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Yahoo Finance Presents: Jay Leno, ‘Jay Leno’s Garage’ Host

Yahoo Finance’s Pras Subramanian sits down with ‘Jay Leno’s Garage’ Host, Jay Leno, at his garage in California, as they discuss Jay’s car collection, Elon Musk, electric vehicles, the seventh season of ‘Jay Leno’s Garage’, and Jay’s line of car care products.

Video Transcript

[MUSIC PLAYING]

PRAS SUBRAMANIAN: So Catholics have the Vatican, soccer fans Old Trafford and Manchester, and for car guys like me, Jay Leno's Garage. Jay, thanks again for bringing us back.

JAY LENO: I was wondering where that was going, Catholics have the Vatican. I go, oh, boy, this is totally different. I am in the wrong-- oh, I see. But I see, you're making a comparison.

PRAS SUBRAMANIAN: Yeah, you know.

JAY LENO: That's why you let people finish what they're saying. OK.

PRAS SUBRAMANIAN: You know, I try. I try. So anyway, thanks again for having us here--

JAY LENO: Sure.

PRAS SUBRAMANIAN: --on hallowed ground, if you will.

JAY LENO: Well, not really. I mean, it's a garage. And everything here runs and rolls, explodes, makes noise. I mean, that's sort of the fun thing. I didn't set out to have a collection. I just never sold anything. And some of the cars are very valuable. But some are just cars I like, Corvairs, Ford Falcons, cars I grew up with type of thing.

PRAS SUBRAMANIAN: And the collection runs the gamut of older classic cars and newer performance cars.

JAY LENO: Yeah, there's no theme to this. I hate when people only have red cars or something like that. It's just I guess the theme would be anything of historical or technical importance, anything that was a noble failure, the double steam car. Even the Corvair was not considered successful. But they sold 1.8 million. Imagine, you sell 1.8 million of anything now, they make you president of the company. But in the '60s the Mustang sold 3 million. 1.8 million, what is that? I mean, it's almost funny by comparison.

PRAS SUBRAMANIAN: That kind of shocks me because knowing that now the reputation of the Corvair has been kind of a car that was a lemon in some sense.

JAY LENO: But not. The Corvair was a very innovative automobile. I think it's one of the greatest American designs of all time. When you look at a '66 Cosa now, I'll take it to a show, and people go is this a car Karmann Ghia? Is this European? Is this some kind of Abarth? No. They never heard of a Corvair.

PRAS SUBRAMANIAN: You know, I've only heard of it because of this sort of the big fascination in classic cars of these days. The market is sort of really kind of exploding. And we just had Monterey Car Week wrap up. Haggerty said there was $470 million in sales at the auctions this year, blowing away 2015's record year. What do you think is going on in the classic cars?

JAY LENO: When money goes down, art, automobiles, collectible guns, things go up. People put their money into something more tangible. Well, if I'm going to lose my shirt, I might as well enjoy doing it. So instead of putting it in a 401(k) or something, I'll buy something I can use and enjoy, and hopefully it goes up in value.

I mean, this is fairly recent in the sense of 25 years or 30. When I was a kid, my dad was always amazed that somebody would pay more for an old car than a new car. My dad, we'd get a new Cadillac. Why would you buy a 30-year-old car? You got a brand new Cadillac. I mean, it made no sense to him. He just didn't get it. And it was just a different time.

And it's only-- I mean, my brother bought a Porsche Speedster, a '58 Porsche Speedster for $800, I think, in '68, fixed it up, sold for $1,200, my father, oh my God, get it out of here. Get the money. My dad couldn't believe made $400 profit. And most recently, a friend of mine-- well, this is a while ago too, 20 years almost. He bought an F1 McLaren for $800,000 or $900,000.

PRAS SUBRAMANIAN: That's it?

JAY LENO: Well, this is when it was new.

PRAS SUBRAMANIAN: Oh, when it's new.

JAY LENO: And within a few years, he got an offer for $1.3 million. And he loved the car, but he said, I'm never going to see that kind of profit again. And he sold it. And of course now they're worth $20 million. So this idea of cars as investments is fairly new. I mean, to me, I don't look at it as investments because I would sell my home first. Everything else would go first. So the idea that it's worth a lot, well, it's very nice, and it makes you look smart.

PRAS SUBRAMANIAN: I think for a lot of fans, and you can speak to this, is that a lot of people are coming in as the investment people come in. And it sort of makes it more unaffordable for people who really like cars to get into that market. Is that sort of a thing that you're seeing?

JAY LENO: Well, there's an upside and a downside to both of those. The upside is, as cars become more valuable, people who make parts to fix that vehicle say, hey, this could be a worthwhile endeavor. Mechanics who repair those vehicles can make a living. I mean, there's a college called McPherson College in Kansas, and they give a four-year degree in automobile restoration.

This is the only country in the world where to be a mechanic, just say, I'm a mechanic. There's a garage here in Burbank that has my favorite sign. It says, we specialize in all makes of cars. Well, how can you specialize in everything? It just sort of makes-- you go to Germany, and you have to have a degree. You have a paper that certifies that you are a trained mechanic, you went to work on car. Well, here, you just go, I'm a mechanic. He said he was a mechanic. And you're a mechanic.

So there are kids that come out of McPherson College, and they start at 100 bucks an hour. You go to the Classic Center in Germany, or a lot of the heritage auto makers now have classic centers where they make parts available for their older cars. And it's like restoring the old masters, paintings, and things of that nature. So that's the upside to it.

I remember when you could buy DB5 Aston Martins for $2,500. I mean, they were just another old car, and then the James Bond phenomenon and all of that, and then it just hit the roof. And now they're $1.3 million, $1.5 million. But more are being saved. Cars that would have been thrown away as parts cars and now being taken back and restored.

PRAS SUBRAMANIAN: So there is a flip side to that enthusiasm.

JAY LENO: Yeah. I think that's OK. I mean, the idea is to get on the market before everybody else does to try and figure out what a modern collectible will be. Like for example, to me, a modern collectible would be a first generation Miata, easy to work on, no airbag, no crazy electronics, a little bit of electronics, not much, but just simple, fun to drive, nice to look at, clean design. That would be an example.

The Taurus SHO from the late '80s, that front wheel drive, that Yamaha V6 engine, very powerful, very fast. The idea is to try and-- if you're knowledgeable about automobiles and you like cars, whatever you like will probably go up in value because other people will like it too. So you try to keep ahead of the market.

PRAS SUBRAMANIAN: I know you're a big EV evangelist. You own a Tesla for many years. And you have the Plaid now for a while. Elon Musk just said that they sold their 3 millionth car about a month ago. Do you think anyone can catch up with Tesla and Musk right now? Or are they sort in the driver's seat when it comes to EVs?

JAY LENO: Well, the thing you have to realize about Elon, which is very clever, he came to this garage in 2007 with his prototype, the Roadster and that early one had a two speed transmission and a couple of other things involved. And I remember sitting, and he was telling me about, and he said, well, what I want to do is build charging stations all up and down the coast. And I'm going, OK, that'll happen, like, oh, that sounds good.

But he started building the infrastructure almost at the exact time he started building the car. So when the car debuted, you could drive LA to San Francisco. And now you can go anywhere in the country. I mean, you see a lot of other automakers get into the EV market, oh, you can charge it anywhere. You can't, really. You might. But it's 1:10. You're going to be here 18 hours, and you know.

So I think he should get a certain amount of credit for leading the charge because before Elon, oh, it's a golf cart. People would joke about electric, oh, they're slow and whatever it might be. So I give him a lot of credit for it. I mean, I think the EV will be the savior of the classic car industry.

PRAS SUBRAMANIAN: Really?

JAY LENO: Yeah, because much like the automobile was the savior of the American horse, in 1900 in New York City, 60 tons of manure was dropped in the street every day. I mean, people got dysentery. And hot weather horses, like a junk man's horse, would drop dead in the street. They'd cut the reins and leave the carcass, and the thing would rot.

And people get-- and all of a sudden, Henry Ford comes along with the Model T and blows little puff of blue smoke in your face. Oh, I'll take blue smoke over manure any day. So that was, oh, OK. So now horses are primarily for recreation. And there are more horses now than there were in the mid-1800s because people use them for enjoyment, and beauty, and they take care of them.

And that's the same thing with cars. You'll use your EV to sit on the 405-- I mean, sitting on the 405 Freeway in a 426 Hemi getting eight miles to the gallon, it makes no sense at all. So you drive your EV. Then on the weekends, OK, you take your Hemi, you go to the car show, you go to Bob's Big-- boy whatever it might be.

PRAS SUBRAMANIAN: Yeah, especially a steam-powered car on the 405, not the best option.

JAY LENO: Right, right.

PRAS SUBRAMANIAN: So you mentioned Ford. I wanted to talk to you about that. Jim Farley. I spoke to him at Monterey, and he's a big car guy. He's racing cars at Laguna Seca. He also split the business into two units to capitalize on we need to move fast with EVs.

JAY LENO: That's why I'm very proud of American manufacturing. Everybody in Ford, GM, Dodge, they're all engineers now. In the old days, this is Bob from Admiral Washing Machines. He's going to help us with the marketing of this, and--

PRAS SUBRAMANIAN: Maytag.

JAY LENO: Yeah, Maytag. I mean, that's what they did. They brought marketing people in, and they put go fast stripes on it, like a like a Ferrari. It's got a stripe on the hood, just like a Ferrari. But now, you've got Royce, the President of GM. He's at Nurburgring setting records with Cadillac. I mean, it's very funny.

But you have real engineers. The businesses are lean. How they build a Corvette for $65,000, I have no idea. I mean, I could barely paint one and restore one for that. So the fact that it's done in a union shop and it's using high grade, a lot of magnesium, a lot of aluminum. It's not steel and torque converter transmissions. It's dual clutches. I mean, I'm really quite proud of American manufacturing. They've done an amazing job.

PRAS SUBRAMANIAN: That Corvette, when I first saw it and drove in it, it reminded me of the McLaren, for, like you said, a third of the price.

JAY LENO: For a third of the price.

PRAS SUBRAMANIAN: And it kind of brings you back to you got Mary Barra GM. You have Jim Farley at Ford. Do you think either one of those is sort of the next level of-- for EV kind of hierarchy, you got Tesla. Do you think it's Ford or GM that'll be the next level in terms of that kind of competition?

JAY LENO: Well, I think America itself has always been about egalitarianism, making it available to everybody. The smart thing about America was anybody could buy a Model T. The idea in Germany or France of the average person owning an automobile, [CHUCKLES] I mean, it just seemed ridiculous.

But to make something affordable, to me, the greatest book ever written is still Charles Dickens' "A Christmas Carol" because it was popular. It was accessible. It was the first time you could improve your life without having to die first or go to heaven and come back. You could just change your life, just by being a nice person.

And this was a concept that people just thought was unbelievable when it came out, that this rich man helps this poor man, and both their lives are improved. How simple could it be? And that's what it is. America was never about building premium automobiles. It was about building working classes, as they used to call it. I mean, of course, we build premium automobiles now. But I mean, I think that's the key. It's volume, really, is what it does.

PRAS SUBRAMANIAN: Yeah, it seems like these days with such skyrocketing new car prices, the blue collar, mainstream kind of guy is buying used cars to survive. But I wanted to talk to you about that, about affordability, and again, Ford, real quick about that the new F-150 Lightning, an electric truck that is promising to come in at a competitive price point. I drove it. I think it's a great truck.

JAY LENO: You know, it's amazing. You can weld in the truck. It's got 240 in the back.

PRAS SUBRAMANIAN: Yeah, so do you think that your guy who works at a worksite, construction worker, really professional kind of tradesmen, are they going to go hop on board the F-150 Lightning--

JAY LENO: Yes.

PRAS SUBRAMANIAN: --and say, you know what? This is what I want.

JAY LENO: Yes. You know why I know that? Because in the '50s, trucks had a bench seat, 3-speed on the column, and a six-cylinder engine. Air conditioning in a truck? What are you, Mr-- are the owner of the factory? Look at this guy. I mean, you weren't a man. You know, trucks were manly things. And then all of a sudden, you have air.

I mean, an F-150 is basically a Lincoln. It's comfortable, you can do everything with it. The funny thing about it, the government's really responsible for that because I think back in the '80s, they put a 5% luxury tax on any vehicle more than $30,000. That was the deal. Anything above $30,000 was considered luxury car, so you paid 5% tax, so manufacturer. But you didn't pay it on trucks.

So then they said-- they came out with something. It was not a success, but it was a trendsetter, the Lincoln Blackwood. This was a luxury truck. And the 5% of the purchase price that you saved in tax you put it into leather interior, standard air conditioning, electric windows. And then suddenly, oh, then you got real value for your money. You could get a truck with all this stuff in it for less money than the equivalent luxury car.

So yeah, so it was really the government with that 5%, that's what spurred people to-- we're very clever here in America. We don't change our habits. You just find ways to get around them. Like, I was never a Hummer guy. I thought they were big, noisy, dirty, rolling coal, all that kind of stuff. So rather than eliminate it, we just make an electric one, a little smaller, a little lighter.

And you know, it's an amazing-- it's a great vehicle. I'm stunned at how good it is. I mean, that always sort of makes me laugh, the way we figure out ways to-- I want to eat cake every day, but I still want to be an athlete. All right, well, let's come up with some kind of cake, instead of eliminating it. Or smoking, people smoke. Let's vape. That's not-- it's stupid. Yeah.

PRAS SUBRAMANIAN: We'll always come up with different ways to spend our money and have fun. You know, speaking of that, we talked about EVs and stuff. And President Biden signing the Inflation Reduction Act, we won't get into the naming of that, but another extension of that tax credit for EVs. So is that-- like you said, a tax rate for trucks spurred that growth. Are we going to see more EV adoption with that?

JAY LENO: Oh, sure, I mean, it took 75 years for every American home to have a telephone. It took five years for every American home to have a computer. So I think using that same sort of thing, you see how quickly it's moving now. I mean, suddenly people who would never consider an EV, there's the psychological thing of seeing $6.98 a-- what? You see, they go past that gas station sign.

Although the EV is not free, it just kind of seems like it's free because it's not $7 a gallon, $5.95. It's not thrown in your face every time you go-- it costs $100 to fill this car up. You sort of plug it in. The next day you magically have, quote, a full tank, and oh, OK.

PRAS SUBRAMANIAN: No more gas stations, no more weird smelling hands.

JAY LENO: Exactly.

PRAS SUBRAMANIAN: I want to also talk about what you're up to these days and the seventh season of "Jay Leno's Garage" is going to come out. And first of all, did you ever think this show would go seven seasons? And can you tell us what we can see, what we can expect coming up in the new season?

JAY LENO: I was just down at SpaceX with Elon, and that's fascinating. You know what's so funny, everybody seems normal until you realize, this guy is like a genius guy. We're down there, and he's got this plan to put send 1,000-- he's building 1,000 rockets to go to Mars. It sounds like some crazy pipe dream.

But then you go there and you see hundreds of these jet engines lined up, and you go, he's really going to do this. And the fact that as he's talking to me, scientists and physicists are coming over, going, oh, yeah, yeah. And he understands manufacturing.

PRAS SUBRAMANIAN: In addition to the rocket science, right?

JAY LENO: Yeah I mean, he understands. It's like Elon says right now, it would cost over $1 billion to put one gallon of water on Mars. He wants to get that down to $100,000 a gallon, which is still crazy, but it's not $1 billion. And so just that thinking outside the box thing, which I find uniquely American, that's why I never got this-- I always felt bad with this banning of immigrants thing that they had a few years ago, with shutting the-- Steve Jobs was Syrian.

I mean, all the doctors, all the people that come from India-- you know, America will seduce you with hamburgers and hot dogs and music. My favorite example is we used to do this Jaywalking thing where we'd knock on doors and ask people questions. I remember going to one house, knocking on the door, and the grandfather answered the door. And he's got a vest and a tie. And he speaks Spanish. He goes, no English.

His son comes over, a little fatter than his dad, a little heavier, kind of sloppy. He speaks English, talks to me, so and so. Then I meet his son. He's got a T-shirt with some obscenity on it, just the deterioration.

PRAS SUBRAMANIAN: The progression of it.

JAY LENO: The progression of downhill. You can see the grandfather is the fittest one in the family because he's the immigrant. He came. He worked hard. And everybody else is profiting off, and that's what America is about. You bring these immigrants in, and they invent stuff, and they and they become citizens. It's a great place to live. The pizza is great. The music's fun. The girls are beautiful. That's what happens. You need new immigrants all the time.

PRAS SUBRAMANIAN: You know, I visited with the Zinger guys the other day. And I know they're coming up on your show too.

JAY LENO: Yeah, right, right.

PRAS SUBRAMANIAN: Father and son team. I mean, great story there, American manufacturing again. And so I guess this season, you're going to be highlighting a lot of these kinds of things.

JAY LENO: We highlight them. We have them on the show. We have Elon. I'm shooting this week with President Biden. We're doing--

PRAS SUBRAMANIAN: Oh, wow.

JAY LENO: Yeah, he's a car guy. He's still got his--

PRAS SUBRAMANIAN: He has a Corvette, right?

JAY LENO: Yeah, yeah, yeah. So we're going to have some fun and take some EVs out and talk about that. Yeah, it's a great show to do. The idea is everybody has some connection with the car. I talk to celebrities all the time, and they go, I know nothing about cars.

I said, well, did you ever do anything with the car with your dad? Oh, when I was a kid, my dad had a Cadillac, and we'd go for ice cream every Sunday. You get a Cadillac, get a celebrity, go for ice cream on a Sunday and talk about it. And then that's pretty much it. I mean, the car is a huge part, I think, of American culture.

PRAS SUBRAMANIAN: Lastly, Jay, I know that you also have various other business interests. And one thing I discovered was have a business where you-- all these cars here are detailed and cleaned with a specific product.

JAY LENO: Well, we developed our own product. I mean, the smart way to do it is a big company comes along, like 3M or something, gives you a huge check, and you hold up-- well, this is the best-- we developed our own stuff here. We quietly put it out, just to see how people reacted to it.

We got a great reaction. People liked it. People ordered and then reordered. And now we're national. We're in Walmart and a bunch of these big stores. I expect the usual snarkiness. Jay Leno, you got to-- you're trying to cash in on the-- OK, maybe. But it's a good product. People seem to like it. And it's doing well, so keep our fingers crossed.

PRAS SUBRAMANIAN: Yeah, I heard you have your own chemistry. It's not just something you put your label on.

JAY LENO: No, no, we developed everything here at the shop. We try it out on all of my stuff. And it seems pretty good. I mean, the one that got us started was cars don't have chrome anymore, none to speak. Of polishes-- and I would use other polishes, and I noticed on the rag, I'd see metallic specks. It's actually peeling off a layer of the chrome. So I said, let's find a company and develop a chemical that cleans without having an abrasive. And that's what we did. That's the one the first took off. And then we built the whole company around that.

PRAS SUBRAMANIAN: So we'll see these products in Walmart now, big deal coming up and seventh season of the show coming up later this month. So Jay, thanks again for joining us.

JAY LENO: Thanks, appreciate it.

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