Bloomberg Audio Studios, podcasts, radio news. The investors are awaiting the University of Michigan's consumer sentiment data out next hour that could shut some weight on how evolving trade policies are impacting inflation and household confidence. Matt Miller sat down with Tom Wagner, the Nighthead Capitol co founder, in Lela, France, and asked him what the FED could be doing to stem inflationary pressures.
I do think the FED needs to cut. Yes, I don't think that. I think we're below target inflation, and I think that you can make an argument that some of the excess spread and rates that we have, you know, put inflationary pressures on key consumer products like housing and auto. Those are industries that are not doing particularly well at the moment, and I think they would benefit from a cut and are critically important industries, not just to the US economy, to the US consumers.
Let's go now to Laman for more because Matt Miller standing by with the CEO of Hurts. Yeah, thanks very much.
I do have Gil West here, the CEO of Hurts, and Gil great to get some time with you. I do want to talk about the business, but first I have to ask about your finish last night, Cadillac one two Hurts team Yoda locked out the front row for Lamar.
I mean, how did you do it?
It's historic stuff, you know. I'm a big gearhead myself race vintage and couldn't be happier, couldn't be prouder of the team and the partnerships we have. So it's historic stuff at the most historic racetrack in the world.
I always ask CEOs, you know, what's the return on investment when it comes to motorsport?
Because it's fun, So I get why you want to do it.
A lot of people see it maybe as a vanity project, but does it really feed down to the bottom line. Does your big Hurts logo on that winning Cadillac make a difference at the end of the day.
Yeah, it's racing motorsports, you know, it's part of our heritage. Hurts has been involved in motorsports longer than I've been alive. You know, me as a customer before I joined Hurts. You know sixty five Shelby Hurts GT. You know that. You know that drew me to Hurt. So you know, we're in the car business and motorsports are central to.
That in terms of your business, we've had some real worries about travel slow down in demand, maybe softer numbers than you would have wanted in the first quarter.
Do you see that picking up now in the second quarter.
Yeah, I think at an aggregate level, you know, we still see your over your growth, you know, as far out as we can see. I think the challenge has been the mix has shifted. So you know, government travels down a bit, but leisure travel, which is our kind of highest margin travel, is up. So while the mix may shift the US inbound government down, there's other other increases in travel as well.
Herts famously built up its fleet of Tesla's before you came on as CEO, and I know you've been working to get them down from I think about one hundred thousand. How have you worked through that inventory and is that part behind you now?
Yeah? Well, I think the whole industry probably went too far too fast with evs. For us, we've rationalized our ev fleet and we've reduced it, but more importantly, we've rationalized it around where the natural product market fit for evs are. So we've got a great partnership with Uber and Lyfts, so on the right Hill business that we support. There is a lot of demand for ev so we've rationalized most of the evs that we have around that.
We also have them allf airport rentals, which is another good product market fit much fewer at the airport.
You also are one of the biggest sellers of cars, and a lot of people don't know that. They think obviously of you as a rental car business. But if we see car prices go up, does that help your business because you can sell cars at a higher price, or does it hurt your business because you need to replace them at a higher price.
Yeah, I think we look at the buy in the sell, so the difference is what's key for us. Is an example, one of our strategies around our fleet is to sell more vehicles through retail, which then if you look at what we buy vehicles for ultimately what we sell them for, you know, it narrows the gap between the two and improves our depreciation. So it's a conscious part of our strategy.
You're right, not a lot of people know that we sell cars, but we're one of the largest used car dealer ships in the world, so we've grown our capacity to sell through retail channels. We do that our seals, we digitize the experience, we offer financing, insurance, everything, and then we got great partnerships in that space as well. But as residual values increase, it certainly helps us in the short run.
In terms of you mentioned the airport locations obviously, and then off airport is helpful. You're getting a lot more competition right now. What does that do to pricing if you have say sixth coming into fifty airports across America?
Yeah, well, I mean competition will always face competition. You know, we're positioned well. We've got an iconic brand, been here for over one hundred years for us. We've really focused and leaned into what we call back to basics. But it's running just a great operational excellence along with enhancing our customer experience. So we're differentiated and people want to rent from Hurts. And then from a competitive standpoint, we positioned ourselves well.
In terms of investors, we just heard from Tom Wagner, you know he at Nighthead.
They have well over fifty percent stake I think in the company.
And recently we've seen Bill Ackman get involved as well.
Does Bill want to call you up? Does he get you on the phone, Does he give you advice?
Yeah? Well, first of all, I mean we're really happy with his confidence in Hurts and his investment, so we welcome an investment, certainly welcome all ideas has included from all quarters, you know, as we're looking to transform the business. So he's got some great insights, he and his team, so we appreciate all the input we can get.
How do you transform the business?
I think of a future where we all get into a car that drives itself.
Is that a benefit to you or is that? Is that a problem for It's in the future.
Yeah, we're of course we're a huge fleet manager, right, I mean we've got you know, well over half a million vehicles. So if you think about large fleets, asset heavy footprint to operate them globally, you know, carrying feeding, maintenance of all those vehicles. We're one of a few in the world that can do this at scale. So we're a natural player in the av space.
And so how soon do you expect that to happen?
When am I going to go to you know, my Hurts location at John Glenn International Airport in Columbus, Ohio and get myself a car that can drive me home to Granville.
Yeah, I think it's coming quicker than what we have all thought. You know, it's been leading up to the moment, but I think right now most major cities in the US you're starting to see not just testing but commercial deployment. So our aim is to be, you know, one of the key players in that mark good space.
All right, Well, you're certainly one of the key players here at the twenty four hours of Little mom It was amazing to see.
You guys qualify in first and second lock out. The front row