1
00:00:02,360 --> 00:00:06,680
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:06,920 --> 00:00:09,360
Speaker 2: Gun Younkin is here. I nearly got that out in

3
00:00:09,400 --> 00:00:09,920
Speaker 2: one go.

4
00:00:09,920 --> 00:00:11,760
Speaker 1: Good morning, good morning, Thanks for having me.

5
00:00:14,000 --> 00:00:15,280
Speaker 2: We sit here at the Airshe and I talked to

6
00:00:15,320 --> 00:00:17,959
Speaker 2: you about this over the last few years. This is

7
00:00:17,960 --> 00:00:20,800
Speaker 2: a really integrated industry. Okay, A lot of the companies

8
00:00:20,800 --> 00:00:23,760
Speaker 2: that are here are headquartered in your state, A lot

9
00:00:23,760 --> 00:00:26,920
Speaker 2: of Virginians are here, but it's a really integrate This

10
00:00:26,960 --> 00:00:28,800
Speaker 2: is a global industry. It's not a Virginia industry. It's

11
00:00:28,840 --> 00:00:31,640
Speaker 2: on American industry. It's a global industry, the aerospace industry,

12
00:00:32,040 --> 00:00:34,760
Speaker 2: and a lot of people here are scratching their heads wondering, therefore,

13
00:00:34,800 --> 00:00:39,000
Speaker 2: what happens next in terms of trade. Can I continue

14
00:00:39,000 --> 00:00:41,560
Speaker 2: to manufacture the aircraft will manufacture with US parts in

15
00:00:41,600 --> 00:00:43,360
Speaker 2: them and European parts in them. Do you think there

16
00:00:43,360 --> 00:00:49,240
Speaker 2: should be some exception made for this incredibly complex, different

17
00:00:49,360 --> 00:00:51,360
Speaker 2: industry that we see behind us here.

18
00:00:51,440 --> 00:00:56,160
Speaker 1: Well, there's historically been arrangements around the world time, Yeah,

19
00:00:56,200 --> 00:01:00,160
Speaker 1: big agreements. I think one of the challenges that are

20
00:01:00,200 --> 00:01:02,960
Speaker 1: working through is how much of the content is in

21
00:01:03,040 --> 00:01:06,399
Speaker 1: what countries and who's buying and so I think that

22
00:01:06,440 --> 00:01:09,319
Speaker 1: the next step here is first to understand the mapping

23
00:01:09,319 --> 00:01:11,400
Speaker 1: of all those supply chains, and then second of all,

24
00:01:12,040 --> 00:01:14,479
Speaker 1: to see whether there can be an agreement this reached

25
00:01:14,520 --> 00:01:17,280
Speaker 1: at the end of the day. I've been very supportive

26
00:01:17,440 --> 00:01:22,880
Speaker 1: of the President's position that we need fair trade, and historically,

27
00:01:23,720 --> 00:01:26,520
Speaker 1: across all the industries, the United States has really been

28
00:01:26,520 --> 00:01:30,920
Speaker 1: a disadvantage around the world with trade really being imbalanced,

29
00:01:30,920 --> 00:01:34,560
Speaker 1: and so he's rebalancing these trade agreements. The result of

30
00:01:34,560 --> 00:01:37,319
Speaker 1: that we're seeing in the Commonwealth of Virginia where so

31
00:01:37,440 --> 00:01:42,120
Speaker 1: many companies now are coming to establish US manufacturing and

32
00:01:42,160 --> 00:01:44,080
Speaker 1: the good thing is they're choosing Virginia. To put it down,

33
00:01:44,160 --> 00:01:46,800
Speaker 1: We've had one hundred billion dollars of commitments from companies

34
00:01:46,800 --> 00:01:49,600
Speaker 1: to build and expand in Virginia and we expect to

35
00:01:49,600 --> 00:01:53,040
Speaker 1: continue to see that. So this long term agreement that

36
00:01:53,040 --> 00:01:55,440
Speaker 1: has existed in aerospace for a long time, I think

37
00:01:55,520 --> 00:01:57,880
Speaker 1: will be something that will be addressed. But at the

38
00:01:57,880 --> 00:01:59,680
Speaker 1: heart of it is rebalancing some of these trades.

39
00:02:00,080 --> 00:02:02,920
Speaker 2: But this is this is a reasonably nuanced story. It's

40
00:02:03,200 --> 00:02:06,800
Speaker 2: this is an industry that is quite balanced. Boeing, headquartered

41
00:02:06,800 --> 00:02:10,040
Speaker 2: in your state, exports a lot of aeroplanes around the world.

42
00:02:10,040 --> 00:02:11,440
Speaker 2: You wouldn't want to see that put it at a

43
00:02:11,520 --> 00:02:14,680
Speaker 2: disadvance Is that company put it at a disadvantage? Kelly

44
00:02:14,680 --> 00:02:16,720
Speaker 2: put it a disadvancege when he tries to sell airplanes

45
00:02:16,760 --> 00:02:17,120
Speaker 2: around the.

46
00:02:17,080 --> 00:02:22,760
Speaker 1: World, would you, well, again, it's a meter of a

47
00:02:22,760 --> 00:02:26,520
Speaker 1: matter of balancing around the world. And if we have

48
00:02:27,120 --> 00:02:30,880
Speaker 1: open trade agreements with our partners, much of this is

49
00:02:30,919 --> 00:02:34,120
Speaker 1: done on a bilateral basis with the current administration, then

50
00:02:34,160 --> 00:02:36,560
Speaker 1: it'll settle out. And if we have certain partners that

51
00:02:36,560 --> 00:02:38,600
Speaker 1: aren't willing to do that, then it'll be more difficult.

52
00:02:38,600 --> 00:02:40,800
Speaker 2: You think it's you think it's real. It appears at

53
00:02:40,800 --> 00:02:44,320
Speaker 2: the moment that if you buy lots of Boeing headquartered

54
00:02:44,360 --> 00:02:46,680
Speaker 2: in Virginia, do you get a good trade deal? Yes?

55
00:02:46,800 --> 00:02:48,720
Speaker 2: Is that a reasonable kind of thing to talk about?

56
00:02:48,840 --> 00:02:52,840
Speaker 1: Yeah, if you're if as as an American, Yes, I mean,

57
00:02:52,880 --> 00:02:56,080
Speaker 1: I think one of the real opportunities is for America

58
00:02:56,120 --> 00:02:58,919
Speaker 1: to recognize and this is exactly what President Trump is doing,

59
00:02:59,440 --> 00:03:02,160
Speaker 1: is that access to the US market is really important

60
00:03:02,200 --> 00:03:05,040
Speaker 1: to companies around the world and were therefore we want

61
00:03:05,320 --> 00:03:07,880
Speaker 1: fair trade with all of our counterparties, and to date

62
00:03:07,960 --> 00:03:10,680
Speaker 1: it has not been very fair, and so they're rebouncing

63
00:03:10,760 --> 00:03:13,040
Speaker 1: that and I think this is exactly what all the

64
00:03:13,040 --> 00:03:14,880
Speaker 1: industries are seeing today when we hear the same thing

65
00:03:14,880 --> 00:03:17,519
Speaker 1: in the automotive industry and others that it is complicated

66
00:03:17,520 --> 00:03:21,160
Speaker 1: in supply chains. Well, over time, as things settle down

67
00:03:21,200 --> 00:03:23,840
Speaker 1: and we can see President Trump reaching deals like he's

68
00:03:23,840 --> 00:03:27,760
Speaker 1: reached with the UK, that we will see fair trade,

69
00:03:28,120 --> 00:03:30,359
Speaker 1: and when that fair trade is set, then we'll see

70
00:03:30,360 --> 00:03:32,639
Speaker 1: industries like the aerospace industry settle into it.

71
00:03:32,800 --> 00:03:35,280
Speaker 2: Let's say a little bit more about buy headquartert in

72
00:03:35,360 --> 00:03:38,560
Speaker 2: Virginia makes a lot of aeroplanes in Seattle, though, and

73
00:03:38,600 --> 00:03:41,520
Speaker 2: I'm wondering whether or not increasingly there is an argument

74
00:03:41,560 --> 00:03:45,920
Speaker 2: that says bowe should be headquartered in Seattle, in Washington,

75
00:03:46,480 --> 00:03:48,600
Speaker 2: not in Virginia. Can you kind of see the logic

76
00:03:48,640 --> 00:03:48,840
Speaker 2: of that.

77
00:03:49,360 --> 00:03:52,120
Speaker 1: Well, I also see the logic of their very very

78
00:03:52,200 --> 00:03:56,000
Speaker 1: large company customer being the Pentagon, which happens to be

79
00:03:56,120 --> 00:03:58,960
Speaker 1: in Virginia and where they had a huge win just

80
00:03:59,040 --> 00:04:02,120
Speaker 1: recently as the prime on the new F forty seven,

81
00:04:02,440 --> 00:04:06,320
Speaker 1: which is the next generation fighter for the military. And

82
00:04:06,400 --> 00:04:09,480
Speaker 1: so I think what Boeing has recognized is that one

83
00:04:09,560 --> 00:04:12,240
Speaker 1: they have the best workforce in the world in Virginia,

84
00:04:12,360 --> 00:04:14,560
Speaker 1: and so they tap into that for all of their

85
00:04:14,560 --> 00:04:18,360
Speaker 1: corporate functions, they have great access to their customer and

86
00:04:18,960 --> 00:04:21,760
Speaker 1: I know that the flights from Dulles to Seattle are

87
00:04:21,800 --> 00:04:26,039
Speaker 1: busy as their senior executives move back and forth between

88
00:04:26,120 --> 00:04:27,520
Speaker 1: Washington and Washington.

89
00:04:28,000 --> 00:04:31,920
Speaker 2: Yes, just confusing for the rest of us. Yeah, but

90
00:04:32,240 --> 00:04:33,800
Speaker 2: isn't there an argument that says you need to be

91
00:04:33,839 --> 00:04:37,440
Speaker 2: close to the shop floor. Then yes, the customers at

92
00:04:37,440 --> 00:04:40,200
Speaker 2: the Pentagon, but being the lesson we've learned is be

93
00:04:40,279 --> 00:04:41,239
Speaker 2: close to the shop floor.

94
00:04:41,360 --> 00:04:43,520
Speaker 1: Yeah. So I spoke to Kelly when he came on

95
00:04:44,040 --> 00:04:46,880
Speaker 1: as the new CEO, and we've had this very candid

96
00:04:46,920 --> 00:04:49,279
Speaker 1: discussion and he says, very comfortable with the headquarters being

97
00:04:49,320 --> 00:04:52,039
Speaker 1: in Virginia, but he personally was going to spend an

98
00:04:52,160 --> 00:04:55,719
Speaker 1: enormous amount of time with the commercial airspace business as

99
00:04:55,760 --> 00:04:58,080
Speaker 1: he set that right, And that's exactly what he's done.

100
00:04:58,800 --> 00:05:02,240
Speaker 1: And yet their defense business has been growing. Not to

101
00:05:02,240 --> 00:05:04,520
Speaker 1: mention the fact again that this F forty seven win

102
00:05:04,640 --> 00:05:05,400
Speaker 1: is a big win for them.

103
00:05:05,480 --> 00:05:07,800
Speaker 2: Okay, you may have defense, so let's just kind of

104
00:05:07,880 --> 00:05:10,360
Speaker 2: talk about defense for just a second. Again, it comes

105
00:05:10,360 --> 00:05:13,039
Speaker 2: back to the same argument, should Europe buying more US

106
00:05:13,120 --> 00:05:14,920
Speaker 2: defense in order to balance the books.

107
00:05:16,120 --> 00:05:18,560
Speaker 1: I think the US defense industry would very much like

108
00:05:18,600 --> 00:05:19,120
Speaker 1: for them too.

109
00:05:19,320 --> 00:05:21,680
Speaker 2: But is that a way to get to get over

110
00:05:22,040 --> 00:05:24,479
Speaker 2: the trade agreement disagreement that we have at the moment.

111
00:05:24,520 --> 00:05:27,400
Speaker 1: I think it's one of the tools and the toolkit

112
00:05:27,520 --> 00:05:31,200
Speaker 1: once again to balance the trade and when you have

113
00:05:31,640 --> 00:05:35,359
Speaker 1: large trade and balances where we are in fact buying

114
00:05:35,400 --> 00:05:37,920
Speaker 1: a lot more from in the United States from countries

115
00:05:38,000 --> 00:05:39,919
Speaker 1: than they are buying from US. It's one of the

116
00:05:39,920 --> 00:05:42,760
Speaker 1: tools in the toolkit. And I do think that the

117
00:05:42,800 --> 00:05:48,440
Speaker 1: defense military complex has the most advanced military capabilities in

118
00:05:48,480 --> 00:05:50,440
Speaker 1: the world, and so I think that what we're seeing

119
00:05:50,520 --> 00:05:54,880
Speaker 1: is the collaborations between US companies and particularly European countries.

120
00:05:54,880 --> 00:05:56,920
Speaker 1: I've had a lot of meetings in the last two days.

121
00:05:56,760 --> 00:05:59,120
Speaker 1: Has never been better right now, And in fact, what

122
00:05:59,200 --> 00:06:02,880
Speaker 1: I think has happened is the European and international companies

123
00:06:02,880 --> 00:06:05,120
Speaker 1: are really moving into the United States with break next

124
00:06:05,120 --> 00:06:08,320
Speaker 1: speed because what they're hearing from the Pentagon is we

125
00:06:08,920 --> 00:06:11,080
Speaker 1: want to do more and we want to do it faster,

126
00:06:11,360 --> 00:06:14,320
Speaker 1: and so we need more robust supply chains that can

127
00:06:14,400 --> 00:06:17,720
Speaker 1: deliver what we need faster, and a lot of the

128
00:06:17,760 --> 00:06:20,560
Speaker 1: international companies are starting to come into the United States

129
00:06:20,640 --> 00:06:24,120
Speaker 1: either through a proxy arrangement or with partners, in order

130
00:06:24,160 --> 00:06:25,680
Speaker 1: to try to meet that demand before.

131
00:06:25,480 --> 00:06:29,120
Speaker 2: I throw it back totany your term limited a cabinet job.

132
00:06:29,240 --> 00:06:29,920
Speaker 2: Maybe next year.

133
00:06:30,000 --> 00:06:31,840
Speaker 1: I'm going to finish strong in Virginia and then we'll

134
00:06:31,839 --> 00:06:33,559
Speaker 1: see what happens. I think one of the great things

135
00:06:33,600 --> 00:06:36,159
Speaker 1: that I have realized is I don't need to worry

136
00:06:36,200 --> 00:06:38,599
Speaker 1: about this every day. I'm focused on the commonwealth, and

137
00:06:38,720 --> 00:06:41,240
Speaker 1: Virginia is really roaring. We've just touched through one hundred

138
00:06:41,279 --> 00:06:43,560
Speaker 1: million dollars of capital commandments from companies. We have more

139
00:06:43,560 --> 00:06:46,320
Speaker 1: people working than ever. We're running our fourth straight year

140
00:06:46,480 --> 00:06:49,239
Speaker 1: of another big surplus, which has allow us to reduce

141
00:06:49,320 --> 00:06:53,080
Speaker 1: tax burdens and make big investments. The state's doing extraordinarily well.

142
00:06:53,120 --> 00:06:54,960
Speaker 1: And I've just loved the job I've had, and i

143
00:06:55,000 --> 00:06:57,080
Speaker 1: can't wait to finish strong, and so I've got to

144
00:06:57,080 --> 00:06:57,920
Speaker 1: do that over the next year.

145
00:06:57,960 --> 00:07:00,719
Speaker 2: Pilet's budgets, they're amazing things. Clean bit, Governor, thank you

146
00:07:00,800 --> 00:07:03,840
Speaker 2: very much indeed for joining us. Thank you, Governor Glenn Young,

147
00:07:03,920 --> 00:07:04,760
Speaker 2: King of Virginia,