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First Move with Julia Chatterley
Putin Speaks at Virtual BRICS Summit; U.S. Futures Point to Higher Open after Wednesday Pullback; Union's Leaders Meet to Decide on Ukraine's Application; Job Seekers and Employees Connecting on Slack; Giving Classic Cars a new lease of Electric Life; Westminster Dog Show Crowns "Best in Show". Aired 9-10a ET
Aired June 23, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
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JULIA CHATTERLEY, CNN HOST, FIRST MOVE: I'm Julia Chatterley in New York and a warm welcome to "First Move"! Is it only Thursday? Yes, it is a crazy
busy week already with pilot power warning and economic hard landing may be on its way as runaway inflation proves hard to stay.
The White House meeting with oil execs today as pricing patients continues to fray President Biden channeling - looking for a gas tax holiday. But
economic exhaustion is all too real. Listen to the new song by Beyonce "Speaking of Green Bay" investors looking a bit crazy in love with U.S.
stocks today Futures turning solidly higher.
Europe though, remains a challenge with energy woes and softer data in focus, economic activity slowing in both Germany and France both the
manufacturing and services sector suffering. And with conflict in Ukraine a brighter picture though over in Asia with Chinese shares closing near four
month highs buoyed by hopes of further stimulus support.
China loosening monetary policy even as the Fed and other inflation fighting central banks tighten the real world ramifications of rising
borrowing costs beginning to hit home in Washington D.C. for real too. Fed Chair Jay Powell warning Senators yesterday that recession is not the goal,
but cannot be ruled out something that major Wall Street banks have been telling us for months so a more pessimistic Powell and an accelerating
energy crisis over in Europe too. And that is where we begin today's show.
Germany warns it's facing a gas crisis as Russia throttles its supplies, the government accusing Vladimir Putin of staging an economic attack, as it
broke the glass of the next stage of its emergency response. The nationwide gas crisis plan now escalated to the level marked alarm. The next step
would be gas rationing.
Anna Stewart joins us now. Anna let's just take a step back here, there was wide speculation that they would have to do something as we saw Russia's
gas supplies being cut, the flows into that Nord Stream I Pipeline, what does this actually mean for consumers and businesses at this stage that are
already facing higher prices? Does it mean a step up again, in costs that they're having to bear?
ANNA STEWART, CNN REPORTER: Well, I think we were already looking at costs increasing. But looking at European gas futures today, it's really quite
alarming prices up 50 percent just this month alone, up some 80 percent since before the invasion of Ukraine and the message from the German
Chancellor was really clear this morning.
He said, gas is now in short supply in Germany and even if you don't feel it yet, we are in a gas crisis. Now after his statement, he was asked
questions by the press he was asked whether they would ration gas, the German state that is, he said hopefully never but of course they cannot
rule that out.
He's calling on Germans essentially to reduce their consumption now, in order that it can fill up gas storage, they can see themselves through
winter. We've also had a response from Russia today. We've had a response from Kremlin Spokesperson Dmitry Peskov; he says the reduced supply is due
to technical and political reasons, adding there's absolutely no hidden agenda here. It all relates to some Gazprom equipment.
I got Siemens energy in Germany for maintenance, it ended up in Canada and one of their facilities there and Canadian sanctions on Russia meant that
it couldn't be returned. Now Germany refutes this. They say it is not a technical reason this is a pretext to drive up gas prices, Julia.
CHATTERLEY: Yes and therein lies the rub. Germany, of course doing everything it can in the meantime to diversify away from Russian gas,
including ramping up coal fired power stations, of course, to some degree of criticism. And clearly they were worried about the winter months. And
they've said they want to build up storage capacity. How are they doing on that front?
STEWART: And that has been critical to their plan to see themselves through the next couple of years. Now, currently, their storage facilities are 56
percent full, we're told today. Now that is above the average for this time of year. And I think it's important to note that, you know, in the summer
gas consumption is low, it's about a quarter or even a fifth of what you'd expect in winter. But this is about storage.
And since the invasion of Ukraine, Germany actually legislated to try and fill up those gas storage facilities more than they normally would say 80
percent by October 90 percent by November, but that relies on their gas contracts with Gazprom being fulfilled as well as buying gas from other
suppliers and as you say, other types of energy, unfortunately, including coal, Julia.
CHATTERLEY: Yes, so more measures required. I think that's the message and actually that was the message from the IAEA this week as well saying be
prepared for significant further cuts in Russian oil and got to look for their options. Anna great to have you with us, thank you Anna Stewart
there!
Now in the past hour, Vladimir Putin has been speaking at the virtual BRICS Summit. Russia is rapidly substituting last trade with the West with trade
from China and India, two of the other nations in the group.
Selina Wang joins us now from Beijing fascinating insight not only into the economic disruption but just sense of how able they are to substitute some
of that lost and sanctioned trade with nations such as the BRICS that they would call a less unfriendly I think to quote the Russian term, Selina, how
they doing?
[09:05:00]
SELINA WANG, CNN CORRESPONDENT: And that's really the theme here. We're seeing Putin as well as the Leader of China really use this as an
opportunity to expand their vision of the global - new global world order at a time when they're increasingly isolated from the west, Putin using
this as an opportunity to talk about how Russia is rerouting trade, to "More reliable international partners".
According to Putin, trade with other BRICS countries has increased by 38 percent and reached $45 billion in the first three months of the year and
take a listen to what else he said. He said, "Contacts between Russian business circles and the business community of the BRICS countries have
intensified. For example, negotiations are underway to open Indian chain stores in Russia; it did increase the share of Chinese cars, equipment, and
hardware on our market".
Now, these comments as well as just seeing Putin even if virtually, alongside these other major growing economic leaders, where we have China,
Brazil, India, South Africa, that symbolically shows that Putin is not alone that Putin is not a pariah to every single country and we have seen
Russia ramp up oil exports to both China and India.
We have seen these countries sap up cheaper Russian oil, this somewhat blunts the impact of Western sanctions on Russia. And we heard Xi Jinping,
as we talked about yesterday, somewhat echo what we heard from Putin's comments?
Xi Jinping condemned Western sanctions on Russia for "Weaponizing the global economy" and also made veiled criticisms of U.S. and NATO, which
Beijing has repeatedly criticized for provoking Russia.
Interestingly, as well, we heard Putin talk about how BRICS nations are exploring the possibility of creating an international reserve currency
based on the basket of the BRICS currencies? And we talked about how this has taken some added urgency given these Western sanctions that have been
slapped on Russia.
But key point here is that it's unclear just how wholeheartedly we're going to see all of the BRICS countries embrace this strong messaging embrace
these initiatives given that BRICS has long struggled with mismatched ideologies and geopolitical interests.
Not all of these countries are going to want to be seen aligning too closely to Russia and anger their western friends and allies. But again,
the importance of BRICS can't be overstated in the sense that they comprise more than 40 percent of the world's population and about a quarter of the
world's GDP, Julia.
CHATTERLEY: Yes, and in a global slowdown, trade is key and particularly when energy prices are so high, ensuring security of suppliers first and
foremost, I think is every nation in the world knows. Selina Wang, thank you so much for that!
OK, let me bring you up to speed with some of the other stories making headlines around the world. Aid agencies are deploying humanitarian teams
that supplies to Eastern Afghanistan after a massive earthquake struck the remote region. More than 1000 people are known to have died so far and at
least 1500 were injured.
U.N. officials say they need $15 million worth of aid right now. Atika Shubert joins us live from Istanbul with all the details. Atika, it's been
going very clear in the last 24 hours, the challenges for the rescue efforts and those rescues that are involved here. What are we hearing
about, perhaps how many people remain alive, trapped and is still awaiting rescue?
ATIKA SHUBERT, JOURNALIST: Well, at least 1000 have been killed, but that death toll is expected to rise. And you are right this is a very remote
area what few roads lead to this part of the country have been damaged by the earthquake and also by landslides.
The earthquake happened just as the monsoon season was beginning so heavy rains actually caused a number of landslides in the area as well. What's
really making it quite difficult, however, is the fact that a lot of international aid agencies actually left Afghanistan when the Taliban took
over last year.
So that kind of international aid infrastructure is really stretched very thin right now in Afghanistan. One of the few on the ground is the ICRC the
International Red Cross. And we just spoke to the ICRC Spokesperson for Afghanistan. And he said they are supplying food, shelter, medical help
clean water.
Those are the basics that are most desperately needed right now, but it is difficult to get to the area. Interestingly, another concern he said, is
the fact that a lot of unexploded ordnance landmines and other weapons contamination are likely to have shifted in the earthquake.
They said the ICRC has actually seen an increase in the number of injuries since the beginning of last year and now they're very worried that with
this earthquake, they're likely to see even more injuries coming not just from the earthquake but with this shift of what with these shifting
unexploded ordnance? So there are a lot of layers to this catastrophe. So it's going to take a lot of help coming in.
[09:10:00]
SHUBERT: Again, the problem is those are the relationships with the Taliban, very few countries really maintain those relationships. So now
getting aid in is very difficult. Turkey is one of the few that actually maintains an Embassy in Kabul. And it is one of the few that is well placed
to actually bring in search and rescue teams.
So we have spoken to the Turkish Red Crescent and other aid agencies here. They say they are on standby. They are already have some teams on the
ground and are sending in help but again, access is difficult, Julia?
CHATTERLEY: Yes, and I spoke to the Head of Care Afghanistan yesterday, too. And they said, he said that they were already resource constrained due
to the economic crisis. So they desperately need international aid help. And to your point, and his comments Atika, what are the Taliban saying
about accepting international aid and help at this moment?
SHUBERT: Well, the Taliban has said that it is accepting international aid and that it does need the help desperately. The problem is it doesn't have
the relationships it needs. I mean, for example, Turkey says it is willing to help with search and rescue, but that it has not received this request
from the Taliban.
So I think one of the real bottlenecks here, in addition to the fact that there are not many aid agencies on the ground, is that the Taliban just
doesn't have the kind of relationships that it needs to get emergency aid to the people that need it the most right now.
CHATTERLEY: Yes, the lines of communication aren't established; actually, their lines of communication between the NGOs are probably better than they
are between NGOs elsewhere and the Taliban itself. Atika great to have you with us, thank you for your insights there Atika Shubert there in Istanbul!
OK, in a few hours, former senior officials from the U.S. Justice Department will testify about Donald Trump's efforts to overturn the 2020
election. They're expected to tell Congress that the Former President tried to pressure the department into supporting his false claims of voter fraud,
and that he considered replacing the Acting Attorney General with someone who backed his claims.
A reminder, you can watch the entire hearing right here on CNN, starting at 3 pm in Washington, that's 8 pm in London 3 am in Hong Kong. Commuters in
the U.K. are once again struggling to get to and from work. It's the second day of a strike by rail workers the biggest to hit the industry in more
than 30 years. Tens of thousands of staff are protesting pay freezes and job cuts. Another strike is set for Saturday.
OK, we're going to take a break here on "First Move" but coming up, are you a Slack? The CEO of Slack says there's plenty of life left and a
communications tool as we all trudge back to the office and making old like new again. Future proofing classic cars with electric power in a business
backed by David Beckham that's all coming up stay with us.
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CHATTERLEY: Welcome back to "First Move"! Green arrows across the board the U.S. Futures a pullback in bond yields and a further softening of crude
prices helping the Wall Street picture or this I think a reflection of Fed Chair Jay Powell's warning yesterday that a U.S. recession cannot be ruled
out.
Many believe a mild U.S. recession has already been priced into stocks. That says the inflationary pain for U.S. consumers remains very real, with
new data showing motorists becoming much more cautious before filling up their tanks.
A new study saying U.S. gas demand for more than 8 percent in early June compared to the same time a year ago, 14 straight weeks of slowing sales at
the pump, in fact. And oil executives are worried about committing to higher production targets with the demand picture so uncertain, even as
political pressure builds for them to pump more and bring down prices.
They're meeting with White House officials today to discuss the road ahead as President Biden states his case for a three month federal gas tax
holiday intended to bring relief to consumers. Gas price pain in the United States, nothing compared to the challenges facing Europe, with Germany
today warning that it's running short of natural gas as Russia cuts supplies.
Rob Thummel joins us now he's Portfolio Manager and Managing Director at Tortoise and he joins us now. Rob, fantastic to have you on the show! The
IAEA warned Europe this week that they need to be prepared for Russia to completely cut off gas supplies.
And we're seeing Germany respond almost immediately. What's your sense of what we're seeing? It's a kind of self-rationing that they're pushing here,
but it has negative consequences surely longer term for oil and gas prices?
ROB THUMMEL, PORTFOLIO MANAGER, MANAGING DIRECTOR, TORTOISE: Yes, no, thanks, Julia. Thanks for having me on. So if you think about what's
happening in Europe, it's really tragic? It's, you know, it really shows the importance of really energy security and having your own and having
access to your own sources of supply.
And so yes, there was this winter, it could be devastating across Europe, if Russia would choose to shut off supply and gas supplies to Europe. Now
the Germany and other countries across Europe are actually taking actions right there. They're reducing gas supplies today. So they can natural gas
supply today. So they can increase their inventories and be prepared for this type of scenario.
But as you highlight, you know, longer term, the answer is probably twofold. It's more U.S. LNG to Europe, as well as then in the intermediate,
you're probably going to have to have less natural gas demand in Europe. So that means more pronounced recession, potentially, in Europe, as industrial
plants and other manufacturing facilities are forced to ration the amount of natural gas that they consume.
CHATTERLEY: It's really tough to forecast in this kind of environment. I mean, your own forecast you're saying natural gas prices are expected to be
111 percent higher this winter than they were last winter. And of course, natural gas prices in Europe, what, two and a half, three times higher than
what we see in the United States because Europe relies on Russia. I'm trying to imagine the kind of demand destruction that you were just talking
about, at those levels severe.
THUMMEL: Yes, potentially, you know, I mean, the thing is, is with natural gas, you know, it's a really inelastic demand, especially in the winter in
general, right. I mean, a lot of us use it for home heating across the world. And, yes, we could turn our thermostats down a little bit and be a
little colder inside her house and put on a sweater that that wouldn't hurt anybody, I guess.
But in general, the demand for natural gas has been very, very inelastic. And so we will see how these elevated prices really impact demand going
forward. But I wouldn't expect to see a significant decline in natural gas demand really anywhere in the world.
CHATTERLEY: Yes Rob, you're interesting in that. You've actually made it personal because you've been honest about what the cost increase has been
for your family? And I believe with two children who also drive four drivers in a household is pretty tough. I think you said it's around $800 a
month extra the cost of the energy prices that we're seeing just to give an international audience a sense, even in the United States.
THUMMEL: Yes, that's for gasoline right. And I've got two teenagers. Obviously my wife and we live in the Midwest, so everybody drives
everywhere for your international audience and for your New York audience as well. So we're driving a lot. So anyway, so yes, it's obviously and it's
just not me it's everywhere obviously across all of U.S. and Europe as well in terms of the economic consequences I guess of these the inflation and
gasoline and the impact that that's having.
[09:20:00]
THUMMEL: The good news is we start to see oil prices come down a bit. And that will correlate in the next few weeks, I hope and to lower gasoline
prices everywhere and reduce some of that extra expense that all of us are having to spend on filling up our gas tanks.
CHATTERLEY: I mean, do you think that anything that government can do to help in the short term would be welcome? Why is there this clear and
obvious reluctance to a gasoline tax holiday that the President suggested yesterday? It's always been - instantly if not before.
THUMMEL: Yes, you know, I'm not a political expert. And if you would ask me before yesterday, what's the easiest way to reduce gasoline prices right
now? I would have said, yes, get rid of the gas tax temporarily. And so I think that's would have that is still a positive move, and can help lower
prices.
Once again, increasing production in the U.S. and in Canada, for oil actually will reduce gasoline prices. There's a big geopolitical risk
premium in oil prices right now, because of what's going on in Russia.
So if you could increase the oil supply - the oil supply globally for more secure sources, that ultimately will help reduce that geopolitical risk
premium in oil prices, in my opinion, and then ultimately, that results in lower gasoline prices. So that doesn't happen right away overnight, like a
gasoline tax reduction could, but that can happen over a series of months and years.
CHATTERLEY: Just quickly, can you quantify the size of that geopolitical price premium that you're talking about?
THUMMEL: Yes, it's hard to estimate, but I a lot of estimated, I would agree this about $10 a barrel. So you know could oil be below 100?
Potentially, if we could get more secure supply sources of oil around the world? And I think that that's true. I actually, it's a bit
counterintuitive, but I do think the more U.S. supply the lower the price.
CHATTERLEY: You know, the only real beneficiaries at this moment are the oil majors, and we're seeing record profits. Could some of that be shared
Rob, do you think in your mind, I mean, it's money that they also desperately need to help the transition to renewable energies?
And it does seem at times that the administration wants it all. They want them to pump more but still shutter, those dirtier parts of the business by
2030. It's sort of counterintuitive to us to invest today and be OK with it being gone in five to six, seven years' time?
THUMMEL: Yes, that's a good point, Julia. I think the majors - I have a high degree of respect for Mike Wirth and Darren Woods at Chevron and
Exxon. And what a lot of people aren't paying attention too is they are reinvesting a lot. I mean, they are growing production volumes in the U.S.,
in particular in West Texas, in the Permian Basin.
So they're trying to produce more energy, but they're also trying to reduce carbon. So not only are they producing more oil or natural gas, and
actually investing in LNG, if you look at Chevron just invested a bunch of LNG yesterday.
They're also actually investing in renewable fuels and things like Chevron just purchased one of the largest renewable fuels operators here in the
U.S. called "Renewable Energy Group", it just closed late last week. So and Chevron's looking at and considering investing significantly in a carbon
capture program and a carbon capture system on the Gulf Coast that could have significant improvements in decarbonizing.
So the majors are doing - are very focused on producing more energy and less carbon. And I hope that that comes through today in the discussions
that they have with the Secretary of Energy.
CHATTERLEY: Yes, it's just a tough conversation in the interim, in the short term, at least. Rob, thank you so much for your insights today great
to chat to you, as always Rob Thummel there Portfolio Manager and Managing Director at Tortoise Capital!
OK, EU leaders are meeting this hour to discuss Ukraine's application to join the bloc. They're expected to approve granting candidate status to
both Ukraine and Moldova. Going into the meeting the President of the European Council called the move geopolitical choice.
(BEGIN VIDEO CLIP)
CHARLES MICHEL, EUROPEAN COUNCIL PRESIDENT: This is a decisive moment for the European Union so a geopolitical choice that we will make today. And
I'm confident that today we will grant the candidate status to Ukraine and to Moldova and express a clear and stern perspective for European
perspective for Ukraine, Georgia, and Moldova.
(END VIDEO CLIP)
CHATTERLEY: Nic Robertson joins us now, Nic it does feel like candidate status for Ukraine is a foregone conclusion beyond the importance of the
symbolism which I don't discount. What does that candidate status unlock for Ukraine?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: It unlocks additional funds, I mean, let's not forget that already the EU is providing
humanitarian support is working towards sort of a build back support when the wars over to build back the country and infrastructure supporting the
government and payments of officials across the country and of course, supporting a military weapons.
[09:25:00]
ROBERTSON: What this does would unlock funds that would allow Ukraine to go through the necessary steps and processes of aligning its laws with Europe
with the European Union? There's an estimated 200,000 pages of laws that they would have to integrate their laws with. That's a huge task for any
country.
I mean, look it took Poland 10 years from deciding to join the EU to the actually completing the process. So it's a long process, but it can be an
expensive one in terms of resources very difficult, where you're fighting a war to be distracted on many fronts.
The Justice Ministry, for example, you know, is looking at war crimes right now. But it will also have to turn its attention to working through
European Union justice documents to align themselves and across the whole panoply of different government ministers. So there would be a financial
support, which would help with the mechanics of getting the country ready for joining the EU.
CHATTERLEY: Essential too it's also a move, of course, it's diametrically opposed to Putin's perceived ambitions. How will he take this?
ROBERTSON: Not well. It's perhaps for him, it's almost as big a threat as having NATO increase its forces closer to the border have more permanent
forces closer on its Eastern flank closer to Russia. But what it tells President Putin is that the people of Ukraine who spoke in 2014,
disappointment when their President turned down his decision at that time to integrate war closer with Europe and turned his focus back more to
Moscow.
That it tells Putin that this is happening, the thing that caused him to invade Ukraine back in 2014, the thing that's caused him so much anxiety
ever since democracy and democratic values, and eradication of corruption and everything that goes with it, and the sort of autocracy that he runs in
his country that's changing closer to Moscow.
And the fear for Putin would be Russian people would read that and react to it and react against him and his style of leadership. So he's unlikely to
take this well he'll know that this is going to take a long time. And right now he's at his embattlement.
We've heard from European leaders today saying very clearly, Russia is waging an economic war against Europe. We've just been talking about it now
that shortage of energy supply is coming to Germany and other European nations and the impact that's going to have time likely for next winter.
Putin knows he's in a big struggle, and this is just another step in the opposite direction of where he wants to get to.
CHATTERLEY: Yes, as Charles Michel said, a geopolitical choice. And that's at the heart of this Nic Robertson great to have you with us, thank you!
We're back after this stay with CNN.
[09:30:00]
CHATTERLEY: Welcome back to "First Move"! U.S. stocks are up and running this Thursday a higher open today after Wednesday's slight pullback. A bit
less volatility so far this week on Wall Street and that is certainly not a bad thing.
Investors will be tuning in to the action on Capitol Hill once again today as Fed Chair Jay Powell delivers a second day of economic testimony before
Congress all this amid new signs of a slowing economy. JP Morgan this week laying off hundreds of employees and its mortgage department as the housing
market cools. Also today's sportswear giant Nike announcing that it's pulling out of Russia completely three months after suspending its
operations there.
Now, the term slacking at work is taking on a whole new meaning particularly as millions around the world balance remote and in person
work. And that's where the messaging programs Slack comes in. Its keeping teams connected no matter where they are located.
And its digital co working space is getting a whole host of upgrades, including a revamped version of a feature known as "Huddles" that soon will
allow video chats. And even your next big break might come from Slack messages. Job seekers have been tuning into invite only networking channels
to land to their next big role.
Joining us to discuss all this Slack Co-Founder and CEO Stewart Butterfield. Stewart, welcome to the show! I was poring over some of the
details and the response to them. And I picked out two words that I liked. Is this the Zoomification and the Linkedinification of Slack?
STEWART BUTTERFIELD, CO-FOUNDER AND CEO, SLACK: It's a great question first of all, great to see you again. The Linkedinification is an interesting
idea. But this is much more networks that workers create around sometimes topic has an interest in times, communities have support for one another.
But kind of demonstrates the kind of professional interests of these employees outside the context of their normal work. And as for the
Zoomification no, it's there's a really interesting continuum.
And I think one of the things we learned during the pandemic was all we had was this hammer of 30 minute Zoom calls or video calls. And so all of the
world of interaction with your colleagues around the world to collaboration looks like 30 minute video called nails, I think we need a much richer set
of tools.
And this isn't, instead of I think this is complementing Zoom. We're a happy customer of Zoom. And I'm sure I'll continue to use them forever. But
there's a pretty big difference between the meeting format and the kind of collaborative live working session. And we're really aiming to support this
use case.
CHATTERLEY: And what's fascinating to me, in many ways about your company, and the sort of flexibility that you're trying to provide companies in this
moment is not only do you have an insight into where people's workers are operating from and where? But also personally because I've read post
pandemic, two thirds of your workforce have actually been hired post, when that - also gives our viewers a sense of how you're scaling up as well?
What is the workforce look like now, and particularly in light of the hiring that you've been doing in very recent times? How those conversations
being had and what are do people want?
BUTTERFIELD: That's a great question. And I think the one thing that people want more than anything else is flexibility. We did a bunch of research
with a group called "Future Forum". 79 percent of people want flexibility in where they work, but 94 percent and this is second only to compensation
94 percent want flexibility in when they work.
And I think the ability to move some of the synchronous works and work that's happening with multiple people at the same time, like a meeting to
asynchronous means is incredibly important. And when we have that alternative, it gives people an enormous amount of flexibility. It gives
employers more flexibility to hire in a wider geographic area.
And you mentioned that two thirds of our workforce is hired and post pandemic. At this point for most companies, it's going to be 20 percent, 30
percent or 50 percent you known we've been in the state for two and a quarter years and the employers who choose to cast a wider net in where
they're hiring I think are at a huge advantage.
[09:35:00]
BUTTERFIELD: You know we've been in this in the state for two and a quarter years. And the employers who choose to cast a wider net in where they're
hiring I think are at a huge advantage. The employees demand for flexibility can only really be met by employers who are willing to have a
little bit of an open mind.
I mean, there's still a pretty large contingent of people who have this belief that at some point soon, you know, 90 days from now, at any given
point, we're going to a go back to exactly the way things were, and that plainly is never going to happen.
CHATTERLEY: Oh, there was a lot in there. I'm trying to decide what I asked you next? You mentioned something really important, I think, which is that
you're hiring in places where you don't even have offices? And this is a crucial part of that. Is it making it easier to hire? Is it making it
cheaper to hire particularly in as we look around the world, super tight labor market conditions?
BUTTERFIELD: It is a super tight labor market. So no, it's not about cost savings. It is really about widening - you know we've been through a decade
plus a very, very difficult competition for hiring technology workers. And regardless of what happens in the macro environment, I don't see that
changing just because technology is becoming a bigger component of healthcare and financial services at retail.
So everyone is hiring technology workers. The realization we had maybe in the summer of 2020, was we're hiring all these people in places where you
don't have offices. We're telling employees who live in New York, San Francisco, Tokyo, London, Toronto, Vancouver, places where we have offices.
That they're allowed to move, many of them moved, you know, hours away, or in some cases much further, in order to get a bigger home to be closer to
family or whatever their needs were, we can't ask them to come back.
So the idea that people are going to be in the office for two days a week doesn't really make a lot of sense, and that's you're really going to
constrain the potential pool of employees to those who live within commuting distance of one of your offices. That would be foolish.
CHATTERLEY: Are we at risk point? And it's interesting, given the economic backdrop, and perhaps the challenging times that we're headed into, and the
uncertainty of the times we're headed into that if you mandate, someone has to come back into work versus saying, look, you can have flexibility? Do
you risk losing people because you've got some anecdotal evidence? Yes go on.
BUTTERFIELD: Yes, I mean, there's - to be clear, it's not that people never want to get together with their colleagues in person, I'm very happy to be
able to do that, as the intensity of the pandemic has subsided, we're getting to do more of that.
It's really a question of what you said, the optionality. And the having the option is really important. Even if there are populations, let's say,
our workers in Japan tend not to have, especially in Tokyo, big palatial houses with multiple rooms where many people can be having video calls, at
the same time.
They're eager to get back into the office, because the built infrastructure doesn't really support it.
There are also some people who just want more separation between home and then work. And there are people who are really young, if you're fresh out
of school, if you're 22 years old work is a really big component of your social life.
So there are people who want to spend some time in the office. But I don't know anyone who's desperate to have to spend nine to five Monday to Friday
in the office anymore. And I know personally I'm never going to do that.
CHATTERLEY: Yes, - say something about them as opposed to what's going on at home. Can I take a step back as well and ask you about the broader tech
sector and, again, the economic backdrop, this shakedown in valuations that we've seen in many ways.
And you can argue whether or not you are but cushioned in some ways through the Sales Force purchase and the ability to perhaps ramp up investment in
more difficult times. What do you see going on in terms of valuation recognition, economic environment? And what does it mean for this sector?
And I know it's diverse, but broadly?
BUTTERFIELD: Yes, so you're right. I think being part of Sales Force is a huge win for us. It's a company that has nearly six hours of free cash flow
a year at this point. Slack's performance has also been really good.
But the kind of compression in multiples is very real. Over the long run, and I've lived through many of these cases, now I graduated from I'm old, I
graduated high school in 1981. So I've lived through the 1982, recession the "Dot Com" crash 2008 and there's a couple of other smaller 2015, 2018
we'll come out the other side of this. I don't see further compression and multiples.
But what we do question is the ability of companies to live up to the earnings expectations, so there is a feeling that there might be another
shoe to drop. On the other hand, if you look at the absolute fundamentals, I don't see any big challenges that we haven't already incorporated into
our thinking.
So we're going to come out the other side of this. We always come out the other side and the maybe the silver lining is this is always an excellent
time to start companies. Slack the company became slack was started in 2009 right in the thrall financial crisis.
[09:40:00]
BUTTERFIELD: That's true of a lot like Uber and Airbnb as well. And I think we'll look back 10 years from now and see this as a really fertile time and
a lot of new companies - a lot of new innovation.
BUTTERFIELD: Yes, I like the optimistic note, and you can't be age nor experience in these kinds of moments, I think as well. On a far more
serious note, Stewart, you signed a letter back in 2019, I believe saying that abortion rights in the United States are a fundamental part of
equality.
And we're waiting for a Supreme Court decision that could allow states to remove access to abortions, but for millions of women in the United States.
I just wanted to get your take at this moment, because business is incredibly powerful. If this happens, how should business respond?
BUTTERFIELD: I think they should respond in the way we at Slack and at Sales Force at a larger scale, have planned to respond in. And many other
companies have done this too, I think Citi Group and others which is offered to support our employees' health in the way that we would normally
and offer to cover travel to jurisdictions where the medical procedures they require more available.
I know this is a very personal debate for many people and I have strong opinions and I think I represent the opinions of our employees. We want to
be respectful to everyone. But at the same time, I don't think we can take away these fundamental reproductive rights from people and companies have a
bit of an obligation to support their employees.
CHATTERLEY: Stewart always great to chat to you thank you, Stewart Butterfield, Co-Founder and CEO of Slack we'll speak again soon thank you!
OK, coming up after the break classic cars it prices to shock this Aston Martin looks like a million dollars in well it costs it too, in fact it
actually costs more than a million dollars, the company giving a new lease of life to classic car next.
(COMEMRCIAL BREAK)
CHATTERLEY: Welcome back to "First Move"! And to a story of famous royals football stars not to mention some really fabulous cars plus saving the
planet to what's not to love? So when our next guests are wedding photos of Prince Harry and Megan Markel, driving off in a Jaguar E-type which had
been converted to electric power. It inspired a business which gives classics like these a whole new lease of life.
[09:45:00]
CHATTERLEY: Lunaz, Restores, Aston Martin, Range Rovers, Rolls Royces, Bentleys and Jaguars and adds electric drive trains instead of their
original combustion engines. Among the investors in one of the UK's fastest growing companies is David Beckham.
And it's not just classic cars the company is also working on industrial vehicles, like refuse trucks. David Lorenz is the CEO of Lunaz and he joins
us now. David, great to have you on! This is a phenomenal concept. It says 60 classic cars meet sustainability. But I know it's about way more than
that. Give us the ethos of the company?
DAVID LORENZ, CEO OF LUNARES: Exactly. So we take vehicles that already exist, and we up cycle electrify them for - future. We really want to
enhance what upside you can do as we see this transition from ICE to clean air power train. So we started with classic cars, we built the first
electric Rolls Royce in the world, the first electric Bentley first electric Range Rovers.
But also Lunaz applied technology where we apply the same approach of taking what already exists, restoring and up cycling it. And this can be
applied to thousands, if not millions of vehicles around the world, and enhancing all of that embedded cargo, which is within these vehicles.
CHATTERLEY: And it's just about everything power steering, operator brakes, suspension, air conditioning, even Apple CarPlay?
LORENZ: Exactly. So we take every car and industrial vehicle back to its bare nuts and bolts, so they get fully stripped down, everything comes off
the back. And then we rebuilt them from the ground up. With the classics we go through a painstaking and thousands of hours of restoration, redoing the
interior exterior, having air conditioning and heating, as you said, Apple CarPlay and all the mod cons you would expect with heated seats, electric
windows, et cetera.
I'm really looking at how we can transition these vehicles for future generations to enjoy? You know, my daughter is four years old and I really
wanted her to be able to see and enjoy and drive these vehicles as we enter a new age of clean air power train.
And it was the perfect answer for institutions around the world, whether it's hotels or restaurants and really looking at fleet vehicles with Rolls
Royces and benefits where they didn't have the option for an electric luxury vehicle in this sector. And we wanted to provide what they needed
and required as an institution. And it's fantastic to see them on the road. And I'm in London today it's lovely seeing them driving around.
CHATTERLEY: OK, what's the cost, David? And how long does it take to I'll use the word pimp, pimp one of these rides to get back to that old show on
TV, they did similar but not quite the same as this is?
LORENZ: Yes, very slightly different to that. They're waiting for - Q4 next year, and the prices start at 350,000 for the Jaguars going up to 1.2
million for the Aston Martin DB 6 platforms that we've developed. And they vary across the platforms.
And we've got from Limousines and the Rolls Royce categories to Range Rovers with no roofs and there's a huge category to choose from, then you
get led into the hands of our design team, Jen Holloway, who used to be the head of Aston Q launch and where you get to tailor these vehicles is really
where the journey begins with Lunaz design.
But it's an amazing concept. And it's an amazing when people enter the factories because not only do they see people designing classics within the
design studio, but you've also got Ben and Jerry's been designed and taken sustainable materials and transitioning these commercial vehicles which
haven't been thought about as subject how they can transition from the future generation? And it's an incredible blend between the two products of
Lunaz design and plant technologies.
CHATTERLEY: Yes, I want to talk about that in two seconds. Just a final question on this are the purists say the classic car purists? Who really -
who's your customer base here because there will be those that say you know, one of the beauties of a classic car is you know lift the bonnet and
you look at the engine and now you look at the battery and it's a bit like, as good as it is for the planet - the customer?
LORENZ: So we were really focused on individuals that everyone loves a classic car. A lot of people don't go near ownership and we wanted to
answer the reliability, usability and sustainability element of classic car ownership.
And really focus on the institutions where we could look at the fleet cars and how we could see classic Rolls Royces and classic - outside hotels is
driving their guests around throughout the day. But it's amazing.
You know, with the purists, we work very closely and we've done multiple tours now with for example, the Rolls Royce enthusiasts club. We've got a
great relationship with and, you know, when they first came to London, as of course, there was a lot of skeptical sides to it.
But when they come in, they uncover and they get to see firsthand the level of restoration work and quality that goes into one of these vehicles.
They're proud and it's an incredible thing and I'm sure Henry Royce himself would have been proud to
CHATTERLEY: Talk to me about the commercial side of this then too, an end the breakdown in the business? If we talk about it, in terms of sort of
revenue and profitability generation is the bulk of the business going to be at some point in the future big contracts to electrify refuse vehicles?
[09:50:00]
CHATTERLEY: For example, commercial industrial vehicles versus the sort of Morris luxury classic cars, which admittedly a very beautiful. How do you
see the pipeline, the orders and the split of the business going forward? Because I'm sure you're hiring people too for the work that's got to be
done?
LORENZ: yes exactly. It already is a much larger side to our business. So with Lunaz design, we've created a factory at Silverstone overlooking the
Formula One circuit about 120 cars a year. But you know we're working now with the largest industrial fleet owners in the UK and Europe.
And our facility is built to up cycle electrified, isn't it six times larger than the current facility we have with a 1200 vehicle capacity on
the industrial side.
You know, the scale side of Lunaz is completely on the industrial side of our business. But Lunaz design is that incredible passion that comes
through, but it's the answer to the quality and assurance of the capability of the engineering team. And they really do go side by side, because it's,
it really is the perfect blend of how you can up cycle a vehicle, whether it's from 1961 or 2016.
CHATTERLEY: You know this is a super cash intensive business. I can already imagine, particularly as you're ramping up. We've obviously shown various
images of one of your investors, which appears of course, David Beckham, are you profitable? Do you even think about that right now or in growth
phase?
LORENZ: No, at the moment, we're purely in growth phase. You know, we are investing heavily into the company, you know, building in different
applications where up cycling is the right approach to this transition.
You know, David was drawn to Lunaz because the limitless possibilities, electrification up cycling, as, and we've got an incredible portfolio of
investors behind the company, which really see the true potential, and we can't wait to globalize the solution.
CHATTERLEY: Yes, it's so exciting to see. Very last question and very quick do David Beckham got a big discount?
LORENZ: Of course not. Its cars - appreciates this. He is an incredible investor and an incredible plant at Lunaz. And I'm just so proud that he
really sees the limitless possibilities of where the company is going? And he was firstly attracted by what we were doing on the commercial front. You
know, it's what really gripped the relationship between the two of us.
CHATTERLEY: Yes, he's great. He's investing in the business too. Your first sentence as the best of course not. Great to chat to you, David come back
and talk to us soon please fascinating to see David Lorenz there thank you! Well "First Move" after the break, stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". And finally, who's a good boy?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The Best in Show winner is the bloodhound.
(END VIDEO CLIP)
CHATTERLEY: This is Trumpet crowned the winner of the Westminster Dog Show in the United States.
[09:55:00]
CHATTERLEY: He was a firm favorite in the field of 3500 dogs of more than 200 breeds and varieties. And in case you're wondering, my little doggy
Romeo never made it to the finals due to administrative oversight on my part. More parental training required course - is perfect.
But as you can see, he's great and balancing on books. He's brilliant. It's all around agility, especially where fluffy doughnuts are involved. And
grooming well, he can practically take care of that all by himself.
He's a bit thinner now. He's had a haircut, Trumpet and all dogs out there we salute you for spreading love, loyalty and happiness around the world.
And that's it for the show.
If you've missed any of our interviews today, they will be on my Twitter and Instagram pages search for @jchatterleycnn, "Connect the World" with
Becky Anderson is up next.
(COMMERCIAL BREAK)
[10:00:00]
END
