Bloomberg Wall Street Week: Bastian, Spak, Brouillette

people in the world. Through the eyes of the most influential voices Larry Summers, the former Treasury Secretary, star Ward, CEO, Kevin Johnson, sec Chairman J Clayton, Bloomberg wool Street Week with David Weston from Bloomberg Radio. When it comes to technology, it's not just social media and artificial intelligence and five

G the United States is competing with China over. It's also energy and the race to develop new ways of generating energy, ways that go well beyond traditional fossil fuels. I talked with the U S Secretary of Energy, Dan Briette about the energy race, and he said we should be concerned about the competition. The global energy landscape has changed dramatically over the last few decades, and our position

as the United States has changed within that landscape. Eight you know, in that time, we've seen a dramatic shift in the flow of US resources to developing economies all across the world. And I was looking at some statistics earlier today. You know, back in nineteen sixty nine of the monetary flows back then were categorized as official development assistance by the US government, and in two thousand and

five eight instead came from the private capital market. So that's you know, that's that's an intense shift away from government resources to the private sector. And that was fifteen years ago, so I'm sure that number could be even higher than today, but it clearly ended, you know, illustrates that the private sector is playing a bigger role in the international arena. And one component of our mission here at the Department of Energy is to reach out and

engage with these increasingly important global actors. And with that in mind, our department d OE Department of Energy is leading some efforts to develop what we think are cutting edge public private partnerships and they'll help achieved results in the very dynamic energy landscape. And we're doing that with our partners and within the inter agency, primarily the UH what's known now as the dfc UH, the old OPEC, the old Overseas Private Investment corporation. We've been working very

closely with them. But you know, we're very excited about these partnerships because they not only yield economic growth, but they enable the US to strengthen its ties to international partners and to provide new opportunities all across the world for American businesses. And UH. I just talked to a Dr. Fatti Barole at the International Energy Agency and he tells me that is now set to see the loclent and

energy investment on record. Obviously due to the pandemic, but this is a reduction of roughly one fifth, or almost four hundred billion US dollars, and that's in capital spending compared to capex as well, as we call it. I e A is reported on the opportunity for policy actions UH and and we've we've worked closely with them. They're targeting energy investments to boot growth, boost growth, to create even more jobs, and to continue reducing energy related emissions.

And even more, there's real potential here to expand energy access by nearly two hundred and seventy million people and provide cleaner cooking solutions to nearly four hundred and twenty million people all across the Globe is my predecessor, Rick Perry. Secretary Rick Perry said, you know, there's still so many people around the world without access to commercial energy, and we want to help fix that problem for them and

create opportunities for us here in America. But um, you know, as we know, and as we've discussed in the past, governments alone don't have the resources for all of those investments. So we're gonna we're gonna rely upon and it will require, you know, very strong public and private partnerships based on it. Well, we refer to here in the United States as a bottom up energy philosophy, one that supports free markets, It funds scientific research, and it honors the choice of producers

and consumers alike. Um. So, with our private sector counterparts, we're gonna be focusing here on things like nuclear technologies and working to develop new reactors and new fuels for those reactors, fuels that are accident tolerant and non prolifferent. We're also focusing on wind and solar technologies, which is a priority for our department, and a large portion of our R and D budget here at the Department of Energy will be spent on the work that's coming out

of our National Renewable Energy Laboratory in Golden Colorado. In that vein, we're gonna be pursuing some new battery technologies, and all of our innovators here and entrepreneurs in the private sector, we're working lockstep on some new carbon capture, utilization and storage process projects. So in short, you know, the government and DEWE can and we should play of very crucial role in helping to bring all of these new projects over the finish line. Um. So, David is exciting.

It's an exciting time to be in the energy business. It's an exciting time to be an energy policy and as the world changes, so will we. It was very helpful and it's clear you want more energy, and you want to achieve, you want more investments, you want some private investment in particular. We've talked before, as you said, and you tend to say it's all of the above

when it comes to energy. As I try to get a choice between renewables versus fossil fuels, things like that give us a sense of what that really means in practice. Doesn't the government have to pick some with it winners and losers. Well, look, winners and losers or something we avoid in the marketplace. We don't as a government, we don't want to pick individual players, um, but as technology picking winners and losers and technology it's not something that

we want to engage in either. What we want is to pursue as you and I have discussed and all of the above strategy and uh, you know the President has talked about this publicly and those words mean exactly what they are. We're gonna pursue renewable technologies very very aggressively. We just announced on the West Coast a brand new facility at one of our laboratories there that's gonna allow us to develop greer scale storage battery storage. This is

Tony Mega Watson above. It allows us to develop the next generation of battery stores that will allow renewables to be integrated into our current electric grid much more easily and much more efficiently. That was Dan Briette, US Energy Secretary, coming up. Corporate America isn't just looking inward, it's also looking at the outside world to see what it can do to move us forward on the pressing issues of our time. Just ask ed Bastion, the CEO of Delta Airlines.

That's next on Wall Street Week on doom This is Bloomberg Will Street Week with David Weston from Bloomberg Radio. The aftermath of the killings of Brianna Taylor and George Floyd made all of us face the deep divisions in our country and the ways we've fallen short of making

this a more perfect union. Ed Bastion, CEO of Delta Airlines, has been addressing what a major public and traded company can and should do to address the need for societal change since he first took over as leader of Delta, and he was thrust in the controversial issue of gun regulation. We spoke to at the Virtual Blue Brig Equalities on it.

The bottom line on this is that we have a responsibility at our company to be not just a great airline but also a great steward of our resources and help build up our own people opera adoptunes for our own team, as well as within our community where we fly and where we invest our time. UH And one of the things the pandemic has shown to us is the vulnerable have become even more at risk and it's

it's led to their voices being heard. It's been an interesting phenomena where has everything has quieted down as the world has had to come to us stop. It's allowed us opportunity to listen to those people that are actually have been speaking to us for some time, and maybe we've been too busy to listen. And I know at Delta that's been the case. And we've had a renewed focus on on racial equality, systemic bias, and injustice and all the things that we can do as corporate leaders

to make a difference in our community. And in your statement you actually referred to the need to listen as you just said, and talked about having town hall meetings and things like that to really learn more from the people at Delta. Have you done that yet and what have you learned Because you knew about this issue before, what perhaps new did you find out from that? We

we have done a lot of that. We've had regular town hall meetings on large company wide tens of thousands of people as well as on small scale matters, and we're doing it in many, many parts of our company. And you're right, David, we've been focused on diversity inclusion for a long time and we've got a pretty good track record. We've been making progress. But the one thing that that I have paid a lot closer attention to

is disaggregating the information Diversity inclusions abroad umbrella. It includes gender, race, ethnicity,

and in other areas of opportunity. But when you look at the information and you see underneath the specific groups that are potentially not keeping up with the broader economy or our corporate opportunities, it's been the black community with within at least within Delta, we've got twenty percent of our employees are are black, yet only seven percent of the top leaders in the company are and that's a

pretty wide gap that we need to commit to close. Well, that's something that we see replicating a lot of you as industry. I suspect certainly in industry. I know about it. ABC, we had those challenges. How is the African American situation somewhat different from other people of color? I mean, there's an issue for all, but as you said, it's went different perhaps because we have four years of slavery. There's

history of slavery to account for. Yeah, that's this. This has been going on for not just decades, but centuries. And the thing that we've we've learned here at Delta is that we all have a role to play to to owning the issue. You know, it's one thing to say that we've got to get better. It's one thing to to acknowledge the numbers. As we said, it's it's important to be transparent about the numbers, but to really understand the reasons and the rationale and put yourself in

someone else's shoes. That's where the listening and the understanding and the reflection have coming are coming from. And one of the things that we've talked a lot about Delta is also being truth tellers, acknowledging the fact that our company does not have a great record on this in the past and may have some challenges it needs to correct for in order to be a more just company

going forward. And while the leaders of the company may not have been here at the time some of those inequities were first initiated, we have to go back and reconcile and make sure we understand what our company's responsibility is,

not just our individual responsibilities. And part of the challenge we have for all the society, business, I think, and perhaps even the Delta is it's not just enough to say going forward, we're going to be even we've got some history, we have to make up for How do you do that without alienating people who are not benefited

by them by the actions. Well, it's a great question, and you're right, there's a lot of people wondering, well, what about me, you know, or does that mean I'm gonna now be by by implication, disadvantaged relative to to an African American colleague. And the answer is no. The answers We've got to raise the bar for everybody we there are. There are plenty of great talented leaders within our African American community that we need to invest more

time and more understanding in. And when you look around the room, you see the room is filled with with people that look just like you and me. So it's clear that we've had advantages. We may not have uh been explicit about it, but implicitly we've had advantages. And we've got to bring others along with us too. And you've mentioned the numbers a couple of times. How do you measure success? How will you know when you've achieved what you need to achieve? And is it basically based

on numbers? It's it's not based on numbers, David. But one of the things that I know within Delta and as well as within the corporate community. Is when you're transparent and you're held accountable, things get done. You know, people pay attention. And we never want this to be seen as a quota system or or lowering the bar as as one would might say, Uh, this is about ownership and accountability and being able to measure that the success that we're having. So numbers are, it's it's an outcome,

it's not not the not the driving force. But when we do see that gap closed, and in the memo you referenced, I've committed to close that gap in half over the next five years, so it's not a lot of time to make some pretty good difference. That will be one measure of success. But when I hear from our our black community within Delta that the opportunities, the discussion, the sense of of of belonging and opportunity is greater than it was, that will tell me that we've really

made that difference. When you talk about closing the gap for those who haven't had the opportunity dis memo and I recommend it to people, you disaggregate those numbers as well. You have the overall population of the Delta employees. But then you have management and then you have a smaller group at the very top. Are you committed to closing that gap across the entire set of different groups, Yes, I am David Uh. In total, we have about of our our team are people of color, about thirty percent

in the in the low thirties are actually UH. In the leadership ranks of the company. More broadly speaking, from front line leaders on up are people of color, and about eighteen percent of our pusers are people of color. But when you figure out what the black component, the African American component of the same population skill set, is half of our people of color black, but only a

third of our top leaders are black. So you can see that there's been even within the designation of people of color, there's been some inequity in imbalance there, and that's what we've got to focus on how we can do better. That was Ed Bastion, CEO of Delta Airlines, coming up the Tesla underwhelmed with its battery day and the wheels started to come off at Nicola. As its chairman stepped down, we talked with Joseph Stack of RBC Capital Markets about the tech side of autos. That's next

on Wall Street Week on Bloomberg. This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio. In the great tradition of startups, we started Apple because we wanted the product ourselves. There is one person or two people who are both the creator and the market so that they know the marketing requirements intuitively because they're the market themselves. So gradually we were pulled into business. It wasn't We

didn't start out to build a large company. We started out to build a few dozen computers for us and our friends. That was Apple co founder Steve Jobs back in talking about how he came to create computers for the masses. This week, another high tech entrepreneur who dropped out of college made news, but of a very different sort. Trevor Milton didn't come up with his one big idea

right away. He tried an alarm sales company, an online classified website, and an energy storage company before fastening on his one true passion, making big trucks with zero emissions. He called it Niccola, after Nicola Tesla, who basically invented alternating current. Starting only five years ago, Milton built his company rapidly, taking a public just last June and seeing its market cap briefly exceed at a Ford Motor Company. But then, like Icarus, maybe he climbed too close to

the sun. He made a big deal for GM to buy eleven percent of his company, which triggered the short seller Hindenburg Research to call it all quote an intricate fraud built on dozens of lies, including a claim Nicola really was nothing more than a licensee and packager, which Mr Milton vigorously denies. Here's the important thing to know. We've already built the Badger from the ground up ourselves, so everything in it is owned by Nicola. What we

decided to do is leverage common parts with GM. I'll tell you for those who don't know, General Motors has the best purchasing power pretty much in the world. They their parts are cheaper than When I see cheaper, they mean they pay less for their parts than anyone else in the world, pretty much with exception to make me Volkswagen. So if you think about that, being able to leverage all their parts, we can commonize things so like a

window regulator or an inverter. I mean, why why spend two thousand dollars on an in burger if you can pay four hundred bucks for it or five for it, or whatever it is, that's the value you get with GM. It doesn't mean that there that we're that we're not doing anything. It means we're commonizing parts and o EAMs do this all the time. The SEC and Justice departments started investigations, the stock fell, and Mr Milton had to quit as chairman. We don't know where this will all end.

Mr Milton says he'll defend himself against what he calls false allegations, and GM insists it did all appropriate due diligence before it made the deal, leaving us all the wonder whether Mr Milton will ultimately be proven to be the revolutionary innovator he claims to be, or an extremely good salesman whose marketing prowess got the better of him. Nicola's goals have caused it to be compared with Tesla,

but there are some key differences between the two. We asked OURBC Capital Markets analyst Joseph Spack, what exactly Nicola is trying to do? Yeah, Nicola is, um, you know a little bit. I think of a misunderstood story. Um,

there's definitely a lot of noise around the name. I think the short report brought out a lot of issues which um you know, I'm certainly not going to defend here, but I think that when you look at the crux of what Nicola was trying to do, they were trying to bring together a whole bunch of partners from the manufacturing side, from the fuel cell and battery side, and from the infrastructure side to be able to offer their customers a point A two B route that they can

take over for them, UM, make green and efficient with hydrogen fueling technology, uh, and be able to offer a fuel cell lease. Now, if you can build out a whole bunch of A two B back and forth routes where you can get customers to sign up for that, slowly but surely, you can build out efficiently hydrogen charging infrastructure network and that helps solve the chicken and egg

problem that exists with hydrogen. But clearly, um you know, some of the issues that that have been brought up, and not a cloud that surround the company, I think he's putting some of these partnerships and potentially customers at risk, and it does mean that the whole idea or concepts can fall apart. So we've heard in the past about the opportunities and hydrogen fuel self for long haul so to speak, in the big trucks going in long distances, that that might well make sense. So that's not a

new thought. What is it that's new that Nicola brings to the party. Yeah, I think UM. I think first of all, you're right, I think you know, battery electric vehicles UM for for commercial trucks as it stands today, with the current state of battery technology, UM makes a little bit less sense for the longer range because of a number of issues including recharge times, battery degredation, and just the weight of battery. So fuel self seems like to get it to work a more ideal solution. UM

the UM why now or why Nicola? Because I think what Nicola was trying to do was come up with more of a business model innovation again what they're trying to accomplish with their customers. And they had this pilot program with Anheuser Busch which is UM, you know, we will UM lease, we will sell you this fuel truck's please.

That includes both the truck, all the fuel and the service and maintenance and so the effectively, like I said, they take over that that dedicated route, that a tow B route for Anteuser Busch and if they know they could get a lot of route, put a lot of density on that route. Um, it's sort of de risks the infrastructure build needed for hydrogen because they can use the the proceedge from the fuels at least to help build out the infrastructure. That was Joseph's back of RBC

Capital Markets. Coming up, we wrap up the week with our special contributor Larry Summers. This is Wall Street Week on Bloomberg. This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio. Well, we had a week gre going uncertainty about the return of the virus, about whether we're gonna get more fiscal siminis, than about the looming election, with President Trump adding that we this might not go when he was told to go. He might not conceive

that election that if it goes against him. The more uncertainty there is, the more that we help from our special contributor Larry Summers of Harvard. So, Larry, great to have you here. First of all, start with that election, because we have a lot of people now the markets included, starting to be concerned about whether we're gonna have some chaos after the election. Are you concerned about that? Of

course I'm concerned, and there's a risk. But my best guess is right now that we're gonna know who won the election by on election night, because the returns are going to come in from Florida and they're going to suggest that Joe Biden won Florida. And when that happens, there's not gonna be much question about the overall outcome. So, yes, it certainly could go close. It certainly could be terrible

in a variety of ways. But my best guess right now is that we're gonna know before we go to sleep on Wednesday night, on Tuesday night, what the result of uh the election has been. I think things are moving uh in that way. So let me ask a question that has some travesty to it. We all know that you basically are in favor of foreign Vice President Biden gett elected. How much difference does it make? I mean, does the particular policies we took a president at this

point make that big a difference? Or are we facing bigger problems than that with, for example, a pandemic. Look, there's a lot that's not even our control. Does the virus UH mutate, How aggressive does China choose to be, What are the consequences of climate change? How much does

artificial intelligence turn out to exacerbate UH inequality. So it's a mistake to think that who the president is and what the policy is are is the only thing that's going to determine how good the next four years are. That said, there is an enormous amount to be gained from a restoration of normality. Normality in the sense of comedy and decent relations with other countries. Normality in the sense of a president who seeks to bring Americans together

rather than pit racial groups against each other. Normality in the sense of a president who respects UH the law, who respects UH scientific expertise, who values a competent civil service. In UH government, there are a whole set of issues which go beyond and come logically before the issues where Republicans and Democrats have different views where there will be a huge difference if things turn UH in UH this election. Differences between democratic and Republican policy are well down in

the list in terms of what's at stake in this election. UH. That's I imagine why John McCain's widow endorsed Joe Biden. That's why all kinds of former military figures who usually stay out of politics or tend to the Republican side, have endorsed UH Joe Biden. That's why people like UH Bill Crystal and Lincoln Project, which is made up of really staunch Republicans, the kind who loved George W. Bush when Democrats were very bothered by things he was doing,

have endorsed UH Joe Biden. I think there's a ton that said stay in normality and normality and reasonable process. Is that much more important given how much that we can't control that's coming down the road. At least we have to be competent and caring with respect to the things that are within our control. I want to pick up on one thing you refer to, which is climate.

The issue of climate. We had a remarkable announcement out of President g in China this week basically saying we're gonna get the carbon neutral by what did you make

of that? Two things, Uh? One that China is buying for global leadership, It is doing the kinds of things that the United States once did making forward looking commitments, and the other in the hope that others will follow and trying to set the terms of the global debate, and so in many ways, the fact that they were making this kind of forward looking UH statement said more to me about our China policy than it did about

our environmental policy. It said to me that China is not an issue for the defense budget, It is not even an issue just for the conduct of our diplomacy, but it is something on which we are going to have to organize our effort for domestic renewal if the United States is going to maintain the kind of position and the leadership of leadership in the world that most Americans I believe very much want the United States to have.

It also pointed up to me the essential role of renewal of energy systems worldwide, whether it's the discovery and implementation of at our battery technologies, David, whether it's moves on carbon pricing, which I think are very very important. UM. Whatever the particular steps UH are, we are gonna have to as we renew our country's infrastructure, pay very close

attention UH to UH energy issues. There may be there are a lot of things that I think are wrong and overdone in some of the green new Deal proposals, which seems to me go way beyond UH climate change. But we're certainly gonna need a new deal on green issues and do things very differently. And that's one of the things that I hope will start to happen in the next several years. So learn as you know. Every week we like I'd like to finish the week with

a lightning round of Larry says. Let me start out way asking what was the biggest disappointment for you this week? The failure to failure to move forward on stimulus at all, and that stimulus is a low priority, but appointing a Supreme Court in the month before an election is a

high priority. I have to say, as an economic policy maker, I worry that a president who makes a travesty of reasonable process with respect to the Supreme Court can hardly be counted on to respect the independence of the Fed when it counts. So if that's a disappointment, what was encouraging for you this week? Even Mitch McConnell basically made clear that the president had gone way beyond the lines when he threatened to stay in office even if he

lost UH the election. The absolute clarity with which even the people who inexplicably to me have been loyal to the president made it clear that if that happened, enough would be enough. Okay, and we had those two. Let's talk about what the biggest mistake was you saw made this week? Probably probably uh no, no, uh no forward movement on stimulus, on stimulus at a time when we hugely need an insurance policy against a double dip for

the economy. The labor market is slowing down. UH. Landlords are having much more difficulty UM paying rents uh to. Tenants are having much more difficulty paying rents uh to uh landlords. Firms are getting ready as they realize this is going to go on for a long time, to pay off um to layoff workers. And above all, David, people are just wishing COVID was over and acting like it was even and look at your ape, and look

at your many look at Europe. Okay, many things. Now the special Wall Street can we contribute he is, of course, Larry Summers. Finally, one more thought. The least dangerous branch, that's what Alexander Bickle called the federal judiciary. It doesn't have the power of the purse, it doesn't command any armies. This week we lost the very embodiment of that least dangerous but all important branch of our government. Ruth Bader Ginsburg stood barely over five feet tall. She weighed all

of a hundred pounds. Her stellar record in law school didn't give her a place in a powerful law firm for one reason. She was a woman. It was Ruth Bader Ginsburg who thought that the U. S. Constitution should treat every American equally, regardless of genders. But in the end, she showed them all. She showed us all all, almost by herself. She changed the course of the law, particularly when it came to the role of women, something we

continue to struggle with. And now, ironically, in her passing, she poses for us the most fundamental question about the role of the judiciary she so loved, for the very power of the least dangerous branch lies in the fact that it is not political. We don't elect our judges. They have no fixed terms. They are the keepers of principles rather than expediency. We are now in the midst of an intensely political fight over the branch of government

that is not supposed to be political. And if in the end the Supreme Court is seen by us all as yet another expression simply of our extreme partisan politics. Then does the Supreme Court, even our Supreme Court, have the same not power but authority that the framers intended it to have. That does it? For this episode of Wall Street Week, I'm David Weston. This is Bloomberg. See you next week. S