Latest / Bloomberg Intelligence / Ferrari Hires Tech Pioneer As CEO

Transcript

Ferrari Hires Tech Pioneer As CEO · Bloomberg Intelligence

0:00
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
0:04
Speaker 1: my co host Matt Miller. Every business day, we bring
0:06
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
0:11
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
0:15
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
0:18
Speaker 1: at Bloomberg dot com slash podcast. Now, let's get over
0:22
Speaker 1: to Michael Dean, is a Bloomberg Intelligence senior autos analysts.
0:26
Speaker 1: I probably read more of Michael Dean's research than anyone
0:31
Speaker 1: else on the Bloomberg terminal. Um now, I definitely do,
0:35
Speaker 1: and he joins us now to talk about Ferrari's news CEO. Michael,
0:38
Speaker 1: It's been a long time coming. We've been waiting for
0:41
Speaker 1: a name to replace Louis Kennellieri, and now we get
0:45
Speaker 1: um someone I never heard of from st Microelectronics who
0:49
Speaker 1: designs what like touch screen interactivity. Yes, that's right, Um.
0:55
Speaker 1: I haven't heard of him either, and he's certainly unknown
0:57
Speaker 1: to also invest this but shouldn't be a surprise because
1:01
Speaker 1: it was only back on April fifteenth that John Alcan,
1:04
Speaker 1: the Ferrari CEO and chairman at the time, said that
1:08
Speaker 1: he wanted someone with the background. So that's what we've
1:11
Speaker 1: got at the moment. All right. But you know, I'm
1:13
Speaker 1: not a car geek like Matt Miller and you and
1:17
Speaker 1: Kevin tain In. But um, I love the sound of,
1:21
Speaker 1: you know, a Ferrari wearing down the street. Here. What
1:24
Speaker 1: happens when they become electric? Yeah, that's a tough one
1:28
Speaker 1: because if you listen to the officiados, they will say,
1:31
Speaker 1: you know, we don't want electric. That certainly happened to Porsche.
1:35
Speaker 1: But we've seen with the take and it can be
1:36
Speaker 1: very successful. And we've seen from the competing luxury brands
1:39
Speaker 1: such as with Lamborghini, Bentley and Rolls Royce they all
1:43
Speaker 1: have electrification strategies. That's the way it's going. And even
1:47
Speaker 1: Ferrari have said they're going to have their first battery
1:49
Speaker 1: electric vehicle in two thousand and twenty five. You know this.
1:53
Speaker 1: Yesterday I was listening to David Weston, he was interviewing
1:56
Speaker 1: one of Ford's big execs on their new pickup truck. That, um,
2:00
Speaker 1: it looks pretty cool. It's less than twenty dollars. Um
2:04
Speaker 1: it's the Maverick. It's a small, smaller pickup truck. But
2:08
Speaker 1: it's going to be a hybrid, And David said, why
2:09
Speaker 1: didn't you go fully electric? Like doing a hybrid was
2:12
Speaker 1: almost to fail. No offense to David, but that's kind
2:15
Speaker 1: of the general. Um, that's the general thought right now.
2:19
Speaker 1: Why is fully electric considered better than the hybrid, which
2:24
Speaker 1: to me is a far better solution. Well, I think
2:27
Speaker 1: it's all to do evaluation. If you look at um
2:30
Speaker 1: where Tesla is valued and the legacy automate makers want
2:34
Speaker 1: want to have some of that sort of tech evaluation
2:37
Speaker 1: rubbing off on them, and they can't do that unless
2:39
Speaker 1: they're fully electric, or that's the perception. And that's why
2:42
Speaker 1: Volkswagen has had such a good run this year because
2:44
Speaker 1: it's jumping in with both feet in terms of full
2:47
Speaker 1: electrification and it's probably gonna overtake totaled by two thousand
2:51
Speaker 1: and twenty four. And hybrid is seen as a halfway house,
2:54
Speaker 1: you know still you know, combustion engine and only half
2:57
Speaker 1: electric and you know in a few all cars will
3:01
Speaker 1: be fully electric. I'm sure boy. All right, So Michael,
3:05
Speaker 1: where is Ferrari? You kind of suggested that they're behind
3:09
Speaker 1: some of their key competitors, like portion Lamborghinia. Is that
3:13
Speaker 1: this year has underperformed shockingly. Yeah. Yeah, I think part
3:16
Speaker 1: of the reason is because they don't have a well
3:18
Speaker 1: defined classification strategy. So their target was to have of
3:23
Speaker 1: their vehicles sold next year being hybrids. They're well behind
3:27
Speaker 1: with that. So what the new CEO has to do
3:29
Speaker 1: and what will probably happen in the first quarter of
3:31
Speaker 1: next year, has come out with a well defined electrification strategy,
3:35
Speaker 1: also a carbon neutral strategy. That's all satisfy investors. What
3:41
Speaker 1: does this mean for the super fast V twelve? Is
3:43
Speaker 1: that going to go the way of the stick shift
3:46
Speaker 1: at Ferrari? Yeah, I think so. So they just announced
3:49
Speaker 1: a special edition V twelve which sells for half a
3:52
Speaker 1: million euros, only making five hundred of them, so getting quickly.
3:57
Speaker 1: But that could be the last V twelve on Ferrari
4:00
Speaker 1: and probably the next main engine that they'll have will
4:03
Speaker 1: be a V six hybrid. Yeah, Matt, you should know.
4:06
Speaker 1: I've asked Michael Dean on many occasions in his interactions
4:09
Speaker 1: with BMW to bring back the stick shift for the
4:12
Speaker 1: five series here in America. They've discontinued it. I'm just
4:15
Speaker 1: crushed here date Michael. Michael has tried to no avail.
4:22
Speaker 1: I actually Uh. There was a time at Fiat Chrysler
4:27
Speaker 1: when I sat down with Sergio. They were just putting
4:29
Speaker 1: out the Alfa Romeo fur C and I said, why
4:31
Speaker 1: don't you make a stick shift? I mean, this is
4:32
Speaker 1: the car that needs to have a manual transmission. And
4:35
Speaker 1: he said, Matt, you and I would be the only buyers.
4:38
Speaker 1: And Michael, that's is that a is that a global trend?
4:40
Speaker 1: And mean it seems like I see more stick shifts
4:42
Speaker 1: in Europe than I do. Certainly U US you don't
4:45
Speaker 1: see CEO many of them anymore as a hit. But
4:48
Speaker 1: I would say, you know, driver Porsche taken and afterwards
4:51
Speaker 1: say that you know, electrification isn't bad for for cars
4:54
Speaker 1: going forward. I'm sure it's amazing. I haven't driven one yet,
4:58
Speaker 1: but I would miss the the roar of the scream
5:02
Speaker 1: in the terms of the boxer. Michael hind Me, Michael Dean,
5:06
Speaker 1: thank you so much for joining us. Always appreciate chatting
5:09
Speaker 1: with you with particularly Matt appreciates chatting with you talking cars.
5:12
Speaker 1: Senior analyst, he covers the European automotive business. Good Partner
5:17
Speaker 1: with Kevin Tyiny New covers the the US Auto Guys
5:19
Speaker 1: and a together put out some great global research on
5:23
Speaker 1: the global automotive business for Bloomberg Intelligence and b I
5:27
Speaker 1: Go and you can find all that good stuff there.
5:32
Speaker 1: Let's talk about cybersecurity because we've seen so many of
5:36
Speaker 1: these ransomware attacks UM, Colonial Pipeline and JBS the biggest
5:42
Speaker 1: of late UM, but we've also seen issues pop up.
5:46
Speaker 1: Yesterday it turned out to be maybe a fat finger
5:49
Speaker 1: on the part of fast Lee, but it kind of
5:51
Speaker 1: freaked out markets for a moment. We saw charts go
5:54
Speaker 1: a little bit haywire when um the Internet appeared to
5:58
Speaker 1: stop working for a moment. Shannon will Coinson joins as
6:00
Speaker 1: founder and CEO of to Go Cyber and just just
6:05
Speaker 1: in terms of what we saw yesterday, Shannon turned out
6:08
Speaker 1: to be nb D, but for for for a moment,
6:11
Speaker 1: it seemed as if something horrible may have happened. Is
6:15
Speaker 1: it possible that a cyber attack could just shut down
6:18
Speaker 1: the Worldwide Web for a little while. Absolutely, it would
6:24
Speaker 1: be interesting. And if you remember, a couple of years ago,
6:27
Speaker 1: the Internet went down on the East Coast due to
6:29
Speaker 1: another fat finger configuration error at one of the domain
6:34
Speaker 1: registry services. So it's absolutely possible either that a cyber
6:38
Speaker 1: attack or one of these engineer issues could absolutely take
6:43
Speaker 1: the Internet down. And even Russia had some issues with
6:47
Speaker 1: their Internet when they tried to do some sort of
6:49
Speaker 1: blocking of Twitter and some of the social media platforms
6:53
Speaker 1: that at their I s P. Level, Um, they actually
6:56
Speaker 1: fat fingered or made some configuration errors and took down
6:59
Speaker 1: the Internet than Russia for about half a day, I
7:02
Speaker 1: think it was. So it's key. It's key to point
7:05
Speaker 1: out that doesn't mean, um, it's not simply you know,
7:08
Speaker 1: no more cat photos on Instagram. There are ways that
7:12
Speaker 1: the Internet works, um in these times, you know that
7:17
Speaker 1: that are vital to human life, right, Yes, absolutely. I
7:21
Speaker 1: mean we live in a very connected world and we've
7:24
Speaker 1: seen this migration the to to the cloud as well
7:27
Speaker 1: as digitalization of business, so everything is connected now. Businesses
7:32
Speaker 1: are relying on Internet cloud providers to provide essential business services,
7:37
Speaker 1: and when those services aren't available, business stops. Shannon, it
7:42
Speaker 1: just seems like it's getting so much more frequent. Here,
7:45
Speaker 1: give us a sense of how much of this is
7:47
Speaker 1: just you know, a knucklehead in a garage somewhere, you know,
7:52
Speaker 1: up to no good versus maybe some state actors or
7:55
Speaker 1: organized crime. Where is this all coming from? It's definitely
8:00
Speaker 1: a combination of both the Colonial pipeline and the JBS
8:04
Speaker 1: is those are more state sponsored affiliate cyber crime groups.
8:09
Speaker 1: And then you you also have on the flip side
8:12
Speaker 1: what is known as the script kiddies, the the you know,
8:15
Speaker 1: atypical hooded, basement dwelling hacker that you know it is
8:19
Speaker 1: just going out there for fun and seeing what you know,
8:22
Speaker 1: kind of disruption or damage they can do. UM. So
8:26
Speaker 1: it's definitely a combination of both of those factors, and
8:29
Speaker 1: businesses just really need to um think about their services
8:35
Speaker 1: and what they do and how much they rely on
8:36
Speaker 1: their technology for business. In the Colonial CEOs testimony to
8:42
Speaker 1: Congress yesterday, we found out that they didn't even have
8:45
Speaker 1: a ransomware plan in place, even though they spend something
8:48
Speaker 1: like forty million dollars a year on cybersecurity. They never
8:51
Speaker 1: even considered what would happen if we got hit by
8:54
Speaker 1: a ransomware attack. They didn't even have a two step
8:59
Speaker 1: security process us. I mean, I can't even log into
9:02
Speaker 1: my computer at work without submitting my fingerprint or you know,
9:06
Speaker 1: a code from a token in any case. Um. There
9:11
Speaker 1: there's the opposite side of that, right, Like, um, the
9:14
Speaker 1: company that runs crack, and we had a great story
9:16
Speaker 1: about them. They have gone as far as to make
9:19
Speaker 1: your kids, eight year old kids sign n DA agreements
9:22
Speaker 1: when they go to company picnics, And you've got to
9:25
Speaker 1: change into everybody wears the same clothes at work UM
9:28
Speaker 1: so that they won't be able to the the bad guys,
9:31
Speaker 1: won't be able to tell exactly who you are. You've
9:33
Speaker 1: got to kill all your social media UM profiles. How
9:39
Speaker 1: far do do companies need to be going, Jen, I
9:43
Speaker 1: think it's about finding a balanced crack. It might be
9:45
Speaker 1: going a little bit over the top on their security protocols,
9:49
Speaker 1: but I think it's about finding a good balance of
9:52
Speaker 1: what makes sense and what a secure So definitely ensuring
9:57
Speaker 1: that you have two factor authentication. I mean Colonial Pipeline
10:01
Speaker 1: we found out. I think Bloomberg broke the news, but
10:04
Speaker 1: it was due to a single compromised account at Colonial
10:08
Speaker 1: Pipeline that was the factor that resulted in the ransomware
10:13
Speaker 1: attacked there. So a single employee account allowed the ransomware
10:17
Speaker 1: to be activated on the network. So enabling two factor authentication,
10:22
Speaker 1: having security protocols in place, having plans for when incidents occur,
10:27
Speaker 1: and just really finding a good balance between what will
10:33
Speaker 1: not disrupt the security the operations of the business and
10:37
Speaker 1: what's a good balance for security at the business as well,
10:40
Speaker 1: So you know, kind of a marriage of business strategy
10:44
Speaker 1: and cybersecurity strategy working together to make sure that the
10:46
Speaker 1: business can continue operating in this new digital age. Shannon,
10:50
Speaker 1: thanks so much for joining us. We really appreciate getting
10:53
Speaker 1: your thoughts on insight on this rising issue ransomware in
10:57
Speaker 1: corporate America. Shannon Wilkinson, founder and CEO of Atago Cyber Well,
11:04
Speaker 1: before you flashback, you know a little bit more than
11:06
Speaker 1: a year ago when we started this pandemic and the
11:09
Speaker 1: resulting economic contraction that we experienced was just extraordinary historic.
11:14
Speaker 1: But the recovery has been as well. As the vaccines
11:17
Speaker 1: get in across the US, the economy is reopening and
11:21
Speaker 1: we're seeing that in the stock market as well as
11:23
Speaker 1: a lot of those reopening players are working very well.
11:25
Speaker 1: For investor Brad McMillan. He's a Chief Investment Officer of
11:28
Speaker 1: Commonwealth of Financial Network. They have about two thirty two
11:31
Speaker 1: billion dollars in assets under management. So a couple of
11:34
Speaker 1: shuckles there, Brad joins us here. Brad, thanks so much
11:37
Speaker 1: for coming on. I'd love to get your thoughts here
11:39
Speaker 1: as we look back over the last fifteen years and again,
11:42
Speaker 1: the beginning of the pandemic, the contraction in the economy,
11:45
Speaker 1: and then the reopening, how are you telling your clients
11:49
Speaker 1: to position their portfolios here as this reopening seems to
11:52
Speaker 1: be really gaining some momentum here in the United States.
11:56
Speaker 1: I think it's important to put this into context because
12:00
Speaker 1: when we talk about the pullback, when we talk about
12:02
Speaker 1: the recession, yes, of course it was the pandemic, but
12:05
Speaker 1: it was really from an economic perspective, the policy response
12:10
Speaker 1: the pandemic that sunk the economy, the shutdowns. So when
12:14
Speaker 1: you look at this what we're seeing, you know, yes,
12:16
Speaker 1: we've seen a fantastic recovery. Were largely just recovering back
12:20
Speaker 1: to the previous trend line. So as we moved past
12:23
Speaker 1: the pandemic, it's about the economy, and the economy continues
12:27
Speaker 1: to do extremely well. You know, I think we've still
12:29
Speaker 1: got some more upside ahead. But wasn't there any serious
12:33
Speaker 1: damage done by the government stepping in and shutting everything down? Well,
12:39
Speaker 1: of course there was, and that was the pullback, But
12:42
Speaker 1: then the question becomes how lasting is that damage? The
12:46
Speaker 1: damage was real, and it was substantial in the short term,
12:50
Speaker 1: and if we if the government had left it at that,
12:52
Speaker 1: then we very well might be looking at the depression
12:55
Speaker 1: right now. But that's not what they did. They gave
12:58
Speaker 1: the cushion to us through that and to get us
13:01
Speaker 1: back to reopen it. And because of that, we're simply
13:05
Speaker 1: in a place where if you look a year on year,
13:07
Speaker 1: absolutely huge huge changes. If you look over the past
13:11
Speaker 1: two years, actually we're still pretty much on track. So, Brad,
13:16
Speaker 1: one of the things that you know, I think about
13:18
Speaker 1: a lot is kind of how will consumer behaviors change
13:22
Speaker 1: or will they change post pandemic as we come out
13:25
Speaker 1: on the other side of this. For example, will people
13:28
Speaker 1: go on cruise ships, Will they you know, go on
13:30
Speaker 1: planes and things like that with a go to movie theaters?
13:33
Speaker 1: How are you thinking about that? And if you made
13:35
Speaker 1: any you know, investment calls based upon what you think
13:38
Speaker 1: might be some changing consumer behaviors, well, certainly when you
13:42
Speaker 1: look at the airline numbers, you know you can make
13:45
Speaker 1: a good case that weas your travel is well on
13:47
Speaker 1: its way back. The real question there from an investment
13:50
Speaker 1: perspective is going to be our business travelers going to
13:53
Speaker 1: be coming back because that's where a lot of the
13:55
Speaker 1: profits come from, and there I think the news is
13:58
Speaker 1: a lot more mixed. So certainly when you look at
14:01
Speaker 1: the headlines, I think it's fair to say people are
14:03
Speaker 1: changing their behaviors. I don't think the the extensive use
14:08
Speaker 1: of internet shopping, for example, is going to go away.
14:11
Speaker 1: People have found out how easy that is. But more
14:14
Speaker 1: common things like restaurants, absolutely they're coming back, and I
14:18
Speaker 1: think the market has already gotten ahead of that. I
14:21
Speaker 1: don't think there's a lot of opportunity there at the moment,
14:24
Speaker 1: but certainly, you know there was some money to be
14:27
Speaker 1: made about what that, you know, six or eight months
14:29
Speaker 1: ago when the uncertainty was at a peak. So where
14:32
Speaker 1: is the opportunity. I mean, if you've got spare cash
14:36
Speaker 1: sitting around, need to put it to work, what do
14:38
Speaker 1: you do with it? I think the stock market in
14:41
Speaker 1: general is a good place because when you look at
14:44
Speaker 1: the earnings expectations and how the markets priced, we're still
14:48
Speaker 1: in a position to see earnings go up. I think
14:51
Speaker 1: healthcare there are some opportunities that still very much. We're
14:55
Speaker 1: seeing a revolution, particularly in biotech. You know that hasn't
15:00
Speaker 1: been fully appreciated yet UM some firms are now putting
15:03
Speaker 1: in UM requests to evaluate vaccines for the slow and
15:09
Speaker 1: if that comes through, I mean obviously that would be huge.
15:11
Speaker 1: So there's knowledge opportunities. If you want something that's a
15:14
Speaker 1: little bit more basic, I think financials. I think is
15:17
Speaker 1: the economy normalizes, we're going to see the interest rates normalized,
15:21
Speaker 1: and that's going to give a tail wind to financials.
15:23
Speaker 1: And I still think there's some opportunities there. So, Brad,
15:27
Speaker 1: is this economy reopens. One of the things that you know,
15:31
Speaker 1: economists are really looking closely at, certainly is the employment
15:35
Speaker 1: getting people back to work, and we're still we've had
15:37
Speaker 1: a couple of months of kind of blow expectation job numbers.
15:42
Speaker 1: How concerned are you about that? Are you concerned that
15:44
Speaker 1: perhaps something structurally may have changed in this economy where
15:48
Speaker 1: you know, some of those jobs just aren't going to
15:49
Speaker 1: come back if you go back that that's a common fear,
15:53
Speaker 1: and I don't agree with it. I was actually just
15:55
Speaker 1: looking at that this morning, because if you go back
15:58
Speaker 1: to prior crises with typically happens is people move out
16:02
Speaker 1: of the labor force. Okay, so they say, okay, it's
16:06
Speaker 1: not worth it, and then the economy starts to open up,
16:08
Speaker 1: wages start to rise again, and then they move back in.
16:11
Speaker 1: And that's exactly what we're seeing. If you look at
16:13
Speaker 1: the not in the labor force people, that's people who
16:17
Speaker 1: want a job that is right now at about the
16:20
Speaker 1: same level as the total number of jobs available. So
16:23
Speaker 1: it's just a question of getting those people back into
16:25
Speaker 1: the labor force. And if you look at that, you
16:27
Speaker 1: can see them actually that you can see that happening.
16:30
Speaker 1: So I think that's the first thing. This is a
16:32
Speaker 1: totally normal process. We've seen this movie before. I think
16:36
Speaker 1: the other thing that is getting people a little too
16:39
Speaker 1: wound up is they're saying, how do we get back
16:42
Speaker 1: to the record low unemployment levels we saw before the pandemic. Frankly,
16:46
Speaker 1: that was unusual. If you look at the averages will
16:50
Speaker 1: be if five is a pretty normal unemployment rate, we
16:53
Speaker 1: should be there in the next three to six months,
16:55
Speaker 1: and after that it's just real progress. So I think
16:58
Speaker 1: by the end of the year will be falling. Brad,
17:01
Speaker 1: thanks very much for joining us. Brad McMillan is the
17:04
Speaker 1: chief investment Officer at Commonwealth Financial Network. As Paul says,
17:08
Speaker 1: they have two hundred and thirty three billion dollars under management,
17:12
Speaker 1: looking at a continued recovery for the economy, back to
17:17
Speaker 1: the trend that we saw before the pandemic. And as
17:19
Speaker 1: he points out, that trend was very good. We were
17:23
Speaker 1: doing quite well economically before this thing hit and we
17:27
Speaker 1: shut all of our businesses down. This is Bloomberg alright, Matt.
17:35
Speaker 1: You know that one of the reasons I always love
17:36
Speaker 1: these big take stories is because they often get me
17:39
Speaker 1: to say, I didn't think of that, or you know,
17:42
Speaker 1: that's how it works. Um. This most recent story, we're
17:45
Speaker 1: talking about big oil companies. Matt. We've seen all the
17:47
Speaker 1: news shareholders forcing them to go green, you know, reduce
17:51
Speaker 1: their carbon footprint. But there's still demand out there for energy.
17:56
Speaker 1: So who's filling that void as some of the big
17:58
Speaker 1: majors pulled back? Kevin Crowley, he's a US oil reporter
18:02
Speaker 1: for Bloomberg News. He joins us with his big big
18:05
Speaker 1: take story entitled the Retreat of Excellent and the oil
18:08
Speaker 1: Majors won't stop Fast or fuel. Kevin, thanks so much
18:11
Speaker 1: for for joining us here, and I love your story
18:14
Speaker 1: here because it really goes to the issue of Okay,
18:16
Speaker 1: Exxon and Chevron and Shell and all those guys. They're
18:19
Speaker 1: pulling back on their energy footprint. But who's filling the
18:23
Speaker 1: void exactly? That's a that's a that's the big question.
18:28
Speaker 1: And really what we're saying here is it's national oil companies.
18:32
Speaker 1: So those from those from Saudi Arabia, those from Russia,
18:35
Speaker 1: those from those from parts of Africa, these are these
18:39
Speaker 1: are these are companies that um, you know, less transparent
18:42
Speaker 1: and and and have a less strong climate record UM
18:47
Speaker 1: and also m really are only beholden to their to
18:50
Speaker 1: their national governments. They do not have the same kind
18:53
Speaker 1: of shareholder pressure that the publicly listed entities have UM
18:58
Speaker 1: and so UM we by the oil majors retreating it,
19:02
Speaker 1: it opens the gates for these companies to come in
19:05
Speaker 1: and fill the gap, which will pose a new challenge
19:09
Speaker 1: for climate activists going forward. I mean, the headline could
19:13
Speaker 1: well be climate activists that oil majors shoot themselves in
19:17
Speaker 1: the foot, because basically they're they're convincing UM, you know,
19:22
Speaker 1: these publicly traded companies to hand back oil production or
19:27
Speaker 1: hand over oil production to UM Chinese nationals, Russian nationals,
19:33
Speaker 1: Middle East nationals, and they're not going to do such
19:35
Speaker 1: a great job when it comes to um shrinking their
19:39
Speaker 1: carbon footprint. Well, I think that's I think that, I
19:43
Speaker 1: think that's true, and I think, yeah, but I think
19:45
Speaker 1: I think the climate movement is focused on the oil
19:48
Speaker 1: because it's really it's the it's the lowest hanging fruit. UM.
19:52
Speaker 1: And so you know, these were these are these are
19:54
Speaker 1: companies that are beholding to their shareholders and climate activists
19:57
Speaker 1: you know, have worked over many many years to you, um,
20:01
Speaker 1: to to gain influence through through the shareholding. Mean, the
20:05
Speaker 1: most recent example was exceon Um lost three directors just
20:10
Speaker 1: just a few weeks ago as a result of growing
20:12
Speaker 1: climate climate activism. UM. But it's and it's not just
20:16
Speaker 1: the climate activist Kevin I noticed recently when Congress was
20:20
Speaker 1: questioning CEOs of the big banks, they were chiding them
20:25
Speaker 1: for doing business with big oil majors, almost throwing national
20:30
Speaker 1: um security, energy security concerns aside. But that's right, that's right, Yeah,
20:37
Speaker 1: it's it's under pressure from I mean, these or companies
20:39
Speaker 1: under pressure from from political class. They are under pressure
20:44
Speaker 1: from the from the banks who are looking to clean
20:46
Speaker 1: up their own carbon footprint, shareholders, consumers, everyone, everyone, everyone around,
20:51
Speaker 1: everyone is rounding on them. Now and I think, but
20:53
Speaker 1: I think, but I think it's it's it's really it's
20:55
Speaker 1: a They are the lowest hanging routs here, and I
20:57
Speaker 1: think the climate movement thinks that, you know, we can
21:00
Speaker 1: we can get these guys to change the Exxon Chevron's
21:03
Speaker 1: shell vps of the world, then other other other companies
21:07
Speaker 1: will will fulfall in line and will follow because while
21:10
Speaker 1: the oil majors only produce around fifteen percent of the
21:13
Speaker 1: world oil at the moment, they are at the forefront
21:16
Speaker 1: of much of the technolog technologies around and they do lead.
21:21
Speaker 1: So the thinking is that maybe you know, some of
21:25
Speaker 1: these national oil companies will start will start to follow
21:29
Speaker 1: their lead if if big oil does make a successful
21:32
Speaker 1: pivot towards greener energy. It's interesting because you know that
21:37
Speaker 1: part of your story where Exxon was getting out of
21:39
Speaker 1: an Iraqi field, and you know they tried to sell
21:42
Speaker 1: their steak, but nobody else would was even bidding forward.
21:45
Speaker 1: So then I guess Iraq had to come in and
21:48
Speaker 1: buy it, or China or China altos. Right, Well, the process, yeah,
21:52
Speaker 1: the process is ongoing, but it's actually a remarkable it's
21:54
Speaker 1: actually a remarkable turner turn of events. I mean, this
21:56
Speaker 1: was this is this is one of the prized oils
21:59
Speaker 1: after after the Second Iraq War, exons stepped into to
22:03
Speaker 1: take it, and really it hasn't really performed UM as
22:06
Speaker 1: well as they would like. If they're looking to they're
22:08
Speaker 1: looking to get out of it. But as you said,
22:10
Speaker 1: as you said, none of the none of the other
22:12
Speaker 1: majors want to take it, and their Iraq UM made
22:15
Speaker 1: a statement that actually they were interested in buying it themselves,
22:19
Speaker 1: which is which is remarkable. Really mean, whether it whether
22:22
Speaker 1: it actually happens or not, is a is another thing.
22:24
Speaker 1: But the fact that they're even considering taking taking the
22:28
Speaker 1: stake is it's quite as quite a remarkable curn of events.
22:31
Speaker 1: And of course the other option then is the the
22:33
Speaker 1: Chinese state state or backed companies. So either way, UM,
22:37
Speaker 1: this field is likely to move out of the hands
22:40
Speaker 1: of a Western super major and into the hands of
22:43
Speaker 1: UM state state backed entity, which which are far less
22:47
Speaker 1: transparent than the ones than the big oil companies. That
22:50
Speaker 1: you have to wonder at some point if the US
22:52
Speaker 1: government another Western governments are going to say, hang on
22:55
Speaker 1: a second, this isn't working out the way we wanted
22:57
Speaker 1: it to. UM. I noticed in your story that Mexico's
23:01
Speaker 1: pem X, for example, is set to buy a Texas
23:04
Speaker 1: refinery from Shell. So it's not even just properties abroad
23:09
Speaker 1: that are going to these nationals, it's even um, you know,
23:14
Speaker 1: part of the infrastructure on home soil if you will.
23:19
Speaker 1: That's right, that's right. That was That was That was
23:22
Speaker 1: another surprising turn of events because you know, obviously most
23:26
Speaker 1: of the time it's the private, private oil companies you know,
23:28
Speaker 1: buy assets from or investing with state owned oil companies.
23:32
Speaker 1: And really in this in this situation Pemic and Shell,
23:34
Speaker 1: we're actually having the the reverse happening. But really it
23:38
Speaker 1: comes back to demands. Um, you know, if if assuming
23:42
Speaker 1: demands that stay strong as it has, the demands for
23:45
Speaker 1: oil and gas as strong as it has done done
23:47
Speaker 1: coming out of become of the pandemic, it really this
23:50
Speaker 1: whole retraction from from the major's really opens the door
23:54
Speaker 1: to the to these national oil companies, you know who
23:56
Speaker 1: who are going to be the producers of of last aws.
24:00
Speaker 1: So you know, while while we while the West is
24:03
Speaker 1: doing certainly doing a job on the supply side, I
24:07
Speaker 1: think the big big challenge really is to to reduce
24:10
Speaker 1: fuels is on the demand side. As long as people
24:12
Speaker 1: keep consuming oil and gas, keep you, companies will step
24:16
Speaker 1: in to produce it. Now, whether that's the majors or
24:18
Speaker 1: whether that's the national oil companies, you know, it's as
24:20
Speaker 1: long as people are using oil and gas, um, you
24:23
Speaker 1: know companies are going to be there to provide it. Absolutely. Hey,
24:27
Speaker 1: great piece, Kevin. Really love UM the Big Takes series
24:31
Speaker 1: and I love this one especially, So congratulations on that.
24:34
Speaker 1: Kevin Crowley, Laura Hurst, and Rachel Adams heard writing the
24:38
Speaker 1: retreat of Exxon and the oil majors won't stop fossil fuel.
24:42
Speaker 1: Check it out and I Big Take Go. This is Bloomberg.
24:46
Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can
24:49
Speaker 1: subscribe and listen to interviews with Apple Podcasts or whatever
24:53
Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter
24:57
Speaker 1: at Matt Miller V three, and I False Sweeney. I'm
25:00
Speaker 1: on Twitter at pt Sweeney. Before the podcast. You can
25:03
Speaker 1: always catch us worldwide at Bloomberg Radio. M