00:35:09,680 --> 00:35:12,360
Speaker 1: does it come from? And they were able to trace

625
00:35:12,480 --> 00:35:16,400
Speaker 1: back a lot of the aluminum on the truck to

626
00:35:17,239 --> 00:35:20,319
Speaker 1: a mining and a refinery in the heart of the

627
00:35:20,360 --> 00:35:25,879
Speaker 1: Amazon in Brazil and down there there are thousands of

628
00:35:26,000 --> 00:35:31,120
Speaker 1: people who are suing now a refinery saying that the

629
00:35:31,200 --> 00:35:33,800
Speaker 1: operation is really dirty and it is making them sick,

630
00:35:34,440 --> 00:35:38,680
Speaker 1: and that it is destroying the environment. And they trace

631
00:35:38,840 --> 00:35:42,640
Speaker 1: the supply chain all the way from there up through

632
00:35:42,719 --> 00:35:46,480
Speaker 1: Canada and then into parts suppliers and then to Ford.

633
00:35:47,880 --> 00:35:54,160
Speaker 1: So are those parts suppliers only selling this aluminum to

634
00:35:54,320 --> 00:35:57,040
Speaker 1: Ford or is that is that aluminum only going to

635
00:35:57,120 --> 00:35:59,840
Speaker 1: Ford because other carmakers obviously use it as well and

636
00:36:00,680 --> 00:36:04,359
Speaker 1: the material I mean, and is it just for the

637
00:36:04,640 --> 00:36:07,440
Speaker 1: lightning because Ford's been using a lot of aluminum in

638
00:36:07,480 --> 00:36:12,160
Speaker 1: the F one fifty for many years now. Yeah, A

639
00:36:12,239 --> 00:36:15,799
Speaker 1: lot of the aluminium used in all kinds of products,

640
00:36:16,080 --> 00:36:21,719
Speaker 1: you know, soft drink cans, other vehicles, a lot of

641
00:36:21,760 --> 00:36:23,520
Speaker 1: the things we buy because you know, we use a

642
00:36:23,520 --> 00:36:27,120
Speaker 1: lot of aluminium comes from the same area. And there's

643
00:36:27,120 --> 00:36:28,840
Speaker 1: a lot of companies, there's a lot of refunders, so

644
00:36:28,840 --> 00:36:32,680
Speaker 1: it's not just Ford. The reason they focused on Ford

645
00:36:32,719 --> 00:36:34,840
Speaker 1: where it was a couple of things. One is that

646
00:36:34,880 --> 00:36:37,600
Speaker 1: supply chains are often kind of black boxes, as they

647
00:36:37,640 --> 00:36:40,440
Speaker 1: describe it. It's really hard to find out the origins

648
00:36:40,520 --> 00:36:43,600
Speaker 1: where stuff comes from, especially when you have a really

649
00:36:43,640 --> 00:36:45,960
Speaker 1: long supply chain, like all the way from Brazil to

650
00:36:46,120 --> 00:36:50,399
Speaker 1: the US. And what happened was the lightning was such

651
00:36:50,440 --> 00:36:53,600
Speaker 1: a big deal when they announced it. Everyone was so

652
00:36:53,640 --> 00:36:55,200
Speaker 1: proud to be working on it that some of the

653
00:36:55,200 --> 00:36:58,640
Speaker 1: parts suppliers said, hey, we're supplying our parts to Ford's

654
00:36:59,000 --> 00:37:03,600
Speaker 1: new trout. And so they were able then to find out, Okay,

655
00:37:03,680 --> 00:37:06,000
Speaker 1: if these companies were sourcing it to Ford, where did

656
00:37:06,000 --> 00:37:08,000
Speaker 1: they get it? And they were able just by looking

657
00:37:08,000 --> 00:37:10,360
Speaker 1: through an enormous number of records and doing interviews to

658
00:37:10,440 --> 00:37:13,600
Speaker 1: trace it all the way back. And the other reason

659
00:37:13,719 --> 00:37:16,959
Speaker 1: they looked at forward was that Ford described this as

660
00:37:17,400 --> 00:37:20,880
Speaker 1: the truck that could possibly change everything that you have

661
00:37:20,920 --> 00:37:24,160
Speaker 1: a lot of people ain't Tesla's and maybe they're really

662
00:37:24,200 --> 00:37:28,400
Speaker 1: thinking about going to net zero in a carbon free future.

663
00:37:28,640 --> 00:37:32,520
Speaker 1: But people will buy pickup trucks. They need utility, they

664
00:37:32,560 --> 00:37:35,200
Speaker 1: want power, and maybe the environmental thing isn't the top

665
00:37:35,200 --> 00:37:38,480
Speaker 1: of mind. So those people can be persuaded that an

666
00:37:38,480 --> 00:37:41,520
Speaker 1: electric truck is a good thing. Then you really shift

667
00:37:42,280 --> 00:37:46,600
Speaker 1: away from gasoline eventually to electric. And so this futuristic

668
00:37:46,680 --> 00:37:49,000
Speaker 1: trucks seemed like a good place to really look at Okay,

669
00:37:49,000 --> 00:37:53,520
Speaker 1: so how clean is it? So West who owns this

670
00:37:54,080 --> 00:37:58,440
Speaker 1: aluminum refinery? It's not forward, right, It's it's another company. No,

671
00:37:58,640 --> 00:38:03,200
Speaker 1: it's another company, and it's based in Europe. And the

672
00:38:04,239 --> 00:38:07,080
Speaker 1: ownership of these companies is really long and involved in

673
00:38:07,200 --> 00:38:10,439
Speaker 1: you don't want to rot here. But Ford is really

674
00:38:10,480 --> 00:38:15,960
Speaker 1: just getting these parts from their suppliers. And I should

675
00:38:15,960 --> 00:38:20,399
Speaker 1: say that the companies themselves, and this is what comes

676
00:38:20,400 --> 00:38:23,040
Speaker 1: out in the story. The companies are following the laws

677
00:38:23,040 --> 00:38:27,400
Speaker 1: of Brazil. That laws in Brazil over environmental regulations are

678
00:38:27,520 --> 00:38:31,399
Speaker 1: pretty weak, and so the companies aren't necessarily breaking the law.

679
00:38:31,600 --> 00:38:34,520
Speaker 1: They're following the law. It's just that the laws themselves

680
00:38:35,440 --> 00:38:40,680
Speaker 1: don't enforce environmental regulations that protect them. The other thing

681
00:38:40,719 --> 00:38:44,000
Speaker 1: that we should really say here is the reporters went

682
00:38:44,040 --> 00:38:46,600
Speaker 1: to Ford and said, hey, we've found this out. What

683
00:38:46,680 --> 00:38:51,120
Speaker 1: do you say? And Ford immediately said, we did not

684
00:38:51,280 --> 00:38:53,680
Speaker 1: know this and we are now going to investigate this

685
00:38:53,760 --> 00:38:57,640
Speaker 1: and so we're going to see what Ford Ashley does

686
00:38:57,680 --> 00:38:59,759
Speaker 1: about it. They said that they had no idea that

687
00:38:59,800 --> 00:39:04,160
Speaker 1: the aluminum was coming from the Amazon, and that points

688
00:39:04,200 --> 00:39:07,400
Speaker 1: up to another problem is that these supply chains are

689
00:39:07,440 --> 00:39:10,000
Speaker 1: so long that a lot of times your suppliers say yes,

690
00:39:10,040 --> 00:39:12,280
Speaker 1: it's all certified, but you don't really look to see

691
00:39:12,360 --> 00:39:15,400
Speaker 1: what about three or four suppliers down the lock right. Well,

692
00:39:15,840 --> 00:39:18,160
Speaker 1: and when you buy the truck, you probably maybe if

693
00:39:18,160 --> 00:39:20,360
Speaker 1: you care about the environmental impact, you look at Forward

694
00:39:20,440 --> 00:39:22,440
Speaker 1: and maybe you look at a couple of their suppliers.

695
00:39:22,440 --> 00:39:25,080
Speaker 1: But consumers, obviously you can't go that far either. I'm

696
00:39:25,080 --> 00:39:28,279
Speaker 1: sure they'll be interested to read this piece. Where's the

697
00:39:28,840 --> 00:39:31,879
Speaker 1: good aluminum come from? Like, if I don't want to

698
00:39:32,239 --> 00:39:34,440
Speaker 1: poison people in the Amazon, where should I get my

699
00:39:34,480 --> 00:39:38,960
Speaker 1: aluminum from? Yeah, this is a really big point, and

700
00:39:39,040 --> 00:39:42,280
Speaker 1: this is something that I asked both Jessica and Sheridan,

701
00:39:42,320 --> 00:39:44,080
Speaker 1: the reporters on the story, and they say, you know,

702
00:39:44,440 --> 00:39:47,440
Speaker 1: like let's say Ford, really they look at this and

703
00:39:47,440 --> 00:39:49,120
Speaker 1: they say, yeah, we don't want to get our aluminum

704
00:39:49,160 --> 00:39:52,000
Speaker 1: from this place anymore. That's problem. There aren't all that

705
00:39:52,239 --> 00:39:56,600
Speaker 1: many places you can get it. And so the conclusion

706
00:39:56,640 --> 00:39:59,960
Speaker 1: that they really came to is that you're not gonna

707
00:40:00,160 --> 00:40:02,880
Speaker 1: just all of a sudden fine new sources of aluminium,

708
00:40:02,960 --> 00:40:06,160
Speaker 1: especially in the massive someone went Forward would need. You

709
00:40:06,320 --> 00:40:09,439
Speaker 1: just have to do a better job of making sure

710
00:40:09,520 --> 00:40:12,480
Speaker 1: the way you're getting a luminium is cleaner and that

711
00:40:12,600 --> 00:40:15,280
Speaker 1: it's doing better by the environment and not just everybody

712
00:40:15,360 --> 00:40:19,279
Speaker 1: kind of looking the other way. So what are the

713
00:40:19,280 --> 00:40:22,759
Speaker 1: people down there in Brazil really looking for? Are they

714
00:40:22,840 --> 00:40:25,400
Speaker 1: looking for them to stop production, to clean up production,

715
00:40:25,480 --> 00:40:31,279
Speaker 1: to change the government rules. So there's all kinds of

716
00:40:31,320 --> 00:40:33,480
Speaker 1: things wrapped up in this because this has been going

717
00:40:33,520 --> 00:40:38,840
Speaker 1: on for decades where mining companies had polluted water had

718
00:40:38,880 --> 00:40:41,480
Speaker 1: you know, of course we've all heard about the deforestation

719
00:40:41,560 --> 00:40:44,040
Speaker 1: problems of the Amazon, ripping oak trees and kind of

720
00:40:44,120 --> 00:40:47,839
Speaker 1: ruining an environment. Allow the water down there was just undrinkable,

721
00:40:48,840 --> 00:40:51,640
Speaker 1: and some of the companies supply people who live there

722
00:40:51,640 --> 00:40:54,399
Speaker 1: with bottle bobble water because they can drink the water.

723
00:40:56,000 --> 00:40:59,480
Speaker 1: It's everything from people saying, you know, their skin is

724
00:40:59,480 --> 00:41:02,480
Speaker 1: that she too, horrible birth effects that they claim are

725
00:41:02,520 --> 00:41:08,319
Speaker 1: the result of these environmental practices, and so what they're

726
00:41:08,360 --> 00:41:12,120
Speaker 1: looking for is redressed to the you know, the things

727
00:41:12,160 --> 00:41:15,960
Speaker 1: they've already suffered, and also to stop it going forward.

728
00:41:17,040 --> 00:41:20,000
Speaker 1: All right, West great stuff, really appreciate it. West Kosovo.

729
00:41:20,120 --> 00:41:24,719
Speaker 1: He is the moderator for the host of the Bloomberg's

730
00:41:24,760 --> 00:41:27,759
Speaker 1: Big Take podcasts, and you can check that out wherever

731
00:41:27,800 --> 00:41:30,960
Speaker 1: you get your podcasts. In this edition talks about you know,

732
00:41:31,320 --> 00:41:38,120
Speaker 1: sourcing aluminum in Brazil. Thanks for listening to the Bloomberg

733
00:41:38,200 --> 00:41:41,560
Speaker 1: Markets podcast. You can subscribe and listen to interviews with

734
00:41:41,640 --> 00:41:46,440
Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller.

735
00:41:46,719 --> 00:41:50,080
Speaker 1: I'm on Twitter at Matt Miller nineteen seventy three and

736
00:41:50,280 --> 00:41:52,839
Speaker 1: on false Sweeney I'm on Twitter at pt Sweeney. Before

737
00:41:52,880 --> 00:41:55,720
Speaker 1: the podcast, you can always catch us worldwide at Bloomberg

738
00:41:55,800 --> 00:41:56,000
Speaker 1: Radio