Global business news twenty four hours a day at Bloomberg dot Com, the radio plus mobile lact and on your radio. This is a Bloomberg Business flag BOM Bloomberg World Headquarters. I'm Charlie Pellett. The Dow, the SMP nez dak at or near their best level of the day. The SMP up eighteen points to two thousand ninety four, signs of a stronger economy, spurring speculation that can withstand higher interest rates.
SMP five d indecks up nine tenths of one percent. Down, Industrial is up one eight one now a gain of one percent. Naztan cop forty points, a gain of eight tenths of one percent. Ten year yield one point eight six percent. It is down one thirty second right now, Gold dropping five ten the ounce to twelve twenty four, a decline there of point four percent. Crude oil rallying two point two percent. West Texas Intermediate now at forty nine seventy of barrel. It is hired by a dollar eight.
I'm Charlie Pellett, and that's a Bloomberg business flash. You're listening to taking stock with Kathleen's and pim Flos on Bloomberg Radio. You know, one of the benefits of broadcasting live from the Bloomberg Breakaway Summit, which is a two day conference springing together a variety of executives select group actually of high growth companies as they get to hear directly from chief executives of companies that have really made it, that have made some kind of major transformation. And so
here's a little quiz. All right, the stock of the company of the chief executive we're going to talk to the stock of the company is of twenty so far this year. They're based in Chicago. And everyone listening, Kathleen, everyone listening has been in close proximity to this company's product today, probably and certainly for their lives. Who do you think it is? Well, go ahead, you can tell it.
Scalfe's chairman, president, CEO of us G Corporation. And there are a construction materials manufacturer that basically Jim helped turn the putting around with a new kind of wall board. I love this story, you know, I think you and Jim no, Jim metcalf thanks very much for for being here. Much appreciated. Um do we do you justice? I mean, have we kind of wonder for us story a little bit here. Well, we don't have enough time for the entire year. All right, Well, I will say, you know,
everyone knows our product rock rock. So there's one of our one of our brand that uh we been. So we're going to take a little closer look at that kind of thing. You know. It' funny. Can I remember as a kid, al when I got to think of sheet rock wall board, I could think of my uh dad who was the home handyman putting it up, cutting it. I just I could just and you know that it's kind of gotten. Was a sper at one point. I
remember the smell. He was a good customer. He started way back in the day when I started with us. She but you know, we're more than just sheet rock. We're building products. And I like to say what we do is we build shelter. It's where you live, it's where you were. Can you play like you said, everyone's everyone's around it and U uh more than just walboard, we make ceiling tile, we make steel. We really build shelter. Uh for for the environment. You started at us G
as a trainee. When was that? And what was yes? Started thirty five years ago? Uh right out of school. I grew up in Ohio and western Pennsylvania area and and drove out west and US Gypsum Company was kind enough to offer me a job in the middle of a recession and started out. What's great about that, I'd like to tell young employees that you can start out at the ground floor and be a trainee and work your way all the way up to be and be honored to be the CEO of a wonder of a
wonderful company. Tell us a little bit about the technology that you're employing. Because you're making board, you know, you're making the stuff lighter, lighter, easier to use, and you're making it more vironmentally friendly. Doesn't necessarily come to top of mind, but actually it's that's why it's so difficult to do it. We we really we reinvented a product that's actually today and this year is a hundred years old.
So walboard was invented sheet rock. Walboard was invented a hundred years ago, and it was a replacement for plaster. And you think there's still buildings with plaster in and it was it was a new invention. So we really re revitalized the line because it was heavy. It was hard to cut um. It was not. We used too much energy. We drive off the water. So we made it thirty lighter, made it stronger, and also we're using
less water. One of our strategies is used fifty less water and all of our manufacturing to really reduce the carbon footprint of of construction. But you know, there's to me that is that's such a dramatic and in human element of this story because when the housing market collapsed in two thousand and eight, that hit us g really hard because all that's that that gypsum walbarb were gonna call that you were selling all those building materials. Suddenly
demand just you lost of your demand. So you got your people together, you had to downsize. You figured you could make this new product. You guys, your your team's told you about three years. He said, no, I've got to do it in a year, right, right, Well, you know we didn't have a lot of time because it was in two thousand and eight. I'm sure every want to remember it was a perfect storm in the financial you know arena, but also it had a ripple effect
in all of our markets. You know, housing was one thing, but we sell in the commercial buildings that was down even more than housing, and then repairing the model. The home depots quit building stores, which he had never done. They're always building stores. So each one of our markets, really I called it, you know, it was a tsunami. And we were not in a recession. We were I called a small d depression, and we had to create our own recovery. Waiting for housing to come back, waiting
for the market to come back. We just didn't have the time to do that. Our balance sheet was under stress and we needed to change the rules. So we put together our strategy, which I called the Plan to Win. We wanted to strengthen our core businesses, which has made manufacturing and distribution in North America. We wanted to diversify our earnings, so we had to get out of some markets. We got out of Europe, and I used the term we weeded and feeded. We weeded some areas where you
can't win. And the definition that you heard it before, you need to be number one or number two in the market, and we were not that strong in Europe. So we took those funds and reinvested in Asia and Austro Asia. That helped us diverse fire earnings to a joint venture which has been very, very successful called us D Borrel. But the third element, which is the most important element of getting everyone together kind of things you asked,
was we needed to differentiate to innovation. And that's where I got our best minds together and said, what is the one thing that we're working on that we can rally the troops. And it was called ultra light and this is taking less weight at taking weight out, keeping
it stronger. It doesn't sag, it performs and from a productivity standpoint, to our contractors that were under stress, it gave them an advantage in this recession because we weren't the only ones that were suffering the contractors, the distributors. Distributors didn't have to buy as much equipment, so it had a big trickle down through the entire network. But we couldn't do We didn't have three years to wait, so focus. I focused the organization. We've had all hands
on deck. We quit doing some things, we stopped doing other projects, and I was personally involved in the rollout of this. If there was an obstacle, I want to know who was on it. I'd like to use the term one neck to choke, So who was involved with that and what do they need to do and how can we shorten that? And what we found was the corporate immune system made it three years. When when I gave everyone the open plane field to say you can do You're so good, you can do this in the
less time. It gave them really the energy to say why not. And for me, being the new CEO, I needed a morale booster because we're letting people off. We were closing down factories. That's not fun. I hate that. So I needed something as a leader. And you know, it wasn't a hail Mary. But we weren't sure it was gonna work because, as you say, Pim, it's very it's counterintuitive. You're taking mass out of a product. It's just as strong, it's lighter. And we were We have
these wonderful scientists that came up with this invention. I mean, it's really all about the bubbles, you know, the bubbles in stucco. It's all about goes, how does this work? What does We can't tell you. I like to say we put like magic pixie dust in it, but it makes the bubbles stronger. So when you say how they get lighter, it's all about the bubbles. I gotta ask you about age, not yours, not mine, but the buildings in the United States, particularly residential and commercial, tell us
about that. That implies they're getting older like we are. Okay, we're making them better because we can remodel those and that falls half of our business is repairing remodel. So the commercial buildings that we're looking around at the beautiful city here are the average ages forty forty years old. So you know you have to you know, there aren't environmentally sensitive you know, the the attendants want uh different lighting, you know, heat, I mean, everything's changed. So we come
in and we remodel a lot of these buildings. Housing. Uh, the average house is forty plus years old. So that's why we've really focused on repairing RAM model because our products are a fairly inexpensive repairing m model in your home, build a new home, get your kids out of the basement, you know, hopefully they go get a job. So it's a really important So we look at that that overall demographics of you know, the demand of of our products.
So isn't that with driving your business. A lot of concern about the economy is still the companies haven't been investing. FED might raise interest rates because they want to get off the dime. As a CEO of a company that seems like it's doing very well, how does that How does this all feel to you? You know when people ask me about the ec on me, I say, it depends where you are in the economy. If you're an oil and gas, you're in the railroads business. I think
they're in a different spot. They kind of were where we were maybe in two thousand and eight. If you look at overall construction, if you look at the household, household growth and the birth rate, you know, we should have about a million four starts. That's kind of the mean, that's the historic mean. Right now we're a million, one million two if you look at the commercial repair and remodel. So we think, you know, the next few years. You know,
we're cautiously optimistic. Um. You know what's great about the United States? People are still having babies, population growth, Uh, interest rates come up a little bit, they're at historic clows. Doesn't matter. I mean, we really don't. We are not as interest rate sensitive as a lot of people may think. And you've got the bubbles under control. We got the bubbles and they're stronger and faster than ever. All Right, Jim mc if you're gonna have to come back, I'd
love to thank you. Harley, Wait, thank you. Jim mcalf as chairman, president, and CEO of us G Corporation based in Chicago. However, today he's in New York City, where we're broadcasting live from the first ever Bloomberg Breakaway Summit. I'm Kathleen Hayes along with Pim Fox, and this is taking Stock on Bloomberg Radio.