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Speaker 1: This is Bloomberg Wall Street Week. What's the state of

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Speaker 1: corporate governance? The deficit is a real issue. The US

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Speaker 1: economy continues to send mixed signals to the financial stories

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Speaker 1: that cheap our word fed action to con concerns over

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Speaker 1: dollar liquidity and encouraging China data. The town's reaction to

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Speaker 1: news on Brexit through the eyes of the most influential

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Speaker 1: voices Larry Summers, the former Treasury Secretary, star Ward CEO,

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Speaker 1: Kevin Johnson, sec Chairman, Jake Clayton. Bloomberg Wall Street Week,

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Speaker 1: We've David Weston on Bloomberg Radio. A virus takes over

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Speaker 1: the world and shakes the economy to its core. This

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Speaker 1: is Bloomberg Wall Street Week. I'm David Weston this week

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Speaker 1: through us all for a bit of a loop, including

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Speaker 1: here on Wall Street Week. Like most of the rest

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Speaker 1: of us were now pretty much working from home or

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Speaker 1: from some other remote location. Looks like the only thing

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Speaker 1: that matters is the coronavirus and what it's doing to

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Speaker 1: our lives and what it's doing to our economy. We

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Speaker 1: start this week on Wall Street itself. The New York

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Speaker 1: Stock Exchange closed its trading floor because of the coronavirus,

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Speaker 1: but upt trading nonetheless online. You know the results. The

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Speaker 1: market posts the biggest one day move up since ninety three,

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Speaker 1: but it's still headed toward its worst month since two

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Speaker 1: thousand and eight. But whatever the ups and the downs,

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Speaker 1: the question is, are the markets really working? How can

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Speaker 1: they price future earnings when the companies themselves haven't a clue.

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Speaker 1: That's where we started with Stacy Cunningham, CEO of the

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Speaker 1: New York Stock Exchange. The markets are functioning properly. There

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Speaker 1: are certainly a lot of uncertainty around how the situation

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Speaker 1: is going to continue evolve, what the impact both short

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Speaker 1: term and long term on companies and the economy more broadly.

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Speaker 1: So a lot of that is uncertain, but markets are

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Speaker 1: always operating with some degree of uncertainty. It just happens

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Speaker 1: to be higher than normal right now. It is important

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Speaker 1: to recognize that they are functioning properly, so very very

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Speaker 1: different from you know, whether or not we like the prices,

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Speaker 1: or whether or not we even think the prices are

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Speaker 1: reflective of where the economy is going. It's important to

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Speaker 1: recognize the market doesn't actually reflect the strength of the economy.

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Speaker 1: It reflects public sentiment about the strengths of the economy.

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Speaker 1: So it's reflecting how people are feeling, and that's why

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Speaker 1: you're seeing these dramatic moves. And clearly we're seeing a

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Speaker 1: much wider band if possible outcomes in the marketing any

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Speaker 1: given day. We're seeing an enormous volatility right now. But

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Speaker 1: is that market sentiment that you refer to, is that

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Speaker 1: really a matter of what we think earnings are going

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Speaker 1: to be or whether we think these companies are actually

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Speaker 1: gonna make it or not. I think it's a reflection

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Speaker 1: of how people are feeling about those things, and so

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Speaker 1: people aren't quite sure what what they're the impact for

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Speaker 1: their overall personal financial stability is going to be, what

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Speaker 1: the impact of small the mid sized businesses is going

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Speaker 1: to be, and what the ripple ripple effects that will

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Speaker 1: have on the economy might look like. How some of

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Speaker 1: the larger companies that has dramatic exposure to coronavirus, uh,

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Speaker 1: you know the effects of the coronavirus certainly how long

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Speaker 1: it's going to take them to recover from from all

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Speaker 1: those things. So like as the markets not pricing all

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Speaker 1: of that in, but it's pracing and how investors just

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Speaker 1: feeling about that the situation is evolving so quickly. Every

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Speaker 1: day we learn so much more. I mean, it certainly

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Speaker 1: feels to me like each day feels like a week

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Speaker 1: in each week feel like a month. And we are

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Speaker 1: really very quickly evolving that. You know, the situation is

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Speaker 1: so rapidly evolving that I do think people are reacting

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Speaker 1: to new information by the minute. There have been times

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Speaker 1: when the markets not function because of circuit breakers, just

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Speaker 1: shut down and say let's not trade for a while

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Speaker 1: so people can really cool their emotions. Have you considered

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Speaker 1: all the possibility of suspending the market for a longer

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Speaker 1: period of time? Some big players and we'll shore you

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Speaker 1: have raised that possibility of very stage. They just say,

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Speaker 1: look at there's too much panic, let's just take a

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Speaker 1: hiatus for a few days. Absolutely not, we are absolutely

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Speaker 1: not considering doing that. And it's really important that we

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Speaker 1: even stop the dialogue around it, in my opinion, because

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Speaker 1: the fear that the markets might unexpectedly close is enough

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Speaker 1: to put selling pressure on the close, and no one

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Speaker 1: in a position of power to make that that change

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Speaker 1: is talking about that. No one is is no one

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Speaker 1: at the exchange level. The exchanges all feel the same way.

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Speaker 1: The the Treasury feels the same way, the SEC feels

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Speaker 1: the same way. They've all made public statements about the

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Speaker 1: markets needing to remain open, and there's a good even

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Speaker 1: that it's because investors need to have access to their money,

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Speaker 1: and it can have an increased effect on panic in

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Speaker 1: the market if you do shut down the market. The

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Speaker 1: reason why we have market wide circuit breakers is because

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Speaker 1: there are a response there. They are a well calculated,

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Speaker 1: well studied, and implemented response that we took in not

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Speaker 1: during the time of stress, but in reaction to the

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Speaker 1: n crash, so that we would be ready for a

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Speaker 1: scenario should it arise again. We don't regularly use them

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Speaker 1: because we're not usually in those in that state, but

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Speaker 1: we have used them four times in this month to date,

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Speaker 1: and that's the mechanism that was agreed when when you

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Speaker 1: had time to think about it and have a rational approach,

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Speaker 1: the decision was, you can't close markets, but let's pause

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Speaker 1: them to investors get fifteen minutes to understand what's happening,

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Speaker 1: to take a deep breath, to assess the situation and

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Speaker 1: react appropriately. The circuit breakers have been functioning the way

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Speaker 1: they're intended to function. Closing the markets would be would

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Speaker 1: be the wrong thing. It's not going to change the

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Speaker 1: underlying can turns, and that's putting pressure on the market

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Speaker 1: in itself. It's not going to it will have have

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Speaker 1: the likelihood of penting up more selling pressure during the

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Speaker 1: market closure, and it denies people of access to their

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Speaker 1: funds when they need it most. So certainly that's not

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Speaker 1: being considered Stacy. Are you happy with the circuit breakers

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Speaker 1: in the way they've worked or do you think it's

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Speaker 1: going to be time? Certainly, once we get past this,

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Speaker 1: which I hope is not too far in the future,

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Speaker 1: we should revisits hell them. But they were imposed. As

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Speaker 1: I recall seven, if you learned anything from the last

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Speaker 1: couple of weeks that would say, you know, we should

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Speaker 1: rethink some aspects of the circuit breakers. Yes, and and

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Speaker 1: and every time we have a market event, the industry

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Speaker 1: comes together and we analyze it and go through the

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Speaker 1: post mortem process of saying, hey, what do we learn

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Speaker 1: and what do we what do we think we can

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Speaker 1: change so that we in further enhance the resiliency of markets.

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Speaker 1: Seven That post mortem resulted in the market White circuit breakers.

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Speaker 1: They've been changed since then. So when they were first introduced.

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Speaker 1: They were introduced by the Brady Commission. They were based

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Speaker 1: on the Dow Jones, not the broader SMP five hundred.

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Speaker 1: They were based on points, not percentage moves. So they've

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Speaker 1: evolved over time to be based now in SMP five

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Speaker 1: hundred index to be based on seven percent move in

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Speaker 1: the market. We absolutely well, after we get through this,

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Speaker 1: take a step back and say what did we learn

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Speaker 1: and where can we further make changes. I do expect

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Speaker 1: we might change some of the levels based on the

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Speaker 1: fact that the futures for the SMPI index end up

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Speaker 1: in a limit state at down five, which makes you

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Speaker 1: lose some of that transparency when you know you're going

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Speaker 1: to trigger a market. I took up a seven percent.

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Speaker 1: In the meantime, we've been leveraging the SMP sp y

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Speaker 1: e t s as a proxy for what that index

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Speaker 1: would be doing if it had not been limited to

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Speaker 1: a five percent move. And that's um, you know that

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Speaker 1: that's I think those are the types of things that

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Speaker 1: will take a look at after after these events and

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Speaker 1: see if there's further room for improvement. That was Stacy

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Speaker 1: Cunningham of the New York Stock Exchange. Coming up, We're

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Speaker 1: pretty much all working from home now. We talked with

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Speaker 1: the man who's making that possible, Chuck Robbins of Cisco.

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Speaker 1: This is Wall Street Week. This is Bloomberg Will Street

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Speaker 1: Week with David Weston from Bloomberg Radio. Teleworking it's become

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Speaker 1: the buzzword of and Cisco Systems provides much of the

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Speaker 1: critical backbone making it possible for millions of Americans. We

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Speaker 1: talked with Cisco Chairman and CEO Chuck Robbins about what

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Speaker 1: the pandemic has meant for the world of remote working. Look,

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Speaker 1: we've we've seen unprecedented volumes. We are, to your point, uh,

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Speaker 1: critical infrastructure for working from home and and the internet

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Speaker 1: service providers that are servicing all of all of us

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Speaker 1: who are trying to work from home. I'll give you

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Speaker 1: some statistics. We launched both free cloud security offers and

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Speaker 1: free WebEx offers, and in the first twenty four hours

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Speaker 1: of putting that offer out, we had two forty thousand

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Speaker 1: new users signed up. And this is a platform that

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Speaker 1: you know, before this crisis was running three hundred million

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Speaker 1: users per month. Uh, we are now at we're doing

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Speaker 1: four and a half million meetings a day. That's that

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Speaker 1: doesn't even include one on ones that are occurring on

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Speaker 1: the platform. We're at twelve billion meeting minutes through March

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Speaker 1: so far, and just to put it in perspective, in

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Speaker 1: the United States during any one hour period, we will

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Speaker 1: do one hundred million meeting minutes in just one hour

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Speaker 1: in the United States right now. So we've seen incredible demand.

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Speaker 1: I'll tell you our teams are tired, but you know

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Speaker 1: when you're when you're talking about a platform that is

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Speaker 1: now trying to support three to four to five times

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Speaker 1: the volume that it ever was built for four weeks ago.

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Speaker 1: They've done yeoman's work, frankly to be where we are, so, Chuck,

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Speaker 1: have you been able to definitely any weaknesses in the system,

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Speaker 1: because no one was prepared for this sort of onslaught,

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Speaker 1: none of us anywhere in any way, shape or form.

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Speaker 1: Have you noticed any weaknesses or anything that you can

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Speaker 1: be improving? What are those weaknesses? What are you doing? Primarily, David,

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Speaker 1: it's just about capacity. And you know, we have tremendous

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Speaker 1: relationships with the large vice providers around the world, and

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Speaker 1: they've been incredible partners for us. We had one of

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Speaker 1: the major ones in the US we needed capacity. This week,

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Speaker 1: I send him a text at six o'clock at night

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Speaker 1: and by midnight they had done the work and increased

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Speaker 1: the capacity. So it's just related to that, and there

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Speaker 1: there are minor things that will happen during the day.

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Speaker 1: You know, we need everybody to be patient as we're

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Speaker 1: just seeing these volumes that these platforms weren't built for.

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Speaker 1: I mean, I joked with our team, I should have

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Speaker 1: told you when we respect this, these technologies that you

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Speaker 1: need to build and to have everyone in the world

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Speaker 1: working from home. And clearly we didn't do that. But

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Speaker 1: the team. I have to tell you, I am so

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Speaker 1: proud of what our team has accomplished because they're working

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Speaker 1: seven by twenty four. We're trying to put more resources

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Speaker 1: with him because I'm worried about them right now. Actually,

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Speaker 1: what's your own experience with working from home? It's a

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Speaker 1: practical matter. Is that giving you a different perspective on

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Speaker 1: actually the product of you people to produce? First of all,

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Speaker 1: I think we all like working from home periodically. I

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Speaker 1: think we all missed the office tremendously. But you know,

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Speaker 1: for our employee, these we we've we've looked at this

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Speaker 1: across three vectors. Right, what are we doing for our employees,

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Speaker 1: what are we doing for our customers, and what are

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Speaker 1: we doing for our communities, and even from home, we're

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Speaker 1: able to execute on all of that. So you know,

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Speaker 1: we have all of our employees are working from home.

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Speaker 1: We've we've stated that we'll continue to pay our contract

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Speaker 1: and hourly workers. We're doing a video meeting with all

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Speaker 1: our employees every week right now, the entire company, and

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Speaker 1: we're we have medical experts that are on We have

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Speaker 1: one later tonight where we'll do a Q and A

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Speaker 1: and we have twenty thirty employees joining uh these Q

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Speaker 1: and A sessions just so we can keep everybody up

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Speaker 1: to date on what's happening in the world. And it's

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Speaker 1: it's working fine for us right now. I think everybody

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Speaker 1: is anxious to get back, but I think right now

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Speaker 1: it's it's working great. So, as you say, you've got

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Speaker 1: your hands full right now, just getting day to day,

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Speaker 1: but it too soon to start thinking about longer term

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Speaker 1: implications for your business. For the business overall, I wonder

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Speaker 1: if everybody who has learned to work from home will

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Speaker 1: necessarily go back to the office once we're past this. Well,

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Speaker 1: I think that the capacity and the ability to work

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Speaker 1: helping people understand is that it's possible and you can

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Speaker 1: be productive from home. So I think that I do

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Speaker 1: think that this will change how we think about it

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Speaker 1: really understand. And I told our our leadership team, look,

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Speaker 1: we're we're not going to understand any structural changes to

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Speaker 1: our business until we get to the other side of this.

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Speaker 1: So I'll tell you the big thing that we're really

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Speaker 1: worried about, beyond our customers, beyond our employees, are our communities.

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Speaker 1: And you know, we it's great to see the package

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Speaker 1: being passed in Washington today, but we've been trying to

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Speaker 1: spearhead you think about what's happening with our homeless communities,

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Speaker 1: with those who are, you know, one financial crisis away

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Speaker 1: from from being on the streets. I mean, these are

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Speaker 1: the people we have to focus on right now, and

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Speaker 1: we've been working very hard in Silicon Valley with our

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Speaker 1: our public counterparts to actually try to make sure we're

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Speaker 1: taking care of them as well. Well. I know the

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Speaker 1: Cisco has stepped up and made a substantial atribution to

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Speaker 1: try to help the effort. Let's talk about your employees.

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Speaker 1: You've mentioned them a couple of times. At the same

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Speaker 1: time that we need you more than ever, you also

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Speaker 1: have to worry about the health and safety of your

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Speaker 1: own employees. How do you strike that balance? Juck Well,

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Speaker 1: we air on the side of safety for our employees.

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Speaker 1: We were really early and work from home, and we

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Speaker 1: we were making those decisions around the globe as we

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Speaker 1: saw this virus spread. And then candidly we were very

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Speaker 1: quick to just say we're we're everyone's working from home now,

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Speaker 1: We're blessed that we have technology. Everyone has this technology.

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Speaker 1: And and then we've also been we but our employees

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Speaker 1: have been in the middle of this crisis response. We

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Speaker 1: had employees in the hospitals that were being built in

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Speaker 1: China helping stand up networking equipment, delivering video units. We've

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Speaker 1: been doing it in countries all around the world. We're

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Speaker 1: working on trying to network enable these parking lot labs

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Speaker 1: that are being put up right now. So our teams

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Speaker 1: many are working from home, but there's a there's a

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Speaker 1: small percentage of our employees who are who are working

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Speaker 1: in the middle of this crisis right now trying to

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Speaker 1: help get us to the other side. So we continue

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Speaker 1: to do everything we can to take care of them

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Speaker 1: as well, but we also have to make sure we're

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Speaker 1: doing our part. Chuck, do you have a sense of

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Speaker 1: what this means to Cisco as a business, just in

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Speaker 1: terms of dollars and cents, revenue costs, things like that.

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Speaker 1: The demand is way up, as you've described, dramatically up.

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Speaker 1: At the same time, are you concerned about the ability

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Speaker 1: of some of your customers to pay well, you know,

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Speaker 1: to be honest with you, do We're not worried about

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Speaker 1: it right now. We're we're actually just trying to get

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Speaker 1: through this crisis, and so whatever our customers need, we're

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Speaker 1: prioritizing our supply chain capacity. You know, we historically we

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Speaker 1: would prioritize that by our biggest customers who you know,

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Speaker 1: who were who were the loudest and frankly, now we

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Speaker 1: put a whole process in place to prioritize our supply

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Speaker 1: chain capacity for those companies who are in the middle

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Speaker 1: of trying to solve this crisis. So we're not thinking

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Speaker 1: much about what happens longer term. We're just trying to

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Speaker 1: make sure we're doing our part to get through it

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Speaker 1: right now, and we'll continue to do that and then

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Speaker 1: we'll figure it out later. Chuck, what do you want

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Speaker 1: to see from the government at this point speed? I

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Speaker 1: think we need to see We need to see speed.

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Speaker 1: I think about this crisis from in three ways. Right.

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Speaker 1: There's there's the medical response, which we need to continue

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Speaker 1: to support those heroes who are out there. I mean

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Speaker 1: they are these people are doing unbelievable work. There's the

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Speaker 1: financial response, which we now have and we need to

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Speaker 1: get that money into the hands of the people who

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Speaker 1: need it. And then the third is making sure that

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Speaker 1: our customers and all of the companies around the world

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Speaker 1: can remain as productive as possible as we go through

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Speaker 1: this this different way of working. And you know, we

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Speaker 1: just need we need speed. And I think that to

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Speaker 1: the extent these small businesses can have a degree of

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Speaker 1: confidence in these individuals can have a degree of confidence,

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Speaker 1: then it will take a lot of stress out of

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Speaker 1: the system. That was Chuck Robbins, CEO of Cisco, coming

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Speaker 1: up on Wall Street Week. The world waited for a

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Speaker 1: monumental stimulus package from Washington, and at the end of

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Speaker 1: the week it got it. We talked with the woman

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Speaker 1: most responsible Speaker of the House, Nancy Pelosi. This is

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Speaker 1: Wall Street Week. This is Bloomberg Wall Street Week with

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Speaker 1: David Weston from Bloomberg Radio. This is Bloomberg Wall Street Week.

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Speaker 1: I'm David Weston. This was the week when Congress passed

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Speaker 1: a spending package that would have been unimaginable just a

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Speaker 1: month ago, over two trillion dollars to cushion some of

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Speaker 1: the blow to workers and companies from bringing an economy

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Speaker 1: to a screeching halt, or at least to slow it down.

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Speaker 1: We talked with the Speaker of the House, Nancy Pelosi,

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Speaker 1: on the eve of the historic House vote. We do

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Speaker 1: recognize that certain industries are going to need federal funds,

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Speaker 1: and we want those those industries to know that we

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Speaker 1: have there are conditions to make sure that workers are protected,

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Speaker 1: that they stay employed, that they're on the pay roll,

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Speaker 1: and that their their rights are protected. It's very important

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Speaker 1: strong and fusion of funds. If for a small business,

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Speaker 1: we're very excited about that, and that is for the

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Speaker 1: first time some grants and small business. This administration or

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Speaker 1: and that process facilitated greatly to aid small businesses, which are,

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Speaker 1: as you know, the lifeblood of our economy of job creators,

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Speaker 1: the wealth creators, so very very important. So again, many

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Speaker 1: of these changes that changed it from trickle down to

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Speaker 1: bubble up. I've took a matter of forty eight or

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Speaker 1: so hours, but that would not be called a delay,

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Speaker 1: that would be called an improvement. Fair fair enough, Let's

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Speaker 1: talk about small businesses for a moment, because, as you say,

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Speaker 1: they really employ a lot of the people in the country.

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Speaker 1: Have you seen a lot of layoffs already at things

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Speaker 1: like restaurants and things. How confident are you that that

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Speaker 1: money can get to those small businesses. Larger businesses have

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Speaker 1: more capital, they can tie it over and keep people

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Speaker 1: on payroll. Smaller ones can't. Small business administration are they

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Speaker 1: up to that task? Well, I spoke with the Secretary

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Speaker 1: of the Treasure Mr. Treasury Mr Manu Chin, and we

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Speaker 1: have been talking about this for a while, that we

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Speaker 1: cannot leave it up to the process of the s

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Speaker 1: b A. UH. That there's a initiative that he put

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Speaker 1: forward that the banks could do the direct lending with

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Speaker 1: the impromatur of the s b A and that would

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Speaker 1: make this all go very much faster. And that's that

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Speaker 1: will be a vast improvement really uh necessary because of

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Speaker 1: the urgency of getting those funds into the hands of

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Speaker 1: the small businesses. And actually there's also a loan forgiveness

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Speaker 1: in there in terms of rent and utilities and the rest,

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Speaker 1: depending on how a business thrives with the resources that

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Speaker 1: they receive and a loan. You mentioned also the oversight

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Speaker 1: that's now in this bill is understand it for some

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Speaker 1: of the dispersus the larger corporations, some might call it

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Speaker 1: a bailout. Is that oversight after the fact or will

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Speaker 1: it be advanced consultation so to be able to say no,

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Speaker 1: it shouldn't be going to that company, or do you

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Speaker 1: have to wait for to go out and then afterwards

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Speaker 1: remonstrate with them. Well, there are a couple of different categories.

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Speaker 1: For example, the airline industry has a very direct formula

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Speaker 1: that part of the money uh nearly fifty fifty, but

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Speaker 1: part of the money goes and loans to to to

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Speaker 1: the airlines, and part of it goes in grants because

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Speaker 1: that goes directly to the employees and that is the

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Speaker 1: condition there. This money just touches base there who goes

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Speaker 1: directly to the employees to keep them employed. Uh. And

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Speaker 1: then the other funds do have their conditions about no

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Speaker 1: buy backs, no dividends, no bonuses, all of that kind

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Speaker 1: of uh uh provisions because people felt very burned about

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Speaker 1: what happened uh in two thousand and eight, two thousand

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Speaker 1: and nine. But it is um in terms of the

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Speaker 1: bigger pot, which which is that largely the special of

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Speaker 1: the administration. We we insisted that there be a oversight

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Speaker 1: on that, and that was in our House bill and

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Speaker 1: in the Senate bill, and it said that for the

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Speaker 1: funds that would be released in that process, that there

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Speaker 1: would be an inspector General h too oversee have oversight

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Speaker 1: over that process. And in addition to that, a five

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Speaker 1: person panel of the Congress appoints UH to oversee how

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Speaker 1: that money goes out as well. UH. This is absolutely essential.

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Speaker 1: It could not be. For example, it was all the

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Speaker 1: respect to the Secretary. You could put out money, we

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Speaker 1: wouldn't even know about it until six months later, who

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Speaker 1: may have gotten it, Whether it was appropriate in the

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Speaker 1: in terms of the priority it should have at this

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Speaker 1: time where the lives and the livelihood of the American

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Speaker 1: people are at stake. There are different regional points of

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Speaker 1: view about that, and uh just the role of government

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Speaker 1: points of view. But we want every you know, again,

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Speaker 1: we don't want to keep any resources from anybody who

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Speaker 1: really needs it in order to again, uh help our

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Speaker 1: economy grow at this time, but it really has to

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Speaker 1: be coronavirus specific. That has been our condition from day one.

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Speaker 1: This is our third bill. Our first bill was about

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Speaker 1: an emergency, Our second bill was about emergency. Our third bill,

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Speaker 1: which this bill, is about mitigation, trying to mitigate for

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Speaker 1: the damage that is being done to our economy as

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Speaker 1: well as continue to meet the emergency health needs of

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Speaker 1: the American people. Our next bills will lean toward recovery,

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Speaker 1: how we can create good paying jobs that we go forward,

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Speaker 1: perhaps building the infrastructure of America. All of these things

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Speaker 1: are being done in a bipartisan way, but we do

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Speaker 1: have to weigh in to make sure the leverage is

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Speaker 1: more equal rather than a favorite trickle down that had

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Speaker 1: than bubble up from the workAs that was Speaker of

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Speaker 1: the House Nancy Pelosi coming up. We need our healthcare

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Speaker 1: teams around the country healthy as they work around the

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Speaker 1: clock to treat the exploding number of COVID nineteen cases.

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Speaker 1: We talked with Mike Woman, CEO of three M whose

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Speaker 1: company is on the spot for producing critical and nine

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Speaker 1: masks as supplies run out that's next on Wall Street Week.

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Speaker 1: This is Bloomberg Wall Street Week with David Weston from

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Speaker 1: Bloomberg Radio. All of us financial Titans is this executives,

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Speaker 1: government officials, and moms and Dad's spent time this week

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Speaker 1: learning about how you fight a pandemic, about social distancing,

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Speaker 1: about washing our hands constantly, about disinfectants, and all of

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Speaker 1: it was for a single purpose, to avoid overwhelming a

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Speaker 1: health care system that has already stretched to the breaking point.

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Speaker 1: But if our doctors and our nurses are to do

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Speaker 1: the job we need them to do, we need the

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Speaker 1: personal protective equipment that keeps them from getting the virus themselves.

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Speaker 1: And three M is the company we need to manufacture

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Speaker 1: that protective equipment. We talked with Mike Roman, chairman and

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Speaker 1: CEO three M about the company's capacity to do just

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Speaker 1: that and what can be done to ramp up and quickly. Yeah, So, David,

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Speaker 1: thank you for having me on. Thank you for getting

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Speaker 1: me back on that. And ninety five respirator is at

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Speaker 1: the center of what we are focused on. Our priority

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Speaker 1: start to the safety of our people, but the safety

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Speaker 1: of public is critical and we have a unique responsibility

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Speaker 1: to deliver those n nine respirators to the healthcare workers

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Speaker 1: on the front lines, and we UH we accelerated to

434
00:22:00,080 --> 00:22:04,960
Speaker 1: maximum production globally, including in the US, beginning back in January,

435
00:22:05,000 --> 00:22:07,560
Speaker 1: and we are currently operating at that level. We produced

436
00:22:07,640 --> 00:22:10,680
Speaker 1: thirty five millions of the N ninety five respirators each

437
00:22:10,760 --> 00:22:14,440
Speaker 1: month out of our manufacturing facilities in the US. We

438
00:22:14,760 --> 00:22:18,720
Speaker 1: have prioritize those rest girators for the healthcare workers in

439
00:22:18,760 --> 00:22:23,560
Speaker 1: the front line. We can we can continue to add

440
00:22:23,600 --> 00:22:25,960
Speaker 1: to that capacity. We're at thirty five millions a day

441
00:22:26,040 --> 00:22:30,480
Speaker 1: and and really delivering to the greatest needs around around

442
00:22:30,520 --> 00:22:34,040
Speaker 1: the US. We were all becoming familiar with these numbers, now,

443
00:22:34,080 --> 00:22:36,399
Speaker 1: were there? President from the vice president, give us a

444
00:22:36,480 --> 00:22:38,720
Speaker 1: sense if you need to increase production, because it sounds

445
00:22:38,720 --> 00:22:40,640
Speaker 1: like right now we can't get enough of these things.

446
00:22:41,200 --> 00:22:43,040
Speaker 1: How long does it take for you to increase above

447
00:22:43,080 --> 00:22:48,680
Speaker 1: that thirty five million range. Well, we're working with government, partners,

448
00:22:48,800 --> 00:22:52,960
Speaker 1: with other companies, looking at all ways to increase our capacity.

449
00:22:53,359 --> 00:22:56,600
Speaker 1: We have made investments, you know, our strategy has been

450
00:22:56,720 --> 00:22:59,960
Speaker 1: to keep idle capacity available for times like this. We've

451
00:23:00,040 --> 00:23:02,879
Speaker 1: brought all that online. We are adding to that with

452
00:23:03,040 --> 00:23:06,320
Speaker 1: additional investments that we had in the pipeline, and then

453
00:23:06,400 --> 00:23:10,080
Speaker 1: we are working to continue to add capacity further out

454
00:23:10,160 --> 00:23:12,080
Speaker 1: as we go through the year, so it's it's kind

455
00:23:12,119 --> 00:23:14,880
Speaker 1: of in stages. Near term, we can add some incremental capacity.

456
00:23:14,920 --> 00:23:18,399
Speaker 1: We're working with other companies to look at alternatives to

457
00:23:18,520 --> 00:23:22,000
Speaker 1: add even more to that. So we we are striving

458
00:23:22,040 --> 00:23:24,360
Speaker 1: to add more each month, and then as we get

459
00:23:24,400 --> 00:23:26,560
Speaker 1: out later in the year, we think we can increase

460
00:23:26,600 --> 00:23:31,240
Speaker 1: significantly with additional production lines that will come on online

461
00:23:31,280 --> 00:23:33,240
Speaker 1: for us. Mike, give us a sense of the relationship

462
00:23:33,240 --> 00:23:34,840
Speaker 1: with the government here, because we have heard about three

463
00:23:34,960 --> 00:23:37,080
Speaker 1: M more than once from the President, from the vice presidents.

464
00:23:37,080 --> 00:23:39,000
Speaker 1: I understand Vice President Fence actually went out and visited

465
00:23:39,040 --> 00:23:42,480
Speaker 1: you at one point. Is this a matter of cooperation support?

466
00:23:42,720 --> 00:23:45,159
Speaker 1: Are they invoking the Defense Production Act with respect to

467
00:23:45,200 --> 00:23:48,800
Speaker 1: three M. Well, we've been working very closely with the government.

468
00:23:48,840 --> 00:23:52,000
Speaker 1: We've been working, you know, with with Vice President Pence

469
00:23:52,080 --> 00:23:55,200
Speaker 1: from his visit, looking at how to make sure that

470
00:23:55,320 --> 00:23:58,800
Speaker 1: we can shift what have been the industrial and ninety

471
00:23:58,840 --> 00:24:02,480
Speaker 1: five respirators into healthcare. So it was really appreciate the

472
00:24:03,160 --> 00:24:05,920
Speaker 1: the Emergency Youth Authorization out of the SPA and then

473
00:24:06,440 --> 00:24:09,240
Speaker 1: the PREP Act amendment which enabled us to be able

474
00:24:09,320 --> 00:24:13,399
Speaker 1: to deliver our industrial respirators at the healthcare workers of

475
00:24:13,480 --> 00:24:15,760
Speaker 1: the front line. That was the first big step, and

476
00:24:15,840 --> 00:24:19,320
Speaker 1: so we worked together on that. The Defense Production Act

477
00:24:19,560 --> 00:24:23,080
Speaker 1: really has enabled us to work together on making sure

478
00:24:23,160 --> 00:24:26,399
Speaker 1: we are getting the respirators to the most critical needs

479
00:24:26,520 --> 00:24:30,199
Speaker 1: around the country. And our teams are working together with FEMA,

480
00:24:30,320 --> 00:24:32,560
Speaker 1: with Health and Human Services making sure that we are

481
00:24:32,640 --> 00:24:35,920
Speaker 1: delivering where the needs are greatest. So it's a partnership

482
00:24:36,000 --> 00:24:39,919
Speaker 1: that that really has been very effective as we've come

483
00:24:40,000 --> 00:24:41,840
Speaker 1: through the month of March. Mike, you're right at the

484
00:24:41,960 --> 00:24:45,040
Speaker 1: very center of a true national global crisis. In fact,

485
00:24:45,600 --> 00:24:47,840
Speaker 1: what in your past experience may have prepared you for

486
00:24:47,880 --> 00:24:50,440
Speaker 1: this or prepared three m for this sort of unprecedented demand,

487
00:24:50,640 --> 00:24:53,560
Speaker 1: not just demand, but need for the safety, safety and

488
00:24:53,640 --> 00:24:56,959
Speaker 1: health of the American public. We learned, i would say,

489
00:24:57,040 --> 00:24:59,440
Speaker 1: coming out of Stars and H one N one that

490
00:24:59,800 --> 00:25:03,640
Speaker 1: we as a leader in providing these personal protective equipment

491
00:25:03,720 --> 00:25:07,359
Speaker 1: solutions and and really the respirators being critical center of that,

492
00:25:07,880 --> 00:25:10,600
Speaker 1: that we needed to be able to lead in times

493
00:25:10,640 --> 00:25:13,440
Speaker 1: of crisis. And so we made the decision to invest

494
00:25:13,520 --> 00:25:18,480
Speaker 1: in capacity that stayed idle under normal circumstances. Normally, a

495
00:25:18,600 --> 00:25:21,000
Speaker 1: majority of our respirators that ND ninety five goes to

496
00:25:21,080 --> 00:25:26,280
Speaker 1: industrial use, protecting workers in difficult environments. In times like this,

497
00:25:26,480 --> 00:25:29,600
Speaker 1: we have to both surge our capacity and we've almost

498
00:25:29,640 --> 00:25:32,159
Speaker 1: doubled our outputs since the beginning of the year as

499
00:25:32,200 --> 00:25:35,960
Speaker 1: we came into the year expecting normal business demand and

500
00:25:36,080 --> 00:25:38,919
Speaker 1: then we uh, you know, we are able to surge

501
00:25:38,960 --> 00:25:41,600
Speaker 1: everywhere around the world. We manufacture in all regions of

502
00:25:41,640 --> 00:25:44,520
Speaker 1: the world. So the US was very important and we

503
00:25:44,640 --> 00:25:46,399
Speaker 1: ramped that up to the thirty five million, but we

504
00:25:46,640 --> 00:25:50,520
Speaker 1: ramped up globally to over a hundred million per month.

505
00:25:50,720 --> 00:25:53,520
Speaker 1: So we are we are surging everywhere around the world.

506
00:25:53,960 --> 00:25:56,280
Speaker 1: Moving beyond the N ninety five. There's something that I'm

507
00:25:56,359 --> 00:25:59,240
Speaker 1: learning about called the powered air Purifying respirator, which is

508
00:25:59,280 --> 00:26:01,200
Speaker 1: the p A p R. There's an announcement that three

509
00:26:01,200 --> 00:26:03,960
Speaker 1: I'm made together with g and with Ford in the

510
00:26:04,119 --> 00:26:07,040
Speaker 1: U explained us what those devices are and what the

511
00:26:07,119 --> 00:26:10,399
Speaker 1: nature of this joint venture is. Yeah, this is I

512
00:26:10,480 --> 00:26:13,280
Speaker 1: think that's a great example of how companies have stepped up.

513
00:26:13,359 --> 00:26:16,480
Speaker 1: They've they've responded to the call to action to do

514
00:26:16,680 --> 00:26:20,520
Speaker 1: everything they can to help serve the public safety and

515
00:26:20,640 --> 00:26:22,920
Speaker 1: the needs of the healthcare workers. This is a great example.

516
00:26:23,359 --> 00:26:26,880
Speaker 1: Ford reached out to us to work together on anything

517
00:26:27,000 --> 00:26:30,240
Speaker 1: that we could do to increase our capacity and the

518
00:26:30,320 --> 00:26:32,600
Speaker 1: solutions we can bring to the market. And this power

519
00:26:32,680 --> 00:26:35,560
Speaker 1: dair purifier is an area that it's a it's an

520
00:26:35,560 --> 00:26:40,440
Speaker 1: important product for use in some of the healthcare environments,

521
00:26:40,520 --> 00:26:44,080
Speaker 1: and and Board can bring expertise, uh, they can bring

522
00:26:44,160 --> 00:26:46,280
Speaker 1: skills where it's needed most for us and help us

523
00:26:47,160 --> 00:26:51,000
Speaker 1: increase our production of those powordair purifiers. So it's a

524
00:26:51,359 --> 00:26:54,520
Speaker 1: it's really I'm really pleased with Ford's response and the

525
00:26:54,560 --> 00:26:56,920
Speaker 1: health they've been giving us. Are there other possible joint

526
00:26:57,000 --> 00:26:58,840
Speaker 1: ventures like that you may be working on or at

527
00:26:58,880 --> 00:27:02,320
Speaker 1: least taking a look at that expand our capacity for

528
00:27:02,440 --> 00:27:07,600
Speaker 1: giving protection equipment to healthcare workers. Well, we're looking at

529
00:27:07,960 --> 00:27:10,480
Speaker 1: all across the supply change what can we do to

530
00:27:10,600 --> 00:27:13,960
Speaker 1: increase our capacity. So we're working with a number of companies.

531
00:27:14,359 --> 00:27:16,919
Speaker 1: How can we increase the output of our lines. How

532
00:27:17,000 --> 00:27:20,240
Speaker 1: can we bring new production faster? That's one of the

533
00:27:20,320 --> 00:27:22,159
Speaker 1: things that we can do is get what would be

534
00:27:22,240 --> 00:27:25,400
Speaker 1: a normally a longer lead time to bring on new capacity.

535
00:27:25,440 --> 00:27:27,639
Speaker 1: How do we shorten that companies are stepping into that.

536
00:27:28,200 --> 00:27:32,320
Speaker 1: There's also the logistics side. Normally the supply chain is

537
00:27:32,440 --> 00:27:35,200
Speaker 1: very efficient, but in times like this where we are

538
00:27:35,680 --> 00:27:38,960
Speaker 1: we are changing daily, are are working environments. We we

539
00:27:39,080 --> 00:27:41,320
Speaker 1: are finding people that are stepping up to help us

540
00:27:41,440 --> 00:27:44,280
Speaker 1: expedite our products. We now have the ability to shift

541
00:27:44,359 --> 00:27:47,560
Speaker 1: directly from our plants to areas that we need uh

542
00:27:48,080 --> 00:27:52,200
Speaker 1: really expedite overnight orders that that are critical too needs

543
00:27:52,240 --> 00:27:55,359
Speaker 1: on the front line. So it's then across that whole

544
00:27:56,200 --> 00:27:59,680
Speaker 1: supply chain spectrum and maybe most important and standing capacity,

545
00:27:59,760 --> 00:28:02,000
Speaker 1: but help all the way back to raw materials has

546
00:28:02,040 --> 00:28:05,840
Speaker 1: been been very, very important. The way companies have stepped up, Mike,

547
00:28:05,880 --> 00:28:07,960
Speaker 1: give us a sense of who's deciding where these and

548
00:28:08,080 --> 00:28:10,440
Speaker 1: ninety fives or p aprs are going because we have

549
00:28:10,520 --> 00:28:12,679
Speaker 1: a crying need for them. We hear from government Cuomo

550
00:28:12,960 --> 00:28:15,159
Speaker 1: here in New York daily about the shortage of them.

551
00:28:15,280 --> 00:28:17,560
Speaker 1: Who's making that decision about where these things go because

552
00:28:17,560 --> 00:28:20,879
Speaker 1: we do have a shortage. Yeah, So we're working with

553
00:28:21,040 --> 00:28:23,520
Speaker 1: Health and Human Services and FEMA to make sure we

554
00:28:23,600 --> 00:28:27,000
Speaker 1: are prioritizing where they see the needs our greatest. We

555
00:28:27,119 --> 00:28:32,320
Speaker 1: work directly with the hospitals themselves, the healthcare providers, and

556
00:28:32,400 --> 00:28:36,520
Speaker 1: we're working to deliver on the greatest need, the urgency.

557
00:28:36,960 --> 00:28:40,320
Speaker 1: We delivered this over the last week. We delivered now

558
00:28:40,760 --> 00:28:43,840
Speaker 1: a million respirators into New York City, for example, responding

559
00:28:43,880 --> 00:28:47,280
Speaker 1: to that urgent need there. We shift product into both

560
00:28:47,320 --> 00:28:50,320
Speaker 1: Washington State in New York City. So it's it's really

561
00:28:50,920 --> 00:28:54,400
Speaker 1: prioritizing where the needs are greatest and getting help from

562
00:28:54,480 --> 00:28:58,120
Speaker 1: every angle on identifying that. Now we we uh and

563
00:28:58,240 --> 00:29:01,440
Speaker 1: we keep visibility right through to those those hospitals and

564
00:29:01,480 --> 00:29:04,200
Speaker 1: those those healthcare workers on the front line. Mike, you

565
00:29:04,280 --> 00:29:06,360
Speaker 1: also are running a very large corporation. You have something

566
00:29:07,120 --> 00:29:10,200
Speaker 1: thousand employees. You said earlier, first priority is the safety,

567
00:29:10,280 --> 00:29:11,840
Speaker 1: health and safety of your own people, but also the

568
00:29:11,920 --> 00:29:13,840
Speaker 1: health and safety of the American people. How are you

569
00:29:13,960 --> 00:29:17,160
Speaker 1: balancing that at this point because we need your people

570
00:29:17,240 --> 00:29:19,640
Speaker 1: in their manufacturing these things. At the same time, they're

571
00:29:19,640 --> 00:29:23,560
Speaker 1: taking some risk being outside their houses. Yes, and we are.

572
00:29:23,880 --> 00:29:27,000
Speaker 1: We are managing that in our operations. We we've been

573
00:29:27,120 --> 00:29:30,200
Speaker 1: like every other company. We've been adapting as we've gone.

574
00:29:30,520 --> 00:29:33,520
Speaker 1: We have everyone who can work from home works from home.

575
00:29:33,920 --> 00:29:37,360
Speaker 1: That's not practical in the factories where we're producing these

576
00:29:38,000 --> 00:29:41,880
Speaker 1: critical safety products, and so we have procedures and operations

577
00:29:41,920 --> 00:29:44,600
Speaker 1: that we put in place. We are we have a

578
00:29:44,760 --> 00:29:49,840
Speaker 1: robust planning process. We have UH processes where we are

579
00:29:50,720 --> 00:29:54,440
Speaker 1: keeping UH having our our own workers using respirators, were

580
00:29:54,800 --> 00:30:00,680
Speaker 1: implementing cleaning and disinfectant disinfecting cycles, really supporting their safety

581
00:30:00,840 --> 00:30:05,479
Speaker 1: in the factories. So there's a a standard operating process

582
00:30:05,560 --> 00:30:07,720
Speaker 1: that we put in place. We've escalated to the most

583
00:30:07,760 --> 00:30:10,600
Speaker 1: critical safety levels for that, and that enables us to

584
00:30:10,680 --> 00:30:13,600
Speaker 1: keep operating in those plants and other operations that are

585
00:30:13,640 --> 00:30:15,840
Speaker 1: so important this time. Mike, you're trying to strike that

586
00:30:15,960 --> 00:30:18,560
Speaker 1: balance between the protection of your people and the other hand,

587
00:30:18,840 --> 00:30:21,880
Speaker 1: really manufacturing things we desperately need we as a country,

588
00:30:22,000 --> 00:30:23,560
Speaker 1: or going through a version of that right now. We

589
00:30:23,680 --> 00:30:26,560
Speaker 1: heard from Larry Cudload, the chief Economic advisor of the President, saying,

590
00:30:26,560 --> 00:30:28,080
Speaker 1: you know what, we think we have to start bringing

591
00:30:28,080 --> 00:30:30,560
Speaker 1: some of the economy back online by by the end

592
00:30:30,600 --> 00:30:32,640
Speaker 1: of the month, which would be next week. What do

593
00:30:32,720 --> 00:30:34,640
Speaker 1: you think about that? Where do you strike that balance

594
00:30:34,800 --> 00:30:37,360
Speaker 1: more broadly for the populace. Should we be letting people

595
00:30:37,400 --> 00:30:39,280
Speaker 1: back out of their houses at least in some locations

596
00:30:39,440 --> 00:30:41,920
Speaker 1: for the sake of the economy. Well, when we put

597
00:30:42,000 --> 00:30:44,000
Speaker 1: our focus on the safety of our people. Right now,

598
00:30:44,120 --> 00:30:46,680
Speaker 1: we are. We are following all of the guidance that

599
00:30:46,920 --> 00:30:50,480
Speaker 1: that we're hearing from and being directed by the government,

600
00:30:50,560 --> 00:30:54,480
Speaker 1: and that's both local, states and federal and we've been

601
00:30:54,520 --> 00:30:59,560
Speaker 1: able to manage our our operations around that and getting

602
00:30:59,600 --> 00:31:02,120
Speaker 1: that bal and, as you said, is critical. So it

603
00:31:02,320 --> 00:31:06,600
Speaker 1: is is unprecedented with the challenges that we're facing, but

604
00:31:06,720 --> 00:31:10,200
Speaker 1: it's something that with these kinds of procedures in place,

605
00:31:10,320 --> 00:31:13,840
Speaker 1: protecting our broader workforce, protecting the people are in the plants, UH,

606
00:31:14,120 --> 00:31:18,480
Speaker 1: we will continue to do our best to operate in

607
00:31:19,000 --> 00:31:21,480
Speaker 1: in support of the needs of them. That was Mike Roman,

608
00:31:21,640 --> 00:31:24,360
Speaker 1: chairman and CEO of three m This has been another

609
00:31:24,520 --> 00:31:26,880
Speaker 1: edition of Wall Street Week Senior. Next week