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Bloomberg's Nocera Says Tom Price's Stock Trades Are Unethical · Bloomberg Intelligence

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  Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm Pim Fox.
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  Speaker 1: Along with my co host Lisa Abramowitz. Each day we
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  Speaker 1: my privilege to introduce Joe No Sarah, who is here
• 0:31
  Speaker 1: in the studio with us. He is a Bloomberg View columnist,
• 0:33
  Speaker 1: a long time New York Times business columnist who I
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  Speaker 1: have respected for many, many years. Uh and Joe, you
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  Speaker 1: wrote a column this week talking about Wait a minute,
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  Speaker 1: can't I just bask in that intro for a minute?
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  Speaker 1: Please go ahead? Would you like to? Would you have
• 0:47
  Speaker 1: you done basking? We move quickly here? The future already
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  Speaker 1: happened somewhere. No, So, you wrote a column about President
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  Speaker 1: Trump's pick for the Health and Human Services Uh post
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  Speaker 1: and you were talking about this band hum price and
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  Speaker 1: some of his decisions with respect to his stock trades.
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  Speaker 1: Can you outline kind of what is the controversy here
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  Speaker 1: and and kind of give us your take on it? Sure? Uh? Well,
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  Speaker 1: I mean, the controversy is revolves around you know, whether
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  Speaker 1: in one particular case, uh, he bought the stock of
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  Speaker 1: a company, then introduced legislation that would help the company,
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  Speaker 1: and then uh, the company gave him a campaign contribution
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  Speaker 1: of a thousand dollars um. I actually think in that
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  Speaker 1: particular case, uh, he's telling the truth when he says
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  Speaker 1: my broker did it. Whether he knew about it or not,
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  Speaker 1: I really don't know. But to me, the larger issue,
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  Speaker 1: the more important issue, is that here's a guy who
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  Speaker 1: um both sits on an important health up committee and
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  Speaker 1: introduces lots of legislation on behalf of pharmaceutical medical companies
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  Speaker 1: and has no compunction about picking up the phone and
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  Speaker 1: calling FDA or another agency on behalf of a medical
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  Speaker 1: company owning a bunch of medical stocks and farmer stocks.
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  Speaker 1: He doesn't just own this one, it's he's he owns
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  Speaker 1: Am Jenny owns Fightser. I can't remember the other ones,
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  Speaker 1: but he owns like a dozen. And to me, that
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  Speaker 1: while is not illegal, it is unethical because it creates
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  Speaker 1: this enormous conflict of interest with him knowing that he's
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  Speaker 1: got he's gonna make money, he's got information in his head,
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  Speaker 1: that in effect is inside information, which is I'm going
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  Speaker 1: to introduce piece of legislation, I'm going to make this
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  Speaker 1: phone call, and yet he has these companies in his portfolio.
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  Speaker 1: It's not right. I just want to push back on you,
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  Speaker 1: just not on the concept of whether it is right
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  Speaker 1: or not, and not whether it is legal or not.
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  Speaker 1: But given the complexity and the Uh, Well, he's an orthopedist,
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  Speaker 1: that's right, Mr. He's an orthopiece. So he comes with
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  Speaker 1: whatever knowledge that would bring to the position of being
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  Speaker 1: a congressman and perhaps a cabinet secretary in that case,
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  Speaker 1: when he comes with that level let's say, scientific expertise. Uh.
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  Speaker 1: Is that the same expertise that you want to be
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  Speaker 1: able to call on if someone is in that role
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  Speaker 1: or are you saying that the role itself has its
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  Speaker 1: own requirements. I think I think it's great that there
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  Speaker 1: are doctors in Congress, you know, and he does have expertise,
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  Speaker 1: and he does have, you know, sympathies towards the needs
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  Speaker 1: and plight of doctors. There's nothing wrong with that. All
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  Speaker 1: I'm saying is that if health is your primary area
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  Speaker 1: in Congress, and you're sitting on subcommittees and you're filing legislation,
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  Speaker 1: you shouldn't have health stocks in your portfolio. You can
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  Speaker 1: have any other kind of stock, but you shouldn't have
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  Speaker 1: health stocks. I mean, one of the points I made
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  Speaker 1: in the column was, you know, if you're a journalist
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  Speaker 1: covering healthcare at Bloomberg or the Times of the Wall
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  Speaker 1: Street Journal or anywhere, you can't have healthcare stocks because
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  Speaker 1: it's a conflict of interest. Why is it different for
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  Speaker 1: a congressman who actually has a lot more ability to
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  Speaker 1: move a stock than a journalist does. Well, but I
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  Speaker 1: thought that in two thousand and twelve, Uh, there was
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  Speaker 1: a law uh that stripped congress members from their immunity
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  Speaker 1: from insterer traders laws. So why wouldn't Tom Price be
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  Speaker 1: potentially susceptible to violating that? Okay? There? There There are
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  Speaker 1: basically two reasons. The first reason is that he says
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  Speaker 1: that his broker bought the stock, and his broker has
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  Speaker 1: um discretion discretion overs a account. So that's uh, I mean,
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  Speaker 1: you can't be um as long as he didn't make
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  Speaker 1: a phone call to the broker saying by the stock,
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  Speaker 1: and it's not inside of trading. He's okay there. But
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  Speaker 1: the second reason is even though they passed that law,
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  Speaker 1: Congress has made it almost impossible for the SEC to
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  Speaker 1: carry out any insider trading investigations of any buddy in Congress,
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  Speaker 1: including staff members. They're trying there there in their current
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  Speaker 1: situation where there's a staff member the SEC is trying
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  Speaker 1: to investigate and Congress is basically blocking it. How, basically
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  Speaker 1: just saying don't continue with it. Yeah, they're just saying,
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  Speaker 1: we won't give you access to the guy, we won't
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  Speaker 1: give you his records. I mean, you know, blocking it.
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  Speaker 1: It's really an unbelievable situation. So they're basically saying that
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  Speaker 1: the law doesn't give the SEC the right to investigate
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  Speaker 1: inside Congress. Remember, yeah, even though the law basically says
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  Speaker 1: it's illegal for members of Congress to be inside to
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  Speaker 1: trade on inside information. You look a little stunned, I am,
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  Speaker 1: But can can we just I don't want to defend
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  Speaker 1: anyone's behavior, so, but I want to just see if
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  Speaker 1: we can get to another point, which I think you raise,
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  Speaker 1: which has to do that This is not something that
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  Speaker 1: is particular to Mr. Price. Oh, absolutely absolutely. Congress has
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  Speaker 1: a long and in many cases revered history of malfeasance
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  Speaker 1: or various kinds of unethical or to deem the ethical behavior. Right, Yes,
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  Speaker 1: I mean I think if you looked at most of
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  Speaker 1: these guys stock portfolios, the ones who have stock portfolios,
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  Speaker 1: I think you'd find probably very similar things. And and
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  Speaker 1: let's let's be clear here. I mean, but the reason
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  Speaker 1: the reason I asked about whether the technology and that
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  Speaker 1: the world has changed so profoundly that it is going
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  Speaker 1: to be very difficult to find people who do not
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  Speaker 1: have these kinds of associations at the higher level of
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  Speaker 1: government or indeed in business. And uh, indeed, I think
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  Speaker 1: you just see that with Gary Cohn, who formally was
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  Speaker 1: of Goldman Sachs and now is the head of the
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  Speaker 1: Council of Economic Advisors, right, and he probably won't have
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  Speaker 1: a stock portfolio, well, but he benefited in other ways. Okay,
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  Speaker 1: I just there's nothing wrong with owning stocks, obviously, But uh,
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  Speaker 1: is it really too much to ask of a of
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  Speaker 1: a public servant, especially somebody like Tom Price who's very wealthy,
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  Speaker 1: to not have healthcare stocks in this portfolio. He's got
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  Speaker 1: lots of other stocks. If he really does have a
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  Speaker 1: broker has discretion over his account that the broken can say,
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  Speaker 1: I'll get anything except healthcare stocks. I don't I understand
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  Speaker 1: why that's such a giant sacrifice, and I don't think
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  Speaker 1: it is that biggest sacrifice. What's been their response, uh,
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  Speaker 1: you know here, well, in in the in the confirmation herrings,
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  Speaker 1: he is you know, insisted again and again that he's
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  Speaker 1: acted quote unquote transparently and ethically. Um. And you know
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  Speaker 1: they only have five minutes to question him, so they
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  Speaker 1: really don't have a lot of time to have you
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  Speaker 1: spoken with him or with him? No, I have. I
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  Speaker 1: haven't spoken with him. I've called his office a few times.
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  Speaker 1: I've gotten the statements from but the statements basically say
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  Speaker 1: the same thing, that he acted ethnically. Well, maybe we'll see,
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  Speaker 1: maybe there'll be a follow up to all of this.
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  Speaker 1: Uh well, I plan to have one actually uh online
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  Speaker 1: this afternoon sometime. Oh we're gonna look forward to that.
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  Speaker 1: Well done, all right, See that's why he's got to run.
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  Speaker 1: Jonah Sarah, thanks very much for being with us, and
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  Speaker 1: welcome a blue burg of view, a columnist talking about
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  Speaker 1: Congress and malfeasance. This is Bloomberg. I want to bring
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  Speaker 1: into Jamie us autos reporter from Bloomberg to talk about
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  Speaker 1: why this might not be the best time for automakers
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  Speaker 1: to invest billions of dollars in new plans. Thank you
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  Speaker 1: so much for joining us. Jamie um So, you wrote
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  Speaker 1: a story that was really compelling. Have auto companies already
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  Speaker 1: been investing a lot of money or is it just
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  Speaker 1: that they've been, uh in sort of a general stripping
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  Speaker 1: down of their dependence and on big plans. Hey, good morning.
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  Speaker 1: So you know, first day, as you recall two two nine,
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  Speaker 1: there was a terrible calamity in the financial industry and
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  Speaker 1: in the UH, in the real industry, in the you know,
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  Speaker 1: manufacturing industries, so GM and Chrysler went bankrupt. The industry
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  Speaker 1: really shrunk down, and since then they've rebuilt, but mostly
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  Speaker 1: through uh, you know, rebuilding, retooling the plants that they kept,
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  Speaker 1: and really shrunk down to something that could be manageable.
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  Speaker 1: They've got flexible labor contracts, so much like doubt. I mean,
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  Speaker 1: the auto industry has been growing now for a record
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  Speaker 1: seven straight years, were a record highs and the plants
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  Speaker 1: are all running, you know, pretty full. But there's not
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  Speaker 1: a lot more growth left. There's not no one really
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  Speaker 1: believes that we're going to grow to from seventeen and
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  Speaker 1: a half million up to twenty million annual sales a year.
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  Speaker 1: So you know, they just don't need more plants. We've
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  Speaker 1: we've got all we need. And there there's some in
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  Speaker 1: construction run in the US in the South UH and
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  Speaker 1: some in UM, you know in Fiat Is announced. You know,
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  Speaker 1: they're kind of adjusting their production. They've stopped making cars.
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  Speaker 1: They're reinvesting in the pickups and SUVs. But Mexico has
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  Speaker 1: been getting a lot of growth. And the funny thing
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  Speaker 1: is it's not Mexico is not gaining at the US's expense,
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  Speaker 1: particularly aside from and there was this case Forward was gonna,
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  Speaker 1: you know, move their small car plant or move their
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  Speaker 1: small car production into Mexico and you know, build a
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  Speaker 1: suv plant here in Michigan. But mostly what Mexico is
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  Speaker 1: getting is UH production that has been done in Europe
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  Speaker 1: and in Asia. So it's you know, we've had NAFTA
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  Speaker 1: for twenty three years and that's the way the industry
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  Speaker 1: is kind of built. So we don't really need more
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  Speaker 1: capacity right now unless things really changed dramatically. Hey, Jamie,
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  Speaker 1: could you just sort of draws a map of visual
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  Speaker 1: map of maybe like how the flow of automobiles works
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  Speaker 1: in the world. You know, for example, you know Canada
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  Speaker 1: and the United States, I mean they are intertwined. You
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  Speaker 1: have imports, you have a lot of foreign companies that
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  Speaker 1: are based here in terms of their production. Now, maybe
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  Speaker 1: you could just give us a picture and so that
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  Speaker 1: we can put that in our mind. Yeah, well, it
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  Speaker 1: really is. Canada, the US and Mexico are are deeply intertwined.
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  Speaker 1: And so you know, if you just go by the
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  Speaker 1: national borders, right, we import Americans import about seven and
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  Speaker 1: a half million vehicles a year, but almost half of
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  Speaker 1: that is from Canada and Mexico U. So it's really
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  Speaker 1: like a continental market for the most part, at least.
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  Speaker 1: That's the way the industry season, that's the way they
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  Speaker 1: make their investments because that's the way the trade lines
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  Speaker 1: as are set up. So, I mean, the biggest you know,
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  Speaker 1: it's like what we're finding with Trump, right is that
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  Speaker 1: you have to take him seriously, but you can't take
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  Speaker 1: him literally. So he says we need more he wants
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  Speaker 1: more plants in the US, and he talked about making
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  Speaker 1: permitting easier. You know, permitting is not a real big
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  Speaker 1: problem for the auto makers if they want to build
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  Speaker 1: a factory their states and communities lining up to uh
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  Speaker 1: invite their one to two billion dollar investments, you know,
• 12:02
  Speaker 1: but you know, the real the key issues, and this
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  Speaker 1: is what we still don't know about the auto industry
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  Speaker 1: under Donald Trump is is tariffs. You know, what is
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  Speaker 1: this NAFTA renegotiation going to do? Are we going to
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  Speaker 1: have a big border tax? Because if we do, that's
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  Speaker 1: going to really dramatically increase costs for consumers. It might
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  Speaker 1: spur some factory building in the US, but it's also
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  Speaker 1: gonna really reduce sales. It's going to raise prices and
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  Speaker 1: that would be very curious. And then the other big
• 12:31
  Speaker 1: one is as fuel economy, the fuel economy rules cafe
• 12:35
  Speaker 1: and whether California can continue to demand that automakers make
• 12:40
  Speaker 1: offer electric vehicles sell electric vehicles that most Americans don't
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  Speaker 1: really want to buy. And so those are the two
• 12:46
  Speaker 1: big levels that are just kind of that are out
• 12:49
  Speaker 1: there and yet to be determined. What is the new
• 12:51
  Speaker 1: ep A going to be like? What is this new
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  Speaker 1: NAFTA going to be like? And until then, you know,
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  Speaker 1: everyone's making nice. They're the automakers. US automakers know how
• 13:02
  Speaker 1: to waive the flag, you know, when they do a
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  Speaker 1: deal with the U A w You know, they know
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  Speaker 1: how to go out and announce all the investments that
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  Speaker 1: they're making and say how proud they are to be
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  Speaker 1: investing in America. But ultimately they answered to their customers
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  Speaker 1: who want good cars at good prices, and to their
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  Speaker 1: shareholders who expect them to make money. Right, Jimmy Butters,
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  Speaker 1: thank you so much for joining us. It's a compelling
• 13:24
  Speaker 1: look at y U S autos. Automakers may not have
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  Speaker 1: the incentive to build more plants in the US, Jimmy Butters,
• 13:31
  Speaker 1: US auto reporters for Blueberg. Looks like a lot of
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  Speaker 1: companies are looking to build in the US, not necessarily
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  Speaker 1: just US companies. We got news that fox Con, Taiwanese manufacturer,
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  Speaker 1: is looking to uh potentially build a business in the
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  Speaker 1: US that would employ up to fifty thousand people. I
• 14:03
  Speaker 1: want to bring in Tim Coulpin, my fellow Gadfly calumnist
• 14:06
  Speaker 1: covering technology at Bloomberg, and Tim first, I just should
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  Speaker 1: say that fox Can has peddled back some of its
• 14:14
  Speaker 1: pledged to create fifty U S jobs and said that
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  Speaker 1: it's more of a a wish than a PROMSS. But
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  Speaker 1: what would this mean for the U S? Would this
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  Speaker 1: be a benefit for the US economy. Will any job
• 14:26
  Speaker 1: would be a benefit for the US. But you know,
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  Speaker 1: let me just say one thing from the very start,
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  Speaker 1: fox Con never made that commitment about fifty thou jobs.
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  Speaker 1: They never said seven billion dollars. That was Massa, a
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  Speaker 1: son of soft Bank, who did that. He kind of
• 14:38
  Speaker 1: went off the reservation and spoke on behalf of fox
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  Speaker 1: Con without fox Con actually ever giving out that number.
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  Speaker 1: So it was Massa, not Terry Goa. And this has
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  Speaker 1: been misunderstood very widely as if it's fox CON's plan.
• 14:52
  Speaker 1: Fox Con followed up by saying, we're looking into possibly
• 14:56
  Speaker 1: maybe investing in the US. So fox Con has never
• 15:00
  Speaker 1: committed to any kind of investment in the US. It
• 15:02
  Speaker 1: is just just real quick. What's the relationship between South
• 15:04
  Speaker 1: Banking fox Can. The chairman of both companies are good mates.
• 15:08
  Speaker 1: They've done co investments together, including with Ali Barbera on
• 15:11
  Speaker 1: the other Pepper robot project. They talk a lot. Uh.
• 15:15
  Speaker 1: Terry Goure of fox Can looks up to two key
• 15:17
  Speaker 1: men in the world, and that is Jack mar of
• 15:19
  Speaker 1: Ali Baba Massi so a soft Bank. So uh, you know,
• 15:22
  Speaker 1: my understanding is they talk regularly and it may be
• 15:25
  Speaker 1: out of that that there was this you know talk
• 15:27
  Speaker 1: or misunderstanding, but really fox Con has never made this
• 15:30
  Speaker 1: pledge and a lot of people need to be aware
• 15:32
  Speaker 1: of that. Now moving on to your second question, of
• 15:34
  Speaker 1: course any job creation will be great for the US, naturally,
• 15:38
  Speaker 1: but the idea of creating thirty to fifty thou jobs
• 15:42
  Speaker 1: really is a wish more than any kind of promise,
• 15:45
  Speaker 1: because you've got to look at a lot of things.
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  Speaker 1: First of all, the US has fantastic technology. If we
• 15:49
  Speaker 1: look about what they're talking about here, which is l
• 15:51
  Speaker 1: C d S. One of the best and biggest makers
• 15:54
  Speaker 1: is Corning. They do a lot of glass, the gorilla glass.
• 15:58
  Speaker 1: They are fantastic at that, you know what. They don't
• 16:01
  Speaker 1: actually have a glass factory for Also, the panels in
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  Speaker 1: the US, they don't. It's all in China, where the
• 16:06
  Speaker 1: manufacturers are, whether where the end users are. They'd be
• 16:08
  Speaker 1: willing to open one in the US, but they don't
• 16:10
  Speaker 1: have it here now. The infrastructure that supply chain does
• 16:13
  Speaker 1: not exist in the US. Now. It would be great
• 16:16
  Speaker 1: for the US if that could all be built out,
• 16:18
  Speaker 1: but it's not here and it would take many, many
• 16:20
  Speaker 1: many years because it's been built out in China over
• 16:23
  Speaker 1: ten twenty thirty years, and it's not all suddenly going
• 16:26
  Speaker 1: to rush to the US now because the President says
• 16:28
  Speaker 1: I'm going to raise import tariffs and try and promote jobs.
• 16:31
  Speaker 1: It's going to be a very slow process and fox
• 16:34
  Speaker 1: con is in many ways constrained by that. Even if
• 16:37
  Speaker 1: they want to open a factory tomorrow, they need to
• 16:39
  Speaker 1: have everybody else part of that. And the second thing
• 16:42
  Speaker 1: is fox con needs incentives. They need tax breaks, they
• 16:45
  Speaker 1: need land, they need all sorts of other things. If
• 16:48
  Speaker 1: some state in the US, like say Pennsylvania, who they're
• 16:50
  Speaker 1: talking to, is willing to offer that, Foxconnell come in,
• 16:53
  Speaker 1: they'll talk about it. But it's really going to be
• 16:55
  Speaker 1: out and come down to one thing, show me the money.
• 16:58
  Speaker 1: And that's what Terry Gore will be saying to everybody
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  Speaker 1: he meets, show me the money. And what do you
• 17:03
  Speaker 1: think he's going to hear. I think he's going to
• 17:05
  Speaker 1: hear a lot of ideas of what can you do
• 17:07
  Speaker 1: for me? How many jobs can you create? What do
• 17:10
  Speaker 1: I need to do for you. It'll be this back
• 17:12
  Speaker 1: and forth. It will be a negotiation, and you know,
• 17:15
  Speaker 1: Terry Gore is a great negotiator. So he'll get the
• 17:17
  Speaker 1: best early can Why is fox Con wishing for this
• 17:22
  Speaker 1: job creation if there isn't the supply chain, Well, it
• 17:25
  Speaker 1: comes down to his key client, which is Tim Cook
• 17:28
  Speaker 1: at Apple. Right. Fox Con has been working with Apple
• 17:30
  Speaker 1: for many, many years, and one thing to know about
• 17:32
  Speaker 1: fox Con is that they are very tell people if
• 17:35
  Speaker 1: they have an Apple device how much just to give
• 17:39
  Speaker 1: an idea of what fox Con does for their Apple device, Well,
• 17:42
  Speaker 1: not just Apple devices, but so fox cons revenue comes
• 17:46
  Speaker 1: from assembling iPhones, right, So it's it's the end part
• 17:49
  Speaker 1: where you put all the parts together. But a lot
• 17:51
  Speaker 1: of the stuff inside an iPhone or inside an ipaid,
• 17:54
  Speaker 1: inside a Mac, inside a Dell PC, inside an HP server,
• 17:58
  Speaker 1: inside a Cisco router, that's all fox Con. Fox Con
• 18:01
  Speaker 1: is everywhere. It is everywhere. It's most famously in the iPhone,
• 18:06
  Speaker 1: but they really are in every electronic device. There is
• 18:08
  Speaker 1: not a single person on the planet who doesn't have
• 18:10
  Speaker 1: an electronic device that doesn't have something fox Con in it.
• 18:14
  Speaker 1: That's a major accountlish from their perspective, it is. But
• 18:17
  Speaker 1: so going back to the idea of why they would
• 18:20
  Speaker 1: want to be here, it would simplify possibly the supply
• 18:24
  Speaker 1: chain if they had plants here, correct, that's the idea.
• 18:28
  Speaker 1: It would make Tim Cook happy. That's what it would
• 18:30
  Speaker 1: come down to. And the reason why I say that
• 18:32
  Speaker 1: is that they did the same thing in Brazil. Fox
• 18:34
  Speaker 1: Con went to Brazil. They started making iPhones in Brazil
• 18:37
  Speaker 1: because Brazil raised tariffs by a lot, and Apple needing
• 18:41
  Speaker 1: to get around those tariffs. I think it was I'm
• 18:44
  Speaker 1: not exactly sure that you're tariff rate. They needed these
• 18:46
  Speaker 1: devices to be made in Brazil. So fox Con said, fine,
• 18:50
  Speaker 1: you might customer, you want me to open up in Brazil.
• 18:52
  Speaker 1: Do that. You you pay me money, I'll open up
• 18:54
  Speaker 1: wherever you like. So it'll really come down to Tim Cook,
• 18:58
  Speaker 1: Apple and other customers. It could be r HP anyone
• 19:00
  Speaker 1: else saying to to Terry Gua, look I need you
• 19:03
  Speaker 1: to do something. I need you to assemble here or
• 19:06
  Speaker 1: have a factory or some kind of supply here, and
• 19:09
  Speaker 1: Terry Gua will listen. But it'll really come down to
• 19:11
  Speaker 1: the clients like Apple that will make it happen. And
• 19:14
  Speaker 1: it's going to come down to you keeping us all
• 19:16
  Speaker 1: in from that's really great, really wonderful perspective and detail.
• 19:19
  Speaker 1: Tim Coulplan is a Bloomberg Gadfly columnists. He covers technology
• 19:25
  Speaker 1: as well as well. She's just about anything else on
• 19:27
  Speaker 1: the planet that you would care to know about. Well, um,
• 19:40
  Speaker 1: you know, it's interesting when you speak about the education
• 19:42
  Speaker 1: you think about a younger cohort in the population, for example,
• 19:47
  Speaker 1: the millennial population. Ron Williams is the former chairman and
• 19:50
  Speaker 1: the chief executive of ETNA. He's also the current chairman
• 19:53
  Speaker 1: and chief executive r W two Enterprises, and he knows
• 19:58
  Speaker 1: a thing or two about this eight ten trillion dollar economy.
• 20:01
  Speaker 1: Ron Williams, thank you very much for being with us. Well,
• 20:04
  Speaker 1: thank you very much, Pam, and thank you Lisa for
• 20:06
  Speaker 1: having me. Is that a decent introduction in the sense
• 20:09
  Speaker 1: of what you know, the topic that you can speak
• 20:12
  Speaker 1: to uh professionally and with your experience of analyzing this,
• 20:17
  Speaker 1: tell us who are these people, where do they come from,
• 20:19
  Speaker 1: and what are they going to be spending their money on? Well,
• 20:23
  Speaker 1: I think that I would start with kind of what
• 20:25
  Speaker 1: prompted the study. I spent a lot of time with
• 20:28
  Speaker 1: CEOs and C suite executives who were really struggling with
• 20:31
  Speaker 1: how do they develop the millennial leaders who will in
• 20:34
  Speaker 1: fact inherit our eighteen trillion dollar economy as senior executives
• 20:40
  Speaker 1: in major corporations. So the study was really about millennial
• 20:43
  Speaker 1: executives and what will it take in order to create
• 20:46
  Speaker 1: the next generation. It really didn't look at it from
• 20:49
  Speaker 1: a consumer purchasing point of view. Ron I gotta push
• 20:52
  Speaker 1: back a little bit. A lot of one complaint by
• 20:54
  Speaker 1: millennials is we're not a monolithic group. It's not as
• 20:57
  Speaker 1: if you know, every millennial has the same ethos. Do
• 21:00
  Speaker 1: you think that there is enough of a tying link
• 21:04
  Speaker 1: in the millennial generation to really make these sort of
• 21:06
  Speaker 1: sweeping statements. Well, I would agree that much of what
• 21:10
  Speaker 1: we hear about millennials is myths and opinion, and that's
• 21:14
  Speaker 1: one of the reasons we decided to conduct a very
• 21:17
  Speaker 1: rigorous study of over three thousand participants in major corporations
• 21:23
  Speaker 1: UM starting with the C suite and involving many UH
• 21:27
  Speaker 1: millennial leaders in actually conducting follow on focus groups. So
• 21:31
  Speaker 1: I think our findings are research based and they really
• 21:34
  Speaker 1: are focused on the millennial leadership. Cohort ron I will
• 21:39
  Speaker 1: hope that can you. I'd like you to share some
• 21:41
  Speaker 1: of the results of the study. I think they're they're
• 21:44
  Speaker 1: really very fascinating, but I just also want to make
• 21:47
  Speaker 1: a note that you are also the vice chairman of
• 21:49
  Speaker 1: the conference board UH and based in Boca Raton, Florida.
• 21:53
  Speaker 1: But I just thought this was an interesting if you
• 21:55
  Speaker 1: could just give us some of the highlights that you
• 21:57
  Speaker 1: came away with. Sure. Well, I think one of the
• 22:00
  Speaker 1: things that was absolutely surprising was that of millennial leaders
• 22:07
  Speaker 1: are planning to stay at their company for fifteen years
• 22:11
  Speaker 1: or more. We hear a lot about job hopping, and
• 22:14
  Speaker 1: we were really surprised to see that this cohort of
• 22:17
  Speaker 1: leaders was really looking at having a long term relationship
• 22:21
  Speaker 1: with the companies they were employed by. And that's surprising
• 22:24
  Speaker 1: because people had this impression that millennials were flighty and
• 22:29
  Speaker 1: willing to go away. What are the sort of practical
• 22:32
  Speaker 1: implications of some of the results that you found from
• 22:34
  Speaker 1: the study. Well, I think the practical implications are that
• 22:38
  Speaker 1: UH the companies have to really invest in this cohort
• 22:44
  Speaker 1: and that the developmental path for these young leaders will
• 22:47
  Speaker 1: be very different. They much more value real time feedback
• 22:51
  Speaker 1: and real time coaching than they do the annual performance review.
• 22:56
  Speaker 1: They also are much more experientially oriented job rotation, different assignments,
• 23:01
  Speaker 1: and surprisingly, they were very interested in regular and steady progression.
• 23:05
  Speaker 1: While they're not big on hierarchies, they themselves want to
• 23:08
  Speaker 1: be promoted and recognized. So I think the implications are
• 23:11
  Speaker 1: really for the developmental programs and leadership development programs that
• 23:15
  Speaker 1: companies have. I thought also was interesting in the study
• 23:19
  Speaker 1: is that you describe them as placing less value on
• 23:22
  Speaker 1: open workspaces than chief executives perceive that they do. And
• 23:27
  Speaker 1: I thought that was interesting because that is a kind
• 23:31
  Speaker 1: of almost as a scenic or Hollywood like image now
• 23:35
  Speaker 1: about the open environment and so on, about working and
• 23:39
  Speaker 1: without offices, and what if you could speak to that,
• 23:42
  Speaker 1: because that's something everyone faces every day, whatever kind of
• 23:45
  Speaker 1: office space they're in, a cubicle or open plan. Yes,
• 23:49
  Speaker 1: it was. One of the most surprising comments that we
• 23:52
  Speaker 1: received is that they value the opportunity to collaborate in teams,
• 23:56
  Speaker 1: and they believe there ought to be workspaces where groups
• 23:59
  Speaker 1: can come together and have very impromptu conversations. But they
• 24:04
  Speaker 1: also believe that this low open environment inhibits creativity and
• 24:09
  Speaker 1: inhibits an ability to focus on the task at hand.
• 24:12
  Speaker 1: So I think, like many things, trans move in one direction,
• 24:16
  Speaker 1: perhaps too far, and they need to move back. So
• 24:19
  Speaker 1: I think I think my console would be to look
• 24:21
  Speaker 1: at a combination of open spaces with lots of opportunity
• 24:25
  Speaker 1: for people to cluster in small groups and even have
• 24:28
  Speaker 1: private workspaces where they can in fact concentrate and have
• 24:31
  Speaker 1: some privacy run. I don't mean to shift away from
• 24:35
  Speaker 1: this uh completely, but I do want to get your take.
• 24:38
  Speaker 1: You set on the on the border, your director at
• 24:41
  Speaker 1: American Express, the Boeing Company, Johnson and Johnson envisioned healthcare.
• 24:45
  Speaker 1: You have been in corporate America for a very long time.
• 24:48
  Speaker 1: It's in senior positions. And a few weeks ago we
• 24:51
  Speaker 1: had Ira Millstein on he's a senior partner at Wild
• 24:55
  Speaker 1: Goatschell and he was talking about how there isn't accurate,
• 25:00
  Speaker 1: are correct oversight over some of the boards that aren't
• 25:03
  Speaker 1: necessarily the right incentives to making a good long term decisions.
• 25:06
  Speaker 1: Do you agree with that? Well, I think it's very
• 25:10
  Speaker 1: easy to generalize. I can only speak to my experiences,
• 25:14
  Speaker 1: and I think I feel fortunate the boards I'm involved
• 25:17
  Speaker 1: with have have a very good balance of senior executives,
• 25:23
  Speaker 1: diverse executives both by gender and ethnicity, and executives who
• 25:27
  Speaker 1: really really engage in a very focused way and take
• 25:31
  Speaker 1: their responsibility of representing the shareholders very serious. Ron Williams,
• 25:37
  Speaker 1: you must of course be following the transition from one
• 25:41
  Speaker 1: administration to another and the emphasis of President Trump on
• 25:47
  Speaker 1: business issues. What business issues do you think affect the
• 25:51
  Speaker 1: millennial leaders the most right now? Well, I think the
• 25:56
  Speaker 1: millennial leaders are watching closely the whole question of the
• 26:03
  Speaker 1: job creation and the degree to which the companies that
• 26:06
  Speaker 1: are involved with may very well begin to take different strategies.
• 26:10
  Speaker 1: As you know, corporations forward plan quite some time, and
• 26:14
  Speaker 1: I think companies are trying to understand what are the
• 26:17
  Speaker 1: policies regarding trade, what are the policies regarding job creation,
• 26:22
  Speaker 1: tax structure, and how that will affect the employment opportunities
• 26:27
  Speaker 1: and the skill mix that companies are going to have.
• 26:30
  Speaker 1: Thank you so much. Ron Williams, the former chairman and
• 26:33
  Speaker 1: CEO of ETNA and the current chairman and CEO of
• 26:36
  Speaker 1: r W two Enterprises, on how millennial millennials are just
• 26:41
  Speaker 1: like us, and they're just going to uh look for
• 26:44
  Speaker 1: steady promotions and they're looking for to be a companies
• 26:48
  Speaker 1: for a long time. They might still buy automobiles and
• 26:52
  Speaker 1: they might still buy homes. Yeah, and they still care
• 26:54
  Speaker 1: about taxes. Thanks for listening to the Bloomberg pen L podcast.
• 27:04
  Speaker 1: You can subscribe and listen to interviews at iTunes, SoundCloud,
• 27:08
  Speaker 1: or whatever podcast platform you prefer. I'm Pim Fox. I'm
• 27:12
  Speaker 1: out there on Twitter at pim Fox. I'm out there
• 27:15
  Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast.
• 27:18
  Speaker 1: You can always catch us worldwide on Bloomberg Radio