WEBVTT - UAW, EVs, Med Tech, and Microsoft 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.080 --> 0:00:05.240 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.600 and Bloomberg experts, along with essential market moven news. 0:00:14.160 --> 0:00:17.279 Find the Bloomberg Markets podcast called Apple Podcasts or wherever 0:00:17.360 --> 0:00:20.520 you listen to podcasts, and at Bloomberg dot com Slash podcast. 0:00:21.280 --> 0:00:24.360 Let's get back to the strike because we're getting red 0:00:24.360 --> 0:00:29.200 headlines across the Bloomberg terminal. Now from Sean Fain's Facebook 0:00:29.360 --> 0:00:33.600 live presentation, he says, the United Autoworkers Union is going 0:00:33.640 --> 0:00:40.080 to expand its strike, but only against General Motors and Stilantis. 0:00:40.760 --> 0:00:45.120 They're not going to expand their strike against Ford. Now. 0:00:46.440 --> 0:00:48.720 I'm not sure what's going to happen to Bronco Production. 0:00:48.760 --> 0:00:50.199 I'm sure a lot of people want to know about that, 0:00:50.640 --> 0:00:53.000 so I'll find out and get back to you on it. 0:00:53.200 --> 0:00:55.240 But they are going to expand their strike against GM. 0:00:55.200 --> 0:00:57.160 At Silantis, we have Kevin Tyne and standing by on 0:00:57.200 --> 0:01:03.080 the phone, Bloomberg Intelligence US autos analyst. Wait is he 0:01:03.240 --> 0:01:03.639 is he there? 0:01:04.240 --> 0:01:04.399 Yeah? 0:01:04.440 --> 0:01:07.920 Okay, good, he's on camera. He's not him on the phone. 0:01:07.959 --> 0:01:08.679 Did you hire him? 0:01:08.680 --> 0:01:09.120 Probably? 0:01:09.280 --> 0:01:12.720 Congratulations, he's very good, Kevin, What do you think about this? 0:01:12.880 --> 0:01:15.800 So it seems like they're getting along a little better 0:01:15.800 --> 0:01:18.080 with Bill Ford now and historically they do get along 0:01:18.400 --> 0:01:21.080 better with the Ford Motor Company because of the Ford 0:01:21.120 --> 0:01:24.920 family and because of Bill. Really with GM and Stilantis, 0:01:24.959 --> 0:01:27.120 they still have serious beef. How do you read it? 0:01:28.280 --> 0:01:32.640 Yeah, I mean using it as leverage, right, saying by 0:01:32.680 --> 0:01:37.760 expanding for Stilanthason GM and holding the line on Ford 0:01:38.959 --> 0:01:42.800 probably motivates, you know, the competitors to get in there 0:01:42.840 --> 0:01:45.160 and be a little bit more aggressive with with their 0:01:45.200 --> 0:01:49.440 negotiating in terms of what they're willing to give. But 0:01:49.440 --> 0:01:53.000 but you know, it's it's not over yet. You know, 0:01:53.040 --> 0:01:56.360 there's still probably a ways to go, and and you know, 0:01:56.480 --> 0:01:59.200 things like this, you might mean the biggest issues or 0:01:59.200 --> 0:02:02.320 the easiest issue, use the low hanging fruit is handled, 0:02:02.360 --> 0:02:05.400 but it's probably going to be in the details before 0:02:05.440 --> 0:02:07.639 anything is really agreed to across the board. 0:02:08.280 --> 0:02:10.960 Hey, Kevin, is there like you've probably done I'm sure 0:02:10.960 --> 0:02:13.960 you've done analysis. When does his strike start there hurt 0:02:14.000 --> 0:02:17.200 them financially? The big three? 0:02:18.840 --> 0:02:22.520 It's weeks, not you know, not days obviously, And keep 0:02:22.600 --> 0:02:25.120 in mind too, there's there was a build up of 0:02:25.160 --> 0:02:30.640 inventory ahead, so there are units on the ground, and 0:02:30.919 --> 0:02:32.440 you could think of it of a little bit of 0:02:32.440 --> 0:02:35.639 a working capital shift from one quarter to the next 0:02:35.720 --> 0:02:38.760 unless it gets you know, very long. The last one 0:02:38.800 --> 0:02:42.240 was forty days and twenty nineteen against General Motors, and 0:02:42.240 --> 0:02:47.520 that's significant, right, so, and historically, even though inventory is 0:02:47.639 --> 0:02:53.600 above where it was a year ago, it's still very low. Historically. 0:02:53.639 --> 0:02:57.040 I think I calculated it out to start September was 0:02:57.040 --> 0:02:59.880 probably about forty three days of inventory for the end 0:03:00.040 --> 0:03:04.240 Street has a whole and typically fifty five to sixty 0:03:04.240 --> 0:03:08.880 five days is considered manageable. So it's below what's considered 0:03:09.240 --> 0:03:13.800 you know, a healthy level. And at the worst, these 0:03:14.000 --> 0:03:17.519 the domestic automakers, they would have eighty ninety days supply 0:03:17.639 --> 0:03:22.800 in some months, so significantly off that, but but not 0:03:23.000 --> 0:03:26.120 as bad as it was prior to the to the pandemic. 0:03:26.680 --> 0:03:28.960 In terms of job security, I mean, we know that 0:03:29.000 --> 0:03:33.880 they're asking for pay rises. Obviously they also want to 0:03:33.919 --> 0:03:37.400 be pension, which is seems less likely, although I'd love 0:03:37.400 --> 0:03:39.800 to hear your take a four day work week, which 0:03:39.840 --> 0:03:43.040 is like nice, there's no way in hell, right, But 0:03:43.120 --> 0:03:47.640 they want actual job security. So from GM there's a 0:03:47.760 --> 0:03:51.600 ton of cars coming, you know, new production. Mary Barros 0:03:51.560 --> 0:03:53.960 say is they won't need fewer workers for electric vehicles. 0:03:54.160 --> 0:03:58.480 There's just a massive offering there from Stilantis, not so much. 0:03:58.600 --> 0:04:00.120 I mean, they have a couple brands that seems like 0:04:00.120 --> 0:04:01.160 they're about to die out. 0:04:02.240 --> 0:04:06.280 Yeah, look, and I think it's it's the line of 0:04:06.400 --> 0:04:09.840 sight is pretty clear, right. So the automakers have made 0:04:09.880 --> 0:04:11.440 a lot of money in the past couple of years, 0:04:11.440 --> 0:04:14.119 not even just through the last contract, but probably over 0:04:14.160 --> 0:04:16.919 the last decade, and it's very easy for the union 0:04:16.920 --> 0:04:19.040 to point to that and say, we want our share 0:04:19.080 --> 0:04:21.840 of that. You've been very profitable due to the concessions 0:04:21.839 --> 0:04:24.480 we've given over the last couple of contracts, all the 0:04:24.520 --> 0:04:28.560 way through the bankruptcy period, and it's not going to 0:04:28.600 --> 0:04:31.640 be easy for the manufacturers to hide that, right that 0:04:31.680 --> 0:04:34.920 you can see that money every day in every filing. 0:04:35.560 --> 0:04:38.520 But at the same time, the manufacturers can look at 0:04:38.560 --> 0:04:41.120 the unions and say, but look at our production. Look 0:04:41.160 --> 0:04:45.280 at our sales volume is way down from the twenty 0:04:45.320 --> 0:04:49.240 seventeen peak in this country. US sales in twenty seventeen, 0:04:49.279 --> 0:04:51.839 we're seventeen and a half million. We're running out of 0:04:51.839 --> 0:04:54.240 fifteen to four. So I think it's going to be 0:04:54.400 --> 0:04:57.800 the manufacturer's pointing to that and telling the union, we 0:04:57.839 --> 0:05:00.040 can't give you a whole lot of job security. This 0:05:00.240 --> 0:05:03.120 market is smaller and it's going to continue to be smaller. 0:05:03.440 --> 0:05:06.320 Transaction prices will be higher, margins will be better, the 0:05:06.400 --> 0:05:09.600 money will be there, but we can't guarantee capacity and 0:05:09.680 --> 0:05:13.039 headcount going forward. We need that flexibility. And then on 0:05:13.160 --> 0:05:18.840 pensions and healthcare, you know, the manufacturers have a very 0:05:18.880 --> 0:05:21.320 easy time of directing the eye of the union too. 0:05:21.880 --> 0:05:25.320 That's what we were bankrupt, remember in twenty two, thousand 0:05:25.320 --> 0:05:28.960 and nine and twenty ten, and that's the structure we had, right, 0:05:29.040 --> 0:05:32.720 So two of those three things are a little bit 0:05:32.760 --> 0:05:35.240 easier for the manufacturer to explain away. 0:05:36.120 --> 0:05:38.320 The money is not. So I think when. 0:05:38.200 --> 0:05:41.360 All is said and done, the likelihood is that the 0:05:41.400 --> 0:05:46.640 manufacturers pay up, but they want that flexibility to adjust 0:05:47.360 --> 0:05:50.560 the cost structure going forward. And I think, you know, 0:05:50.640 --> 0:05:53.760 the pension and healthcare going back to the way it 0:05:53.920 --> 0:05:57.960 was in prior to the bankruptcy period is just a 0:05:58.000 --> 0:06:00.440 non starter. I don't even think that gets discussed in 0:06:00.520 --> 0:06:01.840 any seriousness. 0:06:02.200 --> 0:06:04.040 So I didn't believe you, Kevin A. Couple of years 0:06:04.040 --> 0:06:06.320 ago when you said the industry was going to go 0:06:06.400 --> 0:06:08.760 from a mode of seventeen seventeen and a half million 0:06:08.760 --> 0:06:11.719 production down to you know, something materially less like fifteen 0:06:11.760 --> 0:06:13.919 and a half or something like that. But once again 0:06:13.960 --> 0:06:16.840 you were right, and that do you think the union 0:06:16.920 --> 0:06:17.560 believes that? 0:06:18.400 --> 0:06:21.120 Well, here's the thing, right is that is that you 0:06:21.240 --> 0:06:24.400 have to look at at least one other input. Right, 0:06:24.440 --> 0:06:27.360 everybody wants to talk about volume and the headline of 0:06:27.839 --> 0:06:32.240 seventeen and a half versus fifteen four, but revenue per 0:06:32.320 --> 0:06:37.960 unit matters, right, So while production and sales are down, 0:06:38.200 --> 0:06:41.320 average transaction price is at a record, right, We're heading 0:06:41.360 --> 0:06:44.680 to fifty thousand dollars, So when you multiply out just 0:06:44.760 --> 0:06:48.400 back of the envelope, the revenue pool is actually larger. 0:06:48.920 --> 0:06:51.960 So you know, you have to understand that not every 0:06:52.080 --> 0:06:54.200 unit is the same as every other unit. You know, 0:06:54.240 --> 0:06:56.960 a twenty thousand dollars Toyota Corolla is not a sixty 0:06:57.000 --> 0:07:01.400 five thousand dollars f one point fifty. And this industry 0:07:01.520 --> 0:07:04.920 is moving towards the latter to say, we just want 0:07:04.920 --> 0:07:07.040 to sell as many sixty five thousand dollars things as 0:07:07.120 --> 0:07:10.560 we can. We're willing to give up the bottom. 0:07:09.760 --> 0:07:10.520 Of that market. 0:07:10.680 --> 0:07:13.720 It means our volume goes away, but really the revenue 0:07:13.720 --> 0:07:17.280 pool and the revenue contribution and the profit contribution and 0:07:17.320 --> 0:07:19.400 your margins are just way better. And I think that's 0:07:19.400 --> 0:07:21.240 what this industry becomes going forward. 0:07:21.680 --> 0:07:24.360 By the way, on that note, I wanted originally I 0:07:24.400 --> 0:07:27.680 was planning on talking with you about the Jeep Grand 0:07:27.720 --> 0:07:32.480 Wagoneer Obsidian Series three that I'm driving right now, you know, 0:07:32.560 --> 0:07:35.720 before this hard news crash the party. But that is 0:07:35.920 --> 0:07:39.480 an extremely expensive vehicle. It's the biggest vehicle Jeep has 0:07:39.520 --> 0:07:41.880 ever made. The one I'm driving is one hundred and 0:07:41.960 --> 0:07:44.840 fourteen hundred and fifteen thousand dollars in this trim. And 0:07:44.840 --> 0:07:48.000 though I love the new Hurricane five to ten, the 0:07:48.040 --> 0:07:51.040 Inline six, it's amazing, five hundred and ten horse power, 0:07:51.120 --> 0:07:54.119 five hundred pound feet of torque. For the same price, 0:07:54.160 --> 0:07:57.120 you can get a Range Rover or a BMW X 0:07:57.280 --> 0:08:02.320 seven the M sixty version, or a Cadillac Escalade the 0:08:02.440 --> 0:08:06.320 Ultra super Luxury Platinum version. Like why are they selling 0:08:06.400 --> 0:08:09.000 these one hundred and thirteen hundred and fourteen thousand dollars Jeeps? 0:08:09.680 --> 0:08:12.640 Yeah, I mean, then look the average on Grand Wagoneer. 0:08:12.680 --> 0:08:14.360 I just looked it up. Is one hundred and five 0:08:14.400 --> 0:08:18.240 thousand is the average, you know, sales weighted, you know, 0:08:18.280 --> 0:08:22.200 but that's right there with Expedition, it's there with Suburban. 0:08:22.280 --> 0:08:26.520 That's what you know. Those have become the profit centers 0:08:26.560 --> 0:08:31.080 because you're sharing platform and components with pickup trucks and 0:08:31.120 --> 0:08:34.560 now you're just adding content that's pure profits. So you know, 0:08:34.600 --> 0:08:37.120 that's kind of my point is that, look, if you 0:08:37.240 --> 0:08:42.720 sell one of those how many you know, dodged darts 0:08:42.760 --> 0:08:44.240 did you have to sell to get. 0:08:44.080 --> 0:08:45.000 Anywhere near that? 0:08:45.120 --> 0:08:47.560 And you probably lost money on every Dodge Dart, which 0:08:47.600 --> 0:08:49.280 is why it doesn't exist anymore. 0:08:49.679 --> 0:08:49.880 You know. 0:08:49.960 --> 0:08:53.240 So the old world the hornet coming out. 0:08:52.960 --> 0:08:56.280 Yeah, well the old world would be like, run production 0:08:56.400 --> 0:08:58.640 on hornet all day long and then figure out how 0:08:58.640 --> 0:09:01.200 to sell it. And it's like the new model is 0:09:01.240 --> 0:09:02.719 going to be, Hey, if we can sell one or 0:09:02.760 --> 0:09:06.480 two Grand Wagoneers, we can cut production of hornet. Which 0:09:06.520 --> 0:09:09.840 is why I say in this contract negotiation, you know, 0:09:09.880 --> 0:09:13.080 the manufacturers need to protect that flexibility going forward, saying 0:09:13.120 --> 0:09:15.439 this is going to be a smaller market because we're 0:09:15.480 --> 0:09:16.760 selling more expensive things. 0:09:17.280 --> 0:09:20.400 Man's if I were an investor, I'd be like, I 0:09:20.480 --> 0:09:22.560 like this auto industry better than the old auto industry. 0:09:22.640 --> 0:09:23.160 Yeah, for sure. 0:09:23.200 --> 0:09:25.360 This industry's more, more problem and that's w Kevin has 0:09:25.400 --> 0:09:26.839 been telling us for years. That's where it's going. 0:09:27.040 --> 0:09:30.319 But if you're a UAW were feel that way. 0:09:30.240 --> 0:09:33.840 No, absolute opposite, Kevin Tinny, thanks so much for joining us. 0:09:33.880 --> 0:09:36.640 Kevin is our lead auto analyst for Bloomberg Intelligence. 0:09:37.720 --> 0:09:41.119 You're listening to the team Ken's are Live program Bloomberg 0:09:41.160 --> 0:09:44.520 Markets weekdays at ten am Eastern on Bloomberg dot com, 0:09:44.600 --> 0:09:47.760 the iHeartRadio app and the Bloomberg Business app, or listen 0:09:47.840 --> 0:09:50.600 on demand wherever you get your podcasts. 0:09:52.320 --> 0:09:56.120 Now. Yesterday, Paul and I were talking with a gentleman 0:09:56.200 --> 0:09:58.360 who said, you know, one of the big problems in 0:09:58.480 --> 0:10:03.280 terms of battery production is that a lot of the 0:10:03.320 --> 0:10:06.600 stuff is mined elsewhere, and then most of it is 0:10:06.720 --> 0:10:12.760 processed in China. Yep, China, China. So our next guest 0:10:13.679 --> 0:10:16.480 is hoping to change that a little bit. Nevade Alum 0:10:16.520 --> 0:10:21.120 joins us. He's president CEO of Evolution and they are 0:10:21.320 --> 0:10:28.120 working on a I guess cobalt processing plant in Yuma, Arizona, 0:10:28.960 --> 0:10:33.120 which should supply when it's up to speed about a 0:10:33.160 --> 0:10:36.040 million batteries? What a year, Nevade? Is that an annual 0:10:36.080 --> 0:10:37.680 figure that you want to be a cobalt for a 0:10:37.679 --> 0:10:38.720 million batteries a year? 0:10:39.840 --> 0:10:44.520 Yes, that's correct, Matt, one million a year. You know, 0:10:44.600 --> 0:10:45.080 right now. 0:10:44.920 --> 0:10:48.600 There's thirty cobalt processing facilities in China and zero in 0:10:48.640 --> 0:10:51.800 North America, so you know we need to catch up here. 0:10:51.880 --> 0:10:55.120 That's and you know, luckily we started this process a 0:10:55.120 --> 0:10:58.760 few years ago before the IRA and the other laws, 0:10:58.800 --> 0:11:00.480 and now we're catching a nice ailwind. 0:11:00.559 --> 0:11:01.840 So it's going really well. 0:11:01.880 --> 0:11:04.800 Well, do you get any financing benefits from that? Tax 0:11:04.880 --> 0:11:08.240 breaks from that legislation? I mean, are there subsidies that 0:11:08.240 --> 0:11:09.520 you can take advantage of here? 0:11:10.840 --> 0:11:11.200 Yeah? 0:11:11.240 --> 0:11:13.400 Absolutely, though I will say we were going to do 0:11:13.440 --> 0:11:15.679 this plant without those. 0:11:15.520 --> 0:11:17.960 Subsidies, but it's a great help for us for sure. 0:11:18.840 --> 0:11:22.000 So how much are you going to spend to build 0:11:22.000 --> 0:11:25.400 this plant? I know that Uma because I read in 0:11:25.440 --> 0:11:29.000 a local newspaper expects to have a ton of revenue 0:11:29.600 --> 0:11:31.640 sort of as a job as a knock on effect 0:11:31.800 --> 0:11:34.280 jobs and everything. But how much youre going to spend 0:11:34.320 --> 0:11:35.319 to build it? And when are you gonna be done 0:11:35.360 --> 0:11:37.400 making it all? 0:11:37.400 --> 0:11:37.720 A park? 0:11:37.720 --> 0:11:40.920 Around three hundred million dollars and it'll be done in 0:11:40.960 --> 0:11:41.840 twenty twenty six. 0:11:41.960 --> 0:11:43.520 We think, all. 0:11:43.480 --> 0:11:48.600 Right, so what actually happens at a cobalt processing facility 0:11:48.600 --> 0:11:51.320 and how does that how's that part of the whole 0:11:51.360 --> 0:11:52.440 battery situation. 0:11:54.120 --> 0:11:58.880 So cobolt is a really important metal, uh for EV batteries, 0:11:59.679 --> 0:12:04.160 for normal regulation and for energy density and for you know, 0:12:04.200 --> 0:12:07.640 giving you long range and good cold weather performance. It's 0:12:07.679 --> 0:12:11.319 also extremely important in aerospace and defense. It's used in 0:12:11.400 --> 0:12:15.400 hypersonic missiles and stealth bombers. So it's a really critical 0:12:16.040 --> 0:12:20.680 material for the United States to have self sufficiency in. 0:12:22.280 --> 0:12:26.920 So what we do is we take cobalt hydroxide, so 0:12:27.080 --> 0:12:32.319 already processed cobalt that is processed in Africa, and then 0:12:32.400 --> 0:12:34.600 it'll come here to the United States instead of going 0:12:34.640 --> 0:12:37.760 to China. And you know what the Chinese do is 0:12:37.800 --> 0:12:39.680 they just process it there and then send it back 0:12:39.720 --> 0:12:42.520 to the United States for the cars here such as 0:12:42.520 --> 0:12:48.480 Tesla and other electric automakers. But we want to skip 0:12:48.480 --> 0:12:50.840 the China step, just bring it straight here to America, 0:12:51.000 --> 0:12:55.679 process it into cobalt sulfate, which is the salt that 0:12:55.800 --> 0:13:00.559 goes into the cathode portion of the EV battery. And 0:13:01.000 --> 0:13:04.120 sell it to the new plants that have been announced 0:13:04.160 --> 0:13:09.840 in the United States by General Motors, LG, Samsung Ford. 0:13:10.080 --> 0:13:13.280 You know, they're spending billions of dollars building these what 0:13:13.320 --> 0:13:19.240 they call battery precursor plants. They're going to use nickel sulfate, 0:13:19.320 --> 0:13:22.760 cobalt sulfate, manganese sulfate and put it all together and 0:13:22.800 --> 0:13:23.640 make a battery pack. 0:13:24.440 --> 0:13:28.079 Now I've seen I guess a rendering of the plant 0:13:28.720 --> 0:13:33.320 in Yuma, and one of the things you immediately notice, Paul, 0:13:33.400 --> 0:13:38.080 check this out. Yeah, giant colar facility, even bigger than 0:13:38.120 --> 0:13:41.720 the actual processing plant. So I know, you guys want 0:13:41.720 --> 0:13:44.679 to be carbon neutral. This is all going to be 0:13:45.120 --> 0:13:46.320 powered by the sun. 0:13:47.480 --> 0:13:50.760 Yes, Indeed, Yuma County is the sunniest county in the 0:13:50.880 --> 0:13:53.719 United States, so it's it's pretty easy, we think, to 0:13:54.440 --> 0:13:58.480 do the full on solar power one hundred percent solar, 0:13:58.600 --> 0:14:01.800 no greenhouse gas, is, no propane, no diesel. 0:14:03.040 --> 0:14:06.080 So we also are. 0:14:05.760 --> 0:14:08.320 Going to be benefiting the local farmers by selling them 0:14:08.360 --> 0:14:12.480 back some of our excess solar production at cost. They're 0:14:12.480 --> 0:14:14.959 losing a lot of hydro power from. 0:14:14.800 --> 0:14:17.120 The lower levels on the Colorado. 0:14:16.640 --> 0:14:20.440 River, so they're very excited about our coming in and 0:14:20.720 --> 0:14:22.080 building this facility there. 0:14:22.280 --> 0:14:24.960 Well, I heard that you know you like Yuma, not 0:14:25.000 --> 0:14:27.360 only because I guess apparently your wife is from Yuma 0:14:27.800 --> 0:14:28.280 for one thing. 0:14:28.360 --> 0:14:28.840 That's right. 0:14:29.320 --> 0:14:34.440 It's also very sunny, low cost of living, low regulatory 0:14:34.840 --> 0:14:40.320 kind of hassle there, but it's close to like all 0:14:40.360 --> 0:14:43.360 the used batteries coming back out of California is what 0:14:43.400 --> 0:14:46.480 I read. So are you recycling cobalt there? 0:14:47.560 --> 0:14:49.880 We will. We intend to recycle as well. 0:14:50.040 --> 0:14:53.800 So you know, our first phase is to build a 0:14:53.880 --> 0:14:58.000 sulfate facility, which is sort of I think the easy, 0:14:58.360 --> 0:15:01.080 easier thing. It's a very established to tchnology around the world. 0:15:01.120 --> 0:15:03.240 As I said, there's thirty of these plants in China. 0:15:03.880 --> 0:15:09.000 And then as more and more batteries are spent and 0:15:09.120 --> 0:15:11.920 used up, we want to recycle some of those into 0:15:12.480 --> 0:15:14.960 turning them around and getting the cobalt back out of them. 0:15:15.520 --> 0:15:19.800 And then lastly we want to add a cobalt metal 0:15:20.200 --> 0:15:22.480 facility for aerospace and defense. 0:15:22.960 --> 0:15:24.920 So that's part of the strategic. 0:15:24.520 --> 0:15:29.160 Reserve announced by the President under the Defense Production Act. 0:15:29.200 --> 0:15:31.840 How do you think you will be able to compete 0:15:32.040 --> 0:15:35.800 against the Chinese? They actually have much greater scale, presumably 0:15:36.520 --> 0:15:39.400 government support to some level. How do you think about 0:15:39.400 --> 0:15:40.320 the competitive environment. 0:15:41.920 --> 0:15:45.320 Well, you know, there is no cobalt mined in China either. 0:15:45.520 --> 0:15:48.120 They all take it out of Africa, so we're competing 0:15:48.120 --> 0:15:50.040 with them in Africa. We're going to bring it here 0:15:50.080 --> 0:15:53.400 instead of taking to China, and so logistically we save money. 0:15:53.680 --> 0:15:55.920 The other great thing about Yuma County and where we 0:15:55.960 --> 0:15:59.200 are is right on the border of California and Mexico. 0:15:59.280 --> 0:16:01.080 So we need to come through the port of Long 0:16:01.120 --> 0:16:04.240 Beach or the port of Ensenada with our inputs. So 0:16:04.440 --> 0:16:07.240 and it's only three hours by truck from Ensenada or 0:16:07.320 --> 0:16:10.520 Long Beach. So I think logistically it's the great spot 0:16:10.560 --> 0:16:13.720 we're on in State eight. We're on the up railroad, 0:16:14.200 --> 0:16:17.280 so we we picked it. Also because logistics are important 0:16:17.360 --> 0:16:20.000 in these in these kinds of deals. 0:16:20.640 --> 0:16:24.480 What is it I mean from a competitive perspective? Again, 0:16:24.800 --> 0:16:27.400 can you will you be competing on price to your 0:16:27.440 --> 0:16:31.040 customers here? Can you because of the lower presumably the 0:16:31.080 --> 0:16:34.880 lower logistics costs of nothing else away from China? 0:16:36.000 --> 0:16:38.760 Yeah, Well, look, it's it's a combination of price, and 0:16:38.840 --> 0:16:42.040 we would have been competing on price initially, but more 0:16:42.120 --> 0:16:45.720 now there's tariffs on Chinese sul faith, there's the IRA 0:16:46.400 --> 0:16:52.520 regulations about Chinese inputs that come in to the EV 0:16:52.720 --> 0:16:55.480 battery supply chain. You know, there's a lot of new 0:16:55.800 --> 0:16:58.840 laws that are sort of helping us compete on price, 0:16:59.320 --> 0:17:03.240 so we may be able to charge us higher price 0:17:03.280 --> 0:17:06.120 than we might have ordinarily, you know if there were 0:17:06.119 --> 0:17:07.040 none of these laws. 0:17:08.240 --> 0:17:10.560 All right, it's I think a fascinating story, and we're 0:17:10.600 --> 0:17:13.520 finally starting to see movement, maybe because it's. 0:17:13.359 --> 0:17:15.080 Climate Week and we saw a bunch of these folks 0:17:15.080 --> 0:17:15.520 this week. 0:17:15.840 --> 0:17:19.280 No, I mean, I mean in terms of bringing processing 0:17:19.280 --> 0:17:23.480 here because Nevade, I don't know how much you talk 0:17:23.560 --> 0:17:26.359 with other people in the kind of battery supply chain, 0:17:26.440 --> 0:17:29.359 but I imagine we must be trying to bring a 0:17:29.400 --> 0:17:33.159 lot more processing of cobalt, lithium and rare earths to 0:17:33.200 --> 0:17:34.439 the US at some point. 0:17:34.520 --> 0:17:37.280 Right, Yes, it's all happening. 0:17:37.320 --> 0:17:41.240 It's it's hundreds of billions of dollars of investment, real 0:17:41.480 --> 0:17:45.200 you know, team effort, Lots of big corporations, as I mentioned, LG, 0:17:45.440 --> 0:17:49.880 General Motors, Samsung. They've announced billion dollar plants in Georgia, 0:17:50.000 --> 0:17:53.879 South Carolina, Tennessee, even Arizona. LG is building in a 0:17:53.920 --> 0:17:57.120 five and a half billion dollar plant just up the road. 0:17:57.880 --> 0:17:59.520 In Phoenix, just south of Phoenix. 0:17:59.560 --> 0:18:02.960 So that you know, is going to help us sell 0:18:03.000 --> 0:18:05.000 our product into the United States. 0:18:05.240 --> 0:18:08.120 Yeah, so it's moving. Yeah, the infrastructure, the supply chain 0:18:08.160 --> 0:18:08.880 is moving here. 0:18:09.119 --> 0:18:11.199 That's right, all right, Neved, thanks so much for joining us. 0:18:11.280 --> 0:18:14.720 Nevade Alam he is a president and CEO of Evolution 0:18:15.359 --> 0:18:17.760 there in getting into the battery business and the processing 0:18:17.760 --> 0:18:19.720 of all the cobolt and all that kind of stuff. 0:18:19.760 --> 0:18:23.360 You're listening to the tape cancer Live program Bloomberg Markets 0:18:23.400 --> 0:18:26.800 weekdays at ten am Eastern on Bloomberg Radio, the tune 0:18:26.840 --> 0:18:29.800 in app, Bloomberg dot Com, and the Bloomberg Business App. 0:18:29.840 --> 0:18:32.639 You can also listen live on Amazon Alexa from our 0:18:32.680 --> 0:18:37.720 flagship New York station. Just say Alexa play Bloomberg eleven thirty. 0:18:39.119 --> 0:18:41.960 It is United Nations General Assembly Week here in New York. 0:18:42.000 --> 0:18:44.960 And then we've got lots of unga, lots of stuff happened, 0:18:45.040 --> 0:18:47.560 lots of terrible traffic. But one of the key areas 0:18:47.720 --> 0:18:51.479 is Russia and various sanctions on Russia as it relates 0:18:51.480 --> 0:18:54.040 to the Ukraine War. One area that is going to 0:18:54.040 --> 0:18:57.560 come up for discussion very soon is going to be 0:18:57.600 --> 0:19:00.879 banned on Russian diamonds, so we went to get to 0:19:00.960 --> 0:19:02.639 the bottom of that. We could do that with our 0:19:02.680 --> 0:19:07.720 next guest on Core Daga, CEO of Ongara and Encore, 0:19:07.800 --> 0:19:11.760 thanks so much for joining us again here talk to 0:19:11.840 --> 0:19:15.639 us about just remind us what you do at Angara. 0:19:15.800 --> 0:19:16.080 Sure. 0:19:16.160 --> 0:19:19.679 So, at Angara we are vertically integrated online jewelers. So 0:19:19.720 --> 0:19:23.280 we do everything from cutting and polishing gemstones, to designing jewelry, 0:19:23.280 --> 0:19:26.120 to manufacturing jewelry to retailing over the web in over 0:19:26.200 --> 0:19:26.920 thirty countries. 0:19:28.680 --> 0:19:29.040 All right. 0:19:29.160 --> 0:19:31.439 So I all right, So I had a question on 0:19:31.480 --> 0:19:33.800 a slightly dip before we get into that business, on 0:19:33.880 --> 0:19:38.000 a slightly different thing. I always kind of wonder, isn't 0:19:38.080 --> 0:19:41.879 Wharton the grad school? And I see some people who 0:19:41.960 --> 0:19:44.240 do the undergraduate thing at Wharton, But isn't that Penn. 0:19:45.359 --> 0:19:47.600 Yes, so Wharton is one of the schools in Penn. 0:19:48.440 --> 0:19:50.240 But it is undergrad and grad school. 0:19:50.280 --> 0:19:50.600 All right. 0:19:50.680 --> 0:19:55.200 So you go to Wharton, you study finance there in entrepreneurship, 0:19:55.200 --> 0:19:57.680 then you go get your MBA from Harvard. I've heard 0:19:57.720 --> 0:20:01.760 of it trade school. You decide I'm going to become 0:20:01.760 --> 0:20:02.280 a jeweler. 0:20:03.119 --> 0:20:03.320 Yeah. 0:20:03.359 --> 0:20:05.840 So interestingly, I grew up in the jewelry business, so 0:20:05.920 --> 0:20:08.879 I've kind of played with gemstones a say, age of five. 0:20:09.800 --> 0:20:11.959 I always thought I would never come into the industry 0:20:11.960 --> 0:20:14.879 because it is pretty antiquated and old fashioned, as you 0:20:14.920 --> 0:20:18.360 can imagine. But after work and I went to McKenzie. 0:20:18.440 --> 0:20:21.560 My largest project was turning around a major jewelry retailer, 0:20:21.960 --> 0:20:23.880 and that's when I fell in love with the trade again. 0:20:23.920 --> 0:20:26.120 I saw a lot of opportunities, especially online. 0:20:26.880 --> 0:20:27.480 So here we are. 0:20:27.760 --> 0:20:31.480 So you could have just gone straight to the jewelry business. 0:20:31.720 --> 0:20:34.120 You didn't need to stop. You didn't need to stop 0:20:34.160 --> 0:20:37.520 at McKenzie, You didn't need to stop at Harvard, right, 0:20:37.960 --> 0:20:42.400 But what did you learn at those places that gave 0:20:42.440 --> 0:20:45.120 you an edge now in this business? 0:20:45.400 --> 0:20:47.879 So, I think the industry is one of the most 0:20:47.920 --> 0:20:50.960 fragmented industries out there. So when you compare it to 0:20:51.040 --> 0:20:55.040 any other part of retail. So for example, Signet, which 0:20:55.080 --> 0:20:56.960 is the number one jeweler in the US, only has 0:20:57.040 --> 0:20:59.600 less than ten percent market share you compared to something 0:20:59.640 --> 0:21:02.720 like a best By, which has a much more dominant position. 0:21:02.800 --> 0:21:05.040 So the idea was, how do we structure the industry 0:21:05.080 --> 0:21:07.280 in a way that allows us to get to that 0:21:07.440 --> 0:21:09.480 scale where we can really dominate the industry? 0:21:10.680 --> 0:21:12.600 All Right, so one of the news items you and 0:21:12.640 --> 0:21:15.720 I were talking about it before is Russia. Russia supplies 0:21:15.720 --> 0:21:17.920 a lot of diamonds. Then they're going to I guess 0:21:17.920 --> 0:21:19.520