We start with a new effort to support the growth of advanced manufacturing here in the United States, as Ford, JPMorgan, and the state of Michigan announce a launch pad to match buyers with financing with suppliers in a part of the U.S. economy that's fallen behind. We sat down with JPMorgan CEO Jamie Dimon, Michigan Governor Gretchen Whitmer, and Ford CEO Jim Farley as they gathered in Detroit to lay out their plan.
We're trying to fix a problem: onshoring things that were offshored in the name of pennies on the dollar, to make here in the U.S. where we need it to be independent, even defend ourselves. Ford's going to commit a billion dollars of purchasing for new companies that are going to be building advanced manufacturing, new capabilities, even magnets and rare earths that we used to buy overseas. And now we're going to buy here with the help of JPMorgan as well as the state of Michigan.
It's Michigan LIFT. Do they have to be Michigan companies?
So companies from Michigan. So, Jamie, I ask you, markets we rely upon for an awful lot, basically it's served us in good stead for a lot of years in the United States. Why don't markets already take care of this? Why do we need this initiative?
Yeah. So I think first I applaud the initiative. And I also think it's really important that states, government, business work together to fix things like Detroit, which they did. So that's the number one thing. But we need... we lost some of the muscle to do that. So I think markets will take care of a lot of it. But if you're an innovative company and you invented something here, you need an order. He's got to order it. It's got to actually work. They may have to build a real plant, not just an experimental plant. And so it takes that whole group of us to do this kind of thing. And hopefully this will be replicated. This needs to be done everywhere in a lot of industries to make sure the United States can defend itself.
So, Governor Whitmer, why Michigan? Why is it so important for Michigan? Why is this the right place to start this?
Well, we know how to build things. Michigan, that's who we are in our DNA. We were, you know, the arsenal of democracy. This is about homeland security. It's about advanced manufacturing. That's who we are in Michigan. And so when I saw JPMorgan was doing this resiliency initiative, I reached out and said, 'Let's talk about what's possible here in Michigan,' because I know what we are capable of. And I think government plays an important role with industry as we think about what the future looks like and how do we do advanced manufacturing and protect ourselves. And I think this is a combination of all of those great strengths. But we need to really have a concerted, collaborative effort here.
This is, ultimately, about supply chain, as I understand, a resiliency of supply chain, which has been disrupted by geopolitics, actually, by trade, and things like that. How does this fit, for example, Governor Whitmer, with your near neighbor Canada? As we know, there's a lot of back and forth in the auto industry for Canada. How does this initiative fit with that?
Well, I want to first and foremost say the Canadians have been tremendous allies and partners of ours here in Michigan for a long time. Autos go back and forth over that border. This is the busiest crossing in North America, right here in Detroit. And so we're proud of that long heritage. But I think it's really important that we continue to onshore as much as we can to the United States from all around the world.
But if a Canadian company came along and was innovative in the industrial space and had something, for example, Jim, that you could use, could they apply to this program?
Yes, but we really — we really want this to be a Michigan initiative. But there are so many things in Canada that we depend on, the whole aluminum. All of our trucks are made out of aluminum. All the ingots come from Canada across the border. We do all the finishing of aluminum here, going to all of our trucks and all of our plants. And so we are looking for innovative companies even in the aluminum supply chain with this initiative.
So, Jamie, you are the anchor capital provider to this, and that's obviously very helpful to either startups or, as I understand it, small companies. It's not just for startups that this program is designed. They're facing a lot of other issues too, including higher interest costs right now, which really hits the small and medium-sized businesses disproportionately in the market. How does this fit with the pressures being put on some of these very companies right now, as you see bond yields rise, interest rates rise?
I think you have to separate this. We should be doing this regardless of bond yields and things like that. And that may make it harder for some people. But, you know, to me, the ultimate goal is to get inflation down. And so sometimes you have to have a little bit of pain in the short run to accomplish what you need in the long run. But this effort transcends what the market does today, and it transcends what the yield curve does today. We need to be doing this for the future safety of the United States of America.
This is part of a larger initiative you announced a while ago. The Security and Resiliency Initiative, basically $1.5 trillion. This is part of that. Where does that stand? And, by the way, insofar as this goes beyond the state of Michigan, which is, I understand, you'd like other people to copy you and what you're doing — are you willing to be an anchor capital provider in other places as well?
