Six Days in China: The Speed, Scale and Strategy Outpacing U.S. Innovation - Todd Wanek, CEO of Ashley Furniture - The TechEd Podcast

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TechEd Podcast Introductio (00:09):
This is the TechEd podcast, where we
feature leaders who are shaping,innovating and disrupting
technical education and theworkforce. These are the stories
of organizations leading thecharge to change education, to
rethink the workforce and toembrace emerging technology.
You'll find us here everyTuesday on our mission to secure
the American Dream for the nextgeneration of STEM and workforce

(00:32):
talent. And now here's yourhost, Matt Kirchner,

Matt Kirchner (00:38):
welcome into the TechEd podcast. It is your host.
Matt Kirchner, I have talked anumber of times on this podcast
already here in 2025 how I tooka trip in August of this year
that was one of the mosttransformative weeks of my
entire life. And I'm not justsaying that in terms of what I
learned professionally during myweek in China visiting 26 TechEd

(00:58):
companies, six days full ofvisits, seven in the morning
till 1030 at night, most ofthese days, what I learned there
absolutely changed the way thatI look at all kinds of things. I
was on that trip compliments ofa great friend of mine, by the
way, by the name of Todd wanick.
Todd, as many know, is the ChiefExecutive Officer of Ashley
Furniture industries. It's histhird appearance on the TechEd

(01:19):
podcast. As a matter of fact,we're going to have some fun
breaking down that trip toChina, talking about the
incredible transformation that'staking place across the Pacific
Ocean, and what that means forus here in the United States of
America. Todd, it's such apleasure to have you back.
Thanks so much for being withus. Thank you, Matt, pleasure
being here, and you know this,I'm so grateful for that time
that we spent together in China.

(01:41):
And you know, you and I weretogether back in March, and you
were talking about what you'reseeing over there. I kind of
made a little off handed commentthat said, Well, if you're ever
going and you have some room,let me know. And lo and behold,
a couple weeks later, I got atext from my friend Todd wanick,
and not long after that, we wereoff on our way to China. So
thank you so much for thatexperience and what it's done
for for for us, for ourcompanies, for you know what's

(02:02):
going on with the TechEdpodcast, for our audience, I
can't, can't. Thank you enoughfor that experience. Well, I
really enjoyed the time too,Matt. It was incredible just
sharing, we were on a bustogether, which is actually
probably the best part, and justtalking and brainstorming the
whole time and go see somebody,and we talk and brainstorm and
talk and brainstorm. I think youcame away with 70 pages of
notes, I came away with acomparable number of notes, a

(02:23):
page of notes. It was justabsolutely incredible. So thank
you for joining us. Yeah, youbet. And I bet. I've gone back
time and time again to that, andit's informed so much of, you
know, strategy and differentbusinesses and different
initiatives that we're involvedwith. So I know, I know we're
going to get into this, and Iwant to let our audience know we
came up with a really creativeidea, actually, Todd and I did
together when we were on thattrip for how this podcast, how
this episode is going to run, weboth came up with five questions

(02:47):
that flowed out of our recenttrip to China, and Todd's
actually been there once sincethen. And so I have five
questions for Todd. Todd hasfive questions for me. We traded
questions in advance. I've gotthem all right here. So the way
we're going to do it is that Iwill ask one of Todd's questions
that that he is asking of me,I'll respond to it and then give
Todd an opportunity to expoundon my answer. Then we'll go on

(03:09):
to one of my questions for Todd,and we'll do it in exactly the
reverse order. So this is goingto be a really, really fun
episode. Why not dive right intoit? Todd's first question for
me, the first of five is, why isChina more effective in their
efforts to modernize theireconomy than is the United
States of America? You know, Ithink there's a lot of reasons
for that, and some of theexamples for this. I mean, just

(03:30):
to put this into perspective,you know, right now, the United
States has one nuclear reactorunder construction, and it's
going to cost $30 billion duringthat same period of time,
actually, August of 2024 Chinaapproved 11 new nuclear reactors
in China, and they are going tobuild all 11 for what it costs
us to build one here in theUnited States. That's just one

(03:52):
example of the incredibleinnovation that's taking place
and how quickly they'remodernizing it. I think there's
a number of reasons for that.
You know, if we sit here in theUnited States and even looking
over the course of the last callit 60 or 80 Days, and you see,
and I don't know if dysfunctionis the perfect word, but you
just see how hard it is, in somecases, at the national level to
get things done. Here in theUnited States, China has exactly

(04:12):
the opposite situation. Alltheir decisions are made at the
national level. Here in theUnited States, where we are
graduating, I think 36,000lawyers a year. In China,
they're graduating 1.5 millionengineers a year. And even if we
look at engineers to engineers,maybe 400,000 engineering
degrees here in the UnitedStates versus 1.5 million in

(04:36):
China, they are an engineeringdriven economy here in the
United States, 51% of oursenators. 51 out of 100 are
attorneys. 30% of the House ofRepresentatives. Attorneys in
China, Chairman Ji's entirePolitburo, all engineers.
They're systems thinkers, andthey understand how to build
things. They understand how toget things done. They're also

(04:57):
they're the benefit of.
Central planning, say what youwant about communism. I have
certainly no fan. There issomething to be said for being
able to centrally planeverything and systematically
build and innovate the way thatthey are. And I think that's a
big, big contributor Todd. Whatwould you add to that?

Todd Wanek (05:14):
I would agree. I think that, you know, the
centralized control isabsolutely one of the biggest
things that they've achieved.
They run it like a business.
And, you know, we look at word,we're debating and arguing,
they're looking at it, andthey're running like a business.
And I think that's that's anincredible approach. I love
their five year plans. I've beenfollowing their five year plan.
They're in their 14th five yearplan right now, and there's a

(05:36):
lot of innovations that havehappened. If you go back and you
track them, and you look at theprogression of achievements that
they've achieved, that they'veaccomplished on each one of
those plans. It's amazing. Theybecame an engineering society.
They became a technologysociety. They were formed, their
education, all those things weredone primarily because of their
their centralized control. Nowthere's advantages and

(05:56):
disadvantages of it, right? Theone advantage of speed,

yeah, no question, yeah, the advantage,
the advantage of speed andscale, I think, is the other
one. I mean, just the scale atwhich they're doing, things that
we could come up with, withexample after example, anything
you would add to that, I knowyou're fascinated by some of the
dual circulation, the greentransition, common prosperity,
and so on.

Todd Wanek (06:15):
Yeah, and, you know, I think you and I have kind of
changed some videos that aregoing on right now. The tallest
bridge that's been built inChina. Some of the other
engineering feats that they'veaccomplished, I just look at the
technological self reliance thatthey have, and they're really
focused on that and buildingtheir own computer chips and
rare earth minerals and thingslike that. They've just achieved
a lot of things within theirsociety. They give them an

(06:37):
economic advantage over almostany other country, and it's all

intentional, and it's all planned, and they
execute incredibly well as well.
Once they once they come up withthat plan, they have a way of
getting things done. So agreedon that. I know we're going to
get into some of the rare earthminerals and some of the other
aspects of their economy and howthey're creating simultaneously
kind of protectionism and anexport economy as well. We'll do
that in a bit. I want to move onand make sure that we're getting

(07:01):
to all of our questions. Myquestion, my first question, for
Todd was this, you know, one ofthe things that I learned that I
didn't know beforehand was thiswhole idea of coding and
programming here in the UnitedStates versus in China and here,
all of our code, all of ourcomputer code, all of our AI
algorithms, they're all lockeddown, right? If a company like,
like meta, for example, iscreating their next amazing

(07:22):
algorithm, it's not like they'regoing out and sharing that with
the world. China is exactly theopposite. I mean, literally.
When they come up with new code,when they come up with new
algorithms, when they program anew function into into hardware
that's on GitHub, within a monthor two, there's, there's
literally no IP, no intellectualproperty in China when it comes
to at least, you know, publiccode and code that's taking

(07:43):
place in in their privatecompanies. Contrast those a
little bit Todd the closedsource versus the open source.
What are the advantages anddisadvantages and what do you
like about each

Todd Wanek (07:53):
Well, I think closed source helps a company. You
know, in the US, we're reallyfocused on capitalism and
increasing value of companies,and I think that's a big part of
the closed source system, is thefact that they're trying to
protect themselves in China,it's very open source. So an
open source allows them to do anaccumulation over time and
cumulative learning. And I sawthat happen actually, from

(08:16):
August in my I just got back acouple weeks ago, from China to
November, the speed of changewithin that period of time was
absolutely mind blowing. And ithappened because of open source.
I saw different humanoidrobotics. I saw different
actuators. All those things werehappening because it's an open
source collective system. And Iwas just absolutely blown away
with what was happening, becausethey're all improving. And once

(08:38):
one, I think you and I talkedabout with a humanoid robot.
Once one learns how to walk,they all learn how to walk.
Yeah, and it's just amazing howfast progress is being achieved
because of that.

And I think it, you know, there's a couple, a
couple things that I would addto that. I agree 100% and I
think you started by talkingabout the benefits of
capitalism. And there certainlyare lots of benefits of
capitalism, and many of us haveenjoyed those benefits for a
variety of reasons. I'm sayingthis is almost like an
existential test of which modelis better, right open source and
the Chinese model or closedsource. And kind of profit

(09:08):
driven here in the UnitedStates, we're able to recruit
the best and brightest talent,because the you we can pay these
engineers, AI engineers,tremendous amounts of money,
because there's a profit motiveon the other end of that model.
And so there's, it's really aquestion of, is it that model,
or is it the one where they'reall innovated? Innovating
together? I think the otherthing I would add to your answer
Todd, which was quite eloquent,is it what it's driving in

(09:29):
China? Because there isn't anyany intellectual IP advantage to
to your coding or yourprogramming, or your algorithms,
it's driving a lot of theinnovation into physical AI,
things like humanoid robots,quadrupods, some of the ASRS
systems that we saw. And so theyare innovating like crazy. We're
going to talk about humanoids alittle bit later in the episode,
but innovating like crazy on thephysical AI front. And so that's

(09:51):
been really, really fascinating,really, really fascinating to
watch. So we're on to questionnumber two, and I'm watching our
time closely. I have to manageall this into 60 minutes, and I
promise. Us that we will dothat. But Todd's question to me,
this is his second question is,how has China reformed their
educational system to meet theneeds of industry and foster
innovation? And I would say, Iwould start with kind of where

(10:14):
we started with that firstquestion, which is the whole
idea of centralized planning.
There is a very centralizedapproach to education in China,
and Todd and I are bothmanufacturing guys. In fact, the
first time he was on thepodcast, we talked all about
manufacturing standardization,doing things in one plant same
way you do things at anotherplant. There's some
disadvantages to that ineducation, but lots of
advantages in terms of yourability to scale and your

(10:36):
ability to innovate once andthen spread that across an
entire country. So part of justthe central planning side of
things is a huge contrast, andthey've reformed that way.
They're very highly competitive.
The students there are all forthose that are college bound,
are all competing to perform ona really, really high stakes
college entrance exam. And sowhat that's driven is a lot of

(10:58):
understanding of standardizededucation, standards based
education, teaching students ina way that they will excel when
they get to that entrance exam.
Really, really important. Sothose are some things that are
interesting. I know we're goingto talk in a while about K 12.
Ai, education being mandatory inK 12, which I think is something
that we have to move toward herein the in the United States. And
then back to this whole idea ofengineers. You know, 140,000

(11:21):
engineers a year here in theUnited States, 1.5 million in
China, 50,000 graduate degreesin engineering here, and 400,000
in China. And so many of theseengineers are graduating in
areas like AI and semiconductorsand medical devices, and we'll
talk about metallurgicalengineering in a little bit. So
they've got this whole, youknow, Todd talks about the five

(11:43):
year plan. They decide, what arewe going to accomplish in the
next five years? What kind oftalent do we need for that? And
then how do we align oureducation system from one end of
the country to the other tocreate the talent that we're
going to need to be successful?
So in a lot of ways, that'squite a bit different than what
we what we do in here in theUnited States, so, so agree or
disagree on that one?

Todd Wanek (12:03):
Tot I totally agree.
I think that their top downeducational system is absolutely
working well for them. You know,I've heard this argument over
time, and I know you have twoabout the creativity and the
fact that their their systemstymies the creativity of the
human being, and I'm just notseeing that. You know, everybody
talks about that as one of thebig issues. There's no question,
to a certain degree, it probablyis because of free speech and

(12:24):
other things that may impactthem over time, especially when
you start talking about AI. Butoverall, I believe their
educational approach is isabsolutely massive, and going
to, going to lead them to thenext phase, because they're all
about science, technology, youknow, engineering and
mathematics, and they're reallygetting deep into that, and
really getting deep into thatwhole concept around how do we

(12:46):
develop the next generation ofengineers within our economy?
And I

think a lot of that is driven by, you know, Xi
surrounding himself. So he's anengineer, he's a chemical
engineer. He's surrounded byengineers. I think, at one point
in the last few years, all ninemembers of the Politburo, so his
like senior advisors, were allengineers, so they've created
this engineering environment andhuge believers in engineering
and the ability to build anddriving that into STEM

(13:10):
education. You know, the otherthing that just an observation I
made on a recent podcast Todd,just the incredible, you know,
the speed of innovation, whichyou've already mentioned, but
the enthusiasm on the part ofthe people working in those
companies. I mean, we walkedinto one AI company in Shenzhen
and humanoid robot companytogether at 730 at night, and it
was as busy as you would see anAmerican engineering company at

(13:33):
two in the afternoon. I mean, itwas just, you know, these people
are working 24/7 working to toinnovate, and a lot of that is
because they've trained theengineers that are that are able
to do that.

Todd Wanek (13:42):
There's also an integration of education with
business, and we saw that at theuniversity level, where they're
integrating together and they'reworking together. The
universities are working withbusinesses on their problems and
trying to solve problems. Ithink that's also another key
element,

absolutely, and in fact, one of the thing, every
single company that we visitedhad an education strategy,
right? So here in the US, Imean, Ashley Furniture is our
audience well, knows has beenincredibly supportive of STEM
STEM education but, but we don'tsee that in every company here
in the US, and every singlecompany in China had an
education strategy. So anotherreally important distinction,
and I think good advice for formanufacturers and individuals

(14:18):
across the private economy herein the United States, you ready
for question number two from me?
All right, so we had a bigconversation about the cost of
automating, and I'll if youdon't tell the story, I'll tell
it in my response. But, but, buta couple of meetings where we
were talking with some of theseautomation companies, and for
our audience's benefit, part ofthe visit was to see what we

(14:38):
call ASRS companies areautomated storage and retrieval
systems, so big inventorymanagement systems like you
might see it like an Amazon herein the United States, but
automated systems formanufacturing inventory, for
monitoring and for controllinginventory and for managing
inventory. Met with a lot ofthose folks and a lot of other
automation companies when wetalked to some of the.

(14:59):
Companies, Todd, they drew adistinction between what it cost
to automate in China and what itwould cost us to use the same
automation coming from Chinahere in the United States. So
we'd love for you to reflect onwhat we learned there. Yeah.

Todd Wanek (15:13):
Well, number one, you know, a lot of people, I
just brought this last group of35 people with me in earlier the
month, and one of the thingsthat they thought I was doing
was doing was bringing over tounderstand cheap technology. How
do you get cheap technology andreduce the cost of automation?
And once, the last day, I wassummarized with them, they said,
we thought this is what cheaptechnology. We realized that

(15:33):
this is more innovative thananything we have in the United
States, or as innovative. So itwasn't just about inexpensive it
was about the quality of productthat was there. And I want to
make sure that's understood,that this isn't like just cheap
robotic arms. This is about agood quality product that's
durable, well made and very welldone overall. And it's a
fraction of the cost of UnitedStates, as a matter of fact, we

(15:56):
sell robotic arms, or 20 to 30%of the cost of what it costs the
United States to do. And when wewhen you and I were in that
fact, in that meeting, we'repushing that individual and
saying, why is that price atprice? And he said, well, in the
US, your cost of Labor's so muchhigher, so you can justify our
higher expense of equipment. Andyou and I looked at each other,
it's like you got to be kiddingme. So if I buy a piece of

(16:19):
equipment for Vietnam, it'll becheaper than what it is in
China, and China is cheaper thanthe US. He goes, Yeah, that's
the way it works, because youcould justify something in a
year or two years, and your costof labor is $50,000 let's say,
per person. So you can afford topay $100,000 for robotic arm. In
Vietnam, you only pay $5,000 aperson, so you can only pay
$10,000 for robotic arm. I'mlike that, just that doesn't

(16:41):
make sense, right? But my bigfear with this whole process is,
number one, the technology isprobably not probably it is
world class, whether it'srobotic arms, whether humanoid
robots, whether it's ASRSsystems, all those things are
what I'd call world classtechnology. My big fear is, if
we end up overpaying in theUnited States, that makes us
less competitive, right? And,you know, I believe that China

(17:03):
is such a manufacturingpowerhouse right now, they're
going to control a big part ofthe global market. And to
compete in United States, wehave to get inexpensive
automation to be able tocompete.

And that was the, you know, the first reflection
that I had on that question,Todd, it was exactly yours. It
like had no relation to thedirect cost or even the burden
cost of manufacturing theproduct. It was all about, what
is the cost of the next bestalternative, which seemed I get
it right. I mean, you charge asmuch as you can if somebody's
willing to pay for your product.
But that surprised me a littlebit. I won't say which company,
but we were meeting with one ofthose companies, and we were

(17:34):
talking about automating, whatit cost to automate in China
with an ASRS system. And wesaid, what about the United
States. And literally, the guythat was the senior leader of
the company, like, laughed atus, like he was like, Oh, we
wouldn't sell this in the US.
And I was like, Why? Why not?
And he said, Well, number one,you know, the cost of steel in
the US is way, way higher. Andthen on, you know, on top of

(17:55):
that, you've got the tariffsthat are layered on top of that.
And I've got mixed feelings, asyou know, about tariff strategy,
and I think they make sense incertain circumstances. Certain
circumstances and not in others.
But one of the meetings thatI've had at the highest levels
of the US government is exactlyaround that, which is, look, we
can't burden and tie the handsof our manufacturers here in the
United States with automationtechnology that costs, in this

(18:17):
case, four times more to do ithere in the US than it would
cost to do it in Asia, we've gotto find ways to get low cost, or
at least reasonably cost,automation technology in front
of our manufacturers here. And Iknow those last two are things
that surprised you as well.

Todd Wanek (18:31):
Yeah, and on on my last trip, I went to BYD and
went to byds Auto factory, and Iwas the most automated facility
I've ever seen in my life. EMRsand moving materials around. The
assembly lines are fullyautomated. It was absolutely
fantastic to see that. It was itwas all well orchestrated. But
you know, just the cost of doingthat there versus here, you're

(18:53):
probably talking about fivetimes more to do it the United
States. And it's very hard tojustify automating the factory
or distribution center with thatkind of expense. So my big
concern is, you talked abouttariffs, we got to be very, very
tariff friendly as far asmanufacturing, and bring things
in that we can't make here andmake it affordable so we could
automate our companies andautomate our businesses.

Absolutely, that's the future of
manufacturing without thattechnology. And I see it
firsthand, right? I mean, it'snot a question of replacing
labor with robots. It's aquestion of being able to
produce it all, because we can'tfind, in many cases, the people
that we need to do things costeffectively here on the
manufacturing side. So anythingwe do from a national policy
standpoint that sets ourmanufacturers back, those are
things that we as a country haveto look at really, really

(19:37):
closely and make sure that we'remaking good decisions. I'm all
about bringing manufacturingback to the United States. I'm a
huge believer in USmanufacturing, but the only way
we do that is that we allow ourmanufacturers here in the US to
have access to the tools theyneed to to automate their
processes and continue to driveinto the age of what we used to
call industry 4.0 and I thinkwe're, we're now even, even

(19:58):
beyond that, okay, we are now.
To question number three, yes,question number three, which is
my third question, or Todd'sthird question for me, I should
say, and then he'll respond toit. What is their approach to
clusters as they relate toautomation, AI, E, commerce and
educational clusters? And whyare clusters important? So let

(20:19):
me put this into perspective.
And this was one of the mostjust seminal moments of this
entire trip we visited. There'sa e commerce cluster, what they
call an E commerce cluster inShenzhen. It was, I'm gonna get
it really close to perfect,maybe not perfect. Perfect.
Three buildings, by myrecollection. Every one of those
buildings was at least 70stories tall. So I mean three

(20:40):
huge buildings in Shenzhen,China, and just this is one of
20 5e commerce clusters. Sothink about that, 370 story
buildings. That is just one of25 clusters like it. And when we
say clusters, these were filledwith E commerce companies, over
1000 companies in thosebuildings, they said 100,000
people working in thosebuildings. That's that seemed
like a lot, but easily, 10s and10s and 10s of 1000s of people

(21:03):
working there, 100,000 squarefeet of office space. So think
about that, and they are full ofpeople, and they are absolutely,
I'll just say it, they'reabsolutely gaming, literally and
figuratively, the E commercemarket here in the United
States, and the way that theyare managing what shows up,
whether you're on Amazon, temu,Alibaba, Wayfair, whatever

(21:25):
marketplace you're on, they'vegot this dialed into an absolute
science to when you go on toAmazon and order whatever it is,
new, you know, new furniture, anew pair of socks, whatever
there is somebody on the otherside of that that knew exactly
that you were looking for thatand knew exactly How to get you
to their specific product. Sothat's what's happening in these
e commerce clusters. Now, Iasked a question of one of the

(21:46):
gentlemen that was running oneof the companies. I said, How do
you train all these people, allthese merchandise managers and
and to kind of tee up theanswer. You know, inside these
clusters, there's all kinds ofcompanies, beauty products
companies, there's there'sfurniture companies, there's
fashion companies, apparelcompanies, appliances, toys,
anything that you can think of.
They're selling all theseproducts into the US
marketplaces and elsewhere. Anda lot of these companies are

(22:08):
competitive, right? You couldhave, you know, dozens of
furniture companies or dozens ofapparel companies in those in
that E commerce cluster, theyall use the same people to
train. They have a centralizedtraining function at the E
commerce cluster, all of theirphotography can be centralized.
All their marketing iscentralized. Their access to
capital, in a lot of cases, iscentralized. There's their
access to meeting spaces forlarge and important meetings.

(22:30):
All that is centralized evenamong competing companies. So
you start to think about howthese companies have, through
these clusters, driven out allthe excess cost of having all of
that as one company, all thoseshared services and then and
then really focusing themselveson whatever their highest and
best use is. It's a really,really fascinating model, just
across e commerce and leveragingAI like crazy. I mean, there was

(22:52):
one case where we had saw one ofthe companies that was literally
using an AI agent to go to theircompetitors marketplaces and
scrape all the data from theircompetitors marketplaces. At the
exact same time they werescraping that data, they were
using that to help inform howthey were going to present their
products as for price or as tohow they would present them on
the on the marketplaces, andsimultaneously burning their

(23:14):
competitors ad spend becausethey were visiting their
marketplaces and lowering theirconversion rate. Fewer people
were buying the products becauseit was just a bot that was going
out to do this. So, I mean,Todd, that was absolutely
fascinating to me. That's theapproach to clusters that I saw
in the in China. What would youadd?

Todd Wanek (23:31):
Yeah, I would add.
It was very effective. Clustersare one of the things that build
economies. You know, I've beenpart of clusters in the United
States, in Mississippi, forexample, North Carolina for
furniture clusters where youhave everything around it. You
have raw materials, you havecardboard, you have particle
board, you have suppliers thatare supporting you. In case of
upholstery, you have foam. Soclusters are probably one of the

(23:51):
most effective things that a lotof people strive for. China was
a big manufacturing cluster foryears for furniture as well as
other products, and they stillare. But I would say that the E
commerce cluster is probably oneof the most effective things
I've seen because of thecollaboration that's happening.
And they're collaborating,they're finding ways to get
better. And when somebody findsone way to get better, they

(24:12):
teach everybody else. And that'skind of that whole concept that
we talked about earlier, thecollective raises, and then they
all get better and faster andbetter and faster, and they are
definitely gaining a majoradvantage of the marketplace by
being able to do that, becausewe're nowhere in the US. Have I
ever seen what I'll call an Ecommerce cluster like that? And
they're doing about 70% of thebusiness on amazon marketplace.

(24:32):
The Chinese resellers are. Andit doesn't mean it's product
just from China. It could beproduct in the United States. It
could be product from Vietnam orother parts of the world, and
they're just super effective inhow they approach it.

And they were there. They have DCS
distribution centers locatedhere in the United States. And
just, you know, this is probablygoing to be a lot of questions,
you know, where's the, where'sthe product coming from? Some of
these e commerce companies own,their own manufacturing. Some of
them don't, and they're, they'reoutsourcing that, and not. All
those manufacturers are fromChina, either, right? I mean,
they, they literally have theability. In fact, one of the

(25:05):
questions that we asked is, Howare you responding to us tariff
policy? And and their answerwas, well, if a tariff lands on
one of the countries where we'reproducing this product, we'll
just move the production to acountry that has different, you
know, different tariffrelationship with the US. I
mean, they're literally movingproduction around based upon
what we're doing with our withour tariff policy, which I
thought was, was really, reallyfascinating as well.

Todd Wanek (25:25):
Agree, yeah, and I would say that it's probably one
of the most capitalisticenvironments I've ever seen
totally. And, you know, we talkabout communism versus
capitalism, that was ascapitalistic as I've ever seen,
you know, going around, becauseyou and I went to several
companies within those threebuildings, and we visited, and
was like, Oh my gosh, they'reall learning, they're all
competing. They're working very,very hard. You know, they still

(25:46):
operate basically on a 996,schedule, 9am to 9pm six days a
week. So we just saw the pace ofenergy and the pace of work
within those companies be superhigh and very effective,

9am to 9pm six days a week. And I think another
example that I shared on anearlier podcast, we were it was
actually, well, so it's 230 inthe afternoon. I'll start with
that. It was 230 in theafternoon, and we were at a
company that bills itself as thechat GPT of China, and we were
spending some time with theirwith their AI engineers and some
of the other folks there. Andthen had occasion to kind of

(26:19):
walk back through where all oftheir AI scientists, their data
scientists, their programmers,their coders, were all working,
and there were cots lining thewall. So the first sign is, oh,
my goodness. I mean, thesepeople are sleeping at work when
they have to. I mean, how manypeople sleep at work in the US
anymore? And by the way, it was230 in the afternoon on a
Saturday, so it was like, youknow, when there's look, I've

(26:41):
worked around manufacturingtechnology, technology in
general. Here in the UnitedStates, I know there's places
like Silicon Valley and ResearchTriangle in Austin, where you've
got these really high driving,hard driving tech companies
where people are working at 230in the afternoon of Saturday. I
don't see that very often. Andthen the other thing I'll throw
in there is just you mentionedthe whole spirit of capitalism,

(27:01):
the cap tables of some of thesecompanies and and they were, a
lot of them were really open toit with us about how they
capitalize their businesses. AndI honestly, I figured that, you
know, the answer would be,they're 90% owned by the, you
know, the Communist Party, andmaybe the entrepreneur owns 10%
I mean, those, their capitalmodels are really similar to the
ones we see in us, I mean,venture capital, they've got,

(27:23):
they've got private venturecapital that's coming into these
businesses. They have publicventure capital, so Chinese
venture capital that's cominginto these businesses. And
actually, it surprised me, a lotof cases American venture
capital that is coming intothose businesses, which I'm
like, wow, that that really,really shocked me. And then
asked a couple questions about,you know, at least in my brain.
And there were so many paradigmsthat were blown up over the

(27:44):
course of that trip in my head.
But, you know, I was like, Okay,so the you got this
entrepreneur, and, you knowthis, this individual owns 5% of
this company, or whatever. Imean, you know, the Chinese
government is taking most ofthis, and they're probably just,
you know, working their, theirtheir hands to the bones in
these small companies, and nevergetting anywhere. A lot of these
people are worth 10s of millionsof dollars. I mean, hundreds of
millions of dollars that, youknow, is same as in the US. That

(28:06):
just shocked me is that, is thata fair assessment?

Todd Wanek (28:11):
It's fair assessment, very capitalistic,
driven, and most of thosecompanies are looking to go
public over time, very similarto the US. And if they're trying
to figure out how theycapitalize your company, the
other thing I would say thatthat's really interesting is
they were never they didn't havelimited beliefs around what they
sell. You know, we talked a lotabout that. They just looked at
total addressable market. What'sthe size total addressable

(28:32):
market? Okay, I need to get intokids toy cars. I need to get
into trash cans or whatever itwas. They didn't have limited
beliefs on what they sell. Andthey sell. And they were open up
third party logistics in theUnited States. They pop that
product into a US warehouse.
They sold on an Amazon theyshipped directly to the store.

And, you know, to add to that, the way that I
think about even in some of ourbusinesses, if somebody starts
creeping into your space, right,with a product, and it's similar
to the product that you have,like that, that to us is like,
at least to me, is a hugecompetitive threat. Like, okay,
that's, you know, the you got totake that personally. I mean,
they were just like, if somebodycame up with a product similar
to one that they were come, theywould just then, three months,
innovate into some new space.
And they didn't even, you know,nobody got upset about it.

(29:09):
Nobody got angry about it. It'sjust like, Okay, well, then, you
know, they changed. No, we haveto change. And it was just kind
of the conversation, I know, youremember, we're at the top floor
of one of those buildings havinga conversation with one of those
e commerce companies, and I wasjust like, oh my goodness, they
just, they don't even worryabout it. They just move on to
the next thing, kind of on thesame topic of E commerce, Todd.
We were at this company that hasreally figured out how to get

(29:30):
into the social media feeds ofUS consumers. And when I say
that, I'm talking about ticktock, I'm talking about YouTube
shorts. And you know, I spendless time on tick than I used
to. I kind of got off of itabout a year, but I'm on YouTube
shorts, which works the sameway. You flip through video
after video, and I'm like, Iknow there's an algorithm
running in the background that'skind of showing me a product.

(29:51):
Every once in a while, I kind offigured that was random.
Meanwhile, there's this companyin China that's, like, totally
hacked into the open source, noteven hacked in, but open. Source
code on Tiktok totallyunderstands how to put whatever
product they want to in front ofus based upon our activity on
that social media platform,which is equal parts fascinating
and scary. Talk a little bitabout that. I mean, that was a

(30:12):
huge eye opener. And as youknow, we've actually changed
course in a few businesses as aresult of what of what I learned
on that part of the trip.

Todd Wanek (30:21):
I think traditional market, as we know it is dead,
and not dead yet, but it'sdying, and we're going to see it
die fairly quick. I mean, weobviously saw television die.
Newspapers died, not sayingthey're completely gone, but
they're definitely they don'thave the same level of impact
they had at one point in time.
We're now moving towards aninterspace economy and lot of
conversation on what's aninterest based economy? Well,

(30:41):
that's getting into your socialfeeds to market. You're no
longer gonna be able to marketsomebody the traditional way,
where they go to your website,you know, and you're doing
Google, for example, becausepeople are gonna have agentic AI
over the next couple of years asthey get a genetic obviously,
the agents gonna be serving alot of their a lot of content to
them, they're no longer going tobe searching the way they have

(31:02):
traditionally searched, soyou've got to figure out where
the customer is and go to themand market to them in their
social feeds. And this companythat we visited had an
absolutely amazing approach andhow they're doing it. They could
create a video in seconds andlaunch it as a matter of fact,
one company that theyrepresented created 19,000
videos a month, and did $15million of revenue off those

(31:23):
19,000 videos. Now imagine thatthat's an amazing amount of
content that you put out there,and they did it through Tiktok,
because Tiktok is the number onechannel there. They do about
$300 billion of business inChina, in the US, they do about
10 billion. So just justunbelievable capability that's
being put in place, you know,and the ability to just
basically get in the airwaves,and it's not the same video

(31:44):
being served over and overagain. Once the content is
generating, create more contentoff the content, and they look
at who's clicking in how manyclicks they get, then they
regenerate again and regenerateagain, and they're learning
along the way. So, justunbelievable how those interest
based economies are going toevolve, and how marketing is
going to evolve.

It was all in real time. I mean, to your
point, I mean, one of the thingsI think they they shared, was
that, you know, you could take,you could take 10 videos. So,
like, if I had our, you know,biz dev team and one of our
companies make 10 differentpersonalized videos, and they
could chop that up into 1000different videos that the social
media platforms would notrecognize as the same content
because it was in a differentorder with their, you know,

(32:25):
different aspects of what it wasthey were showing. And it just,
I mean, it's just absolutelyfascinated me. The other
conversation we had, youmentioned agentic AI. And, you
know, our audience knows ourdefinition for that is just a
virtual or a digital employee,but we're going to get to a
point where, you know, if I'musing my AI agent, or I'm, you
know, I'm in chat GPT orperplexity, or cloud or meta,
or, you know, whatever platformI'm using, and there's people

(32:47):
that are already doing this, youcan have that platform go and do
your shopping for you, right?
And then you've got the companyon the other side of it. So a
consumer goods company, forexample, that is marketing using
agentic AI and the kind of, youknow, platforms that we're
talking about here and more, itisn't going to be long before we
literally have, we're going tobe making purchasing decisions
based upon my AI agent, talkingto your AI agent and figuring

(33:07):
out what's best for me, takingthe consumer decision almost all
the way out of the mix, which isjust and that. I mean, that's
not like 20 years from now. Ithink that's two or three years
from now, maybe even, maybe evensooner than that, we

Todd Wanek (33:21):
just launched on perplexity and on chat GPT, chat
GPT in the next 30 days. Sowe're pretty excited about that.
You know, we'll see how it goes.
It's going to be a learningprocess for us to try to feel,
feel our way around, and feelthe walls. But ultimately, our
team's super engaged, and we'reexcited about those platforms.

I feel a fourth episode of the podcast coming up
a year from now, to talk about,you know, what we've learned
about agent agents, selling toagents? Because I think that's
going to be really fascinatingto watch. We're doing a little
bit of that kind of work is inour in our businesses as well.
So super, super exciting. Movingon to our fourth questions. So
Todd's question for Matt, whatis China's attitude towards us?

(33:58):
Reliance on China and exports tonon US companies, and I would
say, and this all kind of goesback to their five year plans.
You know, to summarize it in asentence, they want to make us
more and more reliant on them.
They want to be less and lessreliant on us. There are a
number of different strategiesthat they're that they're
utilizing to do that. We'll talkabout rare earth minerals here
in a little bit, but certainlyin that space, I mean, you look

(34:21):
at their ability to mine andrefine and process rare earth
minerals, we're in a lot ofways, really dependent on China
for our rare earth minerals tothe point where we can't support
our needs for coming to workclose at this point in time here
in the United States. And sowhat they're doing is they're
building into their own economy.
They want to be as self reliantas possible. So whether it's
chips, whether it's rare earths,whether it's technology,

(34:44):
manufacturing, technologicalknow how engineering talent, I
mean, they are building all ofthat inside of their country,
and they're doing that for anumber of reasons. Part of its
economic and trade, a lot of it,is to be able to control
technology and advancetechnology, and then decide who
gets access to what technology.
Yes, and a lot of it is justsurviving economic and
geopolitical threats. So, youknow, the less reliant they are
in the rest of the world, themore that they can survive an

(35:06):
economic threat, and certainly,the more that they can defend
themselves, if they ever needto, you know, from a national
defense standpoint. So there's alot of logic that's going on to
that. To the question about, youknow, non US companies, they're
building incredible partnershipswith Southeast Asian, Asian
nations, Africa, the EuropeanUnion, Latin America, in doing
all kinds of things in terms ofcreating options for their

(35:28):
economy, so that they're lessreliant on us as a consumer, so
that, if for whatever reason,we've got federal trade policy
that is discouraging theacquisition of Chinese products,
they're creating other marketsfor their products so that they
can continue to enjoy thebenefits of those exports. So
it's a it's not happening byaccident. It's all centrally
planned. It's all very, veryintentional. But they would,
they don't. They don't want tocut off trade with the United

(35:49):
States, but they want to putthemselves in a position where
they're not reliant in any othercountry in terms of their own
national security and theireconomic prosperity.

Todd Wanek (35:58):
And I'm Washington, export to the world, you know, I
go, I have a chance to travelall over the world. I'm in the
Middle East, some South America,Central America, and I just see
the product showing up indroves. I don't see American
made cars in Central America andSouth America as much I did
before. The dominance is down.
Same thing in the Middle East.
You start looking at what'shappening the Middle East,

(36:19):
whether it's BYD vehicles andother products coming from from
China. They're world class, andthat they're going after it very
hard, and they're building acomplete supply chain to support
it. I think the risks that wehave in the United States, if we
don't figure out how to get moremanufacturing here, more
automation, affordableautomation, is we're not going
to be exporting anything. We arealready export little out of the

(36:39):
country compared to what weconsume. But if we don't have a
good, solid export engine, thatmakes us vulnerable over time.
And I see China taking over alot of the global economies, and
nothing wrong with that. They'vehad a strategy to be able to do
it, but the US needs to get in aposition where we can, we can
compete against them, and we canexport our products throughout
the world as well.

Yeah, you've mentioned BYD a couple times
that's build your dream. So it'sthe, you know, Chinese
automotive company. Turn theclock back to 1990 there were a
half a million automobiles inall of China. So 1990 I was
just, just about ready tograduate from college, half a
million automobiles. Today,there are 435 million cars in
China. I mean, think about thatgrowth over that period of time.

(37:20):
And, you know, you and Iremember being in a shopping
center after lunch, and their,you know, their auto dealerships
are right in their shoppingcenters, right? So you can go,
you can have lunch at, you know,Ma's, or their version of it,
and then walk across the hall,and there's a there's the
automotive dealership, and justmarveling at, you know, the the
technology. I mean, these, thesecars were as nice as any mid

(37:41):
level, Lexus, Mercedes Benz. Imean, really, really nice Tesla,
but the prices, I mean, $35,000car and so you to your point. I
mean, if we're going to competefrom an export standpoint,
there's no way that we can dothat unless we find every way
possible to lower the cost ofmanufacturing here in the United
States of America, to continueto enjoy that, that export

(38:02):
market. I don't blame China,either for trying to, trying to
do what they're doing, but, butlots and lots of opportunity for
us to, I don't want to saymirror that, but at least to
build on the leverage that wehave and in those areas, whether
whether it's technology or otherareas where we still have a
competitive edge to be able tomanufacture and export here from
the United States.

Todd Wanek (38:18):
Yeah, and I want to go back to that cluster
conversation, because we've lostthe clusters in the United
States, and what President Trumpis trying to do is rebuild it,
rebuild some of this technologyand capability, silicon chips,
whatever it happens to be. Howdo you rebuild manufacturing
prowess? Because if we don'thave the cluster established, in
other words, all the rawmaterials and components that go
into building a product, it getsvery hard to be competitive, and

(38:41):
that's what we have to rebuildthe United States right now, is
get ourselves in a position tobe able to do it. And if we
could do that, stand up a baseand bring the cost of automation
down inside of companies, we canthen turn back into an export
engine, I believe. And I thinkyou and I have talked about this
before, I believe we've lost abattle on exports, but we got to
win the war, and to win the war,we got to reinvest back in the

(39:03):
United States, reinvest back inour capability, but do it very
smart, and do it in a way where,where we're keeping our
companies competitive, we're notraising their costs so they're
uncompetitive.

Exactly this is exactly what we need to do. And
it's and there's all there's somany different ways, whether
it's automation, whether it'slean, driving cost out of
manufacturing operations,standardization, you know,
collaborating on creatingtalent. I mean, if you know
that's a rising tide, lifts allships, you know, all those kind
of things that we can be doingcollaboratively as clusters in
different market spaces. Ithink, really, really important.

(39:33):
I know Ashley, in a lot of ways,is leading the charge on that,
but excited to see what the nextseveral years bring there. You
know, you think about some ofthese technologies. We talked
about, US manufacturing from thetechnology side, US
manufacturing from the durablegoods side. Same things
happening in China. The thingthat I see happening in China,
that I've seen a lot less of inthe United States, is just some

(39:54):
of these really crazy, quicklyinnovating tech companies. And I
want to talk a little bit. Abouthumanoid robots, because, I
mean, we visited probably sevenor eight companies that had some
form of humanoid robottechnology applications across
the board, everything fromsomething that would greet you
at a store and welcome you intothe store, to robots that were

(40:15):
making coffee to robots thatwere built for manufacturing and
distribution centers. There's alot of stuff going on in that
realm. I want to hear a littlebit about what you've seen in
the innovation just since wewere there to now. But talk
about humanoid robots. Are wethat far away from having
humanoid robots actually workingin manufacturing operations here
in the United States?

Todd Wanek (40:35):
No, we're not that far away. You know, humanoid
robot technology is reallyevolving pretty quick. And you
know, again, for my last trip, athree month period of time, we
saw a dramatic shift and changein the capability of these
humanoids. They've got dexterityin their hands. And there's
can't there's companies justspecialize on dexterity in
hands, and they're advancingnow. You could take a look what

(40:57):
Tesla is doing too. Or there'sone extra robotics. There's
Tesla, there's figure in theUnited States. There's a lot of
people are running after thisprize, because the belief is by
2050 we're going to have 50billion robots the United
States. I've heard thosenumbers, right, wrong, right?
That's Elon, yeah, lots ofhumanoid robots over time. I
believe within three to fiveyears, you're going to start to

(41:17):
see them show up inside ofmanufacturing. Right now they're
building capability. We've seenthem deployed in specific cases,
you know, where they're justbasically picking and placing.
But over time, you know, as theybecome more intelligent, with
open source AI, and theartificial intelligence gets
within, within the humanoid,it's going to be able to do
tasks. And the one thing about ahumanoid that's different is it

(41:39):
learns by doing. And if you lookwhat we do today with robotic
arms, with spend a lot of timeprogramming to get it set up and
make sure it knows a pick andplace. As you start getting
vision and you start gettingartificial intelligence, it can
learn by doing, so it's easierto deploy them. And I think
that's going to happen withinthree to five years, we'll begin
seeing them and begin seeingthem in manufacturing, and then

(42:00):
after that, it will obviouslyexplode

absolutely and we've got a podcast, I think
TechEd, up for the firstquarter, with 1x so looking
forward to that, what they'redoing in the humanoid robot
space really, reallyfascinating. I've showed some
videos, and you know, we're nowputting the podcast out on
YouTube so people can go backand look at that. We'll ask
Melissa to link a couple ofthose up in the show notes. But
these humanoid robots, you knockthem over, they stand back up.
They can sit down in the chair.
They can stand up, you know,from a chair. The big question

(42:24):
is, in fact, I was having aconversation. I won't, I won't
use his name specifically,because I actually disagreed
with him in the conversation.
But in New York time, number onebest selling author and I were
having a conversation not toolong ago, and he said, Well,
yeah, the humanoid robots can'tdo a backflip. Do you know, the
backflip test? And I was havingthat conversation a day later
with a friend of mine who's theCEO of Waukesha County Technical

(42:46):
College, rich Barnhouse. And Isaid, Yeah, you know, so and so
said, you know, the technologyisn't right there. You know, we
can't use them in manufacturingbecause they can't do a
backflip. And Rich said, I can'tdo a backflip, but I can work in
manufacturing.

Unknown (43:00):
That's that's pretty interesting thing. Yeah,

exactly. So where that technology is going, and I
think there's all kinds oftechnologies that are playing
into that, bio mimicry, whatwe're doing in materials, what
we're doing with AI, what we'redoing with vision systems, what
we're doing with telemetry, withbattery power. You know, a lot
of, a lot of what we're learningin the EV space and the BYD is
innovating in these are allthings that are kind of

(43:24):
colliding and really creatingsome fascinating developments in
the in the whole world ofrobotics and automation. And so
we've got our eyes really,really closely on humanoid
robotics. I think there's goingto be, you know, there's like 60
companies that are innovating inthat space right now. I think
you're probably going to see twoor three winners. So it's going
to be interesting to see whoends up kind of rising to rising

(43:44):
to the top there. But it's goingto be, it's going to be
fascinating time and othertechnologies as well. We saw
quadropods, any of those othertechnologies that occur to you
that we we saw while we weretraveling through China that our
audience should be aware of.

Todd Wanek (43:56):
No, I would say that those are the big ones, you
know. And one of the interestingthings is they've got the room
service robots that move aroundhotels, every hotel I'm in
overseas now, specifically inChina, they have the room
service robots where they're IoTinto the elevator. They want to
floor 14. They go to the door,rings the doorbell. It's

(44:17):
absolutely amazing. It's got alittle heater inside of it, so
when you pull it out, the food'swarm, but that's that's being
deployed very fast, too,absolutely.

In fact, that was one of the funny, funny moments
from our trip. I remembergetting on the elevator the
first night that we were inShenzhen and and there was a
robot on the elevator. When Igot on, I was like, Hey, dude.
And then, you know, like, ridethe elevator with this, with
this robot that's taking roomservice to somebody's room. It
was, it was really fascinating.
You know, I would throw on tothat. Remember, our first day in
Shenzhen, walked outside andsomebody pointed up, and there

(44:46):
were like, 10 drones hoveringover the top of us, and they're
all just delivering packagesaround Shenzhen. So they're now,
you know, we talk about when,you know, is the day coming when
Amazon will deliver it, delivera package to your front door
using a drone. I mean, that's a.
Alive and well, certainly incertain cities in China. So that
was really, really interestingas well.

Todd Wanek (45:04):
And then the US Walmart is joined in Texas, so
you know this coming here aswell.

Yeah, awesome.
Yeah. I mean, think about allthe costs that drives out of the
supply chain. I mean, we canjust drop a product at
somebody's front door. So that'sthat's an exciting one to to to
keep our eyes on as well. So nowwe are through four questions
each, and we're moving on toquestion number five. Todd's
question for me, number five wasdiscuss rare earth minerals, why
China will retain an advantagein mining over the long term,

(45:29):
and the failure of US educationto understand this critical
need. So let's a great question,by the way, and you know, it is
going to be a while if we'reever going to regain dominance
in that area. It's going to be awhile before it happens. Before
it happens, but I'll share acouple of thoughts, and then
looking forward to your thoughtsas well. Todd, first of all,
I've got a good friend in theform of a guy named Tim
Sullivan. Tim was the ChiefExecutive Officer of bus Cyrus,

(45:51):
and maybe fewer people knowbusiris Now it's been a while
since they were sold thecaterpillar in 2011 but an
iconic company in the miningequipment space. Tim was the CEO
of that company when they soldthe caterpillar for $8.6 billion
I think was the number. So thisis a, this is a big time
company, and a big time guy inthe mining space. Tim and I were

(46:12):
chatting not too long ago, and Isaid, you know, this whole rare
earth minerals thing, I mean,you know, they're mining those
in China. China is going toplaces like Africa to mine them
as well. You know, do we havethat in the US? He said, hands
down. He said, we absolutelyhave all the rare earth minerals
we need here in the UnitedStates. It's just that because
of some of the permitting policyand environmental challenges, we

(46:33):
haven't been able to mine them.
So I think that's the firstpoint to be made. At least,
according to the guy that ranthe largest mining company in
the world. We've got abundanceof rare earth minerals here in
the United States. It's not justa question of mining them. We
also have to refine them andprocess them and so on. But
that's that's the first point tobe made. A second point to be
made is on the refining side. Soit takes five years to build one

(46:56):
of these facilities here in theUnited States. So if we decide
today, and there's some going upnow, actually, I think it's a
great investment opportunityhere in the US, as an aside, but
if we start today, four to fiveyears before we have the
capacity to be able to do therefining of the rare earth
minerals, and that assumes thatthe permitting and some of the
environmental requirements gosmoothly. If they don't, it can

(47:18):
take a lot longer than that. Andthen the third part is, so it's,
it's number one, we have themhere. Number two, it is
expensive and time consuming andand difficult to get the
refining capacity built here inthe United States. And then it's
all about the talent. So there'sa couple interesting things. A
couple weeks ago, Todd, as youknow, I had occasion to travel
to Washington, DC, spent sometime with my friend, Secretary,

(47:40):
Doug Burgum, who's the Secretaryof the Interior, and he has said
publicly, if you look at theUnited States, you know, you
know, we graduated, I mentionedthis a little bit earlier,
36,000 lawyers here in theUnited States every single year.
And you know how manymetallurgical and mining
engineers we graduate everyyear? It's 300 so think about

(48:01):
that. 36,000 that, 36,000lawyers. One of our biggest
challenges is rare earthminerals. We're graduating 300
metallurgical and miningengineers every year. And if you
look at kind of the this is notDoug Burgum anymore. This is
actually Jim Rankin, who was, atthe time, was the president of
the South Dakota School ofMines. If you look at the four
disciplines that are reallyimportant there in rare earth
minerals mining. So MiningEngineering, metallurgical

(48:24):
engineering, geologicalengineering and geology. There
are only four universities inthe entire United States of
America that teach those fourdisciplines. And so if we're
going to ever lead on this,we've got to figure this out.
You know, one of the things thatI'm really excited about, and
we're spending a lot of timethinking about is, how do we
take this idea of gettingstudents excited about

(48:46):
manufacturing careers that we'vebeen really, really successful
with in a lot of ways, long waysto go, but making a lot of
progress, and do the same thingfor mining and metallurgy,
because without thosedisciplines here in the United
States, we're going to have areally, really hard time When it
comes to competing withtechnology. Your thoughts
interesting.

Todd Wanek (49:03):
You brought that up because after we left you in
Hangzhou, Shanghai area, we tookthe bullet train down to a
factory in the center part ofChina. And as I got this bullet
train, there's a bus, and theypicked me up at the bus, because
they're taking this factory.
They had 13,000 virtualmanufacturing facility in this
area. And we drove past thisbeautiful school, and I asked
the person I was with, it wasactually the mayor of the city.

(49:24):
And I said, Tell me, what arethey doing that school? It's a
mining school. And I said,somebody, well, really? He goes,
Yeah. I said, how many kids arein that school? 35,000 kids. I
said, 35,000 kids in this miningschool. He goes, Yeah. And I
said, How many schools like thisexist to China? He said, about
three so think of it. They got100,000 kids going through
mining schools, getting minedegrees every single year, not

(49:45):
every single year, but 25,000 ayear, roughly graduated. And
then he said, I said, what elsethey do? They teach them African
languages. They teach them, youknow, Portuguese for Brazil.
They teach them all theselanguage and then they deploy
and and they. Send them all overthe world to be able to help get
the rare earth minerals, becausethat's the one thing China's
after. And I was just blownaway. And it's a matter of fact,

(50:05):
I was on chat, GPT in the phone,on my phone, as we're driving
around. I'm like, how many kidsthe United States graduate with
mining degrees? It was 300 Yep,yeah. Isn't that crazy, but, but
is absolutely one of thedisadvantages I think we have.
So we talked about rare earthminerals, not about refinery,
but it's also about the peoplein the educational system. We
got to reform that to be able toget people entering these trades
absolutely one.

And I'm assuming that chat GPT got that from the
TechEd podcast. Actually, that'sprobably the source of the
information. Yeah. I mean, it'sjust, it's absolutely
fascinating. And so really,putting a ton of thought here
into how we get more youngpeople excited about that, got a
few things going behind thescenes, believe it or not, on
that. Or not, on that, on thatfront, so we'll see what kind of
fruit that bears. But, but if weare going to be competitive here

(50:48):
in the United States, when itcomes to technology, we have to
get access to these rare earthminerals, and we have them here
in the United States, we have tohave a strategy around
extracting them, doing itenvironmentally responsibly. I
get that part of it, and super,super important. But there's
ways of doing that, but, buthaving access to them and then
building the building theinfrastructure to be able to
process them, and I know that'sa huge priority for the current

(51:09):
administration.

Todd Wanek (51:10):
And the beauty of what the United States, where we
both live, is we are a resourcerich country. Exactly. We've got
abundant resources in the UnitedStates, it's the ability to be
able to do something with thoseresources.

Yep, exactly right. Which is all about
national policy, and it is alittle bit of a contrast between
central planning and picking adirection and going and, you
know, flipping back and forthevery two to four years, which,
you know, we could all do awhole podcast about that. But if
there's one, one lesson or onemessage to the folks at the
highest levels of the USgovernment, it's like, let's get
coordinated on this. Let'srecognize that these, these

(51:42):
things that we're talking about,whether it's AI, whether it's
education, whether it's, youknow, rare earth minerals, let's
agree where we can agree and getgoing on our national strategy.
And I know there's things in theworks already, but super, super
important, one of those things Ijust mentioned was education.
Which brings me to my finalquestion for Todd wanick, on our
list of a list of five, and thatquestion is, contrast China's

(52:07):
strategy to make artificialintelligence education mandatory
in schools, versus the approachto the United States being
hesitant toward AI adoption oroverly focused on chat bots. So
you know, the whole we touchedon this in education. And I just
want to before you answer thatquestion, Todd, to remind
members of our audience thatmaybe aren't as understanding of
the incredible work that AshleyFurniture is doing, that the

(52:29):
Ashley Furniture EducationFoundation is doing, that the
Ron and Joyce wonk Foundationare doing to drive this forward,
and this is something that yourcompany at the highest levels of
leadership recognized A longtime ago, and has really had a
very focused strategy, whichcontinues to expand on, how do
we create that next generationof talent? In many cases, you've

(52:49):
created the roadmap for howothers can do this. And that's
why I wanted to finish on thisquestion is, as we think about
AI education being mandatory inChina, we think about some of
the things you're doing,particularly with our good
friend, Mike Bigley, at theWhite House School District and
surrounding districts to getkids excited about these kinds
of technologies. You know, talkabout their strategy versus
versus our strategy and what weshould be doing.

Todd Wanek (53:11):
Yeah, well, number one, Mike Bigley was on his trip
with us, so we got a lot ofinsight into AI and education
that was absolutely fantastic tohim on that trip. He's so
insightful and so observant, butChina mandated AI in their
schools. It's not debated, it'snot argued about, it's mandated.
So when they say, this isdirection we're going to go,
they go and everybody gets inline, and they reform the

(53:35):
curriculum, and they changetheir whole educational system.
So they mandated it because theyknow it's where the future is
going. And I think that is amassive strategic advantage that
they have compared to the UnitedStates. You mentioned earlier,
the number of AI people that aregraduating from school, or
engineers are graduating fromschool, it's, it's, it's
unbelievable. Compared to theUnited States, we're not

(53:55):
bringing kids out of school withAI education. There's a couple
schools like Whitehall schooldistricts, which doing a great
job. Alpha schools the UnitedStates are doing a great job,
but it's not getting agroundswell of activity yet, and
it needs to, because it is amassive disadvantage if we bring
the kids through school with thetraditional methods of education

(54:15):
from the industrial era that wehave in the United States, we
don't reform our education to beAI based I believe we're going
to be at a massive strategicdisadvantage. We already are.
We've got to catch up, and we'vegot to reform our school
systems. Use these tools, notfight with the tools. I read a
lot about, you know, teacherssaying that they can't use AI in
the classroom. It's like, that'sexactly the wrong approach.

(54:38):
You've got to embrace it and useit, and the ability to basically
customize education for kidsthrough AI is probably the
biggest strategic advantage bySee, math, yeah,

there's no question about it. You think
about everything that we knowabout a student. I wouldn't even
go through the laundry list, butsomebody can make it on their
own. You think about what aschool district, what a school
knows about their students, youknow everything about them, and
being able. Use that tocustomize delivery methods to
meet that student exactly wherethey are, make this as efficient
as possible. We can do all thatwith artificial intelligence,

(55:08):
certainly teaching the use ofgenerative AI. And you and I
agree 100% we shouldn't beprohibiting that. We should find
ways to integrate it intoeducation and then allow and
encourage our educators to bemore creative in terms of what
that classroom experience lookslike. And if, if we need to
morph the experience and be morehands on at school, more project
based, reflecting more on whatwe've learned, rather than just

(55:29):
regurgitating as something outof a textbook. And let's, let's
innovate. And then the finalpart of that, and this is, you
know, a key area among others,where we're Mike Bigley, who's
been a former guest on thepodcast, by the way, we'll link
that episode up he was on withinthe last six, eight months, I
think, great episode where MikeBigley has been a leader in
others. Is this whole idea ofapplied AI and physical AI. How

(55:50):
much of the artificialintelligence that Todd and I
talked about today is related togender of artificial
intelligence algorithms andprogramming, and how much of it
is related to drones andhumanoid robots and quadropods
and electric vehicles and allthese ways that were autonomous
vehicles, all these ways thatwe're deploying artificial
intelligence on the edge. That'swhere it's at. You know, Mike in

(56:11):
association with a quick plugfor the folks at discover AI,
because they've actually createda way to expand that, with
Ashley's encouragement, beyondthe White House School District
into districts all over thecountry. Now, super, super
exciting with that, with thatendeavor as well. We'll put that
in the show notes, but, but ifwe don't get this right, and
it's really taught at everylevel, right, I mean, let's

(56:32):
start out with, we've got to getkids excited about this in K 12.
We have to drive AI learning andapplied AI learning all the way
through their their K 12journey. We have to be teaching
at our Technical and CommunityColleges in terms of how it
apply, applies to a wide rangeof discipline, not just
manufacturing, but healthcare,hospitality, you know, public
safety, every single aspect ofour Technical and Community

(56:53):
Colleges at the universitylevel, we talked about the huge
disparity in terms of the numberof engineers we're graduating
versus other parts of the world,especially China. We've got to
get that right and then in theworkplace, and we've got to get
our manufacturers and othercompanies understanding the
value of E commerce, theimportance of clusters, the
importance of automation, ofmaking automation affordable, of
deploying it at scale. I mean,if we get it from one end to the

(57:14):
other, we get this right in theUnited States that, you know,
there's still a lot of hope. Ihaven't given up by any stretch.
I think if anything, what I sawin China opened my eyes to what
we could be doing here. Butwe've got to get on our game and
drive it forward. I'll give youthe last last comments here
before we close up shop. Yeah,and

Todd Wanek (57:29):
I think the number one thing that we need,
certainly in my business, isI've got to get everybody it got
to have to get a groundswell ofactivity. And I need willingness
of the people. Number one,everybody's got to be willing to
learn. And you know, we got tofoster that within Ashley
Furniture, as well as within theeducational system and in
society in general. We got toget people that are willing to
embrace these technologies andthese these ideas, and then we

(57:50):
got to make it actionable. We'vegot to take things and we got to
make them so you could takeaction on it. You can actually
deploy it, because everybodykind of expects an angel from
heaven to come down and helpthem, right? I you know how it
works this, right? This isn't anangel from heaven. This is up to
us to learn this and then createan action plan around it within
our business so we can deployit. And then we have to have
capacity to be able to do it.
You know, capacity within ourbusiness, within ourselves and

(58:13):
within our time. And I think atno other time in history that
I've ever looked at is theresuch an opportunity, and I'm
super excited about it. Now youare too this whole China
conversation. You know, theyare, they're they're very
efficient, and you got to give alot of credit for what they've
done. I've been there since 1989I lived there for five years. I
understand it well, and I'vejust watched a country come from

(58:35):
nothing to an amazingorganization, amazing country,
within 35 years and the changes,massive changes they've made,
how they perform their society,how they've become Engineering
Society, is absolutely mindboggling. So lots of credit to
China. Obviously, in the UnitedStates, we have to catch up, and
we've got to make sure thatwe're burning the ships, so to

(58:56):
speak. And we're all gettingmotivated and get fired up
because we can compete, and wemust compete. We got to change
our shoulds to must, like witheducation, we can no longer say
we should do these things. Wemust do all. And I think that's
an imperative that we all needto agree to.

And I agree 100% and to your point, it's on us.
So if you're listening to thisepisode of the protected
podcast, it's not about waitingfor somebody to do something.
It's up to every American tofigure this out in every single
aspect of our economy. I shareyour optimism for the future
Todd and and I think we, we canlead on these technologies. I
think there's a lot, there's atremendous value and tremendous
benefits that we have here inthe United States. I wouldn't

(59:34):
trade places with anybody inChina for anything in the world.
I'm not pretending that that Iwould. But to your point, we can
learn from them, and we caninnovate here just as quickly,
if not more quickly. And itisn't a question of whether we
do it. There isn't an option.
And I'm really, really proud tobe on this journey with you.
You're brilliant businessperson. You're brilliant when it
comes to technology, togeopolitics, and most important,
how all of these pieces fittogether. So I always learned a

(59:56):
ton from Todd wanak. You're agreat man and a great. Friend.
Really appreciate you spendingtime with us here on the TechEd
podcast.

Todd Wanek (01:00:03):
Matt, just one more closing comment, our jobs is see
things before others see it. Aleader's job to see things
before others see it. And youknow, to go and see and to
study. Breaknecks, a good bookthat you sent me from Dan Wayne,
if anybody wants to learn more,I'd highly encourage him to do
it. I just got it a couple ofdays ago. So here it is,
breakneck and great book. I'dhighly recommend it. And again,

(01:00:26):
you've got to be curious, andyou got to learn, and you got to
see things before others see it,and then they take action on it.

Matt Kirchner (01:00:33):
Break neck will be linked up in the in the show
notes as well. For the thepodcast, great book, and for
anybody that wants to get asense for everything that Todd's
talking about how quickly Chinais innovating, and what it means
for the United States and therest of the world. That's a
great book to pick up. Todd. Ifeel like we could sit and talk
about this all night. I knowyou're a busy gentleman. I've
kept you more than an hour, butthank you so much for being with

(01:00:56):
us on this episode of The TechEdpodcast. We're going to put all
of our show notes at we'll callit TechEd podcast.com/wanick
Two. Let's do that, because Iknow wanick is already taken, so
we'll call it W, A, N, E, k2 sothat's TechEd podcast.com/wanick
Two, and that's where you'llfind all of the show notes, all
the great things we talked abouthere on this episode of The

(01:01:17):
TechEd podcast. When you'redone, check us out on social
media. We know China will weknow they're doing that. So we
might as well check us out onsocial media as well. We are on
Tiktok. We are on Instagram.
You'll find us on LinkedIn. Youcan find us on Facebook, pretty
much. Wherever you're checkingout your social media, you will
find the TechEd podcast. Whenyou do stop by, say hello, we
would love to see you. We wouldlove to hear from you, I should
say, and we would love to seeyou next week, we'll be back

(01:01:39):
next week with another episodeof The TechEd podcast. Until
then, my name is Matt Kirkner,and thanks for being with
us. You.

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Six Days in China: The Speed, Scale and Strategy Outpacing U.S. Innovation - Todd Wanek, CEO of Ashley Furniture

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Six Days in China: The Speed, Scale and Strategy Outpacing U.S. Innovation - Todd Wanek, CEO of Ashley Furniture