Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Gun Younkin is here. I nearly got that out in
Speaker 2: one go.
Speaker 1: Good morning, good morning, Thanks for having me.
Speaker 2: We sit here at the Airshe and I talked to
Speaker 2: you about this over the last few years. This is
Speaker 2: a really integrated industry. Okay, A lot of the companies
Speaker 2: that are here are headquartered in your state, A lot
Speaker 2: of Virginians are here, but it's a really integrate This
Speaker 2: is a global industry. It's not a Virginia industry. It's
Speaker 2: on American industry. It's a global industry, the aerospace industry,
Speaker 2: and a lot of people here are scratching their heads wondering, therefore,
Speaker 2: what happens next in terms of trade. Can I continue
Speaker 2: to manufacture the aircraft will manufacture with US parts in
Speaker 2: them and European parts in them. Do you think there
Speaker 2: should be some exception made for this incredibly complex, different
Speaker 2: industry that we see behind us here.
Speaker 1: Well, there's historically been arrangements around the world time, Yeah,
Speaker 1: big agreements. I think one of the challenges that are
Speaker 1: working through is how much of the content is in
Speaker 1: what countries and who's buying and so I think that
Speaker 1: the next step here is first to understand the mapping
Speaker 1: of all those supply chains, and then second of all,
Speaker 1: to see whether there can be an agreement this reached
Speaker 1: at the end of the day. I've been very supportive
Speaker 1: of the President's position that we need fair trade, and historically,
Speaker 1: across all the industries, the United States has really been
Speaker 1: a disadvantage around the world with trade really being imbalanced,
Speaker 1: and so he's rebalancing these trade agreements. The result of
Speaker 1: that we're seeing in the Commonwealth of Virginia where so
Speaker 1: many companies now are coming to establish US manufacturing and
Speaker 1: the good thing is they're choosing Virginia. To put it down,
Speaker 1: We've had one hundred billion dollars of commitments from companies
Speaker 1: to build and expand in Virginia and we expect to
Speaker 1: continue to see that. So this long term agreement that
Speaker 1: has existed in aerospace for a long time, I think
Speaker 1: will be something that will be addressed. But at the
Speaker 1: heart of it is rebalancing some of these trades.
Speaker 2: But this is this is a reasonably nuanced story. It's
Speaker 2: this is an industry that is quite balanced. Boeing, headquartered
Speaker 2: in your state, exports a lot of aeroplanes around the world.
Speaker 2: You wouldn't want to see that put it at a
Speaker 2: disadvance Is that company put it at a disadvantage? Kelly
Speaker 2: put it a disadvancege when he tries to sell airplanes
Speaker 2: around the.
Speaker 1: World, would you, well, again, it's a meter of a
Speaker 1: matter of balancing around the world. And if we have
Speaker 1: open trade agreements with our partners, much of this is
Speaker 1: done on a bilateral basis with the current administration, then
Speaker 1: it'll settle out. And if we have certain partners that
Speaker 1: aren't willing to do that, then it'll be more difficult.
Speaker 2: You think it's you think it's real. It appears at
Speaker 2: the moment that if you buy lots of Boeing headquartered
Speaker 2: in Virginia, do you get a good trade deal? Yes?
Speaker 2: Is that a reasonable kind of thing to talk about?
Speaker 1: Yeah, if you're if as as an American, Yes, I mean,
Speaker 1: I think one of the real opportunities is for America
Speaker 1: to recognize and this is exactly what President Trump is doing,
Speaker 1: is that access to the US market is really important
Speaker 1: to companies around the world and were therefore we want
Speaker 1: fair trade with all of our counterparties, and to date
Speaker 1: it has not been very fair, and so they're rebouncing
Speaker 1: that and I think this is exactly what all the
Speaker 1: industries are seeing today when we hear the same thing
Speaker 1: in the automotive industry and others that it is complicated
Speaker 1: in supply chains. Well, over time, as things settle down
Speaker 1: and we can see President Trump reaching deals like he's
Speaker 1: reached with the UK, that we will see fair trade,
Speaker 1: and when that fair trade is set, then we'll see
Speaker 1: industries like the aerospace industry settle into it.
Speaker 2: Let's say a little bit more about buy headquartert in
Speaker 2: Virginia makes a lot of aeroplanes in Seattle, though, and
Speaker 2: I'm wondering whether or not increasingly there is an argument
Speaker 2: that says bowe should be headquartered in Seattle, in Washington,
Speaker 2: not in Virginia. Can you kind of see the logic
Speaker 2: of that.
Speaker 1: Well, I also see the logic of their very very
Speaker 1: large company customer being the Pentagon, which happens to be
Speaker 1: in Virginia and where they had a huge win just
Speaker 1: recently as the prime on the new F forty seven,
Speaker 1: which is the next generation fighter for the military. And
Speaker 1: so I think what Boeing has recognized is that one
Speaker 1: they have the best workforce in the world in Virginia,
Speaker 1: and so they tap into that for all of their
Speaker 1: corporate functions, they have great access to their customer and
Speaker 1: I know that the flights from Dulles to Seattle are
Speaker 1: busy as their senior executives move back and forth between
Speaker 1: Washington and Washington.
Speaker 2: Yes, just confusing for the rest of us. Yeah, but
Speaker 2: isn't there an argument that says you need to be
Speaker 2: close to the shop floor. Then yes, the customers at
Speaker 2: the Pentagon, but being the lesson we've learned is be
Speaker 2: close to the shop floor.
Speaker 1: Yeah. So I spoke to Kelly when he came on
Speaker 1: as the new CEO, and we've had this very candid
Speaker 1: discussion and he says, very comfortable with the headquarters being
Speaker 1: in Virginia, but he personally was going to spend an
Speaker 1: enormous amount of time with the commercial airspace business as
Speaker 1: he set that right, And that's exactly what he's done.
Speaker 1: And yet their defense business has been growing. Not to
Speaker 1: mention the fact again that this F forty seven win
Speaker 1: is a big win for them.
Speaker 2: Okay, you may have defense, so let's just kind of
Speaker 2: talk about defense for just a second. Again, it comes
Speaker 2: back to the same argument, should Europe buying more US
Speaker 2: defense in order to balance the books.
Speaker 1: I think the US defense industry would very much like
Speaker 1: for them too.
Speaker 2: But is that a way to get to get over
Speaker 2: the trade agreement disagreement that we have at the moment.
Speaker 1: I think it's one of the tools and the toolkit
Speaker 1: once again to balance the trade and when you have
Speaker 1: large trade and balances where we are in fact buying
Speaker 1: a lot more from in the United States from countries
Speaker 1: than they are buying from US. It's one of the
Speaker 1: tools in the toolkit. And I do think that the
Speaker 1: defense military complex has the most advanced military capabilities in
Speaker 1: the world, and so I think that what we're seeing
Speaker 1: is the collaborations between US companies and particularly European countries.
Speaker 1: I've had a lot of meetings in the last two days.
Speaker 1: Has never been better right now, And in fact, what
Speaker 1: I think has happened is the European and international companies
Speaker 1: are really moving into the United States with break next
Speaker 1: speed because what they're hearing from the Pentagon is we
Speaker 1: want to do more and we want to do it faster,
Speaker 1: and so we need more robust supply chains that can
Speaker 1: deliver what we need faster, and a lot of the
Speaker 1: international companies are starting to come into the United States
Speaker 1: either through a proxy arrangement or with partners, in order
Speaker 1: to try to meet that demand before.
Speaker 2: I throw it back totany your term limited a cabinet job.
Speaker 2: Maybe next year.
Speaker 1: I'm going to finish strong in Virginia and then we'll
Speaker 1: see what happens. I think one of the great things
Speaker 1: that I have realized is I don't need to worry
Speaker 1: about this every day. I'm focused on the commonwealth, and
Speaker 1: Virginia is really roaring. We've just touched through one hundred
Speaker 1: million dollars of capital commandments from companies. We have more
Speaker 1: people working than ever. We're running our fourth straight year
Speaker 1: of another big surplus, which has allow us to reduce
Speaker 1: tax burdens and make big investments. The state's doing extraordinarily well.
Speaker 1: And I've just loved the job I've had, and i
Speaker 1: can't wait to finish strong, and so I've got to
Speaker 1: do that over the next year.
Speaker 2: Pilet's budgets, they're amazing things. Clean bit, Governor, thank you
Speaker 2: very much indeed for joining us. Thank you, Governor Glenn Young,
Speaker 2: King of Virginia,