WEBVTT - Surveillance: GM CEO Sees Positive 2021 0:00:00.080 --> 0:00:13.040 Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 0:00:13.480 --> 0:00:17.560 Jay Ley. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.280 Bloomberg dot com, and of course on the Bloomberg lis 0:00:27.360 --> 0:00:30.400 An Saunders joins us now shall swap, Chief investment strategist. 0:00:30.480 --> 0:00:32.760 Le's und great to catch up, as always, just walk 0:00:32.800 --> 0:00:35.280 me through how uncomfortable it is, just to stick with it, 0:00:35.360 --> 0:00:39.120 to stick with what's working at the moment. Well, the 0:00:39.159 --> 0:00:42.800 problem is what is working changes on a week to 0:00:42.840 --> 0:00:45.199 week basis, you know, were there was so much attention 0:00:45.200 --> 0:00:49.200 obviously on the most heavily short at stocks in the game. 0:00:49.240 --> 0:00:54.360 Stop saga almost in reading headlines suggesting that this was 0:00:54.440 --> 0:00:56.880 some brand new phenomenon. But the sort of rise of 0:00:56.920 --> 0:01:00.720 retail traders and the dominance they're having goes back to 0:01:00.880 --> 0:01:04.080 last summer. It's just that when when you first started 0:01:04.120 --> 0:01:07.840 to see that increase in speculative activity in single stocks 0:01:07.840 --> 0:01:11.920 in the options market, it was concentrated in those leadership 0:01:11.959 --> 0:01:14.200 stocks at the time, the fang type stocks, the big 0:01:14.240 --> 0:01:16.760 five stocks, and then they kind of rode the rotation 0:01:17.360 --> 0:01:19.600 that really kicked into ernest in November when we got 0:01:19.640 --> 0:01:23.679 the vaccine news into the energy stocks and the financials, 0:01:23.760 --> 0:01:26.480 and for probably a variety of reasons, not least being 0:01:26.600 --> 0:01:29.520 just the sort of social media kind of driving a 0:01:29.600 --> 0:01:33.240 flash mob, it went into these more arcane parts of 0:01:33.280 --> 0:01:36.319 the market. Now it's there, that sort of attention is 0:01:36.319 --> 0:01:40.120 coming back into more macro earnings related So I don't 0:01:40.160 --> 0:01:42.840 know whether you're going to notice it as much. We've 0:01:42.840 --> 0:01:46.960 just been telling investors just the obvious differentiate between gambling 0:01:47.040 --> 0:01:50.520 and speculating on stocks or areas of the market with 0:01:50.640 --> 0:01:54.480 no underlying fundamental and longer term investing. Lisen, I'm gonna 0:01:54.520 --> 0:01:56.480 bore you with my question. I always asked you, because 0:01:56.520 --> 0:01:58.760 I think you're better at this and anybody in the industry. 0:01:59.040 --> 0:02:02.440 What are we actually doing with our money? Chile Schwab 0:02:02.480 --> 0:02:05.840 has a knowledge of flows second to none. What are 0:02:05.840 --> 0:02:11.000 we actually doing with our money? Well, we've seen a 0:02:11.120 --> 0:02:15.400 slight waning of domestic equity flows in the last couple 0:02:15.400 --> 0:02:18.240 of months, but interestingly, you're seeing a pickup and flows 0:02:18.840 --> 0:02:21.760 two markets outside the United States, which which we think 0:02:21.840 --> 0:02:23.880 is a is a good sign that the whole notion 0:02:23.880 --> 0:02:27.160 of diversification is no longer as hard to sell as 0:02:27.160 --> 0:02:29.280 it's been in the recent past. And then also at 0:02:29.280 --> 0:02:32.320 the more sector level, flows have started to pick up 0:02:32.560 --> 0:02:36.440 on the more cyclical parts of the economy, like energy, 0:02:36.560 --> 0:02:40.760 like materials, like industrials, where you're seeing some outflows out 0:02:40.760 --> 0:02:44.240 of areas like consumer discretionary and tech. So I think 0:02:44.280 --> 0:02:49.320 the flows are shifting towards this recovery focus with that 0:02:50.080 --> 0:02:53.840 more cyclical, commodity oriented bias. Do you think, Lizanne, that 0:02:53.880 --> 0:02:56.840 there is complacency in any corners of these markets, that 0:02:56.919 --> 0:03:00.519 the reflation trade that's underway is under price and that 0:03:00.560 --> 0:03:03.480 will continue to see inflation expectations climb as we get 0:03:03.480 --> 0:03:06.079 more stimulised packages past. Is there any signs to you 0:03:06.520 --> 0:03:10.200 that that consensus has gone too far? Well from an 0:03:10.200 --> 0:03:13.080 inflation perspective, we we think we're going to uh to 0:03:13.240 --> 0:03:16.080 see it, but it's going to be more a function 0:03:16.120 --> 0:03:18.960 of price shocks. We don't think we're we're sowing the 0:03:19.000 --> 0:03:23.120 seeds of anything resembling a late seventies early eighties style 0:03:23.160 --> 0:03:28.000 inflation environment, but one where you have imbalances between demand 0:03:28.200 --> 0:03:31.240 and supply. Uh. We think you'll see that. Plus the 0:03:31.280 --> 0:03:35.760 cops get really easy on an inflation front heading into 0:03:36.000 --> 0:03:39.680 what was the pandemic shutdown period of last year. The 0:03:39.760 --> 0:03:43.920 question is at what point does it spook investors, UM 0:03:43.960 --> 0:03:46.280 and or the FED. I think they're going to have 0:03:46.480 --> 0:03:49.320 a decent amount of patients. The other area of complacency 0:03:49.400 --> 0:03:52.120 I worry about is the sense that once we're at 0:03:52.120 --> 0:03:56.280 heart immunity getting everybody is getting vaccinated, that pent up 0:03:56.360 --> 0:03:59.200 demand is going to be unleashed in this massive wave. 0:03:59.320 --> 0:04:02.120 I just think the nature pent up demand on the 0:04:02.120 --> 0:04:05.560 service society the economy is different than pent up demand 0:04:05.640 --> 0:04:07.800 on the good side, and we really have met a 0:04:07.880 --> 0:04:10.280 lot of the demand on the good side autos, housing, 0:04:10.360 --> 0:04:14.200 housing related, but on the services side. You know, if 0:04:14.240 --> 0:04:16.080 if you used to get a haircut once a month 0:04:16.120 --> 0:04:18.360 and you haven't gotten one, you go back when your 0:04:18.360 --> 0:04:20.920 salon opens and you get a haircut, you don't get 0:04:20.960 --> 0:04:24.720 seven of them. You don't You don't go out to breakfast, brunch, 0:04:24.839 --> 0:04:27.480 launch tea, dinner, and dessert every day to make up 0:04:27.520 --> 0:04:30.640 for that lost restaurant time. You don't take six vacations 0:04:30.640 --> 0:04:32.320 in a row. So I just think we may have 0:04:32.360 --> 0:04:35.719 to curb our enthusiasm for what pent up demand means 0:04:35.800 --> 0:04:38.680 to the economy, given that it's more on the services 0:04:38.680 --> 0:04:41.719 side than the good side. Listen, is there some inconsistency 0:04:41.760 --> 0:04:44.719 in your view in the reflation trade that's being priced 0:04:44.720 --> 0:04:47.520 into many markets that you think is based in reality 0:04:47.680 --> 0:04:53.000 and treasure yields at less than one Well, I think 0:04:53.080 --> 0:04:56.960 that you know, yields where they are reflects and improving 0:04:57.040 --> 0:05:02.520 growth environment less so a aspect for a significant increase 0:05:03.160 --> 0:05:07.840 in inflation, and ultimately from an equity market perspective, it's 0:05:07.880 --> 0:05:11.320 not nominal yields that matter, but of course really yields 0:05:11.400 --> 0:05:14.720 and and you know that story at least being put 0:05:14.720 --> 0:05:18.680 out there by the bulls to support still quite high 0:05:18.680 --> 0:05:24.039 evaluations at this stage hasn't wined. Good catch up. Thanks 0:05:24.040 --> 0:05:36.919 for paying the sismonic of child swap right now. And 0:05:36.920 --> 0:05:39.200 this is a joy and indeed an honor for Bloomberg 0:05:39.200 --> 0:05:40.960 surveillance where we've tried to do as much as we 0:05:41.040 --> 0:05:45.080 can on this horrific natural disaster. Albert co Is at Yale. 0:05:45.560 --> 0:05:49.240 He is definitive and epidemiology for havingy courage to go 0:05:49.320 --> 0:05:52.080 where the poor are. He owns a high ground of 0:05:52.160 --> 0:05:55.440 the study of viruses and vaccines not only in Africa, 0:05:55.480 --> 0:05:59.400 but in South America and particularly the Brazil away from 0:05:59.400 --> 0:06:02.360 the prosper Alardie of the big cities. Dr co joins 0:06:02.440 --> 0:06:05.600 us this morning on vaccination, Albert Cole, I've got to 0:06:05.640 --> 0:06:08.359 go to the southern border of the United States. It 0:06:08.520 --> 0:06:12.520 is impoverished, it is Hispanic and boy, those statistics are grim. 0:06:12.520 --> 0:06:15.760 Tell us about this virus, the vaccine path and the 0:06:15.839 --> 0:06:20.280 poor of America. Yes, Tom, thank you very much for 0:06:20.320 --> 0:06:24.680 the invitation to return on your show. Um. Yeah, I 0:06:24.720 --> 0:06:27.599 think that's all on our all of our bandwidths about 0:06:28.680 --> 0:06:33.000 you know, first of all, the inequitable, um and disproportionate 0:06:33.040 --> 0:06:36.080 impact that this pandemic has had are not only the 0:06:36.120 --> 0:06:39.360 poorest countries, but the poorest segments of our population, and 0:06:39.720 --> 0:06:43.600 that includes the impoverished in the South. And I think 0:06:43.640 --> 0:06:46.200 the second thing that we're worried about is um is 0:06:46.320 --> 0:06:50.880 vaccine is potentially going to amplify that that inequity or 0:06:50.920 --> 0:06:56.880 that disproportionate burden, you know, with with how said, uh, 0:06:57.080 --> 0:07:03.520 with impoverished or um underserved communities having lower access to 0:07:03.640 --> 0:07:07.640 the vaccine than wealthier communities. What are the best practices 0:07:07.720 --> 0:07:11.120 from other countries we can affect to get to the 0:07:11.200 --> 0:07:15.480 poor faster. So I think I think, you know, I 0:07:15.480 --> 0:07:19.680 would hold up certain You know, countries such as Brazil, 0:07:19.760 --> 0:07:21.920 as you mentioned where I worked, where they have had 0:07:21.960 --> 0:07:26.560 mass vaccination programs from measles for yellow fever, and they 0:07:26.640 --> 0:07:29.200 run them effectively. I think the most important thing is 0:07:29.240 --> 0:07:32.400 to keep things simple and the second thing is is 0:07:32.440 --> 0:07:37.520 to provide access and and intense you know, numbers of 0:07:37.560 --> 0:07:42.480 clinics and vaccination sites in those communities that have um 0:07:42.800 --> 0:07:47.040 uh lower uptakes and less access in general. Um in 0:07:47.080 --> 0:07:50.840 that sense, you know, countries like India, Brazil, they're they're 0:07:50.880 --> 0:07:54.040 kind of models for us to to follow. Dr co 0:07:54.640 --> 0:07:58.200 John referenced earlier this study showing that in the United Kingdom, 0:07:58.560 --> 0:08:01.440 one dose of the fire Beyond in Tech vaccine offered 0:08:01.600 --> 0:08:04.840 two thirds of the protection against getting the virus. This 0:08:04.920 --> 0:08:07.400 is very good news and indicate you're going to get 0:08:07.440 --> 0:08:11.400 an acceleration of the impact of a vaccination even before 0:08:11.560 --> 0:08:13.760 the complete dose has taken Do we have a sense 0:08:13.800 --> 0:08:16.320 of how much the vaccine has already acted as a 0:08:16.360 --> 0:08:20.520 circuit breaker to stop the pandemic. Yeah, so, Lisa, So 0:08:20.600 --> 0:08:25.920 that's certainly promising news. And there's a there's also information 0:08:26.000 --> 0:08:28.880 and very good quality information coming out of places like Israel, 0:08:28.960 --> 0:08:31.920 which has been rolling out the vaccine very quickly and 0:08:32.280 --> 0:08:35.000 giving us a snapshot of what what could happen here 0:08:35.000 --> 0:08:37.400 in the United States, you know where to roll out 0:08:38.120 --> 0:08:42.760 across the population in large numbers. So at this moment um, 0:08:42.800 --> 0:08:46.760 you know, unfortunately, in order to really get what we 0:08:46.840 --> 0:08:52.280 call that herd immuni effect, that population level benefit of 0:08:52.280 --> 0:08:56.079 the vaccines through either the first dose or the and 0:08:56.480 --> 0:08:58.640 as well as receiving the second dose, it's going to 0:08:58.840 --> 0:09:03.480 require us vacinating much larger numbers, but much larger suabs 0:09:03.520 --> 0:09:07.520 of our population to do that. Right now, you know, 0:09:07.559 --> 0:09:10.680 we're we're still less than ten percent of our country 0:09:10.720 --> 0:09:13.439 has has been vaccinated. We need to really get those 0:09:13.520 --> 0:09:16.160 numbers up much higher and much faster, and that's going 0:09:16.160 --> 0:09:18.080 to be even more important when we're thinking about the 0:09:18.080 --> 0:09:20.800 threat of variants. Do you think we need to recalibrate 0:09:20.800 --> 0:09:23.800 then to optimize the rollout. Doctor given to the UK 0:09:24.400 --> 0:09:26.199 did roll the dice on this in many ways. I'm 0:09:26.200 --> 0:09:28.440 sure it was supported by some medical evidence, but some 0:09:28.480 --> 0:09:30.439 people push back at the same time about doing a 0:09:30.559 --> 0:09:33.640 one dose and then pushing out the time between the 0:09:33.679 --> 0:09:35.880 first dose and the second dose. Is that something that 0:09:35.920 --> 0:09:40.440 resonates with you, sir, something you would endorse. Yes, I uh, 0:09:40.520 --> 0:09:43.400 you know, I think again, first of all, Vagina, I 0:09:43.400 --> 0:09:45.960 think we have to be humble. Um, we're going to 0:09:46.000 --> 0:09:48.520 be We've learned a lot, you know, in a very 0:09:48.520 --> 0:09:52.840 short time about this, uh, this virus, and we're continuously learning. 0:09:52.960 --> 0:09:55.240 And as these studies come out, and particularly the UK 0:09:55.360 --> 0:09:58.480 study that Lisa said, and that makes us more confident that, 0:09:58.840 --> 0:10:02.160 you know, the policy that that England had proposed, which 0:10:02.200 --> 0:10:04.520 is giving the first shot in delaying the second shot 0:10:04.600 --> 0:10:08.600 so they can they can immunize or vaccinate larger population, 0:10:08.840 --> 0:10:12.160 you know, larger proportional population may be successful. Now we're 0:10:12.160 --> 0:10:15.600 going to obviously everyone's going to be looking at the 0:10:15.640 --> 0:10:18.480 scientific evidence as it rolls out, but it's certainly pointing 0:10:18.520 --> 0:10:21.520 that way. John, Dr Co I'm a little bit reluctant 0:10:21.520 --> 0:10:22.760 to ask you this because I don't think I want 0:10:22.760 --> 0:10:26.280 to know the answer. But the post pandemic future coronavirus 0:10:26.320 --> 0:10:28.679 is not going away. It's probably going to mutate. That's 0:10:28.679 --> 0:10:31.920 what all of the professionals in the field say. Are 0:10:31.960 --> 0:10:34.160 we going to be masthless? What will it look like 0:10:34.360 --> 0:10:37.280 as this continues to become part of the medical backdrop 0:10:37.520 --> 0:10:40.959 of the world. Yes, At Lisa, I think let me 0:10:41.000 --> 0:10:43.360 break that down into two parts. The short term. In 0:10:43.400 --> 0:10:47.240 the long term, UM, we know that these variants are emerging, 0:10:47.480 --> 0:10:50.720 and those variants are being fueled by mutations, and those 0:10:50.840 --> 0:10:54.960 mutations in of themselves being fueled by mass you know, 0:10:55.200 --> 0:11:01.880 large scale, widespread, uncontrolled transmission. And as long as we're 0:11:01.920 --> 0:11:06.280 not controlling transmission, we are going to set ourselves up 0:11:06.520 --> 0:11:11.040 for continued selection of variants that potentially may escape not 0:11:11.120 --> 0:11:14.640 only natural infection or the immunity caused by natural infection, 0:11:14.679 --> 0:11:18.839 but also that let alicit to there conferred by vaccines. 0:11:19.360 --> 0:11:21.280 And let me make a second point, is is that 0:11:21.360 --> 0:11:23.360 you know this can't be done just like in the 0:11:23.480 --> 0:11:26.280 UK or the United States and South Africa. Has to 0:11:26.320 --> 0:11:30.680 be done, you know, the control of transmission as a 0:11:30.800 --> 0:11:33.199 driver for these variants has to be done throughout the 0:11:33.240 --> 0:11:36.160 world because we know these variants can can travel in 0:11:36.280 --> 0:11:39.000 one place to the other. So that that that's really 0:11:39.040 --> 0:11:41.600 certainly the concern in the short run. In the long run, 0:11:41.679 --> 0:11:45.520 that means exactly unfortunately, we see your fears that that 0:11:45.559 --> 0:11:49.160 we're going to have to keep keep continuing the public 0:11:49.160 --> 0:11:54.760 health practice of mass social gathering UM reduction in social distances. 0:11:54.840 --> 0:11:57.000 It's going to be really difficult to reopen international travel 0:11:57.000 --> 0:11:58.840 anytime soon now, But thank you for your time today. 0:11:58.880 --> 0:12:00.920 Don't to wrap a how that of the yel skild 0:12:00.960 --> 0:12:13.080 of medicine. Michelle Meyer joins us out with Bank of 0:12:13.120 --> 0:12:15.800 America and they've done some brilliant maths. We went through 0:12:15.840 --> 0:12:19.120 it with their colleague Ethan Harris a couple of days ago. Michelle, 0:12:19.120 --> 0:12:23.360 four percent, g d pause nine g d P g 0:12:23.440 --> 0:12:26.440 d P. You've got that big fiscal pop. Good morning, 0:12:26.440 --> 0:12:30.640 professor Summers. Up against inflation, which breaks? Do we break 0:12:30.679 --> 0:12:35.880 inflation higher or do we get a fiscal job done? Um? So, 0:12:35.920 --> 0:12:37.800 I think the way that we're thinking about it is 0:12:37.840 --> 0:12:40.640 certainly in the near term there's a big pushed into 0:12:40.679 --> 0:12:43.320 the economy as a result of stimulus. There's a lot 0:12:43.320 --> 0:12:46.720 of money slashing around there already and more is to come, 0:12:46.800 --> 0:12:51.160 and that will generate higher consumers spending. Um And as 0:12:51.200 --> 0:12:54.600 Mike outlined, I think quite clearly for certain industries there 0:12:54.640 --> 0:12:57.880 could be supply constraints and that can exert upward pressure. 0:12:57.960 --> 0:13:01.520 But to me to understand whether and it's a sustainable 0:13:02.040 --> 0:13:05.840 turn higher in inflation, there's two critical components. One inflation 0:13:05.880 --> 0:13:10.719 expectations right, that will that will move this transitory inflation 0:13:11.080 --> 0:13:15.760 shock to something more permanent if people reathet expectations and 0:13:15.840 --> 0:13:18.080 if pricing power picks up on the business side, and 0:13:18.120 --> 0:13:20.440 again people are willing to spend more because they have 0:13:20.559 --> 0:13:23.079 this cash on hand um and that kind of feeds 0:13:23.120 --> 0:13:26.160 on itself. The other critical factor is the health of 0:13:26.160 --> 0:13:29.040 the labor market, to the extent that this demand push 0:13:29.200 --> 0:13:32.240 actually helps to also heal the labor market faster, bring 0:13:32.280 --> 0:13:36.120 the unemployment rate down more quickly. That will provide a 0:13:36.160 --> 0:13:41.480 more again persistent um income support for the consumer through 0:13:41.559 --> 0:13:45.079 wage growth through labor income. We keep them Yeah, well, 0:13:45.120 --> 0:13:47.280 we keep referencing this Bill Dudley column, and I want 0:13:47.280 --> 0:13:49.200 to get your view on some of the specific points 0:13:49.320 --> 0:13:52.439 within it. What he's saying will cause higher inflation. One 0:13:52.440 --> 0:13:54.679 of them is that he sees demand picking up at 0:13:54.679 --> 0:13:57.040 a time when supply is still reduced. You've got restaurants 0:13:57.040 --> 0:13:59.439 that have gone on businesses, a lot of small businesses, 0:13:59.800 --> 0:14:02.199 uh that have not recovered. So given the fact that 0:14:02.240 --> 0:14:04.880 there are fewer establishments out there, they'll be able to 0:14:05.000 --> 0:14:07.160 charge more since they'll be in this influx of demand. 0:14:07.440 --> 0:14:11.160 Do you see that as a potential driver of inflation? Sure? 0:14:11.360 --> 0:14:14.440 I think that's a very fair argument that you have 0:14:15.080 --> 0:14:19.120 an imbalance where demand for certain activities picks up very 0:14:19.200 --> 0:14:21.440 quickly and you don't have the supply we thought it 0:14:21.480 --> 0:14:23.680 actually in the reverse on the good side. I mean, 0:14:23.760 --> 0:14:27.640 think about back in this spring and summer when demand 0:14:27.680 --> 0:14:32.680 was picking up impressively for autos, for household appliances, for electronics, 0:14:32.760 --> 0:14:35.920 and there wasn't enough supply initially, and that created this 0:14:36.040 --> 0:14:38.960 kind of one off level shift higher in prices on goods, 0:14:39.200 --> 0:14:43.160 which are now reversing once supply has returned. So this 0:14:43.240 --> 0:14:47.640 supplied demanding balance should be somewhat temporary, right. The demand 0:14:47.640 --> 0:14:49.720 will pick up for something like restaurants, which was cited, 0:14:49.760 --> 0:14:52.560 and then capacity will come back online over time, and 0:14:52.600 --> 0:14:55.160 that will create a little bit more of a of 0:14:55.160 --> 0:14:57.520 a ceiling on the price pressure. So again, to make 0:14:57.560 --> 0:15:02.080 it persistent, it has to be resetting inflation expectations and 0:15:02.160 --> 0:15:05.280 driving much stronger labor fundamentals as well. The only question 0:15:05.280 --> 0:15:07.520 that matters ready, Michelle, for market participants, will the fet 0:15:07.520 --> 0:15:09.680 be bold enough to look through that burst that bust 0:15:09.760 --> 0:15:11.840 we all anticipate at some point like this year. Do 0:15:11.880 --> 0:15:15.080 you think there will be? I do? I do? I 0:15:15.120 --> 0:15:18.120 think certainly the base effects in the spring. They're ready 0:15:18.160 --> 0:15:20.880 for them. They've been talking about them. As Tom and Mike, 0:15:20.920 --> 0:15:23.080 we're just talking about you know, it's just simple math 0:15:23.120 --> 0:15:25.560 when you look at the year of your comparisons, um 0:15:25.640 --> 0:15:27.400 and I think what they're the FED is going to 0:15:27.440 --> 0:15:30.920 do rightfully so is to look at the bottoms up 0:15:30.960 --> 0:15:34.160 analysis of inflation. Where is inflation picking up on a 0:15:34.280 --> 0:15:37.960 sector basis, and given that, can they make the argument 0:15:37.960 --> 0:15:40.760 that it's a short term supply issue versus something more persistent. 0:15:41.120 --> 0:15:43.280 If they get a turnaround and you know, a notable 0:15:43.360 --> 0:15:45.720 increase in some of these more trimmed mean measures or 0:15:45.800 --> 0:15:48.680 something like shelter, which is more a function to business cycle, 0:15:49.080 --> 0:15:52.600 then they might start to anticipate a higher trend of inflation. 0:15:52.840 --> 0:15:54.960 But they're going to be looking at the components to 0:15:55.120 --> 0:15:57.600 understand whether it's transying or not. It's all That's what's 0:15:57.600 --> 0:15:59.920 amazing about this discussion right now. The Fett is talent. 0:16:00.000 --> 0:16:02.760 You what's going to happen, and it's probably going to happen. 0:16:02.800 --> 0:16:05.160 The base effects will kick in. This is what happens 0:16:05.160 --> 0:16:07.280 when people will re engage with the economy as well. 0:16:07.680 --> 0:16:09.480 And they're also telling us what they will do when 0:16:09.520 --> 0:16:11.760 this happens, yet we are still going to be having 0:16:11.760 --> 0:16:15.080 the same conversation for nine months. This goes up to 0:16:15.120 --> 0:16:17.640 the joke I made earlier about the inflation east does 0:16:17.720 --> 0:16:19.960 mischell Meyer. I turned to the e c I, the 0:16:20.040 --> 0:16:23.400 measurement of wages and benefits, And the key thing here 0:16:23.520 --> 0:16:27.040 is how do you have wage inflation? With Heidie Sheerold's 0:16:27.080 --> 0:16:29.880 and e p I saying nine million bodies are out 0:16:29.880 --> 0:16:32.480 of commission and if you extrap laid out of a 0:16:32.560 --> 0:16:35.760 no pandemic boom, it's a more like eleven or twelve 0:16:35.800 --> 0:16:39.200 million bodies out of commission. Where does wage inflation return? 0:16:40.480 --> 0:16:42.960 So I think that it's very hard to understand the 0:16:42.960 --> 0:16:45.800 wage dynamics right now. E c I, as you mentioned, tom, 0:16:46.000 --> 0:16:49.000 is a preferred measure. It's better in real time than 0:16:49.040 --> 0:16:52.080 average early earnings. But there is no perfect measure right 0:16:52.120 --> 0:16:55.760 now because there's been such dislocations the labor market, and 0:16:55.800 --> 0:16:59.680 you have these compositional issues where the lower paid individuals 0:17:00.360 --> 0:17:03.920 experience more job cuts, and as a result, you've seen 0:17:03.920 --> 0:17:07.320 this shift in terms of aggregate income or aggregate wages. 0:17:07.800 --> 0:17:10.439 So I think in the meantime, we just kind of 0:17:10.440 --> 0:17:12.840 have to wait it out until we have a more 0:17:12.920 --> 0:17:16.600 comprehensive and full, you know, broad based labor market recovery 0:17:16.600 --> 0:17:19.720 to properly understand these wage dynamics. Chell great to catch 0:17:19.800 --> 0:17:22.480 up as always, Michelle, thank for America Security's head of 0:17:22.560 --> 0:17:33.480 u SE Economics. Now it's our great pleasure to turn 0:17:33.600 --> 0:17:37.119 to the chairman and CEO of General Motors. Shere's Mary Borrow. Mary, 0:17:37.160 --> 0:17:38.520 thank you so much for being with us. Good to 0:17:38.520 --> 0:17:40.800 see you again. Let me start by saying, barring from 0:17:40.880 --> 0:17:43.639 Queen Elizabeth, this could easily have been an annis horebulus 0:17:43.720 --> 0:17:47.640 for General Motors, given the pandemic, shutting down plants, repurposing 0:17:47.680 --> 0:17:50.520 to make ventilators, and yet it wasn't. You basically beat 0:17:50.560 --> 0:17:53.200 across the board expectations fourth quarter and for the year. 0:17:53.280 --> 0:17:56.960 So from the inside, how did you do it? Well? 0:17:57.000 --> 0:17:59.840 I think it was everybody coming together. It really represented 0:17:59.880 --> 0:18:02.840 the great work and the teamwork at General Motors. With 0:18:02.880 --> 0:18:06.080 our all of our employees are suppliers or dealers. We 0:18:06.119 --> 0:18:07.879 all came together to make sure we could keep our 0:18:07.880 --> 0:18:11.760 employees safe but then also protect our customers and protect 0:18:11.840 --> 0:18:13.960 the business. So I couldn't be more proud of everything 0:18:14.000 --> 0:18:17.000 the team accomplished last year. As it turned out, your 0:18:17.040 --> 0:18:20.800 biggest problem was manufacturing enough, particularly those trucks and those SUVs, 0:18:20.960 --> 0:18:23.160 because the demand came back. Were you surprised how fast 0:18:23.200 --> 0:18:26.000 the demand came back? Well, you know, we have a 0:18:26.119 --> 0:18:28.680 very strong full size truck in our full size SUVs 0:18:28.720 --> 0:18:31.879 that we launched on time last year even with the pandemic, 0:18:32.200 --> 0:18:34.440 and I think it just it speaks to how popular 0:18:34.520 --> 0:18:37.399 the truck is. We have very very different models that 0:18:37.480 --> 0:18:39.560 reach different segments and so we've been able to grow 0:18:39.560 --> 0:18:42.760 share and we're very proud of our truck leadership. So, Mary, 0:18:42.800 --> 0:18:45.000 as you know so well, investors immediately say what have 0:18:45.040 --> 0:18:47.120 you done for me lately? So let's look forward now 0:18:47.160 --> 0:18:50.640 to what you're expecting. You're protecting a strong year as well, 0:18:50.720 --> 0:18:53.159 even though you do have some headwinds from things like 0:18:53.400 --> 0:18:57.560 shortage of chips. Yeah, we think we're going to have 0:18:57.600 --> 0:19:01.639 a very positive year in one, not only from a 0:19:01.680 --> 0:19:06.920 financial perspective, but also the continued acceleration of our EV 0:19:07.080 --> 0:19:10.360 and our a V business. We're really excited that very 0:19:10.400 --> 0:19:13.000 shortly we're going to be launching the Chevrolet Bold EUV, 0:19:13.440 --> 0:19:17.119 which is a great vehicle. And that's uh, that's days away. Uh, 0:19:17.160 --> 0:19:20.080 And then you know later this year will be UH 0:19:20.280 --> 0:19:23.639 serving the market with the GMC Hummer UH e V 0:19:23.880 --> 0:19:27.000 and then the catalec Lyric comes shortly after that as 0:19:27.040 --> 0:19:31.120 well as tremendous progress being made from an autonomous perspective 0:19:31.160 --> 0:19:33.560 as well. So we're really excited about the year, the 0:19:33.600 --> 0:19:36.400 growth opportunities that we have in front of us. UH 0:19:36.400 --> 0:19:38.800 and so it's a year of execution and you know, 0:19:38.880 --> 0:19:41.440 the issues with chips, this is a short term mission, 0:19:41.520 --> 0:19:43.520 will work through it. Well, is general mode is basically 0:19:43.600 --> 0:19:45.880 the same boat as everyone else? Or are there things 0:19:45.880 --> 0:19:47.880 that you can do to get something of advantage over 0:19:47.920 --> 0:19:51.400 other automakers? Well, I think in general this is an 0:19:51.440 --> 0:19:54.600 industry issue. Of course, we're working every single day with 0:19:54.640 --> 0:19:57.320 a cross functional team to look for opportunities of how 0:19:57.320 --> 0:20:00.480 do we minimize the impact. So we'll continue to do that. 0:20:00.640 --> 0:20:03.919 You know, we did provide the guidance with a fairly 0:20:03.960 --> 0:20:06.639 wide range and we'll work at every day and provide 0:20:06.720 --> 0:20:08.880 updates as we go forward. As you said, you've got 0:20:08.960 --> 0:20:11.479 a lot of e V models come out, including as 0:20:11.480 --> 0:20:14.040 you say, the Bold EUV and the Bold EV new 0:20:14.080 --> 0:20:17.320 model coming out. You're investing twenty seven billion dollars. This 0:20:17.359 --> 0:20:20.359 is part of a multi year plan here as a 0:20:20.359 --> 0:20:22.879 practical matter, what are the difficulties in that plan? And 0:20:22.920 --> 0:20:25.280 particularly I want to talk about supply chains things like 0:20:25.840 --> 0:20:29.400 battery cells some of the lithium issues. Do you anticipate 0:20:29.440 --> 0:20:33.920 possible problems with supply chains into your battery operation? Well, 0:20:33.960 --> 0:20:37.000 I think you know, we're one of only two UH 0:20:37.560 --> 0:20:41.960 automakers that are doing cell manufacturer in this country. We 0:20:42.080 --> 0:20:44.800 also are doing a tremendous amount of development on our 0:20:44.840 --> 0:20:46.840 own and our own g M, R and D, as 0:20:46.880 --> 0:20:50.359 well as partnering with startups and our of course our 0:20:50.400 --> 0:20:53.639 joint venture with LG KEM that is development as well 0:20:53.680 --> 0:20:56.800 as production. So you know, we're working hard to make 0:20:56.800 --> 0:20:59.520 sure we have all the cells we need and we've 0:20:59.520 --> 0:21:02.480 worked you know, through the supply base to make sure 0:21:02.520 --> 0:21:05.879 we do because we are as as we've talked about, 0:21:05.880 --> 0:21:11.159 we're accelerating our v e vs with thirty and you know, 0:21:11.200 --> 0:21:14.280 really covering the whole market. So you know, we continue 0:21:14.320 --> 0:21:15.960 to work it, but we think we've got a very 0:21:16.000 --> 0:21:18.480 strong plan. I did some rough math here. It might 0:21:18.520 --> 0:21:20.800 be wrong, but basically if you made all of your 0:21:20.880 --> 0:21:24.040 vehicles as electric vehicles, you would actually be using more 0:21:24.040 --> 0:21:26.560 than the total mono lithium produced in the entire world 0:21:26.640 --> 0:21:29.400 by yourself. So does that mean we'll have less lithium 0:21:29.520 --> 0:21:32.840 used or we're going to find new sources of it? Well, 0:21:32.880 --> 0:21:35.439 I think you know, we're working on securing the supply 0:21:35.520 --> 0:21:38.600 that we need, but we're also working on development that 0:21:39.000 --> 0:21:42.760 allows us to use less precious metals overall. So it's 0:21:42.840 --> 0:21:45.720 kind of a yes, and both are things that we're 0:21:45.720 --> 0:21:48.920 working on at the same time. When we talk about 0:21:48.960 --> 0:21:52.000 things like the Bolt EV that's coming out, questions come 0:21:52.040 --> 0:21:54.800 up with profitability. We had din lawer competitor come out 0:21:54.800 --> 0:21:56.600 and say by the end of the decade they will 0:21:56.600 --> 0:21:59.240 be making as much or more out of electric fields 0:21:59.280 --> 0:22:01.840 as they do off. A question engines, what's your profitability 0:22:01.840 --> 0:22:06.360 path for electric vehicles? Well, we have set a goal 0:22:06.440 --> 0:22:09.520 for ourselves to have margins from our auto business be 0:22:09.600 --> 0:22:12.520 at ten percent. That's not changing. Uh. We don't talk 0:22:12.560 --> 0:22:15.360 about individual product line profitability, but I can tell you 0:22:15.359 --> 0:22:17.400 with the progress that we're making because of the work 0:22:17.480 --> 0:22:21.800 we do with battery development, from our our first generation 0:22:21.880 --> 0:22:24.000 bowl TV to when we get to ultim we see 0:22:24.000 --> 0:22:27.400