Ferrari Hires Tech Pioneer As CEO

I probably read more of Michael Dean's research than anyone else on the Bloomberg terminal. Um now, I definitely do, and he joins us now to talk about Ferrari's news CEO. Michael, It's been a long time coming. We've been waiting for a name to replace Louis Kennellieri, and now we get um someone I never heard of from st Microelectronics who designs what like touch screen interactivity. Yes, that's right, Um.

I haven't heard of him either, and he's certainly unknown to also invest this but shouldn't be a surprise because it was only back on April fifteenth that John Alcan, the Ferrari CEO and chairman at the time, said that he wanted someone with the background. So that's what we've got at the moment. All right. But you know, I'm not a car geek like Matt Miller and you and Kevin tain In. But um, I love the sound of, you know, a Ferrari wearing down the street. Here. What

happens when they become electric? Yeah, that's a tough one because if you listen to the officiados, they will say, you know, we don't want electric. That certainly happened to Porsche. But we've seen with the take and it can be very successful. And we've seen from the competing luxury brands such as with Lamborghini, Bentley and Rolls Royce they all have electrification strategies. That's the way it's going. And even Ferrari have said they're going to have their first battery

electric vehicle in two thousand and twenty five. You know this. Yesterday I was listening to David Weston, he was interviewing one of Ford's big execs on their new pickup truck. That, um, it looks pretty cool. It's less than twenty dollars. Um it's the Maverick. It's a small, smaller pickup truck. But it's going to be a hybrid, And David said, why didn't you go fully electric? Like doing a hybrid was almost to fail. No offense to David, but that's kind

of the general. Um, that's the general thought right now. Why is fully electric considered better than the hybrid, which to me is a far better solution. Well, I think it's all to do evaluation. If you look at um where Tesla is valued and the legacy automate makers want want to have some of that sort of tech evaluation rubbing off on them, and they can't do that unless

they're fully electric, or that's the perception. And that's why Volkswagen has had such a good run this year because it's jumping in with both feet in terms of full electrification and it's probably gonna overtake totaled by two thousand and twenty four. And hybrid is seen as a halfway house, you know still you know, combustion engine and only half electric and you know in a few all cars will be fully electric. I'm sure boy. All right, So Michael,

where is Ferrari? You kind of suggested that they're behind some of their key competitors, like portion Lamborghinia. Is that this year has underperformed shockingly. Yeah. Yeah, I think part of the reason is because they don't have a well defined classification strategy. So their target was to have of their vehicles sold next year being hybrids. They're well behind

with that. So what the new CEO has to do and what will probably happen in the first quarter of next year, has come out with a well defined electrification strategy, also a carbon neutral strategy. That's all satisfy investors. What does this mean for the super fast V twelve? Is that going to go the way of the stick shift at Ferrari? Yeah, I think so. So they just announced a special edition V twelve which sells for half a million euros, only making five hundred of them, so getting quickly.

But that could be the last V twelve on Ferrari and probably the next main engine that they'll have will be a V six hybrid. Yeah, Matt, you should know. I've asked Michael Dean on many occasions in his interactions with BMW to bring back the stick shift for the five series here in America. They've discontinued it. I'm just crushed here date Michael. Michael has tried to no avail. I actually Uh. There was a time at Fiat Chrysler

when I sat down with Sergio. They were just putting out the Alfa Romeo fur C and I said, why don't you make a stick shift? I mean, this is the car that needs to have a manual transmission. And he said, Matt, you and I would be the only buyers. And Michael, that's is that a is that a global trend? And mean it seems like I see more stick shifts in Europe than I do. Certainly U US you don't

see CEO many of them anymore as a hit. But I would say, you know, driver Porsche taken and afterwards say that you know, electrification isn't bad for for cars going forward. I'm sure it's amazing. I haven't driven one yet, but I would miss the the roar of the scream in the terms of the boxer. Michael hind Me, Michael Dean, thank you so much for joining us. Always appreciate chatting with you with particularly Matt appreciates chatting with you talking cars.

Senior analyst, he covers the European automotive business. Good Partner with Kevin Tyiny New covers the the US Auto Guys and a together put out some great global research on the global automotive business for Bloomberg Intelligence and b I Go and you can find all that good stuff there. Let's talk about cybersecurity because we've seen so many of these ransomware attacks UM, Colonial Pipeline and JBS the biggest of late UM, but we've also seen issues pop up.

Yesterday it turned out to be maybe a fat finger on the part of fast Lee, but it kind of freaked out markets for a moment. We saw charts go a little bit haywire when um the Internet appeared to stop working for a moment. Shannon will Coinson joins as founder and CEO of to Go Cyber and just just in terms of what we saw yesterday, Shannon turned out to be nb D, but for for for a moment, it seemed as if something horrible may have happened. Is it possible that a cyber attack could just shut down

the Worldwide Web for a little while. Absolutely, it would be interesting. And if you remember, a couple of years ago, the Internet went down on the East Coast due to another fat finger configuration error at one of the domain registry services. So it's absolutely possible either that a cyber attack or one of these engineer issues could absolutely take

the Internet down. And even Russia had some issues with their Internet when they tried to do some sort of blocking of Twitter and some of the social media platforms that at their I s P. Level, Um, they actually fat fingered or made some configuration errors and took down the Internet than Russia for about half a day, I think it was. So it's key. It's key to point out that doesn't mean, um, it's not simply you know,

no more cat photos on Instagram. There are ways that the Internet works, um in these times, you know that that are vital to human life, right, Yes, absolutely. I mean we live in a very connected world and we've seen this migration the to to the cloud as well as digitalization of business, so everything is connected now. Businesses are relying on Internet cloud providers to provide essential business services, and when those services aren't available, business stops. Shannon, it

just seems like it's getting so much more frequent. Here, give us a sense of how much of this is just you know, a knucklehead in a garage somewhere, you know, up to no good versus maybe some state actors or organized crime. Where is this all coming from? It's definitely a combination of both the Colonial pipeline and the JBS is those are more state sponsored affiliate cyber crime groups.

And then you you also have on the flip side what is known as the script kiddies, the the you know, atypical hooded, basement dwelling hacker that you know it is just going out there for fun and seeing what you know, kind of disruption or damage they can do. UM. So it's definitely a combination of both of those factors, and businesses just really need to um think about their services and what they do and how much they rely on

their technology for business. In the Colonial CEOs testimony to Congress yesterday, we found out that they didn't even have a ransomware plan in place, even though they spend something like forty million dollars a year on cybersecurity. They never even considered what would happen if we got hit by a ransomware attack. They didn't even have a two step security process us. I mean, I can't even log into my computer at work without submitting my fingerprint or you know,

a code from a token in any case. Um. There there's the opposite side of that, right, Like, um, the company that runs crack, and we had a great story about them. They have gone as far as to make your kids, eight year old kids sign n DA agreements when they go to company picnics, And you've got to change into everybody wears the same clothes at work UM so that they won't be able to the the bad guys, won't be able to tell exactly who you are. You've

got to kill all your social media UM profiles. How far do do companies need to be going, Jen, I think it's about finding a balanced crack. It might be going a little bit over the top on their security protocols, but I think it's about finding a good balance of what makes sense and what a secure So definitely ensuring that you have two factor authentication. I mean Colonial Pipeline

we found out. I think Bloomberg broke the news, but it was due to a single compromised account at Colonial Pipeline that was the factor that resulted in the ransomware attacked there. So a single employee account allowed the ransomware

to be activated on the network. So enabling two factor authentication, having security protocols in place, having plans for when incidents occur, and just really finding a good balance between what will not disrupt the security the operations of the business and what's a good balance for security at the business as well, So you know, kind of a marriage of business strategy and cybersecurity strategy working together to make sure that the

business can continue operating in this new digital age. Shannon, thanks so much for joining us. We really appreciate getting your thoughts on insight on this rising issue ransomware in corporate America. Shannon Wilkinson, founder and CEO of Atago Cyber Well, before you flashback, you know a little bit more than a year ago when we started this pandemic and the resulting economic contraction that we experienced was just extraordinary historic.

But the recovery has been as well. As the vaccines get in across the US, the economy is reopening and we're seeing that in the stock market as well as a lot of those reopening players are working very well. For investor Brad McMillan. He's a Chief Investment Officer of Commonwealth of Financial Network. They have about two thirty two billion dollars in assets under management. So a couple of shuckles there, Brad joins us here. Brad, thanks so much

for coming on. I'd love to get your thoughts here as we look back over the last fifteen years and again, the beginning of the pandemic, the contraction in the economy, and then the reopening, how are you telling your clients to position their portfolios here as this reopening seems to be really gaining some momentum here in the United States.

I think it's important to put this into context because when we talk about the pullback, when we talk about the recession, yes, of course it was the pandemic, but it was really from an economic perspective, the policy response the pandemic that sunk the economy, the shutdowns. So when you look at this what we're seeing, you know, yes, we've seen a fantastic recovery. Were largely just recovering back

to the previous trend line. So as we moved past the pandemic, it's about the economy, and the economy continues to do extremely well. You know, I think we've still got some more upside ahead. But wasn't there any serious damage done by the government stepping in and shutting everything down? Well, of course there was, and that was the pullback, But

then the question becomes how lasting is that damage? The damage was real, and it was substantial in the short term, and if we if the government had left it at that, then we very well might be looking at the depression right now. But that's not what they did. They gave the cushion to us through that and to get us back to reopen it. And because of that, we're simply in a place where if you look a year on year, absolutely huge huge changes. If you look over the past

two years, actually we're still pretty much on track. So, Brad, one of the things that you know, I think about a lot is kind of how will consumer behaviors change or will they change post pandemic as we come out on the other side of this. For example, will people go on cruise ships, Will they you know, go on planes and things like that with a go to movie theaters?

How are you thinking about that? And if you made any you know, investment calls based upon what you think might be some changing consumer behaviors, well, certainly when you look at the airline numbers, you know you can make a good case that weas your travel is well on its way back. The real question there from an investment perspective is going to be our business travelers going to be coming back because that's where a lot of the profits come from, and there I think the news is

a lot more mixed. So certainly when you look at the headlines, I think it's fair to say people are changing their behaviors. I don't think the the extensive use of internet shopping, for example, is going to go away. People have found out how easy that is. But more common things like restaurants, absolutely they're coming back, and I

think the market has already gotten ahead of that. I don't think there's a lot of opportunity there at the moment, but certainly, you know there was some money to be made about what that, you know, six or eight months ago when the uncertainty was at a peak. So where is the opportunity. I mean, if you've got spare cash sitting around, need to put it to work, what do

you do with it? I think the stock market in general is a good place because when you look at the earnings expectations and how the markets priced, we're still in a position to see earnings go up. I think healthcare there are some opportunities that still very much. We're

seeing a revolution, particularly in biotech. You know that hasn't been fully appreciated yet UM some firms are now putting in UM requests to evaluate vaccines for the slow and if that comes through, I mean obviously that would be huge. So there's knowledge opportunities. If you want something that's a little bit more basic, I think financials. I think is the economy normalizes, we're going to see the interest rates normalized, and that's going to give a tail wind to financials.

And I still think there's some opportunities there. So, Brad, is this economy reopens. One of the things that you know, economists are really looking closely at, certainly is the employment getting people back to work, and we're still we've had a couple of months of kind of blow expectation job numbers.

How concerned are you about that? Are you concerned that perhaps something structurally may have changed in this economy where you know, some of those jobs just aren't going to come back if you go back that that's a common fear, and I don't agree with it. I was actually just looking at that this morning, because if you go back to prior crises with typically happens is people move out

of the labor force. Okay, so they say, okay, it's not worth it, and then the economy starts to open up, wages start to rise again, and then they move back in. And that's exactly what we're seeing. If you look at the not in the labor force people, that's people who want a job that is right now at about the same level as the total number of jobs available. So it's just a question of getting those people back into

the labor force. And if you look at that, you can see them actually that you can see that happening. So I think that's the first thing. This is a totally normal process. We've seen this movie before. I think the other thing that is getting people a little too wound up is they're saying, how do we get back to the record low unemployment levels we saw before the pandemic. Frankly,

that was unusual. If you look at the averages will be if five is a pretty normal unemployment rate, we should be there in the next three to six months, and after that it's just real progress. So I think by the end of the year will be falling. Brad, thanks very much for joining us. Brad McMillan is the

chief investment Officer at Commonwealth Financial Network. As Paul says, they have two hundred and thirty three billion dollars under management, looking at a continued recovery for the economy, back to the trend that we saw before the pandemic. And as he points out, that trend was very good. We were doing quite well economically before this thing hit and we shut all of our businesses down. This is Bloomberg alright, Matt.

You know that one of the reasons I always love these big take stories is because they often get me to say, I didn't think of that, or you know, that's how it works. Um. This most recent story, we're talking about big oil companies. Matt. We've seen all the news shareholders forcing them to go green, you know, reduce their carbon footprint. But there's still demand out there for energy. So who's filling that void as some of the big majors pulled back? Kevin Crowley, he's a US oil reporter

for Bloomberg News. He joins us with his big big take story entitled the Retreat of Excellent and the oil Majors won't stop Fast or fuel. Kevin, thanks so much for for joining us here, and I love your story here because it really goes to the issue of Okay, Exxon and Chevron and Shell and all those guys. They're pulling back on their energy footprint. But who's filling the void exactly? That's a that's a that's the big question. And really what we're saying here is it's national oil companies.

So those from those from Saudi Arabia, those from Russia, those from those from parts of Africa, these are these are these are companies that um, you know, less transparent and and and have a less strong climate record UM and also m really are only beholden to their to

their national governments. They do not have the same kind of shareholder pressure that the publicly listed entities have UM and so UM we by the oil majors retreating it, it opens the gates for these companies to come in and fill the gap, which will pose a new challenge

for climate activists going forward. I mean, the headline could well be climate activists that oil majors shoot themselves in the foot, because basically they're they're convincing UM, you know, these publicly traded companies to hand back oil production or hand over oil production to UM Chinese nationals, Russian nationals, Middle East nationals, and they're not going to do such a great job when it comes to um shrinking their

carbon footprint. Well, I think that's I think that, I think that's true, and I think, yeah, but I think I think the climate movement is focused on the oil because it's really it's the it's the lowest hanging fruit. UM. And so you know, these were these are these are companies that are beholding to their shareholders and climate activists you know, have worked over many many years to you, um,

to to gain influence through through the shareholding. Mean, the most recent example was exceon Um lost three directors just just a few weeks ago as a result of growing climate climate activism. UM. But it's and it's not just the climate activist Kevin I noticed recently when Congress was questioning CEOs of the big banks, they were chiding them for doing business with big oil majors, almost throwing national

um security, energy security concerns aside. But that's right, that's right, Yeah, it's it's under pressure from I mean, these or companies under pressure from from political class. They are under pressure from the from the banks who are looking to clean up their own carbon footprint, shareholders, consumers, everyone, everyone, everyone around,

everyone is rounding on them. Now and I think, but I think, but I think it's it's it's really it's a They are the lowest hanging routs here, and I think the climate movement thinks that, you know, we can we can get these guys to change the Exxon Chevron's shell vps of the world, then other other other companies will will fulfall in line and will follow because while the oil majors only produce around fifteen percent of the world oil at the moment, they are at the forefront

of much of the technolog technologies around and they do lead. So the thinking is that maybe you know, some of these national oil companies will start will start to follow their lead if if big oil does make a successful pivot towards greener energy. It's interesting because you know that part of your story where Exxon was getting out of an Iraqi field, and you know they tried to sell their steak, but nobody else would was even bidding forward. So then I guess Iraq had to come in and

buy it, or China or China altos. Right, Well, the process, yeah, the process is ongoing, but it's actually a remarkable it's actually a remarkable turner turn of events. I mean, this was this is this is one of the prized oils after after the Second Iraq War, exons stepped into to take it, and really it hasn't really performed UM as well as they would like. If they're looking to they're

looking to get out of it. But as you said, as you said, none of the none of the other majors want to take it, and their Iraq UM made a statement that actually they were interested in buying it themselves, which is which is remarkable. Really mean, whether it whether it actually happens or not, is a is another thing. But the fact that they're even considering taking taking the stake is it's quite as quite a remarkable curn of events. And of course the other option then is the the

Chinese state state or backed companies. So either way, UM, this field is likely to move out of the hands of a Western super major and into the hands of UM state state backed entity, which which are far less transparent than the ones than the big oil companies. That you have to wonder at some point if the US government another Western governments are going to say, hang on a second, this isn't working out the way we wanted

it to. UM. I noticed in your story that Mexico's pem X, for example, is set to buy a Texas refinery from Shell. So it's not even just properties abroad that are going to these nationals, it's even um, you know, part of the infrastructure on home soil if you will.

That's right, that's right. That was That was That was another surprising turn of events because you know, obviously most of the time it's the private, private oil companies you know, buy assets from or investing with state owned oil companies. And really in this in this situation Pemic and Shell, we're actually having the the reverse happening. But really it

comes back to demands. Um, you know, if if assuming demands that stay strong as it has, the demands for oil and gas as strong as it has done done coming out of become of the pandemic, it really this whole retraction from from the major's really opens the door to the to these national oil companies, you know who who are going to be the producers of of last aws.

So you know, while while we while the West is doing certainly doing a job on the supply side, I think the big big challenge really is to to reduce fuels is on the demand side. As long as people keep consuming oil and gas, keep you, companies will step in to produce it. Now, whether that's the majors or whether that's the national oil companies, you know, it's as long as people are using oil and gas, um, you know companies are going to be there to provide it. Absolutely. Hey,

great piece, Kevin. Really love UM the Big Takes series and I love this one especially, So congratulations on that. Kevin Crowley, Laura Hurst, and Rachel Adams heard writing the retreat of Exxon and the oil majors won't stop fossil fuel. Check it out and I Big Take Go. This is Bloomberg. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter

at Matt Miller V three, and I False Sweeney. I'm on Twitter at pt Sweeney. Before the podcast. You can always catch us worldwide at Bloomberg Radio. M