Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business finance and tech news as it happened. Bloomberg
Speaker 1: Business Week with Carol Messier and Bloomberg Quick Takes. Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. We've got the space race,
Speaker 1: the race against the COVID Delta variant, and the race
Speaker 1: to sustainability all top of mind this week Tim with
Speaker 1: our guests. But before we do, Tim, We've got to
Speaker 1: talk about where you were this week on location with
Speaker 1: Jeff Bezos and the Blue Origin crew in West Texas.
Speaker 1: That was in Van Horne, Texas, Carroll the high desert
Speaker 1: of West Texas, not that far from El Paso, but
Speaker 1: about a hundred miles from pretty much anything. Van Hornten
Speaker 1: is this tiny town, about two thousand people, but it's
Speaker 1: the jumping off point for Jeff Bezos. Is Space Race
Speaker 1: ST two one look Controlled business Day ever a great
Speaker 1: place for space flight. It is a great place for
Speaker 1: space flight, except in the Afternia. I know there were
Speaker 1: some weather problems also on that subject, the future of space.
Speaker 1: It's bigger than Bezos, Branson and Musk. This is a
Speaker 1: Bloomberg big take Yeah, it's a great story. All that
Speaker 1: to come. But Tim, let's get back to your trip.
Speaker 1: So let's talk a little bit more about you being
Speaker 1: on the ground. First of all, you had to get
Speaker 1: on an airplane. Yeah, I did for the first time
Speaker 1: in gosh since last March. Um was crowded. There was
Speaker 1: not an empty seat on on either of the flights
Speaker 1: that I ended up taking. Carol. The big takeaway that
Speaker 1: I had, apart from everybody was totally mass compliant on
Speaker 1: the airlines. I was just how crowded everything was in
Speaker 1: every airport that that I went through. There are no
Speaker 1: direct flights to El Paso from New York City, so
Speaker 1: both times when I flew to and from, there were layovers, crowds, crowds, crowds,
Speaker 1: really long lines for for coffee, really long lines for restaurants.
Speaker 1: I couldn't help but thinking, Hey, this is the labor
Speaker 1: shortage that we keep hearing about. That's what I was
Speaker 1: just thinking as you were talking. It's real and you
Speaker 1: saw it firsthand. So you were headed, of course to
Speaker 1: West Texas to catch up with Jeff Bezos and the
Speaker 1: Blue Origin crew. What's interesting is we've had a lot
Speaker 1: going on in the private space race as of late.
Speaker 1: What was different about the Bezos trip versus Richard Branson
Speaker 1: and his crew, Well, they're really apples and oranges when
Speaker 1: you think about how they get to what they define
Speaker 1: as space. So the first thing is you notice is
Speaker 1: the craft and the difference between the Bezos and Branson crafts.
Speaker 1: Branson's is much more of a space plane and it's
Speaker 1: indeed ferried by this huge dual fuselage aircraft to about
Speaker 1: fifty feet and then it's dropped from the belly of
Speaker 1: the craft and then it shoots straight up like a
Speaker 1: rocket would, but it appears much more like an airplane.
Speaker 1: And the way that it comes back to to Earth,
Speaker 1: it glides back to Earth and lands on a runway
Speaker 1: like a traditional airplane, or maybe a better comparison would
Speaker 1: be like the actual Space Shuttle Woodland. Uh. Bezos was
Speaker 1: on a legit rocket. I mean, this is like when
Speaker 1: we think about rockets going to space, Like that's what
Speaker 1: what Bezos did. And the launch profile was really similar
Speaker 1: to Alan Shepherd's launch profile back in nine one. I mean,
Speaker 1: it was a capsule on on top of a rocket
Speaker 1: that shot straight into the sky and kept going for
Speaker 1: a couple of minutes. The capsule was released, and uh,
Speaker 1: the capsule went beyond what's identified as the International definition
Speaker 1: of space, the Carmen line on KOs high and then
Speaker 1: they came back down in a capsule um three parachutes,
Speaker 1: three drug shoots. And I think among the most innovative
Speaker 1: things about this is something that we see from SpaceX two,
Speaker 1: which is that reusable booster. That thing went almost as
Speaker 1: high as the capsule, came down and landed right where
Speaker 1: it was supposed to, just a couple of miles from
Speaker 1: where it took off. You you know this because I've
Speaker 1: talked about this. My dad was involved in the early
Speaker 1: Space Race and involved in guidance systems with all the
Speaker 1: early Apollo and Gemini missions. But what's interesting cause I
Speaker 1: think he would be blown away that you're now reusing
Speaker 1: rockets because that's not the way it was. No. You know,
Speaker 1: I saw somebody point this out on Twitter. This is
Speaker 1: not my my my original thought, but he or she
Speaker 1: basically said, Uh, imagine every time you flew on a
Speaker 1: seven thirty seven, that they would have to dispose of it. Exactly,
Speaker 1: and that's that's how we've got into space in the past, right,
Speaker 1: disposing of this stuff. So the reusability is huge. This
Speaker 1: particular stack, the capsule and rocket combination that Bezos went on,
Speaker 1: had it already been flown twice before. It's pretty remarkable,
Speaker 1: and then to see it come down and hit it
Speaker 1: smart is just mind blowing. Um would you go? I
Speaker 1: think I would? I think I would. Yeah, I mean
Speaker 1: Bezos said like, hey, if if this is a vote
Speaker 1: of confidence, right, Like, if it's not safe enough for
Speaker 1: me to go, then it's not safe enough for anyone
Speaker 1: to go, big time, big time. You and I have
Speaker 1: talked a lot in the last couple of weeks. You
Speaker 1: and I both get excited about this. I have to
Speaker 1: say I was glued to my phone watching Jeff Bezos
Speaker 1: and his crew go up. I just couldn't stop watching. Uh.
Speaker 1: There are those though, that I even talked about on
Speaker 1: the day. I'm like, did you see it? And they're like, yeah,
Speaker 1: you couldn't pay me to go up in there, and
Speaker 1: just we're so dismissive of it. Some would say, we
Speaker 1: have some really big problems in our world. Why are
Speaker 1: we spending so much time so much energy. Even as
Speaker 1: a news organization, Why are we focusing on it um
Speaker 1: when there are some other big problems in this world?
Speaker 1: There is the significance to continue space exploration. Jeff Bezos
Speaker 1: talked about it a lot, he did, and I think
Speaker 1: that criticism is absolutely fair and absolutely warranted. And in fact,
Speaker 1: it was brought up to Jeff Bezos and his crew
Speaker 1: ahead of the launch, and Bezos, I think had a
Speaker 1: pretty good answer. He said, we have to do both,
Speaker 1: and there is room to do both. One thing that
Speaker 1: he talked about a lot after he landed was how
Speaker 1: important it is to preserve Earth and in order to
Speaker 1: do that, and this is part of the long term
Speaker 1: vision of Blue Origin. I mean, Beazos has been working
Speaker 1: on this for twenty one years. Blue Origins established in
Speaker 1: the year two thousand and his long term vision is
Speaker 1: moving the polluting producing activities that we do here on Earth,
Speaker 1: moving those to space, because he said over and over again,
Speaker 1: Earth is the best planet that we've got in the
Speaker 1: Solar system. But the way things are going right now,
Speaker 1: with population growth, with energy usage, it's not going to
Speaker 1: support future generations. I mean, look at the past week
Speaker 1: in terms of climate change and the floods we've seen
Speaker 1: in Germany, the floods that we've seen in China, I mean,
Speaker 1: the fires out in the Pacific Northwest. This is not
Speaker 1: just the last week, but the last few weeks here.
Speaker 1: It's just a reminder that our climate here on Earth
Speaker 1: is definitely at risk. It is. I mean, you were
Speaker 1: you were here in New York, but as I was
Speaker 1: in Texas, I kept seeing posts and hearing from people
Speaker 1: about the sky here thousands of miles away, the smoke
Speaker 1: from fires making its way to the East coast. All right,
Speaker 1: coming up, we're gonna do more on the new space
Speaker 1: race and how the future of space is bigger than Bezos,
Speaker 1: Branson and Musk. You're listening to Bloomberg Business Week. This
Speaker 1: is Bloomberg. This is Bloomberg Business Week with Carol Masser
Speaker 1: and Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio. We're
Speaker 1: going to stay with the private missions into space. A
Speaker 1: store that cut our attention. It was a Bloomberg big
Speaker 1: take featured also in Bloomberg Business Week magazine. Tim, it
Speaker 1: was about how the future of space it is bigger
Speaker 1: than Bezos, Branson and must But before we get into that,
Speaker 1: discussion Bloomberg's Janet who takes a look at the historic
Speaker 1: flight and what happened right after the touchdown to one
Speaker 1: a merror ten minute mission, years and billions of dollars
Speaker 1: in the making, How it felt, Oh my god. Space
Speaker 1: flight has been the dream of Amazon founder Jeff Bezos
Speaker 1: since childhood. In his first words post touchdown, Bezos thank
Speaker 1: the team, all of the engineers a blue origin who
Speaker 1: have toiled hard to get this stud and then this
Speaker 1: surprising remark. I also I want to thank every Amazon
Speaker 1: employee and every Amazon customer, because you guys paid for
Speaker 1: all of this. He also spoke of the implications and
Speaker 1: impact of space travel. This is important. We're going to
Speaker 1: build a road space so that our kids and their
Speaker 1: kids can build the future. And we need to do that.
Speaker 1: We need to do that to solve the problems here
Speaker 1: on Earth. This is not about eskeeping Earth. Much has
Speaker 1: been made of the billionaires race to space, with Bezos,
Speaker 1: Elon Musk, and Richard Branson, who did his suborbital flight
Speaker 1: a couple of weeks ago, all making space travel their
Speaker 1: passion projects. Along for the historic ride, the first paying passenger,
Speaker 1: the eighteen year old son of a Dutch venture capitalist
Speaker 1: and eight two year old Wally Funk, the Mercury aviator
Speaker 1: who was denied entry into the astronaut ranks because of
Speaker 1: her gender. We had a great time. I want to
Speaker 1: go get fast. Damon and Funk just became the youngest
Speaker 1: and oldest people to reach space. So what happened up?
Speaker 1: There a lot of fun that included throwing candy around
Speaker 1: the American billionaires race to space. Well less independence on
Speaker 1: Russia for launches, and Bezos says demand and innovation will
Speaker 1: bring the cost down, in part from criticism over the
Speaker 1: billion spent since Blue Origin was founded. In two thousand,
Speaker 1: Bezos announced two major grants. Dream Corps founder Van Jones
Speaker 1: and chef Jose Andress of World Central Kitchen were given
Speaker 1: a hundred million dollars each to gift to philanthropies, including
Speaker 1: their own. As for Blue Origin, two more flights with
Speaker 1: humans are expected this year. Bezos says they are approaching
Speaker 1: a hundred million in ticket sales. Asked if he will
Speaker 1: go again? Hell, yes, how fast can refuel that thing?
Speaker 1: Let's go. Janet Wu Bloomberg News Thanks to Janet Wu
Speaker 1: for that report. For more on the future of space,
Speaker 1: we also caught up with Bloomberg business Week features writer
Speaker 1: Ashley Vance. He's also the author of Elon Musk Testla,
Speaker 1: SpaceX and The Quest for a Fantastic Future. I mean,
Speaker 1: you know, that's the space tourism sort of piece of
Speaker 1: all this, and then it's kind of these layers of
Speaker 1: building a true economy for the first time in low
Speaker 1: Earth orbit around the Earth. So we've got the space tourism,
Speaker 1: you's got space X doing really well, spending satellites and
Speaker 1: people to space. A company in New Zealand called rocket
Speaker 1: Lab has already sent up dozens of rockets carrying satellites.
Speaker 1: You know, if you look at the launch manifest of
Speaker 1: all these rocket companies were to send up about a
Speaker 1: hundred thousand satellites over the next decade, which would be
Speaker 1: about its currently about three thousand satellites around the Earth.
Speaker 1: And so it's just the point that I wanted to
Speaker 1: make is that this has been his dream for a
Speaker 1: long time, and you know it's still just a handful
Speaker 1: of governments really that of controlled space for the last
Speaker 1: six decades and that's changing now. Well, I love this
Speaker 1: line in your story. What happens up above us will
Speaker 1: be one of the most important economic and technological stories
Speaker 1: of the next decade, whether or not Musk ever settles Mars. Uh.
Speaker 1: It's just like in some ways, or is it different
Speaker 1: from the space race back in the XTSE, I mean,
Speaker 1: which led to a lot of R and D, a
Speaker 1: lot of you know, innovation and just different thinkings about
Speaker 1: our world. Well, we're talking about in the story a
Speaker 1: lot is is something that's just it's kind of more
Speaker 1: basic in some ways. It's building a the next great
Speaker 1: computing infrastructure. I think of it as like a computing
Speaker 1: shell around the Earth, full of communications, satellites, imaging science,
Speaker 1: all kinds of things and and you know, just like
Speaker 1: we had the Internet build out over the last twenty
Speaker 1: thirty years. Um, you know, I think this is going
Speaker 1: to be where the next part of the cloud goes,
Speaker 1: is actually into the avot. You talk about a senior
Speaker 1: at Read College in Portland, Oregon. It's a great story
Speaker 1: and I think it's a great example of what you
Speaker 1: are talking about. More broadly, Here tell us who this
Speaker 1: person is, Decker Eve Lithas am I saying it correctly, Yeah,
Speaker 1: that's right. I mean, so this is an example of
Speaker 1: how far we have common people don't always notice you know,
Speaker 1: a couple of weeks ago, the story broke all throughout
Speaker 1: the news that we'd uncovered about a hundred twenty missile
Speaker 1: silos in China that had not previously been disclosed. It
Speaker 1: seemed to be evidence that they're in the process of
Speaker 1: a very large nuclear weapons build out. You know, in
Speaker 1: the past, this kind of thing would have been discovered
Speaker 1: by a military satellite. Um in this case, it was
Speaker 1: an undergrad read college necker who was on his laptop
Speaker 1: and he was using just commercial satellite imagery from a
Speaker 1: company called Planet Laps, and it happens to be you know,
Speaker 1: these these silos are in the deserts, and so even
Speaker 1: the military satellites would not usually be looking there because
Speaker 1: it's not a point of interest. But in this case,
Speaker 1: Planet has so many imagery satellites that it photographs every
Speaker 1: spot on the Earth every day, and so they had
Speaker 1: you know, hundreds to thousands of images over years of
Speaker 1: this spot. Actually you drew a parallel here just that
Speaker 1: shows how far we've come in such a short period
Speaker 1: of time, roughly seventy years. You write that when the
Speaker 1: U S went spit to space looking for Soviet weapons
Speaker 1: of mass destruct in the late nineteen fifties, it had
Speaker 1: to use rockets to carry bulky satellites into orbit where
Speaker 1: they took photos and then they dropped their film canisters
Speaker 1: back to Earth to be rather incredibly caught in mid
Speaker 1: air by planes. This was the start of the satellite imagery,
Speaker 1: you know, business as it was, and that was at
Speaker 1: the end of nineteen We basically had to develop rocket technology,
Speaker 1: new optics and and all these these amazing ways to
Speaker 1: attatch film canisters coming back to Earth all at once,
Speaker 1: and it didn't work very often at the beginning, and
Speaker 1: they finally figured it out. But then you know, you
Speaker 1: cut forward all this time and any one of us
Speaker 1: now could open up um this planet last software and
Speaker 1: start poking around and the look that was Bloomberg business
Speaker 1: Week features writer Ashley Vance, author of Elon Musk, Testla,
Speaker 1: SpaceX and The Quest for a Fantastic Future. Reminder, it's
Speaker 1: not just about the trip itself, but the implications and
Speaker 1: what we find out and what we can improve upon
Speaker 1: here on Earth. It's hard to imagine that sixty years
Speaker 1: ago we'd be sitting here and have the ability to
Speaker 1: have satellites deliver Internet took places all over the world
Speaker 1: like Elon Musk is trying to do because we didn't
Speaker 1: even know what the Internet was sixty years ago, and
Speaker 1: I think that's a really important way for us to
Speaker 1: think about what could be in the future when it
Speaker 1: comes to space exactly. Still ahead on Bloomberg Business Week.
Speaker 1: You know, space was a big story this week, so
Speaker 1: too was the COVID delta variant, and on that we've
Speaker 1: got a warning for everyone that's next. This is Bloomberg
Speaker 1: broadcasting from the financial capital of the world, Bloomberg eleven
Speaker 1: Frio in New York to Washington, d C. Bloomberg to Boston,
Speaker 1: Bloomberg one O six one to San Francisco, Bloomberg nine
Speaker 1: sixty to the country Sirius XM Chado one nine team,
Speaker 1: and around the globe the Bloomberg Business app and Bloomberg
Speaker 1: Radio dot Com. This is Bloomberg Business Week. The world
Speaker 1: of financial markets obsessed this week with the COVID delta variant.
Speaker 1: And in another Bloomer big take this week, a story
Speaker 1: that's also in the new issue of the magazine. It's
Speaker 1: a story to him with a warning that more COVID
Speaker 1: variants are coming in the US isn't ready to track
Speaker 1: them Bloomberg News US health care reporters Cynthia Kons wrote
Speaker 1: all about it. She joined us along with the editor
Speaker 1: of Bloomberg business Week, Joel Weber. We actually started talking
Speaker 1: about this story um a while ago, and the thing
Speaker 1: that just made me um my ears perk cup was
Speaker 1: because at that time, variants, I don't they were not
Speaker 1: part of the bigger conversation. And and Cynthia was like,
Speaker 1: you know, there's this the threat that variants are going
Speaker 1: to come at us. We're gonna have more than one
Speaker 1: of them. But the bigger thing is we don't actually
Speaker 1: know how to track them the US. Other people actually
Speaker 1: do do a better job of this. But the sort
Speaker 1: of the takeaway from the story is genetic sequencing is
Speaker 1: not something that has really been prioritized in the US.
Speaker 1: So the little kernel of hope is that there is
Speaker 1: this little patchwork quilt that I think we're gonna talk
Speaker 1: about a little bit. But but Cynthia, why is the
Speaker 1: US not doing jen sequencing at scale? And and why
Speaker 1: are we effectively flying blind without it? Yeah, well, it's
Speaker 1: a money issue. Um, there's no real center. Now. The
Speaker 1: CDC has some money from the Biden administration, but they're
Speaker 1: giving it out. It's not moving very quickly from what
Speaker 1: I hear from scientists in the field. But when it
Speaker 1: came down to it, we had these genomic labs at
Speaker 1: academic universities and they would seek you know, grants, or
Speaker 1: they would apply for money and they would get rejected.
Speaker 1: And this happened to so many scientists. I know one
Speaker 1: turn to crowdfunding, but he didn't get much money from that.
Speaker 1: Another one actually was very dejected and about to run
Speaker 1: out of money, and someone who turned her down five
Speaker 1: months prior because they didn't realize the importance of variant
Speaker 1: tracking came back and said, wait, wait, we want to
Speaker 1: give you money. So she reapplied. So it was a
Speaker 1: lot of really slap dash getting money where and how
Speaker 1: you could. And it wasn't hey, here's a substantial amount
Speaker 1: of money. It's going to be invested through academic centers
Speaker 1: and different parts of the healthcare system to get this done.
Speaker 1: Why is it so important that we do this sequencing?
Speaker 1: So this is how we find mutations and so virus
Speaker 1: like covids changing all the time, and you have to
Speaker 1: do a lot of sequencing to figure out what's important
Speaker 1: in that there are tons of changes within the virus
Speaker 1: that don't matter, and to matter, it has to be
Speaker 1: you know, significant in terms of its infectiousness or how
Speaker 1: it harms a person. Potentially they get sicker things of
Speaker 1: that nature, artifects younger patients worse, or something like that.
Speaker 1: There are distinct things that make mutations concerning. But the
Speaker 1: very virus is changing all the time, so you need
Speaker 1: to be keeping an eye on it in such a
Speaker 1: huge way in order to get enough data to say
Speaker 1: that this specific mutation is doing X, y or z
Speaker 1: to patients. And once you have that data, then you
Speaker 1: have a better handle on how to enact measures. This
Speaker 1: is how they decide, say the mask mandate may come back,
Speaker 1: or there may be longer quarantine times. Waiting to see
Speaker 1: the impact on the population we need to see is
Speaker 1: too late because then the disease just continues to exactly exactly.
Speaker 1: That's kind of how you would think of it in
Speaker 1: terms of the best key scenario of public health officials
Speaker 1: had the information fast enough, they could lock it down
Speaker 1: really fast. Granted, it feels like we're in a post
Speaker 1: lockdown world, but not necessarily just in the US, it doesn't.
Speaker 1: It seems like that might not be the next that
Speaker 1: might not be a strategy that's readily employed at this stage,
Speaker 1: but still it could be. If we know we have
Speaker 1: a highly infectious or highly deadly version, things could be
Speaker 1: done to stop it from spreading too quickly. So the
Speaker 1: some of this sequencing is actually happening in New York
Speaker 1: in in Queens right. Talk to us about the Pandemic
Speaker 1: Response Lab and the work that they do. It's Pearl
Speaker 1: for those of us who are cool chill so Pearl,
Speaker 1: as it's called. This was an effort by a company
Speaker 1: called open Trons. They do they create robots that help
Speaker 1: automate labs, and they basically applied to be a COVID
Speaker 1: testing center and they became this pandemic response lab and
Speaker 1: they were a COVID testing center for New York City
Speaker 1: and they augmented the city health efforts and that started
Speaker 1: in the fall. And what happened was early on they thought, okay,
Speaker 1: but let's figure out what's going on mutations. So they
Speaker 1: tried to, you know, convene with health officials and figure
Speaker 1: out if they could get some money to start sequencing,
Speaker 1: and there was just no money for it. Again, coming
Speaker 1: back to the initial issue of money. So because there's
Speaker 1: no money for it, but they were actually in a
Speaker 1: good position. They had a lot of the technology. They
Speaker 1: decided to set this up and do the sequencing on
Speaker 1: their own dime to start out. And so they're doing
Speaker 1: the sequencing and they're giving New York all their data
Speaker 1: and now they're participating in trying to get funding from
Speaker 1: other sources. But they did it basically on their own dime,
Speaker 1: which is pretty remarkable when you consider that's not how
Speaker 1: businesses typically operate. Right Who else is doing a good
Speaker 1: job of this in the US. There's states that are
Speaker 1: doing better than others, but they're still not There's still
Speaker 1: a lot of limitations within state based systems. But Michigan
Speaker 1: has a really strong system, but it's still takes up
Speaker 1: to two weeks to identify and communicate a variant through
Speaker 1: the system that Michigan set up. But they are one
Speaker 1: of the bigger systems. There are some big labs around
Speaker 1: the country doing a lot of it, like Scripts in California.
Speaker 1: UM there's different UM. The Chance Zuckerberg Group was doing
Speaker 1: it for a while. Now they're trying to move into
Speaker 1: helping educate labs around the country and get up and going.
Speaker 1: But there are definitely a lot of places that are
Speaker 1: doing it. The problem is there there's a lack of
Speaker 1: cohesion to create something that we would consider really system
Speaker 1: through which these books are all participating in the same way.
Speaker 1: That's Bloomberg News US healthcare reporter Cynthia Coon. She wrote
Speaker 1: that story. She joined us along with the editor of
Speaker 1: Bloomberg Business Week, Joel Weber. You're listening to Bloomberg Business Week.
Speaker 1: Up next day, continuation of our latest installment of the
Speaker 1: b W Talk series, This one with Raytheon Technology CEO
Speaker 1: Greg Hayes. This about the success of a major aerospace
Speaker 1: and defense industry merger that came together in the early
Speaker 1: days of the pandemic. That's coming up next. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio. This week
Speaker 1: in the magazine, another edition of BW talks with the
Speaker 1: chairman and CEO of Raytheon Technologies. We're talking about Greg Hayes.
Speaker 1: He finds himself at the helm of the second largest
Speaker 1: defense company in the United States. We featured some of
Speaker 1: that conversation last week. Him a little bit of a teaser.
Speaker 1: And now here's part two of the executives in depth
Speaker 1: interview on the cutting edge of military technology. Also his
Speaker 1: reflections on guiding his old company, United Technologies into a
Speaker 1: twenty three billion dollar merger with raytheon last April, just
Speaker 1: as the pandemic was grounding, flights in the aerospace business
Speaker 1: came to a near standstill. What is transitory? Is that
Speaker 1: a word that CEOs can get their head around, you know?
Speaker 1: I asked that questions, you know, several weeks ago when
Speaker 1: I first heard German poll talk about the effect of
Speaker 1: transitory price increases. And my concern there is what is
Speaker 1: really transitory? Because if you start to see inflation in labor,
Speaker 1: that's not transitory because labor costs don't go down. They
Speaker 1: may go up more slowly. But what we're seeing right
Speaker 1: now is a lot of a lot of cost pressure
Speaker 1: at the very low end of the labor scale, and
Speaker 1: I don't think that goes away. Now. Will that translate
Speaker 1: into higher prices across all of the economic spectrum, I
Speaker 1: don't know. But we're also we're seeing inflation in commodities
Speaker 1: in some of the raw materials as well. It's impacting
Speaker 1: what you guys are doing absolutely every day, and so
Speaker 1: I worry that transitory, especially with all of these deficits
Speaker 1: that we we're talking to and a half trillion dollar deficits,
Speaker 1: We're pumping a lot of money into the economy. People
Speaker 1: are flush with cash and they're going to spend it.
Speaker 1: That's going to drive prices up. Are we going to
Speaker 1: get off of that drug soon? I don't think so.
Speaker 1: Would you go as so far to say that FED
Speaker 1: policy is wrong based on what you're seeing in terms
Speaker 1: of economic growth and momentum from your clients and customers, Well,
Speaker 1: I don't know that. I would say Chairman Pole is
Speaker 1: necessarily wrong. I think we have to think about not
Speaker 1: just FED policy monetary policy, but fiscal policy. That is,
Speaker 1: how much can we continue to borrow and burden the
Speaker 1: next generation and the generation after that with these huge
Speaker 1: deficits just to satisfy our desire to have faster growth today?
Speaker 1: Is it better to have slower, steadier growth that is
Speaker 1: more sustainable? And I think that's the that's the calculus
Speaker 1: we have to think about. There's it's not just monetary
Speaker 1: it's fiscal policy as well. So when you look at
Speaker 1: the economic growth projectory or trajector excuse me, over the
Speaker 1: next six to twelve months, how does it look to you?
Speaker 1: That's great? I mean, as I think about it, and
Speaker 1: you know, we have two businesses at raytheon technology. We
Speaker 1: have a commercial aerospace business which was just devastated last
Speaker 1: year down and then we have a very very big
Speaker 1: defense business. Both of those businesses are going to experience
Speaker 1: growth in the next twelve months, in the next two
Speaker 1: or three years. But I think the growth on the
Speaker 1: commercial aeroside, because we're coming off such a low base,
Speaker 1: is going to be phenomenal. And I think that's the
Speaker 1: that's the thing that gives me, gives me hope. But
Speaker 1: I think again, the overall economy, we're probably gonna see
Speaker 1: six seven GDP growth this year. We haven't seen that
Speaker 1: in forever. And the question is when you get that
Speaker 1: is inflation than inevitable? But do you think that's sustainable?
Speaker 1: That's six to seven percent. I mean, listen, we're coming
Speaker 1: from terrible situations. I think it really goes back to
Speaker 1: this fiscal policy. Do we continue to pump money into
Speaker 1: the economy because that is what's going to drive this
Speaker 1: kind of outsize growth in the near term because people
Speaker 1: will have cash. I want to talk about commercial aerospace.
Speaker 1: I'm just curious, are your executives you and I were
Speaker 1: talking to how much you were able to work at home?
Speaker 1: Right you weren't flying around on planes? Planes are in
Speaker 1: Cordan to you and what you do? Um, what do
Speaker 1: you anticipate for business travel? What are your guys doing
Speaker 1: in terms of business travel? So interestingly, you know what,
Speaker 1: we just really resumed business travel within the last month
Speaker 1: or so, where I've been out on the road, visiting factories,
Speaker 1: talking to folks on the on the front lines and
Speaker 1: the shops and in the in the engineering organizations around
Speaker 1: the the company, and we're starting to see it pick up.
Speaker 1: But certainly business travel is forever changed. I would think
Speaker 1: because of Zoom, we don't go back to pre pandemic level. Well, again,
Speaker 1: if you think about commercial air traffic, about seventy commercial
Speaker 1: air traffic is um for leisure that has come back,
Speaker 1: and it's come back faster, stronger than I think anybody
Speaker 1: would have said that. You can just you know, talk
Speaker 1: to Gary Kelly at Southwest or Doug Park or American
Speaker 1: The thirty percent of business travel is the question. And
Speaker 1: what we think is like half of that of the
Speaker 1: total is mandatory travel. That is, we've got to send
Speaker 1: our technicians out to visit our products. We've got to
Speaker 1: service our products. That's going to come back and will
Speaker 1: come back relatively quickly. You know. Will we still see
Speaker 1: big conventions in Las Vegas? Will we still see you
Speaker 1: get together for sales conventions? I think that will come back.
Speaker 1: But there's the other question. Will all of it come back?
Speaker 1: And how soon our own views who probably don't see
Speaker 1: a full recovery in business travel until But again, you know,
Speaker 1: maybe I hope we're wrong, But again it's Zoom has
Speaker 1: zoom or or WebEx or whatever your your favorite pick,
Speaker 1: pick your pick, your your vehicle. But the fact is
Speaker 1: it's really changed our thinking in terms of productivity and
Speaker 1: that I think about return to the office. You know,
Speaker 1: we've had a hundred thousand people showing up to the
Speaker 1: factory floors or the engineering organizations every day during the pandemic.
Speaker 1: But I've had eighty thousand people working at home. And
Speaker 1: I don't think all eighty thousand will ever come back.
Speaker 1: So this is a fundamental change in the in the
Speaker 1: economy and how you do business. There's a lot of
Speaker 1: deals going on. You guys just finished a big deal
Speaker 1: combining assets and combining with United Technologies assets, and then
Speaker 1: you took over as the CEO of it all. Uh
Speaker 1: And that was just as the pandemic was getting going.
Speaker 1: How tough was it to get that deal done in
Speaker 1: terms of the backdrop of where we were, So you
Speaker 1: have to really step back and think utc Over the
Speaker 1: last couple of years, we had done a lot of
Speaker 1: M and A, but we really made a decision after
Speaker 1: we had purchased Rockwell Columns that we were going to
Speaker 1: split off into three businesses. Otis Elevator is a standalone business,
Speaker 1: Carrier as a standalone business, and then U T s
Speaker 1: Arrow as a standalone business. As we were in the
Speaker 1: middle of that those three spins, Tom Kennedy was the
Speaker 1: chairman and CEO of Atheon, called me and said we
Speaker 1: should do a deal, which I thought was absolutely insane
Speaker 1: at the time, but but hey, hey, here you are,
Speaker 1: here we are um and it turned out and again
Speaker 1: the more time and I talked about it, the more
Speaker 1: sense it made. But the last four weeks before the
Speaker 1: deal closed, and we closed on April third of last year,
Speaker 1: we were working from home and the commercial airline industry
Speaker 1: was absolutely in the tank. Did you have a moment
Speaker 1: we were like, oh my god, what what did we
Speaker 1: just do? Probably not, because you've thought it through and
Speaker 1: you I think that, you know, there was there was
Speaker 1: a question because we had made some big commitments to
Speaker 1: share owners if we were to bring this company together.
Speaker 1: We said we're gonna return eighteen to twenty billion dollars
Speaker 1: of cash to share owners in the first three years
Speaker 1: after the merger. And it became very apparent that that
Speaker 1: was going to be tough to do, and so, you know,
Speaker 1: we quickly pivoted and said, Okay, it's gonna take us
Speaker 1: four years, but we had faith that the commercial aerospace
Speaker 1: business was going to come back. We continue to pay
Speaker 1: a very good dividend, We continued to drive cash, and
Speaker 1: we took a lot of costs out of the business.
Speaker 1: And it was interesting. I always tell people, you know,
Speaker 1: let's not waste a good crisis, and I know that's
Speaker 1: probably over from a lot of leaders, and fact is
Speaker 1: the crisis. That crisis gave us a chance to reshape
Speaker 1: the company. We were able to take a cost out
Speaker 1: that we thought was impossible to do, so I think
Speaker 1: again it gave us the impetus to do the really
Speaker 1: hard things that sometimes people don't want to do. So
Speaker 1: if there's a net net, Greg in terms of what
Speaker 1: you and we're talking with Greg Hayes e every theon technologies,
Speaker 1: he's of course the CEO. What did you learn from
Speaker 1: that merger? Is there something? And again it was like
Speaker 1: I feel like that was happening and then the pandemic
Speaker 1: layered on top. But is there something when you do
Speaker 1: a consolidation like that, emerging of cultures, what do you
Speaker 1: learn from it? So interestingly, um, you know, we had
Speaker 1: an aerospace and defense business at UTC which was about
Speaker 1: forty billion dollars merging with the billion dollar primarily defense business.
Speaker 1: What we found is that the cultures weren't all that different.
Speaker 1: But we spent a lot of time talking about values,
Speaker 1: because to bring two companies together, you have to make
Speaker 1: sure that your values are the same. So we talked
Speaker 1: about diversity, equity and inclusion. We talked about the need
Speaker 1: to trust one another. We talked about the need to
Speaker 1: empower our workforce. These are things that I that resonated
Speaker 1: with our workforce and it really it allowed us to
Speaker 1: come together by focusing not on a business problem, but
Speaker 1: on the values that we bring in them on the
Speaker 1: mission that we have. And I always say the mission
Speaker 1: of Atheon Technology is to solve our customer's hardest problems.
Speaker 1: And that is that is something that resonates with people.
Speaker 1: When they have a mission, they come to work and
Speaker 1: they enjoy what they do. Part of that mission is innovation.
Speaker 1: You guys spend a lot on R and D. What
Speaker 1: is the innovation for you guys going forward? And I
Speaker 1: think about things like AI. Is that increasingly a part
Speaker 1: of whether you look at how defense systems are operating,
Speaker 1: our will look at you know, AI is table steaks.
Speaker 1: I think in the next in the next battle space.
Speaker 1: If you think about the challenge of the next war,
Speaker 1: the future war, it's a war that we fought in cyberspace,
Speaker 1: outer space. And the key to defending this country, defending
Speaker 1: our allies is having real time information. And that means
Speaker 1: taking data off of the satellite, taking data off of
Speaker 1: an underseas sensor, off of an airborne sensor, processing it quickly,
Speaker 1: and getting it to a combatant commander in a in
Speaker 1: the time frame that he can make an actionable decision.
Speaker 1: And I just give you one example. UM last December,
Speaker 1: we work with the Missile Defense Agency and we detected,
Speaker 1: we did a test, we launched, or the Navy launched
Speaker 1: and I cb M off of the coast of Australia.
Speaker 1: Our sensors up in space picked it up, tracked it
Speaker 1: down to our ground station, fed it out to a
Speaker 1: ship in the Pacific, transmitted that to our missile, one
Speaker 1: of our missiles, and s M two three A launched
Speaker 1: and intercepted the missile over Hawaii. All of that without
Speaker 1: human intervention, which is phenomenal. That's what AI is. You
Speaker 1: have to have that type of machine learning AI if
Speaker 1: you're going to be successful, because hypersonics are coming right,
Speaker 1: all right, think about hypersonics, right, We're talking about things
Speaker 1: that travel mock five plus. You don't have time for
Speaker 1: someone to say, how do I target that. You have
Speaker 1: to have the systems that know how to get through
Speaker 1: those things and can take action. And that's the chairman
Speaker 1: and CEO of Raytheon Technologies, Greg Hayes. See the magazine
Speaker 1: and Bloomberg business Week dot Com from more. Also check
Speaker 1: out our podcast Speed for that entire conversation. Find that
Speaker 1: at Bloomberg dot Com. And that wraps up the first
Speaker 1: hour of the weekend edition of Bloomberg Business Week. From
Speaker 1: Bloomberg Radio. I'm Carol Masser and I'm Tim Stanivac Ahead
Speaker 1: in our next hour, our cover story when Donald Trump
Speaker 1: called for a big, beautiful wall, A man named Tommy
Speaker 1: Fisher spent millions to build a three mile stretch along
Speaker 1: the US border with Mexico. Now he needs someone to
Speaker 1: buy it back. He does indeed. Plus, one of the
Speaker 1: world's largest retailers is setting aggressive green goals, Walmart's chief
Speaker 1: sustainability officer, Kathleen McLoughlin, breaking down the company's E s
Speaker 1: G priorities. This is Bloomberg. This is Bloomberg Business Week
Speaker 1: inside from the reporters and editors who bring you America's
Speaker 1: most trusted business magazine, plus global business, finance and tech
Speaker 1: news as it happened. S Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes Tim Stenovik on Bloomberg Radio.
Speaker 1: Hi am Carol Masser and I'm Tim stock Plenty head
Speaker 1: in our second hour of the weekend edition of Bloomberg
Speaker 1: Business Week, including We've got a deep dive into sustainability
Speaker 1: and E s G. We're gonna talk to a couple
Speaker 1: of different players in that world, including the chief Sustainability
Speaker 1: officer over at Walbar. We're also going to hear on
Speaker 1: the subject from the C suite at Cisco and the
Speaker 1: co found and CEO of Gotham Green's he is back
Speaker 1: and expanding the business well. First up this hour the
Speaker 1: week's magazine cover. When former President Donald Trump demanded a big,
Speaker 1: beautiful wall be constructed along the US southern border, a
Speaker 1: guy from North Dakota spent millions to build a three
Speaker 1: mile stretch on the Rio Grand. Now he just needs
Speaker 1: someone to buy it back. Here's more from Bloomberg Business
Speaker 1: Week editor Joel Webber, along with the editor on the story,
Speaker 1: Jeremy Keene. Tommy Fisher is a guts from North Dakota originally,
Speaker 1: and he, you know, he's long dreamed of building an
Speaker 1: epic piece of infrastructure, and he's built, I believe, one
Speaker 1: of the longest cathedral arch bridges out there. Um. And
Speaker 1: but you know that didn't really bring him the kind
Speaker 1: of renown he was after. So you know, when Trump
Speaker 1: started talking about a wall, he got him fulf on Scher,
Speaker 1: got himself on Fox News and kind of got his
Speaker 1: name out there and ended up hooking up with Steve
Speaker 1: Bennon and Brian Colefage's We Build the Wall organization. They
Speaker 1: built one quick, small wall and then came to this
Speaker 1: project and just as the money was starting to come
Speaker 1: in for it, Mr Bannon and Mr col Flag run
Speaker 1: into some legal issues that you know around that around
Speaker 1: that same year that for the scuttled the project. So
Speaker 1: Fisher said, well, I'm gonna keep doing the wall and
Speaker 1: struction deals with Texas Landovers put what he says is
Speaker 1: thirty million bucks into it, and off he went. Yeah,
Speaker 1: it's I feel like this is a story to some
Speaker 1: extent of a wall, a builder, a radio host, the journalist.
Speaker 1: Like I love the way he's told and how it unfolds. Um,
Speaker 1: what's you know? I always wonder about the pitch that
Speaker 1: you guys got for this story. Um, Joel, what can
Speaker 1: you tell us about? I mean, obviously we've all been
Speaker 1: obsessed with this ball. We know the President was obsessed
Speaker 1: with this wall. I think we were all a little
Speaker 1: surprised that there was to find that there was some
Speaker 1: that was built. But then you've got this guy who
Speaker 1: wants to like sell it. You know. I think that
Speaker 1: that element um that really drew us in. Uh, when
Speaker 1: when Simon um pitched it to us. Is this idea
Speaker 1: that I mean, I did not know that Tommy Fisher existed.
Speaker 1: I didn't know that he had built a wall, you know,
Speaker 1: like you know, literally, and like the feat that he
Speaker 1: was able to accomplish here worked is worth discussing a
Speaker 1: little bit, which is, you know, there's plenty of wall
Speaker 1: that's already been built, and President Trump rebuilt a lot
Speaker 1: of existing wall. What what he What Fisher's accomplished here
Speaker 1: was to actually put three miles of wall on private
Speaker 1: land in Texas, which is really this is along the
Speaker 1: Rio Grand which will probably talk about a little bit
Speaker 1: more here in a second. In doing so and accomplishing
Speaker 1: this on private land, that has always been the thing
Speaker 1: that sort of anybody who wanted to build a wall
Speaker 1: couldn't quite figure out a way to do it. And
Speaker 1: so the fact that he was able to crack it
Speaker 1: is why I think as he go, you know, part
Speaker 1: of his pitch here is and I think he's looking
Speaker 1: at the state of Texas at this point because Governor
Speaker 1: Abbott there is seems to be the one who's willing
Speaker 1: to probably do something. The fact that he was able
Speaker 1: to do this on private land and on a river
Speaker 1: is sort of. I think there's a little bit more discussion.
Speaker 1: And Jeremy, why why don't you talk about that? Because
Speaker 1: the fact that he was able to do this so
Speaker 1: close to the river is actually like where a lot
Speaker 1: of the controversy stems from, right. So, you know, Simon
Speaker 1: was curious about this part, you know, really began with
Speaker 1: his curiosity about all this talk about walls and whether
Speaker 1: they work and that kind of thing. And so he
Speaker 1: went down there and got the big tour and you know,
Speaker 1: one of the things he drove around with some of
Speaker 1: some of Fisher subcontractors. Fisher talked to some next border agents,
Speaker 1: talked to residents, talk to people who really opposed the wall,
Speaker 1: and um, you know, one of the things that's really
Speaker 1: unusual about it is where there's federal wall in Texas,
Speaker 1: it tends to be built quite a ways away from
Speaker 1: the will border, the Rio Grand and the Rio Grand Valley,
Speaker 1: and that's because it's privately held land. Fisher struck all
Speaker 1: these deals with private landowners, managed to build the wall
Speaker 1: where there's only you know, a few hundred feet or
Speaker 1: something like that separating the wall from the border, and
Speaker 1: that you know, the border patrol guys sort of say,
Speaker 1: that's made it a little easier to patrol that one
Speaker 1: three mile stretch. Um. As the cover shows you, you know,
Speaker 1: you can literally walk around it if once you reach
Speaker 1: the end of it. UM. But um, you know that
Speaker 1: what what ended up happening though, is you know, Fisher
Speaker 1: got sued lawsuits to these that he's contesting, um, the
Speaker 1: National Butterfly Center FO you know, sort of claiming that um,
Speaker 1: that that there was going to be sort of environmental
Speaker 1: damage caused by flooding, um if you know, in the
Speaker 1: event of heavy rain because of the way the wall
Speaker 1: was built. Um. And Uh, the US government actually ironically
Speaker 1: launched a suit the Boundary and Water Commission because it
Speaker 1: argued that that it's illegal to actually move the border
Speaker 1: in a physical sense, and they argued that the wall
Speaker 1: itself could displace the borderline because the river would get,
Speaker 1: would get the banks would change like that kind of thing.
Speaker 1: And so, UM, yeah, it's created. I mean, you know,
Speaker 1: there's a lot of controversy over that. There's controversy over
Speaker 1: whether it's actually going to accomplish the thing that you know,
Speaker 1: all the past governments have tried to accomplish and building
Speaker 1: border wall elsewhere that was Bloomberg Business We get her
Speaker 1: Joel Webber along with the editor of the story, Jeremy Keane.
Speaker 1: You're listening to Bloomberg Business Week. Coming up. For the
Speaker 1: rest of the hour, we're going to focus on being
Speaker 1: green with the chief sustainability Officer at Walmart and the
Speaker 1: founder and CEO over Gotham Green's. And in keeping with that,
Speaker 1: straight ahead, Cisco's CFO on the business outlook and how
Speaker 1: e s G is part of the company's long term
Speaker 1: growth strategy. This is Bloomberg. This is Bloomberg bus In
Speaker 1: this week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stenovan from Bloomberg Radio. All right, everybody, so grab a
Speaker 1: green smoothie, relax because for the rest of the hour yesterday, Carol, Well,
Speaker 1: for the rest of the hour, we're going green. First up,
Speaker 1: it spout. A week and a half ago, Bloomberg hosted
Speaker 1: its Sustainable Business Summit Global. At that event, I got
Speaker 1: a chance to catch up with two senior executive at Cisco.
Speaker 1: Friend kauseudas longtime Cisco Exact Che's executive VP in Chief People,
Speaker 1: Policy and Purpose Officer, along with Scott Heron, he is
Speaker 1: Executive VP and Chief Financial officer at Cisco. So, Carol,
Speaker 1: you were there to talk about the sustainability steps and
Speaker 1: initiatives that Cisco has been taking for years, also the
Speaker 1: impact that that's had on long term growth. You began, know,
Speaker 1: as we often do, asking about today's business environment. Business
Speaker 1: activity is picking up. We're coming out of the pandemic.
Speaker 1: Um it's picking up rapidly, to the point now that
Speaker 1: it looks like inflation is you know, it's not just
Speaker 1: something that's being projected, it's something that we're actually seeing
Speaker 1: measured at this point. So I think the business environment
Speaker 1: in general is air strengthened pretty significantly, certainly from where
Speaker 1: it was there in the pandemic. And friend, come on
Speaker 1: in on this as well, because you're dealing with the
Speaker 1: people at Cisco, right, there's so many different policies that
Speaker 1: may be changing and so on and so forth. How
Speaker 1: do you see it when you look at the economic environment,
Speaker 1: the business environment, the market environment. Yeah, it's an interesting
Speaker 1: time because in addition to seeing a recovery across all industries,
Speaker 1: which is wonderful, you see a very active talent market place.
Speaker 1: You see people moving, you also see talent right now
Speaker 1: looking at how companies plan to work moving forward and
Speaker 1: that guiding some of the decisions that they're making. And
Speaker 1: so I would just say we're seeing a ton of
Speaker 1: movement across the industry, a lot of opportunity and candidates
Speaker 1: feeling like they really have their choice of where they're
Speaker 1: going to work and how they want their career to progress.
Speaker 1: There's no friend just to follow. There's no going back
Speaker 1: to the way it was pre pandemic. When it comes
Speaker 1: to how we work, it's different, right, It's changed. Yeah,
Speaker 1: it's fine. I was talking to a customer and we
Speaker 1: were sharing that we don't believe there is any going
Speaker 1: back to where we were. Um, we do think that
Speaker 1: both from a company perspective, but also from an employee perspective,
Speaker 1: there's a realization that we're going to work differently. Some
Speaker 1: of the research that we've done shows us now that
Speaker 1: of meetings will have someone who is not in the office,
Speaker 1: so we'll have someone who is remote, and now the
Speaker 1: technology and the people practices need to accommodate that. We
Speaker 1: also see that across the industry, employees in general are
Speaker 1: saying that they want to be in the office only
Speaker 1: two to three days of the week. And so I
Speaker 1: don't think there's going back to the way that it
Speaker 1: was before. Well A Scott, what does that mean for
Speaker 1: your business? You guys infrastructure, you know you this is
Speaker 1: your world in terms of connecting people. Um, is that
Speaker 1: good or bad going forward? Yeah? Let me start by saying,
Speaker 1: I think in general it's good, right. I think the
Speaker 1: the there's a lot of terrible outcome from the pandemic.
Speaker 1: Obviously no one wished for this, but I think it
Speaker 1: it proved a few things that have been theorized and
Speaker 1: shown in spots previously, like hybrid work, like the ability
Speaker 1: to be effective and lead teams effectively when they're not
Speaker 1: all sitting at there, you know, at their desk in
Speaker 1: the office. And so I view it and just as
Speaker 1: a general societal good that that's come out of this.
Speaker 1: From a business standpoint, you know, the hybrid work and
Speaker 1: remote meetings will continue to be an upside for US
Speaker 1: and Cisco. It's to the extent that we're meeting like
Speaker 1: this instead of sitting in a conference room, we're meeting
Speaker 1: using technology, and it uses not just our collaboration technologies
Speaker 1: and WebEx but it uses a lot of network capacity
Speaker 1: and bandwidth right inside the network out to the cloud
Speaker 1: and finally to the endpoint in the home. So I
Speaker 1: think it's a in general, it's a tail wind for us.
Speaker 1: All right, So let's talk about why you both are here,
Speaker 1: because I really want to get into this issue, and
Speaker 1: we're talking about, you know, the initiative that you folks
Speaker 1: have done in terms of sustainability and really how that
Speaker 1: has contributed to long term growth. I was looking at
Speaker 1: some of the key points. You launched Cisco Networking Academy
Speaker 1: back in nine set your first greenhouse gas emissions reduction
Speaker 1: goal in two thousand six. That's fifteen years ago. You
Speaker 1: put out sixteen years of sustainability reporting. Correct me if
Speaker 1: I'm wrong, You're getting ready. I believe though for the
Speaker 1: seventeenth The reason I go through some of this and
Speaker 1: I'm only scratching the service is that this is part
Speaker 1: of your DNA. It really has been for a long time. Uh,
Speaker 1: share with us some of the history of this, of
Speaker 1: how it came together in friend, I want to start
Speaker 1: with you. You've been at Cisco for almost seventeen years.
Speaker 1: Helped me out with how it all evolved and came
Speaker 1: to be. Yeah, So I would say, first of all,
Speaker 1: it is a big part of who we are. The
Speaker 1: networking academies was our first real push into understanding that
Speaker 1: through education we could create access and careers for people
Speaker 1: around the world. And it's interesting the networking academy these
Speaker 1: feed all of our competitors are peers in the marketplace,
Speaker 1: and we want that we're trying to create careers for others.
Speaker 1: We have trained, if you can believe it, about twelve
Speaker 1: point six million students since that time, and so this
Speaker 1: is something that's incredibly important to us. I think from
Speaker 1: an employee perspective, our employees care deeply and we want
Speaker 1: to have both impact from a business perspective, but we
Speaker 1: want to feel like we have left the world in
Speaker 1: a better place. A year ago, we created our new purpose,
Speaker 1: which is the Power and Inclusive Future for All, And
Speaker 1: as you would imagine, this purpose will guide us as
Speaker 1: it relates to doing our part, as it relates to
Speaker 1: the digital divide, inclusion, UH, climate sustainability, and how we
Speaker 1: partner with governments around the globe. The interesting thing is
Speaker 1: that we put that purpose together right before we understood
Speaker 1: the impact of the pandemic, and I will tell you
Speaker 1: that it guided us through the last almost year and
Speaker 1: a half now around how we want to show up
Speaker 1: how we want to have impact, how we want to
Speaker 1: work with our peers to address some of the biggest issues.
Speaker 1: And so I'm so proud of the team um that
Speaker 1: worked on this. The fact that our first sustainability report
Speaker 1: was in two thousand and five is wonderful. The last
Speaker 1: thing I'll say here is I think there's a big
Speaker 1: difference to and where we are today. If you look
Speaker 1: back in the early two thousand's, sustainability was something that
Speaker 1: you did in addition to your business. It felt like
Speaker 1: it's sat on the side. It was powerful. But now
Speaker 1: the biggest difference is it's embedded in who we are
Speaker 1: and how we work. It's got your new to Cisco,
Speaker 1: but you've been in the tech industry. You're at Autodesk.
Speaker 1: Like the things that you're bringing to Cisco, you've been
Speaker 1: thinking about and doing for a long time. I came
Speaker 1: across this quote where you said, fundamentally believe that climate
Speaker 1: changes are still Sustainability is our generations problem to solve.
Speaker 1: We don't have a lot of time anymore, do we know?
Speaker 1: We don't. And you know that that comment came from
Speaker 1: looking at the greatest generation and the issues that they
Speaker 1: had to solve and you know, kind of work your
Speaker 1: way forward. Um, this is a massive issue. This is
Speaker 1: a worldwide It's a global issue that needs global solutions,
Speaker 1: and everybody has to take it upon themselves to be
Speaker 1: a part of the answer. I have a personal responsibility
Speaker 1: to this and I've got a corporate responsibility to this,
Speaker 1: and I think that's the way. So when I say that,
Speaker 1: the idea is to spur more people to say, you
Speaker 1: know what, I can't do everything, but I can do something,
Speaker 1: and I need to take personal accountability for going out
Speaker 1: and doing that. That's francut Suit is Cisco's Chief People,
Speaker 1: Policy and Purpose Officer. Also Scott Herron, executive vice president
Speaker 1: and CFO at the company. Still the common Bloomberg Business Week,
Speaker 1: we'll talk more s G with the chief sustainability officer
Speaker 1: over at Walmart. Also up next the co founder and
Speaker 1: CEO of Gotham Green's on growing the business and product line.
Speaker 1: This is Bloomberg Broadcasting from the financial capital of the
Speaker 1: World Bloomberg. He live in Rio in New York to Washington,
Speaker 1: d C. Bloomberg to Boston Bloomberg one oh six one
Speaker 1: does San Francisco, Bloomberg nine sixty to the country, Sirius
Speaker 1: XM Chado one nine team and around the globe, the
Speaker 1: Bloomberg Business app and Bloomberg Radio dot com. This is
Speaker 1: Bloomberg Business Week. You know, we like to talk a
Speaker 1: lot on Bloomberg Business Week about how the world is changing,
Speaker 1: being disrupted, right tim, We do. And one thing we
Speaker 1: also like to talk about is food production and where
Speaker 1: the food is going to come from that's going to
Speaker 1: feed the world. And one voice we've leaned on to
Speaker 1: know more about this is Viage Purity, co founder and
Speaker 1: CEO of Gotham Green's, which is growing plants and climate
Speaker 1: controlled hydroponic greenhouses. We've got an update on last year's
Speaker 1: capital raise and the business overall. It's going very well.
Speaker 1: We are under construction for several large scale climate controlled
Speaker 1: greenhouse facilities that we're building in cities across America to
Speaker 1: grow high quality, perishable fresh produce using a fraction of
Speaker 1: the water compared to conventional farming. So we raised an
Speaker 1: eight seven million or so capital raised in the third
Speaker 1: quarter of last year. Busy putting it to use. There
Speaker 1: have been a lot of supply chain issues with construction materials.
Speaker 1: We've seen a lot of congestion, UH in the ports
Speaker 1: for imported materials. So it's certainly been challenging, but the
Speaker 1: time is rife, given all the drought that's going on
Speaker 1: and all these other supply chain issues on the proteas side,
Speaker 1: for us to really get these greenhouse buildings up and
Speaker 1: operational and getting healthy food into supermarkets um as soon
Speaker 1: as possible. Got a million questions how much less water
Speaker 1: remind our audience? How much less? Because this is real
Speaker 1: and uh, you know, coming off of our conversation about
Speaker 1: Jeff Bezos, you know, going up into space, increasingly we
Speaker 1: are having conversations about our climate. It's real, uh, and
Speaker 1: the impact it's having on food access, food sustainability. How
Speaker 1: much less water remind our guys? How much you guys,
Speaker 1: you are less? Yeah, we use about less water than
Speaker 1: conventional farming. So in other words, Gotham Greens can grow
Speaker 1: a full head of lettuce, a mature head of lettuce
Speaker 1: in one of our company owned greenhouses using under two
Speaker 1: gallons of water and out in the field, and say
Speaker 1: California or Arizona, where these crops are typically grown, it
Speaker 1: would require about forty gallons of water. So as water
Speaker 1: continues to become a more scarce, resource. Uh, you know,
Speaker 1: we and others believe that this form of farming is
Speaker 1: going to play a much greater role to come. I
Speaker 1: mean where the drought conditions right now are more widespread
Speaker 1: than at any point in like the last twenty five years.
Speaker 1: So it's it's significant. Are you guys at neutral on
Speaker 1: the environment of Yeah, where we're winning in addition to
Speaker 1: the water conservation is really on land use. So there's
Speaker 1: been a lot of talk about regenerative farming, right, which
Speaker 1: basically allowing farmland to sequest her carbon and keep carbon
Speaker 1: in the ground and in the soil. Right and by
Speaker 1: by growing in these high tech greenhouses, we don't need
Speaker 1: to use arable land, We can use city property, we
Speaker 1: can use asphalt, concrete, all these types of things because
Speaker 1: we don't grow in the soil, and we can locate
Speaker 1: these farms anywhere. And what we can grow in one
Speaker 1: acre of our greenhouses would require about thirty acres out
Speaker 1: in the field. So I think from a land use perspective,
Speaker 1: greenhouse farming comes on top. And we looked at a
Speaker 1: lot of different types of indoor farming and if you
Speaker 1: have actually selective greenhouses, uh, deliberately because we rely on
Speaker 1: natural sunlight to grow for photosynthesis, So from an energy perspective,
Speaker 1: it uses considerably less energy than other forms of climate
Speaker 1: controlled indoor farming. And we have a commitment to source
Speaker 1: of our electricity from renewable sources. So a combination of
Speaker 1: the renewable energy, the equipment selection as well as our
Speaker 1: proxivity to market really keeps a lot of trucks off
Speaker 1: of the road. And so you know, the lettis today
Speaker 1: in the US and Canada shifted an average of three
Speaker 1: thousand miles from farm to supermarket, a lot of carbon
Speaker 1: emissions there. Conversely, for Gotham Green's greenhouse, we're shipping probably
Speaker 1: a hundred miles at most from greenhouse to supermarket distribution center,
Speaker 1: so a lot fresher product, less, less food waste, and
Speaker 1: less emissions than the transportation barage. Can we ultimately grow
Speaker 1: everything this way? Technically you can grow anything this way,
Speaker 1: but that doesn't mean you should not. Everything is sort
Speaker 1: of commercially viable currently where the where the technology and
Speaker 1: the seed variety and where the genetics are are primarily
Speaker 1: on leaf crops, so all of your lettuces, leafy greens, herbs,
Speaker 1: and then binding crops like tomatoes, cucumbers, peppers. These are
Speaker 1: very large total addressable markets. We're looking at over dollar
Speaker 1: markets just in the US and Canada alone, and many
Speaker 1: believe that strawberries and other types of fruits and vegetables
Speaker 1: are are going to be commercially viable soon. So very
Speaker 1: large addressable markets can be hoarded by this technology, but
Speaker 1: certainly not. It's not a silver bullet or a panacea
Speaker 1: for all types of food production, but it's a very
Speaker 1: important tool in the overall tool kid. We believe for
Speaker 1: much more sustainable um and secure food supply going forward.
Speaker 1: All right, so I gotta ask your latest expansion and
Speaker 1: the foods that you're doing is too new plant based, dairy,
Speaker 1: freestyle addressings. Why are you doing that? It's a vegan
Speaker 1: caesar and a vegan ranch. It is. The consumer tail
Speaker 1: winds are staggering. The amount of people who really want
Speaker 1: to transition too a plant based diet and eat less dairy,
Speaker 1: less meat products and things that it's really staggering the
Speaker 1: amount of consumer pail winds behind this. That's Varage Pery,
Speaker 1: co founder and CEO of Gotham Greens. Well transparency eat
Speaker 1: their greens, so do I? Alright? Coming up more on
Speaker 1: the green economy, this time from a giant in the
Speaker 1: retail space that's leaning in big time as well on
Speaker 1: being a regenerative company. Walmart's chief sustainability officer joins us,
Speaker 1: you're listening to Bloomberg Business Week. This is Bloomberg. You're
Speaker 1: listening to Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovich from Bloomberg Radio. They are the
Speaker 1: nation's biggest private employer, well known household corporate name one,
Speaker 1: also known big time to our financial investment audiences. Tim,
Speaker 1: we're talking Walmart. It's also a company that's on a
Speaker 1: mission to become a regenerative company. We talked about that
Speaker 1: with Walmart Executive vice president and chief sustainability Officer Kathleen McLaughlin. Yeah. Well,
Speaker 1: you know, our focus when it comes to E s
Speaker 1: G really is on shared value meeting. How do we
Speaker 1: as a business address the issues that are most important
Speaker 1: to our stakeholders, the societal issues that are relevant to
Speaker 1: our business, important to the stakeholders are we can make
Speaker 1: a difference through our business. And boy, what are year
Speaker 1: it's been um COVID obviously, climate, what we're hearing about, nature, equity,
Speaker 1: economic opportunity for people. You know, we had it all
Speaker 1: and you know many ways when when COVID really struck,
Speaker 1: we thought, gosh, this is gonna make it things really challengeing,
Speaker 1: graphistic step back. If anything, it's actually strengthened their resolved
Speaker 1: and how us go faster on just about everything. Well,
Speaker 1: you know, that's a great point. And I do wonder
Speaker 1: this last year laid bare things that we knew were
Speaker 1: already existing in our society but nonetheless kind of hit
Speaker 1: us bam in the face because we were all at
Speaker 1: home and kind of taking it in or feeling it.
Speaker 1: Has it helped in terms of the timelines and aggressiveness
Speaker 1: that you can apply to E s G goals at
Speaker 1: your company. Yeah, it has, you know, as you say,
Speaker 1: it really has been a moment when all of us UM,
Speaker 1: you know, I had to sit back and take notice.
Speaker 1: And I think we realized a few things. One is
Speaker 1: the power of individual action. You know, everybody acting together
Speaker 1: can really turn the corner on something that's global and scale.
Speaker 1: We learned that with COVID. We're seeing the same thing
Speaker 1: with climate or equity or other things. So it really
Speaker 1: did help us UM elevate our ambition and in many ways,
Speaker 1: we have moved faster. So you know, for example, in
Speaker 1: terms of the response to COVID, our first concern was
Speaker 1: associate safety and could we even continue to operate in
Speaker 1: terms of PPE and protective equipment, plexic glass, all those
Speaker 1: kinds of safeguards, additional emergency paid time off leave policies,
Speaker 1: hiring an additional five thousand people to put some slack
Speaker 1: in the system and make it easier for folks to
Speaker 1: stay all that they felt they needed to, and so on,
Speaker 1: So all of those kind of things. But in terms
Speaker 1: of our omni channel transformation to serve the customer well
Speaker 1: in a contact less way, we accelerated our expansion of
Speaker 1: O g P, for example online grocery pickup sites, and
Speaker 1: we now offered that in three thousand seven hundreds could
Speaker 1: see locations, So we moved faster on that. You know.
Speaker 1: In terms of climate, we elevated our ambition. We were
Speaker 1: the first retailer years ago, back in two thousands sixteen
Speaker 1: to set a science based target for emissions reduction. Um
Speaker 1: this last year we eleve it at our ambition and said, okay,
Speaker 1: let's set as a date to get to zero emissions
Speaker 1: in our own operations, not met zero, but euro and
Speaker 1: let's go faster, you know, Um, we did set out
Speaker 1: a broader aspiration to be to become a regenerative company,
Speaker 1: which for us means needing to go beyond just being
Speaker 1: sustainable but actually build back, whether you're talking about climate
Speaker 1: or natural ecosystems or equity. And you know that's huge, right,
Speaker 1: Like it's not just about reducing your impact, but then
Speaker 1: kind of bringing back our climate and our environment. Right,
Speaker 1: that's just one example. You know, we're now at a
Speaker 1: point we know from the science that we actually need
Speaker 1: to draw down emissions, you know, not just avoid further emissions.
Speaker 1: So it's a it's a higher bar. And similarly on equity,
Speaker 1: you know, we all felt the impact in a very
Speaker 1: visible way of what happened with George Floyd, and like
Speaker 1: many others, caused us to reconsider what could we do,
Speaker 1: what more could we do with the assets that we
Speaker 1: have When it's our jobs, our purchase orders around equity
Speaker 1: and it's it's not a matter of holding steady on equity.
Speaker 1: We got a lot of work to do, right to
Speaker 1: elevate people and to address some of the wrongs of
Speaker 1: the past and newly addressed your harbors of systemic racism. Hey,
Speaker 1: I wanted to ask you because you pointed out that
Speaker 1: you guys are working towards zero missions across your global
Speaker 1: operations by you know, without relying on all of those
Speaker 1: carbon offsets that a lot of companies put into effect
Speaker 1: and use. Why does it take help me out here?
Speaker 1: So that's what nineteen years from now, Um, part of
Speaker 1: me wants to say. And to be fair, I asked
Speaker 1: this of all the companies when we talk E. S.
Speaker 1: G and all the big companies like yourself, why does
Speaker 1: it take so long? What is so difficult? Because most
Speaker 1: scientists are saying we're running out of time. If you
Speaker 1: look at what's going on the Pacific Northwest, just this
Speaker 1: like couple of weeks, the flooding in Germany, the flooding
Speaker 1: in China. Yeah, we just maybe don't have another twenty years. Yeah.
Speaker 1: So let's be clear. Is the date will zero in
Speaker 1: Scope one and two? It's not the date that you
Speaker 1: know we'll start working on stuff, right. Scope one and
Speaker 1: two is direct impact and indirect impact like through suppliers
Speaker 1: and things. Correct, Um, that's scope three. So our science
Speaker 1: based target covers all of it. Here's what we're doing
Speaker 1: and here's to answer your question about So for our
Speaker 1: own operations, that includes the electricity to power our stores
Speaker 1: and our dcs, you know, fulfillment centers and so on.
Speaker 1: It's our on site fuels, it's refrigeration equipment, refrigerants, and
Speaker 1: it's the tractor trailers you see on the road that
Speaker 1: our labeled Walmart, right, it's the heavy rigs that are
Speaker 1: carrying products around. So all of that getting to zero
Speaker 1: takes time. Some of it goes fast, and by the way,
Speaker 1: we're working on it every day. So the science based
Speaker 1: target has us reducing emissions every year. It's not as
Speaker 1: if we wait. So you'll see if you look at
Speaker 1: our reporting, we've reduced our cumulative admission since two thousands,
Speaker 1: five teams substantially you started on this, and every year
Speaker 1: we reduced further. What will take the longest in what
Speaker 1: requires the technical breakthrough in those categories transportation and Kathleen,
Speaker 1: you know it is impressive. You go to your website
Speaker 1: and you look at the different you know, programs and
Speaker 1: initiatives that you guys are working on specifically and making progress. Uh.
Speaker 1: And when it comes to your impact on the environment,
Speaker 1: I do wonder when you set out goals. We had
Speaker 1: an interesting Bloomberg story last week that just said governments
Speaker 1: need to get more proactive, that we almost need a
Speaker 1: response to climate and e s g. We need the
Speaker 1: government to kind of create crisis programming just like they
Speaker 1: did for the pandemic, to get to be able to
Speaker 1: kind of help the world, and companies get two goals faster.
Speaker 1: What's the company's take on that. Yeah, you know, absolutely,
Speaker 1: science based government policy that's consistent about a predictable operating
Speaker 1: environment and creates the appropriate intentive. You know, again, a
Speaker 1: line with the science is needed. Um, we saw it
Speaker 1: in COVID. I think the same can be said for climate. Um.
Speaker 1: So having some type of mechanism to encourage climate action
Speaker 1: as something we would really welcome. Are there any specific
Speaker 1: initiatives that you think that the government could be helpful on? Well,
Speaker 1: I think what you raised in terms of climate action, um,
Speaker 1: and you know, I'm not a policy maker. I don't
Speaker 1: know the specific public policy mechanisms that would be best,
Speaker 1: but something that would encourage climate action in line with
Speaker 1: what we need to get to around a one and
Speaker 1: a half degree warming scenario, you know, that's what we're
Speaker 1: shooting for through our own actions. And you know, I'd
Speaker 1: say we're going to do what we're doing in line
Speaker 1: with the science regardless, but I think it would help,
Speaker 1: especially in some of these areas. I mentioned transportation as
Speaker 1: one where we need technological innovation to actually achieve our
Speaker 1: goal by forty for certainly long haul transportation. Having favorable
Speaker 1: policy environment for something like the carbonizing transportation would be
Speaker 1: just an example. Well it did stink too, because I've
Speaker 1: been talking we had a Bloomberg Global Sustainable Summit here
Speaker 1: recently and talking with the Cisco CFO and the cfovert
Speaker 1: A b MBV and their chief sustainability officers as well,
Speaker 1: and you know, there's lots of conversations about, you know,
Speaker 1: using government policy maybe to impact truckers to some extent
Speaker 1: because they create the most usage and destruction, if you will,
Speaker 1: to our roadways when we're talking about infrastructure, and how
Speaker 1: by doing so that might help create more innovation right
Speaker 1: to a more sustainable way. And so I hear what
Speaker 1: you're saying when it comes to trucking, because that's a
Speaker 1: big initiative, and you do wonder whether you know government
Speaker 1: policy along those lines can make a difference, right right, So,
Speaker 1: and then you know, coming back something you're asking me
Speaker 1: before the break in terms of emissions reduction. Um, you
Speaker 1: asked a really good question, which is, gosh, doesn't twenty
Speaker 1: four you seem the late certainly would be late for
Speaker 1: the action. But the science based targets shet out a
Speaker 1: trajectory that we are following that how justus reducing um,
Speaker 1: you know, day by day. So, for example, the most
Speaker 1: recent reporting of our calendar year two dozen nineteen emissions,
Speaker 1: we're down over twelve percent where we started in our
Speaker 1: two fifteen baseline, and we're about to come out with
Speaker 1: our latest numbers for which you'll see that you know,
Speaker 1: for the decrease. So um, please don't take me as suggestibly.
Speaker 1: Wait till we're moving as quickly as week and day
Speaker 1: by day, that's the that's the day we get to
Speaker 1: zero on our scope one and two. Well, I have
Speaker 1: to say, what really caught my attention, and we were
Speaker 1: talking about this in our planning, is you guys are
Speaker 1: committed to protecting, restoring fifty million acres of land, one
Speaker 1: million square miles of ocean. Uh, you know you are
Speaker 1: doing these things aggressively. You're thinking about our community at large.
Speaker 1: What really moves the needle do you think when it
Speaker 1: comes to reducing our world, our corporate world, are everyone's
Speaker 1: impact on the environment. We're now we're now learning that
Speaker 1: natural ecosystems are as challenged as climate. So that's why
Speaker 1: we set that goal. And it is about you wiring
Speaker 1: food production, production of other products so that the way
Speaker 1: we do that is regenerative to nature. We enhance for
Speaker 1: our health, we can improve water quality, we can improve
Speaker 1: our diversity. That's what's needed in our secret claus as Walmart,
Speaker 1: and we invite other companies to do this too. Is
Speaker 1: to connect the big goals that we have to achieve
Speaker 1: a society to the practical action we can take through
Speaker 1: you know, in our case business to reach other business
Speaker 1: and it's true for any company. And that's really what
Speaker 1: he has c is about and recognizing that those things
Speaker 1: create value, financial value for the company as well as
Speaker 1: health society address these tough challenges. That's Walmart Executive vice
Speaker 1: president and Chief Sustainability Officer Kathleen McLoughlin. That wraps up
Speaker 1: the weekend edition of Bloomberg Business Week from Bloomberg Radio.
Speaker 1: Thanks so much for joining us. I'm Carol Masser and
Speaker 1: I'm Tim Stovik. Be sure to tune into our Bloomberg
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