WEBVTT - JetBlue CEO Stepping Down, Xi's Anti-Corruption Crackdown

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<v Speaker 1>Good morning.

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<v Speaker 2>I'm Brian Curtiz and I'm Doug Krisner. Here are the

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<v Speaker 2>stories we're following today.

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<v Speaker 1>The United Airlines says it has found loose bolts in

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<v Speaker 1>multiple Boeing seven thirty seven Max nine jets during inspections.

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<v Speaker 1>This comes in the wake of a door plug getting

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<v Speaker 1>blown out of an Alaska Airlines plane over the weekend.

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<v Speaker 1>As a result, US aviation safety regulators grounded and ordered

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<v Speaker 1>inspections on some one hundred and seventy one Max nine jets. Today,

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<v Speaker 1>Boeing issued guidelines to airlines on how to conduct these inspections.

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<v Speaker 1>It's an initial step that is required before the US

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<v Speaker 1>Federal Aviation Administration could approve a return to flight for

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<v Speaker 1>the planes. Boeing shares, by the way, closed down eight

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<v Speaker 1>percent in New York. They are a little changed in

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<v Speaker 1>after hours, which is interesting because it came after we

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<v Speaker 1>heard as comments from United Airlines. But that eight percent

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<v Speaker 1>dropping the stock is the biggest decline we've seen in

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<v Speaker 1>Boeing since October of twenty twenty two.

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<v Speaker 2>Will the CEO of Jet Blue Airways, Robin Hayes, He's

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<v Speaker 2>going to be stepping down next month. We are told

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<v Speaker 2>his decision came at the urging of his doctor, although

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<v Speaker 2>no specific health issue is involved. Here's more from Bloomberg's

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<v Speaker 2>Charlie Pellett. The company says Hayes will be replaced on

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<v Speaker 2>February twelfth by Joanna Garrity, a nearly twenty year Jet

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<v Speaker 2>Blue veteran who is currently serving as president. The fifty

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<v Speaker 2>seven year old Hayes has been CEO since February of

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<v Speaker 2>twenty fifteen, and Jet Blue shares have declined by about

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<v Speaker 2>two thirds since then. The transition comes at a critical

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<v Speaker 2>time for Jet Blue, as it awaits a federal judge's

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<v Speaker 2>ruling on whether it's pending three point eight billion dollar

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<v Speaker 2>takeover of Spirit Airlines violates antitrust laws and should be

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<v Speaker 2>blocked in New York Charlie Pellett.

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<v Speaker 1>Bloomberg Radio shares closed at a record an up six

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<v Speaker 1>point four percent in the latest session after the company

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<v Speaker 1>unveiled three new desktop graphics chips. These extra components will

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<v Speaker 1>let gamers, designers, and others computer makers and users get

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<v Speaker 1>better use of AI in their personal machines. We heard

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<v Speaker 1>earlier from Bloomberg Z and King.

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<v Speaker 3>AI has been an enormous benefit for this company already.

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<v Speaker 3>It's proved materially that this is real, that this is

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<v Speaker 3>about actual sales and actual deployment. Again in video comes

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<v Speaker 3>out here and says, hey, don't forget about us. This AIPC,

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<v Speaker 3>that Intel, that AMD has been talking about. We can

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<v Speaker 3>do this too, and actually we think we're better than IAS.

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<v Speaker 3>So again that's likely to press the right kind of

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<v Speaker 3>button with investors and with saying that reaction.

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<v Speaker 1>Bloomberg Z and King separately in video said the capabilities

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<v Speaker 1>of its new products will not trigger rules put in

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<v Speaker 1>place by the US government to limit the export of

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<v Speaker 1>AI related chips to China. And again and video shares

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<v Speaker 1>a very good session of six point four percent.

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<v Speaker 2>We go to China next, where the central Bank is

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<v Speaker 2>hinting at further monetary easing with a possible cut in

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<v Speaker 2>banks reserve ratios. The story from Bloomberg zivon men in

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<v Speaker 2>Hong Kong.

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<v Speaker 4>The PBOC may use a sortied monetary policy tools to

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<v Speaker 4>provide more support. The central Bank's head of monetary Policy,

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<v Speaker 4>Joe Lahn, said these tools include money market operations, medium

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<v Speaker 4>term lending facilities, and reserve requirements. The comments come after

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<v Speaker 4>the Central Bank already provided a massive amount of liquidity

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<v Speaker 4>in recent weeks. Back in July, Zoe made similar comments

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<v Speaker 4>in public before the Central Bank made a triple r

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<v Speaker 4>cut in September. Much of this may already be priced

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<v Speaker 4>into markets. Last month, economists pulled by Bloomberg forecast a

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<v Speaker 4>twenty five basis point cut in the first quarter of

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<v Speaker 4>this year. In Hong Kong I'm Yvon Mann Bloomberg Radio.

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<v Speaker 1>Meantime, Chinese President Shijin Ping is pledging to deepen the

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<v Speaker 1>country's crackdown on corruption. Bloomberg's Juan Wong has that story.

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<v Speaker 2>From Hong Kong.

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<v Speaker 5>President, she said he would increase punishment for people who

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<v Speaker 5>offer bribes. CCTV says she urged tighter monitoring to prevent

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<v Speaker 5>the spread of graft to news sectors. He highlighted finance, energy,

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<v Speaker 5>infrat structure, pharmaceutical and state owned firms as the main

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<v Speaker 5>areas of focus. She has repeatedly foiled a zero tolerance

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<v Speaker 5>on corruption since he took office in twenty twelve. Just

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<v Speaker 5>last year, China investigated a number of high profile bankers.

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<v Speaker 5>These include former Bank of China chairman Liul Janga and

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<v Speaker 5>former China Development Bank Vice president Jo ching Yu. In

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<v Speaker 5>Hong Kong, joined Wan Bloomberg Radio.

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<v Speaker 2>Sony is planning to call off the ten billion dollar

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<v Speaker 2>merger agreement of its Indian unit with Z Entertainment. We

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<v Speaker 2>are told it's due to a standoff over leadership. Seems

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<v Speaker 2>as though there were questions surrounding whether Z CEO punit Goenca,

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<v Speaker 2>who is also incidentally the founder's son, would lead this

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<v Speaker 2>new merged entity. Back in twenty twenty one, in agreement

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<v Speaker 2>was signed for go Inca to lead the new company. However,

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<v Speaker 2>Sony no longer wants him to be in the role.

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<v Speaker 2>Sony seems to be a little wary about a regulatory

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<v Speaker 2>probe against him, and now Sony is working on sending

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<v Speaker 2>a termination Noticed by January twentieth for World.

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<v Speaker 1>News, Donald Trump is looking to have one of his

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<v Speaker 1>court cases thrown out. We get more on this from

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<v Speaker 1>Bloomberg's Dan Schwartzman, Dan, that's correct, Brian.

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<v Speaker 6>In a filing today in Atlanta, Georgia, Trump has asked

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<v Speaker 6>a judge to throughout the state's criminal case against him.

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<v Speaker 6>The former president has been accused of leading a conspiracy

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<v Speaker 6>to overturn the twenty twenty election. Now, Trump argues he

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<v Speaker 6>should be immune from prosecution due to having been acquitted

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<v Speaker 6>by the Senate after being impeached for the same conduct.

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<v Speaker 6>Trump will also use the same argument on Tuesday during

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<v Speaker 6>an appeals court hearing in Washington after a district judge

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<v Speaker 6>struck down his immunity defense. President Biden speaking in Charleston,

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<v Speaker 6>South Carolina, today as he tries to make his case

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<v Speaker 6>to black voters as to why they should support him

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<v Speaker 6>like they did in twenty twenty. The president's favorability amongst

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<v Speaker 6>black voters felt to sixty one percent in December. That's

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<v Speaker 6>down seven percent from October. Donald Trump holding steady a

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<v Speaker 6>twenty five percent. Biden was interrupted by pro Palestinian protesters

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<v Speaker 6>during his speech. He says he's working to get Israel

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<v Speaker 6>out of Gaza.

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<v Speaker 7>I understand their passion, and I've been quietly working. I've

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<v Speaker 7>been quietly working with the Israeli government to get them

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<v Speaker 7>to reduce and significantly get out from Gaza. I'm using

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<v Speaker 7>all I can to do.

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<v Speaker 6>As President Biden speaking in South Carolina. Secretary of State

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<v Speaker 6>Anthony Blincoln continuing his fourth tour the Middle East since

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<v Speaker 6>Hamas's October seventh attack on Israel with a meeting with

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<v Speaker 6>Saudi Arabia's Crown Prince Mohammed bin Salman. Blincoln is attempting

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<v Speaker 6>to calm the region while also urging Israel to do

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<v Speaker 6>more to protect civilians in Gaza. The Secretary also took

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<v Speaker 6>the time to warn the Iranian Baktruthy militants that there

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<v Speaker 6>will be consequences for attacking commercial ships in the Red Sea.

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<v Speaker 6>Hes BLA says that a senior commander we sum Taweel

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<v Speaker 6>was killed in an Israeli airstrike on a car in

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<v Speaker 6>southern Lebanon. The terror organization and Israel have been trading

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<v Speaker 6>fire daily since Hamasa's attack on Israel. Senior Israeli officials

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<v Speaker 6>have warned that they are prepared to militarily moves law

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<v Speaker 6>from the northern border if a diplomatic solution is not achieved,

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<v Speaker 6>with time for a resolution running out. The first US

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<v Speaker 6>moon landing in fifty years seemingly is doomed, as the

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<v Speaker 6>Pittsburgh based Astrobotic Technology says the spacecraft developed a quote

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<v Speaker 6>critical fuel leak hours after takeoff. The company says they

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<v Speaker 6>had managed to point the lander toward the sun to

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<v Speaker 6>allow for the solar panel to collect enough sunlight to

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<v Speaker 6>charge its battery. While determining the next steps Astrobotic is

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<v Speaker 6>aiming to be the first private company to land on

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<v Speaker 6>the Moon, with NASA having giving them and a Houston

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<v Speaker 6>based company millions of dollars to build and fly lunar landers.

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<v Speaker 6>The second company is scheduled to make an attempt on

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<v Speaker 6>the Moon next month. Global News twenty four hours a

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<v Speaker 6>day and whenever you want it with Bloomberg News Now.

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<v Speaker 6>I'm Dan Schwarzman, and this is Bloomberg.

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<v Speaker 1>I'm Brand Curtis in Hong Kong. This is Bloomberg Daybreak, Gajia.

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<v Speaker 1>Paul Allen joins us now from Sydney, and our guest

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<v Speaker 1>is George Ferguson, Bloomberg Intelligence senior Aerospace and Airlines analyst,

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<v Speaker 1>to look closer at this Boeing story in all the latest,

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<v Speaker 1>so George, this latest disclosure by United Airlines would seem

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<v Speaker 1>to be quite troubling as it involves multiple jets being

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<v Speaker 1>affected by this, although the testing apparently was confined to

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<v Speaker 1>the Max Dash nine jets. And we'll get into maybe

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<v Speaker 1>later whether or not this could spread, but in the

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<v Speaker 1>short term, could this set back hopes now that the

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<v Speaker 1>FAA might clear these planes anytime soon?

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<v Speaker 8>You know, first, thanks for having me on. I just

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<v Speaker 8>think that I think given the problems with the Alaska airflight,

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<v Speaker 8>I think the FAA would have wanted inspection of all

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<v Speaker 8>the airplanes of the fleet anyways, And so my senses

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<v Speaker 8>it doesn't necessarily slow things down or change the inspection program.

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<v Speaker 8>I do think that, you know, this plug is typically

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<v Speaker 8>used on the longer version of the seven three seven,

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<v Speaker 8>so I think that the risk that it spreads to

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<v Speaker 8>the rest of the MAX fleet is lower. And this

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<v Speaker 8>is not even a plug in the smaller of the

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<v Speaker 8>airplane as near as we can tell, and so I

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<v Speaker 8>think that it probably does stay limited to the DASH nine.

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<v Speaker 9>Yeah, another small development that we heard of that is

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<v Speaker 9>kind of curious. The cockpit flight recorder got overridden. First off,

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<v Speaker 9>since when was that a thing? And secondly, what are

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<v Speaker 9>the implications?

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<v Speaker 8>Yeah, i'd heard this as well, and so you know,

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<v Speaker 8>it's like one of those hard drives that probably overwrites

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<v Speaker 8>itself every so many hours. And my guess is though,

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<v Speaker 8>that there's wasn't a lot to learn necessarily from the cockpit,

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<v Speaker 8>right the pilots got the airplane back intact, thankfully, you know,

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<v Speaker 8>to the airport. I'm sure there's a bunch of stress

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<v Speaker 8>in the cockpit. But I really think that the majority

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<v Speaker 8>of what we're going to learn about this flight is

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<v Speaker 8>going to be back at the door plug and the

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<v Speaker 8>piece they found on the ground.

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<v Speaker 1>It seems like what we've learned so far is that

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<v Speaker 1>this is more of a manufacturing issue rather than a

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<v Speaker 1>design issue. Is that correct? And is that somewhat less

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<v Speaker 1>troubling then? To clean up the manufacturing side rather than design,

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<v Speaker 1>I think.

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<v Speaker 8>It is less troubling. I think it would be a

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<v Speaker 8>silver lining for Boeing. You hate to have this happen

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<v Speaker 8>under any circumstances. But when you look at the the

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<v Speaker 8>you know, the way that the plug, You look at

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<v Speaker 8>these sort of the shots later on, and you see

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<v Speaker 8>where the plug was in the airplane and how clean

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<v Speaker 8>the plug seemed to have left the airplane, it does

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<v Speaker 8>seem to indicate that either fasteners failed or someone didn't

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<v Speaker 8>apply the fasteners correctly. And I think the United News

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<v Speaker 8>kind of confirms that maybe somebody on the manufacturing line

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<v Speaker 8>didn't understand the right procedure for, you know, for applying

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<v Speaker 8>this plug.

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<v Speaker 9>Are we potentially seeing a bit of a blame game

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<v Speaker 9>starting to emerge here as well as to whether it's

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<v Speaker 9>Boeing's process is at fault, perhaps Spirit that makes the fuselage,

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<v Speaker 9>or even this other company when hearing about AI which

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<v Speaker 9>should installed Wi Fi during a maintenance period.

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<v Speaker 8>Yeah, so the ar is a sort of a late

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<v Speaker 8>breaking story. And I guess I'd have to hear that

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<v Speaker 8>they had done the dome on both Alaska and United

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<v Speaker 8>and a bunch of airplanes. I think we'd have to

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<v Speaker 8>find sort of more evidence that would tie them together.

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<v Speaker 8>I would think that there, you know, there's always a

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<v Speaker 8>potential for blame game here. But at the end of

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<v Speaker 8>the day, Boeing manufactures the airplane and warrants to be

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<v Speaker 8>warrants it to be air worthy as it leaves their factory.

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<v Speaker 8>And so I think, as much as they might have

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<v Speaker 8>a supplier problem with Spirit not doing the work right,

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<v Speaker 8>it's their job to make sure the airplane leaves the

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<v Speaker 8>factory ready to go. And so I think that you

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<v Speaker 8>can't get away with too much of that, And I

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<v Speaker 8>would just, you know, I sort of follow that up

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<v Speaker 8>a bit with Boeing can't make the seven thirty seven,

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<v Speaker 8>any version of it without Spirit Aerosystems. And so as

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<v Speaker 8>much as they may want to say, hey, look, our

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<v Speaker 8>supplier did this, is not our fault. They you know,

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<v Speaker 8>they need spirit to survive and they need spirit to thrive,

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<v Speaker 8>and so again they can only get away with so

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<v Speaker 8>much of that. They really need to get down there

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<v Speaker 8>if the problems is spirit, and help Spirit fix the problem,

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<v Speaker 8>because that's the way forward for both Spirit and for Boeing.

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<v Speaker 1>Just asking this from a pure layman standpoint, you know,

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<v Speaker 1>getting back to the question of these plugs. You know,

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<v Speaker 1>these these areas of the plane which might have a door,

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<v Speaker 1>but in this case was had a plug block in

0:12:41.880 --> 0:12:45.520
<v Speaker 1>there and that's what blew off and caused this. Since this,

0:12:46.120 --> 0:12:49.400
<v Speaker 1>if it ultimately is a manufacturing issue, wouldn't this kind

0:12:49.440 --> 0:12:52.920
<v Speaker 1>of raise questions about many other planes no matter what,

0:12:53.200 --> 0:12:56.280
<v Speaker 1>because you know a lot of these manufacturing processes, you know,

0:12:56.320 --> 0:12:59.000
<v Speaker 1>these people are working on multiple types of planes.

0:13:00.400 --> 0:13:00.679
<v Speaker 7>Yeah.

0:13:00.800 --> 0:13:06.080
<v Speaker 8>So Spirit though, has you know, a heavy amount of

0:13:06.080 --> 0:13:08.080
<v Speaker 8>work on the seven thirty seven. So I think that

0:13:08.160 --> 0:13:11.240
<v Speaker 8>you're you know, if it's a problem it's spirit, Does

0:13:11.280 --> 0:13:13.040
<v Speaker 8>it mean that it's a problem on a lot of

0:13:13.040 --> 0:13:17.760
<v Speaker 8>different narrow bodies? Not necessarily. Plugs are used on a

0:13:17.800 --> 0:13:20.560
<v Speaker 8>lot of different airplanes that have been used effectively for many,

0:13:20.600 --> 0:13:28.200
<v Speaker 8>many many years, right, And you know, I think as well, you.

0:13:28.240 --> 0:13:33.160
<v Speaker 8>If there's a problem with a plug, significant enough problem

0:13:33.240 --> 0:13:35.760
<v Speaker 8>that it's not going to be able to maintain pressure,

0:13:36.200 --> 0:13:39.040
<v Speaker 8>you're going to know it, I think pretty soon when

0:13:39.080 --> 0:13:41.240
<v Speaker 8>you get into service. And this particular airplane have been

0:13:41.240 --> 0:13:44.480
<v Speaker 8>in service less than three months, so I don't think

0:13:46.000 --> 0:13:47.880
<v Speaker 8>I don't think it's something that we all have need

0:13:47.920 --> 0:13:50.640
<v Speaker 8>to be overly concerned about. But again I think on

0:13:50.679 --> 0:13:53.679
<v Speaker 8>the on the dash nine you do, and we need

0:13:53.720 --> 0:13:55.839
<v Speaker 8>to make an inspection on everything in the fleet to

0:13:55.920 --> 0:13:57.240
<v Speaker 8>feel safe.

0:13:58.040 --> 0:13:59.280
<v Speaker 9>Can you give us a bit of a saints of

0:13:59.320 --> 0:14:02.480
<v Speaker 9>the task. I hate NAFA Boeing in terms of restoring trust,

0:14:02.559 --> 0:14:06.160
<v Speaker 9>restoring its reputation. Is there anything comparable in your experience?

0:14:08.080 --> 0:14:11.480
<v Speaker 8>No, the I mean, I think these last four or

0:14:11.480 --> 0:14:14.360
<v Speaker 8>five years of Boeing have been I would I would

0:14:14.360 --> 0:14:19.160
<v Speaker 8>say perhaps unprecedented, and starting from the mcast debacle, with

0:14:19.280 --> 0:14:24.080
<v Speaker 8>the with the crashes and getting to hear I think

0:14:24.120 --> 0:14:27.200
<v Speaker 8>we can see how this occurred. Right the airplane was

0:14:27.240 --> 0:14:30.440
<v Speaker 8>grounded prior to the pandemic. I think you know that

0:14:30.520 --> 0:14:33.000
<v Speaker 8>led the stress on the workforce. People may decide to leave.

0:14:33.760 --> 0:14:36.680
<v Speaker 8>There were reductions in workforce. Then you hit a pandemic

0:14:36.760 --> 0:14:39.880
<v Speaker 8>where travel goes to almost zero. And you can understand

0:14:39.920 --> 0:14:41.760
<v Speaker 8>why other people might say that would be their time

0:14:41.800 --> 0:14:45.000
<v Speaker 8>to leave the business. So I think the way forward

0:14:45.080 --> 0:14:49.000
<v Speaker 8>is really about training the workforce extremely well, and they

0:14:49.000 --> 0:14:50.320
<v Speaker 8>may have to overdo that here.

0:14:50.680 --> 0:14:53.720
<v Speaker 1>Yeah, all right, George, thank you very good information. George Ferguson,

0:14:53.720 --> 0:14:58.920
<v Speaker 1>Bloomberg Intelligence Senior Aerospace and Airlines Analyst. This is Bloomberg

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