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WeWork CEO May Be Fall Guy For Investor Misvaluation · Bloomberg Intelligence

0:02
Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul Sweene. You,
0:05
Speaker 1: along with my co host Lisa Brahma Wicks. Each day
0:07
Speaker 1: we bring you the most noteworthy and useful interviews for
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Speaker 1: you and your money. Whether at the grocery store or
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Speaker 1: the trading floor, find a Bloomberg Penil podcast on Apple
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Speaker 1: podcast or wherever you listen to podcasts, as well as
0:17
Speaker 1: at Bloomberg dot com. Let's switch gears there now to
0:22
Speaker 1: we work. Talk about a company that has had a
0:25
Speaker 1: rough couple of weeks. First of all, it's evaluation appears
0:29
Speaker 1: to have been dressed dramatically from forty seven billion dollars,
0:32
Speaker 1: So what might be something in the ten to fifteen
0:34
Speaker 1: billion dollar range? Now, even the chair, the CEO is
0:38
Speaker 1: under pressure to resign, So let's get the latest. We
0:40
Speaker 1: bring in Sure overday. She's a technology columnist for Bloomberg Opinion,
0:44
Speaker 1: joining us here in our Bloomberg inter after Broker studio.
0:46
Speaker 1: So sure, it's been a tough couple of weeks for
0:49
Speaker 1: this company, for this CEO. What's the latest here? Because
0:53
Speaker 1: it looks like the board might be meeting today. Yes,
0:55
Speaker 1: that is the latest that our colleagues at Bloomberg News
0:58
Speaker 1: and other news outlets have reported the the we Work
1:00
Speaker 1: board is meeting, maybe as early as today, and one
1:03
Speaker 1: of the things they may talk about is um removing
1:08
Speaker 1: Adam Newman or pressuring Adam Newman, who's the co founder
1:11
Speaker 1: and CEO of the company, to step down from the
1:13
Speaker 1: CEO position, which is uh, just the latest very weird
1:18
Speaker 1: twist and what has been a very very weird corporate saga.
1:21
Speaker 1: So is he being basically the fall guy here? It
1:25
Speaker 1: does feel that way. I mean, the thing to understand
1:27
Speaker 1: about all this is that this is ultimately there's ultimately
1:31
Speaker 1: two players that matter in we Work, and that is
1:35
Speaker 1: we Works, Uh Adam Newman, the co founder and CEO,
1:39
Speaker 1: and Massio Shi sone who's the head of soft Bank,
1:42
Speaker 1: which is UM we Works biggest outside investor, and Son,
1:46
Speaker 1: until I guess now has been Adam Newman and we
1:50
Speaker 1: Works biggest backer. In the face of resounding doubts from
1:56
Speaker 1: many other people, including SoftBank's own investors and it's very
2:00
Speaker 1: large vision fund investment fund, and Massa has stood by
2:05
Speaker 1: Newman again. Something must have changed in the in the
2:09
Speaker 1: calculus of Son and soft Bank. I do not know
2:12
Speaker 1: what it is, but it's clear that they are turning
2:15
Speaker 1: billions ten billions that would yeah, well yeah, the valuation
2:19
Speaker 1: cut I think it was is probably the thing that
2:22
Speaker 1: would change the minds of even um sort of idiosyncratic
2:26
Speaker 1: billionaires like Maayoshi. So what's I mean? In reality? Though
2:31
Speaker 1: they can't force him out of the CEO spot can
2:34
Speaker 1: doesn't he still have some super voting stock? Yes, so
2:38
Speaker 1: I can't pretend to understand the corporate structure and what
2:43
Speaker 1: is or isn't possible. But yes, Adam Newman controls the
2:47
Speaker 1: votes in this company, and he can remove the entire board. Um,
2:52
Speaker 1: but there is also stipulation that you can see and
2:55
Speaker 1: we works i PO documents that the board has the
2:57
Speaker 1: power to remove the CEO. Now, I don't know how
3:00
Speaker 1: those two things could be in conflict, and so I
3:03
Speaker 1: don't know how to resolve those. Um, if it gets
3:06
Speaker 1: to that, what do you think that Adam Newman did wrong?
3:12
Speaker 1: So I don't want to put all the blame on
3:15
Speaker 1: Adam Newman. Look, this is a company that has been
3:19
Speaker 1: run in rather wild fashion for years, and that was
3:25
Speaker 1: enabled by all of the investors in this company, including
3:29
Speaker 1: soft Bank, and so everything that we work is today,
3:33
Speaker 1: which is this cash burning, maybe financially unsustainable company run
3:40
Speaker 1: by self dealing CEO. That was all information that was
3:44
Speaker 1: known and enabled by every investor in this company the
3:48
Speaker 1: last few years. And that top of that list is
3:50
Speaker 1: soft Bank. So everybody deserves blame for the company getting
3:53
Speaker 1: to the position that it is today. So let's flip
3:56
Speaker 1: it on its head. Is there anything that Adam Newman
4:00
Speaker 1: rings to we Work and frankly cult of personality among
4:03
Speaker 1: them that would be problematic if the company was stripped
4:08
Speaker 1: of it? Yeah? Look, I mean I you have to
4:10
Speaker 1: give Adam Newman credit. Again. It may seem baffling to
4:13
Speaker 1: those of those of us on the outside, but he
4:16
Speaker 1: has been a very effective pitchman for this company, both
4:20
Speaker 1: with investors, um and with other business partners and employees.
4:25
Speaker 1: So you know, again, this company is what it is
4:29
Speaker 1: today because of Adam Newman, both the good things and
4:32
Speaker 1: the bad things about We Work. My question is if
4:36
Speaker 1: you if you remove Newman from if Newman is removed
4:39
Speaker 1: or it steps down from the CEO position, do things
4:42
Speaker 1: really change? I mean, this is now a weekend company.
4:45
Speaker 1: It's reputation. I don't think I've ever seen a company,
4:48
Speaker 1: certainly not on the doorstep of an I P O
4:50
Speaker 1: where the sentiment about it is so relentlessly negative, and
4:55
Speaker 1: in a way, removing the CEO or having the CEO
4:58
Speaker 1: step down is sort of acknowledge ament of how messed
5:01
Speaker 1: up it is. And so I don't know what happens
5:04
Speaker 1: with or without Adam Newman in the CEO position. It's interesting.
5:07
Speaker 1: I like your thought that you know, really his behavior,
5:11
Speaker 1: of the company's behavior. The company's just the whole rise
5:13
Speaker 1: has been enabled by a whole host of investors, led
5:16
Speaker 1: by soft Bank. So to me, the only thing that's
5:19
Speaker 1: changed in the last two weeks is the valuation. That's
5:22
Speaker 1: the only thing that that's changed. And what that does.
5:25
Speaker 1: It shows that soft Bank miss priced and the other
5:30
Speaker 1: investors anything above ten or twelveillion dollars that's on them,
5:32
Speaker 1: that's not on Adam Newman. So it's one can make
5:35
Speaker 1: an argument, which I'm sure the Adam Newman camp is
5:37
Speaker 1: going to make, that he is perhaps being used as
5:40
Speaker 1: escapegoat for what is a arguably a flawed business model
5:44
Speaker 1: and a flawed valuation which the public markets are now
5:47
Speaker 1: shining a light upon. I think that's absolutely right that look,
5:49
Speaker 1: this shows you some of the inherent flaws in the
5:52
Speaker 1: soft bank business model is soft bank investment model, which
5:56
Speaker 1: is we poor, we train our cash ucas on these companies,
6:01
Speaker 1: and we make their success inevitable just by virtue of
6:05
Speaker 1: having more capital than anybody else. The downside of that,
6:08
Speaker 1: as you pointed out, is that they have so much
6:10
Speaker 1: money that valuations inherently become inflated. And the downside of
6:16
Speaker 1: that is what happens if nobody else but soft Bank
6:19
Speaker 1: agrees um what this company's work. And I think what's
6:22
Speaker 1: changed in the private to public thing in T nine
6:26
Speaker 1: is Uber. It just kind of changed the whole dynamic,
6:29
Speaker 1: which is, if you can't convince me, public shareholder to
6:32
Speaker 1: mutual fund in Boston, that you have a path of
6:34
Speaker 1: profitability that I can value, then I have a hard time,
6:38
Speaker 1: you know, giving you the valuation you're looking forward. So
6:40
Speaker 1: there's it's almost a pre uber post Uber timeframe, and
6:43
Speaker 1: unfortunate for we Work, they came post I think that's
6:46
Speaker 1: it's a good point. Obviously we can't go back in time,
6:48
Speaker 1: but I do wonder if Uber hadn't gone out first
6:51
Speaker 1: and kind of fallen a little bit on its face,
6:54
Speaker 1: would we work? We would the we work situation be
6:56
Speaker 1: a little bit different. I would point to remember Blue
6:58
Speaker 1: Apron from two years ago. That was a company again
7:02
Speaker 1: that once it went public, everybody was like, this company
7:05
Speaker 1: doesn't make sense, and then it had. It took a
7:08
Speaker 1: significant valuation haircut and has continued to decline precipitously. So
7:12
Speaker 1: that shows you that Uber wasn't the first time where
7:15
Speaker 1: public investors questioned UM, a highly touted company that had
7:20
Speaker 1: a lot of question works around its business model. Sure
7:22
Speaker 1: of it A thank you so much for the insight
7:24
Speaker 1: show over a Bloomberg opinion columnist joining us here in
7:27
Speaker 1: our interactive Brokers studios. We're joined by John Author's senior
7:45
Speaker 1: editor for Bloomberg Markets, and Culver Kadonna, chief US economists
7:49
Speaker 1: for Bloomberg Economics. So John, let's follow up on that
7:52
Speaker 1: wide ranging interview that Tom Keene and Jonathan Faroe just
7:56
Speaker 1: had with a former New York Fed chairman President John
7:59
Speaker 1: UM Bill Dudley. So key takeaways for you as it
8:04
Speaker 1: relates to some of his discussion about the report market.
8:06
Speaker 1: He seemed to be suggesting that kind of a short
8:09
Speaker 1: term issue, nothing major to be concerned about. Yes, I
8:12
Speaker 1: think he was definitely trying to do his bit to
8:16
Speaker 1: calm things down. I think it is interesting bearing in
8:20
Speaker 1: mind that there's been a lot of anger in the
8:23
Speaker 1: last week about the dismissal of all the early enforced
8:29
Speaker 1: early retirement of Simon Potter, who was very much regarded
8:32
Speaker 1: as Bill Dudley's man, and who is the guy who
8:34
Speaker 1: would have been in charge of dealing with the response
8:38
Speaker 1: last week, and who has been quoted. I don't think
8:42
Speaker 1: he wanted to be quoted publicly, but talked to be
8:45
Speaker 1: of a and Bloomberg gathered that the typing Potter has
8:50
Speaker 1: been making some criticisms of the way that the Fed
8:54
Speaker 1: has handled this, the new Fetters handled this, So I
8:57
Speaker 1: think he was going quite a long way out of
8:59
Speaker 1: his way to be to downplay the degree of conserve
9:03
Speaker 1: of criticism, the degree of anger that there has been
9:05
Speaker 1: in the market about about the New York Fed itself
9:09
Speaker 1: and its response, and whether there's been something wrong in
9:12
Speaker 1: the way that Williams has taken over from him. He's
9:16
Speaker 1: being diplomatic. That's that's a really interesting point. Carcadona also
9:19
Speaker 1: joining US GPS economist Karl what was your biggest takeaway? Well,
9:23
Speaker 1: I think it was important to see that he wasn't
9:25
Speaker 1: raising any red flags, because there is this notion that
9:28
Speaker 1: maybe the FED was you know, a day late and
9:30
Speaker 1: a dollar short to respond to the situation. But now
9:33
Speaker 1: things are well under control. So they did announce uh,
9:37
Speaker 1: you know, recurring operations extending beyond month end, plus a
9:41
Speaker 1: longer term operations. So that that really is taking a
9:45
Speaker 1: buzuka to the problem and should be a very solid
9:50
Speaker 1: temporary patch. What I was looking for in terms of
9:53
Speaker 1: a little bit more color was maybe some timing about
9:57
Speaker 1: when the balance sheet does start to grow again. Uh.
10:01
Speaker 1: And again we shouldn't call it QUWI. I wouldn't even
10:03
Speaker 1: call it QUI light, but an expansion of this point
10:10
Speaker 1: exactly prudent reserve management. When will prudent reserve pr When
10:17
Speaker 1: will PRM kick in? Uh? And that's going to have
10:20
Speaker 1: to happen relatively soon or we are going to see
10:22
Speaker 1: these funding strains extend through the latter half. Just understand, Carl,
10:26
Speaker 1: is this the permanent um fix for this repo issue.
10:32
Speaker 1: The permanent fix will be expanding the reserves over time
10:36
Speaker 1: that reserve management operation. What they're doing now is really
10:39
Speaker 1: a temporary patch and it should work. Right. Seventy five
10:42
Speaker 1: billions of repos on a on a daily basis should
10:45
Speaker 1: be enough to add to sufficient liquidity back into the system.
10:49
Speaker 1: They could certainly expand that if they needed to. Unlikely
10:52
Speaker 1: that that would actually become a problem. But the reality is, uh,
10:56
Speaker 1: relatively soon before year end, for sure, the FED is
11:00
Speaker 1: going to have to embark on this balance sheet expansion.
11:02
Speaker 1: And the reason for that is as the economy expands
11:06
Speaker 1: the banking system, banking system has to keep a pace
11:09
Speaker 1: with it, and that means that reserves have to grow
11:11
Speaker 1: along with economic growth. So I want to shift gears
11:14
Speaker 1: a little bit because I'll tell you what my biggest
11:16
Speaker 1: takeaway was. I thought that actually, probably one of the
11:19
Speaker 1: most interesting things that he said is that, uh, the
11:21
Speaker 1: risk is not necessarily right now looking like deflation. It's
11:26
Speaker 1: looking like he's seeing a little bit more of a
11:29
Speaker 1: pickup in inflationary trends. Not the risk, but that he's
11:32
Speaker 1: actually seeing the trend go in the opposite direction. And John,
11:36
Speaker 1: I thought that was interesting because it's kind of counter
11:41
Speaker 1: to what the market has been implying. It's drastically counter
11:44
Speaker 1: to what the market has been implying. I actually nervously
11:47
Speaker 1: took a quick look at the break Heavens Well allows
11:52
Speaker 1: minute and they're down again too. This, yes, that's what
11:54
Speaker 1: I'm saying. Last week's core CPN numbers. Okay, the Fed
11:59
Speaker 1: cares more about ec even core CPI, but they were up.
12:03
Speaker 1: They were the highest they've been, off the top of
12:05
Speaker 1: my head in a decade um. It does certainly look
12:09
Speaker 1: as though you're finally getting the feed through with about
12:12
Speaker 1: the kind of lag you would have expected from all
12:15
Speaker 1: the jolt of adrenaline that was that was delivered during
12:18
Speaker 1: the tax tax cutter for eighteen months or so ago.
12:21
Speaker 1: And that in turn does give you a very ample
12:26
Speaker 1: explanation for why the FED at this point is so
12:29
Speaker 1: in such a different place from the market. I think
12:33
Speaker 1: the other possibility, and this is one of the things
12:37
Speaker 1: that Powell arrived really trying to make a big signal
12:41
Speaker 1: that he was going to be different from his predecessors,
12:44
Speaker 1: is that he didn't buy that US monetary policy had
12:48
Speaker 1: as big an impact on the rest of the world
12:50
Speaker 1: as others had said. If you are looking at the
12:55
Speaker 1: rest of the planet, particularly the Eurozone, you are much
12:58
Speaker 1: more likely to be really worried about inflation then if
13:01
Speaker 1: you're just looking at the US, where it looks like
13:04
Speaker 1: we have a not by the comparison with the seventies
13:08
Speaker 1: and eighties. But we have a minor league inflation problem
13:11
Speaker 1: dreaming here, which suggests we shouldn't be cutting rights. So Carl,
13:14
Speaker 1: what do you think is it related as you know,
13:16
Speaker 1: just what John was saying about inflation, where we might
13:19
Speaker 1: be what we've experienced with the repo market in the
13:21
Speaker 1: last week. Where do you think the FED is right now?
13:24
Speaker 1: Is I think about the next level meetings? Sure? Well,
13:27
Speaker 1: I think the Fed is, And again Bill Dudley suggested
13:30
Speaker 1: there's not as much division on the committee as maybe
13:33
Speaker 1: looking at the dot plot would otherwise have You believe
13:36
Speaker 1: the Fed is very much looking at taking insurance out
13:40
Speaker 1: to extend a record long economic expansion, and that means
13:44
Speaker 1: that they're watching the trade negotiations very carefully. And if
13:48
Speaker 1: we do see a significant escalation of tariffs in mid
13:51
Speaker 1: October a scheduled and more follow through in December as scheduled,
13:55
Speaker 1: than the FEED is going to have to act more forcefully.
13:57
Speaker 1: So right now, even the as devish doves on the
14:01
Speaker 1: committee are signaling a willingness for just one additional high
14:05
Speaker 1: game where seven dots excuse me, cut, there were seven
14:08
Speaker 1: dots calling for a cut by year end. I think
14:13
Speaker 1: that that's going to continue to drift downward if we
14:16
Speaker 1: see those additional tariffs that come into play. And so
14:18
Speaker 1: my team's view is we'll see a rate cut in
14:21
Speaker 1: October and of October and another follow through in mid December,
14:25
Speaker 1: and we can look at what's happening in the market
14:27
Speaker 1: here right there was risk off in August, September was
14:31
Speaker 1: a little bit of renewed optimism, and now as October looms,
14:35
Speaker 1: it looks like we're going back into a risk off mode.
14:37
Speaker 1: Yields her down, and really the compelling issue for the
14:41
Speaker 1: Fed towards YR end is going to be a trade
14:45
Speaker 1: headwinds stiffening and also the FED having to cut further
14:49
Speaker 1: to uninvert the yield curve. So I'm just curious going forward.
14:54
Speaker 1: First of all, whether Bill Dudley has any impact on
14:58
Speaker 1: the Federal Reserve at this point in the fact he
15:00
Speaker 1: is no longer with it. I mean, how much do
15:03
Speaker 1: former FED members and leaders have on the current FED
15:08
Speaker 1: john It depends on which former leader it is, evidently,
15:12
Speaker 1: I think I think Stanley Fisher, who apart from anything else,
15:16
Speaker 1: wrote that, literally wrote the textbook that most current FED
15:20
Speaker 1: governors read when they did their original economics degrees. I
15:24
Speaker 1: read Dornbush and Fisher when I did my economics degree,
15:27
Speaker 1: as he's come out beginning to suggest that negative rates
15:31
Speaker 1: and helicopter money are things that can at least be considered.
15:36
Speaker 1: That makes which is not something I remember thinking was
15:39
Speaker 1: even remotely a possibility from my reading of the Dornbush
15:43
Speaker 1: and Fisher all those years ago. That that's very influential
15:46
Speaker 1: he's beginning to create give them permission to go to
15:49
Speaker 1: a space that they didn't really previously. Intellect would be
15:52
Speaker 1: like a go, But that's Stan Fisher. Bill Dudley, I
15:56
Speaker 1: doubt is as influential as Stan Fisher. That's said, the
16:00
Speaker 1: New York Fed is unquestionably first among equals. The New
16:06
Speaker 1: York Fed governor is always on, gets to vote in
16:09
Speaker 1: the f O m C. The New York Fed always
16:13
Speaker 1: votes with the governor. Paul Volker moved to the move
16:17
Speaker 1: to the big the hot seat from being from running
16:20
Speaker 1: the New York Fed. Previous New York Fed governors do
16:23
Speaker 1: matter more. Um final point, I it's very unusual. It
16:30
Speaker 1: was very unusual to see the Fed itself really feel
16:34
Speaker 1: the need to say no, this is wrong, to build
16:37
Speaker 1: Dudley's original um op ed for Bloomberg Opinion, which we
16:42
Speaker 1: are delighted he wrote for us, We're very happy chose
16:46
Speaker 1: us as and we were delighted to continue that that
16:49
Speaker 1: relationship that he built, built it that he foster debate
16:53
Speaker 1: through us. But it was quite interesting that they really
16:56
Speaker 1: did say, no, we don't agree with our former New
16:58
Speaker 1: York Cha just being onto what John said there. Uh
17:02
Speaker 1: you know, I think there was an important, too too
17:04
Speaker 1: important observation, so one as a uh relates to the
17:09
Speaker 1: ongoing situation in the repo market. I think that Bill
17:12
Speaker 1: Dudley has tremendous way because the Dudley Potter fed you know,
17:16
Speaker 1: was there during the crisis and really understands how these
17:19
Speaker 1: things operate. And uh, you know, he was way out
17:22
Speaker 1: in front talking about banks, you know, the reserves being
17:25
Speaker 1: at a higher level post crisis and where we were
17:28
Speaker 1: pre crisis. So number one, he has tremendous authority on
17:31
Speaker 1: that front. In number two, he did throw negative rates
17:35
Speaker 1: under the bus, and he's the discussion. The hurdle is
17:37
Speaker 1: very very that will definitely get to that CARCA down
17:40
Speaker 1: in chief you as economist at a later conversation. Unfortunately,
17:43
Speaker 1: thank you so much for being with us, and of
17:44
Speaker 1: course our sincere thanks John Author, senior editor for a
17:47
Speaker 1: Bloomberg Market's both joining us in our interactive broker studios.
18:07
Speaker 1: In this current era of technology, it really is the
18:10
Speaker 1: STEM careers that are in the front and center that
18:13
Speaker 1: are most needed as well as often has paid. There
18:17
Speaker 1: is a question why are there so few women who
18:20
Speaker 1: are entering the field? Joining us down to discuss this,
18:22
Speaker 1: Corliss Murray, senior vice president, head of Engineering at Abbot
18:27
Speaker 1: based in Chicago, to talk about a new blueprint that
18:30
Speaker 1: they have come up with to get more girls into
18:34
Speaker 1: the STEM field. Before we get started on that, though, Corless,
18:37
Speaker 1: can you just give us a sense of what it
18:39
Speaker 1: means to be senior vice president and head of Engineering
18:41
Speaker 1: at Abbott. Yes, Lisa, and thank you so much for
18:44
Speaker 1: the opportunity to to speak to your audience today. UM.
18:48
Speaker 1: I'm responsible for UM, the corporate quality, engineering and regulatory organizations,
18:54
Speaker 1: and our team supports all of Abbott's businesses worldwide and
18:58
Speaker 1: we do that through a number of for such as UM.
19:01
Speaker 1: It could be everything from structural and architectural support to
19:04
Speaker 1: special technical areas including governance of quality policies and procedures
19:10
Speaker 1: and regulatory strategy. So let's gives a sense you know,
19:13
Speaker 1: we we know the numbers in terms of women in
19:17
Speaker 1: STEM underrepresented. Gives a sense of kind of what Abbott
19:21
Speaker 1: is thinking about in terms of its blueprint for you know,
19:24
Speaker 1: getting young women involved in STEM. Well, I think one
19:29
Speaker 1: of the things that we have found very consistently and
19:31
Speaker 1: it lines up what other research that has been conducted,
19:34
Speaker 1: and that is that many, as not most, girls don't
19:37
Speaker 1: enter these fields because of lack of exposure and lack
19:40
Speaker 1: of role models and encouragement. And so for us, being
19:44
Speaker 1: a science based company, it is essential for us to
19:47
Speaker 1: be able to bring women to help with the diversity
19:51
Speaker 1: of ideas and innovation as well as representing the markets
19:54
Speaker 1: quite frankly in which we operate UM. And so it's
19:59
Speaker 1: it's a part of our foundation and a part of
20:01
Speaker 1: our talent focus UM at all levels the new organization.
20:04
Speaker 1: And so, but you have to begin with building that
20:06
Speaker 1: pipeline and making certain that we're reaching these young women
20:10
Speaker 1: early in life UM, so that they can get a
20:12
Speaker 1: feel for what it is that that they can do
20:14
Speaker 1: as far as their careers may go. Okay, so this
20:18
Speaker 1: has been a big question which is how do you
20:20
Speaker 1: exactly counter and the idea that you came up with
20:22
Speaker 1: a blueprint a detailed playbook for successful high school girls
20:27
Speaker 1: going into an internship program. Can you give a sense
20:30
Speaker 1: of what the playbook is? So the playbook is actually
20:35
Speaker 1: UM built similar off our college intern program. And and
20:38
Speaker 1: what we do is we work with based on criteria
20:42
Speaker 1: to select students to come into the program. We work
20:45
Speaker 1: with high schools that UH they have curriculums that are
20:48
Speaker 1: Project Lead the Way or the International Baculide Program, and
20:52
Speaker 1: these are programs that UM would make sure that these
20:55
Speaker 1: young people are getting some of the higher advanced levels
20:57
Speaker 1: of science and math exposure. UM. We then take that
21:01
Speaker 1: bring it into our organization and work with assignment managers.
21:05
Speaker 1: Assignment managers or individuals that actually work in the professions
21:09
Speaker 1: UM day in and day out. So they could be
21:12
Speaker 1: cybersecurity experts, they could be UM, you know, mechanical engineers, architects,
21:17
Speaker 1: civil engineers and electrical engineers, biomedical engineers. And then we
21:21
Speaker 1: actually develop assignments that are real projects that are done
21:26
Speaker 1: by these engineers and others like them. And we create
21:30
Speaker 1: these assignments for the students and we expose them to
21:32
Speaker 1: it and the blueprint goes into a lot of detail
21:36
Speaker 1: on everything around how to work and pardner with a
21:39
Speaker 1: school to how to work and identify assignments to what
21:42
Speaker 1: we call an intern week where they're exposed to other
21:46
Speaker 1: things such as how to conduct yourself in a professional environment, um,
21:51
Speaker 1: you know, basic business ethics and things of that nature,
21:54
Speaker 1: so that they're well rounded. So court less um Abbott
21:58
Speaker 1: that is a you know, it's a glow little healthcare company.
22:01
Speaker 1: I'm sure lots of demand for engineering math type folks
22:06
Speaker 1: at your company. How do you go about at Abbott
22:09
Speaker 1: trying to ensure that you attract the best and brightest
22:12
Speaker 1: uh and and you know, get a fair representation in
22:14
Speaker 1: your workforce. And I know, I'm sure a lot of
22:16
Speaker 1: these jobs that you have are very important and uh
22:20
Speaker 1: but define you getting the right talent. We are getting
22:24
Speaker 1: the right talent and we are a company that people
22:28
Speaker 1: want to be a part of. You know when when
22:29
Speaker 1: you look at not only the technical work that we do,
22:33
Speaker 1: but you look at the environment that we have where
22:36
Speaker 1: we've been recognized for you know, being working mothers, working women,
22:40
Speaker 1: be at you know, scientists, you know, UM innovation. We've
22:43
Speaker 1: been recognized on a lot of different venues. And so
22:47
Speaker 1: when you combine UM the total environment along with an
22:52
Speaker 1: environment that encourages development of people. UM, these young people,
22:56
Speaker 1: we find they're excited about the technologies that we create.
23:00
Speaker 1: They're excited about the people that they work with. Because
23:03
Speaker 1: the mentors and the assignment managers that work with them
23:06
Speaker 1: love developing others and and they want these young people
23:09
Speaker 1: to be successful, and they're excited to share their professions
23:12
Speaker 1: with them and help them to have a better indication
23:15
Speaker 1: of what they potentially could do. So I think that
23:18
Speaker 1: Abbott creates a holistic environment where people want to be
23:22
Speaker 1: a part of our organization so we get our fair
23:25
Speaker 1: share of talent. If you will to come into this organization.
23:29
Speaker 1: Courtlos Marie, thank you so much for joining us. Corliss
23:31
Speaker 1: as a senior vice president, head of Engineering and Abbott
23:34
Speaker 1: talking about getting young women into STEM related fields. It
23:51
Speaker 1: was a tremendous story to read the concept of a
23:54
Speaker 1: hundred and fifty thousand tourists stranded on overseas beaches and
23:58
Speaker 1: in vacation hotspots. The UK government is now trying to
24:02
Speaker 1: get back to the country in what is being called
24:04
Speaker 1: the largest repatriation in peacetime history. This all comes after
24:09
Speaker 1: the collapse of tour operator Thomas Cook Group. My question is, Paul,
24:15
Speaker 1: why did this come such a huge surprise and shock
24:18
Speaker 1: suddenly to leave so many people stranded? And here to
24:21
Speaker 1: answer that question is Richard Weis's reporter for Bloomberg News
24:24
Speaker 1: joining us from Frankfurt. So Richard, what is the answer
24:27
Speaker 1: to that question. Well, the honest answer is it didn't
24:31
Speaker 1: come as a surprise to those who follow the company closely.
24:34
Speaker 1: Of course, the timing was a surprise that this happened
24:37
Speaker 1: at two in the morning local time last night. But
24:41
Speaker 1: they just want to add a little bit of contracts contexts.
24:44
Speaker 1: As you say, this is the biggest repatriation since the
24:47
Speaker 1: Second World War. There's hunead fifty thousand Brits stranded abroad
24:52
Speaker 1: at this point in time, So the British government is
24:55
Speaker 1: tasked with bringing about twenty thousand people home every day.
25:00
Speaker 1: So if you take a seven four seven jumbo jet,
25:03
Speaker 1: which seats about just under five that's forty jumbo jets
25:07
Speaker 1: every day for about a week, to be organized by
25:10
Speaker 1: a government which doesn't have a fleet of such size
25:12
Speaker 1: for such a task. So that gives you a feel
25:14
Speaker 1: for what the bridge are undertaking as we speak. So
25:17
Speaker 1: it's again I have to admit I really don't understand
25:20
Speaker 1: how this happened and how I just can't take my
25:23
Speaker 1: ticket that I guess is no longer valid and maybe
25:26
Speaker 1: get another airline to honor it and fly back home.
25:29
Speaker 1: But is that not an option for these people? The
25:31
Speaker 1: good thing is that in Europe for a lot of
25:34
Speaker 1: these things there's consumer protection. In the UK it's called atoll.
25:39
Speaker 1: It essentially means in a case like this, the government
25:42
Speaker 1: will step in and organize a transport and you even
25:46
Speaker 1: have to pay for it, and if you're lucky, you
25:47
Speaker 1: can even stay for the remainder of your holiday at
25:50
Speaker 1: your hotel. Of course, at the moment this happens, like
25:53
Speaker 1: last night, this causes shock and awe with the fact
25:56
Speaker 1: that people, but in the end most of the bridge
25:58
Speaker 1: on vacation at the moment, will probably be able to
26:02
Speaker 1: spend the days on the beaches there and they will
26:04
Speaker 1: get home taken possibly even by the same aircraft that
26:08
Speaker 1: they flew into. The destination. Was just with the difference
26:11
Speaker 1: that the government charges it from wherever owns it, lessers
26:15
Speaker 1: most likely to fly them home, and that money comes
26:18
Speaker 1: from a fund that all two operators have to pay
26:20
Speaker 1: into So Richard, I hate being pedantic here, but I
26:24
Speaker 1: want to go back to the two am filing here
26:27
Speaker 1: or announcement. I mean, what transpired that led to such
26:31
Speaker 1: a sudden shuddering of the entire operation in anyway with
26:35
Speaker 1: no contingency plan whatsoever to continue to sort of make
26:39
Speaker 1: things go smoothly until the orderly wind down of the
26:42
Speaker 1: company and its operations could be completed. It sounds very
26:46
Speaker 1: dramatic that that's happened tonight at two am, and that's
26:48
Speaker 1: what actually did happen. However, there's a strong rationale behind it.
26:54
Speaker 1: When a company is bankrupt or have to be liquidated,
26:58
Speaker 1: like in this case, the question is where are the
27:01
Speaker 1: asset and who owns them? So the administrator has to
27:05
Speaker 1: go in basically count everything and see what can I
27:08
Speaker 1: turn into cash. So if I ground an airline and
27:11
Speaker 1: Thomas Cook is a huge airline with more than one
27:14
Speaker 1: hundred jets in the leisure sector, that's one of the
27:16
Speaker 1: biggest airlines across Europe, when I ground an airline at
27:19
Speaker 1: two in the morning, chances are most of the jets
27:22
Speaker 1: are going to be at their home airports, meaning in
27:25
Speaker 1: the UK this is the UK company, so the insolvency
27:28
Speaker 1: administrator will be able to actually get their hands on
27:32
Speaker 1: the jets and sell them later on. So there's some
27:35
Speaker 1: practical reasons behind this timing. So this is a you know,
27:39
Speaker 1: Thomas Cook has been around for a hundred seventy eight years.
27:43
Speaker 1: What happened to this company to push it to where
27:46
Speaker 1: we are today. Well, um, if you go back and
27:50
Speaker 1: look into the history books, it was founded by a
27:53
Speaker 1: preacherman who wanted to keep people in Victorian England from drinking.
27:57
Speaker 1: So it's actually fascinating history. The problem is in the
28:01
Speaker 1: last fifteen or twenty years or so, they haven't been
28:04
Speaker 1: quite up to speed with the changes in the industry
28:07
Speaker 1: as the low cost carriers emerged also across Europe and
28:12
Speaker 1: ticket prices continued to fall over the last couple of years.
28:16
Speaker 1: At the same time, online rivals, both travel agents and
28:20
Speaker 1: pure online travel agents as you know in booking dot
28:23
Speaker 1: Com for example, pushed into this market and squeezed the
28:28
Speaker 1: margins that were already slim and highly seasonal. It's a
28:32
Speaker 1: business where in the summer the money comes in and
28:35
Speaker 1: in the winter you have to pay the hotels that
28:37
Speaker 1: you buy your beds from. In bulk, so it's very
28:41
Speaker 1: seasonal and you have to be able to withstand shocks.
28:44
Speaker 1: For example, across Europe, a lot of the important destination
28:48
Speaker 1: countries are Tunisia, Egypt, Turkey, and all these countries had
28:53
Speaker 1: political turmoil in the past couple of years, and some
28:56
Speaker 1: of them even had incidents that shut the entire country
29:00
Speaker 1: is down for a couple of months. Out of a
29:02
Speaker 1: perspective from a tour operator, so that means you may
29:05
Speaker 1: have spent money on sending hundreds of thousands of guests
29:08
Speaker 1: there and in the end you can't. So if you
29:11
Speaker 1: don't have a big financial buffer, this is a very
29:13
Speaker 1: tough business to be in. Richard Wis, thank you so
29:16
Speaker 1: much for bringing this story to us. Just extraordinary. Richard Rice,
29:20
Speaker 1: Bloomberg News based in Frankfort. Thanks for listening to the
29:24
Speaker 1: Bloomberg P and L podcast. You can subscribe and listen
29:27
Speaker 1: to interviews at Apple Podcasts or whatever podcast platform you prefer.
29:30
Speaker 1: Paul Sweeney, I'm on Twitter at pt Sweeney. I'm Lisa A.
29:33
Speaker 1: Bram Woyits. I'm on Twitter at Lisa bramwo Wits. One
29:36
Speaker 1: Before the podcast, you can always catch us worldwide. I'm
29:39
Speaker 1: Bloomberg Radio