He weighs in on the trade war but says the group is extremely wellpositioned despite the risk. If we are not forced to do deals, we have a good strategy. Years, wehe latch you are wellpositioned to capture organic opportunities. Of course, if we have an opportunity to evaluate nonorganic options, we will, but it is not something we are forced to do. Nejra defense undercut. Gordon sondland says President Trump demanded a quid pro quo from ukraines new president as he implicates senior officials in the administration. Welcome to bloomberg daybreak europe. Breaking numbers coming through on the bloomberg. The event headlined is that is proposing suspending his 20182019 dividend. That is the main thing to look at. Fullyear adjusted ebitda comes in at 802 million euros. A little soft on the fullyear adjusted two number. 42 billionevenue at euros. Estimate, 41. 6. That comes in slightly better than expected. The strategy was key for investors as the industrial giant reports these numbers today. Months of investor focus on the development of the elevator unit disposal. Really, what we are seeing and focusing on is it being set to suspend this dividend as losses have been widening. Dividend to suspend payments after it warmed losses would deepen. Crisis for thee industrial giant peered losses were significantly worse in 2019 and 2020. The uncertainty around the u. S. China trade war have complicated the operating environment for companies. The Industrial Group has downgraded its fullyear earnings outlook and said weakness in the asiapacific region oppressed its thirdquarter revenues. Chinas Economic Growth hitting the slowest pace in 30 years. It has affected big multinational companies. For more, lets get to shery ahn at Bloomberg NewsEconomy Forum in beijing. Great to see you. Shery thank you so much for that. Whom to best ask . The ceo joins me at the new Economy Forum in beijing. Thank you so much for being with as. We are seeing so much uncertainty over these trade tensions between the u. S. And china. How is that affecting your customers view and investment plans ahead and how is that affecting your business . We look at it through the lens of our customers. In china markets, we are viewing our customers, where are they going with their demand, where do they see their changes, and there has been a lot of discussion. Do supply chains move . Forward, wills go customers move production . We have not seen that. We continue to serve customers in china. Isare 70 of our revenue specified in our customers materials or the processes they use. That tends to be very, you know, and cycle demand from them, that is staying here in china. Shery one of the most difficult markets for u. S. China specifically. What made it so difficult for you to gauge customer demand here . Mike we saw softness. Industry, automotive and we saw a decline in demand. It globally slowed down. China, significantly it declined into 2019, and it has been staying soft all year. Electronics softened as well. Between china electronics, automotive globally, it is 30 of our road for new revenue that we saw slowing and we had to make adjustments in our plans as we went through the middle to the lagger part of the year that are part of the year. Shery is it difficult to gauge demand . Mike we get clear demand from our customers. And specifiers of our solutions. The automobile makes and models, the electronic oems. In between us is a channel and that is something that has to adjust to changes in demand. We saw that in the first half of the year. That added to the decline. Have been down. The channel took out inventory, so we saw doubledigit decline in automotive for a time. Shery what have you seen Going Forward . Will you see this demand come back next year . Mike we see inflections first. We see downturns early. We tend to lead out as well. Us, whatconomists ask are you seeing . Do you see anything changing . Second half of 2019, it has been pretty steady. We told everybody, we see q4 much like q3. We have not seen the inflection up yet. There is hope and optimism things will get better, but we have not seen that yet in the marketplace. Shery you have to revise down in your marketplace. Do you wish you had been more conservative . Mike we thought we were. We came into the year knowing electronics and automotive would be stopped. As we came to the second half of q1, it changed dramatically, and you can be more conservative, but that has impact. Shery what do you think led to that change . Mike the marketplace saw softer consumer demand in both electronics and automotive. It was global. It was also in the china market. That changed. It slowed down. The inventory and Everything Else had to adjust. We had to adjust. Have is thehings we strength of reacting quickly. We can react within a cycle. It was difficult to react in half of a quarter, but by the time we got in the Second Quarter, we realigned ourselves to the changes in the market place and we have been delivering strong execution operation performance even in a Slower Growth market. Shery you do a lot of costcutting as well . Mike we did. Everything from operations to the investments we were planning on larger growth around the world. We just pulled back on those. We did that fairly quickly. Shery you have gone through with massive acquisitions. The medical tech company as well. Some have pushed back on those cost synergies. What do you say to them . Mike we continue to invest for the future. We are not going to that is one of the strengths of coming out of slowdowns. We keep investing for the future organically and when we see the opportunities to really take advantage of acquisitions that can leverage the synergies, the thing that makes our company greater than the sum of our individual parts, we will make those acquisitions as well. The largest acquisition we made today at happened to fall right in the Second Quarter after we had come out with a slowdown of those markets, but it was really the great strategy. Takes advantage of our global position. It will be a very strong platform for growth. Nejra nejra is everything you are saying right now meaning you are looking at more acquisitions ahead in organic growth . Shery it takes a lot of our focus and we are putting a priority on that. Doing another large acquisition in the near term is less likely, but we continue to make key strategic acquisitions. We had made one right before we announced the company in the digital space. A billiondollar deal, which is in line with some of the acquisitions we made in recent years. It does focus office on a priority. Shery when it comes to these Big Industrial giants, it is all divesting were spinning off. Do you feel the pressure to simplify . Mike we have one big idea that drives us. Centered on our technologies and we take our technologies and combine multiple technologies. We solve customer problems in unique ways. We end up specified and designed in at our customers. They are a unique Value Proposition for our customers. We end up in many markets. We see opportunities. Largely material science in markets, transportation, consumer, health care. We end up and we look like a diversified conglomerate from a market perspective. Even our portfolio is very broad. That one 3m model at the heart of it. If we do not deliver synergies off of that, if we do not have differentiated value, it is up to us to manage our portfolio. Parts of our business become disconnected from those synergies. We make acquisitions when they are connected to synergies other than that, the priority is to continue to invest organically. Shery are you bound by this big unit . You dont really see it being broken up . Mike you would have synergies. If you pull apart those pieces that benefit from not just our Technology Platforms but our manufacturing technologies, we have a lot of intellectual property in our manufacturing. Our global capabilities to operate these different go to market models from health care to consumer to industrial. Shery do you see the slowdown in growth in industrials of bottoming out anytime soon . Mike it has been more study in the second half. One way to see that is what is happening in the distribution channels. Are they adjusting inventory . They have continued to moderate a little bit. It has been less pronounced than the first half of the year so it is more stable. It still has been stable at a low growth level, and that 30 of our business in electronics and automotive, that is still negative. Shery you can still have it hanging over 3ms 100 lawsuits or so over alleged water contamination because of your chemicals. What risk does this pose for your company and how should investors see this . This ishis mike very complex. When you have been leading to try to be as transparent as we can with our investors and all of our stakeholders, our employees care about it. We are leading forward with a focus on 3m sustainability, trying to help people understand it. I think it will evolve over time. Probably get more visibility on some of the litigation next year. In the meantime, we have taken a step forward where we manufactured to remediate to step forward and solve some of the challenges. Shery do you have an idea of total liability . Mike not at this time. It is too early to have a view of that. We can get pieces of it. We have it in place for what it will take to resolve that but beyond that, it is too early to tell. Shery mike roman, great to have you here with me in beijing. The ceo of 3m at the Bloomberg NewsEconomy Forum. Back to you. Nejra thanks to shery ahn with. Ike roman stay tuned for more interviews from the Bloomberg NewsEconomy Forum in beijing, including with David Solomon, the ceo and chairman of Goldman Sachs. You can catch that exclusive conversation at 6 30 on the show, this morning london time. First word news with Rosalind Chin in hong kong. Rosalind damaging testimony for President Trump in the impeachment inquiry. He says Rudy Giuliani was working at trumps direction and demanding a quid pro quo from ukraine. Giuliani was calling up a white house meeting unless the country announced investigators that would benefit trump politically. President trump is expected to sign the bill supporting hong kong protesters. It was passed by both houses of congress and could go to the president as soon as today. It sets up a confrontation with china that could imperil the longawaited trade deal. Beijing says the legislation is a grave violation of International Law. Is nearing its 30 election in a year after former military chief benny gantz was unable to form a government. This follows Benjamin Netanyahu failing to do the same. Line up a news governing coalition. If it cannot break the deadlock, israel goes back to the polls. Global news, 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Nejra Rosalind Chin in hong kong. Coming up, staying the course. Bill winters says the bank is extremely long on chinese economy and shortterm economic pressures are manageable. Do not miss that exclusive interview, next. And how does Goldman Sachs ceo and chairman David Solomon feel about the trade war . He joins us for an exclusive interview. Dont miss it. This is bloomberg. Omberg. Deals. Re not forced into we have a good strategy. It has been quite successful over the last few years, and we are wellpositioned to capture organic opportunities. Of course, if we have an opportunity to evaluate the nonorganic options, we will, but it is not something we are forced to be. Nejra Sergio Ermotti speaking with manus cranny in beijing. He says the group does not need to do a deal to change the scale of the business. One group that is looking to a change of sorts is bengal santander janko Santander Banco santander. She spoke in an exclusive interview. We are ready to grow. Our business in dallas is doing great. Theres a lot of growth here and it is going to be profitable. Does growing in the u. S. Eventually mean buying in the u. S. . Not necessarily. I think we can grow organically. Nejra Standard Chartered ceo bill winters has seen a reasonably robust Global Economy but is going extremely long on the chinese economy. Inspoke with Francine Lacqua beijing. Are long and the medium and the longterm. In the short term, there theres some pressures. 5. 6 growth, these are pressures that are manageable. I think we will continue to get stronger. Francine it seems we are in a better footing than we thought we would be three or four months ago. It is still fragile. Theres lots of things going on in the geopolitical world which could derail a robust economy. I think it persists for a little while. We get into 2020 and beyond and i think it is pretty good, actually. It feels like we made some of the adjustments related to the initial phase of the trade war. If things get worse on any of the funds we watch quite closely, it will be different. We are optimistic we can avoid the detour back into that. At Standard Chartered, we are continuing to invest as if the economy will steadily improve over the next year and a half. Francine if we stay in this trade war without getting a phase i deal but without it getting worse, what does that mean for the World Economy . Bill i think china has adjusted and supply chains are steadily adjusting to the to this reality that it will become more expensive. We are seeing some of the companies dealing with it. The one that was identified as a result of a visit from President Trump was apple. Very difficult for apple to run their business. That is not a good thing for u. S. Consumers. I would say there is a flexibility and reality on both sides. Francine if you look at apple, what does that mean . Is it more likely beget a phase one deal because of the impact it could have on u. S. Consumers before christmas . Bill i do not know that the christmas effect is that big given the timing of things. Right now, it is as much a sentiment as anything. If the Consumer Community detente,there is a investments will begin again and people will begin to stop taking actions that one takes if they think tariff increases are pending. It is a confidence thing as much as a behavior thing. Francine the supply chains have changed. Will it go back to what they used to be for the resolution . Bill they are evolving anyway. China is not the low cost producer. It is a much more prevalent high value added producer so that change is happening anyway. The world was changed forever. The confidence of supply from a Single Source for anybody in the world has reduced. So people will be spreading their bets, hedging themselves, arranging alternative supply chains, and i am afraid there will be building more and more at home. I sound afraid because we all know that this whole theory of comparative advantage, we should be doing things where they are best. Bill wintersas speaking to Francine Lacqua at the Bloomberg NewsEconomy Forum in beijing. Francine lacqua is standing by. Joining us again today from the u. S. Economy forum with an exclusive interview. Great to see you, francine. Francine we are delighted to be here at the new Economy Forum and i am delighted to be joined by Goldman Sachs chairman and chief. Mr. Solomon, thank you for giving us your time today. Thank you for joining us. When you look at the Financial System in china and the fact that it is opening up, what does it mean for goldman . How much money are you putting in it . The most important economies in the world. Goldman sachs has been in china for 25 years. It is important that the opening up continues because we would like to own our business and take control of our business, so economic control of our business, so we are watching what is going on in the trade discussions. At this point, it is talking about the Financial System. If that occurs, we will own 100 of our business and i would expect it will make more significant investments there. We went in front of our board a couple of months ago with a fiveyear plan for china. And assuming we could own 100 of our business, that would lead us to put significantly more capital onto the business and significantly increase the people we have on the ground. Nejra how much more capital . David a significant amount. Hundreds of millions of dollars of capital potentially. When you think about the headcount, 200 people in beijing and we could see over the next five years that that number could grow materially. Francine that would be World Management . David our primary client franchise. Serve a very broad array of clients across china. We do think that the Wealth Management opportunity could be a very significant opportunity over time and we are starting to think about ways we could partner with people here to build out our Wealth Management presence. It is a business we are only nascent point at this point in time. Francine do we carefully get a phase one . David i think we care a lot. One of the big issues when you think about Economic Gro