Surveillance: Hertz EVs With Tom Brady

Good morning, Tom, Good morning to you. I'm down here at Times Square. This is part of the NASDAC and I'm with Tom Wagner nighthead Capital Management, Greg O'Hara, up Sertaris, and Mark Fields, the interim CEO of Hurts. This trio, Tom is responsible for one of the most remarkable corporate turnarounds in American history. Back in May of two thousand twenty, Hurts foiled for bank see last night. It went public again at a share giving the company in market value

of some thirteen billion dollars. What are remarkable turnaround? Greg would like to begin with you Hurts stunned not just the auto industry, but the financial markets with this order for one hundred thousand Tesla's. Why make such an early bet on electric vehicles, Why take the risk of being the first mover. As you know, if we're in the travel industry, we've got we've got to investments all across the travel industry and providing people with the products they want.

It was an easy decision for us. So we know our corporate travelers want electric vehicles to go visit their clients and and and do business in. We know our leisure travelers want electric vehicles. It's a great way for them to try electric vehicle without committing, And specifically they

want Tesla's. They like Tesla's and they'd like to rent Tesla's. So, in combination with understanding the demand is there, and an opportunity to get a very hot product and amazing product that allows us to put it in the hands of people who want it, was an easy decision for us. Tom At the ip O price of twenty nine dollars a share, you've pretty much tripled your money in the space of four months, which in and of itself is remarkable. As you know, there are some skeptics out there, haters,

you might call them haters. They don't believe in your story. They say Kerch doesn't have a firm order for Tesla's. They say Elon Musk is dumping model freeze. What can you say right here, right now to address some of that, let's call it confusion. Well, I think that there's no question that there's an incredible amount of demand for our products. Generally, we have a very robust environment for the rental car industry. We expect that to continue. We're very focused on bringing

products into our fleet. As Greg mentioned that we know people want to rent. There's no question they want to rent Tesla's, There's no question that they want to rent you know, higher value vehicles from all the O e M s. There's no question. It's a big move a

foot to electrifications. So, you know, for the people who doubt what we're doing, um, you know, we we would simply ask if they stay tuned and watch what we have to come because we think that this is just the beginning of an effort to put Hurts at the center of mobility in a way to serve our O e M partners and to serve our customers, to provide a better rental experience and a better corporate partnership with those parties. Mark these other guys here, Tom and Gregg

their financial guys. Right, you're a real economy CEO. You ran forward, you know all about operations and execution. One of the biggest challenges Hurts has to overcome in this move to electrification and the transition to what we might call share mobility. Yeah. Well, first off, first off, I

don't look at me as challenges. I look at at a huge opportunities because we're really staking ourselves out I think a very important place in as Tom mentioned, this mobility ecosystem, wherever mobility two point oh goes obviously clearly as we look to lead an electrification can sure we get our charging infrastructure in place that's happening as we speak, and then be able to you know, that first mover advantage of learning how to manage these large electrified fleets,

I think is going to give us a very big competitive advantage, not only in the near term, as Tom and Greg said, to get customers into these vehicles that they want to drive, but more importantly, you know, in business you have to start looking around the corner. So as you think about autonomy down the road, those are large electrified fleets. I think We're gonna be well positioned to work with a lot of different partners to make

that happen. That's an important point. Some people think of this as just an e V play for rental car customers. What what do you mean by these lords? What is what is fleet management and why is it important? Well, first off, it steps back and about our overall corporate strategy. And you mentioned this is not only a turnaround, this

is a transformation of hurts. And looking around the corner, you have to look at the big trends, right mobility, Uh, you've got electrification, shared mobility, can at cars, autonomy, and we're positioning the company for the things that we do better than anybody else, which is managed large fleets. We do it economically consistently all around the world. That is

going to need that. That the the ability to manage those fleets and mobility two point out, somebody's going to have to do it and we're the best at that, and we want to position ourselves. Avis, as you might know, is trash talking her. It's on the conference call just a few days ago. Knowing what you know, Tom directly from the manufacturers. I might add about the current and future supply of electric vehicles. What are the chances that Avis or maybe enterprise is going to catch up with you.

I think that over time, we'll see all of the rental car companies transition to e vs. And I think that that will happen because it's what we believe consumers want Today. There's is certainly a huge percentage of the population that really wants to to drive electric vehicles, and we think that will only happen with increasing speed as time pass us. So I think it's a natural evolution

for the industry to to take. And I think you're seeing that on the O E. M side, You're gonna see it on the product delivery side from the rental car companies, You're gonna see it in right hill. So um, I think this is the first step of a large transformation and a process of bringing electric vehicles into mainstream. And you know, we're happy to be, you know, playing

our role in it. You know, our goal is to provide our customers with what they want, and we believe that this, you know, this effort really hits the nail on the head in that regard. Now, I want to point out that unless you've been living under a rock, you will have seen that Hurts has a pitchman and its new commercials for these electric vehicles, these Tesla's. He happens to be a super Bowl winning quarterback. His name

is Tom Brady. Tom, Here's what I've been wondering. Why would a super Bowl winning quarterback you choose to star in ads for a rental car company? What is it about the Hurt story and the transformation plan that resonates with Tom Brady? Well, first of all, good morning. Uh, nice to see You've got some great guys up there on the stage with you, And wish I could be there in New York, but I got football practice today,

so I got to do my job. I think obviously it starts with incredible leadership, and I think Tom, Greg and Mark really provide that. And uh, you know, I've got great faith in the leadership team, and I think they're building and reinventing a great business. I've been someone who's uh been a customer of Hurts for a long time, and I think their move to electrical vehicles is super important.

And when Tom talked about what the opportunity was, um, you know, for him in this business, I certainly wanted to do my best to help promote people who are changing the world in a really positive way. So we talked so much about sustainability and actions that you can do on a daily basis that are sustainable for now in the future. And you know, this is one of those areas that you know, I feel really strongly about and I love partnering with you know, a great business,

a great business team that has a great mission. So it's a really fun campaign and I hope people really enjoy it. You drive an e v right, Tom, I do, and I have for for quite a few years. Which model and what was it that made you an e Vy convert? Well, I've had a Tesla for about four years.

And again I think it's a it's kind of the direction to the world is heading, and I think for me, it was about being really conscious about, obviously the impact that we all have on on our planet and the things that we can do as individuals to make progress

in the airs of sustainability. And um, I love the cars. Uh, there's a lot of companies that have followed suit, obviously, and as the guys up there, as Tom greg Mark talked about, that's kind of where where everyone's heading, and you know, it's a really cool time to be a car lover, and I certainly have and Tom always gives me a Nobody loves cars as much as Tom Wagner, believe me, and he always kind of keeps me in tune with what's going on, and he's really on the

forefront of the really cool aspects of carmaking. Tom, you're lending the credibility of the Tom Brady brand, so the Hurts brand. What is it about sustainability that resonates with your personal philosophy and are you deliberately trying to raise awareness around topics such as climate change. I think it's absolutely and I think it's um in a really broad,

you know, a scheme of things. It's about raising consciousness about you know, what sustainability means that you know, correlate so many of the things that are happening, you know, in my personal life to you know, my business life. And you know, I've thought so much about sustainability of my own body and what I need to do in order to treat my body a certain way so that it can continue to perform at a high level. And I think businesses are doing the same. You know, people

want to understand areas in which they can be more sustainable. Um. Certainly to help the environment, and you know, raising consciousness through electric vehicles and you know, things that we do on a daily basis. You know, as we talked about the mobility of where we all are. I'm someone that travels a lot. You know, I'm very mobile. But if I can do that in a more conscious way, um, you know, I think that's a great thing for the future. Tom. A quick question back to Greg O'Hara here. Tom Brady

has redefined sustainability. Is it concerns the human body? You guys are now in all of you are in the travel business versus in the Why is sustainability to the new theme, the new mantra and travel. It's not lost on me the dichotomy between me and Tom Brady. Um, uh and and and are sustainable bodies? Um? Mine's more disposable, I think than distinct and sustainable. Um. You know. One of the things that that people don't realize is, you know, Tom said a lot of things about why he does it.

One of the things that we can do as financial investors is promote an investment opportunity to people that allows them to invest profitably in in the um environmentally conscious area, right. And if you look at what we've what we've created here, it's an opportunity of a business that creates actual cash flow in the near term. And we can transform hundreds of thousands of vehicles and electrify them. Um not just that, but turn them into robotaxis. Our offer, we believe to

two Uber creates better opportunities for Uber drivers. Um uh. And we've got all kinds of things in the in the pipe. Not only that, but you know, the rental car experience has been the same for fifty years, and we're going to try to automate that rental car experience so that when you get to the airport, you just show up, hold your phone to the car and go. Greg O'Hara, Mark Fields, the two Toms, one more recognizable than the other, Tom Waggoner and of course Tom Brady.

We thank you all, and back to yet another recognizable Tom, Tom Keane, Eric Chesker, thank you. Sony Cupt you honest with us right now. He's the chief executive officer of Marriott. We're going to dive into an extended conversation here, Tony, I want to talk about Marriott optimism. You're leading to country with construction of a hundred and sixty six thousand, one seventy four rooms right now. I assume that's globally as well. Tell us about the optimism in the middle

of a pandemic that gets you to build twelve hundred projects. Yeah, we actually good morning by the way, Tom, it's it's good to be back. We have about over two hundred thousand rooms under construction globally, and I think that optimism is really based on our belief about the long term future of travel and tourism. Because of some of the supply chain issues, we are seeing some delays in construction, so many of these hotels won't open for one to

maybe even three years. Are you I don't mean to interrupt the Ford I know John and Lisa have a ton of questions to Lisa's looking for a new Marriott right where she lives. Uh to go in Tony. I'm looking here at your big impediment, which is the US government. How big an impediment has the Biden administration been in their reticence to open up as we improve in this terrible pandemic. Well, while we were disappointed and lobbied the administration hard to get the borders open. Yesterday was a

big day for US obviously, seeing international borders open. I've been traveling extensively internationally and there is enormous pent up demand from international travelers to come to the US. So I think today yesterday was a watershed day for the travel on tourism industries. It's Tony, We're all living in the amount is back big time, has being for most

of this year. You're aware of that. How are you meeting that at the moment, just in terms of getting the talent on board when you need to where you need them. How difficult is it at the moment signing It's improving, Jonathan, as you as you know one in five of the jobs that were lost in this country during a pandemic, we're in the travel and tourism sector. We've hired more than forty thou folks here in the

US since the beginning of the year. The challenge for US is the most acute difficulties we're having are in the markets where demand has come back most quickly. Um. But we think we've got a really compelling offering for future merit associates and we're seeing really good progress both in terms of the increases in the applicant pool and the number of folks that were able to bring on board. Have you had to shift the price to make that happen, Sony, or is that something to time is healed over the

last year. Yeah, there's a bit of of wage pressure again in some of the markets that have recovered most quickly, But again a lot of our focus is on UH career growth, training and development opportunities and in some markets some one time incentives to fill those vacancies. How much have you been able to pass along the costs to

the end consumer to people renting a room. Well, the really encouraging thing we saw in the third quarter, Lisa, we said that that revenue per available room globally was only twenty six percent behind where we were same quarter nineteen, But interestingly, average daily rate, which really equates to pricing power, was only four percent off where we were in the same quarter of nineteen. So we've seen really strong pricing

power through the recovery. When it comes to hiring, Tony, I do wonder how many people just said, who used to work in the industry, I don't want to deal with the hospitality industry anymore. It was really hard for me to be sent home for more than a year. I don't want to have to deal with people, and I'm still worried about a virus. It's going to take more than just a higher salary to get me back. How much is that what you're facing when you try

to bring on more people. I spoke at a CEO panel yesterday at the n y U Investment Conference, and as you might expect, this was the most significant topic, and it was really around the work we need to do as an industry deliberately to identify the prospective future employees, the opportunities that exist. I think travel and tourism for many years was viewed as a safe harbor set of industries, and to your point, the impact of the pandemic has

shaken some of that confidence. So we've got some real work. I want to talk about the tension that you deal with every day. You've provided leadership with save Venice over the travesty of the boats and the ships right up against the Basilicas and Marco. The view from the Grand Canal room of the St. Regis is pretty good. What's it go for at night? As high as we can go? But um it's uh an extraordinary hotel. I was just there three weeks ago. The renovation is stunning. How do

you cut this then? How do you cut all the population you want back? So Venice will sink versus your save Venice efforts. Well, it's it's an interesting dynamic and it's not limited to Venice. There are many cities and tourist destinations around the world that are wrestling with this notion of over tourism. John, I can see you, John and the Grand Canal of the CEO of Mary. This sounds very personal to you, Toh, not to me, because we know there's an annual visit that you make to

Venice every single year around Christmas. Just think the St Regis has a certain view of the Grand Canals, sort of caring with Gucci behind it. It works. That's Italy, Tony, let's talk about this and put you on the spot just a little bit. You've been going around the world, looking across geography, is working out who's got this right right now, you're perfectly positioned to talk about it. Everybody's got a different policy. You've got zero COVID over in

China's got very different tolerance levels around the world. Who's got it right right now, as far as you're concerned operating a business there, I'm not sure anybody has it perfect. And that's not a criticism. The most challenging thing for all of us that are trying to navigate this there's no playbook. None of us were around for the last great pandemic, and it's so unpredictable. Use you mentioned China during our second quarter earnings call, we talked about the

fact that China was back to pre pandemic level. It is not only an aggregate, but in each of our demand segments. You fast forward a quarter, you saw some outbreaks, you saw a hundred and fifty cities lockdown, and that had exactly the impact on demand you would expect. And so I think we're trying to share best practices. We're looking at at cities and countries that seem to have it right, but I'm not sure there's a perfect solution. Tony, good to catch up. Can you take Tom to Venice

with you next time? Just give us a break and you enjoy anytime. I'll pay for the boat sounds good to me. Sounds good to have no idea, John, what those boats costs, the power boats, and particularly one to marry I would do those gorges wooden boat things. They got what we feel like we're a template for his planning on vacation. Has nothing to do with a proper interviews and everything to you see me in a gondola, I mean I could see you in the back tell

making it happen. I could, I could see it making it happen. Sony. Good to catch up, so as always look forward to catching up soon, Sonny camp Of one of that Thank you, sir. We are thrilled to Claudius Som joins us today Bloomberg opinion columnists, but really one of the most articulate voices in um what I'm gonna call the social policy of the Fed, Claudius, Um, should we pick a FED chairman based on politics and social belief? So?

Absolutely not. But the reality is the Federal Reserve is in Washington, d C. And it is impossible to escape politics and all of those positions. And Biden has now got five. He's get to a point. These are political appointees. So I firmly disagree with people who have been advocating for Biden to have his chair, like knocking Powle out just because he was a registered Republican and Trump put him in place. But I mean, you know, if Ide

wants to do that, that is his choice. What is so interesting, Claudia, is if you look at the Wikipedia for both Powell and Brainerd, it is absolutely stunning the different path from Wesleyan College or Wesleyan University, I should say, in Princeton University. Have you ever seen a separation of two candidates as we see now? I'm not sure about that. I think that because Greenspan was there so long, I don't What I have been adamant about is that how

Embrainered are an amazing team. Like together they do so much more. And I think this could very well be because they come at it from different backgrounds. How has looked to Brainerd for a lot of intellectual leadership. I think they would be in a like a really knock it out of the park palace chair laylis vice chair that's often a chair and waiting position. Uh I just

I think it. The vent is navigating the most difficult period in its history since the Vulgar Area, and you era and you absolutely need the US people in all five of those pointed positions, Claudia, one of the difference is that people have pointed to between a Leo Brainard as well as J. Powell, is that Leo Brainard might be willing to look plast inflation and actually increase the target a bit more to allow inflation to run it perhaps a more persistent three percent rather than a two percent.

Do you agree with that assessment of her view and the potential for that to really shift FED policy? So I think Jay is is as committed to the new framework, which importantly, and we're going to talk about it a lot more this year, has broad based and inclusive employment. I truly believe Jay is the real deal on that. Leo absolutely is, and I don't think we have a choice now whether we're moving toward a three percent target,

that's a completely different discussion. And neither of them is going to I don't think they're going to need to go there, right, but but I think either of them will do what it takes and are committed to really elevate on par the maximum pointment Mandy, And that is really exciting. This is not the FED of even a few years ago. Claudia. We have to leave it. They're too short of visit. We look forward to speaking to

you seriously in the coming days, Claudia. So the Jane Family Institute here is front and center, a changing of the guard at the FED. We'll see where that goes. With Powell and Brainers. Joining us from the copy summit is Ola Collonnius, the CEO of Daimla. I want to start right then and then we can indulge you and

talk about some of the bigger issues. Where you are right now on the supply chain, are you starting to see things improve and if you are, West specifically said, well, this year we have been mostly affected by the semiconductor situation, and uh, we believe that the quarter three, what's the quarter that was most effective, and we're seeing a gradual

improvement in quarter four and going into next year. But there is still an element of uncertainty here, and the main chip suppliers have said that there will be restrictions also throughout the year of two. So we're not quite out of the woods yet, but we like to believe that we're kind of seeing the worst behind us. Mr Colonus, it is the most interesting thing to see Daimler run by a gentleman from the north, and I'm sure that's

been culturally fascinating culturally. There's a shift in America as well, led by Mary bar at General Motors. From where you sit, how do you perceive the effort of General Motors, Ford and the other in America to catch up with you on electric vehicle engineering. The whole auto industry is in a major transformation as we speak, and ultimately we will

go to a world with zero emission mobility. That is what we have Diamler has committed to through our Vision nine, more than ten years ahead of the Paris Climate Agreement. We want to go see a neutral SEO two, neutral not just with the product, but across the whole value chain, and we observe old and new competitors moving in the

same direction. What is the technological constraint? I remember over ten years ago the Detroit Auto Show staring in eye and what you were doing in power train, and it was a nascent part of green What is the industry

and Daimler's constraint forward to get this done? There has been any massive development on the technological side, much better energy density on the battery cells, more efficient power trains, so that now we're in a we're on the verge of having mass electric mobility possible and that's where we're making our bet sas Mercedes fence and investing from five forward in our new vehicle architectures going electric only for the whole market to transfer into a zero mission electric

only scenario. What needs to go hand in hand with this effort on the product side is infrastructure. We as an industry are investing a data as well, but this is a bigger one where across the industries need to work with each other and governments to make commitments to build up an infrastructure everywhere for electric mobility. That's the one thing that is going to also decide the pace of this transformation. In an interview last year at you said that in the next ten years you expect the

biggest growth for your company to be in China. Has that changed given some of the COVID policies, given some of the infrastructure challenges that the country faces as it tries to curb some of the leverage and spending. COVID has been a stress test for the whole industry and a supply chains as we men before, but we are very clear in our belief that China, in terms of market growth in this decade, represents the biggest absolute growth potential.

That does not mean that we're not going to focus on the other markets that we have North America, Europe and so on, Japan, Korea and other important markets for US for luxury mobility, especially sustainable luxury mobility. We see UH promising growth potential in this decade, but we have

to go through this transformation at the same time. So the forefront of our investment effort is to put in our capital into new innovative technologies, turn the power trains CEO two neutral and at the same time build up software architectures, the car as a service subscription models, tapping into new revenue pools that we haven't had before. Just quickly ahead from my good friend and colleague Matthew Miller, he wants to hand along the waiting list is to

the electric g Wagon. Do we know We announced the electric g Wagon at the Munich Auto Show and I was overwhelmed with messages from friends UH and fans of the Mercedes brand. Everybody loves it, they wanted. We're gonna launch it in the first half of You better sign up early because the line is going to be pretty long. I guess I'm sure Matt's already done that. Thank you, sir, great to catch up. An he's there, the CEO. John. I'm sorry, John. I can see him, and I can

see Matt in the electric g wagon. Can't you see him going around with that one? Lisa? Doesn't he half one already? I thought he has one in Berlin? You think an electric one? He that's that specifically. Glasgow has been more than interesting, a lot of what we expected and some surprises along the way, but no one is surprised. The immediately following Glasgow and what we do about energy,

the debate is well in Scotland. If you move from Glasgow and you go west of Edinburgh up the shore of Aberdeen, and then you go north north north to the Shetland Islands, there is an oil field. The First Minister of Scotland joins us this morning. Minister, thank you so much for joining Bloomberg. This is an oil field and I guess the decisions in Westminster in that. Where is the common ground and energy that you share now

with the Prime Minister of the United Kingdom. Well, I think the common ground is that we are both very committed to the transition to a zero future and as part of that to building up the renewable energy capacity for Scotland and the UK. Scotland has got massive potential in wind energy in particular on shore and offshore, but also some real potential in new and emerging technologies carbon

captured and storage for the example. There's also I think an understanding and perhaps the UK government and I don't entirely agree on the detail of this, but we must accelerate the move away from fossil fuels. We've got to do that carefully in a way that protects the people who are currently employed in that sector in Scotland around a hundred thousand jobs, and do it in a way that doesn't see us importing more oil and gas but

instead moving to the alternatives. But the world and the planet demands that we accelerate that transition away from oil and gas and fossil fuels generally. First Minister, we had a conversation with the Secretary of Energy of the United

States the other day. In her fallback position was that oil is a world price and that here you are with shell saying that if you develop this field it will allow for direct investment in energy savings in the decades ahead, in climate change advantages in the decade ahead, can you contain the benefit of these wells to make wind firms in the Shetland Islands and so much more well in Scotland has enjoyed the benefits of oil and

gas now for forty fifty years. Some would say we haven't enjoyed the economic benefits of that sufficiently, but that's another matter. But we have vast potential and renewable energy.

Our challenge now is to develop the renewable and low carbon sources of energy so that we can accelerate the move away from fossil fuels, because we see from the International Energy Agency and other very respected voices that the challenge of limiting global warming, the challenge frankly, of saving the planet, means that we cannot simply go on and on and on extracting oil and gas forever. Now for any government, it's not as simple as flicking a switch.

There are careful transitions that need to be done, and that is an energy to transition. We need to make sure that as we wind down dependence on oil and gas, we are increasing our reliance on the alternatives and also moving the people who currently work in oil and gas into alternative jobs as well. So it's complicated. Nobody denies that, and we need to get that transition right. But we're here in Glasgow in the midst of COP twenty six.

The warnings about the future, or perhaps lack of a sustainable future for the planet if governments across the world do not act to limit global warning warming are stark and simply cannot be ignored. So its minister, have you voiced an opinion on the Campbell oil field that I believe Thomas referring to yes, I have and what I've said, it is quite clear that just before I tell, well before I tell, let me just explain for your viewers

the background here. The Campbell development already has a license, it's had a license for about twenty years. It now has to go through a process of permission to develop that field, and I have said it should not be given that permission unless there is a very rigorous climate assessment done. That's currently not the plan of the UK government,

and I'm pressing them to do that now. There are many voices who would say no new oil field whatever, plat pass a stringent climate assessment, but at the very least it should be subjected to that test, because the plan right now to simply give it a green light without that climate assessment is not, in my view, consistent with our objectives to meet the names of the Paris Agreement. So you are concerned about the means end to getting

to a greener future. We've heard very confusing rhetoric out of CAP twenty six and heading into this confab, you said you hoped that a century from now people would look back and describe Glasgow as the place which really took the correct fork in the road for our planet, looking back on what's happened. Do you think that we can really say that? Well, I don't know yet, and we won't know until this COP twenty sixth concludes, hopefully on Friday. UM, But yes, I do hope, not just

for Glasgow's reputation a though, that would be nice. Glasgow is often described as the birthplace of the Industrial Revolution. It would be nice if future generations look back on Glasgow as, as you say, the point in history where the world took the correct fork in the road and managed to avert climate catastrophe. Are we going to get there? There's a lot of work to be done over the

next few days. I think there was over the course of last week are increasing degree of tentative optimism about the potential outcome of this summit, but that has not yet been delivered. What do we need to see on Friday? We need to see action, real action that keeps this objective of keeping global warming to one point five degrees alive, and that means near term commitments that will have global emissions by the end of this decade. It's not called

a decisive decade for nothing. And secondly, we need to see the commitments made more than a decade ago to fair climate financing so that the developed what old starts to repay its day to the developing what ald twitches experiencing the impacts of climate change and of course have done so little to cause the problems. So these are key tests of success and I really hope that we get there. But I don't underestimate the amount of work

that negotiators have to do over these next few days. Nikola, I think this is the first time we've spoken and not taught about Brexit. I think that's a success for respect. Doesn't that feel good? It feels good for me anyway, First Minister, thanks dying with us. Nicholas Turchin net At of Glasgow. This is the Bloomberg Surveillance Podcast. Thanks for listening.

Join us live weekdays from seven to ten am Eastern on Bloomberg Radio and on Bloomberg Television each day from six to nine am for insight from the best in economics, finance, investment, and international relations. And subscribe to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg dot com, and of course on the terminal. I'm Tom keene In. This is bloom