WEBVTT - Bloomberg Wall Street Week: Barra, Tarullo, Summers 0:00:00.240 --> 0:00:04.160 This is Bloomberg Wall Street Week. Market shrug of higher 0:00:04.160 --> 0:00:07.080 consumer prizes. The economy is in the process of rebounding. 0:00:07.120 --> 0:00:09.440 Will the utter reserve have its own digital currency? The 0:00:09.440 --> 0:00:12.440 financial stories that cheap hard work. Many people think the 0:00:12.480 --> 0:00:14.320 eels are just going to keep marching out. We have 0:00:14.440 --> 0:00:16.680 more spending coming out of Congress. One of the big 0:00:16.760 --> 0:00:19.600 questions I think on investor's mind inflation through the eyes 0:00:19.640 --> 0:00:22.720 of the most influential voices. Larry Summer is the former 0:00:22.760 --> 0:00:26.160 Treasury Secretary, Bryan wynhand back of America, Will sar Ceo, 0:00:26.360 --> 0:00:30.479 Charlie Sharp. Bloomberg wool Street Week with David Weston from 0:00:30.560 --> 0:00:35.120 Bloomberg Radio. One step forward and one step back, Final 0:00:35.120 --> 0:00:38.839 approval for Fliser's vaccine. Congress moves forward on spending, but 0:00:39.440 --> 0:00:43.440 tragedy mars An already difficult pull out from Afghanistan. This 0:00:43.560 --> 0:00:47.560 is Bloomberg Wall Street Week. I'm David Weston. We begin 0:00:47.640 --> 0:00:49.600 this week with the Fed. In his remarks to the 0:00:49.680 --> 0:00:52.960 Jackson Whole Symposium, Chapal did nothing to get in the 0:00:52.960 --> 0:00:55.639 way of some tapering of the Fed's bond buying by 0:00:55.680 --> 0:01:00.200 the end of the year. At the FMCS recent July eating, 0:01:00.680 --> 0:01:03.960 I was of the view, as were most participants, that 0:01:04.040 --> 0:01:07.640 if the economy evolved broadly as anticipated, it could be 0:01:07.680 --> 0:01:11.319 appropriate to start reducing the pace of asset purchases this year. 0:01:11.680 --> 0:01:14.840 For more on what chair Pal said and it didn't say, 0:01:15.000 --> 0:01:18.880 we check in with former Treasury Secretary Larry Summers. I 0:01:19.000 --> 0:01:22.200 was struck, for example, that he didn't say anything about 0:01:22.240 --> 0:01:26.240 the housing sector that's the largest part of the consumer 0:01:26.280 --> 0:01:30.280 price indices. I saw a statistic Bloomberg actually had it 0:01:30.400 --> 0:01:33.920 the other day that said, on average, when a new 0:01:34.000 --> 0:01:40.000 tenant moves into a rented residents, they're paying seventeen percent 0:01:40.080 --> 0:01:43.280 more than the old tenant. That suggests a lot of 0:01:43.360 --> 0:01:47.720 rental price inflation. If you look at owner occupied houses, 0:01:48.120 --> 0:01:51.840 the prices are taking off. Uh. None of that has 0:01:51.880 --> 0:01:55.720 been reflected yet in our price indsease. And yet on 0:01:55.800 --> 0:02:00.840 any common sense definition, that's surely inflation. And so my 0:02:00.960 --> 0:02:05.200 guesses you'll start to see the housing component of inflation 0:02:05.920 --> 0:02:09.680 show up as rising pretty rapidly, or if you don't, 0:02:10.160 --> 0:02:14.480 it will reflect defects in the way we create Uh, 0:02:14.560 --> 0:02:20.160 the price indusease. I the chairman mentioned rightly, uh that 0:02:20.200 --> 0:02:24.639 we've got record levels of job openings and workers are 0:02:24.680 --> 0:02:29.160 turning over very fast workers are quitting UH their jobs. 0:02:29.960 --> 0:02:32.520 I'd have thought that all of that would be a 0:02:32.560 --> 0:02:36.280 signal than in a labor shortage economy, you'd still be 0:02:36.400 --> 0:02:40.079 starting to see much more rapid wage increases then you've 0:02:40.160 --> 0:02:43.360 seen historically, but that that was a process that would 0:02:43.360 --> 0:02:46.639 take a certain amount of time. He was more serene 0:02:47.320 --> 0:02:53.760 um about all of that. He was referencing that we 0:02:54.120 --> 0:03:00.360 had had four percent unemployment um before COVID without apidly 0:03:00.360 --> 0:03:04.239 accelerating inflation, and he was right about that, of course. 0:03:04.880 --> 0:03:09.359 But I see that we're having far more structural change 0:03:09.360 --> 0:03:13.480 in the economy, as businesses rethink their business models, when 0:03:13.520 --> 0:03:15.600 people aren't going to be coming to the office, as 0:03:15.639 --> 0:03:22.000 people rethink their lives after a year without commuting, as 0:03:22.040 --> 0:03:26.040 the whole structure of the economy changes. And I think 0:03:26.080 --> 0:03:29.680 with all that structural change, you're likely to see some 0:03:29.919 --> 0:03:34.600 substantial increase in the level of unemployment that the economy 0:03:34.680 --> 0:03:42.080 can sustain without excessive inflation. So there's no certainties, but 0:03:42.360 --> 0:03:49.160 I think the inflation risks are graver than those that 0:03:49.240 --> 0:03:56.320 the chairman UH recognized. I think that the toxic side 0:03:56.360 --> 0:04:03.080 effects of q E are rather greater then the chairman recognized. 0:04:03.640 --> 0:04:07.440 So in the range of places where this speech seemed 0:04:07.480 --> 0:04:10.520 likely to come down. I think that came down in 0:04:10.600 --> 0:04:14.680 a relatively uh good place from my point of view, 0:04:15.200 --> 0:04:20.320 pointing towards a taper uh this year. But in terms 0:04:20.440 --> 0:04:24.520 of the issues I've been concerned about for quite some time, 0:04:25.120 --> 0:04:28.480 that we're kind of making a bit of a paradigm 0:04:28.760 --> 0:04:33.200 uh error. Uh. I didn't expect that the speech was 0:04:33.240 --> 0:04:37.159 going to represent a deviation from the paradigm, and I 0:04:37.200 --> 0:04:40.679 don't think it did. Hilary, the day before J. Powell 0:04:40.720 --> 0:04:43.360 came in speech, you wrote an essay in the Washington 0:04:43.440 --> 0:04:45.520 Post and which you really took on the question of 0:04:45.600 --> 0:04:48.400 quantity of easy. You mentioned inflation what you just talked about, 0:04:48.520 --> 0:04:51.400 but also some of those toxic effects, which included things 0:04:51.440 --> 0:04:53.159 like the tenor of the debt, something you've talked on 0:04:53.200 --> 0:04:55.920 this program before that overall the federal debt, we're actually 0:04:55.920 --> 0:04:57.719 going into the short side. We should be going to 0:04:57.760 --> 0:05:01.159 the long end. And also asked bubbles and pumping money 0:05:01.160 --> 0:05:04.240 in the economy by getting it into financial assets. Tell 0:05:04.320 --> 0:05:06.440 us about why you think that would be wrong, and 0:05:06.480 --> 0:05:09.839 maybe as important, do you think QUI should go to zero? Yeah? 0:05:09.839 --> 0:05:14.120 I think, Hue. I think the question is like, as 0:05:14.200 --> 0:05:17.000 I used the analogy in the column, it's like withdrawing 0:05:17.040 --> 0:05:21.480 from Afghanistan. Uh, it's pretty clear that after twenty years, 0:05:22.040 --> 0:05:26.159 the right thing was for the United States not to 0:05:26.279 --> 0:05:31.840 be uh continuing in a war fighting mode in Afghanistan. 0:05:32.360 --> 0:05:37.320 But you can't do You can't get there necessarily overnight, 0:05:37.520 --> 0:05:40.680 as we're learning painfully. And in the same way, I 0:05:40.720 --> 0:05:45.840 think we clearly should have zero que which doesn't mean 0:05:45.920 --> 0:05:49.760 we can get there overnight or we can get there 0:05:49.839 --> 0:05:56.039 with a uh drastic lurch. Why uh, every homeowner in 0:05:56.080 --> 0:05:59.120 America is trying to lock in a long term mortgage 0:05:59.480 --> 0:06:02.919 rather than moving towards the floating rate mortgage. The government 0:06:02.920 --> 0:06:07.360 should think the same way and be chterming out the debt. 0:06:07.720 --> 0:06:12.120 What quee does by having the Fed issue interest bearing 0:06:12.160 --> 0:06:16.320 bank reserves to buy up longer term debt when those 0:06:16.360 --> 0:06:21.400 interest reserves can float upwards, it's shortening the maturity of 0:06:21.440 --> 0:06:24.560 the debt. Given the epic levels of debt we have, 0:06:24.680 --> 0:06:27.719 and given the very high levels of fiscal uncertainty we have, 0:06:28.360 --> 0:06:33.400 why would we want to be charming in the debt 0:06:33.600 --> 0:06:35.919 right now? Thank you so much. That's our special contry 0:06:36.000 --> 0:06:38.800 to Wall Street Week. He's Larry Summers of Harvard coming up. 0:06:38.920 --> 0:06:41.320 We talked with former Fed Governor Dan to Rule of 0:06:41.400 --> 0:06:45.000 Harvard about the politics of reappointing J. Powe and whether 0:06:45.040 --> 0:06:49.120 there should be more coordination between the Fed and the Treasury. 0:06:49.320 --> 0:06:58.200 That's next on Wall Street Week on Bloomberg. This is 0:06:58.240 --> 0:07:02.599 Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 0:07:03.080 --> 0:07:06.200 It was a big week for Banks Central and Otherwise 0:07:06.400 --> 0:07:09.679 as BECA America's longtime head of Investment Banking and CEO, 0:07:09.920 --> 0:07:13.320 Tom Monteg announced his retirement, leaving a big hole and 0:07:13.400 --> 0:07:16.200 raising questions about succession at the bank. And FED chair 0:07:16.320 --> 0:07:19.440 J Pale appeared at the Jackson Whole Symposium amid speculation 0:07:19.440 --> 0:07:22.320 about his future as well. We spend most of our 0:07:22.360 --> 0:07:24.760 time worrying about the independence of the FED from all 0:07:24.760 --> 0:07:27.800 political influence. But is that realistic? And if it were possible, 0:07:27.920 --> 0:07:30.600 would it be the right thing? Given the enormous influence 0:07:30.640 --> 0:07:33.239 the Fed can have over the economy and our lives. 0:07:33.640 --> 0:07:36.000 Dan's Rullo served on the Federal Reserve Board with J. 0:07:36.120 --> 0:07:38.760 Pal He is now a professor at the Harvard Law School. So, Dan, 0:07:38.760 --> 0:07:40.560 thank you so much for being with us. So address 0:07:40.600 --> 0:07:42.840 that question. I mean, we have a lot of influence 0:07:42.880 --> 0:07:44.480 of the FED right now on our day to day 0:07:44.520 --> 0:07:46.920 lives as well as the economy. Is there a role 0:07:47.040 --> 0:07:49.760 for some sort of a political factor here and is 0:07:49.800 --> 0:07:52.160 it possibly healthy for j Pale to be thinking, You know, 0:07:52.280 --> 0:07:55.720 I do need to think about reappointment. Well, David, you know, 0:07:56.040 --> 0:08:00.720 um Bil martin U, one of the famous past chairs 0:08:00.720 --> 0:08:02.640 of the FED, for whom one of the FED board 0:08:02.680 --> 0:08:06.920 buildings is named, characterize the position of the FED as 0:08:07.560 --> 0:08:11.520 at the Federal Reserve was in the government. It was 0:08:11.560 --> 0:08:14.880 independent in the government. It was not independent of the government. 0:08:15.520 --> 0:08:18.400 And what that is that that means is that the 0:08:18.480 --> 0:08:23.960 relationship between the FED and democratically accountable branches of government, 0:08:24.000 --> 0:08:28.960 the President and the Congress, is an issue of ongoing importance. 0:08:29.840 --> 0:08:32.360 So if you had a system whereby the FED we're 0:08:32.360 --> 0:08:36.479 self perpetuating and each chair chose his or her successor, 0:08:36.840 --> 0:08:40.040 that might make some monetary policy people happy, but it 0:08:40.080 --> 0:08:44.000 would really strain any notion of the FED being accountable 0:08:44.080 --> 0:08:47.680 ultimately to the Congress. And as you know, Congress has 0:08:48.120 --> 0:08:50.839 the powers and Article one of the Constitution that allow 0:08:50.960 --> 0:08:53.320 the creation of the FED. So I think what we 0:08:53.440 --> 0:08:57.080 see with the four year appointment term, what we see 0:08:57.120 --> 0:09:01.200 with the requirements for testimony are way reason which Congress 0:09:01.240 --> 0:09:06.920 has tried to provide some political responsiveness, some political accountability, 0:09:06.960 --> 0:09:12.280 without making the Fed adhere to the day by day 0:09:12.320 --> 0:09:15.440 wishes of the administration. Instance, it's not being short of 0:09:15.440 --> 0:09:18.199 a day to day coordination administration apart from Congress and 0:09:18.240 --> 0:09:20.600 the Fed, what about the Treasury and the Fed. We 0:09:20.679 --> 0:09:23.040 had Larry summers On earlier in this program saying there's 0:09:23.040 --> 0:09:24.640 an issue of the tenor of the debt right now 0:09:24.800 --> 0:09:27.040 given what they're doing with bond buying, in fact, we're 0:09:27.040 --> 0:09:29.160 sort of going more short term of the debt. Doesn't 0:09:29.160 --> 0:09:32.239 make sense. Should there be some mechanism for more coordination, 0:09:32.440 --> 0:09:36.040 not control, but coordination? Well, I mean in fact, and 0:09:36.960 --> 0:09:39.480 I assume that this is going on between Janet Yellen 0:09:39.600 --> 0:09:43.600 and Jay Powell. There's there's always been a weekly lunch 0:09:43.720 --> 0:09:46.920 usually sometimes breakfast between the Fed chair and the Treasury 0:09:46.960 --> 0:09:50.640 Secretary where they go over a range of issues. Uh. 0:09:50.720 --> 0:09:54.080 Those meetings can be more frequent in periods of stress, obviously, 0:09:54.400 --> 0:09:59.720 but even in normal times, fiscal policy and monetary policy 0:10:00.080 --> 0:10:04.360 dependent on one another, and in less normal times or 0:10:04.600 --> 0:10:08.400 or new kinds of times, the relationships between the two 0:10:08.480 --> 0:10:11.960 are probably sometimes harder to parse, and so it does 0:10:12.040 --> 0:10:16.080 call for at least more communication between Treasury and the FED. 0:10:16.320 --> 0:10:19.160 I mean, something that people may have forgotten is that 0:10:19.200 --> 0:10:21.520 from most of the good part of the history of 0:10:21.520 --> 0:10:25.760 the FED there was a kind of subordination to the 0:10:25.800 --> 0:10:31.520 Treasury Department that formally ended in ninety one. But the 0:10:31.640 --> 0:10:35.000 interest of the administration and often of Congress and keeping 0:10:35.040 --> 0:10:39.679 interest rates low is an ongoing interest, uh and the 0:10:39.720 --> 0:10:43.599 FED always needs to be in a position of deciding 0:10:43.800 --> 0:10:47.280 what its posture is visa the current fiscal policy dan. 0:10:47.400 --> 0:10:50.040 We all heard from the current chair J. Pile, part 0:10:50.040 --> 0:10:54.520 of this uh uh Jackson Holes symposium a year ago. 0:10:54.600 --> 0:10:57.600 At this same symposium, as I recall, the Chair announced 0:10:57.600 --> 0:11:00.800 the new framework for determining monetary policy based on really 0:11:00.800 --> 0:11:04.640 being willing to go above the two percent number on inflation. 0:11:04.920 --> 0:11:07.080 Some people now, including Larry Summers, are saying, you know, 0:11:07.120 --> 0:11:09.000 that framework maybe was never a good idea, but it 0:11:09.080 --> 0:11:10.840 sure isn't now because it was a dealing with the 0:11:10.920 --> 0:11:13.480 demand side issue and now it was applies side. Is 0:11:13.480 --> 0:11:15.280 it possible I FED is sort of painting uself in 0:11:15.320 --> 0:11:17.320 a bit of a corner at corner and gotten too 0:11:17.360 --> 0:11:20.839 stubborn on its monetary policy by having that framework. I 0:11:21.160 --> 0:11:23.560 don't think so. I mean, look, there are issues in 0:11:23.600 --> 0:11:25.440 the execution of the framework, which I get to in 0:11:25.440 --> 0:11:29.079 a moment, but it seemed pretty clear to a lot 0:11:29.120 --> 0:11:32.319 of people, including people who were worried about secular stagnation, 0:11:32.880 --> 0:11:35.960 that the FED framework, which had prevailed in the pre 0:11:36.040 --> 0:11:39.800 global financial crisis period, needed to be changed. And what 0:11:39.920 --> 0:11:42.040 I think you saw last year was not really a 0:11:42.120 --> 0:11:46.719 radical break, but instead the culmination of an evolution of 0:11:46.760 --> 0:11:50.640 the FEDS thinking about the relationship between employment and inflation. 0:11:51.200 --> 0:11:54.719 I think that difficulty has been that the FED at 0:11:54.760 --> 0:11:58.760 that time expected that it was going to have a 0:11:58.760 --> 0:12:02.959 period of somewhat sluggish growth in which it could fill 0:12:03.000 --> 0:12:07.640 out it's meaning to maximum employment and how long inflation 0:12:07.679 --> 0:12:10.360 had to be above two percent, and with this, with 0:12:10.520 --> 0:12:13.520 the amount of fiscal stimulus, would have the quick recovery 0:12:13.520 --> 0:12:16.800 in the economy. I think the FED was back footed 0:12:16.840 --> 0:12:21.920 a bit, and it's perhaps been a little less um 0:12:22.200 --> 0:12:26.960 nimble in adapting to the new circumstances and describing what 0:12:27.200 --> 0:12:31.960 those metrics mean under these circumstances. But I don't I 0:12:32.000 --> 0:12:35.400 actually don't think it's the framework itself that's the problem, 0:12:35.640 --> 0:12:38.000 and Indeed, I tend to agree with those who think 0:12:38.080 --> 0:12:42.440 that periodically the FED should revisit its framework, not because 0:12:42.480 --> 0:12:46.000 the framework sets monetary policy, but because it sets the 0:12:46.040 --> 0:12:49.920 framework for discussing monetary policy. So Dan, just briefly here 0:12:49.960 --> 0:12:52.680 at the end, I wonder whether j Palal would have 0:12:52.720 --> 0:12:55.439 picked this time to give a major address that all 0:12:55.480 --> 0:12:57.000 the markets and all the pundits were paying attention for 0:12:57.080 --> 0:12:59.800 monetary policy if there weren't Jackson hole. And that leads 0:12:59.840 --> 0:13:03.640 to why does Jackson Hole exist? Well, I mean the 0:13:03.880 --> 0:13:08.320 historically answer is the former Federal Reserve Bank of Kansas 0:13:08.360 --> 0:13:12.400 City president started it in one invited Paul Woker, and 0:13:12.559 --> 0:13:15.959 Paul Voker came, and since then it it's been kind 0:13:15.960 --> 0:13:21.000 of the centerpiece of the summer for for monetary policy. UM. 0:13:21.040 --> 0:13:23.560 I think that, you know, the traditional issues people have 0:13:23.640 --> 0:13:25.840 raised around that, David one, you know, should you have 0:13:25.880 --> 0:13:28.040 it in a vacation spot. I mean it's a national park, 0:13:28.040 --> 0:13:32.559 it's still a vacation spot. To the preferential access that 0:13:32.880 --> 0:13:38.400 some reporters and some academics and some even market actors get. Um, 0:13:38.800 --> 0:13:40.959 I don't think people would be at all worried about 0:13:41.000 --> 0:13:43.840 that if the chair were not there. For two and 0:13:43.880 --> 0:13:46.560 I not wasn't this year, of course because it was virtual, 0:13:46.600 --> 0:13:48.920 but normally the chairs there for two and a half days. 0:13:49.360 --> 0:13:51.200 And that's you know, that's the big light in the 0:13:51.240 --> 0:13:54.560 backyard that attracts the moths. Uh And and so the 0:13:54.640 --> 0:13:59.040 question really does become, should there be something like that 0:13:59.040 --> 0:14:01.520 that does give the pre ferential access. Let me just 0:14:01.559 --> 0:14:04.920 add one thing from the board, the Federal Reserve Board's 0:14:04.920 --> 0:14:08.880 own position. It's a mixed blessing. It's a nice um 0:14:09.200 --> 0:14:12.959 vehicle for getting across a big message when you want to. 0:14:13.440 --> 0:14:17.200 But oftentimes the FED chairs doesn't particularly want to get 0:14:17.240 --> 0:14:20.000 a big message and doesn't want a lot of anticipation, 0:14:20.520 --> 0:14:22.800 and to the degree that the feel they have to go, 0:14:22.840 --> 0:14:24.280 it kind of puts them on the spot. And Dan 0:14:24.400 --> 0:14:26.640 could have another vacation. Thank you so much to dant 0:14:26.720 --> 0:14:29.840 Roll of Harvard, the former FED governor. Coming up, the 0:14:29.960 --> 0:14:33.240 revolution that's coming to the auto industry with all the 0:14:33.320 --> 0:14:36.720 challenges and all the opportunities with Mary Barr, a chair 0:14:36.800 --> 0:14:40.360 and CEO of General Motors. That's next on Wall Street 0:14:40.400 --> 0:14:52.680 Week on Bloomberg. This is Bloomberg Wall Street Week with 0:14:52.840 --> 0:14:56.120 David Weston from Bloomberg Radio. We were in Detroit this 0:14:56.160 --> 0:14:59.200 week and had the opportunity to visit General Motors headquarters 0:14:59.200 --> 0:15:02.120 and sit down with a company's chair and CEO, Mary Barrow. 0:15:02.480 --> 0:15:05.120 In a few minutes you'll hear our discussion about electric 0:15:05.200 --> 0:15:08.040 vehicles in the future of GM. But first, as the 0:15:08.080 --> 0:15:10.680 Delta variant spread across the country, I asked her about 0:15:10.720 --> 0:15:13.840 the steps she is taking to keep her employees safe. 0:15:14.200 --> 0:15:18.080 We've been following the safety protocols of the appropriate social distancing, wearing, 0:15:18.160 --> 0:15:22.840 mass screening and has worked quite well. Because of the 0:15:22.920 --> 0:15:25.640 outbreak of the delta variant, we are now back into 0:15:25.680 --> 0:15:27.880 wearing masks in the US, and it varies around the 0:15:27.920 --> 0:15:30.600 world based on what's happening, and our employees have just 0:15:30.640 --> 0:15:34.200 done a phenomenal job of following our safety protocols. So 0:15:34.240 --> 0:15:37.840 we continue to evaluate all options of what we can 0:15:37.880 --> 0:15:41.320 do because we know getting everyone vaccinated is going to 0:15:41.400 --> 0:15:44.359 be critical to stopping the you know, the different variants 0:15:44.400 --> 0:15:47.160 of the disease. Right now, we're also very much focused 0:15:47.160 --> 0:15:49.360 on education because you know, there's a lot of myths 0:15:49.400 --> 0:15:53.360 out there or or a misinformation where people are making 0:15:53.360 --> 0:15:56.800 decisions to not get the vaccine based on bad information. 0:15:56.920 --> 0:15:59.520 So we also are running an education campaign as well. 0:16:00.120 --> 0:16:02.840 So to be clear, do you know the vaccination status 0:16:02.920 --> 0:16:04.920 of your employees? Are you asking that question? Are you 0:16:05.000 --> 0:16:07.400 asking them to tell you if they're vaccinated? We are 0:16:08.120 --> 0:16:10.800 requesting in the United States, and we're working to do 0:16:10.840 --> 0:16:13.680 that around the globe, obviously following the local laws or 0:16:13.720 --> 0:16:16.480 country laws, and so we are working on that right 0:16:16.520 --> 0:16:18.800 now and that will inform the decisions that we make 0:16:18.840 --> 0:16:22.680 as we move forward. And masks. We wear masks in 0:16:22.720 --> 0:16:27.200 our facilities, whether it's our manufacturing plants, warehouses, offices, mass 0:16:27.240 --> 0:16:30.560 are required whether you're vaccinated or not. So I talked 0:16:30.560 --> 0:16:32.960 to us also about unions and the role of unions 0:16:32.960 --> 0:16:35.120 and all this. First of all, is it okay to 0:16:35.200 --> 0:16:38.480 require vaccinations with the u A W Are they resisting that? 0:16:38.560 --> 0:16:41.480 Are they with that? Are they united with you in this? Well, 0:16:41.600 --> 0:16:44.080 you know, first of all, I would say, in working 0:16:44.120 --> 0:16:46.920 to make sure our workforce is safe, the UAW has 0:16:46.960 --> 0:16:51.360 been a absolute fantastic partner on being data driven, following 0:16:51.360 --> 0:16:54.080 the advice from the CDC, and that's you know, really 0:16:54.080 --> 0:16:55.840 I think what has allowed us to have the very 0:16:55.880 --> 0:16:59.920 successful protocols to not only protect lives, but to protect livelihood. 0:17:00.600 --> 0:17:02.720 And so you know, as we look at what the 0:17:02.840 --> 0:17:04.920 right thing to do as it relates to the vaccine 0:17:05.200 --> 0:17:07.639 will work with the unions and and that will be 0:17:07.680 --> 0:17:10.040 something that we negotiate with them or work with them 0:17:10.080 --> 0:17:11.760 to decide what the right thing to do is. Do 0:17:11.800 --> 0:17:13.560 you try to have the same rules for the our 0:17:13.680 --> 0:17:16.800 employees as for the salary. We we do, but we 0:17:16.880 --> 0:17:20.119 also really respect the fact that some of our workforces 0:17:20.160 --> 0:17:22.240 represented not only by the U a W, but with 0:17:22.280 --> 0:17:24.800 other unions around the globe, and it's an important part 0:17:24.800 --> 0:17:28.200 to have that dialogue as part of the contractual process. 0:17:28.200 --> 0:17:30.399 Where's GM on bringing people back into the office. This 0:17:30.480 --> 0:17:33.119 is a hot topic all through US industries, certainly in 0:17:33.119 --> 0:17:35.360 New York. There's a whole debate by banks, for example, 0:17:35.560 --> 0:17:37.679 where are you in bringing your people back to the office. Well, 0:17:37.720 --> 0:17:39.680 several months ago we rolled out what we call work 0:17:39.720 --> 0:17:43.480 appropriately and for those who don't necessarily have to be 0:17:43.520 --> 0:17:45.119 at work to do their jobs. First, I want to 0:17:45.119 --> 0:17:47.240 give a big shout out to all the people, whether 0:17:47.240 --> 0:17:53.120 they're in our our manufacturing, fertilities, warehouses, R and D labs, design, 0:17:53.560 --> 0:17:55.880 thank you for coming to work every day and following 0:17:55.880 --> 0:17:58.280 the protocol so you can do your work safely. For 0:17:58.359 --> 0:18:01.919 the portion of our workforce that UM doesn't necessarily always 0:18:01.920 --> 0:18:04.480 have to be in the office. It's work appropriately and 0:18:04.520 --> 0:18:07.280 we're leaving it to the individual and their leader decide 0:18:07.520 --> 0:18:09.760 where can you do your best work, and so far 0:18:09.800 --> 0:18:13.120 it's been very well received by our employees. Going back 0:18:13.119 --> 0:18:14.760 to the unions for a moment, let me ask a 0:18:14.760 --> 0:18:18.040 broader question about electric vehicles. We saw President Biden again 0:18:18.119 --> 0:18:20.359 with you at the White House and ahead of the 0:18:20.440 --> 0:18:22.480 u a W was there very specificly involved in The 0:18:22.480 --> 0:18:24.639 President talked a fair amount about the world of union 0:18:24.680 --> 0:18:28.800 workers in this process. Uh, it's the union help in 0:18:28.880 --> 0:18:31.560 moving faster evs or can it be a hindrance? How 0:18:31.640 --> 0:18:34.760 is it working? Because sometimes unions have not always been 0:18:34.760 --> 0:18:38.399 progressive in adopting new technologies. Well, I can only speak 0:18:38.400 --> 0:18:40.200 to the relationship that we have with the U a 0:18:40.440 --> 0:18:43.720 W and talking about the technology and frankly, it's opportunities 0:18:43.760 --> 0:18:46.520 for growth and its opportunities to make sure that the 0:18:46.600 --> 0:18:50.960 workforce that they represent, our workforce, that they have these opportunities. 0:18:50.960 --> 0:18:53.960 We go forward and with what we're doing at Factory zero, 0:18:54.240 --> 0:18:56.800 UM and other plants around the world are and and 0:18:56.840 --> 0:19:00.320 specifically in the US, we're making sure we provide the means, 0:19:00.320 --> 0:19:02.720 so they'll be part of our all electric future. So 0:19:02.800 --> 0:19:05.479 I think it's very positive right now. So as you 0:19:05.520 --> 0:19:08.320 look forward to this future that you clearly have crafted 0:19:08.359 --> 0:19:10.920 and you've laid on detail, and let's be honest, it's 0:19:10.960 --> 0:19:13.760 it's going well into the future in success, it's gonna 0:19:13.880 --> 0:19:16.440 last well passed you and me. As a practic matter, 0:19:16.920 --> 0:19:18.600 as you look at what is the thing that you 0:19:18.640 --> 0:19:21.800 worry the most about, what could be a potential hindrance 0:19:21.880 --> 0:19:24.879 to achieving what needs to be achieved. Well, one of 0:19:24.880 --> 0:19:26.879 the things I talked about, I feel very confident we 0:19:26.920 --> 0:19:29.720 have the right strategy and we have the adaptability that 0:19:29.760 --> 0:19:31.760 if we have to make changes in tweaks here and there, 0:19:31.800 --> 0:19:34.720 we will. But it's speed, speed of execution, and that's 0:19:34.720 --> 0:19:37.520 what I talk about to our our team all the time, 0:19:37.760 --> 0:19:39.920 and making sure we're getting out of our own way 0:19:40.280 --> 0:19:42.959 and getting rid of bureaucracy so we can move quickly 0:19:43.000 --> 0:19:47.240 to achieve this vision. Uh. So, you have had a 0:19:47.280 --> 0:19:50.520 wonderful run at General Motors. Tell me about your team, 0:19:50.560 --> 0:19:52.320 because one of the things that it's always trucking about 0:19:52.320 --> 0:19:54.679 you as a CEO, you always say it's the team effort. 0:19:54.720 --> 0:19:57.320 It's not just me. Tell me about who you've got 0:19:57.320 --> 0:20:00.520 on your team you particularly rely upon. Well, there's several 0:20:00.560 --> 0:20:03.240 members of the senior leadership team that are just phenomenal. 0:20:03.320 --> 0:20:05.480 I mean Mark Races, our president, and he is the 0:20:05.480 --> 0:20:08.840 most one of the most knowledgeable you know, car people, 0:20:09.280 --> 0:20:12.240 I think on the globe in the globe, So he 0:20:12.600 --> 0:20:15.320 does a phenomenal job. And then, um, you know, we 0:20:15.400 --> 0:20:18.119 have people who have been at the company many years, 0:20:18.160 --> 0:20:21.560 like myself and Mark, Steve Carlisle who runs North America. 0:20:21.760 --> 0:20:23.640 But then we have people who have just recently joined 0:20:23.640 --> 0:20:27.199 the company like Paul Jacobson, our CEO, Alan Wexler, who 0:20:27.280 --> 0:20:30.920 came from Sapient. And really the benefit of having all 0:20:30.920 --> 0:20:34.240 these diverse experiences and being from different industries, but also 0:20:34.280 --> 0:20:36.600 the deep knowledge of our industry I think is what 0:20:36.680 --> 0:20:39.640 makes General Motors Leadership team special and why we're able 0:20:39.640 --> 0:20:41.919 to move so quickly. That was Mary Barr, Chair and 0:20:42.040 --> 0:20:46.359 CEO of GM. Coming up more with GM's Mary bar 0:20:46.640 --> 0:20:50.000 on the electric future of her company. That's next on 0:20:50.040 --> 0:20:59.520 Wall Street Week on Bloomberg. This is Bloomberg Wall Street Week. 0:20:59.720 --> 0:21:03.720 We've David Weston from Bloomberg Radio. It was only a 0:21:03.760 --> 0:21:06.639 dozen years ago that the American Auto industry stood on 0:21:06.680 --> 0:21:10.040 the brink of collapse during the Great Financial Crisis, something 0:21:10.040 --> 0:21:13.800 President Obama said he could not let happen. We cannot 0:21:13.840 --> 0:21:17.879 and must not and we will not let our auto 0:21:17.960 --> 0:21:21.560 industry simply vanish. And so the industry went through a 0:21:21.600 --> 0:21:26.200 painful restructuring to emerge smaller, more efficient, and more profitable. 0:21:26.680 --> 0:21:29.280 And no sooner did he get through all that than 0:21:29.320 --> 0:21:32.000 it has to reinvent itself all over again. As the 0:21:32.080 --> 0:21:35.199 nation and the world moved to electric vehicles. There are 0:21:35.200 --> 0:21:38.320 a vision of the future that is now beginning to happen, 0:21:38.880 --> 0:21:43.840 a future of the automobile industry that is electric, battery, electric, 0:21:43.880 --> 0:21:49.000 plug in hybrid, electric, fuel cell electric. It's electric and 0:21:49.200 --> 0:21:52.199 there's no turning back. Is the industry up to this 0:21:52.240 --> 0:21:54.679 new challenge? And if it is, will it be the 0:21:54.680 --> 0:21:57.600 traditional car companies who lead the way or will they 0:21:57.640 --> 0:22:00.399 have to make room for the pure play electric vehicle 0:22:00.440 --> 0:22:03.880 makers like Tesla and Rivian dan Ives of web Bush 0:22:03.880 --> 0:22:07.360 says President Biden is creating a huge new market. This 0:22:07.440 --> 0:22:09.520 is the start of what I believe is a five 0:22:09.600 --> 0:22:13.080 trillion dollar market with definitely Biden kicking off the green 0:22:13.119 --> 0:22:16.639 tide away from the US, which is underperformed when we 0:22:16.640 --> 0:22:19.560 look compared to China in Europe, and i've says GM 0:22:19.680 --> 0:22:23.119 is well positioned that as GM proves out its e 0:22:23.240 --> 0:22:25.840 V vision over the coming years, the stock will be 0:22:25.880 --> 0:22:29.240 re rated more as a disruptive technology and EV play 0:22:29.359 --> 0:22:33.800 rather than its traditional auto valuation. Cathy would have our investments. 0:22:33.840 --> 0:22:36.679 On the other hand, says the traditional automakers are just 0:22:36.920 --> 0:22:41.280 too far behind to catch up. The traditional auto manufacturer. 0:22:41.280 --> 0:22:42.720 If you look at their R and D budgets, So 0:22:42.760 --> 0:22:47.520 you look at GMS of it's R and D dollars 0:22:47.560 --> 0:22:53.280 and I'm sorry, uh, capital spending is allocated to electric 0:22:53.680 --> 0:22:56.160 they should be at almost a hundred now given what's 0:22:56.160 --> 0:22:59.600 about to happen. They have just gotten started and what 0:22:59.720 --> 0:23:06.840 they delivered our cars that don't even meet whether it's 0:23:07.080 --> 0:23:12.760 range or other metrics, um the model esque circuit two 0:23:12.760 --> 0:23:15.640 thousand twelves. But in the end it may not be 0:23:15.720 --> 0:23:19.320