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Bloomberg Audio Studios Podcasts Radio News welcome to the Bloomberg this Weekend Podcast with
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David Gura, Christina Raffini and Elisa Mateo. Thanks for joining us for today's selection of convers from the show.
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You can listen to our favorite discussions right here on the podcast, but also make sure to join us live every Saturday and Sunday morning starting at 7am Eastern.
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We're on Bloomberg Television Radio and the Bloomberg Business App bringing you unique takes and in depth interviews on news, politics, lifestyle and culture.
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The US Is entering the third week of its war with Iran. Defense Secretary Pete Hegseth slammed Iranian leadership and questioned if the new Ayatollah is up for leading the country.
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Iran's leadership is in no better shape. Desperate and hiding, they've gone underground.
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Cowering.
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That's what rats do.
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We know the new so called not so supreme Leader is wounded and likely disfigured.
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He put out a statement yesterday, a
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weak one actually, but there was no
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voice and there was no video. It was a written statement. He called for unity. Apparently killing tens of thousands of protesters is his kind of unity. Iran has plenty of cameras and plenty of voice recorders. Why a written statement?
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Joining us this morning, Bloomberg Jerusalem reporter Dan Williams. We've got Bloomberg's Washington correspondent Jeff Mason, who is traveling with President Trump this weekend. He's in West Palm Beach, Florida. And Philip Crowther is with us as well. He's an international correspondent for the Associated Press and joins us. He is reporting from the Strait of Hormuz this morning. Phil, let me start with you if I could. And with that attack on Kharg Island, I'm going to read a bit from the Truth Social post the president posted last night about that attack. He said at my direction, the US Central Command executed one of the most powerful bombing raids in the history of the Middle east. The president's words, and totally obliterated every military target in Iran's crown jewel, Kharg Island. Our weapons, he writes, are the most powerful and sophisticated that the world has ever known. But for reasons of decency, I have chosen not to wipe out the oil infrastructure on the island. Would love to get your perspective from your vantage of the significance of that. We know that 90% of the oil that Iran produces goes through this hub off the coast of Iran. How big a deal is this and what does it signal to you that it wasn't a kind of full attack on the oil infrastructure on that island?
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Philip
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well, first of all, it's certainly considered an escalation by Iran because shortly thereafter comes the state. The statement from the Iranian Revolutionary Guard says that because those attacks were staged here in the United Arab Emirates, by the way, without proof from Iran that that was actually the case, but because of what they think were attacks that came from here, that cities and ports in the UAE are now not safe anymore and are legitimate targets. Iran also says that people here should now leave those places because attacks might be coming. Now, it's worth saying that that has already happened. Remember that the likes of Abu Dhabi and Dubai, the biggest cities in the United Arab Emirates, have already seen drone attacks since the start of the U. S Israeli war on Iran. But we have, though, as part of that Iranian escalation, at least in theory, we do have seen something concrete on the ground. Not too far from here, just south from here in Fujairah, is a very large oil facility that was struck earlier this morning by what presumably were Iranian drones. We do not have confirmation thereof, but there were two large columns of smoke billowing from that oil facility just a short while ago. Now that is particularly important right now because with the Strait of Hormuz and you can see the entrance of it right behind me with it essentially being closed. Well, there are some ways of bypassing it to a lesser degree. There are pipelines in Saudi Arabia and the United Arab Emirates that can bring oil away from the Persian Gulf and to other ports where oil can be picked up and where the Strait of Hormuz does not need to be used. And Fujairah, just down the road from here is one of those. Now a little note on the Strait of Hormuz I just mentioned. There is very little movement and we have been watching it from our vantage point here, almost no movement whatsoever. We can see dozens of ships here. Now these are tankers that carry oil but also natural gas. They are waiting to enter the Strait of Hormuz. And then there are hundreds in the Persian Gulf who are waiting to get out. So far we've seen very little movement. We do know that some China linked ships have made their way in and out of the Strait of Hormuz and Iranian ships as well, a tiny, tiny exception. They are essentially what we're looking at here is a pretty much a full on blockade of the Strait of Hormuz.
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I want to pivot to a different peninsula and that's Jeff Mason who is with the President in Florida. Jeff, in your latest piece you've got a good breakdown of what the war is costing so far. U.S. officials told lawmakers the first six days of the war with Iran cost more than 11.3 billion, says a person familiar with the matter. How do you think that cost is going to go down with both members of Congress and the American public as this war, the President has said could go long, may not go long, we're going have to wait till he feels it.
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Yeah, I asked him that last night on the.
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F
I heard you. I thought that was your voice and I was listening to that this morning. Jeff Mason.
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Yes, you were spot on there, Christina. And he said, he said it would last as long as necessary and I think it's worth taking a pause to talk about that for a second given that just a little over a week ago, I believe when he was starting to feel politically sensitive to the price of oil and gasoline, he suggested that the war was going to, was going to end quickly. He didn't give a timeline then, he hasn't given a timeline now. But he has walked away from that language and that action right there. Verbal decision anyways is something that I think markets are going to be sensitive to going forward. To your question about Congress, look, the president already has a sales pitch to make to Congress, certainly to Democrats, which I think he's probably much less concerned about. But more generally, there's already some tension there about the fact that he has launched a war in the Middle east without seeking permission from Congress. The Congress, as you well know, also controls the purse strings. And that amount of money is no doubt something that's going to get scrutinized. And as I like to mention, because politics is my wheelhouse, this is an election year and this is also a president who campaigned on and in fact started his first year talking about government waste and about cutting down on government spending. Obviously, a war costs money. A war does not achieve those particular goals.
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A
Dan Williams, let me turn to you. I want to ask about Israel's incursion into Lebanon, which has really escalated here, and I'm very curious about the end goals for Israel. I know that the UN Secretary General, Antonio Guterres, was on the ground in Beirut in recent days. Let me play a bit of tape of what he said to both of those feuding parties, Lebanon and Israel.
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My strong appeal to both parties to Hezbollah and to Israel, is for a ceasefire to stop the war and pave the way to find a solution that would allow Lebanon to become a country independent, with sovereignty and territorial integrity respected.
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The UN Secretary General saying he made that trip in solidarity, his word with the Lebanese people. We see reporting from Axios this morning that Israel is planning to significantly expand its operation in Lebanon with the aim of dismantling Hezbollah's military infrastructure. That's according to Israeli and US Officials. Axios cites quote, this could be the largest Israeli ground invasion of its northern neighbor since 2006, dragging Lebanon to the epicenter of the escalating war with Iran. Dan, I'm very curious what you're hearing from Israeli officials about the objectives of this military campaign, this effort here to encroach on, perhaps seize more territory in Lebanon.
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Well, that's certainly the mood music. In fact, it was stated explicitly by the Israeli defense minister that as he put it, the Lebanese state had failed to impose its authority over the entirety of Lebanon, meaning reining in that sub national group Hezbollah, a group that's clearly a cat's pull for Iran, a group that reopened the Lebanese front with Israel in solidarity with Iran a couple of days into this Gulf War, this Iran war that we've all been covering and dealing with. So the Israelis haven't said explicitly how deeply they're willing to go into southern Lebanon. They have ordered out civilians. Hundreds of thousands of civilians have now fled accordingly, north of the Litany river, which is the natural demarcation of southern Lebanon. It makes up something like 10% of the Lebanese landmass there. If you believe the Axos report, Israel is willing to go all the way up to the Litany. Again, perhaps there is some saber rattling here, some muscle flexing, given that an invasion on that scale would really require a couple divisions worth of troops. The Israelis may need time to muster that number of men. They have been doing so in recent days. I'm not sure they would want to. I think they would still want to see the Lebanese state intervening, coming in at last moment to really impose its authority on Hezbollah. But given that Hezbollah, especially in recent days, has been escalating rocket attacks into northern Israel, Israel responding in kind, it would appear the escalation vector is very, very clear here.
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F
Philip, I want to ask you, because you're in the area, you were talking about those stranded ships. And later on in the show, we're going to talk to a UN official about what these international agencies are trying to do to help the stranded sailors. About 20,000 stranded merchant marines and sailors on those vessels. Four have already been killed, seven injured, and at least seven ships have been hit, either by flying debris or other explosions in the region. What are the different governments trying to do? Are those vessels just sitting out there? Are these sailors coming into port? Are they getting supplies out there? Can you give us kind of a situation?
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No.
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Look, the truth is there is pretty much no movement whatsoever. A colleague of mine, though, today was in touch with one of the one of the sailors on one of those tankers, in fact, waiting to go through the Strait of Hormuz. He actually told him that he felt a little bit like a sitting duck and was a little bit afraid, afraid that the oil company or maybe the transport company wasn't clear there. Who he mentioned was feeling the pressure for financial reasons to actually move through the Strait of Hormuz despite the dangers. So that is the situation these seamen are in. Essentially, the pressure to make money and to move through the Strait of Hormuz is huge. It's just right now that because of these recent Iranian attacks and there have been several of them, as you mentioned, and the threats that more will be forthcoming, that the evaluation right now is simply it is too dangerous to move through the Strait of Hormuz. Insurance companies, as I'm sure you have spoken about over the last two weeks, insurance companies have skyrocketing rocketing rates. And they also, of course, deem it very, very dangerous indeed to pass through the Strait of Hormuz. So there is no movement here, not in and out of the Strait and not towards any ports either. Now, generally, these are ships, and it is a generalization, but still they tend to have enough provisions on board once they get close to the Strait of Hormuz, because they know, especially during this time, that something bad could happen and then they might get stuck. So in that sense, they should be okay. Now, what are governments doing? Of course, they want to get their citizens out, but there's very little they can do. That brings us on to an entirely different subject, in a sense, is what could foreign governments do to actually get these ships moving through the Strait of Hormuz? Of course, the Trump administration has spoken about the possibility of escorting ships. It's not something that is happening right now. And it's also something that is very hard to put into place. It is logistically very, very hard. And it's also a military option in a sense, because as long as Iran has the, the power, the firepower to attack ships and to use drones on cities here in the United Arab Emirates, well, then it should also be powerful enough to take on the US Navy if it brings in escort ships. Now, there's another attempt. France is involved in a potential international coalition to escort ships in and out of the Strait of Hormuz. Again, that takes weeks to set up. It's not going to happen anytime soon.
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A
Jeff Mason, very quickly, want to wrap up with you here. We've got about a minute left, and we're kind of threading through the conversation. Comments we've gotten from from the president to Brian Kilmeade and on President Trump's Truth social site, he writes, the fake news media hates to report how well the US Military has done against Iran, which is totally defeated, and wants a deal, but not a deal that I would accept. And we see this news that the US is sending 2,500 additional Marines to the region. Your read on what that portends. It's going to take about a week for them to get there. What does it say about the president's appetite for a deal in the minute we have left?
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I
Well, number one, I would say that the president is telling the truth when he says the war is going to go on as long as necessary. Does not. It doesn't seem to me like he has an end game in mind. And it does seem like he's, he's prepared to increase resources to achieve the goals that he's looking for. I wouldn't take seriously what he or what Secretary Hegseth said yesterday about how the media should be covering the war. It's our job to cover it truthfully and factually and not take tips from the government. But I would say from an analytical perspective, it is not unrealistic to conclude that they're committed for a long term, even if that has a negative impact on the economy and a negative impact on the president's political prospects in November.
- [15:39]
A
Jeff Mason, thank you very much. Jeff Mason, who covers the White House for us here at Bloomberg, Dan Williams, our Jerusalem reporter with us this morning, and Philip Crowther, who is with the AP on the Strait of Hormuz. Thank you very much for the time.
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F
Thanks, guys.
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A
Stay with us for more on Bloomberg this weekend, right after this.
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B
Hello. Hello. I'm Malcolm Gladwell, host of the podcast smart talks with IBM. I recently sat down with IBM's chairman and CEO Arvind Krishna, and I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them Pick areas you can scale. Don't pick the shiny little toys on the side. For example, if anybody has more than 10% of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30% more productive today with the goal of being 70% more productive.
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D
Yeah.
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A
Wow.
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So we are not asking our clients to be the first experiment on it. We say you can leverage what we did. We're happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit IBM.com smarttalks.
- [17:14]
C
You need to make a huge presentation in an hour. Adobe Acrobat uses AI to take all your documents and generate a presentation with a single click. Build slides quickly and streamline the process. Need a last minute pitch deck? Do that with Acrobat. Need to level up your presentation design? Do that with acrobat. You have 30 plus documents that need to be simplified into a proposal. Do that, do that, do that with Acrobat. Learn more@adobe.com AC do that with Acrobat.
- [17:47]
D
Support for the show comes from public. Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades, and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts.
- [18:12]
E
Yep.
- [18:12]
D
High yield cash? Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing Member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor Crypto Services by ZeroHash. All investing involves risk of loss. See complete disclosure@public.com disclosures.
- [18:55]
A
The war in Iran continuing to escalate and widen as we've been discussing so far this morning. President Trump taking to truth social late last night, claiming Iran had plans to take over the Middle east, obliterating Israel. But now, quote, just like Iran itself, those plans are now dead.
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G
All right.
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Joining us now is retired Colonel Joel Rayburn. He's a former member of the National Security Council staff during President Trump's first administration. He was also envoy to Syria and a senior fellow at the center for Peace and Security in the Middle east at the Hudson. Excuse me, I almost got through that whole title at the Hudson Institute. Joel, thank you so much for joining us. Given all your experience in the region and at the State Department, I do want to ask you your take on some of these evacuations we saw, it appears at least the embassy compound in Baghdad seems to have taken a strike this morning. There was smoke rising over that horizon. We've also got order departures in Bahrain, Iraq, Jordan, Kuwait, Lebanon, Qatar, Saudi Arabia, uae, and a regional consulate in Turkey. What does it do for State Department operations? When you have so much going on in a region, you need all those people who know those countries and you also need them out of harm's way.
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E
Well, good to be with you. Yeah, that's a tough situation because the Iranian regime has been targeting those diplomatic facilities because the Iranian regime doesn't really distinguish between military civilian targets. They will target each indiscriminately as though they're equivalent. They don't respect that division. So our diplomats on the ground do have to be cognizant of that. It's not the first time that we've had to do this kind of ordered departure or authorized departure from from some of these stations because it's the Iranians before who have threatened those facilities. So, yeah, it cuts down on our diplomats ability to do their work and engage with with host nations in those places, but they have to be kept safe.
- [20:39]
A
I want to get your read on this story that's developing that the administration is sending 2,500 additional Marines to the region in light of what's been happening over the last couple of weeks. And that will kind of add to the total of 50,000American troops that are in the region right now. What does that portend to you? How do you read that? And then I'm curious, as we listen to the president not ruling out the prospect of there being boots on the ground unequivocally, does it concern you, does it raise an eyebrow that this could be where we're headed if we have that many new troops headed the region?
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E
Well, no, because in addition to being a State Department, former State Department person in a former life for 26 years, I was an army officer and I was actually a military planner and analyst at U.S. central Command, the headquarters that is carrying out this campaign in lead for the United States. And so I was familiar back then in the olden days with an earlier version of this campaign plan and the idea of having a Marine Expeditionary Unit to do the kind of operations that you would need to protect commercial vessels, commercial shipping going through the Strait of Hormuz to be able to do operations in the Persian Gulf littoral to protect shipping, to be able to would give the president, would give the CENTCOM commander more options. And it actually signals, I think it's a good signal to the Iranian regime leaders in Tehran that the president and Admiral Cooper are keeping that option open. That's precisely the kind of very well trained marine force that you would need in order to be able to seize threatening vessels, in order to be able to disrupt minelaying operations. If the Iranian regime were to do that or if they were want to try to seize some sort of Iranian island, maybe Kharg island or other facilities like that, it's signaling that the US has that strategic option.
- [22:22]
F
Colonel, since as you're saying, this plan did exist during the first term, how closely is this administration's action following that plan and what comes next?
- [22:32]
E
Well, I don't have any inside information on that. Being retired, I'm out of the loop, so I can only.
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F
But you were in the loop the first time around. So so far is it playing out according to.
- [22:42]
E
Well, it's so much more advanced. I mean, as someone who was formerly familiar with an earlier version of that plan, the military technology advances just in the 15 years or so since I was involved in that sort of thing are just astonishing. And the military imbalance between the US And Israel on one side and the Iranian regime on the other is far wider than CENTCOM would have enjoyed back then under General Abizai, General Petraeus and so on. Me in 2009 that two weeks into this campaign plan, the Iranian leadership would be decimated. Their ballistic missiles would be down by over 90%, their drones down by over 90%. They would have no, no operable air force, Navy, missile defense and air defense. I'd have told you you were smoking something. But it's, it's just astonishing the, the military progress that's being made, you know, at that, at an operational level, you
- [23:39]
A
talk about the military progress made. The president sat down with Brian Kilmeade on his radio show a little earlier this week and talked about what an end game might look like. Let's take a listen to what he had to say to Brian Kilmeade.
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B
We had the greatest economy in history. We do. We still do. Oh, this will bounce right back when it's over. And I don't think it's going to be long. When it's over, this is going to bounce right back so fast.
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E
When are you going to know when it's over?
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B
When I feel it.
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C
Okay.
- [24:03]
B
I feel it in my bones.
- [24:05]
A
Colonel, I want to get your reaction to that last line when he feels it in his bones, but you very clearly laid out that list of all of the defensive targets that have been hit by the US and taken offline, the supreme leader killed, as you mentioned, your sense from your experience in the first term and from what you've observed here over the last few weeks of what the end game is likely to be here and what the timeline this administration is working with.
- [24:24]
E
Well, there's a military endgame. There's a military end state that's very clear. There's a political end state that's something different. On the military side, the objectives that they laid out, the president, Secretary Rubio, at the beginning of eliminating the nuclear program, ballistic missile and drone program, the, the ability for the Iranian regime to use terrorist proxies outside their borders, those are all well on their way to being accomplished. And then the further phase of essentially eliminating the Iranian regime's production capacity to be able to regenerate those kind of things, if there is a cessation of hostilities with an Iranian regime still there in place. Now, the political estate is still unclear. And it seems, it seem to me, as I was a staffer for President Trump, we all know, the president is someone who likes to keep his strategic options open. He enjoys strategic ambiguity because it gives him leverage in negotiating outcomes. And I think he's still doing that here. Whether, whether he's willing to tolerate an end of campaign with a rump Iranian regime still in place but greatly weakened with it, lacking the capacity to go on into the future is something he's keeping, he's keeping that option open and that creates confusion on the Iranian regime side. I actually hinders their ability to respond, which is what you want.
- [25:42]
F
Colonel, quickly, before we let you go, the secretary of defense admitted in his press conference this week, saying that I can't say that we anticipated necessarily that's how Iran would react. He was, he was being asked about Iran striking regional allies, which in his defense, I think did take quite a people, quite a lot of people, even regional experts, by surprise. Should the US have anticipated that and how should the US Respond to an Iran that is willing to strike friends and neighbors in the region?
- [26:09]
E
Well, I think when you're planning, when you're going through the permutations and possible scenarios, if you're planning out your war, gaming a campaign plan like this, I think absolutely the planners would have had a scenario where they said the Iranian regime just lash out at the region around it. You would consider that a worst case scenario. But you'd also consider it, I think, low probability because it's something that's so counterproductive to Iran Iranian interests, it's harmed them so much the entire rest of the Arab world in Turkey were drawn into a conflict that they had intended to stay on the sidelines of.
- [26:46]
A
Colonel, thank you very much. Drawing from your expertise. Yes. At centcom, as you mentioned, and on the NSC as well. Grateful for your time on this morning. That's Colonel Jill Rayburn joining us here on Bloomberg this weekend.
- [26:56]
F
Stay with us for more on Bloomberg this weekend right after this.
- [27:04]
C
Hello.
- [27:04]
J
Hello.
- [27:05]
B
I'm Malcolm Gladwell, host of the podcast smart talks with IBM. I recently sat down with IBM's chairman and CEO Arvind Krishna, and I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example, power. If anybody has more than 10% of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software, 30% more productive today with the goal of being 70% more productive.
- [27:51]
D
Yeah.
- [27:52]
E
Wow.
- [27:53]
B
So we are not asking our clients to be the the first experiment on it. We say you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit IBM.com smart talks.
- [28:21]
C
You need to make a huge presentation in an hour. Adobe Acrobat uses AI to take all your documents and generate a presentation with a single click. Build slides quickly and streamline the process. Need a last minute pitch deck? Do that with Acrobat. Need to level up your presentation design? Do that with acrobat. You have 30 plus documents that need to be simplified into a proposal. Do that, do that do that with Acrobat. Learn more@adobe.com do that with Acrobat.
- [28:54]
D
Support for the show comes from Public Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public.
- [29:12]
E
Public.
- [29:12]
D
You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts?
- [29:19]
E
Yep.
- [29:19]
D
High yield cash? Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing member finra SIPC Advisory Services by Public Advisors SEC Registered Advisor crypto services by ZeroHash all investing involves risk of loss. See complete disclosures@public.com Disclosures.
- [30:03]
F
Several days ago as part of our C Suite Saturday segments, we spoke to the CEO of Trane Technologies, Dave Regneri about his company and how they are trained transforming in an ever changing climate.
- [30:14]
J
Think of Trane Technologies. We're a global H Vac player, okay? So think about heating, ventilation and air conditioning. We're also a leader in transport refrigeration with our Thermal King brand. We're a pure play climate innovator and you know, our purpose is to challenge what's possible and innovate for a sustainable world. And over the last six years we've had just a great run. I mean our compound annual growth rate on the top line is is 11%, a little bit over 11% and on the bottom line it's over 20% so I'm super proud of what our team's been able to accomplish. And as I always tell people, we've had a great run over the last five plus years, but the future looks even brighter than what I saw five years ago.
- [30:55]
F
And the company itself, I mean, I'm familiar with you guys from your, your home product, which is a smaller portion of your portfolio, but the company itself has existed in some, some foreign since 1913, and you've been around, well, almost that long. No, I'm just kidding. But you, you did start at the company not in existence.
- [31:11]
J
I just got a compliment when I came down. Someone said, you look younger than me.
- [31:14]
F
I'm sorry, I meant duration. You've been at the company, but you start as an intern.
- [31:19]
J
I started as an intern back in 1984 just to date me a bit here. But yeah, I mean, when I came out of college, I was going to go into investment banking and I decided, no, no, I'll take this opportunity and go learn a business. And I figured I'd be there for just a short period of time. But I just had so many different roles in the company. I kept advancing to different areas of the company. And, you know, people always ask me, well, how'd you get to where you are? Is it, is it luck or hard work? I tell them, the luckier I get, the harder I work. Right. But. But it's just, you know, I've had the opportunity to run all the businesses that we have in the company today, so I know them very, very well. And it's just such a great company. You know, when I started as CEO, and I've been the CEO now for coming up on my fifth year, I knew we were a great operator and I knew we were a great innovator, but we weren't thought of as a growth company.
- [32:14]
F
Why not?
- [32:16]
J
Because we weren't growing at the rates that we should be growing at. And I knew we had every opportunity, opportunity to be this growth company. And trust me, you don't become a growth company just because the CEO says, puts it on a PowerPoint. Say, hey, let's become a growth company, if only. It doesn't work quite that way. But one of the things that we did was we had to change the mindset. So we have, as I'm sure most companies do, we have an annual operating plan, and that kind of sets every business's plan for the year. And I won't say it was a negotiation, but it kind of felt like it at times. Times like people wanted a lower number because Nobody wants to miss their forecast. And early on, we changed it. And we basically said, so the business, the first business comes in, presents their operating plan to us. And I was like, I don't know, 2 or 3% growth rate, which is, you know, incremental. So the assignment that they took away, I said, come back in two weeks. And I want you to tell us, my CFO and myself, what you need to invest to grow at 15%.
- [33:11]
F
Swing for the fence.
- [33:13]
J
Yeah. And so, you know, here we are. So roll forward. Each business comes back two weeks later, and they come back with these investments. And my CFO is kicking me under the table saying, dave, I don't know if we could afford all these. I said, no, it's not. They'll never be able to spend that amount of money. And, but by the way, it's. I need, I need a mindset, shift, change. And that was kind of the catalyst for us to start thinking about, hey, we can be a growth company. We are going to invest.
- [33:37]
A
You mentioned your, your optimism for the future. We're at a moment where so many businesses are being disrupted by AI or have the potential to be disrupted by AI. Talk about your involvement in this boom in data centers that I mentioned just a moment ago. Suffice to say, you might not have predicted that a few years back, but this has become a huge growth opportunity for you. Huge driver of the growth that you're talking about.
- [33:57]
J
Sure. I mean, look, data centers, we've always been strong in the data center vertical, okay? But we're also very strong at other core verticals. And we track 14 different verticals, and data centers is one. But data centers has been very, very strong. And we're part of the thermal management system within a data center. So data centers produce a lot of heat. That heat has to be removed. We're the company that helps the data center OEMs remove that heat. And it's really through Chiller technologies. It's through what they call CDUs or cooling distribution units. Fan wall. There's lots of different components that make up that thermal management system. But. But we're a leader in that space. But we've been a leader in that space for decades.
- [34:36]
F
But this is kind of controversial because these, these data centers are going into areas and they're driving up energy costs. And as much as people like to chat things, they also not like to not pay a ton for energy bills. Is there a balance to be struck there?
- [34:49]
J
Yeah, I believe there is. Because. Well, like I said, we're very strong in other verticals. Right. And we need the intelligence from data centers to help us make buildings smarter. And if you think most buildings, they use about 40, 40% of the energy in a building. And by the way, globally, 30% of all energy is for buildings, but 40% of that is for heating and cooling. And we know most buildings operate very inefficiently, like 30% inefficiently. A very conservative number. We've developed algorithms to make buildings strong, smarter. And this is why I'm so excited about the future.
- [35:24]
A
They talk a bit about who you're hiring to work for your company. So I mentioned 45,000 employees. Are you able to find the kind of workers that you need in this environment? I know that there are reports this is a difficult labor market for a lot of people. Who are you looking for? And what is the training process like for those new employees?
- [35:41]
J
Great question. Look, five years ago we had when we started as trained technologies or six years ago now we had 35,000 employees. Today we have, you know, over 45,000 employees. So growth companies create job opportunities. I'll start with that. Now you need to be able to recruit the right talent. Like service technicians. Right. We're always looking for great service technicians. And we learned during the COVID period that it's really hard to recruit these positions and find the right talent. So we developed an apprenticeship program and today the appointment apprenticeship program is now backed by the Department of Labor. I believe we have about 400 employees that are part of this apprenticeship program. And by the way, depending on your experience, this apprenticeship program could be two years to four years. And here we're just changing lives of people. We now use our hourly workforce as a place to recruit for the apprenticeship program for technicians. Whether it works or not, you're going to learn a lot by saying yes and understanding what someone else's problems are. Right. And you know, that's our whole mindset and we love being close to customers. We love working towards yes and, and we love our innovation.
- [36:53]
A
Dave, thank you very much. Appreciate it.
- [36:55]
F
Thank you for being here, for being our very first CEO. Saturday C Suite Saturday Guest and I
- [37:00]
J
feel privileged to be here. So thank you very much and thanks for your time today and good luck with your show.
- [37:05]
A
Thank you for that. When we come back, the pointed news quiz. Take us with you no matter where you go. You can watch us on Bloomberg tv, listen on Bloomberg Radio, stream us live on the Bloomberg business app. Wherever you are, we're there. This is Bloomberg.
- [37:17]
G
Stay with us for more on Bloomberg this weekend right after this
- [37:26]
B
Hello. Hello, I'm Malcolm Gladwell, host of the podcast smart talks with IBM. I recently sat down with IBM's chairman and CEO Arvind Krishna, and I asked him how can companies use AI to its fullest potential to create smarter business? My one advice to them Pick areas you can scale. Don't pick the shiny little toys on the side. For example, if anybody has more than 10% of what they had for customer service 10 years ago, go, they're already five years behind. If anybody is not using AI to make their developers who write software 30% more productive today with the goal of being 70% more productive.
- [38:13]
D
Yeah.
- [38:14]
B
So we are not asking our clients to be the first experiment on it. We say you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit IBM.com smarttalks.
- [38:43]
C
Everyone has been there. Your team's feedback is scattered across emails, chats and sticky notes. It's a mess, but PDF spaces in Adobe Acrobat gives you one collaborative workspace to streamline every file and comment. So if you need six departments to finally agree on a proposal, do that with Acrobat. Need to turn a mountain of feedback into one plan of action? Do that with Acrobat. Want to stop searching for files and finally get everyone on the same page. Do that, do that, do that with Acrobat. Learn more@adobe.com do that with Acrobat.
- [39:20]
D
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- [40:29]
F
Welcome back. Now for this weekend's Pointed news quiz. The news quiz for risk takers.
- [40:33]
A
I'm very excited about this, as I was last week until I lost the first inaugural.
- [40:38]
G
That is true.
- [40:38]
F
I'm sorry. You did lose to me last week. However, I have not studied as much as I did last week, so this may be your week.
- [40:45]
A
There are three categories, as usual. Lisa Mateo, quizmaster extraordinaire.
- [40:48]
G
Yes.
- [40:49]
A
What are the. Give us the lay of the land.
- [40:51]
G
Give me the lay of the land. I'm getting overly excited about this. I know. I see it in your face, David. Okay, so you basically have 30 chips in front of you, each of you. So Christina has 30, David has 30. Okay. Now, based on those three categories, you're gonna place your chips where you think you know the best. If you get the answer wrong, you hand over those chips, you bet to me.
- [41:12]
A
Yes.
- [41:12]
G
Okay. And you lose them and you lose some points. Okay, so let's get to our categories. This is what David was asking.
- [41:17]
A
All right, I'm ready.
- [41:17]
F
Okay.
- [41:18]
G
The first category is Oil.
- [41:20]
A
Oil. We've been talking about it at some
- [41:22]
F
length this week, which is gonna make it extra embarrassing if I nail this one.
- [41:25]
A
We should be in good position for this one.
- [41:27]
G
Second category. Asia politics. Asia politics. Okay. And third category is. Is Hollywood. You know, Oscars around the corner, guys.
- [41:36]
A
They are. And I already demonstrated how little I know about this year's film.
- [41:40]
E
And action.
- [41:40]
F
It's not your forte. You have other strengths. David Gur.
- [41:43]
A
All right.
- [41:44]
G
Okay. So, Christina, you're going 10 across the board.
- [41:46]
F
I'm going to do an even split. I know.
- [41:48]
G
Okay. The first one, David's going in 20.
- [41:50]
A
I'm going 20 on that oil. Again. We've talked about it a lot, so I feel like.
- [41:54]
F
Okay, I know, I know. But I'm nervous.
- [41:56]
G
Asia, Paul.
- [41:57]
A
I must admit, I'm not an expert on Asia Paul's.
- [41:59]
G
Are you ready for this question?
- [41:59]
A
Viewers may be disappointed. Okay, I'm ready. Okay, Here you go.
- [42:02]
G
Play with us along at home too, as well. Okay, so question is, oil and gas giant Shell agree to sell which brand to the private equity Firm Monomi for $1.3 billion. How are you feeling about those 20?
- [42:18]
A
Oh, my gosh. I was not expecting a. I really have no idea.
- [42:23]
G
Which brand?
- [42:23]
A
Which brand?
- [42:24]
G
Okay, Think of.
- [42:24]
F
That's the thing of the Shell am, the Shell subsidiary.
- [42:27]
A
Correct.
- [42:27]
G
Which brand?
- [42:29]
A
Okay, I'm thinking.
- [42:30]
G
So they agree to sell it.
- [42:31]
A
Yeah. All right.
- [42:32]
F
It's a private equity firm.
- [42:33]
G
Monomoy.
- [42:34]
A
Monomoy.
- [42:35]
G
Okay.
- [42:35]
A
Is that a hint?
- [42:36]
G
No, no. But it's a brand that you may be familiar with. If you get an oil change.
- [42:42]
A
Oh, okay.
- [42:43]
I
All right.
- [42:43]
F
If you get an oil change.
- [42:44]
C
Now you feel better?
- [42:45]
A
I got my theoretic. Okay.
- [42:46]
G
Okay, ready?
- [42:47]
F
Let's flip it.
- [42:47]
A
Synthetic or regular oil?
- [42:48]
I
When you change the oil.
- [42:49]
G
Oh, you just flip it.
- [42:51]
A
Valvoline.
- [42:52]
G
Valvoline. Oh, and what do you have?
- [42:54]
F
Jiffy Lube.
- [42:54]
A
Jiffy Lube.
- [42:55]
F
Christine, no. Are you kidding me?
- [42:56]
J
Oh, my God.
- [42:57]
F
It's like the only thing I know about oil changes.
- [42:59]
G
This is the best game ever.
- [43:01]
A
The only thing you know about oil changes is Jiffy Lube.
- [43:04]
F
And that I never get them done. And then my brother yells at you.
- [43:07]
G
I take your 20 day victory.
- [43:10]
A
Okay, we're gonna have to rework this game.
- [43:13]
F
I'm just gonna sit over here and do this.
- [43:14]
J
Love it.
- [43:15]
D
Yes.
- [43:16]
I
Count them up.
- [43:16]
G
Okay, gloat. Here we go. Asia politics.
- [43:19]
A
Yes.
- [43:19]
G
You may recoup your winnings here. Okay, ready? Let's see.
- [43:22]
A
I bet nothing on this.
- [43:22]
I
Here we go.
- [43:23]
G
Balendra Shah, a rapper turned politician, is on a course to become the prime minister of which country? Balendra Shah.
- [43:34]
A
Balendra Shah.
- [43:35]
E
Yes.
- [43:35]
G
A rapper turned politician.
- [43:36]
A
All right.
- [43:37]
G
The prime minister of which country? On course to become the prime minister.
- [43:40]
A
Of course.
- [43:41]
G
Country in Asia.
- [43:42]
A
Yeah. Thank you.
- [43:44]
J
Of course.
- [43:45]
G
Asia politics. Was that a good hint? Okay, here we go.
- [43:48]
F
We've had a long week here at Bloomberg.
- [43:50]
D
Flip it.
- [43:50]
G
Thailand. David. Nepal. Christina, Nepal is correct. She's got it again. Oh, you didn't bet anything on that one, did you?
- [43:59]
A
No, I didn't. But I feel like I only know
- [44:00]
F
that because those Gen Z uprisings. And it seems very appropriate that they would then elect a rapper.
- [44:05]
A
Yes.
- [44:05]
E
Bingo.
- [44:06]
A
Very in touch with the Gen Z around the world.
- [44:08]
G
You know, me and the utes.
- [44:09]
F
I am so cool.
- [44:10]
G
Her and the ute. Okay, here we go. Look at the sunglasses.
- [44:12]
A
Yeah, they're very cool. I would like to see you rocking those Mayhaps.
- [44:18]
G
All right, David, I feel you're going to do better in Hollywood.
- [44:21]
A
I feel like everyone is so disappointed,
- [44:23]
G
but you bet 10. You bet 10. Okay, let's see. The question is Netflix will pay up to $600 million for Inter Positive. It's an AI moviemaking company founded by witch actor.
- [44:37]
A
I hope that you do too. Not really.
- [44:40]
G
Which actor? $600 million.
- [44:43]
A
Can I spell it?
- [44:44]
G
A lot of money.
- [44:44]
A
I can't. I think so.
- [44:47]
G
She's writing furiously. Christina Kench.
- [44:49]
F
Okay.
- [44:50]
C
All right.
- [44:50]
G
Ready?
- [44:50]
A
I'm ready. And I can write.
- [44:52]
G
David, what'd you write?
- [44:52]
A
Ben Affleck.
- [44:53]
G
Ah. And Christina.
- [44:55]
F
Timothy Chamalama Chalamet.
- [44:57]
I
Why is it so hard to say?
- [44:59]
J
Chalamet.
- [44:59]
A
Chamalama.
- [45:01]
G
It is Ben Affleck.
- [45:02]
A
It is Ben Affleck. Thank you so much. I pretend myself.
- [45:05]
G
I miss that story this week. You got that wrong. Hand over your 10 to me.
- [45:10]
F
Ben Affleck is doing movie making AI.
- [45:13]
G
He has a company. AI net with it for $600 million. Okay. Nothing. Okay.
- [45:22]
A
Bonus.
- [45:22]
G
Are we ready for a bonus?
- [45:23]
A
And what do I win if I get the bonus? Everything is great again for me.
- [45:27]
G
Yeah, I might give you 10 back. I don't know.
- [45:29]
F
I'll think about it.
- [45:31]
G
Okay. Okay. I'll give you 10 back if you get this one. Because it's food and beverage is the last category. Okay.
- [45:36]
A
I do like both.
- [45:38]
G
We're glad to know Swig. Have you heard of this one?
- [45:41]
A
No.
- [45:41]
G
It has nearly. We're off to a good Start. Has nearly 150 stores. Specializes in which type of soda using flavored syrups, juices and cream.
- [45:53]
A
Okay. All right.
- [45:55]
G
Your kids have to know this. My daughter loves this thing.
- [45:58]
A
You remember? Well, I don't know. Remember Surge? Surge.
- [46:02]
F
I love Surge Green. Oh, it was absolutely trash.
- [46:05]
G
It was so great.
- [46:06]
A
I don't know what happened to that.
- [46:07]
G
Okay, this is sweet.
- [46:09]
F
Wait until we're tight on time.
- [46:10]
E
Ready?
- [46:10]
D
Okay.
- [46:10]
G
Ready? Flip it, guys.
- [46:12]
A
Yes. Probiotic sodas.
- [46:13]
G
Sodas.
- [46:13]
A
Salty, salty sodas.
- [46:16]
G
Dirty soda. Do you know the dirty soda?
- [46:19]
E
No.
- [46:19]
A
Tell me about it.
- [46:20]
G
Mountain West Texas, the Hulu reality show the Secret Lives of More have made it popular.
- [46:26]
F
I do very.
- [46:27]
G
You're not a fan of the stupid artist of women wives. Okay, the winner is. Christina. Yes. 20 again for the second week in a row.
- [46:36]
F
That's two to nothing. But I will say you did beat me in almost every rehearsal. So it's just. You'll come back.
- [46:41]
J
You'll come back.
- [46:41]
I
All right.
- [46:42]
G
He's feeling good.
- [46:42]
A
Lisa Mateo, thank you very much.
- [46:44]
G
You tried, David Gerd.
- [46:44]
A
I'm very proud. That's all I can do on this show is try. You can test your knowledge on all 10 questions on the pointed quiz. If I have no shame, I will go do that after the show. You can take it@Bloomberg.com pointed. You can find it on the business app as well.
- [46:58]
F
Thanks for joining us on today's Bloomberg this weekend podcast. Don't forget to tune in live for the show every Saturday and Sunday morning starting at 7am Eastern.
- [47:06]
A
We're on Bloomberg Television Radio and the Bloomberg Business app bringing you unique takes and in depth interviews on news, politics, lifestyle and culture.
- [47:21]
C
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Deadlines shift, plans change and sometimes you
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