1 00:00:09,880 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane jay Ley. 2 00:00:13,960 --> 00:00:16,960 Speaker 1: We bring you insight from the best in economics, finance, 3 00:00:17,040 --> 00:00:23,520 Speaker 1: investment and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,640 --> 00:00:27,200 Speaker 1: Bloomberg dot Com and of course on the Bloomberg. Now 5 00:00:27,280 --> 00:00:29,760 Speaker 1: let's go straight to one of the newsmakers, of course, 6 00:00:29,800 --> 00:00:33,320 Speaker 1: one of the main key of newsmakers on this a 7 00:00:33,400 --> 00:00:36,879 Speaker 1: Democratic Unionist Party leader Earl Foster. Earlian Foster, thanks so 8 00:00:36,920 --> 00:00:40,319 Speaker 1: much for joining Surveillance. What does the Prime Minister in 9 00:00:40,360 --> 00:00:43,320 Speaker 1: your eyes need to do to win your support in 10 00:00:43,360 --> 00:00:46,520 Speaker 1: the House of Commons vote on Braxay. Well, good morning, 11 00:00:46,560 --> 00:00:49,080 Speaker 1: it's very good to be with you. Um. The deal 12 00:00:49,159 --> 00:00:51,680 Speaker 1: that has come forward from Europe but not a deal 13 00:00:51,920 --> 00:00:55,800 Speaker 1: that the Democratic Unions Party can support because it makes 14 00:00:56,040 --> 00:00:58,960 Speaker 1: a difference between Northern Ireland and the rest of the 15 00:00:59,040 --> 00:01:02,160 Speaker 1: United Kingdom by the backstop that has been inserted in 16 00:01:02,240 --> 00:01:04,440 Speaker 1: the deal. There are many good parts in the deal, 17 00:01:04,600 --> 00:01:08,319 Speaker 1: such as the recognition of European citizens rights um, the 18 00:01:08,360 --> 00:01:13,920 Speaker 1: fact that we future recognition of professional qualifications, but the backstop, 19 00:01:13,959 --> 00:01:17,120 Speaker 1: as far as we are concerned, cannot allow to support 20 00:01:17,160 --> 00:01:20,800 Speaker 1: this seal and therefore the backstop must go. Okay, but 21 00:01:20,840 --> 00:01:23,360 Speaker 1: there's a suggestion that the Prime Minister would agree to 22 00:01:23,520 --> 00:01:27,000 Speaker 1: a common rule book between the UK and the EU 23 00:01:27,080 --> 00:01:30,440 Speaker 1: are lean faster that might be enough to actually avoid 24 00:01:30,440 --> 00:01:33,320 Speaker 1: barriers between Northern Ireland and the rest of the UK. 25 00:01:33,520 --> 00:01:37,319 Speaker 1: Would such a unilateral declaration be enough for you? We'll 26 00:01:37,360 --> 00:01:40,160 Speaker 1: see the difficulty for us in Northern Irelanders that this 27 00:01:40,520 --> 00:01:43,520 Speaker 1: withdrawal agreement, if it's accepted by Parliament, and of course 28 00:01:43,520 --> 00:01:46,200 Speaker 1: there's no evidence that it will be accepted by Parliament, 29 00:01:46,560 --> 00:01:53,040 Speaker 1: would bring into place allegally buyinging international treaty which is 30 00:01:53,080 --> 00:01:55,200 Speaker 1: then in law and is there in black and white 31 00:01:55,440 --> 00:01:59,480 Speaker 1: and cannot be superseded. Our difficulty is that the political 32 00:01:59,520 --> 00:02:03,080 Speaker 1: victory that are being talked about our aspirational they are 33 00:02:03,160 --> 00:02:06,840 Speaker 1: not legally binding and therefore there is a real asymmetrical 34 00:02:06,920 --> 00:02:11,400 Speaker 1: relationship between those two documents. Right, So I understand from 35 00:02:11,400 --> 00:02:13,720 Speaker 1: what you're saying or I'm inferring, and correct me if 36 00:02:13,720 --> 00:02:16,960 Speaker 1: I'm wrong, that a unilateral declaration would not be good 37 00:02:17,040 --> 00:02:19,960 Speaker 1: enough for you. We want to hear what the Prime 38 00:02:19,960 --> 00:02:21,919 Speaker 1: Minister has to say, and we welcome her to this 39 00:02:22,080 --> 00:02:24,480 Speaker 1: part of the unedited Kingdom, but we will be saying 40 00:02:24,560 --> 00:02:26,480 Speaker 1: very clearly to her that she needs to get rid 41 00:02:26,520 --> 00:02:28,760 Speaker 1: of the back stub. You know, this is going to 42 00:02:28,800 --> 00:02:31,240 Speaker 1: be a waste of time today if he doesn't listen 43 00:02:31,240 --> 00:02:33,119 Speaker 1: to what people have to say to her. And as 44 00:02:33,160 --> 00:02:36,480 Speaker 1: far as I can see, this is not going through Parliament. 45 00:02:37,000 --> 00:02:40,040 Speaker 1: And therefore, instead of wasting time over this next two 46 00:02:40,040 --> 00:02:43,560 Speaker 1: weeks going on a pr offensive around her deal, what 47 00:02:43,720 --> 00:02:45,480 Speaker 1: she should be doing is to try and find a 48 00:02:45,560 --> 00:02:49,160 Speaker 1: third way forward, a deal that find support in Parliament 49 00:02:49,200 --> 00:02:52,080 Speaker 1: and a delible work. So we're saying to her, don't 50 00:02:52,120 --> 00:02:55,160 Speaker 1: waste the time, use that time profitably and trying to 51 00:02:55,160 --> 00:02:58,400 Speaker 1: find a better dat right. But the UK government is 52 00:02:58,440 --> 00:03:00,600 Speaker 1: telling us that there's no point in real opening talks 53 00:03:00,680 --> 00:03:04,280 Speaker 1: because they want Budge on the backstop. Well, you know 54 00:03:04,360 --> 00:03:06,280 Speaker 1: they would say that wouldn't play. I mean, of course, 55 00:03:06,320 --> 00:03:08,360 Speaker 1: people are going to hold to their line until something 56 00:03:08,360 --> 00:03:10,799 Speaker 1: else has to be done, um, and they believe that 57 00:03:10,919 --> 00:03:13,280 Speaker 1: this is the best way board. The Parliament is going 58 00:03:13,320 --> 00:03:16,760 Speaker 1: to tell her something very different. Okay, the DUP has 59 00:03:16,760 --> 00:03:21,359 Speaker 1: already abstained in important votes on government business. How likely 60 00:03:21,440 --> 00:03:26,600 Speaker 1: is that to continue? Well, the the deal, as I understand, 61 00:03:26,600 --> 00:03:29,639 Speaker 1: it's coming to Parliament next week for debate and then 62 00:03:29,639 --> 00:03:32,920 Speaker 1: we'll be voted on on the Tuesday, the eleventh of September. 63 00:03:33,840 --> 00:03:36,800 Speaker 1: As it currently stands, we will not be supporting the 64 00:03:36,920 --> 00:03:40,000 Speaker 1: stale and not as the case for many across the Chamber, 65 00:03:40,040 --> 00:03:42,480 Speaker 1: whether they are remain voters or lead voters, they are 66 00:03:42,520 --> 00:03:46,680 Speaker 1: not going to support the stale and therefore Prime Minister 67 00:03:46,800 --> 00:03:48,880 Speaker 1: is not going to get this steal through. So instead 68 00:03:48,920 --> 00:03:51,400 Speaker 1: of wasting her time, she should actually be trying to 69 00:03:51,440 --> 00:03:55,440 Speaker 1: find a way that is acceptible to everybody. Okay, I 70 00:03:56,000 --> 00:03:59,080 Speaker 1: was talking to Nicki Morrigan at the Treasury Select Committee 71 00:03:59,280 --> 00:04:02,080 Speaker 1: yesterday and she are saying it's a chance that actually 72 00:04:02,200 --> 00:04:04,520 Speaker 1: we have a hard Brexit if this deal does not 73 00:04:04,680 --> 00:04:07,080 Speaker 1: get through. What do you think are is a probability 74 00:04:07,520 --> 00:04:11,120 Speaker 1: of a crashing out? Well, I think people are wanting 75 00:04:11,160 --> 00:04:13,840 Speaker 1: to portray this as a binary choice between this stale 76 00:04:13,880 --> 00:04:16,200 Speaker 1: and no deal, and of course the Prime Minister wants 77 00:04:16,200 --> 00:04:18,240 Speaker 1: to portray it is that because that's the best chances 78 00:04:18,279 --> 00:04:20,880 Speaker 1: are getting the deal through. We don't accept that that's 79 00:04:20,880 --> 00:04:23,039 Speaker 1: the case. If we say that there is a third way, 80 00:04:23,120 --> 00:04:25,400 Speaker 1: a better way, a way that we'll get the support 81 00:04:25,520 --> 00:04:28,640 Speaker 1: of the British people through their parliamentarium and we should 82 00:04:28,680 --> 00:04:31,440 Speaker 1: be looking for that way now instead of wasting time 83 00:04:31,480 --> 00:04:34,679 Speaker 1: on the day that's not going to get support, Okay, 84 00:04:34,800 --> 00:04:36,840 Speaker 1: Arlene Foster. A lot of people think that the DUP 85 00:04:37,040 --> 00:04:39,039 Speaker 1: is bluffing, right, that you will end up, you know, 86 00:04:39,040 --> 00:04:42,599 Speaker 1: supporting this deal because you fear fresh elections and Jeremy 87 00:04:42,600 --> 00:04:45,000 Speaker 1: Corbyn coming in, or that you will support the deal 88 00:04:45,040 --> 00:04:49,600 Speaker 1: in exchange for more money. Are you bluffing? That's quite 89 00:04:49,600 --> 00:04:53,480 Speaker 1: offensive actually to say that we're going to uh not 90 00:04:53,640 --> 00:04:55,400 Speaker 1: vote again, that we're going to support the steal and 91 00:04:55,480 --> 00:04:57,560 Speaker 1: we were giving money for Northern Island of not what 92 00:04:57,680 --> 00:04:59,960 Speaker 1: this is about. This is about the future of Northern 93 00:05:00,000 --> 00:05:03,800 Speaker 1: in Ireland constitutionally and economically. Therefore, we will not be 94 00:05:03,839 --> 00:05:06,760 Speaker 1: supporting the deal in its current format. And by the way, 95 00:05:06,920 --> 00:05:09,039 Speaker 1: if it is voted down in Parliament, that does not 96 00:05:09,160 --> 00:05:11,960 Speaker 1: mean a general election, because what we have at the 97 00:05:12,000 --> 00:05:14,520 Speaker 1: moment is affect plim in Parliament back and it's only 98 00:05:14,640 --> 00:05:17,800 Speaker 1: in Parliament of votes for a general action that it's happened. 99 00:05:18,120 --> 00:05:20,839 Speaker 1: So that's a false thing to say, and it is 100 00:05:20,880 --> 00:05:23,640 Speaker 1: quite offensive to say that we're bluffing and that we're 101 00:05:23,680 --> 00:05:25,880 Speaker 1: only holy Night for money. Nothing could be further to 102 00:05:25,960 --> 00:05:29,320 Speaker 1: the truth. M Arlene Foster, how do you see it? 103 00:05:29,520 --> 00:05:32,160 Speaker 1: So if you think that this deal will be voted down, 104 00:05:32,480 --> 00:05:35,679 Speaker 1: does then the Prime Minister go back to the EU 105 00:05:35,839 --> 00:05:37,839 Speaker 1: and get a better deal and then it gets through 106 00:05:37,880 --> 00:05:40,520 Speaker 1: Parliament a second time? Or you know what happens after 107 00:05:41,160 --> 00:05:44,280 Speaker 1: December eleventh. Well, we would much prefer if she looked 108 00:05:44,279 --> 00:05:46,440 Speaker 1: for a better day now instead of within the next 109 00:05:46,440 --> 00:05:50,560 Speaker 1: two weeks. Our offenses. We think that would be much 110 00:05:50,600 --> 00:05:54,080 Speaker 1: better spent trying to find a better way forward getting 111 00:05:54,120 --> 00:05:56,200 Speaker 1: out of that Irish back stuff, because of course the 112 00:05:56,240 --> 00:05:58,440 Speaker 1: only reason the Irish back stuff is any we are 113 00:05:58,440 --> 00:06:01,440 Speaker 1: tooled is because to prevent a hard border on the 114 00:06:01,440 --> 00:06:04,239 Speaker 1: island of Ireland. But Leo Broadcal, the Irish pig monster, 115 00:06:04,360 --> 00:06:05,880 Speaker 1: has said he's not going to put up a hard 116 00:06:05,880 --> 00:06:08,600 Speaker 1: border Europe, so they're not pretty slow hard border. She's 117 00:06:08,680 --> 00:06:10,920 Speaker 1: very strange to know who's going to put this hard 118 00:06:10,920 --> 00:06:13,520 Speaker 1: border up. I don't think I'd come to Ireland. Um, 119 00:06:13,600 --> 00:06:16,440 Speaker 1: so we have over hundreds of pages dealing with an 120 00:06:16,440 --> 00:06:20,159 Speaker 1: Arish back stop that Frank Day isn't needed. But have 121 00:06:20,240 --> 00:06:22,920 Speaker 1: you heard any indication from the government or Theresa A 122 00:06:23,080 --> 00:06:26,480 Speaker 1: that she is willing to go back to Brussels before 123 00:06:26,560 --> 00:06:30,599 Speaker 1: December eleven, then if not what happens on December twelve, No, 124 00:06:30,880 --> 00:06:34,120 Speaker 1: I haven't um and she is determined for Shade with 125 00:06:34,200 --> 00:06:36,360 Speaker 1: her deal. She believes that her day is the best 126 00:06:36,360 --> 00:06:39,920 Speaker 1: way forward. But clearly she's not listening because Parliament. I 127 00:06:40,000 --> 00:06:43,440 Speaker 1: think that was very clear yesterday when she came at 128 00:06:43,480 --> 00:06:45,440 Speaker 1: to the floor of the House of Common. But she 129 00:06:45,520 --> 00:06:50,080 Speaker 1: doesn't have the support to get this deal through. Arling Foster, 130 00:06:50,120 --> 00:06:53,279 Speaker 1: thanks so much for joining us for a very valuable conversation. She's, 131 00:06:53,279 --> 00:06:56,720 Speaker 1: of course Arlene Foster. She is a UK Democratic Unionist 132 00:06:56,839 --> 00:07:02,240 Speaker 1: Party leader. If you care about Lordstown, Ohio and the 133 00:07:02,320 --> 00:07:06,600 Speaker 1: other places where time will march on according to General Motors, 134 00:07:06,640 --> 00:07:10,400 Speaker 1: this is without question the interview of the day. Kevin 135 00:07:10,400 --> 00:07:13,800 Speaker 1: Tynan is an auto guy. He is with Bloomberg Intelligence. 136 00:07:14,400 --> 00:07:17,040 Speaker 1: But John, what is so important about Kevin Tynan? As 137 00:07:17,080 --> 00:07:21,760 Speaker 1: he understands that a Chrysler Slant six a Dodge Slant six. 138 00:07:21,800 --> 00:07:27,040 Speaker 1: If you drop the screw into the distributor cap area 139 00:07:27,080 --> 00:07:30,000 Speaker 1: where the spark plugs used to wire into you know 140 00:07:30,120 --> 00:07:33,400 Speaker 1: you will ruin your distributor and your father will not 141 00:07:33,440 --> 00:07:38,280 Speaker 1: bail you out in your car won't move until you 142 00:07:38,440 --> 00:07:40,360 Speaker 1: This would be a little bit of personal experience. Kevin, 143 00:07:40,840 --> 00:07:44,040 Speaker 1: I have the clearest memory of walking along the chain 144 00:07:44,120 --> 00:07:48,600 Speaker 1: link fence of Rochester, Delco. In the early eighties when 145 00:07:48,640 --> 00:07:53,440 Speaker 1: it vapored. Is that what's going to happen to these geographies? Uh, 146 00:07:53,480 --> 00:07:57,120 Speaker 1: there's a there's a distinct possibility that we go through 147 00:07:57,160 --> 00:08:00,880 Speaker 1: that kind of uh you know, Flint, Michion again and 148 00:08:00,880 --> 00:08:04,480 Speaker 1: and and Rochester. And But at the same time, I 149 00:08:04,520 --> 00:08:07,680 Speaker 1: would say, you know this, this looks a lot like 150 00:08:08,000 --> 00:08:11,560 Speaker 1: General Motors clearing the deck and saying, look this this 151 00:08:11,680 --> 00:08:15,680 Speaker 1: advanced into technology. We've kind of half effort in it. 152 00:08:15,960 --> 00:08:20,120 Speaker 1: So let's let's just let's draw this line here and 153 00:08:20,160 --> 00:08:23,400 Speaker 1: say and and I think you see this by them 154 00:08:23,600 --> 00:08:27,800 Speaker 1: uh ceasing production of Chevrolet Vault with a V yet 155 00:08:27,800 --> 00:08:31,840 Speaker 1: continuing the bolt with a b um to say, look 156 00:08:31,840 --> 00:08:35,400 Speaker 1: that the plug in hybrid electric probably isn't the way 157 00:08:35,440 --> 00:08:37,560 Speaker 1: forward here. We have to go full commitment with the 158 00:08:37,559 --> 00:08:40,839 Speaker 1: battery electric and still trucks obviously, right that's going to 159 00:08:40,920 --> 00:08:44,720 Speaker 1: pay the bill and give them the opportunity to innovative 160 00:08:45,440 --> 00:08:47,640 Speaker 1: or catch up on the e V side. Before John 161 00:08:47,720 --> 00:08:50,319 Speaker 1: jumps into the nuts and bolts of this no pun intended. 162 00:08:50,760 --> 00:08:53,360 Speaker 1: Kevin I had a good friend in Flint, Michigan in seventies. 163 00:08:53,559 --> 00:08:55,400 Speaker 1: He said, come on, you got to hear this. And 164 00:08:55,440 --> 00:08:58,320 Speaker 1: I remember sitting in a van hearing the rumble and 165 00:08:58,320 --> 00:09:01,920 Speaker 1: the roar. Is those wooden doors opened up out of 166 00:09:01,920 --> 00:09:04,760 Speaker 1: the nineteen thirties and forties and everybody ran across the 167 00:09:04,800 --> 00:09:10,120 Speaker 1: street to the bars. Those people weren't retrained. Then Ted 168 00:09:10,160 --> 00:09:14,240 Speaker 1: Alden told us some CFR this morning, we fail at retraining. 169 00:09:14,600 --> 00:09:18,160 Speaker 1: Can we retrain these people? We can? And and I 170 00:09:18,200 --> 00:09:20,400 Speaker 1: was listening to that that piece, and and I think 171 00:09:20,400 --> 00:09:22,280 Speaker 1: it was right on the money. And I think that's 172 00:09:22,280 --> 00:09:27,480 Speaker 1: what becomes important here is that, uh, those factories are 173 00:09:27,520 --> 00:09:30,080 Speaker 1: now able to and and and again I think this 174 00:09:30,200 --> 00:09:32,520 Speaker 1: was one of or this is one of the sort 175 00:09:32,559 --> 00:09:35,760 Speaker 1: of uh, you know, points that I look at as 176 00:09:36,200 --> 00:09:40,200 Speaker 1: the industry moves towards electric technology. Is you know, how 177 00:09:40,200 --> 00:09:44,520 Speaker 1: many automakers have committed plants to battery electric vehicles. We've 178 00:09:44,520 --> 00:09:47,040 Speaker 1: seen Volkswagen start to talk about it in Germany a 179 00:09:47,080 --> 00:09:50,360 Speaker 1: little bit. Now. I think this is General Motors opportunity 180 00:09:50,400 --> 00:09:53,719 Speaker 1: to say, where we're done with this half effort. We're 181 00:09:53,720 --> 00:09:56,520 Speaker 1: going all in on this. I'm not sure how big 182 00:09:56,559 --> 00:10:00,199 Speaker 1: that market is globally, but GM is saying, hey, if 183 00:10:00,200 --> 00:10:02,880 Speaker 1: that's ten percent of the global market, we want our share, 184 00:10:03,120 --> 00:10:05,959 Speaker 1: because it may be fift Like we see our friends 185 00:10:06,000 --> 00:10:08,120 Speaker 1: at benf talk about this is half the market is 186 00:10:08,160 --> 00:10:12,959 Speaker 1: electrification by UM And to Mary Barr's credit, I think 187 00:10:13,040 --> 00:10:16,640 Speaker 1: previous administrations at General Motors might have dismissed this as 188 00:10:17,040 --> 00:10:19,800 Speaker 1: money losing technology and we're not going to get involved, 189 00:10:19,800 --> 00:10:22,040 Speaker 1: and maybe not even made the bolt in the first place. 190 00:10:22,360 --> 00:10:24,800 Speaker 1: And I look at that as an engineering sort of 191 00:10:25,200 --> 00:10:28,560 Speaker 1: and and design experiment that says, Okay, now we have 192 00:10:28,640 --> 00:10:31,280 Speaker 1: this technology, let's just scale it up into other products 193 00:10:31,280 --> 00:10:33,960 Speaker 1: that we can sell. So Kevin, for a lot of people, 194 00:10:34,000 --> 00:10:37,640 Speaker 1: the last twenty four hours is really really significant, and 195 00:10:37,720 --> 00:10:40,720 Speaker 1: that essentially what GM has done has said that here 196 00:10:40,720 --> 00:10:43,640 Speaker 1: in the United States, if it's a sedan with an 197 00:10:43,640 --> 00:10:48,199 Speaker 1: internal combustion engine, it's just not worth making here anymore. Now, 198 00:10:48,200 --> 00:10:51,960 Speaker 1: if that's the conclusion, my next question will be who's next? 199 00:10:52,800 --> 00:10:55,360 Speaker 1: And how big? What is the scale of what's about 200 00:10:55,400 --> 00:10:58,680 Speaker 1: to happen? What is it right? Well, and and look 201 00:10:59,360 --> 00:11:04,679 Speaker 1: Ford said this already, Uh Chrysler did it without you know, 202 00:11:04,760 --> 00:11:07,920 Speaker 1: being so vocal about it. But you know, uh, they've 203 00:11:07,960 --> 00:11:12,080 Speaker 1: gotten out of the car business. I mean they're truck now. Uh, 204 00:11:12,160 --> 00:11:14,720 Speaker 1: just that LX platform is the only thing they have left. 205 00:11:14,800 --> 00:11:18,200 Speaker 1: So the other two guys, General is actually laid on this. 206 00:11:18,640 --> 00:11:21,040 Speaker 1: And if you look at GM's numbers, look at an 207 00:11:21,040 --> 00:11:23,719 Speaker 1: eight percent drop on the car side in the full 208 00:11:23,800 --> 00:11:27,800 Speaker 1: year seventeen another this year. So I think the idea 209 00:11:27,840 --> 00:11:29,920 Speaker 1: is that, you know, do we lose money on these 210 00:11:29,920 --> 00:11:34,040 Speaker 1: products that are seeing dramatically declining demand or do we 211 00:11:34,080 --> 00:11:37,360 Speaker 1: lose money on the products that have this huge upside? Uh? 212 00:11:37,400 --> 00:11:40,120 Speaker 1: Potentially because now you have governments in China behind them 213 00:11:40,160 --> 00:11:42,800 Speaker 1: and Kevin, let me represent the president of the United 214 00:11:42,840 --> 00:11:48,080 Speaker 1: States everything you're saying, Cent and I know John and 215 00:11:48,120 --> 00:11:50,160 Speaker 1: I are on the same page on this. So you 216 00:11:50,280 --> 00:11:54,640 Speaker 1: gotta build something new. What is holding you back from 217 00:11:54,760 --> 00:11:59,600 Speaker 1: choosing a spot in Ohio to do it other than 218 00:11:59,720 --> 00:12:03,439 Speaker 1: the the the scale, right, I think I don't think 219 00:12:03,440 --> 00:12:06,199 Speaker 1: there there is any reason why you wouldn't choose that 220 00:12:06,280 --> 00:12:08,880 Speaker 1: spot to do it, other than you have a whole 221 00:12:08,920 --> 00:12:11,760 Speaker 1: lot of installed capacity and not a whole lot of 222 00:12:11,800 --> 00:12:14,920 Speaker 1: demand for those products yet. Right, So that's one percent 223 00:12:14,960 --> 00:12:18,880 Speaker 1: of the global market, it's one percent of the US market. Um, 224 00:12:18,920 --> 00:12:22,120 Speaker 1: you know, So so you're gonna take the Chevrolet Cruz 225 00:12:22,160 --> 00:12:25,280 Speaker 1: for example, that's hundreds of thousands of units per year, 226 00:12:25,320 --> 00:12:27,640 Speaker 1: and you're gonna go in and you're gonna build tens 227 00:12:27,679 --> 00:12:30,880 Speaker 1: of thousands of electric deals. So it's certainly possible. It's 228 00:12:30,920 --> 00:12:33,719 Speaker 1: just you're gonna have capacity utilization that's going to be 229 00:12:34,400 --> 00:12:36,920 Speaker 1: on the floor, Kevin, the repress releases that gets sent 230 00:12:37,000 --> 00:12:39,360 Speaker 1: to Wall Street. One of the last twenty four hours 231 00:12:39,600 --> 00:12:42,400 Speaker 1: from GM was a press release for Wall Street. What's 232 00:12:42,440 --> 00:12:45,400 Speaker 1: the press release for the White House? What does the 233 00:12:45,440 --> 00:12:47,840 Speaker 1: president say and what is the response of this company? 234 00:12:47,880 --> 00:12:49,920 Speaker 1: And I did not think I'd be asking that in 235 00:12:50,200 --> 00:12:52,680 Speaker 1: the home of capitalism, but I am what is the 236 00:12:52,720 --> 00:12:54,600 Speaker 1: White House say back to this? And what is the 237 00:12:54,600 --> 00:12:58,120 Speaker 1: GM board and the c suite say back to them? Well, 238 00:12:58,160 --> 00:13:00,680 Speaker 1: and here's the interesting thing, Jonathan to and from my 239 00:13:00,760 --> 00:13:04,040 Speaker 1: perspective is that you know, when you look at the 240 00:13:04,040 --> 00:13:06,400 Speaker 1: White House, I think a lot of what you see 241 00:13:06,600 --> 00:13:11,720 Speaker 1: is this really dramatic, UH move to spark a response? Right, 242 00:13:11,760 --> 00:13:14,040 Speaker 1: If you want change, it's gonna have to be dramatic. 243 00:13:14,080 --> 00:13:17,920 Speaker 1: If we go softly through this, nothing ever happens. And 244 00:13:17,960 --> 00:13:20,240 Speaker 1: I'm speaking in very general terms, and I think that's 245 00:13:20,320 --> 00:13:23,959 Speaker 1: general motors move here is to say, look, we need 246 00:13:24,040 --> 00:13:25,840 Speaker 1: to be here in the future, we need to be 247 00:13:25,920 --> 00:13:28,120 Speaker 1: growing in the future, and for us to do that, 248 00:13:28,400 --> 00:13:30,839 Speaker 1: we have to draw this line right here, right now 249 00:13:31,200 --> 00:13:35,079 Speaker 1: and make this transition. Is it painful, absolutely, But if 250 00:13:35,120 --> 00:13:37,840 Speaker 1: we're going to exist and be relevant in the future, 251 00:13:37,880 --> 00:13:39,679 Speaker 1: we have to do this now. Is this just a 252 00:13:39,800 --> 00:13:43,000 Speaker 1: labor arbitrage? I'm talking like Steve Roach of Yale University. 253 00:13:43,080 --> 00:13:45,880 Speaker 1: I mean, Union used to make a hundred fifty thousand 254 00:13:46,000 --> 00:13:48,760 Speaker 1: year overtime, a hundred thirty whatever it was, and then 255 00:13:48,800 --> 00:13:51,880 Speaker 1: Steve Rattner came in, as cars are and we remodeled labor. 256 00:13:51,920 --> 00:13:53,720 Speaker 1: I get it. I don't know what they make now, Kevin, 257 00:13:53,760 --> 00:13:56,199 Speaker 1: please tell me. But is it just still a labor 258 00:13:56,280 --> 00:14:00,080 Speaker 1: arbitrage where the American auto worker makes too much for 259 00:14:00,160 --> 00:14:03,200 Speaker 1: GM to make money on that next suv or pickup truck. 260 00:14:03,800 --> 00:14:06,080 Speaker 1: I don't think so. But but look at pricing in 261 00:14:06,120 --> 00:14:09,960 Speaker 1: the industry. Right We talked about transaction prices being at 262 00:14:10,640 --> 00:14:14,360 Speaker 1: record highs. But if you look at the technology UM 263 00:14:14,400 --> 00:14:18,320 Speaker 1: and everything, not only in vehicle but in terms of production, 264 00:14:19,000 --> 00:14:22,200 Speaker 1: it's expensive to manufacture UM, you know. And then if 265 00:14:22,240 --> 00:14:24,720 Speaker 1: you look at declining volumes, it makes it it makes 266 00:14:24,720 --> 00:14:28,480 Speaker 1: the equation that much more on balanced. So UM, you know, 267 00:14:28,520 --> 00:14:30,800 Speaker 1: I don't I don't think it's just the labor arbitrage. 268 00:14:31,120 --> 00:14:35,600 Speaker 1: There's cost inflation all across the board there and you 269 00:14:35,640 --> 00:14:38,440 Speaker 1: have to adjust for it. Um. At the same time, 270 00:14:39,040 --> 00:14:42,480 Speaker 1: you know there there's pushed back against moving to lower 271 00:14:42,520 --> 00:14:45,600 Speaker 1: costs to Mexico without production there, and to say, look, 272 00:14:45,600 --> 00:14:48,640 Speaker 1: we we want this ten percent adjusted EBIT margin. The 273 00:14:48,680 --> 00:14:50,840 Speaker 1: only way we're gonna do it is if that part 274 00:14:50,880 --> 00:14:53,480 Speaker 1: of them, that component of the of the cost structure 275 00:14:53,800 --> 00:14:56,240 Speaker 1: isn't as low as it can be. Hey, Kevin grant To, 276 00:14:56,280 --> 00:14:58,720 Speaker 1: can't sell you really really smart. Thank you so much 277 00:14:58,720 --> 00:15:01,880 Speaker 1: for dropping buying giving us a kill. Kevin Sainen, Bloomberg 278 00:15:01,960 --> 00:15:07,160 Speaker 1: Intelligent Senior Automotive Analysis as GM announces some big job 279 00:15:07,200 --> 00:15:13,000 Speaker 1: cuts and some big factory closures as well from the 280 00:15:13,000 --> 00:15:17,040 Speaker 1: Bloomberg Interactive Broker Studios, John Farrell and Tom Keene, thank 281 00:15:17,040 --> 00:15:20,040 Speaker 1: you for being with us. And now a definitive conversation 282 00:15:20,160 --> 00:15:23,000 Speaker 1: on trade. Edward Alden wrote one of my books of 283 00:15:23,000 --> 00:15:28,320 Speaker 1: the summer, Failure to Adjust. It is a deceptively wonderful, narrow, 284 00:15:28,680 --> 00:15:32,520 Speaker 1: dense treatise on trade and what America needs to do. 285 00:15:32,600 --> 00:15:35,440 Speaker 1: Let's get an update at Alden. What does President Trump 286 00:15:35,520 --> 00:15:40,240 Speaker 1: and what does America need to do on trade right now? Oh? 287 00:15:40,320 --> 00:15:42,560 Speaker 1: Now that is that is a big question. I mean, 288 00:15:42,840 --> 00:15:46,800 Speaker 1: you know, I I think the immediate challenge is to 289 00:15:46,920 --> 00:15:49,640 Speaker 1: find some way to enter into serious negotiations with China. 290 00:15:49,720 --> 00:15:53,400 Speaker 1: I mean, we are on potentially a very destructive road 291 00:15:53,480 --> 00:15:55,320 Speaker 1: with China. That's not to say there are real problems 292 00:15:55,360 --> 00:15:57,880 Speaker 1: in China. There are serious problems, but we need to 293 00:15:57,880 --> 00:15:59,600 Speaker 1: find a way forward on it. And I mean the 294 00:15:59,680 --> 00:16:01,960 Speaker 1: posit it. A thing with Trump is they were able 295 00:16:01,960 --> 00:16:04,120 Speaker 1: to do a new NAFTA deal. There was a lot 296 00:16:04,160 --> 00:16:05,920 Speaker 1: of storm and drawing, but at the end of the 297 00:16:06,000 --> 00:16:08,080 Speaker 1: day they came out of with the deal. I hope 298 00:16:08,120 --> 00:16:10,120 Speaker 1: the same thing as possible with China. And then we've 299 00:16:10,160 --> 00:16:11,880 Speaker 1: really got to focus on what's going on here in 300 00:16:11,880 --> 00:16:15,160 Speaker 1: the United States and how to boost our economic competitiveness 301 00:16:15,160 --> 00:16:16,800 Speaker 1: in a whole range of ways that we're just not 302 00:16:16,840 --> 00:16:20,920 Speaker 1: doing at the moment. Did the jobs GM Did they 303 00:16:21,000 --> 00:16:24,120 Speaker 1: go to China? As the John Prine, the Great John 304 00:16:24,160 --> 00:16:28,080 Speaker 1: Prine of Chicago would say, the jobs went to Mexico. 305 00:16:30,160 --> 00:16:32,480 Speaker 1: I mean yes and no, I mean no in the 306 00:16:32,560 --> 00:16:34,960 Speaker 1: sense that that you know, GM is not gonna be 307 00:16:35,040 --> 00:16:38,160 Speaker 1: exporting it certainly anytimes in your future cars from China 308 00:16:38,200 --> 00:16:40,840 Speaker 1: to the United States. It's not a Mexico type relationship. 309 00:16:41,240 --> 00:16:44,200 Speaker 1: But China is obviously a much bigger future market for 310 00:16:44,280 --> 00:16:47,000 Speaker 1: GM right now than the United States is. And GM 311 00:16:47,080 --> 00:16:49,600 Speaker 1: is rationalizing in various ways in North America. They're not 312 00:16:49,640 --> 00:16:52,680 Speaker 1: going to build these lower margin products in the United 313 00:16:52,680 --> 00:16:55,720 Speaker 1: States or Canada anymore. They're going to focus on next 314 00:16:55,800 --> 00:16:58,560 Speaker 1: generation vehicles. All that makes a lot of economic sense, 315 00:16:58,880 --> 00:17:01,240 Speaker 1: but it doesn't create a whole lot of jobs for 316 00:17:01,240 --> 00:17:04,280 Speaker 1: for auto workers. And and and that's been the story 317 00:17:04,280 --> 00:17:05,879 Speaker 1: for a long time. And nothing that the President is 318 00:17:05,960 --> 00:17:09,480 Speaker 1: under anybody else's done has changed that underlying economic reality. Said. 319 00:17:09,480 --> 00:17:12,000 Speaker 1: There was a really interesting gonticle in the Washington Post 320 00:17:12,240 --> 00:17:15,359 Speaker 1: yesterday following the GM layoffs that was titled GM layoffs 321 00:17:15,480 --> 00:17:18,919 Speaker 1: or another victory for capital over labor? What do you 322 00:17:18,920 --> 00:17:23,520 Speaker 1: think about that line? Said? You know, I think again, 323 00:17:23,600 --> 00:17:28,479 Speaker 1: for better worse, that is true. I mean, you know, labor, 324 00:17:28,560 --> 00:17:31,680 Speaker 1: even even the auto workers who have done better than 325 00:17:31,720 --> 00:17:35,440 Speaker 1: most labor unions, have been losing for for decades now. 326 00:17:36,160 --> 00:17:40,800 Speaker 1: The the owners, you know, the folks who run GM 327 00:17:40,840 --> 00:17:43,959 Speaker 1: and other companies, have a lot of flexibility. They can 328 00:17:44,000 --> 00:17:46,320 Speaker 1: produce anywhere they want in the world. They can decide 329 00:17:46,359 --> 00:17:49,639 Speaker 1: to replace labor with technology, and at the end of 330 00:17:49,640 --> 00:17:51,560 Speaker 1: the day, there's not a whole lot the unions can 331 00:17:51,600 --> 00:17:54,040 Speaker 1: do to stand in the way of that. So I 332 00:17:54,080 --> 00:17:56,520 Speaker 1: think this is the latest chapter in a very long story. 333 00:17:56,560 --> 00:17:59,000 Speaker 1: I think that analysis is correct. Whether White House stands 334 00:17:59,040 --> 00:18:01,040 Speaker 1: out head the lines of to come ready blood. Is 335 00:18:01,080 --> 00:18:03,520 Speaker 1: this the White House for labor or for capital? Which 336 00:18:03,560 --> 00:18:07,560 Speaker 1: one is it? That's a that is a really good question. 337 00:18:07,600 --> 00:18:10,080 Speaker 1: It wants to be the White House for both. So 338 00:18:10,240 --> 00:18:12,280 Speaker 1: you know, if you look at the new NAFTA, there 339 00:18:12,280 --> 00:18:14,400 Speaker 1: are a bunch of provisions in there that organized labor 340 00:18:14,480 --> 00:18:17,520 Speaker 1: is pretty happy with. I mean, unlike the Transpacific Partnership. Uh, 341 00:18:17,560 --> 00:18:19,200 Speaker 1: the f l c i O is holding its fire 342 00:18:19,200 --> 00:18:21,439 Speaker 1: on this agreement, saying, you know, the unions might be 343 00:18:21,480 --> 00:18:24,280 Speaker 1: able to support it. But at the same time, obviously, 344 00:18:24,520 --> 00:18:26,200 Speaker 1: so White has done a lot for capital, you know, 345 00:18:26,280 --> 00:18:29,439 Speaker 1: particular at the big corporate packs cut that was signed 346 00:18:29,440 --> 00:18:32,760 Speaker 1: by the President in December, and the presidents obviously very 347 00:18:32,800 --> 00:18:36,640 Speaker 1: concerned about Wall Street. So so so far it's trying 348 00:18:36,680 --> 00:18:38,920 Speaker 1: to be both. Um, there may come a point in 349 00:18:38,960 --> 00:18:41,280 Speaker 1: which it has to make a decision. This, Uh, the 350 00:18:41,480 --> 00:18:43,600 Speaker 1: GM example is a good one. President is obviously upset 351 00:18:43,640 --> 00:18:46,440 Speaker 1: about this. He's upset about these factors closing. Whether he's 352 00:18:46,440 --> 00:18:48,600 Speaker 1: going to do anything real to try to put pressure 353 00:18:48,600 --> 00:18:50,920 Speaker 1: on GM, I kind of doubt it. Okay, Well, what's 354 00:18:50,920 --> 00:18:57,680 Speaker 1: he do'ssure? Uh? You know, I mean, I suppose one 355 00:18:57,760 --> 00:19:00,000 Speaker 1: source of pressure is these auto tariffs that everybody is 356 00:19:00,080 --> 00:19:03,440 Speaker 1: talking about. I mean, this investigation on whether the US 357 00:19:03,520 --> 00:19:07,399 Speaker 1: can can block auto imports on national security grounds is 358 00:19:07,400 --> 00:19:09,679 Speaker 1: going to be delivered no later than February. And I 359 00:19:09,760 --> 00:19:12,600 Speaker 1: suppose if you know, the United States puts in place 360 00:19:13,440 --> 00:19:16,880 Speaker 1: steep carafs on auto imports, particularly from Europe and Korea 361 00:19:16,960 --> 00:19:22,000 Speaker 1: in Japan, that could put some pressure on companies to 362 00:19:22,040 --> 00:19:24,439 Speaker 1: expand production here in the United States just to serve 363 00:19:25,000 --> 00:19:27,440 Speaker 1: this market, even though it isn't the fast growing market. 364 00:19:27,480 --> 00:19:30,080 Speaker 1: I mean, that would obviously be a very drastic step, 365 00:19:30,520 --> 00:19:33,520 Speaker 1: but in the short run might actually bring some auto 366 00:19:33,600 --> 00:19:36,360 Speaker 1: jobs back to the US. Ted Alton, thank you so much, 367 00:19:36,359 --> 00:19:40,760 Speaker 1: greatly appreciate it. Failure to adjust just a wonderful thought 368 00:19:40,800 --> 00:19:45,320 Speaker 1: provoking book. A trade with the counts on Foreign Relations, 369 00:19:45,400 --> 00:19:50,480 Speaker 1: Edward Alden, particularly for our American audience, and to be 370 00:19:50,560 --> 00:19:54,159 Speaker 1: honest for myself as well. We need to triangulate. We 371 00:19:54,240 --> 00:19:57,720 Speaker 1: need to do that on Russia and on Ukraine. And 372 00:19:57,760 --> 00:20:01,800 Speaker 1: there's no better person to triangulate with that Andrew Woods. 373 00:20:01,840 --> 00:20:04,639 Speaker 1: Sir Andrew is of course the former British Ambassador to 374 00:20:04,680 --> 00:20:08,840 Speaker 1: Yugoslavia and then served a substantial five years as British 375 00:20:08,840 --> 00:20:14,119 Speaker 1: Ambassador to Russia and is with Chatham House, London Surrender. 376 00:20:14,160 --> 00:20:16,199 Speaker 1: We are thrilled to have you with us today. It 377 00:20:16,320 --> 00:20:20,320 Speaker 1: is nine and twenty miles from Belgrade to Kiev. It's 378 00:20:20,359 --> 00:20:24,520 Speaker 1: fourteen hundred miles from Belgrade used Yugoslavia up to Moscow. 379 00:20:25,119 --> 00:20:28,639 Speaker 1: And I bring up this triangulation because so many people 380 00:20:28,680 --> 00:20:32,280 Speaker 1: say that Ukraine is a gateway to Europe. How do 381 00:20:32,320 --> 00:20:38,480 Speaker 1: you translate that? How is Ukraine a gateway to Europe? Well, 382 00:20:38,520 --> 00:20:42,320 Speaker 1: in the sense that it's her an oil and gas transit, 383 00:20:42,440 --> 00:20:46,400 Speaker 1: her company country brother in the sense that it's got 384 00:20:46,520 --> 00:20:53,040 Speaker 1: very strong roots in Russian culture, and therefore, in principle, 385 00:20:53,640 --> 00:20:58,240 Speaker 1: those two countries should be in effective communication, which they 386 00:20:58,280 --> 00:21:01,919 Speaker 1: absolutely not. They're not right now. And I believe martial 387 00:21:01,960 --> 00:21:05,320 Speaker 1: law enforce in Ukraine or or or soon. But so 388 00:21:05,440 --> 00:21:09,960 Speaker 1: much of this to use Joseph Nay is power and interdependence. 389 00:21:10,520 --> 00:21:13,840 Speaker 1: Is this just about the power of Russia versus the 390 00:21:13,880 --> 00:21:20,400 Speaker 1: power of Ukraine? Or can they find a common ground? Well, 391 00:21:20,480 --> 00:21:23,879 Speaker 1: they could, um, but that would really be up to Russia. 392 00:21:24,440 --> 00:21:26,639 Speaker 1: I think we ought to be. In general, it's the 393 00:21:26,720 --> 00:21:32,080 Speaker 1: Russians who are trying their best to stop Ukraine becoming 394 00:21:32,119 --> 00:21:36,600 Speaker 1: an independent country able to make its own uh Norse 395 00:21:36,680 --> 00:21:40,600 Speaker 1: and pursue its own interests, because they believe they have 396 00:21:40,680 --> 00:21:49,280 Speaker 1: an innate right two make Ukraine there. John John Mersheimer 397 00:21:49,280 --> 00:21:52,280 Speaker 1: of Chicago, out with a new book, has been heated 398 00:21:52,640 --> 00:21:57,280 Speaker 1: in Notorious about saying that the US and the West 399 00:21:57,359 --> 00:22:01,320 Speaker 1: extended too far east towards Russia. Shah, did we do 400 00:22:01,400 --> 00:22:05,119 Speaker 1: that with Ukraine? As John Musheimer onto something, that we 401 00:22:05,280 --> 00:22:11,159 Speaker 1: extended too far to the adjacent geographies of Russia. I 402 00:22:11,160 --> 00:22:12,879 Speaker 1: don't agree at all, but of course that is what 403 00:22:12,920 --> 00:22:16,000 Speaker 1: the Russians themselves would say, because they regard the West 404 00:22:16,080 --> 00:22:21,000 Speaker 1: as a threat. UM. If he's talking about the extension 405 00:22:21,040 --> 00:22:24,240 Speaker 1: of NATO in the last century, which is essentially a 406 00:22:24,240 --> 00:22:27,760 Speaker 1: space what he has in mind, then one shouldn't forget 407 00:22:28,119 --> 00:22:31,800 Speaker 1: the um the fact that the country that did join 408 00:22:31,880 --> 00:22:35,119 Speaker 1: NATO or wanted to, precisely because they were afraid and 409 00:22:35,240 --> 00:22:38,000 Speaker 1: what Russia might do, and precisely because Russia was in 410 00:22:38,000 --> 00:22:41,639 Speaker 1: a state of quite considerable confusion at the end of 411 00:22:41,680 --> 00:22:46,760 Speaker 1: Gorbachev and through through the beginning of the Elsin. Is 412 00:22:46,840 --> 00:22:49,720 Speaker 1: Russia in confusion now? It doesn't seem to be. It 413 00:22:49,760 --> 00:22:53,280 Speaker 1: seems to have a plan. Are they in confusion or 414 00:22:53,320 --> 00:22:58,480 Speaker 1: what is the Putin plan? I think for the things 415 00:22:58,520 --> 00:23:02,000 Speaker 1: that the inhabitants of Russia would care about, he doesn't 416 00:23:02,000 --> 00:23:04,480 Speaker 1: have a plan at all. That is, the economy is 417 00:23:04,920 --> 00:23:10,960 Speaker 1: not doing well. He's not attending to their needs in health, education, infrastructure, 418 00:23:10,960 --> 00:23:13,120 Speaker 1: and so on and so forth. He's spending a lot 419 00:23:13,119 --> 00:23:18,800 Speaker 1: of money, however, on military expenditure, precisely because he believes 420 00:23:19,000 --> 00:23:22,920 Speaker 1: that is necessary to establish Russia as a quote great 421 00:23:23,000 --> 00:23:28,720 Speaker 1: power unquote. I think this will end in a much 422 00:23:28,760 --> 00:23:33,719 Speaker 1: poorer Russia and one which will become most unstable as 423 00:23:33,760 --> 00:23:35,840 Speaker 1: the years go ahead. If you're just joining us, Sir 424 00:23:35,920 --> 00:23:38,679 Speaker 1: Anderwood with us, he's a former British Ambassador to Russia 425 00:23:39,119 --> 00:23:43,280 Speaker 1: and also before that British ambassador to Yugoslavia with Chatham House. 426 00:23:43,600 --> 00:23:46,760 Speaker 1: I guess there's been sanctions. One sanction, d I can 427 00:23:46,800 --> 00:23:50,560 Speaker 1: go French and you, Sir Andrew, sanctions TOI. Are we 428 00:23:50,560 --> 00:23:54,439 Speaker 1: going to get another set of sanctions here as a 429 00:23:54,480 --> 00:23:58,840 Speaker 1: result of this, this immediate incident, Yes, um, I wouldn't 430 00:23:59,040 --> 00:24:01,399 Speaker 1: think so. What we are going to get is it 431 00:24:01,880 --> 00:24:05,680 Speaker 1: to be much more difficult for Putin to persuade other 432 00:24:05,720 --> 00:24:11,200 Speaker 1: countries two uh to lift sanctions which he badly needs 433 00:24:12,000 --> 00:24:13,640 Speaker 1: in that in that sense Athing going to be back 434 00:24:13,680 --> 00:24:16,160 Speaker 1: in his face. But it does depend on what he 435 00:24:17,240 --> 00:24:20,520 Speaker 1: really wishes to make of this, what his purpose was 436 00:24:20,800 --> 00:24:25,800 Speaker 1: in in doing it. It was only in September that 437 00:24:25,880 --> 00:24:30,680 Speaker 1: similar Ukrainian ships passed through the Kirch straight, as they 438 00:24:30,680 --> 00:24:33,920 Speaker 1: have every right to do under an agreement between Ukraine 439 00:24:33,960 --> 00:24:38,120 Speaker 1: and Russia, that this is their common territory of waters, 440 00:24:39,080 --> 00:24:44,320 Speaker 1: and his reference to Russian frontiers and rights is, by 441 00:24:44,320 --> 00:24:47,080 Speaker 1: implication at least a claim to his control of the 442 00:24:47,119 --> 00:24:50,960 Speaker 1: whole of the as of Sea, Sir Andrew. My colleague 443 00:24:51,000 --> 00:24:54,439 Speaker 1: Pim Fox points out that within the Brexit battle you 444 00:24:54,600 --> 00:24:57,720 Speaker 1: have a Gibraltar in view. I think a lot of 445 00:24:57,760 --> 00:25:03,040 Speaker 1: Americans understand where Gibraltar is in the Mediterranean. Gibraltar is 446 00:25:03,080 --> 00:25:07,400 Speaker 1: not Scotland. It's not Ireland or Northern Ireland. It's Gibraltar. 447 00:25:07,840 --> 00:25:12,760 Speaker 1: Can Gibraltar in the smaller geographies of the United Kingdom, 448 00:25:12,800 --> 00:25:18,760 Speaker 1: can they play a real part in this immediate Brexit debate? Well, yes, 449 00:25:19,320 --> 00:25:21,119 Speaker 1: I should declare an interest because I was born in 450 00:25:21,200 --> 00:25:24,280 Speaker 1: Gibraltar and spent much of my boyhood there, so I 451 00:25:24,359 --> 00:25:30,320 Speaker 1: have an interest. Um. Actually, Gibraltar has been in British 452 00:25:30,400 --> 00:25:33,560 Speaker 1: or English hands for considering longer than it ever was 453 00:25:33,720 --> 00:25:39,000 Speaker 1: in Spanish. Secondly, it's been an important base to your 454 00:25:39,000 --> 00:25:43,640 Speaker 1: country and mine and others during wartime, so I think 455 00:25:43,640 --> 00:25:47,879 Speaker 1: it is a memory of loyalty from us to it 456 00:25:48,040 --> 00:25:51,120 Speaker 1: in that sense. There's also the fact that the last 457 00:25:51,160 --> 00:25:55,159 Speaker 1: time the population of Gibraltar were consulted about whether they 458 00:25:55,200 --> 00:25:58,520 Speaker 1: wished or did not wish to have a co dominion 459 00:25:58,560 --> 00:26:04,680 Speaker 1: with Spain, now to nine percent of the voted YEA. Well, 460 00:26:04,760 --> 00:26:07,199 Speaker 1: within this debate of Braxit, and I'm going to ask you, 461 00:26:07,240 --> 00:26:10,600 Speaker 1: I guess a more general question with your esteem work 462 00:26:10,600 --> 00:26:14,320 Speaker 1: and diplomacy, what is the diplomacy the Prime Minister needs 463 00:26:14,359 --> 00:26:18,399 Speaker 1: now to assist Tories to some form of decision and 464 00:26:18,440 --> 00:26:22,560 Speaker 1: may maybe drag your labor party into the decision as well. 465 00:26:22,600 --> 00:26:26,399 Speaker 1: You served under Tony Blair and uh and John major 466 00:26:26,640 --> 00:26:29,520 Speaker 1: is as well. There has to come to a conclusion 467 00:26:29,600 --> 00:26:34,160 Speaker 1: here what would diplomacy is necessary right now for your 468 00:26:34,280 --> 00:26:42,240 Speaker 1: United Kingdom. Well, uh, the Brexit problem is a problem 469 00:26:42,280 --> 00:26:46,480 Speaker 1: which has shared with other countries still in the European Union. 470 00:26:47,720 --> 00:26:53,840 Speaker 1: It's a clash between the Wish buoyed up by the 471 00:26:53,920 --> 00:26:59,159 Speaker 1: creation of the Euro as a currency to increase the 472 00:26:59,200 --> 00:27:03,960 Speaker 1: amount of centralized control in Brussels with the help of 473 00:27:04,080 --> 00:27:08,280 Speaker 1: the cir called Franco German Motor. A lot of countries 474 00:27:08,320 --> 00:27:11,879 Speaker 1: have found the pressure of that on them to change 475 00:27:11,880 --> 00:27:15,520 Speaker 1: their policies here and mostly in economic terms that there 476 00:27:15,560 --> 00:27:22,879 Speaker 1: are policies considerable and we are now as we're facing that. 477 00:27:24,440 --> 00:27:29,160 Speaker 1: I don't know how the Parliament will vote on the 478 00:27:29,280 --> 00:27:33,760 Speaker 1: arrangement that our prime ministers negotiated, but the chances are 479 00:27:33,760 --> 00:27:38,720 Speaker 1: pretty highly they're going to refuse it. After that we 480 00:27:38,880 --> 00:27:40,919 Speaker 1: will be back at square one in one way, but 481 00:27:41,040 --> 00:27:43,240 Speaker 1: in another week we should be faced with a difficult 482 00:27:43,320 --> 00:27:47,840 Speaker 1: choice depending how the EU reacts exactly, Sir Andward, thank 483 00:27:47,880 --> 00:27:49,720 Speaker 1: you so much. We have to leave it there this morning. 484 00:27:49,800 --> 00:27:54,960 Speaker 1: Greatly appreciated the former British Ambassador to Russia, Sir Andrew Wood, 485 00:27:55,240 --> 00:27:59,440 Speaker 1: thanks for listening to the Bloomberg Surveillance Podcast. Subscribe and 486 00:27:59,480 --> 00:28:04,800 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 487 00:28:04,880 --> 00:28:09,119 Speaker 1: platform you prefer. I'm on Twitter at Tom Keene before 488 00:28:09,119 --> 00:28:12,960 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg 489 00:28:13,040 --> 00:28:13,359 Speaker 1: Radio