Transcripts For BLOOMBERG In The Loop With Betty Liu 20131210

Because of all of the controversy over the sheer pants. In their defense, it has been a massively growing company. Hi, short interest. Questions about inventory. The scandals about the comments from the ceo. Of they a classic case could have handled it much better once they made the misstep. Instead, they stumbled, they took too long to repair the situation. As you say, the founders founders comments were not listen to hear for some women. Fish stinks from the head. Problemnot beinthe lulu anymore. Were going to go inside ups these next two hours. Carol massar has been working on this special for quite a while. Is probably the biggest day of the year for the Worlds Largest packaging company. Carol massar is in the thick of things. Hubis at their massive called world port. Hows it going down there . It is a little quiet. Most of what happens here happens overnight. We had a little bit of snow this morning. The planes got out this morning. The line behind me is a little quiet, things will start to get busy again. There is another level of activity around the afternoon. Lots of packages. 1. 6 million packages go through world port every day. They deliver 16 million a day. Year, their peak was 4 million. Their busiest day is expected to be this coming monday. Facility. Ry busy everything is done with precision. It is amazing at how efficient they are in getting things on the off the line and on the planes. This is backed by a lot of data and information technology. I spent some time at one of their data centers up in new jersey. It is built like fort knox. There is so much information. Lots of levels of security. That building there are only about 50 buildings built with that kind of data security. We got to see some of the 20,000 servers that back up all of the that is the necessary to get the packages around the world. I spoke with the chief Information Officer and this is what he had to say about managing all of that data. Cancellations are being done every second . How many calculations are being done every second . Driver has 120 to 175 stops today. You might think that is relatively easy to plan, but it 15 trillion calculations to determine what that most optimum route would be. It all happens here in these data centers. Tons and tons of data. They have that huge data center up in new jersey. They have another backup center in atlanta. L center so that if anything goes wrong, they can transfer over to the other center. They want to make sure that no system ever goes down, no matter what is happening. Backupve backup engines, everything. Is just to make sure the data is secure. They want to emphasize that they are more than a Package Delivery company. They more than just ship your package is. They are a Logistics Company. Ande all think about them they are the worlds biggest Package Delivery company. I was lucky enough to spend time with their supply chains for areas. They are big in terms of health care and food hillman. And fulfillment. They do all the packaging hear. They do the warehouse share. It is on believable it is unbelievable the amount of space they devote to health care. Health care is one of the strategic areas for the company. You think of them as a package company, and that is what they do, but they are a Logistics Company and they do this for health care, pharmaceuticals, tech companies. That is something you may not have realized about ups. Cory. Ver to you, thank you very much. Interesting stuff. An inside lookve at the company all day. Moving and shaking this hour is Satya Nadella. He is one of the possible successors to steve ballmer. He told bloomberg that he plans to stay at microsoft for the longterm, no matter who gets top dog. He did not reveal any secrets when he revealed how the search was going. Andteve ballmer is the ceo i am actively engaged in running our enterprise engineering group. Why would he be considered a candidate . I think that he is the leading candidate. He has created the biggest business within microsoft in the last decade, since the xbox. The Cloud Services business is huge and growing. Has reallyy he created that from scratch. It makes a point to the way forward for microsoft. Is growing like crazy and it could be the center of computing. We see big Cloud Companies growing. That could be the future for microsoft, a future that is not dependent on windows. Google has a new offering that is. It is microsoft with the business that Satya Nadella runs. That could be the way forward for microsoft. We may see what the board is thinking about the future of microsoft. It will be really telling who they put in that ceo post. We cannot go a day without talking about health care reform. That is the subject in washington that we are focusing on. Health exchange website, healthcare. Gov, was three years in the making. How much did it cost taxpayers . Megan hughes joins us with more. You have the numbers. Tell us. The frightening answer is that we do not know. We have some new numbers from hhs, but they are not eliminating. They have confirmed that the agency has owes 600 30 million through september. Of that, it spent 319 million through october. Since october 1, they brought in dozens of computer engineers and programmers from google, oracle, red hat. That costs money. The total cost is something that lawmakers have been trying to get to the bottom of. Administration spent in total, not just on healthcare. Gov, but all of the exchanges . How difficult is that figure to give me . I would like to get it to you in writing very quickly. More than a month later, no number has been supplied. Lawmakers have respect requested a response to their question by thursday. The Government Accountability office is checking into the cost of fixin in the site. There should be transparency, but a lot of the contracting databases are not clear. Thank you so much. Megan hughes, our washington correspondent. One vocal republican who has given up the fight to repeal obamacare is ron johnson. Too late to get rid of the Affordable Care act and now is the time to focus on the transition. He sits on the budget committee. He is here with us in new york. Senator, great to have you join us this morning. I havent given up the fight, when the Health Care Law was simply 20,000 pages, you could repeal it and get rid of it. Happened, itas exists. We have the exchanges set up. Now i have to talk about how you unravel the Health Care Law . How do you limit the damage and protect americans. That is our responsibility to do so. Law,ll want to repeal the but it exists. When you repeal it, youre going to have to transition into free market reforms that will restrain costs. What is your focus now . To preserveng freedom and choice in health care. That is what we need to do. We are seeing all of these mandated coverages that are increasing costs. Those problems are made by the president and democrat senators and house members. If you like your health care and your doctor, your prescription drugs, now were finding out you are not able to keep those things. Republicans need to show the American Public what we are for. People are going to buy these health care plans, they cannot find out whether or not their doctors are in the plans. Doctors have been given the contracts because of the increasing costs. They are not being reimbursed, so they are not joining the network. When i am committed to is trying to prefers preserve freedom and choice. Obamacare is about coercion. We need to allow americans to buy the type of Health Care Coverage and have the treatments they want. Im about preserving choice and freedom. Megan hughes is standing by. Is it true with the senator is saying about the shrinking choices of americans . Sure. One of the back and forth that we have seen in the house, congressman upton had a plan where companies would be able to offer individual plans to new customers as well next year. Say that isocrats going to gut the law. For whatour hope january 1 looks like . Do you see there being improvements in healthcare. Gov . Will be a it disaster. We are in the back end. I have seen private sector web experts saying they could have produced this website without 5 million to 10 million. We spent close to a billion dollars to do it. Ask asking people to themselves, do you want the federal government to be more involved in your life and your Health Care System and making Health Care Decisions for you . It is a bad decision. I think this will be a disaster. I think people will wake up not being insured the way they think they are, not having access to doctors and treatments that could keep them alive. We are trying to preserve the treatments and doctors. Was on with us yesterday and he gave a 5050 chance that congress will pass some sort of budget before december 13. We went through a painful and nonproductive 16 day shutdown. I tweeted that we fought the good fight and it is time to plastic pass a clean cr. I did not see it getting better. Where are you in this camp . I think the government doesnt harm to our economy. Continuing resolutions, increases in debt ceilings, they create force action to deal with the longterm issues. What i would say is, we have the budget control act, i hope the ryan and congressman senator murray cannot come up with a good deal, i hope they pass a clean, continuing resolution. ,emocrat senators voted for it president obama signed it. I do not want to shut down the government. Thank you for joining us. Ron johnson of the wisconsin. We have more great guest ahead. We are going to be talking to and how it ismens dealing with the uncertainties in washington. Our dentures in bitcoin. Yesterday, matt miller bought a coin. We will show you what he has been buying with it. He stiffed me yesterday on lunch. We will tell you what he bought. You are watching in the loop. Step,t, the feds next is Big Industrial company overhauling its operations, cutting 15,000 jobs, restructuring and selling units. A new ceo took over. Siemens largest market, 52,000 people in the u. S. Joining us is aaron spiegel. Eric spiegel. You involved in a restructuring going on at siemens. A lot of the decisions have been announced and we are executing here. We have sold off some businesses which were significant businesses in the u. S. We have to adjust to that. Of new companies coming in. We have acquired new businesses in the u. S. Quite a bit of time making those things happen. When you hear 15,000 job cuts, how much of that is in the u. S. . Couple of sold off a big businesses, bought a number of big businesses. We have not seen a big impact in the u. S. We were talking about ron johnson with ron johnson about the health care act. How does the new Health Care Law change your decision about your Big Investments . A medical device tax has had a big impact. Medical device tax is going to cost us tens of millions of dollars. How much is going to hurt sales. It will hurt bottom line for sure. That has an impact. We have to find other ways to make up for that difference. Overall, the medical business is flat. Theres a lot of uncertainty about where the Affordable Care act is going. There is a lot of consolidation going on in the industry. We do not see Companies Buying the way they were. We do not see the expansion that we saw a couple of years ago. You seem passionate. This is something that i think cory can see as well. You say there is a skill gap in the United States. You are having a hard time finding people with the right skills to fill those jobs. You lacking people who are well trained in science, mathematics, technology. Is this right . Absolutely. We have built new manufacturing plants where we had to spend significant Time Training people to get up to speed to still his plans, we had to put in place programs so that we can ensure a pipeline of skilled workers who could work on the production floor. That is one of the biggest gaps. The skills gap is real and the u. S. Estimate about 3 million jobs that are difficult or hard to fill because we dont have the skill to fill. How many jobs are you having a hard time filling . 200 positionsut open. Depending on how the lancet have open and where we are expanding, the numbers sometimes less than that. Holidays are the upon us. It means it is time to go it is go time for ups. To do they deliver a win you . We ask of the cfo next. Y has finally legalized pot. Will other countries follow suit . We will find out. Stay in the loop. You are watching in the loop. Were streaming on your phone and bloomberg. Com. I am betty liu. I am cory johnson. We are looking inside ups. All day we are going to continue. Right now, the company is in the midst of its busiest time of the year, maybe the busiest day of the year. Carol massar is that the company in louisville, kentucky. Here with the chief Financial Officer of ups. It is great to have you here with us. Thank you and welcome to world court. Port. When you wake up and see snow, what do you think . Delivery is an outside sport. We have to be ready for whenever nature throws us. This time of year with the added volume and weather, a can create some challenges. Our people work hard. The drivers have to be safe and very careful when there is icy roads. We manage through it and make sure that our customers packages get where they should. Talk to me about delivery and volume. What is it running compared to last year . We expect this to be a very busy peak season. This shopping season between thanksgiving and christmas has shopping days. When the calendar is compressed like that, you seem on a daily basis. We expect our average volume to be between to be up about eight percent. Last year, you had your youest day, do you think might break your mark . There is a good chance of it. The busiest day and world port will process over pre. 5 million packages in this building alone. Over 3. 5 million packages in this building alone. You do so much in ecommerce, but you are also working with brick and Mortar Retail as well, to help them compete against the online ecommerce, arent you . Bigger,commerce becomes we work very hard to help the brick and Mortar Stores make the sales. One of the things we are seeing is that a lot of good retailers are using their individual, local stores as shipping locations. We may have ups drivers making pickups at four or 500 Different Stores around the country. Deliver the goods the next day and that local area. Youre helping manage their inventory, in essence. Yes. What do you see, in terms of volume, what does it tell you about the consumer and the economy overall . U. S. Economyen the improving steadily, but not as fast as anybody would like. That is the story all year. During this holiday season, you see different numbers. The surveys that are primarily brick and Mortar Retail stores, they show slightly disappointing results, but at the same time, ecommerce sales are up double digits. How that averages out, we will see when the holiday does come. You do a lot of Package Delivery, i talked a little bit about the supply change. You are looking for different areas of growth. Ups does a good number of acquisitions. We like small and midsized acquisitions to bring new capabilities to the company. We have one of the best customer lists in the world. Many customers use us. When we look at new services we can bring to customers an a company andught Eastern Europe that specializes in distribution. That allows us to have very viable facilities for distribution and medical equipment in Eastern Europe. We see more acquisition potential for 2014 in Eastern Europe . We will continue to do acquisitions. We will be in geographic areas where we are perhaps not as concentrated. As we continue to develop industryspecific Solutions Use all the building yesterday here and we have found that when we can bring together our traditional package, our warehouse capabilities, and link all the capabilities together, then customers can really get benefits. I know sustainability is an important area for you. You want to be fast and efficient. And youre thinking about the impact on the environment. That more with less is what we need to do efficiently. And it has an impact on the environment. We have spent a lot of time researching new technologies. One of the biggest things we just committed to purchasing 1000 over the road tractors that run on natural gas. Were very excited about that. Supply is wonderful. It is a much more efficient way to power vehicles. We are a big supporter of that. You for that. I know it is noisy here. Thank you for joining us. That was kurt kuehn from ups. Massar. Was carol keep watching bloomberg tv as we continue to do inside ups coverage all day. The ceo at 3 00 eastern on street smart. A look at the top headlines. A Memorial Service being held for Nelson Mandela today. President obama spoke this morning to a crowd which included world leaders, celebrities, royals, and tens of thousands of south africans. Nelson mandela last thursday at age of 95. Lulu lemon the founder of the company is stepping down as chairman. He will be replaced by the lead director. The ceo is also step down and will be replaced by former toms shoe president. All because of those sheer yoga pants. A drugmaker warns that its earnings will miss analysts estimates next year if regulators allow Generic Companies of a multiple of a multiple sclerosis drug. We will be back in two minutes. Bitcoin has been a speculative frenzy lately. But will all the attention celebrating the 12 days of bitcoin not really a traditional holiday. Matt miller is here for a day two. On the second day of bitcoin, matt miller gave to me what have we got . Today is the day where i start experimenting with all the different kinds of stuff i can buy. Each day we are going to do Something Different with bitcoin. Yesterday was about acquiring the coin, which i did. I bought it for about 800 in cash. Cory actually stole 20. I take it while you were not looking, but i gave it back. What is the value today . Today, the bitcoin is sitting in my wallet right now and is worth 924. On a transaction, ive already made 125. I made 20. People keep sending eco money. It is heart of the way the community operates. It is part of the way the community operates. I have gone to reddit to get help into learning how to use the bitcoin and learning how to negotiate through the potholes of trading it, holding it, and keeping it secure. There are so many different aspects. It is fascinating. People on reddit, if they like it comment you make or they support your cause, they will tip you. One dollar here or three dollars here. Some denominated in dollars. It is really fascinating. Today is the day what can you do . I am looking to buy stuff. It is almost limitless, the amount of things you can buy because of some intermediaries. There are a number of tools that can help you buy it bitcoin. Gift is one company. Another one called foodler that barry silver started. Aforcoins is the one i used yesterday to buy about three pizzas for 30. Pizza,are enjoying that by the way. Well, i bought three of them and really fed the whole office. That was the last piece. I looked on gyft today and started going through all the merchants. I could buy stuff at cabell as, which is my favorite store. I could buy stuff at Whole Foods Market which is the upper east sides favorite store. I could buy from nike. It is sort of like a broker . Exactly. You buy these gift cards with your bitcoin and then take the cards to the vendor and you can spend your cash there. I have a question about the speculative nature of this thing. Everyone is so excited. They are literally handing out this fake money. My old Business Partner sent a picture to all the cysts represent for an sick research sent a picture to everybody at his company of this lotus with a license plate that says bitcoin. I have massive respect for somebody who drives that car. It is a fantastic channeling car. It is not have a huge engine or mountains of power. It is a car guys car who does not have 1 million. You could probably get that for 30,000. Wow. That is not a quite statement. It is not a brandnew car. Is where i have started to think of bitcoin as two different communities that often work together. There is one group of people who think of it only as an asset. Because of the way we are trained, we hang out with wall street guys all the time. Were talking about stocks and bonds and financial assets. That is the way we think of it, only as a way to invest and make money. There is a Different Community surrounding bitcoin that started it coined. There is a movement behind bitcoin. They think of it in a different way. They think of it as a mason currency, as a movement, that isg in beta form still being developed. The interesting thing about the transactions, both micro transactions where you buy something for one dollar or three dollars and give somebody tips on reddit, but you can also move 1 million across borders without getting stopped by a government with almost no transactional fee at all. Matt miller, the bitcoin expert, de two. There is a deal, and we will look at what the new exposure can mean for the all things d startup. Americans are spending more than ever on firearms. We have to look at what is driving gun sales today in the loop. Nearly three years after it was first introduced, the government is finally voting on the voelker rule. Five regulators will be voting to approve this rule. I will bring in tom keene. Joining us from new york is Neil Borofsky, former bestial Inspector General for tarp. First, breaking news on General Motors. Big changes at the top for gm. Gm is said to name the first female ceo of the detroit automaker, succeeding dan ackerson. This there have been many contenders for the job. He said he would be retiring next year. She will be succeeding dan ackerson. Pretty big news. They are really turning over the company. She has been on the list to take over for a long time. She has spent her entire career at gm. Her father worked at gm. She went to the gm technical institute. She literally has been every moment of her life except her stamford business degree at gmp richy was plant manager. An ran hr p reggie is not engineer the, interestingly. Right, but she is has overseen development over the last few years. Controversy over her getting that job because she was in hr for quite some time. Some said she was not a product person and should not be in the post killer in the post. She went to kettering. She is an engineer. Indeed, she is an engineer. There was some controversy because people say she is coming from hr, but that is not really the case. She was already the Vice President and charge up product in charge of manufacturing, i should say. I gave her another hat to wear with hrp richy was still running manufacturing and hr. That was from july 2009 until may of 2010. She had a stint in hr that a lot of people would say helped her to shape the culture of the company. Then she became the first female head of product and is now going to become the first female ceo of not only an american car maker but as far as i know any carmaker ever in the history of making cars on a massive scale. It is a big story in the sense that she is a woman. Any negative fallout will probably only come from the fact that she is a woman. But she has definitely got the chops. She has been at gm for over 30 years p reggie started working at a plant as over 30 years. She started working at a plant as an intern. Said it is inevitable that a woman is going to take over at some point at either General Motors or one of the big detroit automakers. Here is thatction up from thea came softer side of hp, and i have much respect for her. The management side. That is a sharp distinction. And she came from lucent. Person tried and true. She is from michigan. I have family there who have grown up in the same world. That is a world where being a plant manager is as big a job that someone in the town can have. How toissa mayer say that . Mayeron meyer marissa was hugely qualified. Carly fiorina and Morrison Meyer Marissa Mayer is that mary barra is a car gal. There was a comment that there are no car guys running the detroit 3 right now. They all came up through finance. Even Sergio Marchionne started out at beloit. And ford, alan mulally is an engineer but from boeing. He said there are no car guys but there is going to be a car gal. He was basically saying she is it. Half the cars in the United States archer than by women, so they do have some insight. Half the cars inc. Of the United States are driven by women. You were there during the bailout. This happened right after the government finally sold its shares in General Motors. What a great way for gm to celebrate that it is free at last from government ownership. It is a bold move regardless of her qualifications. What a great shattering of the Glass Ceiling in this industry. I think it is good for gm. It is a big global company. As much as it is an american company, it has a lot of cells overseas. This is the biggest u. S. Car manufacturer by the Big International car manufacturer as well. Sksand one of mary barras ta will be to try to the gm on the same footing as international competitors. Companies like toy yoda, volkswagen, hyundai have better Profit Margins than General Motors. Part of that is because they make their cars on much fewer platforms. Volkswagen only uses 15 platforms to make its multitude of models. Meanwhile, General Motors with fewer models uses 30 platforms to produce those cars. She wants to cut that down to 10 platforms by 2020 to save 1 billion. And she wants to electrify the fleet appeared to want to boost the amount of cars they make that run on electric power to 500,000 within the next four or five years. She has Ambitious Goals for the company and to help it compete better with international counterparts. Mean for thethis other folks at gm who have been sitting on the sidelines, seeing if they were going to be picked as the ceo . It is a very good question. Frankly, i am wondering the same thing. What does this mean for mark . Oyce he has been there for so long. So many people have had him tipped as the next ceo. These guys are also from well, diverse backgrounds as far as cars and finance. But this is the thing, you have to either be an engineer or finance guy to be the ceo. Mark royce is the engineer. Is the finance guy. They both drive race cars as a hobby. Both of them may have thought they were in line for the job. You do not really know unless you are inside the company. Obviously, ackerson has had a preference for mary barra for while now. It is fantastic for the government that has worked so closely with gm to get them to name a female ceo. They have four females on their executive board and i think four on their board of directors. Hang on, i know Neil Borofsky has to run off. Thank you so much for joining us. I want to bring in another auto expert. Maryann keller. You have got desk first off, how do you feel about this appointment of mary barra at gm . I know everybody will be pointing to the fact that she is obviously a woman and the first auto female ceo evan company. But i would hope that that was not the reason why she was chosen. I would hope the reason she was chosen was because she is the best choice for the company. Is she . For me, it is a surprise. Because i thought that steve gursky, who clearly wanted the candidate have been a , and of course mark royce because of his long experience and the fact that he has done a very good job with gm north america. I think bringing her into this role gives the Company Somebody who has had the exposure now to the International Product lineup. And if gm is going to be a global company, it aspires to be a more rational global company. Gursky is one of the guys who may be a candidate for leaving now. He wanted to do some other stuff. Get along well with each other, he and ackerson. Quick obviously, steve has been putting out fires in europe. His task has been more brokented with fixing parts of General Motors van it has been looking towards the future and seeing how you can make this company a more formidable competitor globally. All of it hinges on engineering and roddick, and that is what she has been doing on engineering and product. Choice. Is an excellent is this a good time to be in charge of this business . It is a great time to being code charge. You have a company that is financially very sound and now has a Good Foundation in the United States is great product. She is not going to have to worry much about the u. S. Market for the next few years. Her issues are going to be how to repair some of the dysfunctional businesses overseas. What is her most recent accomplishment . What can we grasp onto to say she put her stamp on that . I am not sure you can point to them sort of externally. Because when youre working on Product Development and landform organization, you are really looking at things that are supposed to happen in two, 3, 4, five, 10 years. Obviously, her choice is the next ceo comes more because the satisfaction that they have with the direction she has taken internally. You do not see that in todays sales figures. Thank you for joining us. Maryann keller of keller and associates. Breaking news about General Motors, the detroit automaker to go naming mary barra the first female ceo of the company. We will keep following this story for you. The stock is slightly lower in the premarket. 30 minutes to the opening bell. This is in the loop with betty liu. Welcome back. General motors makes history today. They choose mary barra as the first female ceo. Will replace dan ackerson. Shares of Toll Brothers rose 65 in the fiscal fourth quarter. Earnings beat estimates. The average home price up 17 in seven two 703,000. The editors all things behind dear taking things to Nbc Universal. Getting back to the breaking news story about General Motors. Mary barra, the product chief, will be the next ceo of General Motors, the first ceo female ceo. Dan ackerson retiring in january. He mentioned it was inevitable that at some point a woman would take over a carmaker. Big dealis not just a for her and a big deal for gm, the Largest Company ever run by a woman. 5 million in revenue. Compare that to startup company. This is my understanding, that this really attracted the attention of dan ackerson and his support over the past year or so. Lets my sources on the board say when they were thinking about the next ceo, the issue is about continuing the work they are doing. There is a lot of work ahead, effort to continue the transformation coming out of bankruptcy. They do not feel they have reached the point where they can take a deep breath and declare victory yet. Dan ackerson as ceo likes to often say 40 day bankruptcy was a curse and a blessing. A blessing they got out and saved the brands. Was they were not able to do the systemic changes they were not able to do that would normally occur in a bankruptcy. He has spent the past few years doing renovation. Mary will have to continue some of those efforts and really push for the cultural changes that so many outsiders say need to occur. Simplehas said she has a philosophy of no more crappy cars. You point out in your story, they put out 18 new models this year. 14 new ones next year. Cards isr calling cutting layers of management. Cutting through red tape. It used to be three big bosses had to approve a new car design. To one. As come down is that through her work . She is based on the idea of getting to the issue in getting it done and making a decision and not messing around with it. Move forward. She wants to get at the work and not let the work overwhelm you. What do we know about the other executives in where they are headed . Ammon who had been chief Financial Officer will become the title of president. Mark royce perceived as the front runner in the race will take over marys position as the chief product officer. Under theisen up previous ceo, ed whitaker, and had spent the past few years running the north america operation. He is at the heart of car guy. Will he be happy in that role . A lot of outside folks say he we big that she would be most happy as a parttime, having his hands in the development of the vehicle. On thehat enjoys being race track. He is a car guy. Her resume, it al is all gm. Assistant totive jack smith. When you look at her resume, what jumped out to you . She started essentially on the plant floor and worked her way up to the 39th floor of the headquarters in downtown detroit. Along the way she has had pivotal positions as she ran importing plants here in detroit that today makes the bolt. She has experience running plants. She has experience doing the complicated engineering required car frombring a concept into the plants. She has experience in various degrees of engineering. Those are the kinds of complexities that a leader of helpfulmotors will be to be versed in those sorts of things. One of the things missing on her resume is a lot of time and marketing. She will be surrounded by a team of folks i do that. She spent time in human resources, a brief stint, but for some people it labored labeled her as an hr person. In that time a very important part of the company. They were coming out of bankruptcy. She had her hands shaping and form who the next leaders would be. The person on the ground trying to change the culture at the time. I think she jokingly told Fortune Magazine that her biggest achievement was getting rid of the Company Dress code. Great story. Congratulations on the great scoop. Time for todays big number. That number 4,000,945 allison 700. That was her full compensation for the last year as the divisional Vice President of General Motors. 61 years old. More than your average public executive with restricted stock awards nearly 4 million last year. Ensation she began working at gm when she was 18 years old while she worked towards an Electrical Engineering degree. The biggest vision of sales that has a woman as a leader. We are forgetting one, pepsi is bigger by margin count. That is an interesting salary figure that you pointed out. Dan ackerson gets paid about 12 million. Ballpark. These are difficult to figure out. Stock valuation is part of that. Every company uses a different model. Lets just say alan mulally sneezes at these paychecks. I think he gets paid more than 30 million per year. Surprised at how well compensated these Auto Executives really are. Bottom line, it is a lot. They are making products that sell for a lot of money. The one thing gm has done so well is they are coming out with great products. Consumption consumption was bold, styling. Came in. Cadillac a racing machine. The camaro, it was bold. You can go down the list. A great jobne such with cadillac to show a to gmc. I like the trucks. We will be over this story all morning long. An exclusive interview with a former boss. Lead theer will help company out of bankruptcy. He will be joining market makers. Also coming up, nearly a year after the the sheer pants of lulu lemon announcing changes to the management team. Will it be enough to turn the company around . We will find out. The smokescreen of the business of marijuana. Stay in the loop. And washington, five Government Agencies will vote on the volker rule. It could ban portfolio hedging. Any moment now the government is set to announce the adoption of the rule. It would restrict banks from trading on their own account and limit them to private equity. Peter cook has the details. Is wall street worried or first of all, it is a complicated day in d. C. And has taken three years to get this done in the first place. Now we have a snowstorm that has closed on the federal government, yet this will still go out. We will see the rule at 9 30 eastern time and there will be both today to finalize this thing. This was first conceived by paul volcker to reduce the risk in the financial system. Not going to be late be relieved by what they see but they will at least get certainty and target to shoot for. Do not be surprised if this ends up in court. A band for proprietary trading. Keep the things from being able to invest in private equity firms and hedge funds. There are specific hedge funds it specific rules in this. Have these all been made . Do you expect once it is approved by the regulators that there will be more changes on wall street . I think they will have to read the fine print. A lot of them have already moved out of the hedge funds and private equity investments. That aspect of the role was pretty clear. There was questions about how much of the Market Making could and 10 you. They will read the fine print as they can do more of the business because it abides by the business or maybe it is right on the edge and is a skill that. It is a significant amount of money. The top five ranks in the country came from the mark it principal business. We have seen an advance copy of the rule. What it says with regard to Market Making. The rule says the trade must not exceed the reasonably expected nearterm demands of clients. It remains to be seen if regulators agree on what reasonable means. That seems to offer latitude to the banks. Victory for them. The hedging language may be even tougher. You mentioned the london whale. Already clear this would prevent that kind of portfolio hedging. Pretty clear this would prevent that kind of hedging. Thank you. We will watch how this plays out today. We are staying on the news about General Motors and mary barra, preparing to take the reins of the automaker. We will talk more about this announcement. Here is a look at the top tech stories. Yahoo disclosing more details on advertisement revenue. Letters have been sent asking for clear dictation that they did not want to get. Withhad a search agreement microsoft. 31 of revenue in the past quarter, a huge business. They will tell us the truth about the numbers. Twitter a named the most since its ipo. Biggest gain since the company went public. 9. 3 . Hoping new advertising product will spur future sales. Positive analyst commentary as well. Than 200 orhed more 2 million users. Get all the latest technology, media, the future of business at 1 00 and 6 00 on the east coast. For the othering tech ipos after the twitter tape you debut with such a big deal a month ago. With the opening bell in just a few moments. Welcome back. You are in the loop. Is no east coast. You brought the snow in. Snowy east coast. The hour,tes after which means Bloomberg Television is on the markets. A run date. At s p taking a pause after another record close yesterday. Next data point out of china overnight. Stronger retail sales. In the past hour s p futures picked up a little bit of steam to the downside. In an investor conference, brian moynihan, singing the economy still not very strong. Markets are waiting on more news about the volker rural. Le. That is right. Waiting for that news. Counting down to the open with a top 10, the only trades you need to know about today. Alix steel joins us. Starting with number 10, teva pharmaceuticals. Warning that analyst earnings will miss analyst estimates. Brings in more than half of the prophet. Number nine, texas instruments. Narrowing in the fourth quarter, right in line with the guidance was. The company gave a warning in the thirdquarter results. Texas instruments dealing with uneven demand but improvements in automotive and industrial. This could be the First Quarter in more than two years they do not see falling sales. Steepled nicholas racing shares of the mobile Oncology Company to buy fro buy from hol. Ifel nicholas. number seven, autozone. Reporting firstquarter earnings that topped wall street estimates. The Company Performance was boosted by the addition of new stores in the u. S. And mexico, and the growing commercial business. A licensingix, agreement with Micron Technology for rambus. J. P. Morgan sees the settlement as a positive for rambus. Number five, united rentals. Fromraised to the top pick outperform. Now has a Monthly Price target of 85 per share. The stock of more than 50 this year. Plus heads and new 52week high yesterday. Number four, ups. This is the biggest busiest time for the big brown. Taking you inside the worlds biggest package he delivery Package Delivery company. We will have exclusive interviews with the top executives, including the ceo later today. Number three, Toll Brothers. Reporting fourthquarter earnings that beat analyst estimates as prices for houses are climbing. Talking about the drama of yoga pants. Talking about lulu lemon humming in at number two. The founder and announcing he will step down as the chairman. The Company Naming former toms shoe ceo. The company has suffered a series of problems, starting with yoga pants that were to share. Luckily mine are not to share. Number one, General Motors. Not too shear. Mine are not either. The automaker naming mary barra as the new ceo. She will reclaim replace dan ackerson who is stepping down in january. She will be the first female ceo in the Global Automotive industry. Some say it is about time. For the past two years she has been in charge of Product Development and quality for all gm cars and trucks. Basically responsible for the look and feel of General Motors vehicles. Breaking news out on the financial front with the volker rule. Snow has closed down the federal government. It will still be voted on by regulators. Everything has been complicated, including the final adoption. It has taken three years. Critical piece finally becoming a reality. At this hour, the five regulatory agencies have released the final link which that wall street has been so eager to take a look at. They will look at the final language, and all five regulatory agencies will meet and vote on this and finalize it, making the rule of the road going forward. It does ban proprietary trading, trying to profit off their own accounts. And also bans them from participating in hedge funds, private equity funds. There are exceptions for hedging market basic business of making principal trading. The language its very important. Tougher on the hedging side of things. Things like the london whale trading would be banned under this rule. There are key language fours the lawyers to go over carefully. Lawyers to go over carefully. A lot of them continue to buy stake in certain companies, buy securities, with the notion that has a specific purpose to serve test him or and are hedging risk specific to to serving them risk specific to this. One, they can continue to trade in sovereign debt. That was not part of initial rule making. There were complaints that that would negatively affect those countries. Their foreign debt. Separately, there is also a language with regard to compensation packages. Traders cannot be compensated based on rewards based on prohibited trading. Seems pretty logical. Is pretty significant, bank ceos must sign off on the notion that they have the compliance programs in place, but the language does not go so far to have them a test for compliance is actually happening. That is a big thanks and. A little bit off the hook him a regulators backing off from a much more strict interpretation of that. Thank you. Nothing has been easy or straightforward and this journey. Thank you. Peter cook, chief washington correspondent. Turning to the call on the markets. Managing a traitor who manages 3. 5 billion. He has several calls, but the one i want to focus on his auto related. It is important news. One, the government does not own General Motors anymore. Gets them the ability to do what they want, pay what they want and go forward with the strategic plan. Secondly, the new ceo is great. She has been at the firm 30 years. About time you have a woman running a car company where the fires are not just all mail. She started gm as an intern. She has been there 30 years. She has an mba from stanford. She understands product and engineering. She has been in hr. She knows the company. From what i hear, she is very well respected. That will be important going forward. Deliver thel she past that gm has . I think ford is a little bit ahead of them in terms of finances and products. She has some runway to go. I think if she can prove herself, the stock will do pretty well. You are actually quite bullish on the auto industry. We are. It has worked out quite well for us. Overall, not just here but overseas, about average car life is 11 years. In europe, finally starting to get better, i think that is where you will see traction. Exposure thanore four does. In terms of growth, we have seen a big turnaround in profit. Do you think the games can continue with the cars they have on the market right now . I think consumers have turned the corner, whether it is in china or asia. Especially here in the u. S. As well. Given the overhang we have removed with the government, and now the new ceo, no more questioning who will run the company and she will be able to go in the right direction. How do you play this from an investor point of view . Others. Are the Car Companies and Auto Parts Companies as well. Companies like elf i delphi. Oems. E from the top it does not really matter as to who will win the war, they will be providing the pieces that go into the automobiles that people will buy. One of our analyst met mary barra. Was quite impressed. Not she was probably the most knowledgeable person in the room, which is great. Including the analyst. That is what you want to look forward to, someone people have known and unknown commodity and has been around for 30 years. I think it is great. Thank you for joining us. Story were following this morning, Brian Roberts and Nbc Universal making a deal with the Conference Start up all things d . A very big conference for those in tech. That is more in just a few moments. Lululemon founder may have put his foot in his mouth. Not a yoga move. An interview he did with trish regan last month. Frankly, some womens bodies do not work or it. They do not work for the pants . They do not work for some womens bodies. It is about the running through the thighs. Comment, buttrue not popular. Now he is stepping down as chairman. Julie hyman covering the story. It isis change means removing a wildcard. This is not the first comment he has made. He has made comments through the years. He has made comments like this historically. Christine day, who has been ceo, has said she would be stepping down as soon as they found a successor. Here have been reports that has been popping into the office sort of meddling in the company affairs. This removes that as well. Remember 20072008 for the ants that claim they have special benefit because they were made with seaweed and not made with seaweed. The New York Times did their own studies. They claim it was the seaweed. They claim it was woven into the fiber. Through pants. Rubbing through the size. He said his to blame for the killing the pants have seen. More importantly, the company is getting a new ceo. At toms the shoe company. Analysts are saying this sort of of companies and experiences might make him a good fit. Shares are trading higher today. That was really in the overhang. Who will get in here and fix the supply chain problem . There was a culture problem. They have the culture of the landmark forum. They strongly encouraged a lot of employees to attend. We will see if that continues. One thing we have not mentioned, everyone getting into yoga pants. Thathat is still is still an issue. Thank you so much. Moving and shaking this morning, whoset ceo Brian Roberts Nbc Universal unit disclosed the deal with all things d. In badly whong broke the story for us. Those who follow these very do. Ely like cory we all this is a big eel. This is a big deal. It is a big brand name. To have the backing thomas to have the exposure on any one of the networks is big. They wanted this because they tech . N in in tothey are looking for ways cover the tech industry, which is pretty big we all know. Banks because of the groundbreaking work. We are all close in the technology world. I am very excited for them. You actually had numbers. Give us numbers. Tell me the size of the business. I wanted to know how they were doing, they have conferences. Is mainly thes conference. The one conference every year. 500 limited seats and they sell out. Bigticket items. 500 for one ticket. There is also a website. Advertising on that. Altogether the business makes 14 million in sales each year and 5. 5 million and profit. A tiny little business. Nice margins. They punch above their weight class. Comcast know how much put into this . 35 in this about new entity. Valued between 2535,000,000. That is a lot of money. A third of 5 million annual profit for 20 million . Exactly. That is a great valuation. It will be interesting to see if they change coverage or expand coverage. What do we know about the plans early quickly . They are not in radio or tv or anything else. They will do more tech reviews as well. He is known for tech reviews. Great job. Ed lee also doing a great job. More in the loop. When we coe back. Time for the global outlook. Uruguay expected to be the first country in the world to legalize marijuana. Will create a Legal Marijuana market. , weed expert. About that. Know i know a lot about the subject. Is as expected, a surprise . It is a could expect it is expected to go through. I guess it is a surprise because this is the first country to legalize the consumption and sale. The country wants to be able to regulate this better. Users will be able to buy up to 40 grams per month. Registered users can grow up to six plants. Coops can grow up to 99 plants. You will not be able to sell to of 18. Him under the age the whole plan is to better regulate an industry that is not regulated. Home state of california, there are places it is legal in the county. Mendocino county, for example. This reminds me of Mendocino County because you are allowed to grow a certain number of plants. In this particular case, you do not have to worry about the feds knocking on your door. Was it a pretty smooth process . Interestingh an country right now. They have done a lot to liberalize certain laws. For example, they passed gay marriage, which is a big deal in latin america. The most liberal abortion laws that he has put into place, and now this. There is a definite trend. You look at uruguay and other countries that have done somewhat similar things. No one as radical as this. Portugal decriminalized all drugs. You can go there and get caught using heroin on the street, and nothing will happen. Has been a tremendous results. They have seen a decline in drug usage overall. They spent all the money they would have spent on incarceration on programs to get people help. It has resulted in a decline, especially amongst the youth of drug usage. That is encouraging. Uruguay is looking to countries saying there is probably more we can do to help with the problem, and hopefully stem some of the crime that surrounds it. Marijuana most profitable drug in the world. Certainly watching that in uruguay. Thank you. Trish regan. That does it for today on in the loop. Tomorrow we will be back. We will joined by be joined by Howard Buffett and the president of rwanda will be talking about the countrys turnaround and how it is trying to attract more international business. Tomorrow at 8 00 eastern time. It is 56 past hour, which means Bloomberg Television is on the markets. I am alix steel. Getting you caught up already minutes into the start of u. S. Trading. Looking at a down day after the s p closed that a record yesterday. We have had mixed data overseas and China Industrial numbers less better than estimated. Retail sales came in better than estimated. A mixed picture for the global economy. In terms of the u. S. , still awaiting more news about the local rule. Volcker rule. A little bit of pessimism filtering into the markets. Soybean futures falling from a near threemonth high. This is ahead of a u. S. They report on u. S. And international supply. Joining me is gary silver. Larry silver. What are you expecting from this report today . It seems that most people think the narrative will continue that stocks around the world are very tight. Lets consider the fact that we see these surprises like we saw yesterday. China booking 200 50,000 tons. That caught everyone by surprise. Why arent we seeing a big rally ahead of the tight supply narrative . I think it is because there is a positive risk premium open to the soybean future. People understand the south america planting season is finished. They understand brazil has run out of export, putting more demand on import from the United States. Traders are long 26 of the open interest. 100 57,000 contracts to be exact. It is creating positive him and andhim assuming logistical weather concerns. A very long growing season in south america. That combination, we are vulnerable were a big downdraft. Right now is traders are very bullish. What is korans role corns role in down accelerating the downgrade . Commercials tend to be really short corn. See thentinue to downdraft, we want to see soybeans follow suit. It becomes a cheaper alternative for some people. Lets talk about supply. You mentioned brazil, but next year the estimates are for brazil to produce 88 million tons. That is enormous and will surpass the u. S. Cause pressure on prices . That goes to the store story that think it is full durable. World wide supply continues to explain in expand. The story that some think it is fulv vulnerable. Also, weather. Or april,til march the harvest season. A long time to worry about what will happen with the crop. Talking about demand. You mentioned china. To use ratio for beans, how much extra they have is that 10 . Put that into perspective for us. How low is that . What could demand be in the future . Very low. 10 . That continues to keep momentum on the upside for soybeans. It could go much higher, almost 15 , if not higher. I think the market is not fooled as people continue to realize it could go much higher. We appreciate your take. We are on the markets again in 30 minutes. General motors, his replacement takes the reins of gm, the historic moment, you will hear from the former ceo, who talks to us exclusively. Final votes, no shock, d. C. Regulators, braving the storm, finally passing the volker rule. Wilbanks find away way around the new restrictions