WEBVTT - JPMorgan Shakes Up Top Ranks, Spotlighting Three Executives 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:18.640 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:19.880 --> 0:00:22.239 We go to a story that is the most read 0:00:22.280 --> 0:00:24.959 on the Bloomberg or among the most read all day today. 0:00:25.079 --> 0:00:27.440 Yeah, it broke after the close yesterday. It raises the question, 0:00:27.520 --> 0:00:31.840 is Jamie Diamond possibly setting up to really finally, finally, 0:00:31.880 --> 0:00:33.800 could it be actually say goodbye? 0:00:33.880 --> 0:00:34.120 Carol? 0:00:34.200 --> 0:00:35.320 I don't know. I don't know. 0:00:35.720 --> 0:00:38.000 It looks like it the actual news by the way, 0:00:38.080 --> 0:00:41.080 JP Morgan Chase Jamie Diamond. Of course, the CEO there 0:00:41.280 --> 0:00:43.600 moved some of his top lieutenants into new senior roles, 0:00:43.600 --> 0:00:47.280 positioning them for more experience running the firm's operations. 0:00:46.920 --> 0:00:49.040 As he prepares potential successors. 0:00:49.040 --> 0:00:50.800 That's how we reported it out. It does look like 0:00:50.840 --> 0:00:54.600 he's giving people some more experience, or bigger experiences, if 0:00:54.640 --> 0:00:54.960 you will. 0:00:55.160 --> 0:00:56.240 So what does it mean? 0:00:56.240 --> 0:01:00.040 Bloomberg New Senior Finance reporter Shtrina Rajan is here in 0:01:00.080 --> 0:01:03.560 our radio studio, shre what does it mean? Two and 0:01:03.600 --> 0:01:06.240 a half years left, is he kind of getting ready. 0:01:06.560 --> 0:01:08.399 Let's be clear that two and a half years is 0:01:08.520 --> 0:01:11.080 just the five year retention package you got. That doesn't 0:01:11.120 --> 0:01:14.720 necessarily put an end line for the Jamie Diamond tenure 0:01:14.760 --> 0:01:17.080 or a JP Morgan chase. Look, it is the latest 0:01:17.240 --> 0:01:20.560 edition of the musical chairs at JP Morgan where Jamie 0:01:20.560 --> 0:01:25.080 Diamond is conducting this move. We've seen this before, we're 0:01:25.080 --> 0:01:28.800 seeing it again. And the thing is any organizational reshuffle 0:01:28.880 --> 0:01:32.440 that we see now this many years into Diamond's tenure 0:01:32.520 --> 0:01:36.360 atop the country's largest bank, the most profitable bank, obviously 0:01:36.400 --> 0:01:38.880 begs the question as to what are the tea leaves 0:01:38.920 --> 0:01:42.959 we can read from it about succession, who is best placed? 0:01:43.000 --> 0:01:46.560 So actually, just let's look at what's reason. Let's look 0:01:46.600 --> 0:01:50.400 at the names here here you have till now, till yesterday, 0:01:50.400 --> 0:01:53.480 people would have argued Jen Peepsak and Marianne Lake are 0:01:53.520 --> 0:01:57.280 the two executives who've seemed best positioned to be the 0:01:57.280 --> 0:02:00.360 successor to Jamie Diamond. So what does this show do 0:02:00.720 --> 0:02:04.040 You're taking Gen Peepsack from the consumer and community banking 0:02:04.040 --> 0:02:06.000 side of it, one of the largest parts of this 0:02:06.200 --> 0:02:09.040 giant bank with a fortrillan dollar balance sheet, and moving 0:02:09.080 --> 0:02:13.679 her to the commercial and investment bank site alongside Troy Roorberg, 0:02:13.880 --> 0:02:17.919 who's that trading head who now gets expanded responsibilities, and 0:02:17.960 --> 0:02:21.799 by virtue of this promotion, gets added into the mix 0:02:22.000 --> 0:02:25.240 of potential successes in a serious way. You have Mary 0:02:25.280 --> 0:02:29.280 and Lake who's getting expanded responsibilities in the consumer and 0:02:29.360 --> 0:02:34.239 community bank side, and Chase still is the big beast, 0:02:34.280 --> 0:02:37.760 big component of JP Morgan Chase. My read of it, 0:02:38.320 --> 0:02:42.640 you have three contenders. Gen Peepsack gets to now have 0:02:42.840 --> 0:02:47.080 run all the important parts of JP Morgan, So I 0:02:47.120 --> 0:02:50.240 would put her a hair ahead of Mary and Lake, 0:02:50.600 --> 0:02:54.560 who's still very solid contender, But Troy Roorberg now suddenly 0:02:54.639 --> 0:02:57.760 leaps into the mix as a long short contender. But 0:02:57.840 --> 0:03:01.160 it all ultimately depends on how much more time Jamie 0:03:01.160 --> 0:03:04.720 Diamond wants to spend holding the reins a JP Morgan Chase. 0:03:04.800 --> 0:03:06.480 I just got to say, I'm just loving that there 0:03:06.480 --> 0:03:10.040 are two women who are strong contenders potentially to take 0:03:10.040 --> 0:03:14.240 over for Jamie Diamond at JP Morgan. Is that something 0:03:14.320 --> 0:03:18.840 that has certainly been important to him in terms of 0:03:19.080 --> 0:03:21.480 the role of advancing women at that firm, And then 0:03:21.520 --> 0:03:24.320 maybe you know, getting ready to set somebody to lead it. 0:03:24.919 --> 0:03:26.839 I'm sure he would say it's been important to him. 0:03:26.919 --> 0:03:29.120 I'm also sure that he'd probably said that at the 0:03:29.240 --> 0:03:31.200 end of the day, the success that he picks, or 0:03:31.240 --> 0:03:33.600 he helps the board pack, or the board decides, is 0:03:33.639 --> 0:03:35.680 not going to be decided based on whether it's a 0:03:35.720 --> 0:03:39.400 woman or not. He's had two contenders in the mix. 0:03:39.720 --> 0:03:42.400 A few years ago the move would have been extremely 0:03:42.480 --> 0:03:46.560 symbolic and valuable, But the fact that Jane Fraser became 0:03:46.720 --> 0:03:49.280 cu as City Group sort of stole the thunder from 0:03:49.360 --> 0:03:51.800 JP Morgan. For the longest time, we always thought that 0:03:51.880 --> 0:03:54.800 maybe twelve thirteen, fourteen years into Jamie Diamonds tenil, when 0:03:54.840 --> 0:03:57.840 he's ready to hand over the reins, it would be 0:03:57.880 --> 0:04:01.520 a woman running the country's largest bank. But Jamie's still there, 0:04:01.880 --> 0:04:03.960 and Jane Fraser's now the CEO City Group. 0:04:03.840 --> 0:04:05.920 And that's what I wanted to talk about. Jamie's still there. 0:04:05.920 --> 0:04:07.560 He has at least two and a half years left 0:04:07.560 --> 0:04:11.280 on this, on this portion, what do we know about 0:04:11.280 --> 0:04:12.880 it seems like he has a lot of fun doing this. 0:04:13.520 --> 0:04:15.360 It really does. I mean, he's been doing this since 0:04:15.400 --> 0:04:16.160 two thousand and five. 0:04:16.400 --> 0:04:18.440 He seems to be having more fun than ever before. 0:04:18.440 --> 0:04:20.440 He still has a spring in his step. He's still 0:04:20.480 --> 0:04:23.359 ready to be the you know, the sort of the 0:04:23.400 --> 0:04:26.440 dean of Wall Street CEOs. This is the speaker of 0:04:26.480 --> 0:04:29.960 the caucus, if you may. He's representing the industry in DC. 0:04:30.120 --> 0:04:32.720 He's speaking his mind. Look, that's been true of Jamie 0:04:32.760 --> 0:04:35.760 Diamond forever, but more so now than ever before. And 0:04:35.800 --> 0:04:39.120 the stock's been up twenty five percent in the last year. 0:04:39.640 --> 0:04:42.320 That's called winning and that does not make anyone feel 0:04:42.360 --> 0:04:43.279 bored or tired. 0:04:43.560 --> 0:04:46.520 So two thousand and five he became president CEO. So 0:04:46.880 --> 0:04:49.960 would twenty twenty five be a nice round number to 0:04:50.040 --> 0:04:51.840 come off of this position? 0:04:52.200 --> 0:04:54.960 Well, you know, if you could read into his mind, 0:04:55.000 --> 0:04:58.520 show that sounds like a nice round number. Yes, he's 0:04:58.560 --> 0:05:01.039 closer to the end of his ten than not. But 0:05:01.160 --> 0:05:03.360 at the same time he's playing his cards very cool. 0:05:03.440 --> 0:05:05.400 So you could argue that twenty thirty also sounds like 0:05:05.440 --> 0:05:08.880 a good round number. Twenty fifty what about? What about? 0:05:08.920 --> 0:05:10.800 When do they have they moved into the new building? 0:05:10.839 --> 0:05:11.880 Forgive me if I don't know that. 0:05:12.040 --> 0:05:14.040 Oh no, it's still Verry. What is that done? 0:05:14.160 --> 0:05:15.039 When is that done? 0:05:15.560 --> 0:05:15.800 You know? 0:05:15.880 --> 0:05:18.200 That's that's the other favorite partner game. At least I've 0:05:18.240 --> 0:05:20.560 had a bed with at least some JP Morgan executives, 0:05:20.560 --> 0:05:23.040 and I said, a good time to call time on 0:05:23.120 --> 0:05:25.760 his time at wow? I said time four times and 0:05:25.800 --> 0:05:28.559 six words. Okay, But a good time to call time 0:05:28.880 --> 0:05:31.200 on his tenure JP Morgan would be when the new 0:05:31.200 --> 0:05:34.600 building is completed, call it the Jamie Diamond Building and 0:05:34.640 --> 0:05:37.280 say goodbye. But I have been definitively told that if 0:05:37.279 --> 0:05:38.960 I were to make that bet, I would lose it. 0:05:39.120 --> 0:05:41.120 Three twenty seconds left. Is there anything else we need 0:05:41.160 --> 0:05:43.240 to know about the people moves announced yesterday? Because it 0:05:43.320 --> 0:05:45.200 wasn't just these three individuals you named. 0:05:45.920 --> 0:05:50.120 There were other moves beneath that top layer. But the 0:05:50.120 --> 0:05:52.720 most important news for all of us is it clearly 0:05:53.000 --> 0:05:56.160 puts the spotlight on these three individuals. And when we 0:05:56.200 --> 0:05:58.800 think about succession and when we think about who will 0:05:58.880 --> 0:06:03.680 run the tree's most profitable bank, it's these three names 0:06:03.760 --> 0:06:05.400 we have to look at right now. 0:06:06.160 --> 0:06:10.000 Really fascinating and it certainly popped when the news crossed yesterday. 0:06:10.279 --> 0:06:12.760 Shere always making sense of the comings and goings on 0:06:12.800 --> 0:06:15.040 Wall Street, Thank you so much, really appreciate it. That is, 0:06:15.040 --> 0:06:17.640 of course, Bloomberg New Senior finance reporter Strina A. Rajan 0:06:17.920 --> 0:06:22.559 here in our studio at Bloomberg Headquarters. Shares of JP Morgan. 0:06:22.600 --> 0:06:24.839 By the way, they're up about one point four percent 0:06:25.320 --> 0:06:27.400 so far this year, just down a little bit in 0:06:27.440 --> 0:06:29.760 this trade. You are listening and watching Bloomberg Business Week, 0:06:29.800 --> 0:06:32.200 Carol Master, Tim Stenovic, this is Bloomberg. 0:06:33.440 --> 0:06:36.960 You're listening to the Bloomberg Business Week podcast. Catch us 0:06:37.000 --> 0:06:40.239 live weekday afternoons from two to five pm Eastern Listen 0:06:40.279 --> 0:06:42.440 on Apple car Play and then brought auto with a 0:06:42.440 --> 0:06:46.599 Bloomberg Business app or watch us live on YouTube. 0:06:47.640 --> 0:06:50.080 Well, real estate continues to be on our radar. 0:06:50.160 --> 0:06:52.640 Yesterday you might recall we've got a great check on 0:06:52.640 --> 0:06:55.200 commercial real estate. We talked with Michael Levy, who's the 0:06:55.240 --> 0:06:58.120 CEO of Crow Holdings. What he talked about, Tim was 0:06:58.200 --> 0:07:01.680 top tier office. I got a problem. In fact, he's 0:07:01.680 --> 0:07:04.000 still building office space in places such as Doubt. 0:07:04.120 --> 0:07:04.280 I know. 0:07:04.320 --> 0:07:06.039 I pushed back on it. He said, it's got to 0:07:06.040 --> 0:07:09.720 be top tier. Yeah, I mean they building so much. Yeah, 0:07:09.760 --> 0:07:12.200 it's struggling right now. So we wondered too about the 0:07:12.200 --> 0:07:15.320 hospitality side of the business. The Bloomberg reat Hotels indexes 0:07:15.400 --> 0:07:18.320 rallied twenty six percent since late October, and we had 0:07:18.360 --> 0:07:20.920 the perfect guest with us. Kevin Davis is CEO America's 0:07:20.920 --> 0:07:25.120 hotel and Hospitality at JL Jones Langlas Soli's, the publicly 0:07:25.160 --> 0:07:28.160 held real estate and investment management consultancy. It trades under 0:07:28.200 --> 0:07:31.600 the ticker JL. Kevin's here in our studio at Bloomberg 0:07:31.640 --> 0:07:34.800 Headquarters in New York. Good to have you with us 0:07:34.800 --> 0:07:37.400 this afternoon. Welcome back, Great to be here. You know, 0:07:37.440 --> 0:07:40.320 our Bloomberg Pursuits team called it already, they said, twenty 0:07:40.360 --> 0:07:42.080 twenty four is going to be a record setting year 0:07:42.080 --> 0:07:44.400 when it comes to travel on the tourism side, on 0:07:44.440 --> 0:07:48.080 the business travel side. First up, though at JLL you're 0:07:48.120 --> 0:07:51.440 involved in office, industrial, retail, give us size and scope 0:07:51.440 --> 0:07:53.720 here when it comes to the hotel and hospitality business 0:07:53.720 --> 0:07:54.520 that you're in charge of. 0:07:55.200 --> 0:07:57.720 Yeah, So our business relative to some of the other 0:07:57.800 --> 0:08:01.920 asset classes is relatively small, but certainly our impact on 0:08:02.040 --> 0:08:04.960 g GDP is relatively large given the number of people 0:08:04.960 --> 0:08:08.920 that work in hotels and hospitality and leisure around the country. 0:08:09.040 --> 0:08:12.440 So's a business that has a pretty significant impact on 0:08:12.480 --> 0:08:13.120 the economy. 0:08:13.320 --> 0:08:13.600 Yeah. 0:08:13.640 --> 0:08:16.080 Absolutely, And you guys obviously want to get into because 0:08:16.120 --> 0:08:18.400 why and want you assume you can grow to how 0:08:18.480 --> 0:08:19.280 much of your business. 0:08:19.920 --> 0:08:23.520 Look, we have aggressive and ambitious growth goals, and so 0:08:23.760 --> 0:08:26.320 our hope is that we continue to move the business 0:08:26.320 --> 0:08:28.960 forward and make significant strides in terms of growth. 0:08:29.000 --> 0:08:30.440 I mean, is it going to grow faster? Is it 0:08:30.480 --> 0:08:32.680 going to grow faster than office, industrial and retail? 0:08:32.960 --> 0:08:35.080 You know, it's Look, it's hard to say. Certainly, some 0:08:35.120 --> 0:08:37.360 of those sectors have been challenged and are in the 0:08:37.400 --> 0:08:40.320 midst of recovering. I will tell you one of the 0:08:40.320 --> 0:08:43.559 things that we're super optimistic about as it relates to hospitality, 0:08:43.800 --> 0:08:45.960 it has proven to be a strong inflation hedge, and 0:08:46.040 --> 0:08:48.400 while inflation looks like it's in the rear view mirror, 0:08:48.679 --> 0:08:50.840 as a result of that, it's attracted a lot of 0:08:50.880 --> 0:08:55.800 institutional investors into the space. And also hospitality typically offers 0:08:55.840 --> 0:08:59.320 incremental yield relative to other asset classes, and so as 0:08:59.360 --> 0:09:01.720 a result of that, investors are coming into the space. 0:09:01.840 --> 0:09:04.480 Kevin, you talk about investor interests, quantify that give us 0:09:04.480 --> 0:09:07.200 an idea of how it was maybe pre pandemic. I mean, 0:09:07.360 --> 0:09:09.240 tell us, what how long have you guys been building 0:09:09.280 --> 0:09:09.960 up this business. 0:09:10.240 --> 0:09:12.760 I mean, we've been in the hospitality business at JLL 0:09:12.800 --> 0:09:15.080 for over twenty five years. So this is a core 0:09:15.160 --> 0:09:17.120 business for US, and we are leaders in the space. 0:09:18.000 --> 0:09:20.520 So just by a order of magnitude, and I'll give 0:09:20.520 --> 0:09:27.120 you global numbers. I mean generally globally hospitality, it's typically 0:09:27.120 --> 0:09:29.760 between seventy five and one hundred billion dollars worth of 0:09:29.760 --> 0:09:33.240 transactions that take place in a given year. Last year, globally, 0:09:33.280 --> 0:09:35.760 we had about fifty billion dollars worth of transactions, so 0:09:35.800 --> 0:09:39.840 we were down about thirty percent relative to twenty twenty two. 0:09:40.400 --> 0:09:43.680 But we expect that it will likely increase sales volume. 0:09:43.679 --> 0:09:46.520 Transaction volume will likely increase fifteen to twenty five percent 0:09:46.559 --> 0:09:48.720 this year, so we are on the way back. We 0:09:48.760 --> 0:09:50.680 don't expect to get all the way back this year, 0:09:50.920 --> 0:09:54.960 but we think we're on a great trajectory toward stronger transactions. 0:09:55.200 --> 0:09:57.800 What's feeling that you talk about investor demand? Is it 0:09:57.840 --> 0:10:00.440 because we're expecting a lower rate environment? Is because you 0:10:00.480 --> 0:10:03.280 expect the economy and I'm curious when you look at 0:10:03.280 --> 0:10:05.520 the economies, I'm assuming it's the US and elsewhere or 0:10:05.520 --> 0:10:06.800 is it the US specifically? 0:10:06.960 --> 0:10:10.920 Yeah, it's strong growth in the US, strong growth in 0:10:10.960 --> 0:10:14.880 Europe globally, though relatively speaking, we actually expect more growth 0:10:14.920 --> 0:10:17.520 in Asia, which has been slow to emerge out of 0:10:17.520 --> 0:10:22.839 the pandemic Japan. Japan has actually started, but more specifically China, 0:10:23.160 --> 0:10:26.520 which has recently opened up much more so, we expect 0:10:26.520 --> 0:10:29.920 that you'll see strong growth in China. Also inbound travel 0:10:30.679 --> 0:10:33.319 from China to the US, which is something that certainly 0:10:33.320 --> 0:10:35.040 has not it's not close to recovering to what it 0:10:35.080 --> 0:10:35.840 was pre pandemic. 0:10:35.880 --> 0:10:37.480 Hey, talk a little more about that, because we've talked 0:10:37.480 --> 0:10:39.560 a lot on our program about the struggles that China 0:10:39.600 --> 0:10:42.360 faces internally, the struggles that they face with their own 0:10:42.360 --> 0:10:46.360 property market, with the economy, with youth unemployment, with demographic challenges. 0:10:46.480 --> 0:10:47.880 Why are you bullish on China? 0:10:48.000 --> 0:10:51.480 Well, I'm bullish relative to what we've seen over the 0:10:51.559 --> 0:10:54.000 past couple of years. I'm bullish in terms of Chinese 0:10:54.000 --> 0:10:57.440 travelers getting out and traveling. I mean, you ultimately have 0:10:57.600 --> 0:11:01.000 an emerging and growing middle class in China, and as 0:11:01.320 --> 0:11:03.679 the middle class grows, we expect that more people will 0:11:03.720 --> 0:11:07.040 travel and will travel specifically to the US into Europe 0:11:07.080 --> 0:11:07.480 as well. 0:11:07.600 --> 0:11:10.559 So what type of hospitality properties do you think investors 0:11:10.559 --> 0:11:13.920 are investors kind of clamoring for or asking for of you? 0:11:14.000 --> 0:11:18.560 Guys, Absolutely, it's really the two poles. If you will 0:11:18.760 --> 0:11:22.680 it's luxury, which has performed exceptionally well coming out of 0:11:22.679 --> 0:11:26.240 the pandemic, and it's select service and extended stay assets, 0:11:26.240 --> 0:11:27.640 which have also performed well. 0:11:27.720 --> 0:11:28.560 What's select service? 0:11:28.640 --> 0:11:32.040 Select service? So typically you don't have extensive food and beverage. 0:11:32.040 --> 0:11:34.880 It's primarily rooms, and you typically don't have a lot 0:11:34.920 --> 0:11:37.080 of meeting space, so you wouldn't if you're going to 0:11:37.080 --> 0:11:39.480 a big conference, you're generally not the meetings are not 0:11:39.480 --> 0:11:41.320 going to be at a select service hotel. You'll typically 0:11:41.360 --> 0:11:44.200 go to a full service hotel that has meeting space 0:11:44.280 --> 0:11:47.240 and banquets and catering, et cetera. Part of the reason 0:11:47.320 --> 0:11:50.839 why the select service space has grown though, particularly extended stay, 0:11:51.320 --> 0:11:53.920 is people have a lot more flexibility now post COVID 0:11:53.920 --> 0:11:56.200 as it relates to work, and you've seen a bit 0:11:56.240 --> 0:11:58.720 of the blended business and leisure travel, the so called 0:11:58.760 --> 0:12:02.400 bleisure travel. So because people have a lot more flexibility 0:12:02.440 --> 0:12:05.319 to travel when they are frequently on the road, they 0:12:05.320 --> 0:12:09.440 want a bit more homelike amenities. So extended stay, which 0:12:09.440 --> 0:12:12.960 typically have kitchens, are attractive and that's a sector where 0:12:13.000 --> 0:12:14.360 we expect to see a lot of growth. 0:12:14.559 --> 0:12:16.680 What about regional differences here in the US, you talked 0:12:16.679 --> 0:12:19.880 about where you're seeing action globally, but what about here 0:12:19.920 --> 0:12:20.400 in the US. 0:12:20.520 --> 0:12:22.840 Yeah, So in the US, it's interesting and it's changing. 0:12:23.480 --> 0:12:25.800 In the first couple of years out of COVID, we 0:12:25.840 --> 0:12:28.960 saw strong growth in the Sun Belt and the resort markets, 0:12:29.320 --> 0:12:33.000 which we expect to continue. We saw meaningful contraction in 0:12:33.040 --> 0:12:38.000 the urban markets New York, Boston, Chicago, Los Angeles, San Francisco. 0:12:38.880 --> 0:12:41.560 But the trend that we started to notice last year, 0:12:41.679 --> 0:12:43.959 which picked up steam and we expect will continue over 0:12:43.960 --> 0:12:46.600 the course of this year, is really improving performance in 0:12:46.760 --> 0:12:50.720 urban markets, so again the New York's, the Boston's, Chicago, etc. 0:12:51.240 --> 0:12:55.960 The reason really threefold. You've had return of leisure travelers. 0:12:56.120 --> 0:12:58.240 For many years, people were concerned to go to an 0:12:58.320 --> 0:13:01.000 urban city, to an urban market because the pandemic. So 0:13:01.120 --> 0:13:04.120 you've had leisure comeback. You've also had group travel comeback, 0:13:04.200 --> 0:13:06.679 so people coming to the cities for meetings. And then 0:13:06.720 --> 0:13:10.440 you've also had a sector called business business transient, which 0:13:10.480 --> 0:13:13.560 are business people coming to meet with clients and colleagues, 0:13:13.559 --> 0:13:16.280 et cetera. So that segment is all coming back. The 0:13:16.440 --> 0:13:19.839 other part, the last component though, is the global which 0:13:20.000 --> 0:13:22.880 is early days of coming back. But we expect that 0:13:22.880 --> 0:13:24.679 that will pick up in earnest and that's going to 0:13:24.800 --> 0:13:29.160 drive performance in markets like New York, Boston, San Francisco. 0:13:30.160 --> 0:13:32.480 Go move a little bit more on San Francisco because 0:13:32.480 --> 0:13:34.240 I feel like Tim, we've had some different guests who 0:13:34.280 --> 0:13:36.200 are it's fine, it's coming back. 0:13:36.320 --> 0:13:38.400 Others say no way, we're not touching it, and that 0:13:38.440 --> 0:13:38.800 they make. 0:13:38.720 --> 0:13:41.520 It so hard to build or do anything in that city. 0:13:41.720 --> 0:13:44.760 So you see opportunities there. 0:13:44.880 --> 0:13:47.920 Look, San Francisco is a gateway market, it's a top 0:13:47.960 --> 0:13:50.679 five market. It's not going anywhere. Certainly, it's having its 0:13:50.760 --> 0:13:54.480 challenges now they're political issues, social issues. 0:13:54.120 --> 0:13:54.600 Et cetera. 0:13:54.960 --> 0:13:57.720 But we certainly believe that longer term, San Francisco is 0:13:57.720 --> 0:14:00.640 going to be a great place to invest. So, yes, 0:14:00.679 --> 0:14:03.400 the market is challenged today, but we think this is 0:14:03.440 --> 0:14:06.679 a short, medium term issue which over time San Francisco 0:14:06.720 --> 0:14:07.240 will recover. 0:14:07.320 --> 0:14:08.479 You sound really optimistic. 0:14:08.640 --> 0:14:09.560 I have bottom lined. 0:14:09.679 --> 0:14:10.880 So what's the risk at there? 0:14:10.920 --> 0:14:13.640 I mean, we have spent so much of January, you know, 0:14:13.760 --> 0:14:16.400 laying out quite a long list of risks for folks 0:14:16.440 --> 0:14:19.320 out there, whether it's geopolitical politics here in the US 0:14:20.000 --> 0:14:21.880 and elsewhere. What if the FED gets it wrong, just 0:14:21.880 --> 0:14:24.160 got about thirty seconds. What's your number one risk that 0:14:24.200 --> 0:14:26.240 could kind of upend this optimism. 0:14:26.440 --> 0:14:29.480 Number one risk is if the FED doesn't cut rates 0:14:29.920 --> 0:14:33.200 as aggressively as the market expects, so six ' five 0:14:33.560 --> 0:14:36.520 or or look, I think it's at least three, okay, 0:14:36.800 --> 0:14:40.520 Or or if the rate cuts get pushed to later 0:14:40.600 --> 0:14:42.600 in the year. I think if one or both of 0:14:42.640 --> 0:14:45.600 those things happen, that will take some, not all, some 0:14:45.680 --> 0:14:48.080 of the optimism out of the market, and we may 0:14:48.080 --> 0:14:50.600 be on a slightly different trajectory. But ultimately we feel 0:14:50.720 --> 0:14:52.120 very good about twenty twenty four. 0:14:52.160 --> 0:14:53.640 All right, well, this was a fun check up. Thank 0:14:53.640 --> 0:14:54.040 you so much. 0:14:54.200 --> 0:14:55.280 Thank you, I appreciate it. 0:14:55.400 --> 0:14:58.480 Kevin Davis, He's chief executive officer of America's Hotels and 0:14:58.480 --> 0:15:02.680 Hospitality over it. Jones Lang LaSalle joining us here in 0:15:02.760 --> 0:15:05.400 our studio at Bloomberg Headquarters. All right, folks, you are 0:15:05.400 --> 0:15:07.960 listening and watching Bloomberg Business with Carol Master Tim Steedvik. 0:15:08.120 --> 0:15:08.920 We're back in a moment. 0:15:10.760 --> 0:15:14.600 You're listening to the Bloomberg Business Week podcast. Listen live 0:15:14.720 --> 0:15:17.520 each weekday. He's starting at two pm Eastern on applecar 0:15:17.640 --> 0:15:20.600 Play and Android Auto with the Bloomberg Business app. You 0:15:20.640 --> 0:15:23.920 can also listen live on Amazon Alexa from our flagship 0:15:23.960 --> 0:15:27.760 New York station, Just Say Alexa playing Bloomberg eleven thirty 0:15:31.120 --> 0:15:34.120 A welcome glass. Here is something to be. 0:15:37.680 --> 0:15:39.440 And now to the cover story of the new issue 0:15:39.480 --> 0:15:42.400 of Bloomberg Business Week, featuring none other than Sean Fain, 0:15:42.560 --> 0:15:45.160 the president of the United Auto Workers, who earlier this 0:15:45.200 --> 0:15:47.440 week made quite a bit of news when the UAW 0:15:47.520 --> 0:15:51.320 endorsed Joe Biden's twenty twenty four reelection bid. But Carol, 0:15:51.440 --> 0:15:54.000 that's not why we're talking about Sean Fain today, No. 0:15:54.080 --> 0:15:54.360 It is it. 0:15:54.440 --> 0:15:57.360 We're talking about Sean Fayn because after making historic gains 0:15:57.360 --> 0:15:59.800 for autoworkers last year, he's now got his site set 0:15:59.800 --> 0:16:02.160 on a company we talked about a lot this week. 0:16:02.280 --> 0:16:06.000 Tesla Well, Josh Idelson, and Gabriella Coppola write all about 0:16:06.000 --> 0:16:08.200 Sean Fayne and the new issue of Business Week magazine, 0:16:08.280 --> 0:16:10.880 available on newsstands, on the Bloomberg terminal and at Bloomberg 0:16:10.920 --> 0:16:14.760 dot com slash BusinessWeek. Josh Idelson is Bloomberg News Labor reporter. 0:16:14.840 --> 0:16:18.440 He joins us on Zoom from Washington, DC. So, Josh, 0:16:18.480 --> 0:16:22.200 before we get to what exactly Faine is trying to 0:16:22.240 --> 0:16:23.680 do and the UAW are trying to do. It's not 0:16:23.720 --> 0:16:25.000 just Tesla, by the way, there are a lot of 0:16:25.000 --> 0:16:27.080 companies in the US that are trying to organize beyond 0:16:27.080 --> 0:16:30.440 the Big Three. Talk a little bit about the wins 0:16:30.440 --> 0:16:32.120 that he had last year and how big of a 0:16:32.200 --> 0:16:34.080 deal it was that he was able to get those 0:16:34.120 --> 0:16:37.400 concessions for the UAW workers from the Big Three. 0:16:39.200 --> 0:16:43.640 The contract victory that the UAW pulled off this fall 0:16:43.880 --> 0:16:48.320 has no precedent in the set past several decades of 0:16:48.480 --> 0:16:52.880 the union's history. The union one raises that with cost 0:16:52.880 --> 0:16:56.720 of living increases will be a third over the next 0:16:56.760 --> 0:17:00.000 four and a half years for many workers. Some workers 0:17:00.040 --> 0:17:02.120 will see their pay more than double if they were 0:17:02.160 --> 0:17:07.320 previously classified as temps. The union also won some key 0:17:07.440 --> 0:17:13.000 victories in areas like making it easier for workers at 0:17:13.080 --> 0:17:20.199 the joint ventures of General Motors and Stilantis to unionize, 0:17:20.400 --> 0:17:25.040 join the OW, and join the existing union contract over 0:17:25.280 --> 0:17:29.600 the coming years. And so this was both a reversal 0:17:29.880 --> 0:17:32.440 of a trend where auto workers have been losing ground 0:17:32.520 --> 0:17:36.320 to inflation and also a big step towards securing the 0:17:36.440 --> 0:17:40.080 union's future as the auto industry changes. But to continue 0:17:40.119 --> 0:17:42.360 to do that is going to take a lot more 0:17:42.400 --> 0:17:46.600 work and in fact climbing more difficult mountains for this union. 0:17:46.680 --> 0:17:48.800 All Right, it sounds like one of those mountains is 0:17:49.119 --> 0:17:52.240 named Tesla. So talk to us about he set his 0:17:52.280 --> 0:17:55.880 sights on Tesla and what his goal mission and how 0:17:55.880 --> 0:17:56.960 he thinks about it. 0:17:58.720 --> 0:18:03.080 So the union is trying to organize thirteen companies non 0:18:03.200 --> 0:18:06.680 union plants to organize one hundred and fifty thousand workers, 0:18:06.800 --> 0:18:10.280 double the number of automaker employees that are in the UAW, 0:18:10.359 --> 0:18:14.159 a union that has lost the majority of its membership 0:18:14.280 --> 0:18:17.720 in the past several decades. And Tesla is one of 0:18:17.760 --> 0:18:22.040 those thirteen companies. It's a particularly alluring and difficult target. 0:18:22.440 --> 0:18:26.600 It's the company that is synonymous for many people with EVS. 0:18:27.359 --> 0:18:29.760 It's the most valuable automaker in the world. But it's 0:18:29.800 --> 0:18:33.280 a company whose CEO, Elon Musk, has shown that he's 0:18:33.320 --> 0:18:36.000 staunched the anti union and willing to put up with 0:18:36.240 --> 0:18:40.120 embarrassing media and lengthy legal battles in order to get 0:18:40.119 --> 0:18:43.560 what he wants. The US National Labor Relations Board is 0:18:43.600 --> 0:18:47.280 found that Tesla repeatedly violated the law in response to 0:18:47.480 --> 0:18:52.320 prior UAW organizing, including by firing an activist who still 0:18:52.359 --> 0:18:57.080 has not gotten his job back. Now seven years later, 0:18:57.520 --> 0:19:02.320 Tesla has denied wrongdoing, has made clear that he would 0:19:02.400 --> 0:19:06.119 see unionization in the plant as a failure on the 0:19:06.119 --> 0:19:06.880 company's part. 0:19:07.400 --> 0:19:10.399 So how then, why is it so difficult then for 0:19:10.480 --> 0:19:13.600 the UAW to organize? Because it's it's ultimately not up 0:19:13.600 --> 0:19:16.399 to Tesla as a company and not up to Elon Musk. 0:19:16.480 --> 0:19:20.200 Why is it so hard for the UAW two actually 0:19:20.720 --> 0:19:23.359 organize the folks who work at Tesla and get them 0:19:23.400 --> 0:19:24.000 on their side. 0:19:25.119 --> 0:19:28.080 So under US labor law, it is not easy to 0:19:28.200 --> 0:19:31.680 unionize a big company that is trying to stop workers 0:19:31.720 --> 0:19:34.959 from organizing. Companies have the ability to use tactics like 0:19:35.080 --> 0:19:39.040 mandatory anti union meetings that Labor Board precedent says are 0:19:39.119 --> 0:19:44.000 legal when there is retaliation. Although it's illegal to punish 0:19:44.000 --> 0:19:47.480 someone for organizing, the Labor Board does not have the 0:19:47.520 --> 0:19:52.360 authority to hold executives liable or to make companies pay 0:19:52.400 --> 0:19:56.679