1 00:00:00,280 --> 00:00:11,680 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Intelligence 2 00:00:11,840 --> 00:00:12,920 Speaker 1: with Paul Sweeney. 3 00:00:13,080 --> 00:00:16,319 Speaker 2: The real app performance has been the US corporate high yield. 4 00:00:16,360 --> 00:00:20,040 Speaker 2: These are two big time blue chip companies. One person's 5 00:00:20,079 --> 00:00:23,720 Speaker 2: cast is another person's animal spirits, breaking market. 6 00:00:23,440 --> 00:00:26,240 Speaker 1: Headlines and corporate news from across the globe. 7 00:00:26,320 --> 00:00:28,560 Speaker 3: Our viewer is if the economy is slowing down, there 8 00:00:28,640 --> 00:00:31,480 Speaker 3: is the possibility of the debt spirals. Both futum competing 9 00:00:31,480 --> 00:00:33,080 Speaker 3: and AI are going to power the future. 10 00:00:33,200 --> 00:00:36,479 Speaker 1: People are just buying everything with tex Bloomberg Intelligence with 11 00:00:36,680 --> 00:00:41,560 Speaker 1: Paul Sweeney on Bloomberg Radio, YouTube and Bloomberg Originals. 12 00:00:41,960 --> 00:00:45,080 Speaker 4: I'm Paul Sweeney, I'm Normalanda filling it on Bloomberg Intelligence. 13 00:00:45,159 --> 00:00:47,440 Speaker 2: On Today's Bloomberg Intelligence Show, we dig inside the big 14 00:00:47,479 --> 00:00:49,839 Speaker 2: business stories impacting Wall Street and the global markets. 15 00:00:49,960 --> 00:00:52,239 Speaker 4: Each in every week, we provide in depth research and 16 00:00:52,320 --> 00:00:54,800 Speaker 4: data on some of the two thousand companies and one 17 00:00:54,880 --> 00:00:57,520 Speaker 4: hundred and thirty industries our analysts cover worldwide. 18 00:00:57,560 --> 00:01:00,120 Speaker 2: Today, we'll look at why the planemaker Boeing reported am 19 00:01:00,120 --> 00:01:02,640 Speaker 2: moreer than expected loss last quarter, plus. 20 00:01:02,320 --> 00:01:05,200 Speaker 4: Well discuss why the Dutch brewing company Heineken reported a 21 00:01:05,240 --> 00:01:06,880 Speaker 4: decline in beer volume sales. 22 00:01:07,000 --> 00:01:09,280 Speaker 3: But first we begin with news in the railroad industry. 23 00:01:09,480 --> 00:01:12,240 Speaker 4: This week, Union Pacific agreed to buy Norfolk Southern and 24 00:01:12,319 --> 00:01:15,120 Speaker 4: a seventy two billion dollar cash in stock transaction. The 25 00:01:15,240 --> 00:01:18,800 Speaker 4: merger would create the first and only US transcontinental Railroad. 26 00:01:18,880 --> 00:01:19,840 Speaker 3: For more on this in. 27 00:01:19,800 --> 00:01:22,160 Speaker 2: The Future of the Railroad Industry, guest host Isabell Lee 28 00:01:22,160 --> 00:01:25,319 Speaker 2: and I were joined by Lee Clascow, Bloomberg Intelligence senior 29 00:01:25,400 --> 00:01:28,440 Speaker 2: Transport Logistics and chipping analysts. We first asked Lee to 30 00:01:28,480 --> 00:01:31,039 Speaker 2: give us his outlook on how this mega deal can 31 00:01:31,040 --> 00:01:31,559 Speaker 2: get done. 32 00:01:31,720 --> 00:01:31,959 Speaker 5: Yeah. 33 00:01:32,040 --> 00:01:35,000 Speaker 6: I think the whole speculation before the deal was formally 34 00:01:35,080 --> 00:01:39,120 Speaker 6: announced about a possible consolidation, and I think people are 35 00:01:39,160 --> 00:01:41,240 Speaker 6: just trying to take maybe a breather right now because 36 00:01:41,280 --> 00:01:43,920 Speaker 6: there are some execution risks. Right this deal is not 37 00:01:44,000 --> 00:01:48,400 Speaker 6: going to close. If it does close until early twenty 38 00:01:48,480 --> 00:01:52,400 Speaker 6: twenty seven, it needs regulatory approval, which is not an 39 00:01:52,440 --> 00:01:55,040 Speaker 6: easy thing to do. There were certain rules that were 40 00:01:55,080 --> 00:01:59,520 Speaker 6: created at the Surface Transportation Board to make it very 41 00:01:59,560 --> 00:02:03,560 Speaker 6: difficult for large Class one rail mergers to happen. That 42 00:02:03,720 --> 00:02:07,120 Speaker 6: was because at one time in the eighties and nineties, 43 00:02:07,520 --> 00:02:12,000 Speaker 6: those sorts of deals resulted in terrible service. I think 44 00:02:12,080 --> 00:02:17,040 Speaker 6: that the rails today were much more cognizant of service 45 00:02:17,120 --> 00:02:20,560 Speaker 6: as it relates to integration. And I don't really think 46 00:02:21,040 --> 00:02:24,600 Speaker 6: you know, either company once once, assuming a merger does happen, 47 00:02:24,840 --> 00:02:27,920 Speaker 6: are going scorched earth in terms of, you know, what 48 00:02:27,960 --> 00:02:30,480 Speaker 6: they're going to do to their networks. You know, they 49 00:02:30,520 --> 00:02:33,280 Speaker 6: mentioned on the call that they had earlier today that 50 00:02:33,320 --> 00:02:35,720 Speaker 6: they're really not going to lay off any uh, you know, 51 00:02:35,880 --> 00:02:39,720 Speaker 6: frontline workers. Most of the probably layoffs are going to 52 00:02:39,800 --> 00:02:45,000 Speaker 6: happen you know, in in in in the offices. So 53 00:02:45,120 --> 00:02:50,359 Speaker 6: you know, that would just mean that services would prevail. 54 00:02:50,680 --> 00:02:52,720 Speaker 6: And one of the reasons why they are doing this, 55 00:02:52,800 --> 00:02:55,480 Speaker 6: you know, from an outsider looking in, you know, it 56 00:02:55,560 --> 00:02:58,600 Speaker 6: does make complete sense. Between the two of them. They 57 00:02:58,639 --> 00:03:02,240 Speaker 6: interchange around a million and car loads a day and 58 00:03:02,280 --> 00:03:04,560 Speaker 6: if they're just able to if that's that car load 59 00:03:04,639 --> 00:03:07,080 Speaker 6: is able to be on the same network, it's not 60 00:03:07,120 --> 00:03:11,800 Speaker 6: only going to improve network fluidity, it will actually lower 61 00:03:11,840 --> 00:03:15,880 Speaker 6: the railroads their costs. Let's hope they pass on some 62 00:03:15,919 --> 00:03:18,280 Speaker 6: of that cost savings to their shippers. I think that's 63 00:03:18,320 --> 00:03:20,359 Speaker 6: what shippers might be concerned about. 64 00:03:20,880 --> 00:03:25,040 Speaker 7: And it'll it'll provide probably a better service product that 65 00:03:25,080 --> 00:03:28,200 Speaker 7: they can go out and compete against other modes such 66 00:03:28,200 --> 00:03:31,600 Speaker 7: as trucks, and you know that's you know, also a 67 00:03:32,040 --> 00:03:35,600 Speaker 7: good thing because you know, from an environmental standpoint, railroads 68 00:03:35,640 --> 00:03:40,000 Speaker 7: are less fuel efficient, you know, trucking kind of deals 69 00:03:40,080 --> 00:03:43,880 Speaker 7: with you know, turnover issues and trucker availability issues. 70 00:03:44,080 --> 00:03:46,720 Speaker 6: Right now that's not an issue, but at times it 71 00:03:46,800 --> 00:03:50,000 Speaker 6: can be. And so you know, it is definitely a 72 00:03:50,120 --> 00:03:54,280 Speaker 6: very interesting deal. It will create the first trans continental railroad. 73 00:03:55,360 --> 00:03:57,560 Speaker 6: But you know, they do have their work cut out 74 00:03:57,600 --> 00:03:59,560 Speaker 6: for them to get that regulatory approval. 75 00:04:00,280 --> 00:04:02,840 Speaker 8: So the deal is worth eighty five billion dollars, How 76 00:04:02,880 --> 00:04:04,760 Speaker 8: do they plan to make money back? What are the 77 00:04:04,800 --> 00:04:07,800 Speaker 8: financial wins so to speak, to justify that happy price? 78 00:04:07,880 --> 00:04:08,080 Speaker 5: Tad. 79 00:04:08,840 --> 00:04:12,440 Speaker 6: Yeah, they laid out two point seven five billion in synergies, 80 00:04:12,440 --> 00:04:14,800 Speaker 6: about one point seven five and that two point seventy 81 00:04:14,840 --> 00:04:17,159 Speaker 6: five is going to be from revenue. So what they're 82 00:04:17,200 --> 00:04:20,200 Speaker 6: saying is that, you know, we can probably get more 83 00:04:21,000 --> 00:04:23,799 Speaker 6: volume onto the network because it all of a sudden 84 00:04:23,880 --> 00:04:27,200 Speaker 6: becomes a much more compelling service offering, and then about 85 00:04:27,240 --> 00:04:30,719 Speaker 6: a billion dollars in cost savings and some of that. Again, 86 00:04:31,040 --> 00:04:34,719 Speaker 6: you don't need to CEOs, you don't need two CFOs. 87 00:04:34,760 --> 00:04:38,560 Speaker 6: You don't need two corporate headquarters, you know, the dimension. 88 00:04:38,640 --> 00:04:41,960 Speaker 6: They are going to have their headquarter in Omaha where 89 00:04:42,040 --> 00:04:45,120 Speaker 6: Union Pacific is located, and keep a I think they 90 00:04:45,160 --> 00:04:51,120 Speaker 6: worded a major presence in Atlanta where Norfolk is currently 91 00:04:52,040 --> 00:04:53,880 Speaker 6: So but you know, obviously they're not going to need 92 00:04:54,320 --> 00:04:56,920 Speaker 6: as much space as they once have. And then there's 93 00:04:56,960 --> 00:05:01,640 Speaker 6: technology benefits, you know, so you're only you know, money 94 00:05:01,680 --> 00:05:06,720 Speaker 6: in technology once, not twice to get those productivity improvements. 95 00:05:06,880 --> 00:05:09,840 Speaker 6: So I think those are the major aspects of it. 96 00:05:10,120 --> 00:05:11,800 Speaker 6: And you know, they mentioned that you know, they could 97 00:05:11,800 --> 00:05:16,720 Speaker 6: be you know, EPs a creative after year or two. 98 00:05:17,760 --> 00:05:20,440 Speaker 2: Well, he mentioned a lot of regulatory agencies are going 99 00:05:20,480 --> 00:05:22,880 Speaker 2: to weigh in here on this deal. I also think 100 00:05:23,240 --> 00:05:26,200 Speaker 2: President Trump is likely to weigh in. Do we know 101 00:05:26,720 --> 00:05:29,680 Speaker 2: anything about how he might view this deal or just 102 00:05:29,720 --> 00:05:31,520 Speaker 2: consolidation in general? 103 00:05:32,080 --> 00:05:34,320 Speaker 3: What's the views as to the Trump administration? 104 00:05:35,160 --> 00:05:39,000 Speaker 6: I mean, we don't. The language that management noted on 105 00:05:39,040 --> 00:05:42,680 Speaker 6: the call is like they wouldn't have moved forward with 106 00:05:42,720 --> 00:05:46,640 Speaker 6: this transaction if they felt that it was impossible to 107 00:05:46,640 --> 00:05:50,320 Speaker 6: get regulatory approval. So whether that means they were talking 108 00:05:50,360 --> 00:05:53,279 Speaker 6: to the administration, whether that means they were talking to 109 00:05:53,320 --> 00:05:57,560 Speaker 6: the STB or the DOJ, or everybody in between. That's 110 00:05:57,640 --> 00:05:59,559 Speaker 6: kind of you know, if you read between the lines, 111 00:05:59,640 --> 00:06:01,960 Speaker 6: is what they were saying. The fact that they're not 112 00:06:02,000 --> 00:06:06,920 Speaker 6: going to lay off any union folks is probably a 113 00:06:07,279 --> 00:06:11,279 Speaker 6: net positive for a Donald president Donald Trump to say, 114 00:06:11,440 --> 00:06:12,960 Speaker 6: you know, this is okay with me. 115 00:06:14,040 --> 00:06:14,240 Speaker 7: You know. 116 00:06:14,279 --> 00:06:17,800 Speaker 6: So there's a lot of unknown still and again this 117 00:06:17,880 --> 00:06:19,600 Speaker 6: is this is going to take a long time. So 118 00:06:19,920 --> 00:06:23,960 Speaker 6: we have a deal. It has to get Surface Transportation 119 00:06:24,040 --> 00:06:27,520 Speaker 6: Board approval, which you know won't happen at least for 120 00:06:27,600 --> 00:06:28,320 Speaker 6: a year and a half. 121 00:06:29,120 --> 00:06:32,080 Speaker 8: Could this park more railroad mergers in the US? And 122 00:06:32,120 --> 00:06:35,159 Speaker 8: if it goes through, what will shipping look like in 123 00:06:35,200 --> 00:06:37,680 Speaker 8: five to ten years? You said, absolutely, please elaborate. 124 00:06:38,320 --> 00:06:42,159 Speaker 6: Yeah. So, so the other railroads in the US are 125 00:06:42,600 --> 00:06:47,039 Speaker 6: Burlington Northern, which is you know, owned by Berkshire Hathway. 126 00:06:47,240 --> 00:06:50,880 Speaker 6: They may make their own bid for Norfolk Southern or decide, 127 00:06:50,920 --> 00:06:54,839 Speaker 6: you know, we're just going to go after CSX because 128 00:06:54,920 --> 00:06:57,640 Speaker 6: if they do not merge, then they're going to be 129 00:06:57,680 --> 00:07:00,600 Speaker 6: at a competitive disadvantage. Why would you want to send 130 00:07:00,640 --> 00:07:04,320 Speaker 6: your freight across two railroads when you can send it 131 00:07:04,360 --> 00:07:09,680 Speaker 6: across one. So it just would make sense. And if 132 00:07:09,720 --> 00:07:12,960 Speaker 6: there is regulatory appetite for this kind of a transaction. 133 00:07:13,920 --> 00:07:16,760 Speaker 6: You know, you could see a Berkshire hacked the way 134 00:07:17,040 --> 00:07:21,320 Speaker 6: and CSX coming and you know, if their competitors were 135 00:07:21,320 --> 00:07:24,240 Speaker 6: able to get a deal, there's no reason why you 136 00:07:24,280 --> 00:07:27,280 Speaker 6: wouldn't get a deal done between the two. A lot 137 00:07:27,280 --> 00:07:29,480 Speaker 6: of ifs and butts and candies and nuts, but we'll 138 00:07:29,480 --> 00:07:30,239 Speaker 6: see what happens. 139 00:07:30,480 --> 00:07:30,600 Speaker 5: Our. 140 00:07:30,680 --> 00:07:35,360 Speaker 4: Thanks Salie Clascow, Bloomberg Intelligence Senior Transport, Logistics and shipping analysts. 141 00:07:35,640 --> 00:07:37,960 Speaker 3: Move next to news in the drug and pharmaceutical space. 142 00:07:38,240 --> 00:07:41,040 Speaker 4: This week, the Danish drug maker Novo Nordisk announced that 143 00:07:41,120 --> 00:07:44,520 Speaker 4: insider Masier Mike Dustar would need to take over as 144 00:07:44,560 --> 00:07:47,120 Speaker 4: the company CEO. This came after Novo cut its full 145 00:07:47,200 --> 00:07:49,560 Speaker 4: year outlook, stating that it's seen a decline of its 146 00:07:49,600 --> 00:07:51,720 Speaker 4: blockbuster weight loss drug wig Goovi for more. 147 00:07:51,840 --> 00:07:54,120 Speaker 2: Guest host Isabel Lee and I were joined by Michael Shaw, 148 00:07:54,320 --> 00:07:58,000 Speaker 2: Bloomberg Intelligence Senior pharmaceutical and biotech analyst. Your First asked 149 00:07:58,000 --> 00:07:59,960 Speaker 2: Michael to break down Novo's a recent guy. 150 00:08:00,080 --> 00:08:02,920 Speaker 9: It's reported guidance now is calling for some percent sales 151 00:08:02,920 --> 00:08:07,120 Speaker 9: growth six percent operating profit growth after adjusting for currency, 152 00:08:07,120 --> 00:08:11,680 Speaker 9: and that compares to fourteen and fifteen percent respectively previously. 153 00:08:12,200 --> 00:08:15,760 Speaker 9: Now a lot of that is related to the US market. There, 154 00:08:15,800 --> 00:08:18,480 Speaker 9: they're still seeing headwinds from compound and GLP one, which 155 00:08:18,520 --> 00:08:21,520 Speaker 9: seems to be the main driver that's affecting wegov growth. 156 00:08:21,880 --> 00:08:24,040 Speaker 9: And there's a lack of visibility here. So all of 157 00:08:24,040 --> 00:08:27,080 Speaker 9: that creates uncertain z for investors and also kind of 158 00:08:27,200 --> 00:08:31,480 Speaker 9: questions around not only only twenty twenty five numbers, but 159 00:08:31,560 --> 00:08:34,320 Speaker 9: the exit rate into twenty six. So there's concerns about 160 00:08:34,360 --> 00:08:37,480 Speaker 9: you know, mid to long term growth given how concentrated 161 00:08:38,840 --> 00:08:42,920 Speaker 9: or how reliance orry Novo is on WE'REGOVI for growth. 162 00:08:43,400 --> 00:08:46,920 Speaker 9: The other headwind is competition to a zepic, So that's 163 00:08:46,960 --> 00:08:49,480 Speaker 9: the GLP one for diabetes and that's another you know, 164 00:08:49,559 --> 00:08:54,000 Speaker 9: key growth driver for the for the company. Second piece 165 00:08:54,040 --> 00:08:57,600 Speaker 9: of news new CEO appointment. So they went with an 166 00:08:57,600 --> 00:09:02,160 Speaker 9: internal candidate. I think the market was perhaps expecting them 167 00:09:02,200 --> 00:09:05,360 Speaker 9: to go for an external candidate, so you know, perhaps 168 00:09:05,360 --> 00:09:08,600 Speaker 9: a bit of disappointment there. But that said, you know 169 00:09:08,720 --> 00:09:11,520 Speaker 9: he's been at the company. So this is Mike Dudster. 170 00:09:12,120 --> 00:09:14,199 Speaker 9: He's been at the company since ninety two. He's been 171 00:09:14,200 --> 00:09:18,320 Speaker 9: heading up international operations since twenty sixteen and over that time. 172 00:09:18,360 --> 00:09:22,559 Speaker 9: You know, we've seen international operations sales double to around 173 00:09:22,640 --> 00:09:25,840 Speaker 9: eighteen billion dollars, So you know, he's an internal higher, 174 00:09:25,880 --> 00:09:29,199 Speaker 9: he's familiar with the company culture. I think it's a 175 00:09:29,240 --> 00:09:31,240 Speaker 9: bit too early to to, you know, to write him 176 00:09:31,240 --> 00:09:34,720 Speaker 9: off before he's even started. Now, his focus is going 177 00:09:34,760 --> 00:09:37,240 Speaker 9: to be on re get gaining ground to Lily in 178 00:09:37,280 --> 00:09:41,560 Speaker 9: the obesitie space, maintaining leadership in a diabetes space, and 179 00:09:41,559 --> 00:09:44,160 Speaker 9: then improving execution. And that's something that's going to be 180 00:09:44,240 --> 00:09:46,880 Speaker 9: key ahead of the Cagary Semma launch as well as 181 00:09:46,880 --> 00:09:50,199 Speaker 9: the launch for its oral JP one in a in obesity, 182 00:09:50,760 --> 00:09:54,360 Speaker 9: particularly given you know Cagary Summer perhaps isn't as differentiated 183 00:09:54,400 --> 00:09:56,920 Speaker 9: as we had hoped for, and then the oral JLP 184 00:09:57,040 --> 00:10:01,560 Speaker 9: one profile perhaps trails of Lily's. 185 00:10:02,280 --> 00:10:04,880 Speaker 8: The new CEO said he's planning to review the company's 186 00:10:04,920 --> 00:10:08,080 Speaker 8: cost base with outstting specific targets and metrics. So could 187 00:10:08,120 --> 00:10:12,080 Speaker 8: this indicate indicate that Novos preparing for a period of 188 00:10:12,200 --> 00:10:15,720 Speaker 8: solar growth after the initial surge and demand, especially the 189 00:10:15,720 --> 00:10:17,120 Speaker 8: blockbuster we Go V drug. 190 00:10:19,320 --> 00:10:21,960 Speaker 9: I mean, I think it will be hard to slash 191 00:10:22,080 --> 00:10:25,679 Speaker 9: R and D to be honest, So I mean, and 192 00:10:26,040 --> 00:10:29,280 Speaker 9: they would need to you know, continue marketing, continue to 193 00:10:29,320 --> 00:10:33,559 Speaker 9: do DTC in order to you know, in order to 194 00:10:33,600 --> 00:10:38,240 Speaker 9: compete with Lily. They're obviously healy heavy investing into Capex 195 00:10:38,280 --> 00:10:41,200 Speaker 9: at the moment, but there is probably some operating leverage 196 00:10:41,240 --> 00:10:44,839 Speaker 9: in there, you know, to provide some sort of relief. 197 00:10:44,880 --> 00:10:47,360 Speaker 9: I mean, the company's got a margin about forty five, 198 00:10:48,120 --> 00:10:49,800 Speaker 9: which is at the top end for large farmer. 199 00:10:50,400 --> 00:10:52,160 Speaker 2: Hey, Mikey, is there any reasons to believe that maybe 200 00:10:52,160 --> 00:10:55,520 Speaker 2: the marketplace has been over estimating the size of this 201 00:10:55,840 --> 00:10:57,360 Speaker 2: OBC drug market? 202 00:10:59,559 --> 00:11:02,120 Speaker 9: I think, I mean, yeah, I think there's always a 203 00:11:02,200 --> 00:11:04,400 Speaker 9: risk with it with an indication this size when you 204 00:11:04,440 --> 00:11:07,520 Speaker 9: look at the market potential. You know, in the US alone, 205 00:11:07,559 --> 00:11:12,080 Speaker 9: it's one hundred and thirty one hundred and forty million patients, 206 00:11:12,080 --> 00:11:13,520 Speaker 9: which which is a target population. 207 00:11:14,000 --> 00:11:15,520 Speaker 3: There is a population head. 208 00:11:16,520 --> 00:11:19,000 Speaker 9: Yeah, I mean there is a risk that you know, 209 00:11:19,120 --> 00:11:22,880 Speaker 9: perhaps consensus did get ahead of itself. But the difficulty 210 00:11:22,920 --> 00:11:26,199 Speaker 9: here is, you know, you have you know, huge runway 211 00:11:26,240 --> 00:11:31,520 Speaker 9: of patients. There's obviously limited supply, so that it's difficult 212 00:11:31,559 --> 00:11:34,160 Speaker 9: to know kind of you know, how quickly that supply 213 00:11:34,640 --> 00:11:38,040 Speaker 9: can come on board. Now, you know, Nova gives guidance 214 00:11:38,080 --> 00:11:40,520 Speaker 9: around you know, the growth prospects. You know, where they 215 00:11:40,520 --> 00:11:42,360 Speaker 9: think sales et cetera are going to go, but they 216 00:11:42,440 --> 00:11:49,080 Speaker 9: keep they don't necessarily quantify, you know, the cadence supply 217 00:11:49,160 --> 00:11:51,120 Speaker 9: and how that how quickly that's going to come online. 218 00:11:51,160 --> 00:11:54,800 Speaker 9: So that kind of makes forecasting quite difficult. And obviously 219 00:11:54,840 --> 00:11:57,160 Speaker 9: they don't want to give that information because it's competitive 220 00:11:57,200 --> 00:11:59,880 Speaker 9: information and they want, you know, lily to know about it. 221 00:12:00,520 --> 00:12:04,360 Speaker 4: Our thanks to Michael Shaw, Bloomberg Intelligence senior BARMA biotech analysts. 222 00:12:04,480 --> 00:12:07,240 Speaker 4: Coming up, we'll discuss the importance of Samsung producing AI 223 00:12:07,320 --> 00:12:08,880 Speaker 4: chips for the ev giant Tesla. 224 00:12:09,000 --> 00:12:11,720 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 225 00:12:12,040 --> 00:12:14,240 Speaker 2: research and data on two thousand companies in one hundred 226 00:12:14,240 --> 00:12:15,040 Speaker 2: and thirty industries. 227 00:12:15,120 --> 00:12:17,600 Speaker 4: You can access Bloomberg Intelligence via b I go on 228 00:12:17,679 --> 00:12:20,280 Speaker 4: the terminal. I'm normal Inda and I'm Paul Sweeney, and 229 00:12:20,360 --> 00:12:21,400 Speaker 4: this is Bloomberg. 230 00:12:26,000 --> 00:12:29,680 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 231 00:12:29,760 --> 00:12:32,840 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 232 00:12:32,880 --> 00:12:36,160 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 233 00:12:36,240 --> 00:12:39,800 Speaker 1: you get your podcasts, or watch us live on YouTube. 234 00:12:40,240 --> 00:12:42,439 Speaker 4: I'm Paul Sweeney and I'm normal, Linda filling it on 235 00:12:42,480 --> 00:12:45,280 Speaker 4: Bloomberg Intelligence. We move on to earnings and the aerospace 236 00:12:45,320 --> 00:12:46,280 Speaker 4: and airline industries. 237 00:12:46,559 --> 00:12:49,760 Speaker 2: This week, planemaker Boeing recorded a smaller than expected loss 238 00:12:49,800 --> 00:12:53,559 Speaker 2: for the second quarter, along with revenue that beat analyst expectations. 239 00:12:53,800 --> 00:12:57,199 Speaker 2: Going also said it almost halted its cash burn last quarter. 240 00:12:57,440 --> 00:13:00,320 Speaker 4: Separately, Jet Blue Airways posted a smaller than expected lost 241 00:13:00,360 --> 00:13:02,360 Speaker 4: in the second quarter as the man rebounded. 242 00:13:02,520 --> 00:13:04,680 Speaker 2: For more guess Isabel Lee and I were joined by 243 00:13:04,760 --> 00:13:09,480 Speaker 2: George ferguson Bloomberg Intelligence. Senior Aerospace, Defense and Airlines analyst. 244 00:13:09,480 --> 00:13:12,360 Speaker 2: First asked George for his key takeaways on Boeing's earnings. 245 00:13:12,840 --> 00:13:15,440 Speaker 10: The free cash flow is still a little bit negative, 246 00:13:15,600 --> 00:13:19,760 Speaker 10: not much cash from operations positive a little bit two 247 00:13:19,840 --> 00:13:22,280 Speaker 10: hundred million. I think it was roughly on two hundred 248 00:13:22,280 --> 00:13:24,880 Speaker 10: negative free cash flow to a positive and cash flow, 249 00:13:24,880 --> 00:13:29,120 Speaker 10: I think roughly. So we're seeing an inflection point here 250 00:13:29,120 --> 00:13:29,680 Speaker 10: in cash flow. 251 00:13:29,760 --> 00:13:30,880 Speaker 6: So cashflow had. 252 00:13:30,800 --> 00:13:33,040 Speaker 10: Been negative for the last I think it was six 253 00:13:33,160 --> 00:13:36,400 Speaker 10: quarters before this, and I think that's just the sign 254 00:13:36,440 --> 00:13:40,520 Speaker 10: of they're getting more aircraft delivered. They're gonna you know, 255 00:13:40,520 --> 00:13:42,600 Speaker 10: they've got a lot of inventory still, they'll pull off 256 00:13:42,600 --> 00:13:46,319 Speaker 10: the shelf to build aircraft going forward to pull a 257 00:13:46,360 --> 00:13:48,960 Speaker 10: bigger report proportion of stuff off the shelf than they 258 00:13:49,000 --> 00:13:53,160 Speaker 10: would during normal times, which should juice that cash flow up. Uh, 259 00:13:53,679 --> 00:13:56,600 Speaker 10: you know pretty well. So I think it's you know, 260 00:13:56,640 --> 00:14:00,800 Speaker 10: the turnaround is still in uh is underway. It looks 261 00:14:00,840 --> 00:14:05,040 Speaker 10: like it's you know, well in you know, in swing 262 00:14:05,920 --> 00:14:08,200 Speaker 10: in the results we saw and the way you know, 263 00:14:08,840 --> 00:14:11,679 Speaker 10: company management commented on the end of the year and 264 00:14:11,760 --> 00:14:14,760 Speaker 10: so you know, I think it was a pretty good 265 00:14:15,000 --> 00:14:17,800 Speaker 10: results quarter for Boeing again, turn around intact. 266 00:14:18,280 --> 00:14:21,040 Speaker 8: How are they addressing quality in safety issues, especially when 267 00:14:21,040 --> 00:14:23,040 Speaker 8: it comes to the seven three seven MAX program. 268 00:14:23,640 --> 00:14:27,320 Speaker 10: Yeah, I mean there it's you know, as Kelly Oprok said, 269 00:14:27,320 --> 00:14:31,600 Speaker 10: it's a process. I think just the sign of seeing 270 00:14:31,760 --> 00:14:36,040 Speaker 10: increased deliveries is showing us that the quality improvement at 271 00:14:36,120 --> 00:14:42,360 Speaker 10: Spirit you know, has has seen success. And they're talking 272 00:14:42,400 --> 00:14:45,600 Speaker 10: about you know, they're at thirty eight seven thirty sevens 273 00:14:45,640 --> 00:14:48,400 Speaker 10: a month now. Kelly Opork says he's going to approach 274 00:14:48,400 --> 00:14:52,000 Speaker 10: the FA in a short period of time and work 275 00:14:52,040 --> 00:14:55,520 Speaker 10: on the forty two. It's seven thirty sevens a month. 276 00:14:55,560 --> 00:14:57,880 Speaker 10: So again he must have some level of confidence that 277 00:14:58,360 --> 00:15:02,040 Speaker 10: his quality and his engineering is good in order in 278 00:15:02,120 --> 00:15:05,200 Speaker 10: order to go further. It's not perfect. They've been slowed 279 00:15:05,200 --> 00:15:08,360 Speaker 10: down a little bit in the certification of seven three 280 00:15:08,440 --> 00:15:11,400 Speaker 10: seven DASH ten and DASH seven. They've pushed them into 281 00:15:11,400 --> 00:15:13,960 Speaker 10: twenty twenty six. I think it's okay. It's not a 282 00:15:14,000 --> 00:15:17,560 Speaker 10: big move. You know, we'd like to see them come 283 00:15:17,600 --> 00:15:21,000 Speaker 10: faster because seven thirty seven DASH ten is a large 284 00:15:21,040 --> 00:15:23,960 Speaker 10: competitor to the Airbus A three twenty, which is very 285 00:15:23,960 --> 00:15:27,160 Speaker 10: successful and one of the reasons they saw United place 286 00:15:27,200 --> 00:15:30,000 Speaker 10: a big order with Airbus. But again, I think that 287 00:15:30,080 --> 00:15:32,280 Speaker 10: you can't expect this stuff to go in a straight line. 288 00:15:32,760 --> 00:15:34,400 Speaker 10: And the fact that they think twenty twenty six is 289 00:15:34,400 --> 00:15:38,040 Speaker 10: when they could get certification, it doesn't tell me anything's broke. 290 00:15:38,120 --> 00:15:41,320 Speaker 10: It just tells me the process is nonlinear, and I 291 00:15:41,360 --> 00:15:43,400 Speaker 10: think to be expected in aerospace, all right. 292 00:15:43,680 --> 00:15:47,720 Speaker 2: Also, jet Blue posted a smaller than expected loss. Here, 293 00:15:47,760 --> 00:15:49,960 Speaker 2: what's going on with Jet Blue and the airline business? 294 00:15:49,960 --> 00:15:52,360 Speaker 2: He's aces because I know the last quarter, Boy, these 295 00:15:52,440 --> 00:15:55,920 Speaker 2: airline companies are really reticent to give any kind of guidance. 296 00:15:56,800 --> 00:15:58,520 Speaker 10: Yeah, I mean a lot of them have come back 297 00:15:58,560 --> 00:16:01,360 Speaker 10: with guidance in a lot of cases is lower a 298 00:16:01,400 --> 00:16:03,680 Speaker 10: lot you know, the airline business right now is really 299 00:16:03,720 --> 00:16:07,120 Speaker 10: counting on less capacity in the second half of twenty 300 00:16:07,200 --> 00:16:09,680 Speaker 10: twenty five, and we'll see how that goes. Last time 301 00:16:09,720 --> 00:16:12,960 Speaker 10: I looked at domestic capacity plans for three Q it's 302 00:16:13,040 --> 00:16:16,640 Speaker 10: kind of about zero growth. I mean, I think they 303 00:16:16,640 --> 00:16:18,920 Speaker 10: need to cut capacity in the marketplace. If you look 304 00:16:18,920 --> 00:16:22,680 Speaker 10: at jet Blues results, load factor fell by I think 305 00:16:22,680 --> 00:16:26,000 Speaker 10: it was around three hundred basis points down to the 306 00:16:26,040 --> 00:16:31,040 Speaker 10: low eighties from mid eighties they and they held fares 307 00:16:31,520 --> 00:16:34,320 Speaker 10: pretty much flat, yields were kind of just up a 308 00:16:34,360 --> 00:16:36,840 Speaker 10: little bit. So that just tells me that there's too 309 00:16:36,920 --> 00:16:40,440 Speaker 10: much capacity in this market. They just can't fill airplanes 310 00:16:40,480 --> 00:16:43,360 Speaker 10: at the right price. Jet Blue has other problems like 311 00:16:43,400 --> 00:16:46,320 Speaker 10: you know, the gear turbo fan keeps them from expanding. 312 00:16:46,360 --> 00:16:48,880 Speaker 10: That means costser ballooning on them. But I don't see 313 00:16:48,880 --> 00:16:51,560 Speaker 10: how they'd want to expand right now. What I see 314 00:16:51,560 --> 00:16:54,480 Speaker 10: as a market that has can't fill airplanes at the 315 00:16:54,520 --> 00:16:58,080 Speaker 10: price that's going to keep them very profitable, and so 316 00:16:58,120 --> 00:17:00,280 Speaker 10: someone's got to cut. And the question is who the 317 00:17:00,280 --> 00:17:03,000 Speaker 10: full service carriers are saying, Hey, we got premium to 318 00:17:03,040 --> 00:17:06,160 Speaker 10: subsidize us. We don't care. The low costs are going 319 00:17:06,160 --> 00:17:08,960 Speaker 10: to have to jet Blue will cut in three Q 320 00:17:09,200 --> 00:17:11,159 Speaker 10: but every time they cut, their costs go high or 321 00:17:11,160 --> 00:17:14,600 Speaker 10: per seed, so they're a bit of a challenging position. 322 00:17:15,080 --> 00:17:17,480 Speaker 8: It does seem like the issues just compound for the 323 00:17:17,520 --> 00:17:20,119 Speaker 8: companies in this space from aircraft shortages. 324 00:17:19,600 --> 00:17:22,320 Speaker 4: Delivery delays, pilot shortages. 325 00:17:21,840 --> 00:17:26,239 Speaker 8: Wage inflation, labor and negotiation and so on. Are there 326 00:17:26,320 --> 00:17:29,240 Speaker 8: differences in how Boeing and Jet Blue addressing the issues 327 00:17:29,359 --> 00:17:33,159 Speaker 8: or is really an industry wide consensus and problem. 328 00:17:33,640 --> 00:17:36,000 Speaker 10: Well, I mean if you talk to Boeing, everybody wants 329 00:17:36,040 --> 00:17:37,960 Speaker 10: an airplane, right and they're sold out in the seven 330 00:17:38,080 --> 00:17:39,639 Speaker 10: thirty seven and seventy eight seven to the end of 331 00:17:39,680 --> 00:17:42,600 Speaker 10: the decade. Everybody wants the newest, and I think what 332 00:17:42,640 --> 00:17:45,480 Speaker 10: needs to happen is, again the airlines are just putting 333 00:17:45,480 --> 00:17:48,400 Speaker 10: too much capacity in the marketplace, especially in the US, 334 00:17:48,960 --> 00:17:52,600 Speaker 10: and someone has to cry uncle and say, hey, you know, 335 00:17:52,760 --> 00:17:55,720 Speaker 10: we can't take the profitability at these levels. Park some 336 00:17:55,800 --> 00:17:59,239 Speaker 10: airplanes get them out of the business so they can 337 00:17:59,280 --> 00:18:02,960 Speaker 10: write size compacity, and I think nobody wants to do it. 338 00:18:03,359 --> 00:18:06,040 Speaker 10: You have some competitors that are in a situation where 339 00:18:06,040 --> 00:18:08,879 Speaker 10: they they've you know, some of them are declared Chapter 340 00:18:09,000 --> 00:18:12,720 Speaker 10: eleven it's like spirit and then and then refashion themselves 341 00:18:12,720 --> 00:18:15,040 Speaker 10: and got back out in the marketplace. But it's either 342 00:18:15,040 --> 00:18:18,199 Speaker 10: someone's gonna have to go away or the market's going 343 00:18:18,280 --> 00:18:21,720 Speaker 10: to have to get negative enough and profitability that people 344 00:18:21,760 --> 00:18:24,959 Speaker 10: start to park airplanes. As we get into laid end 345 00:18:24,960 --> 00:18:26,960 Speaker 10: of this year, four Q and one Q, those are 346 00:18:27,320 --> 00:18:31,200 Speaker 10: weak quarters for the US airline industry. If something doesn't improve, 347 00:18:31,520 --> 00:18:33,600 Speaker 10: If you've got a Jet Blue that's barely positive and 348 00:18:33,680 --> 00:18:37,600 Speaker 10: profitability in two Q without a change in this market, 349 00:18:37,680 --> 00:18:40,360 Speaker 10: that's that's a strong negative. Near the end of the year, 350 00:18:40,400 --> 00:18:42,960 Speaker 10: people will start to cut capacity and try to boost fares. 351 00:18:43,119 --> 00:18:44,879 Speaker 2: So, George, who does that? Is it one of the 352 00:18:44,880 --> 00:18:48,000 Speaker 2: big three? I mean, Jet Blue can't drive capacity in 353 00:18:48,000 --> 00:18:48,600 Speaker 2: this industry. 354 00:18:48,800 --> 00:18:51,400 Speaker 10: It's got to be one of the big three, right, Yeah, Look, 355 00:18:51,400 --> 00:18:54,280 Speaker 10: I don't think it's. The big three are in a 356 00:18:54,640 --> 00:18:57,359 Speaker 10: game of chicken with the low cost right they think 357 00:18:57,880 --> 00:19:00,560 Speaker 10: that they've got pole position here and that they just 358 00:19:00,640 --> 00:19:04,120 Speaker 10: keep capacity and someone's going to fail on the low 359 00:19:04,160 --> 00:19:08,000 Speaker 10: cost side because the low cost doesn't have this premium seating. 360 00:19:08,440 --> 00:19:10,879 Speaker 10: They might be right right right now, it looks like 361 00:19:11,040 --> 00:19:14,199 Speaker 10: their profitabilities hanging in there. The low cost carriers are 362 00:19:14,200 --> 00:19:16,280 Speaker 10: the ones taking it on the chin our. 363 00:19:16,280 --> 00:19:19,679 Speaker 4: Thanks to George Ferguson, Bloomberg Intelligence Senior Aerospace, Defense and 364 00:19:19,800 --> 00:19:21,600 Speaker 4: Airlines analysts. 365 00:19:21,200 --> 00:19:23,680 Speaker 3: We moved to news from the ev giant Tesla. 366 00:19:24,160 --> 00:19:26,359 Speaker 4: This week, we heard Samsung will make AI chips for 367 00:19:26,440 --> 00:19:30,080 Speaker 4: Tesla in a sixteen point five billion dollar multi year deal. 368 00:19:30,320 --> 00:19:32,960 Speaker 4: That's according to Tesla CEO Elon Musk, must be the 369 00:19:32,960 --> 00:19:35,600 Speaker 4: statement on x where he stated that the strategic importance 370 00:19:35,640 --> 00:19:37,560 Speaker 4: of this deal is hard to overstate. 371 00:19:37,720 --> 00:19:39,600 Speaker 2: For more guestos, John Tucker and I were joined by 372 00:19:39,680 --> 00:19:43,200 Speaker 2: Craig Trudell, Bloomberg Global Autos Editor. We first asked Craig 373 00:19:43,320 --> 00:19:45,840 Speaker 2: what this deal between Tesla and Samsung will do for 374 00:19:45,920 --> 00:19:46,520 Speaker 2: the carmaker. 375 00:19:46,920 --> 00:19:52,680 Speaker 11: Samsung is an existing supplier of these high powered semiconductors 376 00:19:52,760 --> 00:19:56,040 Speaker 11: that are used for its driving systems that it markets 377 00:19:56,160 --> 00:20:00,880 Speaker 11: as a full self driving and autopilot. Contrary to those 378 00:20:00,960 --> 00:20:03,840 Speaker 11: names that you know, you cannot buy a Tesla today 379 00:20:03,880 --> 00:20:06,880 Speaker 11: and have to drive itself for you. You still need 380 00:20:06,960 --> 00:20:10,359 Speaker 11: to pay attention and keep your hands on the wheel 381 00:20:10,400 --> 00:20:12,600 Speaker 11: and eyes on the road. But uh, it is the 382 00:20:12,640 --> 00:20:16,360 Speaker 11: case that those systems are are becoming more more capable 383 00:20:16,440 --> 00:20:19,199 Speaker 11: and that Tesla's trying to kind of press the issue 384 00:20:19,200 --> 00:20:21,800 Speaker 11: with them to the point where uh, you know, they're 385 00:20:21,800 --> 00:20:24,080 Speaker 11: they're taking people out of out of the driver's seat 386 00:20:24,160 --> 00:20:28,960 Speaker 11: and and having uh you know, supervisors in the in 387 00:20:29,000 --> 00:20:32,440 Speaker 11: the passenger seat of cars in Austin, Texas, and and 388 00:20:32,480 --> 00:20:36,080 Speaker 11: trying to to take that elsewhere as well. Uh this 389 00:20:36,080 --> 00:20:40,600 Speaker 11: this will be interestingly. Musk announced that they will be 390 00:20:40,760 --> 00:20:44,080 Speaker 11: going to a T S M C chip for for 391 00:20:44,240 --> 00:20:47,920 Speaker 11: the next generation of Semis that they use and then 392 00:20:48,000 --> 00:20:51,679 Speaker 11: go to Samsung, relying on on supply from from this 393 00:20:51,720 --> 00:20:55,160 Speaker 11: plant in Texas that that Samsung is boys to to open, 394 00:20:55,440 --> 00:20:57,119 Speaker 11: uh in the near future. 395 00:20:57,680 --> 00:21:01,360 Speaker 12: And what near future? How how long does it take 396 00:21:01,400 --> 00:21:05,520 Speaker 12: to build a fab plant? The cool kids say fab right. 397 00:21:06,080 --> 00:21:09,479 Speaker 11: Yeah, that's right. Yeah, I mean I think, uh, you know, 398 00:21:09,520 --> 00:21:12,560 Speaker 11: the the this is a project on Samsung's part that's 399 00:21:12,600 --> 00:21:14,600 Speaker 11: been in the worse for some time, right, and and 400 00:21:14,680 --> 00:21:18,040 Speaker 11: so uh they they you know, were sort of moved 401 00:21:18,119 --> 00:21:21,520 Speaker 11: actually by the Chips Act under the Biden administration, and 402 00:21:21,880 --> 00:21:25,160 Speaker 11: Trump uh was was critical of of the Chips Act, 403 00:21:25,640 --> 00:21:27,520 Speaker 11: you know, on the on the campaign trail. And yet 404 00:21:27,800 --> 00:21:30,760 Speaker 11: we've seen uh sort of a continuation and somewhat of 405 00:21:30,760 --> 00:21:33,760 Speaker 11: an embrace of it. Uh you know, as we've we've 406 00:21:33,760 --> 00:21:37,560 Speaker 11: seen a change in the White House, uh in terms 407 00:21:37,560 --> 00:21:41,120 Speaker 11: of the exact timing of when exactly this new AI 408 00:21:41,280 --> 00:21:44,240 Speaker 11: chip uh you know, will will be coming out of 409 00:21:44,240 --> 00:21:47,159 Speaker 11: that Texas factory. It's it's not yet clear, and the 410 00:21:47,200 --> 00:21:50,040 Speaker 11: companies have have not said much because uh, you know, 411 00:21:50,200 --> 00:21:53,080 Speaker 11: they of course agreed to uh you know, some some 412 00:21:53,119 --> 00:21:57,000 Speaker 11: privacy here that must proceeded to to sort of loosen 413 00:21:57,080 --> 00:22:00,879 Speaker 11: up on you know, at least over social media. 414 00:22:01,040 --> 00:22:04,040 Speaker 2: Craig, do we know at this stage to what extent 415 00:22:04,119 --> 00:22:07,080 Speaker 2: Elon Musk is engaged in the day to day the 416 00:22:07,160 --> 00:22:12,080 Speaker 2: strategic of Tesla and any stepped back from his doze responsibilities. 417 00:22:13,280 --> 00:22:15,000 Speaker 11: I mean, I think you can you can glean so 418 00:22:15,160 --> 00:22:20,120 Speaker 11: much from his his you know activity on x as 419 00:22:20,119 --> 00:22:22,720 Speaker 11: to what he's paying attention to. And it absolutely is 420 00:22:22,720 --> 00:22:25,920 Speaker 11: the case that we're seeing him him posting more about 421 00:22:26,000 --> 00:22:28,200 Speaker 11: things like this deal with Samsung, and I do think 422 00:22:28,200 --> 00:22:31,640 Speaker 11: that that's helpful sort of for for sentiment around Tesla. 423 00:22:31,880 --> 00:22:35,040 Speaker 11: And yet I would say too that you know, if 424 00:22:35,240 --> 00:22:38,720 Speaker 11: if there was a sort of you know, scorecard, sort 425 00:22:38,760 --> 00:22:41,160 Speaker 11: of an informal scorecard that you'd be keeping track of 426 00:22:41,560 --> 00:22:44,159 Speaker 11: where he's sort of devoting most of his time and 427 00:22:44,440 --> 00:22:47,120 Speaker 11: attention to I would say it's as much or more 428 00:22:47,160 --> 00:22:50,040 Speaker 11: on XAI and just ai in general than it is 429 00:22:50,080 --> 00:22:54,879 Speaker 11: on Tesla specifically. You know, you heard from him a 430 00:22:54,920 --> 00:22:56,959 Speaker 11: few months ago that he would really be turning his 431 00:22:57,000 --> 00:23:01,480 Speaker 11: attention back to Tesla, you know, as he was making 432 00:23:01,480 --> 00:23:03,840 Speaker 11: his way out of the White House. But I think 433 00:23:03,960 --> 00:23:06,440 Speaker 11: you know, the amount of attention and emphasis he's put 434 00:23:06,480 --> 00:23:08,359 Speaker 11: on trying to catch up to the likes of open 435 00:23:08,400 --> 00:23:13,760 Speaker 11: AI and Google in our artificial intelligence and LMS is 436 00:23:14,359 --> 00:23:18,320 Speaker 11: you know, definitely exceeds you know, the amount of you know, 437 00:23:18,440 --> 00:23:20,520 Speaker 11: noise we're hearing from him about the day to day 438 00:23:20,880 --> 00:23:22,600 Speaker 11: interworkings of Tesla. 439 00:23:23,040 --> 00:23:26,199 Speaker 4: Our thanks to Craig Drudell, Bloomberg Global Autos Editor. Coming up, 440 00:23:26,240 --> 00:23:28,480 Speaker 4: we'll discuss the impact of President Donald Trump's a big, 441 00:23:28,520 --> 00:23:30,120 Speaker 4: beautiful bill on green hydrogen. 442 00:23:30,400 --> 00:23:33,119 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 443 00:23:33,200 --> 00:23:35,639 Speaker 2: IF research and data on two thousand companies and one 444 00:23:35,680 --> 00:23:36,760 Speaker 2: hundred and thirty industries. 445 00:23:37,000 --> 00:23:39,520 Speaker 4: You can access Bloomberg Intelligence via b I go on 446 00:23:39,560 --> 00:23:41,359 Speaker 4: the terminal, I'm normal, Linda. 447 00:23:41,119 --> 00:23:43,240 Speaker 3: And all Paul Sweeney and this is Bloomberg. 448 00:23:51,000 --> 00:23:54,680 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 449 00:23:54,800 --> 00:23:57,479 Speaker 1: weekdays at ten am. He's done on Apple, Cocklay and 450 00:23:57,480 --> 00:24:00,360 Speaker 1: Android Auto with the Bloomberg Business app. That's the non 451 00:24:00,400 --> 00:24:03,640 Speaker 1: demand wherever you get your podcasts, or watch us live 452 00:24:03,720 --> 00:24:04,760 Speaker 1: on YouTube. 453 00:24:05,040 --> 00:24:07,159 Speaker 4: I'm Paul Sweeney and I'm normal into filling in on 454 00:24:07,200 --> 00:24:08,200 Speaker 4: Bloomberg Intelligence. 455 00:24:08,320 --> 00:24:10,840 Speaker 3: We moved next to the consumer goods industry this week. 456 00:24:10,920 --> 00:24:13,640 Speaker 4: The Dutch brewing company Heineken reported a decline in beer 457 00:24:13,720 --> 00:24:16,480 Speaker 4: volume sales during the second quarter. This came as Heineken 458 00:24:16,480 --> 00:24:19,679 Speaker 4: feest disputes over price increases with regional buying groups in 459 00:24:19,800 --> 00:24:20,760 Speaker 4: Western Europe. 460 00:24:20,640 --> 00:24:22,360 Speaker 2: The More guest host John Tucker and I were joined 461 00:24:22,400 --> 00:24:25,880 Speaker 2: by Duncan Fox, Bloomberg Intelligence senior consumer products analysts. First, 462 00:24:25,920 --> 00:24:28,000 Speaker 2: they asked Duncan for his take on honingg it's most 463 00:24:28,040 --> 00:24:28,680 Speaker 2: recent guidance. 464 00:24:29,119 --> 00:24:35,359 Speaker 13: Essentially, European retailers decided not delayed pushing the prices up 465 00:24:35,400 --> 00:24:38,840 Speaker 13: after I suppose last year wasn't particularly big on pricing 466 00:24:38,920 --> 00:24:41,159 Speaker 13: the last three percent of the local Heinegen brown, but 467 00:24:41,520 --> 00:24:44,080 Speaker 13: the previous two years when inflation was raging, you know, 468 00:24:44,119 --> 00:24:47,919 Speaker 13: they did get fourteen and ten percent respectively. In twenty 469 00:24:47,920 --> 00:24:51,400 Speaker 13: two and twenty three. Costs of goods are not really 470 00:24:51,480 --> 00:24:53,720 Speaker 13: going up, so I think the retailers just pushed back 471 00:24:53,760 --> 00:24:56,240 Speaker 13: and he took them longer to push to get a 472 00:24:56,280 --> 00:24:59,240 Speaker 13: small price through in Europe and that's just hit the 473 00:24:59,280 --> 00:25:02,320 Speaker 13: So it's about fifty of the overall business. 474 00:25:02,520 --> 00:25:05,480 Speaker 12: What is what is a Heineken class in the pub? 475 00:25:07,640 --> 00:25:09,720 Speaker 13: Well, if you're in London, a heck of a lot. 476 00:25:09,760 --> 00:25:13,600 Speaker 13: It's it's probably eight pounds plus I can be about ten, 477 00:25:15,560 --> 00:25:18,520 Speaker 13: which they are either the Dorset, you'd be lucky to 478 00:25:18,520 --> 00:25:20,440 Speaker 13: get it. You know, it's sort of around five to 479 00:25:20,520 --> 00:25:25,240 Speaker 13: six pound. But nonetheless, you know, when you're pushing the 480 00:25:25,280 --> 00:25:29,080 Speaker 13: price up the premium Heinegen brand, which is probably twenty 481 00:25:29,080 --> 00:25:34,360 Speaker 13: percent more expensive than any other sort of mainstream beer 482 00:25:34,400 --> 00:25:36,639 Speaker 13: that they've got on the pulfo, you can see why 483 00:25:37,200 --> 00:25:39,639 Speaker 13: the volumes struggled in the short term given cost of 484 00:25:39,680 --> 00:25:42,960 Speaker 13: living crisis. So it's something they will resolve and hope 485 00:25:43,000 --> 00:25:45,520 Speaker 13: they have evolved in fact on the pricing, so one 486 00:25:45,720 --> 00:25:47,240 Speaker 13: hope it will get better as we go to the 487 00:25:47,240 --> 00:25:51,200 Speaker 13: second half. With that's a weather that we've found in Europe. 488 00:25:50,920 --> 00:25:53,320 Speaker 2: So we we had I guess the announcement of a 489 00:25:53,320 --> 00:25:56,880 Speaker 2: trade deal between the US and the EU, I don't 490 00:25:56,880 --> 00:25:59,800 Speaker 2: think what's it mean for the spirit's business, the beer business, 491 00:26:00,040 --> 00:26:01,760 Speaker 2: line business asking for a friend. 492 00:26:03,440 --> 00:26:07,639 Speaker 13: I hope you've already stocked up that fifteen percent is 493 00:26:07,640 --> 00:26:10,879 Speaker 13: probably is probably a good outcome given some of the 494 00:26:10,960 --> 00:26:12,960 Speaker 13: rumors that were going around from April on was that 495 00:26:12,960 --> 00:26:14,800 Speaker 13: he could have gone up to two hundred percent. But 496 00:26:15,760 --> 00:26:18,280 Speaker 13: obviously the cost of beer coming in for someone like 497 00:26:18,359 --> 00:26:23,560 Speaker 13: harnek and they basically ship in from either Holland or Mexico. 498 00:26:24,080 --> 00:26:26,960 Speaker 13: Some of the Mexican beer may well be tariff free 499 00:26:26,960 --> 00:26:29,760 Speaker 13: on the us NCA agreement, but then you've got the 500 00:26:29,800 --> 00:26:33,240 Speaker 13: out sort of the cans, So lord knows how much 501 00:26:33,280 --> 00:26:36,240 Speaker 13: that will push the price up. But yeah, they'll just 502 00:26:36,320 --> 00:26:40,080 Speaker 13: have to push prices up on beer and spirits. Spirits 503 00:26:40,080 --> 00:26:45,000 Speaker 13: at fifteen percent probably say it's not huge, but it'll 504 00:26:45,000 --> 00:26:48,359 Speaker 13: mean pushing prices up three four percent something of that 505 00:26:48,560 --> 00:26:51,200 Speaker 13: order on top of what they would normally try and get. 506 00:26:51,320 --> 00:26:54,000 Speaker 13: So it's it's not going to be easy to do, 507 00:26:54,119 --> 00:26:57,480 Speaker 13: but it's not as disastrous as thirty percent or something 508 00:26:57,520 --> 00:27:01,639 Speaker 13: like that, which Renby said would take thirty five million euros, 509 00:27:01,720 --> 00:27:07,199 Speaker 13: So a little bit better than expected or feared, but 510 00:27:07,320 --> 00:27:09,080 Speaker 13: it's still not going to be great and use wine. 511 00:27:09,119 --> 00:27:09,960 Speaker 6: There really isn't. 512 00:27:09,800 --> 00:27:15,680 Speaker 13: Anybody that exports wine that's quoted, so it's a bit 513 00:27:15,680 --> 00:27:17,560 Speaker 13: difficult to say all the impact is, but it will 514 00:27:17,560 --> 00:27:21,320 Speaker 13: certainly make it more expensive compared to your good, US 515 00:27:21,680 --> 00:27:24,240 Speaker 13: great varieties that come on the market. So I would 516 00:27:24,240 --> 00:27:26,200 Speaker 13: have thought you'd see people switch to US lines. 517 00:27:26,520 --> 00:27:28,919 Speaker 12: I find that's kind of disturbing. This part of the 518 00:27:28,960 --> 00:27:33,280 Speaker 12: story where you quote the CEO of Heineken beer markets 519 00:27:33,280 --> 00:27:36,840 Speaker 12: have declined that a pace Heineken has rarely seen any 520 00:27:36,880 --> 00:27:40,280 Speaker 12: time before. Is this the end of humanity as we 521 00:27:40,320 --> 00:27:40,680 Speaker 12: know it? 522 00:27:42,760 --> 00:27:44,560 Speaker 13: Well, if it carries on you, I think there was. 523 00:27:45,080 --> 00:27:48,320 Speaker 13: There's been stories that, you know, the gen Z's have 524 00:27:48,440 --> 00:27:52,760 Speaker 13: given up and drink. I think that's wildly wrong. But 525 00:27:52,800 --> 00:27:56,520 Speaker 13: there's certainly people are abstaining during the week a little bit. 526 00:27:56,920 --> 00:27:59,199 Speaker 13: But the real problem is that people are drinking more 527 00:27:59,240 --> 00:28:03,679 Speaker 13: at home going to the pub, and that's sort of change. 528 00:28:03,800 --> 00:28:06,240 Speaker 13: That's the big change from COVID. So you've got to 529 00:28:06,240 --> 00:28:09,320 Speaker 13: make sure you get your pricing at retailer's right. Goes 530 00:28:09,359 --> 00:28:13,640 Speaker 13: back to your original question, because people that know it's 531 00:28:13,680 --> 00:28:16,919 Speaker 13: sort of more like eighty percent drinking at home in 532 00:28:16,920 --> 00:28:21,080 Speaker 13: the US, it's anywhere between sort of fifty and twenty percent, 533 00:28:22,240 --> 00:28:23,639 Speaker 13: depends on where you're on in the world. There are 534 00:28:23,640 --> 00:28:25,320 Speaker 13: a lot more people drinking at home and going to 535 00:28:25,440 --> 00:28:30,240 Speaker 13: pugs and clubs, so the mix is poor really or 536 00:28:30,320 --> 00:28:33,640 Speaker 13: has been, and it needs the good summer would help 537 00:28:34,359 --> 00:28:36,680 Speaker 13: and in these people to have a bit more money 538 00:28:36,720 --> 00:28:39,600 Speaker 13: in their pocket as well, so maybe feeling a little 539 00:28:39,640 --> 00:28:41,720 Speaker 13: bit more confident that they can go out and spend 540 00:28:41,960 --> 00:28:45,760 Speaker 13: with their friends rather than buying it cheap from retailers 541 00:28:45,960 --> 00:28:47,200 Speaker 13: and entertaining at home. 542 00:28:47,360 --> 00:28:49,880 Speaker 2: Don't get are one of this is a national phenomenon 543 00:28:49,880 --> 00:28:52,000 Speaker 2: because it's a phenomenon on the Jersey Shore, which is 544 00:28:52,320 --> 00:28:55,520 Speaker 2: people are drinking like these iced tea vodka things, the 545 00:28:55,520 --> 00:28:58,960 Speaker 2: White Claws, all this stuff that's not beer. 546 00:28:59,360 --> 00:29:01,400 Speaker 3: Are you seeing that? Is that a trend around the world? 547 00:29:02,200 --> 00:29:04,720 Speaker 13: Unfortunately, it seems to be that is a trend. You 548 00:29:04,880 --> 00:29:08,520 Speaker 13: get a lot of ready to drinks being being pushed 549 00:29:08,960 --> 00:29:11,920 Speaker 13: and they big for sort of twelve eighteen months, and 550 00:29:12,280 --> 00:29:15,280 Speaker 13: it does tend to go against the beer volume more 551 00:29:15,280 --> 00:29:18,960 Speaker 13: than anything else. Spirit companies are doing it with no 552 00:29:19,120 --> 00:29:22,960 Speaker 13: alcohol spirits now and they're also pushing you in bigen 553 00:29:23,040 --> 00:29:25,400 Speaker 13: and tonic or already drink gin and tire and stuff 554 00:29:25,440 --> 00:29:27,840 Speaker 13: like that. So there's just a lot more choice to 555 00:29:27,880 --> 00:29:30,120 Speaker 13: the consumer than there was, you know, when I was 556 00:29:30,120 --> 00:29:34,760 Speaker 13: a kid, So it just takes a little bit of 557 00:29:34,800 --> 00:29:38,040 Speaker 13: a shine off. You can try new things, and I'd 558 00:29:38,080 --> 00:29:41,040 Speaker 13: say people are spending more or spending a similar amount 559 00:29:41,080 --> 00:29:44,000 Speaker 13: of arcoli just buying less of it in terms of volume. 560 00:29:44,080 --> 00:29:47,360 Speaker 13: So it's all about getting the value right. Premium brands 561 00:29:47,360 --> 00:29:49,840 Speaker 13: are doing well in Premium brand did very well in 562 00:29:49,880 --> 00:29:52,040 Speaker 13: these results, but it's only twenty four percent of their 563 00:29:52,280 --> 00:29:55,560 Speaker 13: overall volume, So you know, four point five percent on 564 00:29:55,600 --> 00:29:57,400 Speaker 13: twenty four percent doesn't sort of help. 565 00:29:57,760 --> 00:30:01,280 Speaker 4: Part thinks Sid Duncan Fox Bloomberg Intelligence Senior Consumer Products analysts. 566 00:30:01,440 --> 00:30:04,120 Speaker 2: Each week we look at research from Bloomberg n EF, 567 00:30:04,200 --> 00:30:06,280 Speaker 2: previously known as a New Energy Finance. 568 00:30:06,440 --> 00:30:08,600 Speaker 4: They're the team at Bloomberg that tracks and analyzes as 569 00:30:08,640 --> 00:30:12,600 Speaker 4: the energy transition from commodities to power, transport, industries, buildings, 570 00:30:12,640 --> 00:30:15,320 Speaker 4: and agriculture sectors. This week, we looked at the impact 571 00:30:15,360 --> 00:30:18,320 Speaker 4: of President Donald Trump's Big Beautiful Bill on US clean 572 00:30:18,400 --> 00:30:20,640 Speaker 4: energy spending and on hydrogen For more. 573 00:30:20,680 --> 00:30:22,920 Speaker 2: Guest host John Tucker and I were joined by Martin Tangler, 574 00:30:23,000 --> 00:30:26,120 Speaker 2: Bloomberg n EF's head of hydrogen Research. First to ask 575 00:30:26,160 --> 00:30:29,320 Speaker 2: Martin how the Trump administration is impacting the hydrogen sector. 576 00:30:29,920 --> 00:30:33,600 Speaker 5: Hydrogen was being portrayed, as you've kind of implied, as 577 00:30:33,640 --> 00:30:38,960 Speaker 5: this huge economic opportunity until recently, and if you've been 578 00:30:39,080 --> 00:30:42,280 Speaker 5: following the news, then you may have noticed that there 579 00:30:42,400 --> 00:30:44,720 Speaker 5: was There has been a lot less news on hydrogen 580 00:30:44,760 --> 00:30:49,960 Speaker 5: these days, with a couple exceptions, and I think this 581 00:30:50,160 --> 00:30:53,360 Speaker 5: was to be expected. The industry right now is what 582 00:30:54,080 --> 00:30:56,120 Speaker 5: we have called it bn EF and what Gardner of 583 00:30:56,200 --> 00:31:00,800 Speaker 5: course has called in their high cycle theorem a truffle disillusionment. 584 00:31:00,960 --> 00:31:03,479 Speaker 5: So previously people were too excited. We had this this 585 00:31:03,800 --> 00:31:07,960 Speaker 5: inflated expectation about how much hygiene we were going to use, 586 00:31:07,960 --> 00:31:09,520 Speaker 5: and we were going to use it in cars, We're 587 00:31:09,520 --> 00:31:10,840 Speaker 5: going to use it in heating, We're going to use 588 00:31:10,880 --> 00:31:14,760 Speaker 5: it everywhere, and b and EF Bloomberg NEF you're saying, no, 589 00:31:14,840 --> 00:31:17,240 Speaker 5: that's not going to happen. Let's take a step back. 590 00:31:17,320 --> 00:31:19,920 Speaker 5: And now we're kind of there. So we're seeing projects 591 00:31:19,920 --> 00:31:23,480 Speaker 5: canceled and fid's final investment decisions turning out not to 592 00:31:23,480 --> 00:31:26,160 Speaker 5: be final and being taken back. So what's the was 593 00:31:26,160 --> 00:31:28,640 Speaker 5: the problem? I would say problem number one is low demand. 594 00:31:28,720 --> 00:31:31,120 Speaker 5: So a lot of producers, a lot of companies want 595 00:31:31,120 --> 00:31:33,440 Speaker 5: to make this stuff, but not so many want to 596 00:31:33,440 --> 00:31:35,600 Speaker 5: buy it. Why do they not want to buy it? 597 00:31:35,640 --> 00:31:38,280 Speaker 5: Because it's turned out to be more expensive, especially the 598 00:31:38,320 --> 00:31:43,080 Speaker 5: green kind hydien made from water with renewed electricity, And 599 00:31:43,120 --> 00:31:45,960 Speaker 5: why is that? Why is it expensive Because there's less 600 00:31:46,880 --> 00:31:51,719 Speaker 5: insufficient policy than people expected, which kind of brings us 601 00:31:51,760 --> 00:31:54,520 Speaker 5: now to Trump. So you're asking, what's going on with Trump? 602 00:31:55,000 --> 00:31:57,480 Speaker 5: What's going on in the US. So, of course the 603 00:31:57,520 --> 00:32:01,280 Speaker 5: obb B A but got the right number of bees 604 00:32:01,720 --> 00:32:06,400 Speaker 5: and one big beautiful bill Act got passed just recently, 605 00:32:06,760 --> 00:32:10,520 Speaker 5: and that had a lot of impact on of course 606 00:32:10,560 --> 00:32:15,200 Speaker 5: clean energy and hydrogen as well. In one sentence, I 607 00:32:15,200 --> 00:32:20,040 Speaker 5: would say it cemented the dominance of blue hydrogen over green. 608 00:32:20,120 --> 00:32:22,760 Speaker 5: Of course, gray hydrogen one that we make from fossil 609 00:32:22,760 --> 00:32:24,880 Speaker 5: fuels without any carbon capture and storage. We don't care 610 00:32:24,880 --> 00:32:26,720 Speaker 5: how much we release. That's the one we make most 611 00:32:26,720 --> 00:32:27,080 Speaker 5: of today. 612 00:32:27,200 --> 00:32:27,680 Speaker 12: Hydrogen. 613 00:32:28,640 --> 00:32:31,320 Speaker 5: Yeah, so blue hydrogen is hydrogen that's made the same 614 00:32:31,360 --> 00:32:34,320 Speaker 5: way as gray from fossil fuels, which is made from 615 00:32:34,360 --> 00:32:37,160 Speaker 5: natural gas, but where we try to capture some of 616 00:32:37,200 --> 00:32:41,480 Speaker 5: the CO two that's released in the process and as 617 00:32:41,600 --> 00:32:44,680 Speaker 5: you may be aware and of the Trump administration, they 618 00:32:44,920 --> 00:32:48,600 Speaker 5: like the CO two or CO two capture, so they've 619 00:32:48,640 --> 00:32:52,360 Speaker 5: improved some of the conditions for the forty five Q 620 00:32:52,640 --> 00:32:56,800 Speaker 5: tax credit. Many of the tax credits got canceled or revised, 621 00:32:57,400 --> 00:33:00,040 Speaker 5: but the forty five Q for capture, carbon capture and 622 00:33:00,120 --> 00:33:04,000 Speaker 5: storage actually got better for blue hydrogen producers who now 623 00:33:04,040 --> 00:33:07,720 Speaker 5: can make more money if they do the enhanced oil 624 00:33:07,800 --> 00:33:09,959 Speaker 5: recoveries that they pumped the CO two back into an 625 00:33:09,960 --> 00:33:13,240 Speaker 5: old field and extracted, they may now get the same 626 00:33:13,240 --> 00:33:15,040 Speaker 5: amount of money as if they were just to bury 627 00:33:15,040 --> 00:33:19,440 Speaker 5: that underground. So that's an improvement for blue hydrogen that's 628 00:33:20,240 --> 00:33:22,760 Speaker 5: come out of the obbb A. 629 00:33:24,400 --> 00:33:29,400 Speaker 12: The credits favor hydrogen that's kind of polluting and not 630 00:33:29,640 --> 00:33:31,560 Speaker 12: the stuff that's the good stuff. 631 00:33:33,480 --> 00:33:36,080 Speaker 5: I think I know that I wouldn't I would not 632 00:33:36,200 --> 00:33:39,680 Speaker 5: go that far. So there's another kind of hydrogen's green, 633 00:33:39,720 --> 00:33:42,480 Speaker 5: which I also want to talk about, which is made 634 00:33:42,480 --> 00:33:45,560 Speaker 5: from renewables and the tax credits. There were very generous 635 00:33:45,560 --> 00:33:48,400 Speaker 5: tax credits for that called forty five V, and those 636 00:33:48,440 --> 00:33:51,040 Speaker 5: got scaled down very significantly. So you now must start 637 00:33:51,080 --> 00:33:53,920 Speaker 5: construction by the end of twenty twenty seven, as opposed 638 00:33:53,960 --> 00:33:57,000 Speaker 5: to end of twenty thirty two in order to be 639 00:33:57,000 --> 00:34:00,000 Speaker 5: eligible for this very generous tax credit that was passed 640 00:34:00,160 --> 00:34:05,280 Speaker 5: by the Biden administration in twenty twenty two. So that's 641 00:34:05,320 --> 00:34:08,520 Speaker 5: been a reduction in support for the green kind, which 642 00:34:08,560 --> 00:34:12,399 Speaker 5: is lower emissions, and improvement for the support very very 643 00:34:12,640 --> 00:34:15,560 Speaker 5: limited improvement, but some improvement in the support for blue 644 00:34:15,600 --> 00:34:17,480 Speaker 5: and then blue. There's a lot of questions around how 645 00:34:17,520 --> 00:34:19,839 Speaker 5: much of the carbon you actually capture, but you could 646 00:34:19,920 --> 00:34:22,560 Speaker 5: argue that you could capture ninety five percent, as much 647 00:34:22,560 --> 00:34:25,120 Speaker 5: as ninety five percent in some situations has not been 648 00:34:25,120 --> 00:34:28,080 Speaker 5: done yet but could be done. Then actually it's not 649 00:34:28,200 --> 00:34:30,960 Speaker 5: so unclean. So there's lots of people. Some say it's 650 00:34:31,080 --> 00:34:34,200 Speaker 5: it's it's very dirty, but others say it's it's it 651 00:34:34,239 --> 00:34:35,080 Speaker 5: can be quite clean. 652 00:34:35,640 --> 00:34:35,920 Speaker 3: Martin. 653 00:34:35,960 --> 00:34:38,480 Speaker 2: To the extent that this administration is not as supportive 654 00:34:39,080 --> 00:34:41,840 Speaker 2: of the energy transition that led let us say, is 655 00:34:41,840 --> 00:34:44,640 Speaker 2: maybe some other administrations, What does that mean for the 656 00:34:44,680 --> 00:34:45,560 Speaker 2: global trends here? 657 00:34:45,600 --> 00:34:46,960 Speaker 3: How important is. 658 00:34:46,920 --> 00:34:50,960 Speaker 2: The US in terms of this global transition to alternative 659 00:34:51,040 --> 00:34:52,040 Speaker 2: energy sources? 660 00:34:52,960 --> 00:34:55,439 Speaker 5: Well, I don't think I have the expertise to talk 661 00:34:55,480 --> 00:34:59,280 Speaker 5: about more broadly alternative energy sources more broadly, but certainly 662 00:34:59,600 --> 00:35:04,680 Speaker 5: in terms of hydrogen again, which is my field. I 663 00:35:04,719 --> 00:35:07,520 Speaker 5: would argue the US is very important to the people. 664 00:35:07,600 --> 00:35:12,719 Speaker 5: When the tax credits were announced back in twenty twenty two, 665 00:35:12,840 --> 00:35:16,640 Speaker 5: everybody was really really afraid that the US would jump 666 00:35:16,680 --> 00:35:20,399 Speaker 5: in and take over everything in hydrogen. And then people 667 00:35:20,480 --> 00:35:23,400 Speaker 5: were waiting and waiting for the final guidance on these credits, 668 00:35:23,440 --> 00:35:27,440 Speaker 5: which came very very late, and the US actually did 669 00:35:27,480 --> 00:35:30,279 Speaker 5: not become a leader, but it can still be a 670 00:35:30,360 --> 00:35:34,480 Speaker 5: leader on exports of especially that blue hydrogen that I 671 00:35:34,520 --> 00:35:37,600 Speaker 5: talked about. The Japanese, the Koreans they're keen to import 672 00:35:37,640 --> 00:35:39,840 Speaker 5: some of it to burn in power plants, which we 673 00:35:39,880 --> 00:35:43,600 Speaker 5: have a whole series of report reports that says bad idea. 674 00:35:43,680 --> 00:35:46,200 Speaker 5: But if the Japanese, Japanese and the Koreans want to 675 00:35:46,239 --> 00:35:48,200 Speaker 5: do it, then I think the US is there and 676 00:35:48,239 --> 00:35:50,080 Speaker 5: ready to sell that, and that actually happened. So we 677 00:35:50,160 --> 00:35:53,120 Speaker 5: had a deal between for example, CF Industries and a 678 00:35:53,120 --> 00:35:57,120 Speaker 5: couple of Japanese companies to sell that blue ammonia, which 679 00:35:57,160 --> 00:35:59,600 Speaker 5: is a chemical made out of hydrogen to be burned 680 00:35:59,600 --> 00:36:03,000 Speaker 5: in Japanese power plants are used in steel plants in Japan. 681 00:36:03,680 --> 00:36:06,760 Speaker 5: And then you've got Europe, which is very very focused 682 00:36:06,800 --> 00:36:11,000 Speaker 5: on green hydrogen. They really want to adopt green as 683 00:36:11,000 --> 00:36:15,000 Speaker 5: opposed to blue to reduce dependence on fossil fuels. But 684 00:36:16,440 --> 00:36:19,680 Speaker 5: we still see an opportunity for blue hydrogen from the 685 00:36:19,800 --> 00:36:23,840 Speaker 5: US being exported to Europe if the carbon price is 686 00:36:23,840 --> 00:36:26,680 Speaker 5: here in Europe rise to the levels that we expect 687 00:36:26,680 --> 00:36:30,040 Speaker 5: them to rise to in twenty thirty at bnf. 688 00:36:29,840 --> 00:36:32,640 Speaker 4: R thanks to Martin Tangler, beenap's head of hydrogen research. 689 00:36:33,320 --> 00:36:38,000 Speaker 1: This is the Bloomberg Intelligence podcast, available on Apple, Spotify, 690 00:36:38,200 --> 00:36:41,680 Speaker 1: and anywhere else you get your podcasts. Listen live each 691 00:36:41,719 --> 00:36:45,440 Speaker 1: weekday ten am to noon Eastern on Bloomberg dot com, 692 00:36:45,600 --> 00:36:49,120 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 693 00:36:49,560 --> 00:36:52,480 Speaker 1: You can also watch us live every weekday on YouTube 694 00:36:52,880 --> 00:36:55,120 Speaker 1: and always on the Bloomberg terminal