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P&L: The Global Nature of the Auto Industry · Bloomberg Intelligence

• 0:04
  Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm Pim Fox.
• 0:08
  Speaker 1: Along with my co host Lisa Abramowitz. Each day we
• 0:11
  Speaker 1: bring you the most important, noteworthy, and useful interviews for
• 0:14
  Speaker 1: you and your money, whether at the grocery store or
• 0:16
  Speaker 1: the trading floor. Find the Bloomberg P L Podcast on iTunes,
• 0:20
  Speaker 1: SoundCloud and at Bloomberg dot com. Toyota Motor Company has
• 0:29
  Speaker 1: said that it will invest ten billion dollars in the
• 0:31
  Speaker 1: United States over the next five years, and Bob Carter
• 0:34
  Speaker 1: is the president of Toyota North America. He joined us
• 0:37
  Speaker 1: for a discussion of the all new, updated camera, the
• 0:40
  Speaker 1: outlook for sedans, and also being positioned for the presidential transition.
• 0:46
  Speaker 1: The new camera is a vehicle that we're very proud of.
• 0:48
  Speaker 1: This is the eighth generation since we introduced it originally
• 0:52
  Speaker 1: back in three but this is a this is a
• 0:57
  Speaker 1: unique camera for us. We've done this entire car completely.
• 1:02
  Speaker 1: It has a new platform, new power trains, new body,
• 1:05
  Speaker 1: new interior, and all the new technology that that that
• 1:10
  Speaker 1: we have developed over the years is all comes together
• 1:13
  Speaker 1: in this eighth generation car. Uh really proud of it.
• 1:17
  Speaker 1: We've done two executions of the camera. There's one that's
• 1:21
  Speaker 1: very sporty and there's one that's very luxurious. So depending
• 1:26
  Speaker 1: on what the consumers preferences. And we're announcing it here
• 1:30
  Speaker 1: for the first time globally in in uh in the
• 1:33
  Speaker 1: Detroit Auto Show, but it will be available at our
• 1:37
  Speaker 1: dealerships later this summer. So why is Toyota focusing on
• 1:41
  Speaker 1: a camera which is a mid size smaller midsized vehicle
• 1:45
  Speaker 1: when the trend is really really moving towards light trucks.
• 1:49
  Speaker 1: The story of Team was was light trucks, and and
• 1:55
  Speaker 1: light trucks happens to be an uh more of an
• 1:58
  Speaker 1: industry slang. What it's really most popular right now is
• 2:02
  Speaker 1: car based SUVs or c uvs um like our rav
• 2:06
  Speaker 1: and like our our Highlander. However, the sedan market is
• 2:11
  Speaker 1: still an extremely large and important part of the business.
• 2:15
  Speaker 1: How big of a part of business is it for you?
• 2:17
  Speaker 1: It's about well, the industry itself, it's about two point
• 2:20
  Speaker 1: five million units, and Camray is the number one vehicle
• 2:25
  Speaker 1: not only in that segment, but it's the number one
• 2:28
  Speaker 1: selling pass in your car in the US for fifteen
• 2:31
  Speaker 1: consecutive years. What about for Toyota, it is by far
• 2:34
  Speaker 1: our number one volume vehicle and we have a four
• 2:38
  Speaker 1: O FO. We did three thousand last year, and so
• 2:44
  Speaker 1: we're looking at similar sales going into One of the
• 2:48
  Speaker 1: things I think it's going to be interesting to watch
• 2:50
  Speaker 1: because we've seen this over the years, is the midsize
• 2:54
  Speaker 1: sedan segment hasn't had a lot of innovative product, new
• 2:57
  Speaker 1: product coming in. So this year we're we're launching the
• 3:01
  Speaker 1: best camera that we've ever built, full of new technology.
• 3:04
  Speaker 1: This vehicle is so sophisticated that even if a pedestrian
• 3:08
  Speaker 1: walks in front of the vehicle, it will actually apply
• 3:12
  Speaker 1: the brakes and assist the driver of steering around it.
• 3:16
  Speaker 1: So it's automatic breaking, which is available in the market,
• 3:20
  Speaker 1: but by we've developed or that it can actually uh
• 3:23
  Speaker 1: sense soft tissue and help avoid avoid accidents. UH. There's
• 3:28
  Speaker 1: rumors that perhaps there's going to be a competitors will
• 3:32
  Speaker 1: bring be bringing their cars to market later this fall.
• 3:35
  Speaker 1: So we have seen in the past in small pickup trucks,
• 3:39
  Speaker 1: We've seen it in in subcompact cars. When new vehicles
• 3:44
  Speaker 1: come with new styling, new design, new technology, UM, there's
• 3:49
  Speaker 1: life comes back into that segment. So we we think
• 3:52
  Speaker 1: that the UH the segment that did decline last year,
• 3:55
  Speaker 1: will will plateau and who knows, perhaps even show little
• 3:58
  Speaker 1: growth next year. Bob where up rating? It seems at
• 4:00
  Speaker 1: least in the automobile industry or any big manufacturer in
• 4:03
  Speaker 1: a different world. Come January, there will be a new president.
• 4:08
  Speaker 1: Donald Trump has certainly taken to the Twitter sphere in
• 4:11
  Speaker 1: order to voice his particular perspective on where automobiles are made.
• 4:17
  Speaker 1: Do you feel, as an auto executive that you are
• 4:20
  Speaker 1: living in a different time than you were, let's say,
• 4:23
  Speaker 1: twelve months ago. Well, my quick answer to that, pen
• 4:27
  Speaker 1: would be, it's a little bit early to tell. But
• 4:29
  Speaker 1: the global the the auto industry is very much a
• 4:33
  Speaker 1: global industry. We have fifty three plants that are currently
• 4:37
  Speaker 1: operational in UM countries around the world. Ten of those
• 4:42
  Speaker 1: plants are here in the US, but the supply chain
• 4:45
  Speaker 1: is very very much global. The camera that we were
• 4:49
  Speaker 1: talking about earlier, UM cars dot Com has now for
• 4:53
  Speaker 1: four years named that the most American car consumers can buy.
• 5:00
  Speaker 1: And what they calculate that on is where are the
• 5:03
  Speaker 1: parts sourced? Whereas the labor source and by their calculation
• 5:09
  Speaker 1: of the camera is American sourced. The reverse of that, though,
• 5:14
  Speaker 1: is we still because of the global supply network, uh
• 5:18
  Speaker 1: do source of a camera across the world. So it's
• 5:22
  Speaker 1: very much a global industry. The supply chains are very long,
• 5:27
  Speaker 1: and so we're working. We look forward to working with
• 5:30
  Speaker 1: the new administration to get them to understand the complexities
• 5:33
  Speaker 1: of our industry. What's your number one fear for this
• 5:35
  Speaker 1: year as far as political interference with the auto industry,
• 5:39
  Speaker 1: I wouldn't characterize it as a as a fear. We
• 5:42
  Speaker 1: we are very confident this year. The economy is very good.
• 5:45
  Speaker 1: There was seventeen point five million cars sold in the
• 5:49
  Speaker 1: US last year. We believe it's gonna be lower in ten,
• 5:54
  Speaker 1: but we're forecasting and market between seventeen seventeen point two.
• 5:58
  Speaker 1: Uh So the economy, he's very robust right now. We think, uh,
• 6:03
  Speaker 1: we think it's going to be another good year. That
• 6:05
  Speaker 1: was Bob Carter, president of Toyota North America, speaking with
• 6:09
  Speaker 1: US yesterday about the updated Camray, as well as the
• 6:13
  Speaker 1: outlook for sedans and the potential uh for political interference
• 6:17
  Speaker 1: or perhaps lack thereof. There we are hearing is going
• 6:31
  Speaker 1: on right now at Capital Hail. Jeff Sessions is looking
• 6:35
  Speaker 1: to be confirmed as Attorney General, and John Kelly president
• 6:39
  Speaker 1: elect Trump's pick for Homeland Security. I want to bring
• 6:42
  Speaker 1: in Nancy Agnanovitch. She's a Capital Hill reporter for Bloomberg
• 6:46
  Speaker 1: b an A in Washington, d c UM, and I
• 6:49
  Speaker 1: wanted to get your sense of so far what we've learned.
• 6:53
  Speaker 1: I believe Jeff Sessions is still being grilled. Well, this
• 6:57
  Speaker 1: is only the beginning of his two day hearing. As
• 7:00
  Speaker 1: ss UM, they'll be meeting at Judiciary for two days
• 7:04
  Speaker 1: in a row to look at his qualifications. I think
• 7:07
  Speaker 1: he's one of the people who's already got all of
• 7:09
  Speaker 1: his financial information in and has complied with those requirements,
• 7:14
  Speaker 1: and so he's covered there in terms of fulfilling those requirements.
• 7:17
  Speaker 1: But I guess there are concerns about his very conservative
• 7:21
  Speaker 1: philosophy concerning immigration and other issues, and so there'll be
• 7:25
  Speaker 1: a lot of questions there. And so I was gonna say,
• 7:29
  Speaker 1: could you just outline for us how many how many
• 7:32
  Speaker 1: hearings are going to be held today and then tomorrow
• 7:35
  Speaker 1: and then on Thursday, just we have an idea of
• 7:37
  Speaker 1: how packed the schedule is this week. All overall, we're
• 7:40
  Speaker 1: looking from twelve to fifteen depending on how you calculated.
• 7:43
  Speaker 1: But today we have those three hearings, including too that
• 7:46
  Speaker 1: you mentioned. Then tomorrow Wednesday, there were six that were scheduled.
• 7:52
  Speaker 1: But Senator Schumer, the Minority leader, just a little bit
• 7:56
  Speaker 1: ago this morning, I announced that Eastern negotiated a plan
• 7:59
  Speaker 1: with joy Pretty Leader McConnell to reduce that down to
• 8:02
  Speaker 1: three on Wednesday and to push some of those off
• 8:05
  Speaker 1: till Thursday and next week. And then on Thursday we
• 8:08
  Speaker 1: have another five to six hearings. So there are a
• 8:12
  Speaker 1: lot and a lot of these deal with President elect
• 8:15
  Speaker 1: Trump's national security team, and McConnell wants very much to
• 8:20
  Speaker 1: get six to seven of the cabinet picks or national
• 8:25
  Speaker 1: security team members confirmed by inauguration day in order for
• 8:30
  Speaker 1: him to have that in place when he goes into
• 8:33
  Speaker 1: the White House. Nancy, is this typical, this type of
• 8:36
  Speaker 1: packed confirmation schedule, Well, Senator McConnell has said repeatedly that
• 8:42
  Speaker 1: on the very first day of the Obama administration they
• 8:46
  Speaker 1: confirmed seven people. But I think what Democrats are saying
• 8:49
  Speaker 1: is those people um already had their FBI tabinet I'm sorry,
• 8:54
  Speaker 1: FBI background checks done, their financial disclosure, the disclosure forms,
• 8:59
  Speaker 1: the in and all these other requirements, and a lot
• 9:02
  Speaker 1: of people who Trump as proposed to nominate haven't flied
• 9:06
  Speaker 1: without so far, and for that's one of the reasons
• 9:09
  Speaker 1: why Democrats want to slow this process down. And then
• 9:12
  Speaker 1: they also were saying that, unlike in the Obama administration,
• 9:16
  Speaker 1: we're looking at many billionaires or otherwise very very wealthy
• 9:21
  Speaker 1: people who have very complicated financial holdings that require more examination.
• 9:27
  Speaker 1: And also many of these people have never served in
• 9:30
  Speaker 1: government before, especially not at this kind of level. Rex Chellison,
• 9:36
  Speaker 1: former chief executive of ex On Mobile, slated to be
• 9:39
  Speaker 1: the nation's top diplomat. How contentious or how confrontational do
• 9:44
  Speaker 1: you believe those hearings will be? Well. Democrats will obviously
• 9:48
  Speaker 1: raise a lot of questions about his relationship with Vladimir
• 9:52
  Speaker 1: Putin and his feelings with Russia over the years, And
• 9:56
  Speaker 1: I guess the primary question is whether he can put
• 9:59
  Speaker 1: aside maybe his friendship with Putin to look out for
• 10:02
  Speaker 1: the interests of the United States as this country's top diplomat.
• 10:07
  Speaker 1: So I think there will be some contentiousness there. So, Nancy,
• 10:11
  Speaker 1: from your perspective, I mean, so far, what is the
• 10:14
  Speaker 1: tenor of the questions been, Like, I mean, is it
• 10:16
  Speaker 1: mostly just political grandstanding or are are the questions, really
• 10:20
  Speaker 1: probing and substantive and trying to get to some kind
• 10:24
  Speaker 1: of comfort with who we have. There's always political grandstanding,
• 10:30
  Speaker 1: but I think there are legitimate concerns about UM some
• 10:34
  Speaker 1: of these nominees financial holdings and trying to get a
• 10:38
  Speaker 1: look at that in order to identify potential conflicts of interest, UM,
• 10:44
  Speaker 1: when a person is in charge of a department UM
• 10:48
  Speaker 1: with billions of dollars in funding going out to different industries,
• 10:53
  Speaker 1: and you can't really look for potential conflicts of interest
• 10:56
  Speaker 1: if you haven't seen the paperwork yet. So I think
• 10:59
  Speaker 1: they're trying to slow it down, and I think Democrats
• 11:01
  Speaker 1: know that it's very unlikely that they can derail many
• 11:06
  Speaker 1: of these nominees, but they want to have a chance
• 11:08
  Speaker 1: to do what they call the advice and consent role
• 11:11
  Speaker 1: that the Senate has traditionally done before they let them advance,
• 11:14
  Speaker 1: before they're actually put to a vote on the Senate floor.
• 11:18
  Speaker 1: Thank you very much for joining us. Nancy Ognanovich, Capitol
• 11:22
  Speaker 1: Hill reporter for Bloomberg b NA, joining us from Washington,
• 11:25
  Speaker 1: d C. We're broadcasting from the North American International Auto Show,
• 11:41
  Speaker 1: and Lisa Brahmins, do you know that Cadillac is going
• 11:44
  Speaker 1: to launch a fifteen hundred dollar a month luxury car
• 11:48
  Speaker 1: subscription service. Do you get a new car every months?
• 11:51
  Speaker 1: Coming in the mouth, Well, you might be able to,
• 11:54
  Speaker 1: particularly since we're gonna be talking now with the president
• 11:56
  Speaker 1: of Cadillac. Johann didn't meet Mason. Thank you very much
• 11:59
  Speaker 1: for being in here. Tell us about this new subscription service.
• 12:02
  Speaker 1: What's it aimed at, and why are you Why are
• 12:05
  Speaker 1: you launching this? It's called Book by Cadillac, and really
• 12:08
  Speaker 1: is a response to what is a very dynamic environment
• 12:12
  Speaker 1: within which the order industry is doing business today. If
• 12:15
  Speaker 1: we look at the emergence of the mega cities around
• 12:17
  Speaker 1: the world. UM, these cities were initially enabled by the
• 12:23
  Speaker 1: principle of individual mobility, but the principle has become so
• 12:26
  Speaker 1: successful that it's resulted in congestion and noise and pollution
• 12:30
  Speaker 1: and all the things that are big obstacles to vehicle ownership. UM.
• 12:37
  Speaker 1: One response to that is the emergence of right shoting
• 12:40
  Speaker 1: service is like lift and Ubo, and those certainly will
• 12:43
  Speaker 1: probably containue to gain traction. And living in New York
• 12:46
  Speaker 1: I can tell you that we face significant barriers to
• 12:52
  Speaker 1: operating vehicles so we are still diplomatic. I mean, honestly,
• 12:57
  Speaker 1: I've driven down a one way street with three bike
• 12:59
  Speaker 1: riders coming at me and you know, another person walking
• 13:01
  Speaker 1: out in front. This is this is what you're talking
• 13:03
  Speaker 1: about with challenging. So it's it's it's like one benefit
• 13:06
  Speaker 1: of living in the city. I experienced it first then.
• 13:09
  Speaker 1: And what we want to do is to make sure
• 13:11
  Speaker 1: that we are part of the world that does the
• 13:13
  Speaker 1: disruption and we don't end up being disrupted. And so
• 13:17
  Speaker 1: we need to respond to a changing world. And we
• 13:20
  Speaker 1: know that for affluent customers, flexibility convenient time has value,
• 13:26
  Speaker 1: and we thought, why should we follow only the conventional
• 13:31
  Speaker 1: model of business ownership where you're right out of check
• 13:33
  Speaker 1: by the car pocket in your garage for of the time,
• 13:35
  Speaker 1: and that's kind of it. Surely there must be an
• 13:38
  Speaker 1: opportunity to respond with greater flexibility. So it's basically like
• 13:43
  Speaker 1: a new version of having a personal driver. Not quite no,
• 13:48
  Speaker 1: you will continue to drive the car yourself. But of
• 13:50
  Speaker 1: course this is a precursor to full autonomous driving capability,
• 13:53
  Speaker 1: in which gets that's no longer a point is that
• 13:55
  Speaker 1: the point of this, though partly up to it's it's
• 13:58
  Speaker 1: basically training well to have call, have cars on call,
• 14:03
  Speaker 1: rather than having ownership and being able to have that
• 14:06
  Speaker 1: car brought to them and for now they'll drive it,
• 14:09
  Speaker 1: but maybe in three years they were but precisely right.
• 14:11
  Speaker 1: So it's a setup for the future that we see
• 14:13
  Speaker 1: a little bit beyond just the the the definition of
• 14:16
  Speaker 1: the product substance today and what this really book means
• 14:20
  Speaker 1: is that you buy into a Cadillac experience, a luxury
• 14:22
  Speaker 1: experience that's fully immersive. It's not tied to any individual vehicle.
• 14:27
  Speaker 1: It gives you flexibility to change your car eighteen times
• 14:30
  Speaker 1: a year, so more than once a month. And if
• 14:32
  Speaker 1: today you feel like a sports car, tomorrow it's a
• 14:35
  Speaker 1: night out of the town and a luxury automobile. And
• 14:37
  Speaker 1: then you want to go skiing, you need a suv.
• 14:39
  Speaker 1: You can have all of those. And as we expand
• 14:42
  Speaker 1: the program, we're starting off in New York, but conceivably,
• 14:45
  Speaker 1: let us say you go to l A for a
• 14:47
  Speaker 1: week and you need a car there, Well, you take
• 14:48
  Speaker 1: your book by Cadillac in l A. You know, to
• 14:51
  Speaker 1: rent a car anymore. So it's about convenience, about flexibility.
• 14:54
  Speaker 1: All maintenance insurance is taken care of. They always have
• 14:56
  Speaker 1: a car that's clean and fully gassed, a lover to
• 14:59
  Speaker 1: your doorstep, and all of that convenience and flexibility we
• 15:03
  Speaker 1: think has value for affluent consumers. Now you have experienced
• 15:06
  Speaker 1: at Infinity as well as Audi, and I'm wondering what
• 15:10
  Speaker 1: you are bringing Cadillac, particularly to the dealership network, because
• 15:14
  Speaker 1: there's a big effort on the part of Cadillac to
• 15:17
  Speaker 1: really upgrade and streamline and stabilize the dealership. The real
• 15:22
  Speaker 1: thing for us is we are on a long term journey.
• 15:25
  Speaker 1: I would have to say to restore Cadillac what we
• 15:28
  Speaker 1: kind of loosely call to the pinnacle of premium, back
• 15:31
  Speaker 1: to that world where it occupied this position as the
• 15:34
  Speaker 1: unquestioned standard for the world in Project It's called Project
• 15:39
  Speaker 1: Pinnacle for that reason. And while we are working very
• 15:43
  Speaker 1: hard on expanding the product portfolio and really creating top
• 15:46
  Speaker 1: technology cars with great craftsmanship and and and great technology,
• 15:51
  Speaker 1: that's only part of the question that needs to be answered.
• 15:54
  Speaker 1: We also need to look downstream at the overall ownership experience.
• 15:57
  Speaker 1: And yeah, dealer network plays a crucial role because it's
• 16:00
  Speaker 1: the environment within which the customer engages the brand and
• 16:05
  Speaker 1: the quality of our dealer network also needs to reflect
• 16:08
  Speaker 1: our premium aspirations. And to be clear, we have some
• 16:11
  Speaker 1: really outstanding dealers that do an herculean task in terms
• 16:16
  Speaker 1: of elevating the overall brand experience. Reality for us, though,
• 16:19
  Speaker 1: is we also a very large dealer network and the
• 16:22
  Speaker 1: variability in the overall delivery of that experience is something
• 16:27
  Speaker 1: that we are trying to get into a narrower distribution,
• 16:31
  Speaker 1: and the Project Pinnicle is designed to set around brand
• 16:34
  Speaker 1: standards for our dealers in terms of that customer experience,
• 16:39
  Speaker 1: which we then reward with ever increasing financial bonuses as
• 16:44
  Speaker 1: they reach increasing compliance. Johann Denaithan, thank you so much
• 16:49
  Speaker 1: for being with us. It's truly fascinating development. The idea
• 16:53
  Speaker 1: of trying to create a precursor to what the inevitable.
• 16:56
  Speaker 1: The Johann Denaisan, president of Cadillac, talking about the new
• 17:00
  Speaker 1: car subscription service in New York City, which may really
• 17:03
  Speaker 1: be the stepping stone to the new version of auto
• 17:07
  Speaker 1: lack of ownership, which a voids the bicycles when you drive.
• 17:11
  Speaker 1: I'm trying. My dad tells me, this is Bloomberg. We're
• 17:27
  Speaker 1: broadcasting from them North American International Auto Show Earlier we
• 17:31
  Speaker 1: got a chance to sit down with the Joe Henrix.
• 17:34
  Speaker 1: He is the president of the Americas for Ford. Talked
• 17:37
  Speaker 1: about the new F one fift pick up, the electrified
• 17:40
  Speaker 1: vehicle lineup at Ford, plus investments in new jobs in Michigan,
• 17:44
  Speaker 1: and the Donald Trump effect. The first question we wanted
• 17:47
  Speaker 1: to know was what the importances of the F series
• 17:49
  Speaker 1: is to Ford. You know, when you when you start
• 17:52
  Speaker 1: with our business in North America, it starts with F series,
• 17:55
  Speaker 1: or of our volume in North America's our F series trucks.
• 17:59
  Speaker 1: FIR trucks have been the best selling vehicle in the
• 18:02
  Speaker 1: United States for thirty five years consecutively, the best selling
• 18:05
  Speaker 1: trucks for forty years. So it's a big part of
• 18:08
  Speaker 1: our business. Obviously, we're expanding beyond that into all kinds
• 18:12
  Speaker 1: of other parts of the business, but it's it's safe
• 18:14
  Speaker 1: to say the crown jewels of Ford Motor Company in
• 18:16
  Speaker 1: North America are the F series trucks. And of course
• 18:18
  Speaker 1: we got to announce the two thousand eighteen Molly R
• 18:21
  Speaker 1: F one fifties getting some upgrades and freshening, which is
• 18:24
  Speaker 1: all he's very exciting to talk about. Whenever we talk
• 18:27
  Speaker 1: about car companies. At this point in the political trajectory.
• 18:32
  Speaker 1: We have to uh talk about President elect Donald Trump
• 18:35
  Speaker 1: less than a week ago forward canceled plans for one
• 18:37
  Speaker 1: point six a billion dollar planned in Mexico. You have
• 18:41
  Speaker 1: to think it has to do somewhat with President elect
• 18:44
  Speaker 1: Trump's rhetoric. Will this cancelation material effect the production of
• 18:50
  Speaker 1: any particular vehicles and do you expect less of production
• 18:54
  Speaker 1: of certain types of vehicles because of the political pressure
• 18:57
  Speaker 1: right now? Yeah, So you know, it's a hot topic
• 18:59
  Speaker 1: at the moment. To be sure. I mean, we took
• 19:02
  Speaker 1: a look at the end of last year where small
• 19:04
  Speaker 1: car sales were going in the US and and did
• 19:06
  Speaker 1: some updated projections whether they're going to be in the future,
• 19:09
  Speaker 1: and we reached a point where we felt comfortable enough
• 19:11
  Speaker 1: that we could fit the focus volume that we forecast
• 19:14
  Speaker 1: for two thousand and eight, nineteen twenty and beyond into
• 19:17
  Speaker 1: an existing manufacturing capacity plant we have in Hermcile, Mexico.
• 19:22
  Speaker 1: That was the big driver decision. Uh. And because in
• 19:25
  Speaker 1: our in our business capacities everything, it's such a billion
• 19:28
  Speaker 1: dollar plants are a big deal. Capacitization is everything, and
• 19:32
  Speaker 1: you when you can get new capacity into existing plants
• 19:35
  Speaker 1: a lot cheaper than building a new plant, even though
• 19:37
  Speaker 1: we were pretty far along on starting the new plant.
• 19:40
  Speaker 1: The cancelation of that, the movement of focus into her
• 19:43
  Speaker 1: mas SEO and then investing some of that money into
• 19:46
  Speaker 1: an expansion of our plant here in Michigan to produce
• 19:49
  Speaker 1: two new products. That say, it's about five million dollars
• 19:51
  Speaker 1: of capital UM and that was the big driver read decision.
• 19:54
  Speaker 1: I know the timing and us of his um leads
• 19:57
  Speaker 1: to a lot of other questions, but but you know,
• 20:00
  Speaker 1: the ability to be able to forecast lower small car sales,
• 20:02
  Speaker 1: so that's what's been happening in the US really was
• 20:04
  Speaker 1: the main driver. So do you think that Ford will
• 20:06
  Speaker 1: make any changes to its future plans as a result
• 20:09
  Speaker 1: of the current political climate and sort of the focus
• 20:12
  Speaker 1: on American produced goods? You know, well, we are taking
• 20:16
  Speaker 1: into account what we expect to be some pro growth
• 20:18
  Speaker 1: initiatives by the Trump administration, including some taxation policy discussions,
• 20:23
  Speaker 1: hopefully some improvements in the competitiveness of the US economy
• 20:26
  Speaker 1: when it comes to corporate tax rates and some other
• 20:27
  Speaker 1: things regulatory and the like. So if he never say
• 20:30
  Speaker 1: one factor really drives a decision, there's in our business,
• 20:34
  Speaker 1: so many things get taken into account when you're making
• 20:36
  Speaker 1: investment decide of what we make. But we are taking
• 20:39
  Speaker 1: into account some expected changes into the into the you know,
• 20:43
  Speaker 1: regulatory and economic cycle in the US. You asked the
• 20:47
  Speaker 1: question about production, we're not. We're still moving focus production
• 20:50
  Speaker 1: to Mexico. We won't, it won't be any production. Kind
• 20:52
  Speaker 1: of mythsed by all of this. It's just making sure
• 20:54
  Speaker 1: that we spend the right amount of mind to do it.
• 20:56
  Speaker 1: Give our listeners an idea Ford's business in North America
• 21:01
  Speaker 1: and Ford's business overseas. It's may surprise people. Yeah, well,
• 21:06
  Speaker 1: in North America we're the second largest manufacturer and seller
• 21:10
  Speaker 1: of vehicles. We actually produce more vehicles in the United
• 21:13
  Speaker 1: States and anybody else. We employ more workers and manufacturing
• 21:16
  Speaker 1: workers in the US and anybody else. We're number one
• 21:18
  Speaker 1: in Canada, we're second in the U S and sales,
• 21:21
  Speaker 1: number one in Canada for sales, and we're you know,
• 21:23
  Speaker 1: fifth or six in Mexico, depending on what time of
• 21:26
  Speaker 1: the year we are. And our business in total of
• 21:29
  Speaker 1: North America is over three million units. Ford globally has
• 21:33
  Speaker 1: a strong presence of course in Europe, a strong presence
• 21:35
  Speaker 1: now in China. We're now in the top six, five
• 21:38
  Speaker 1: or six brands in China. UM, we have a strong
• 21:42
  Speaker 1: presence in Brazil and South America. Were third or fourth
• 21:45
  Speaker 1: or fifth, depending on what market. Second in Argentina, but
• 21:48
  Speaker 1: we're depending on what market you're looking at, and when
• 21:51
  Speaker 1: you look at our business, the majority of our revenue
• 21:55
  Speaker 1: comes to North America. The majority of our profits come
• 21:57
  Speaker 1: from North America, but we certainly have a strong presence
• 21:59
  Speaker 1: all around the Roman what's the weakest market right now, Well,
• 22:03
  Speaker 1: it's harder to find weakest market. The probably the most
• 22:06
  Speaker 1: challenged market would be Brazil, given the economic and political
• 22:11
  Speaker 1: challenges that the country faces. The auto industry in Brazil
• 22:14
  Speaker 1: has collapsed about half were it was a few years ago.
• 22:17
  Speaker 1: That puts a lot of pressure on our business. Also
• 22:20
  Speaker 1: the uncertainty and the political challenges that they've had. We've
• 22:23
  Speaker 1: seen some progress lately the president Tamarins and things that
• 22:25
  Speaker 1: have happened, but Brazil is certainly challenged and the Indian
• 22:28
  Speaker 1: market India has not grown to the level people thought
• 22:30
  Speaker 1: I was going to grow and there's a lot of
• 22:32
  Speaker 1: pressure on that business as well. That was Joe Hendrix.
• 22:36
  Speaker 1: He is the president of the Americas for Ford. Thanks
• 22:45
  Speaker 1: for listening to the Bloomberg P and L podcast. You
• 22:47
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• 22:52
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• 22:56
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• 22:59
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• 23:02
  Speaker 1: always catch us worldwide on Bloomberg Radio m