00:00If I recall correctly, you are constantly going around and visiting shops, visiting auto mechanics, visiting auto body professionals and talking to them about the industry, about the economy.
00:13What's your read right now on the U.S. labor market?
00:17OK, here's what I'll say. I'm going to see you again, Matt.
00:19You know, I hope you made the fish concert in Columbus this summer.
00:23It was a tough ticket.
00:25I tell you that. Hey, look, look.
00:27Yeah, I was just in Washington and Maryland and the D.C. the other day talking to franchisees and speaking to them.
00:33You know, in our war, the economy is pretty good.
00:36But the labor market has a whole bunch of different implications associated that aren't necessarily indicative of the economy.
00:43Take I was at the National Association of Manufacturers, a great organization, over 10,000 manufacturers in part of that.
00:49And what's happening in manufacturing today, which is a big driver of employment, is people are keeping their powder dry.
00:55Because they're looking out in the future and saying, I've got to restructure the supply chain.
01:01And while it may seem that tariffs have settled down, we haven't done trade deals with Canada, Mexico, or China.
01:11And they are the principal sourcing partners for manufacturers.
01:15So all these manufacturers are sitting there, they're like quarterbacks who can't diagnose the defense.
01:20They're saying, I don't want to throw interception.
01:22So I'm not going to commit to anything right now.
01:24I'll keep my powder dry, not really, stay pretty lean, because I know when I make a change, it's going to raise costs.
01:32So I want to get some benefit or some cushion against that.
01:36And so that's what you're seeing.
01:38We're hiring in our hand tool plants.
01:39And we're a little different.
01:40And Snap-on makes 80% of what we sell off the vans we make right here.
01:44But there are other companies that are doing that.
01:47They're sitting back and saying, what?
01:48To use your, to take your football metaphor.
01:51Annie, welcome back from London.
01:53Thank you very much, Nick.
01:54Very kind of you.
01:55Great to be back.
01:56But if I could take your football metaphor and probably torture it and butcher it a little bit.
02:01A quarterback not moving is a decision in itself.
02:04And it's a quarterback that will get sacked.
02:06So if it is companies and manufacturers that are deciding not to do anything, to sit on their hands,
02:12at what point does that become a problem in itself for this economy?
02:16Great analogy.
02:17Great analogy.
02:18It's a question, though, of the timing.
02:20In the NFL, it's two and a half seconds.
02:22But if you're talking about making a decision and moving on a factory, this is one of the interesting,
02:27it's much different than the street's expectation.
02:29You know, I remember April 2nd, the Liberation Day, everybody expected manufacturers to have made a decision.
02:34It doesn't happen that way.
02:35You can't redeploy physical assets as fast as you can redeploy financial assets.
02:40And I think that creates a mismatch in terms of expected timing.
02:43So what happens when you move a factory, Danny, is you have to figure out what you're going to do with the people at the other end.
02:47You have to figure out how to bring it down.
02:49You've got to make sure that your documentation is right, because if it isn't, you're going to spit up blood all over the move.
02:54Many people have lost a lot of money in moving factories.
02:56And you have to figure out your new site.
02:58You have to get the workers.
02:59All those things take time.
03:01And so, yes, the analogy is correct.
03:04But you have a lot more time than I think the financial community realizes in that situation.
03:09One of the things that's happening today, I think, boy, there's a lot of uncertainty.
03:13The costs are going to drift up if you have to move to the United States.
03:16Eventually, they'll go down because the American worker is so effective at driving down costs.
03:20But you want to keep yourself as lean as possible.
03:24It gives you more degrees of freedom for whatever you're going to do.
03:28Nick, I want to ask about your business, because, as you know, I'm a fan.
03:34Whenever I see a snap-on van, I try and stop and buy a tool.
03:37I can't afford a whole kit myself because I'm just tinkering in my garage.
03:41But I was thinking about the president's new obsession with furniture, woodworking, cabinetry, and so on.
03:50And looking through your website, and I saw everything related to mechanics, aerospace, tooling, et cetera.
04:00But nothing to do with woodworking.
04:02Why doesn't Snap-on venture into that sort of area?
04:06Well, we actually don't venture too much into factories.
04:09Some woodworking could be the case.
04:12But Snap-on actually prospers, where the penalty for failure is high, and the need for repeatability and reliability justifies a Snap-on-level product.
04:21I mean, these are non-pro products.
04:24And so that's one of the things that defines our place.
04:28Now, a woodworking guy can probably afford to have two or three implements.
04:32But when you're in repair, Matt, as you know, the mechanic addresses the car.
04:37He doesn't know what he's going to use.
04:39He can't afford to have many of them because he's not going to use the same tool over and over.
04:42He needs to have a full array, and they've got to work right away.
04:45This is a Snap-on thing.
04:46One of the cool things about Snap-on is I think it demonstrates the power of the American worker.
04:52One of the things about the labor, I think, secretly in this kind of thing, is they think, well, manufacturers are never going to resource because American workers can't compete.
05:01You know, I know there are people, when I say this, they're thinking I'm a disciple of Jethro Tull.
05:06I'm living in the past.
05:07Well, that's not true.
05:08The Snap-on proves it every day that we can compete.
05:11Our margins have gone from 6%, you know, and then gone up 85% a year for the last 15 years.
05:18We're at 22% today.
05:20I'd like to say it was charismatic leadership, but everybody here knows it wasn't.
05:24What it is is the American worker enabled.
05:28We enhance them by training.
05:30We enable them with technology.
05:31There are no delivery use from evil in technology.
05:34We don't expect AI to deliver us from evil.
05:37We expect it to help us gradually and enable our workers.
05:40Then they figure out how to improve because they're the best people to know how to improve their site.
05:44They know the job, but they know where it should go.
05:47Then we celebrate it and we start again.
05:48This is what's driven it.
05:50And so this is the core of the American worker.
05:52They do it better than anybody else.
05:54So we reassure, we'll engage more of our people in technical careers and be stronger than ever.
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