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- The shock and awe of politics is now almost becoming routine, maybe even commonplace.

Welcome again to the most widely watched and the longest running dialogue on business policy and public affairs here in North and South Carolina.

I am Chris William.

Are we getting more desensitized to what in the past may have been a distressing event or action or dialogue?

Is the uncommon now becoming common and something that has been gospel in business before certainty and a stable playing field?

How much has that ambiguity being assimilated now and accepted?

Of course, a lot of these questions are a bit existential, but we're gonna try to stick to the facts, man We start with our panel in just a moment and later on he's the Chief Executive Officer and the founder of Boom Supersonic, Blake Scholl joins us.

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(upbeat music continues) On this edition of "Carolina Business Review", Dr. Frank Hefner from the College of Charleston, Joe Waters of Capita, and special guest, Blake Scholl, founder and CEO of Boom Supersonic.

- Hello, welcome to our program.

We are taping here on the Easter weekend, so I'd like to thank the crew particularly that you don't see.

You only have to look at me, but the crew is doing double and triple duty to make sure that this program's quality is up.

So thank you to all of you all.

But joining us now from Charleston and also from Upstate South Carolina and Western North Carolina are Dr. Frank Hefner, as well as Joe Waters.

Gentlemen, welcome back.

Thanks for joining us.

Happy Easter weekend.

Happy beginning of summer season in the Carolinas.

Frank, we're gonna start with you.

Is there any way to model out the impact of tariffs in the short term on the Carolinas economy?

- Well, at the risk of sounding flippant, based on historical trends on an event we have never seen since the 1930s, (laughing) no, it's going to be very hard.

The first quarter data is still just coming in.

The estimation by the Atlanta Fed is that the first quarter will come at a negative 2% growth rate for the nation, and we still don't have a lot of the numbers, so it's gonna be very difficult to do, to make any reasonable forecast.

So, pretty much what I'm looking at is anecdotal evidence and some local points.

And some of the local points are, for example, it appears that a lot of the companies in the Carolinas have front loaded their purchases because of the disruption of the supply chain.

They get that from the ports.

And so the activity has been fairly high in this first quarter for that reason.

And that's pretty much due to the tariffs.

As far as the other effects, what is it going to do?

We still haven't seen it in a lot of places.

In fact, the national news is still talking about the price of eggs of all dang things, which has nothing to do with the tariff, but it hasn't filtered through the whole supply chain network yet.

- Yeah, Joe, let's bring you into this, and I know you're not an economist, but you do have your finger on the pulse, you do talk to people, you are in policy think tank kind of mode.

How does it show up in some of the dialogues that you're hearing?

And I'm talking about not, let's call it the fog of political combat.

How does that show up?

- Well, first of all, Chris, thanks for having me back.

The number one thing is the policy uncertainty.

The environment, the policy environment is uncertain.

Members of congress, state legislators, they don't know what's gonna be coming down the pike in terms of economic impact to their communities, but also revenues that are gonna be a available to spend and so forth.

And this is in the context of a lot of uncertainty created by DOGE and other things as well.

Certainly philanthropists, funders are looking at the markets.

They're looking to see what sort of hit their corpuses are gonna take and what that will mean for grant makers in the future.

And then for families, certainly a lot of the products that are imported that new families need, strollers, for instance, there's a great story on this in Vox earlier this week or last week.

A lot of those things that families, young families need to buy that are already expensive, are gonna get more expensive.

So there are a lot of different things going on there.

- Yeah.

Sorry Joe, I didn't mean to interrupt you.

Frank, let me bring you back in.

You're the economic scientist.

As Joe outlined many of the broad strokes around policy, around family affairs, around public affairs, as the economic scientist, and I promise it's gonna sound like a leading question, and you've known me long enough to know maybe what I'm trying to get to, how do we, I mean, what we're doing, upsetting, changing, talking about change, doing some things maybe need doing, maybe shouldn't be done, but however you look at it politically, it's not sustainable in this form because it'll submarine everyone's economy.

So how long do you think this type of uncertainty can really go on before it becomes acute and pathological?

- Well, to quote Herbert Stein from about 50 years ago, "Things that can't keep going on typically don't."

So that's one issue.

So my concern right now is that what are our trading partners, what are businesses, what are supply chains going to do to readjust to this?

And even if we get back to a more stable situation of say, stable tariffs and some stability and some treaties made up, will everyone go back to the previous connections?

And I don't think that's gonna happen because once you reestablish a supply chain, you're typically locked in for quite some time.

So even if we get some kind of political stability, this is gonna change the fabric.

And that may be one of the things the current administration's trying to do is change the fabric, the production patterns.

But the way it's going about is just very nerve wracking and businesses are going to try to find some kind of stable point.

- Frank, let me ask you a quick follow up, and then Joe, I wanna shift a little bit and go toward housing and what that's looking like this year.

But Frank, don't economic or don't economists call this creative destruction, isn't there Phoenix rise out of the ashes, so to speak?

- Yes, but when we talk about it, we're talking about, for example, what Blake is doing and that is a new aircraft, an innovation that changes this landscape of an existing market.

We're not talking about creative destruction in terms of government policy.

Government policy that is destructive is just plain destructive.

- Okay.

Alright.

Joe, housing, I know again, something that you follow because it impacts families and it impacts debate and policy down in small communities.

We've seen kind of a strange time, interest rates are higher, yet housing is still growing.

How does that compare and contrast to the challenges around affordable housing and workforce housing at this point in the Carolinas?

- Well, Chris, the thing that I am constantly hearing when I talk to families, particularly those with young children, three costs: healthcare, childcare, and housing.

And so families very much want relief on any or on all of those.

And certainly the inflation of the last several years has really negatively impacted families.

We have a colleague who is an economist, Catherine Ann Edwards, and she says it all, for families, it all comes down to cost.

The cost of living is extraordinarily too high, particularly for those people who are thinking about starting families.

And obviously housing is a big part of that.

And I was actually in a conversation with somebody just this week talking about they want to grow their family and yet they can't afford a new house.

They're already busting at the seams.

And so, you know, people are frankly just not having the children that they want to have, in the places where they want to have them, in the communities where they want to have them because of the cost of housing, that's prohibitive.

It's prohibitive certainly from a workforce perspective, from an economic perspective, but it's also not the type of future that we want for our families, for our communities, for our children.

- Frank, are there confusing signals in the housing market and will this eventually find some stability, some reset?

- Well, of course it'll find a reset and there there is some stability and all housing markets are, they're local.

I mean, it's where you're located and so there is affordable housing, just maybe not where I wanna live and that becomes the problem.

The other problem we're gonna have is if the economy's going into a contractionary time period right now, that's gonna put pressure on everything that Joe just mentioned because salaries are not gonna be going up.

And we've already seen the possibility of employment dropping.

So that hasn't quite happened yet.

We haven't seen those numbers, the unemployment numbers yet.

So the American economy's pretty resilient.

But housing is going to be a problem for a lot of people.

And it's also worldwide.

I mean, if you go to some of the major metropolitan areas in Europe, you don't live in downtown Rome or downtown Paris or downtown London if you're working at a low wage job, and that's not an uncommon phenomena worldwide.

- Okay, Dr. Hefner, thank you.

Stay with us.

You had mentioned something about innovation, about our guests, so why not bring 'em into the dialogue?

Before we do that, coming up on this program, Lee Lilley is the new, newly named by the new North Carolina governor, the Secretary of Commerce, Secretary Lee Lilley will join us soon.

And also Scout Motors is another innovative company that announced not long ago in south of Carolina that they were building the New Scout.

You remember that?

He is Scout Motors CEO Scott Keogh will also join us in the middle of the fog of COVID back in January, 2022, a Colorado based company, boom Supersonic announced that they would be building a supersonic 65 to 88 passenger airliner that travels twice the speed of current passenger jets and is powered by a 100% sustainable aviation fuel.

The site to build what they are now calling the Overture Supersonic airliner is at Piedmont Triad International Airport in Greensboro.

No doubt that this is definitely different than conventional airplanes.

Does it mean, and does it signal yet another level of passenger air travel?

It's a good question to probably start with.

Joining us now is Boom Supersonic founder and Chief Executive Officer Blake Scholl.

Mr. Scholl, welcome to the program and it's nice to see you, sir.

Thanks for joining us.

- Thanks for having me.

- So is this next gen, next level air travel?

- I think so.

I mean, I think we're living in a dark ages of travel right now and nobody knows it.

You know, it was a longer period of time from the jet to today than it was from the Wright brothers to the jet.

We've had no speed up in passenger air travel since 1958, not one that was mainstream.

And in so many ways we've just gone backwards in comfort and convenience and I think that's a tragedy.

There's no good reason for it.

We need to go faster.

We need to make the world more connected.

We need to make humanity more mobile.

- Blake, was the turning point for you, as you say this around the innovation of air travel, is the turning point that you solved for the boom of supersonic air travel?

Is that what did it?

- That actually was sort of a bonus along the way.

When we started the company about 10 years ago, our focus was to start with the international roots, the ones that are mostly over water, where you can make a sonic boom, you know, think New York to London, think Miami to Madrid, think Seattle to Tokyo.

Ones that are mostly over water.

You go supersonic over water, make a boom, no one's there to hear it.

And then you fly under the speed of sound over land and it turns out that speeds up a huge piece of the most painful flights today.

But along the way, we found a way to fly over land with no audible sonic boom.

That just makes it even better 'cause it means we can fly supersonic across the country, not just overseas.

- Gentlemen, Frank, I'm gonna open it up to you.

Question?

- Yes.

I guess, you know, the big elephant in the room still is, is how are tariffs going to affect your current operations?

- Yeah, I mean, I think, you know, we said it already, there's an enormous amount of short-term uncertainty and I find it very helpful to take a click back and say, "Well, what is the long-term trajectory here?

And what is the long-term policy objective?"

And I think what we're really seeing is this administration is pulling every lever in favor of American reindustrialization.

And if we go back to, you know, really how the allies won World War II, we didn't go into World War II with a defense industrial base, but we went into it with the commercial industrial base that was the envy of the world.

And Ford and Boeing and Douglas all pivoted to make defense products.

And but since then we've really had the hollowing out of American industry.

And we've seen many of the most advanced factories, many of the most advanced manufacturing capabilities go overseas, mostly to go to China, and a world where, you know, we're post Cold War we're post World War II, everybody's peaceful, we all just get along.

Maybe that's okay, but that's not the world we live in.

And and we've got a lot of countries like China that are not friendly.

And so I think what we're seeing is simultaneously pulling of all the levers for American reindustrialization.

There's deregulation, there's removing of barriers to building things, removing barriers to having more energy.

And at the same time, you know, putting in place tariffs which, you know, create an onshoring incentive.

And I think we're starting out with those as a very blunt object, but that blunt object is gonna get refined over time.

And so long as we are aligned with, I think what we need to do as a country, which is reindustrialize, then long term, I'm not worried about it.

It's all gonna be okay.

- Mm-hm.

Joe.

- Great.

- Blake, first of all, I'm super excited for the day when I get to fly on one of your planes, but I'd love to hear from you, we've done this before, we've done passenger Supersonic before.

What are the lessons you're taking on from Concord and other efforts and the lessons learned to move forward?

- Yeah, so I have a radical view on this.

I think Concord killed supersonic flight and I think Apollo killed space exploration.

And that probably sounds crazy to say, especially someone where aerospace innovation means so much to me.

But in 1969, we could fly supersonic, in 1969, we could land on the moon, in 2025 we can't do either of those things.

And there is a common thread between Concord and Apollo, which is both were done with enormous amounts of taxpayer money and government leadership rather than commercial leadership.

So there was no business model for going to the moon.

And Concord, which is the European, you know, really kind of a socialist project.

Two governments got together, they built 100 seat airplane, 100 uncomfortable seats with $20,000 tickets.

And guess what?

That's for rock stars and royalty.

It's not for, you know, ordinary people.

And so the most important thing we need to do when we bring supersonic flight back is to do it in a way that's got affordability for passengers and profitability for airlines, and then it can be really big.

- You know, you've mentioned it a couple times, you talk about affordability, talk about a business model, Blake, what is it gonna cost to buy a seat on the plane?

- Yeah, our ultimate goal is to make supersonic flight available for everybody from the president on down to ordinary families.

But where we're starting with Overture One is business class.

And so that is, you know, think about a $5,000 ticket versus Concord being about a $20,000 ticket.

And you know, I know that's not yet for everybody, but it is mainstream business class fairs which are tens of millions of passengers now, and it's about 80% of international airline profits are from business class.

So that's where we're starting.

And then as we scale, the cost will come down over time and you know, like I said, I wanna make this available ultimately to basically everybody.

- How long do you think it would take?

I'm sorry, Frank, I'll let you get back in here.

But how long do you think you get that leverage of economies of scale to get it to where, oh, it's surprisingly inexpensive.

Yes, I'd like to buy a ticket.

- Yeah, I think we're looking at, you know, 10, 15 years, something like that.

You know, we're gonna do this as quickly as we humanly can.

- [Chris] Frank.

- Yeah, so, well, this is great 'cause this gives me, in terms of long term, a nice sense of optimism and I do appreciate the idea that private entrepreneurship is what's leading this as opposed to state run enterprises.

But you already have booked a number of orders I think, I mean, are those solid or is that at risk given the current chaos in the world?

- Well, we've got the first five years of production in Greensboro already in the order books.

So that's about 130 airplanes, United, American, Japan Airlines all have orders or pre-orders.

United and American have actually put money down that's non-refundable.

And you know, I think to put it in historical context, United has a deposit on 15 of these airplanes and there were only 14 Concords that ever carried passengers.

So I think this is big.

If we had the airplanes ready yesterday that, you know, the airlines would be snapping them up.

- Joe.

- Oh, that sounds great.

What about pilots?

I mean, qualified pilots to fly this machine?

- Yeah, so I mean our test airplane that flew in January and February broke the sound barrier, you know, that was flown by a military test pilot, you know, like literally a top gun pilot.

But for a commercial airliner, we can actually make this easier to fly than a Boeing or Airbus because computer technology has come so far.

The cockpit on Overture, it's gonna be like going from a Blackberry to an iPhone.

You know, there are large touchscreens, simple controls for the things that really matter and a lot of automation.

So, you know, we designed for, you know, it's difficult to think that this actually exists, but we designed for the worst airline pilot to be able to fly it safely and it's gonna be a lot easier to fly than other airliners.

- Yeah, Joe?

- So should I renew my private pilots license?

- Hold on one second, Frank, we gotta let Joe get in here.

Joe, go ahead.

- Yeah.

- No worries.

Blake, I would imagine you're already in conversations with the regulators, the FAA and others around the world.

I'm just curious how DOGE and everything else that's happening at the federal level is potentially gonna impact safety and the confidence that passengers have to get on these planes.

- I think the most important thing to recognize here is that air travel is by far the safest travel form in the world.

In fact, the most dangerous part of air travel is driving to the airport.

You are far more likely to die in a car crash on the way to the airport than you are to get hurt in an airplane.

And yet at the same time there's enormous room for improvement.

You know, we have an air travel system that is operating on 1960s kind of technology.

We're handing off paper strips between air traffic controllers, that system is very labor intensive.

We don't have enough controllers.

And I think we're seeing, you know, we're seeing it falter at the edges, but guess what?

Innovation helps.

And I think there is opportunity to improve the efficiency, opportunity to improve the safety.

And I think it's not easy, but I'm glad to see, you know, for example, you know, Secretary Duffy is very focused on it.

- You know- - Are you worried that a cutback- - Go ahead, Joe.

- FAA is gonna hurt.

Yeah.

Are you just worried that a cutback FAA is gonna slow down the innovation y'all are pursuing?

- No, I'm not worried about that at all.

I mean, we're adding air traffic controllers so that matters.

And I think, you know, thematically what I've seen in my own business, I think what we've seen in a lot of businesses is that many times, you know, smaller teams are more efficient, can get things done more effectively than big bureaucracies.

And we did the XB-1 supersonic jet with 50 people, and that's something that, you know, a Boeing or Airbus would've put 500 or 5,000 people on.

And the result of that is not just cost, it makes everything slower.

Smaller teams can be faster and more efficient and more innovative.

And I think that's important wisdom here.

- Blake, you know, as I heard your comments talking about the international ownership of the Concord and also the Apollo program, I had not thought of the aerospace component here, and I wanna bring it to the dialogue that some people may not know that you worked with Jeff Bezos years ago in the early, quote unquote, the early days of Amazon.

And now Blue Origin obviously has gotten some press recently, but, so how do you think about the continuum supersonic travel, Blue Origin, SpaceX?

Is that all part of the same ecosystem?

I'm assuming you're thinking that way.

- Yeah, in a certain sense I think the answer's yes.

I there's a real story about the birth of flight, you know, starting with the Wright brothers in 1903, and we had a golden era between 1903 and 1921, where basically all of the great aerospace companies that we think of today were created.

Boeing, Douglas, McDonald, Lockheed, all created between 1903 and 1921.

And then there were no new commercial airliner companies until Boom in 2014.

So we went, you know, we went 100 years without any entrepreneurship, and we saw the last founder in the commercial airliner industry retire in the 1960s.

It coincides perfectly with the last speed up in travel we had.

And now I think what we've seen is, and I think it really started with, you know, Elon and SpaceX, but now there's a whole wave of entrepreneurs that are saying, "Hey, this industry that was dying from a lack of entrepreneurship can be brought back."

And we saw space lead with, you know, SpaceX and Virgin Galactic and Blue Origin and Relativity and Rocket Lab.

And there are large number of these companies on the rocket side and I was very inspired by that.

I think when you do the same thing on the airplane side of it.

So that was the origin of Boom.

And now if we look around, there are companies doing, you know, vertical takeoff and landing, electric aircraft.

There are people working on blended wing bodies.

You know, there is a lot of entrepreneurial activity and I think that is very bullish for the future of flight in the atmosphere as well as in space.

- Yeah, I wish we had more time to unpack that.

We've got about a minute left.

I do wanna go to the economic development component here.

Why Piedmont Triad International?

Why not Charlotte Douglas or Raleigh Durham or Greenville in the upstate of South Carolina?

What was it?

- Yeah, I mean, it was a hard decision in the end, but it turned out that Piedmont Triad was the fastest path to an operational factory.

The airport manager there, Kevin Baker, is totally a visionary.

He wanted to bring the future of aerospace manufacturing to Piedmont Triad.

And before we ever met, he'd prepared the site, built the infrastructure, and all we had to do is come in with the plans for the factory and stand it up.

So it was the fastest, most efficient path.

And that's really proven out to bear fruit.

The factory got done about a year ahead of our plan, which is incredible.

- Yeah.

It is pretty amazing.

And I know everyone's watching you.

In about 20 seconds, does airport capacity matter?

Can you land those planes at any runway of decent size?

- Yeah, any major international airport is fine.

If you can operate a Boeing 777, you can operate a supersonic airliner.

- Yeah.

Blake, thank you.

Please come back.

A thousand unanswered questions like, when can I get a seat on it?

And you know, more personal stuff like that.

But so nice to see you.

Thanks for joining us and making the time.

Good to see you.

- Thank you.

- Thank you.

Joe, always nice to have you.

And I'm not just saying that to Joe.

Frank, you too.

You've been around for so long.

- Thank you.

- We take you for granted.

Thanks, Frank.

- Thank you.

Until next week, I'm Chris William.

Happy Easter.

Happy weekend.

Happy spring.

Goodnight.

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