U.S. Secretary of Transportation Pete Buttigieg joins Yahoo Finance’s Editor-in-Chief Andy Serwer to discuss the current situation with the airlines, how the money from the infrastructure bill is being distributed and used, as well as his thoughts on the recent vote on same-sex marriage.
ANDY SERWER: Welcome to Yahoo Finance Presents. I'm Andy Serwer, and I'm joined now by Transportation Secretary Pete Buttigieg. Secretary Buttigieg, welcome.
PETE BUTTIGIEG: Hi, thanks for having me. Good to be with you.
ANDY SERWER: to talk about. I know you're keen to have a conversation about airports. I want to start with airlines, though, and ask you about the wave of flight cancellations and delays we've seen this summer. One bit of context is the airlines received billions of dollars in bailout money during COVID and aid during COVID. Do they owe consumers more than what they're giving them now? And have they held up their end of the bargain?
PETE BUTTIGIEG: Well I think any time you sell a ticket and collect revenue in exchange for a promise to get somebody from point A to point B, you need to be prepared to actually do that. And that's a conversation we've been pressing the airlines a lot on these last few weeks. Look, it is great news that demand has returned-- that passengers have both the income and the inclination to get back in the skies after everything that our country has been through and that the aviation sector has been through.
But now that they are back, it's very important that the airlines and the system are prepared to get them where they need to be. Now, I'll tell you. Since I gathered airline leaders together shortly after the Memorial Day travel weekend where we saw a really unacceptable level of cancellations and delays, we've seen a lot of steps that have been underway, including accelerated work to recruit and train pilots, improved pay for aviation crews, which I think is a very obvious and important way to help deal with the perceived shortages in staffing-- more resources going into customer service.
And I think that those steps have made a difference. Our last couple of weekends, we've seen the cancellation rate go back below 2%, which is more in line with what you've seen historically. But there's still a lot of work to do. And we'll do everything that we can to help as a department. We'll look to the airlines to do the right thing and collaborate with them there. And when and if they don't do the right thing, that's what our enforcement powers are for. And we'll use those too when and if it's appropriate.
ANDY SERWER: Another long-term effort you announced recently is the $1 billion infrastructure money to improve airport terminals, which sounds great. We're all for it. But is it enough money, Mr. Secretary, because, you know, the improvements at LaGuardia alone, for instance-- $8 billion range. So talk to us about this endeavor, please.
PETE BUTTIGIEG: Well, there's always going to be a desire for more. But what we have here overall in the context of the Infrastructure Law that the President led-- that Congress passed on a bipartisan basis-- we have more to work with than we have in a very long time. And we're putting it to use right away. And it's going to airports big and small. I was in Los Angeles, where we're putting $50 million toward a road improvement.
If anybody's ever been in that notorious horseshoe where you drop people off and then might have to spend another half hour just getting back out of there depending on what terminal you drop them at, we're going to be able to improve that-- all the way through to a place like Chamberlain, South Dakota. They've got a general aviation terminal that's a mobile home right now. And we're helping them build a more permanent facility-- and everything in between. These improvements are going to make a big difference for the passenger experience.
And they're coming [AUDIO OUT] more what I would call back of house-- supporting improvements to the tarmac, the runway, the apron, or, indeed, the air traffic control tower where we've got fantastic FAA employees working under challenging circumstances, sometimes in very old and dilapidated structures. All of that improves thanks to the resources that we have under this congressional act and the other resources we're putting to work.
ANDY SERWER: I think you yourself noted, Mr. Secretary, that none of our airports in the United States are in the top 25 world airports. So you've got that on the one hand. The delays-- OK, it's getting better. Is there a holistic problem here that you're looking to resolve?
PETE BUTTIGIEG: Look we're the country that ushered in the aviation age. We ought to have the best when it comes to our airlines and our airports. We ought to be the pride of the world. And they ought to be racing to catch up with us. Unfortunately, in this sector and most of our transportation in the country, decades of underinvestment have taken their toll. But now we're in a position to change that. And after spending so much of last year making the case for more infrastructure dollars, now we're out there putting them to work.
And the other thing that's really exciting about this is that even while it takes a while sometimes for the project to be completed, the terminal to be finished, or the upgrade to be done, right away, you're seeing the job opportunities associated with that. I was just with a group of apprentices who were getting trained in the build trades. And they know because of all this airport and other work up ahead that they not only have a job they're working at the moment but a whole career ahead of them in good paying work. And we're excited about what that means too.
ANDY SERWER: Another facet of transportation-- let's move on to gas, EVs, cars. Gas prices-- we've had 35 days now of declines. You're colleague at the State Department, Amos Hochstein, recently said gas could go below $4 a gallon on average. Do you agree?
PETE BUTTIGIEG: Yeah, we're seeing it below $4 in many-- I think in most states now. So it's gone down markedly. It's still high, though. We're under no illusions about the pain that everybody is feeling at the pump. That's why we're continuing to work to do what we can, being realistic, of course, about how much this is under the control of any American policymaker. But there are steps you can take-- a lot of steps the President has taken. And then, for the long run, making sure we double down on domestic clean energy production-- I think the president's thinking about that right now-- and creating more options for families and for drivers by making it cheaper and easier to have an EV.
ANDY SERWER: Yeah, let's talk about EVs because you're overseeing the effort to have 500,000 public EV charging stations around the country by 2030. How is that going from the government side? And also, with a public-private partnership, are you confident that the overall EV sector is on pace to shoulder the load as more and more people switch over from internal combustion engines?
PETE BUTTIGIEG: We're hard at work on this. And we are confident that America is up to the task. But it's going to take a lot. And we're talking about major changes in the infrastructure required to support vehicles. And the infrastructure that came about over decades for gas vehicles is-- we just don't have time to do it at that organic pace, which is why we're making the investments that we're making right now to get to the president's goal of 1/2 a million chargers by the end of this decade. As you mentioned, it's a public-private partnership. We're not envisioning most or even many of these being government-owned and operated chargers.
But we do see a lot of areas where it's not yet profitable to have a charger put in by the private sector penciling out. Or we need to make sure that we buy down the difference to support a nationwide network so that you're always confident when you go on a road trip that you can get a charge when you need it. We are within days of the deadline for states to deliver their plans state-by-state for how they're going to use the first year's worth of formula funding. We've got $1 billion headed their way.
And I'm really interested to see what the states are going to come up with because, in all humility, even though we've got a lot of expertise-- we've teamed up with the Department of Energy for a lot of best practices. We're setting the standards for EV chargers. No one really knows a perfect solution on this. And I think each state's going to come with a slightly different approach. And we're going to learn a lot from that as we go.
ANDY SERWER: Speaking of states, my understanding is that you are now a resident of the State of Michigan, which is the home of the American auto industry. And just curious when you think, Mr. Secretary, new car sales for EVs is going to exceed that of gas engines. And is this something the government should be in the business of encouraging?
PETE BUTTIGIEG: We think it is something we need to encourage for three reasons. Look, we think the market is going EV no matter what. That's where the world is headed, and that's where the automotive industry is headed. And as you noted, that's true for the Detroit legacy automakers, just as it's true for startups-- the Teslas and Rivians and other firms that have been in so many ways leading the way toward EVs. So it's very interesting to see relatively new companies that specialize in this and some of the most storied names in US automotive sector-- the big three out of Detroit-- all moving in this direction.
So I guess the question comes up. Why would we be involved if this is happening anyway? Here's three things that I think will not happen anyway. Will it happen fast enough to beat our climate challenge? Will it happen in a way that is led by America and not dominated by firms from other countries? And will it happen in a way where the benefits reach everybody quickly, including those who, because they are lower income, stand the most to gain by being free from gas bills but only if they can afford the vehicle in the first place?
Those are the things that don't happen on their own. That's why we think it's important for policy to play a role-- getting the charging network out there. And we continue to believe in the idea of making EVs cheaper through tax credits until the market has come full circle. And in terms of when we'll hit that point, the President set out a goal of half of sales being EVs by the end of the decade. We just passed 5%, which many analysts consider to be something of a tipping point in terms of some of the scale effects. So I'll be very interested to see it accelerate and watch the auto industry continue to rev up its supply to meet the growing demand for these vehicles.
ANDY SERWER: And quick follow-up question there, if I may-- is Tesla and the Biden administration on the same page, do you think?
PETE BUTTIGIEG: Look, as a regulator, we call balls and strikes. And we regulate companies to make sure that they're compliant with the laws. We don't cheer for one company over another. Tesla is the largest producer of EVs in the country. They've played a remarkable role in [AUDIO OUT] EV revolution. They're one of many companies that are doing remarkable work. And again, my primary role is just to make sure that every auto that hits the road, no matter who made it, is safe and complies with our safety expectations-- and then, more broadly, to the private sector to ensure that this is a made-in-America EV revolution.
ANDY SERWER: And final question before I let you go-- one other issue I wanted to get your take on is the news from last night that the House of Representatives voted to codify the right to same-sex marriage. And I saw you tweeted about this, pointing out how 157 House Republicans voted no. Should this concern investors and business people, Mr. Secretary?
PETE BUTTIGIEG: Well, I think so. I mean, first of all, hopefully, it just concerns everybody at a human level. And I say that as somebody who knows that my marriage is now somehow once again up for debate in this town. But also, if you think about it from a more dollars-and-cents point of view-- and I say this as a mayor who was leading my city in Indiana when then-Governor Pence pushed a notably anti-LGBTQ bill that was really devastating to the reputation of the business community of my state-- and actually it was the revolt of a lot of business leaders, Republican and Democratic, that helped force then-governor Pence to backtrack. I do think we have to face what message it sends to our own [AUDIO OUT] and to the global community when 3/4 of the members of Congress from one of our two major political parties went out there and said in 2022 that they are against marriage equality in the United States.