CNBC Transcript: Ken Langone speaks with CNBC’s “Squawk Box” today and blasts Washington on coronavirus relief.
WHEN: Today, Monday, March 23, 2020
WHERE: CNBC’s “Squawk Box”
Q4 2019 hedge fund letters, conferences and more
BECKY QUICK: Andrew, thank you very much. This morning nearly one in three Americans are under strict stay at home orders. This is all happening as the nation tries to fight coronavirus. Joining us right now on the phone to talk more about business's response and what’s happening on the medical front on this is Ken Langone. He is the Chairman of Invemed Associates, he the Co-Founder of Home Depot and he is the Chairman of the Board of Trustees at the NYU Langone Medical Center. And Ken, thank you for taking the time to talk with us this morning. How are you doing?
KEN LANGONE: Good morning, Becky. And thank you for having me on.
BECKY QUICK: So, Ken, what are you seeing right now? And I know you’re involved, Ken, in every aspect of this. Just seeing what’s happening on the medical front, seeing what’s happening on the business front. What can you tell us about—
KEN LANGONE: Let’s talk about –
BECKY QUICK: Yeah, go ahead.
KEN LANGONE: Well, let’s be positive. What I’m seeing here: the doctors, the nurses, the ambulance drivers, this country is so blessed, these people we’re mentioning are the infantry of the war. These are the people where the battle is being conducted. And they’re redeeming themselves fabulously. They are doing a great job. They’re at risk themselves. The health care industry in total, what a job they’re doing. The pharmaceutical companies, everybody is pitching in. For example, I’ve got Tom Joyce on the phone Saturday morning. Tom Joyce is the President of Danaher. They own Cepheid. Cepheid developed this new test. Everybody is in high gear doing what they can. It’s a massive national effort and it’s a wonderful thing to see. There’s a young man in Washington by the name of Nat Turner. He sold his company to Roche some time ago, for a lot of money. And here he is, I can reach him almost 24 hours a day, he’s based in Washington, he’s doing everything he can to keep the pipelines open, the supplies, where they are, where they’re needed. This is a wonderful thing to see and experience. And all I can tell you is all of us ought to be proud to be Americans. Now, let’s take a step back and be a little bit analytical. Italy is in a mess right now. Interesting number. The per capita ICUs in America is twice the ICUs per capita in Italy. You want to get a system where you go on the cheap, that’s what you do. We ought to take this opportunity to refresh our minds about what we have and be very careful, be very careful that we don’t kill the goose that’s laying the golden egg. Right now, we’re reaching out to Triple M, we’re reaching out to Hanes Corporation, a textile company, is joining up with a private company called Parkdale America. What are they going to do? They’re going to start making masks next week. We need masks. We need eye protective wear. We need outer gear. Why? Because if our providers get sick themselves, we’re really in trouble. So, we have got to make sure that while we focus on the patient, we also are spending time and effort to make sure we protect those people who are at the lines delivering health care in real-time. So much of that. The other thing is we’re making every imaginable effort we can. More important to me, America is showing its value system is intact. We are going through all of this – we have to rationalize the number of deaths, and say, well, we lose that many in the flu season. We’re not taking that position. We’re saying, wait a minute, we are going to make an effort to save every life we can, no matter the cost. That’s our value system. That’s what makes America precious. And this is an effort. And now to our people in Washington, get off your asses. Okay? There’s going to be plenty of time to argue philosophy and points of view. Right now, we need a bad transfusion in America. And they better get it done and they better get it done today. You know, I hate to be -- maybe I’ll give you a little bit of humor in this. But I’m reminded of the dog making love to the porcupine. As good as it is, how much of this can I take? These people in Washington need to understand that they’re being watched, now. They’re being watched. And they better redeem themselves by what they do, both parties. Not just the Democrats or the Republicans, both parties. This is a national effort. I am impressed with what I see so far, Becky. Home Depot, Lowe’s, Hanes, I’m mentioning all of these companies, they’ve all got their shoulder to the wheel. They they’re all doing their part. We’re aware we have a national crisis and we’re dealing with it. All I can say, Becky, is everything I see here makes me feel proud to be an American. Very proud to be an American, and very proud to be a capitalist. I would be remiss if I didn’t take advantage of an opportunity. You want a one payer system? Go over to Europe and see what you get with a one payer system. We have got the best health care system in the world. Can it be made better? Yes. Will it be made better? Yes. Let’s not throw the baby out with the bathwater. We’re proving how precious our health care is in America. Lily, a couple of weeks ago, announced a major effort on research. Roche. You go right -- Pfizer. All of these companies are putting forward everything they’ve got to address this problem. They have pushed everything else aside. They’ve pushed everything aside and said, here’s where we have to be, here’s what we’ve got to do. I’m watching it all. -- is up at Columbia Presbyterian, doing what I’m doing. What am I doing? I normally dial for dollars. I’m now dialing for test kits, I’m dialing for masks, I’m dialing for outer protective gear, I’m dialing for eyeshields. These are the things we need. And if there’s anybody out there listening that has an idea how they can help, we need it now. Please come forward and help us get this done. So, Becky, that’s my point of view.
BECKY QUICK: Ken, let me ask you.
KEN LANGONE: Yep.
BECKY QUICK: Let me ask you because that’s an incredibly positive view. It’s very optimistic and I love to hear what’s happening behind the scenes, how companies are stepping up to help out. But I also keep reading these articles in the Wall Street Journal and other places about how those people on the front line, the people that you are so proud of, that we are so thankful for, the health care workers who are out there, how at this point some of them are having to reuse masks, they are having to rewear surgical gowns, they can’t get the tests that are out there. How bad is the situation? And how quickly will it be addressed by all of the moves that companies and others are taking?
KEN LANGONE: Let me tell you what you do. This is management. We’re taking the position that the people that have direct interface with a patient are the ones most at risk. So, we’re making sure that they have adequate -- we’re not cutting any corners. Anybody who thinks -- this is dramatic. Oh, my god, we’re reusing them they should be thrown out. A lot of nonsense. We’re doing – nobody-- nobody I know of, not only NYU but Columbia, Cornell, Special Surgeries, Sloan Kettering, none of us are going to compromise or risk these people. As I said, this is the infantry. They’re in the foxhole, they’re shooting the bullets back. If they get sick, we’re in trouble. So, I’m sorry, Becky, there’s no compromise here of quality. And these dramatic -- I can tell you right now, the media ought to take a pass on – or on sensationalism. We have got enough sensationalism because of the problem. One more thing, Becky, very interesting. The highest underlying condition of the people that we see that are dying, ready? Smoking and obesity. Two things you can do something about yourself. You can stop smoking. You can do something about controlling your weight. Not easy, I know it’s not. I’ve been fighting it all my life. Not easy at all. And it’s a never-ending fight. But these are things that we can have some control over that can have an impact, god forbid, if we had a crisis again. Becky, to your primary question, no way. We are not compromising on anything. And we’re scurrying around to make sure that we have all of these things for the exact reason you cite, that we don’t reach the edge where they should be exchanged or they should be discarded for a new one.
BECKY QUICK: Ken, you said you’re watching what’s happening in Italy very closely.
KEN LANGONE: Right.
BECKY QUICK: Some of the numbers there have been incredibly concerning, where 8.3% of the cases there are among health care workers.
KEN LANGONE: Right.
BECKY QUICK: Are you convinced that we’re in a much better position? That that’s not going to happen here?
KEN LANGONE: Never say never, okay. Right now, I would bet my last dollar we’re not going to have the experience they did. Number one, lifestyle. I’m an Italian. We love to hug. We love to kiss. They also say we like to use a gun every once in a while. But what I’m saying is the way we live as people in Italy, you have multi-generations living in one house. The child, the mother, the grandmother. So, these are all things that contribute to what’s going on there. But I come back again and this is where I’m pitching: I love our health care system the way it works. That’s a single-payer system over there. That’s what you get. The number of ICU beds per capita, we have here twice what they have. Why? ICU beds are very, very expensive. Think about the labor and the intensity of labor and effort. But guess what? You don’t want to cut back on that because that’s where you keep -- that’s the ultimate line of defense to keep people alive. So –
BECKY QUICK: Ken, that’s –
KEN LANGONE: My guess, Becky, is it won’t be as bad as it is here as it is there, in terms of proportion.
BECKY QUICK: Right. Right. That’s good to hear.
KEN LANGONE: By the way, Andrew Cuomo’s doing a hell of a job. What a job he’s doing. And I’m proud of him and I’m proud to know him. I scream at him a lot, but I also want him to know he’s done a hell of a job in this crisis.
BECKY QUICK: Ken, what about Home Depot? I know you’ve been talking about the extraordinary measures that they’re taking at Home Depot. Can you describe it a little bit?
KEN LANGONE: Yeah. The store hours are being shortened so we have people available to restock the shelves. You know, we’re continuing to stay open. By the way, we’ve increased paid leave, an extra 80 hours for each full-time employee and 40 hours for each part-time employee. So, if somebody wants to stay home in this period of time, although I must tell you this, it looks like most of our people want to show up for work. It’s wonderful to see.
They want to be there for the customer. They want to be there to help the customer through it. No doubt about it, our business is beings impacted, but I can tell you right now, Home Depot is presenting itself – and by the way, Lowe’s as well. Lowe’s voluntarily called last week, we’ve got some N-95 masks, we’d love to have them, they sent them to us, we got them. Look, we’re showing ourselves as a nation at our very, very best. God bless America.
When I say don’t give up on America, I’m telling you right now, we’re proving again and again and again why we should never give up on America. So, Home Depot’s taking every necessary step. We’re doing it. We’re intensifying our supply chain management. We’re intensifying making sure we have those things that are particularly important during this crisis at this time. And so far, so good.
BECKY QUICK: Andrew.
ANDREW ROSS SORKIN: Hey, Ken, I love your optimism.
KEN LANGONE: Hi, Andrew. How are you?
ANDREW ROSS SORKIN: And boy, I hope you’re right. And by the way, please stay safe, Ken, and stay healthy. That’s the most important part of all of this.
KEN LANGONE: I am doing just that.
ANDREW ROSS SORKIN: I was going to ask -- good. Good. You should be in bubble wrap, my friend. In bubble wrap. My question to you is to the degree that we do get out of it, we do come out of this or – and I don’t know when we think that’s going to happen-- and we get to a point where we try to rev some of the economy back up, and maybe people are going to ultimately be walking around wearing masks, and people are going to take temperatures, and do all of that. Home Depot, I imagine, I know a number of big companies are starting to think about what that actually looks like, how they’re going to protect their own employees, what society is going to look like even over the next several months. Have you thought about that?
And also, have you invested – started to talk to people with the thermometers and all of these other technologies? And the other piece of it is what you think is going to happen to privacy and civil liberties? I don’t know what I stand on this anymore. Because I think a lot of people are going to have to share their information in ways they historically have not.
KEN LANGONE: Look. Go back to 9/11. Our lives changed dramatically. Before 9/11 I could walk into any building in Manhattan, walk to the elevator, go up to wherever I wanted to go to see whoever I wanted to see. Look at the security you have now. Look at the security getting on an airplane. Our lives will and should change. Does it make sense that we have a strategic petroleum reserve, think of this, to keep ourselves warm and keep ourselves air-conditioned or keep our trucks running? Does it make sense that here we are short basic things like facemasks?
Why wouldn’t we have a strategic reserve of these products? And by the way, if there’s a shelf life, you pay the cost of getting rid of the ones that have gone beyond their life and bring new ones in. But what we’re doing now is we’re being given a lesson, as we learned in 9/11, that we have to be on our guard. The same has got to be true here. Now I think you could accomplish whatever you need to do without invading privacy. I told you this morning that the two biggest single comorbidity things we see are smoking and obesity.
I didn’t give up a name, I’m just looking at raw numbers and saying, hey, there’s a takeaway here and here’s what it is. So, Andrew, and by the way, Home Depot right now, I’m sure they have still got people planning -- and understand, I’m retired, I’ve been off the board for 12 years, it’s still the love of my life. I still go to the stores.
I still talk to Craig and I talk to Frank and I talk to everybody I can, not for any reason other than to let them know how great they are and to let them know how much we appreciate what they’re doing. But right now, Home Depot’s focus is one thing and one thing alone: taking care of our people and making sure we do everything we can to help the nation get over this crisis. There will be plenty of time – plenty of time to do strategy and tactics going forward. And I’m sure there may be some of that going on right now. But I’ll give you a for instance, last night, Sunday afternoon, Theresa Rosebon, she’s Executive VP and General Counsel. I called her because her job now is managing facemasks, among other things.
This gives you some idea of how we’ve created a baby Marshall Plan to get the job done. By the way, we will get beyond this. We will get beyond this with minimum -- thank god, with minimum loss of life. Tragically we’re going to lose lives. Hopefully, there are a lot less than there would have been if we weren’t doing what we’re doing. But, Andrew, each of us as Americans today ought to be so proud to be an American. Each of us. And by the way, a message to these kids that are on the beach, get your ass home and worry about your grandparents and make sure you don’t bring that bug in.
Because they are the ones who are at the highest risk. And if you love your grandparents, and I hope you do, then you better make damn certain you don’t put them at risk. I think it was -- in fact, I got a message to the Governor’s office down here in Florida, shut the beaches. Shut them. Let them go home. We’ve got a compound problem.
They’re not in college anymore because all the colleges are closed. So they’ve got plenty of time. I’ll tell you what they should do. Call up a local hospital. Call up a local health care provider. See if you can volunteer to help out. This is what brings America to its greatness. These kinds of things. We’ve done it before and we’ll do it again. Look at what we did--in 1939 and 1940, the world had an existential threat: Hitler, and fascism.
Guess what? In a matter of 18 months, we were ready to go. Look at what we produce in this country. We were the arsenal to the world and as I said, I wrote Jerry Speyer a note this morning, we are the arsenal. We, America, the pharmaceutical company – and by the way, now I’m making a pitch because I’m a significant investor in the pharmaceutical industry. Let me tell you something right now. I am so proud to be an investor in the pharmaceutical industry. Bernie Sanders, get off their butts. They’re doing a great job. They’re saving lives. And they’re pushing aside the profit motive.
BECKY QUICK: Hey, Ken, we have to go, but before we do, quickly, can you just tell us what you think about the New York Stock Exchange? The floor is closed but they are trading electronically. You used to be on the board there. You think that this is -- no problems with that?
KEN LANGONE: No, no problems at all. In fact, most of your trading is electronic anyway. Frankly, you asked the question, I’d be surprised if it ever opened again. If you go down and look at the floor of the Stock Exchange, there aren’t many people down there anyway. I remember the old days, god, you had a mountain of paper on the floor from the handwriting of all of these messages and all this stuff. That’s all gone. We can do business electronically. So, my own feeling is that probably there’s a good chance – and I say probably, I wouldn’t be surprised if they didn’t open the Stock Exchange again. That’s one thing. And we’re proving the system works. And by the way, any nut that’s got a notion they want to shut the markets, because you’ll really create the crisis then, let the markets do what the markets are capable of doing. It’ll adjust. Leave it alone. Anyway--
BECKY QUICK: Ken, thank you. We love talking to you thank you for your time.
KEN LANGONE: Keep the faith. By the way, I’ve been sitting here a little while ago I noticed the sun pop up over the horizon. There’s another day in another America. We’re going to be great. Take heart say your prayers and do what you can to help each other.
ANDREW ROSS SORKIN: Ken, thank you. Ken Langone, talk to you again soon.
ANDREW ROSS SORKIN: Ken Langone.
KEN LANGONE: Thank you.
