Ford, all of these basically weaker than expected although slightly better than expected for fiat and chrysler. The real concern is when you look at car sales. Were not talking about suvs and pickups. Were talking about car sales. The numbers, thats not a mistake there. That is accurate. Fiat chrysler cars down 39 . Gm down 25 . Same with ford. Toyota, down 15. 9 . What is happening here . A couple things. Moderate gas prices are having an impact. People are saying if i have gas at, what, 2. 32 a gallon on average in this country, hey, its still relatively cleep to where it was a few years ago. As a result, you see people rotating to crossovers, suvs. So when you take a look at the japanese automakers sh the reason were showing you the stocks is because these guys have more exposure to the car market in north america relative to gm, ford, fiat chrysler. Keep in mind, those guys have much greater exposure to trucks and suvs relative to the japanese automakers. Any way you slice it, theyre not pretty numbers coming tout day. Phil, stay right here. Pleasure to you have on set, by the way. The big autos are still struggling, can tesla be immune . Lets bring in dave wiston who in addition to tesla covers the traditional automakers. Also with us is collin rush, Senior Research analyst covering tesla. Of course, phil sticks around for this one. Dave, ill start it off with you. Can you explain away the big decline that we have been seeing . What is really a concern is the mass declines were seeing in autos and cars specifically. Yeah. I think phil described it pretty well. The headline numbers, lets say gm, for example, down 18 . Its a horrible number for sure. There is a story behind the numbers. Every month the media focuses a little too heavily on just the volume. You have to look at things like mix or what other stories theyre in. In this case, quite bate wia bi gm. You had four plants shut down in late april for two weeks. They were making a lot of new products. They were making the malibu and cruz. You also have a very large intentional reduction in gms rental fleet volume which i love. It was down 49 in may. Thats a big decline. 22,000 units. Largest decline in 15 and 16. The extrapolation is not that we hit or nearing peak auto sales, there are fewer selling days in may. Youre looking through this . Z to a point. Im on the plateau side. Low growth, were staying at these volumes, gm, ford, everybody, theyre very profitable at these levels. Those are so obsessed on growth. You may be disappointed. So in an environment, whether it is plateau or peak auto, in particular when we see declines in car sales, when you take a look at tesla, its reliant on sales of model s which is a car in order to ramp up production for the x as well as the three. Is it immune . Tesla is in a category that is not in a broad auto sales category. It is for the experienced driven sale. And folks that want the vehicle certainly have enough liquidity and disposable income to buy these cars still even in a challenge macro environment. Collin, given the fact were seeing the big focus for tesla being the model 3, i know we dont see deliveries until the end of next year. They dont start ramping up until 2018. They are moving into that mass market car arena. Should there be some concern there if youre a tesla investor . Not athis point. I mean we already have backlog through the end of 2019 into early 2020 in our model at this point. So were not thinking about demand until the end of the decade. Orders are going to come to fruition. You have people putting down 1,000 or whatever it, is how can you argue that its a good thing for tesla to go mass market and say also, you know what . Its immune from the mass Market Trends which is a decline in sales . Im talking about two different products here. Three. Three. No, i was talking about the model s. We were talking about immune. When you look at the model three, youre looking at a different buyer. You have to take that into consideration. My argument here is that they have enough backlog and folks have put that 1,000 down. Even if you have an excessive cancellation rate into the teens or 20s, we still have backlog into the end of the decade into 2 2019 and well see a new wave of orders. So were not very concerned about that demand issue for them at this point. Dave, im curious. Given the profitability that were seeing for the traditional automakers, feen were at plateau sales, not peak sales, whats to give people excited about the stocks . Why should somebody be excited about gm or ford, fiatchrysler, any automaker . What is in the future that you would say, i like that. Thats why i would buy this stock . Yeah, great question. I get asked that a lot. And the hard thing for people to accept is that theyre not sexy but theyre also turn around stories and turn around stories take a lot of time. Gm is not done transforming themselves and giving them economy of sale. Thats what you can be excited about as an investor and also that very nice and very safe dividend yield. All right. Well leave it. There dave, collin, our thanks to phil lebeau. Misch snell. Two sports giants falling today. Nike is lower after a pair of down grades. Under armour shares are also in the red. For the year, both stocks down deep in the red. Off by 13 each. Not the same story though for lulu lemon. That stock is rising this year, up 27 so far. Despite the gain, lul has far underperformed at nike and under armour over past 2 1 2 years. Thats about the time the current managemen was put in place toon open letter to the board just posted minutes ago on cnbc. Com, founder chip wilson writes, unfortunately, lulu lemon lot of its way and i believe a call to action is needed. Goes on to say, we cannot continue to seed the Market Opportunity we created to under armour and nike. Lulu lemon joins us for a power lunch exclusive. There is a plaintiff letter that you have written to the board and basically to the shareholders of the company that you founded. I was doing yoga this morning with my deer taeeacher who wear lulu lemon all the time. I said to heshgs ways going toinlt view. She said, why . I said because he has written a letter. What does he want . I said i think he wants his baby back. Do you want your baby back . Number one. And number two, what would you specifically do differently than the current management and board . Do i want my baby back . My life has gone further than probably lulu lemon at this time although im still the largest shareholder. It is my child to a great extent. Its everything who i am and who i how i live my life. I believe that its really up for me at this point of view to bring forward what has been happening over the last three years and be very clear that lulu lemon greatly underperformeded. Under armour has gone up 75 , nike 45 . The s p 500 has gone up 19 . And lulu lemon has gone down 8 . These are really these are really, really tough numbers. Its really up for me right now to bring this forward and to try to get the board to change the context of how they operate. What would you do different . You have a staggered board that makes it difficult to effect change on the board. What would you do specifically to reorient the company . Cultural . It is what . Four or five years ago i started bringing this up to the board. The real thing is that everything that i am is vision, culture, innovation, technology product. These things are almost impossible to quantify. With the Board Structure the way its set up, you have eight members that are mostly interested in that and mostly are in the 1 shareholder and really scared of git litigation. For them to jump in and say that i want to have i want to believe in this guy. It is just not in their nature. I guess i what im still waiting to hear and what tyler is asking, so if you were able to effect a change you want with this letter, if you get a new board or change the board, how would the company be differently run or what would you do or have them do to not lose market share to under armour and nike. Vision is really missing. Theyre just rolling out stores. But theyre not morphing into anything new. Theyre not they say they have technology. They say theyre doing innovation. But i might be the number one person in the world to understand that. I dont see it anywhere. So words are different than reality. Can we put up a two year chart of lulu lemon . That is the time frame that were talking about here as we look at that. So far this yeeshgs the stock has performed pretty well. A lot of people would love a 20 return this year. Over the past two years, there is two year chart, chip. That says its up almost 50 from just two years ago. Id love to have a 50 return. So some people would say what is the beef . Two years ago i told 30 to 15 of the ownership to bring up the staggered board which is really holding so much of the value of the Company Inside of it. So by building two private equity people that i can make a change, so the stock went right up after that to where it is now. And then because of miss management, the stock dropped. And now it only found its way up. This is in the midst of lulu lemon buying back half a billion dollars of shares. So has the management done anything . I would say no. Some say that lulu lemon invented athlesiur. Women change the way they dress on the a daily basis for yoga but for every day. They wear them like pants. We are at a moment though where fashion is shifting. A lot of people think athleisure peaked. Flair is n flair is very different than wearing a tight rowinga pant s part of the issue that the game has changed since you invebted this company . Well, sure. I was in the snowboard industry and then into yoga. They went to 500 and down. Someone i think from Glamour Magazine or someone came up with athleisure. I would never use that. As i invented the market, i like to say that name i use more like street nic. It is street, technical and stretch. So, yes, you can say oh, this a athu a athleisure thing has gone by, but Technology Never changes. And technology, as long as you keep pushing it will always affect fashion. Dont you always have also have a lot more competitors at the high end and the low snend everybody is producing athleisure at this point. Yes. But there say difference between athleisure and technology. I mean, if you look at how lulu lemon is built, everything is around the fabrics, the silver threads in it, the thumb holes, the 12 stretch, the preshrinking. And compression. So as long as that is you keep pushing that and you move yourself out of the commodity market. You basically say what kevin plafrpg says, im a Technology Company that happens to make apparel and foot ware in his case, sfligt thats sort of what youre saying here. Youre a Technology Company. You left the company. You went on a he s sabbatical. Then the company went into the hard times there. You came back. And when you finally stepped away from the board about 15 months ago in february of 2015, you said some very nice things about the then management and board. I wonder what changed in those 15 short months in the face of a stock that turned nicely in the last six months, what changed since you said those nice things on the way out the door and what are the questions you want to ask the board and the management today . Management hasnt produced. It is the structure of the board . That is my question. The questions i would like to ask the board are lulu lemon is worth double the amount of under armour two years ago. Its now half. Does the board plan to get that money back . That is eight or 9 billion on top of a bunch of other stuff they could do. What are the metrics we should be looking at quarterly to see that happen . The second question i would like to ask is around the staggered board. The shareholders can only vote for three shareholders at a time every year. The world is changing too fast. Do you want your baby back . Do you want to take back this company and run it . You know what . The company cant afford me, quite frankly. Nice place to be. It is. The real important thing though is that it is its very frustrating for me knowing that there if lululemon can grab the culture, innovation and vision back, at built to get to 8 billion or 9 billion increase in value is easy. I still dont understand what you want f you dont want the baby back, if they cant afford you, i dont buy. Youre the biggest shareholder. This is your money on the line but, okay. If you get what you want and they change the structure of the board, then what . First off, they would have to change the structure of the board. Yeah. Okay. If that happens . All shareholders to do that. And then i would have, i believe sh i could have more board seats and i could effect the management and then i could i believe i could go and help as a consultant because whats happened now is that the management got rid of everybody that actually knows how to use the Business Model. They brought in wholesale people that dont understand how to leverage it. They have nobody left to train the people on what how the Business Model works. All there needs to be is a short amount of time in order to put that back in place and they can be a rocket ship. I dont want to let you go without remarking on your kit and ace shirt which is this technical cashmere. It is very cool. I touched it, folks. You throw it in the wash, right . This is the new venture with your familiarly. Congratulations on. That and we got throughout interview without calling him flip wilson. Right. Its chip wilson. Lululemons founder. Thank you. All right. Thank you. Lets take a check on the markets here. The s p 500 turning positive briefly. Were now down by a point as we await the beige book which is due out at the 2 00 hour. Were seeing big moves within certain sectors. Take a look at tell come. That is down by 1. 25 . On the flip side, in the positive, we got Consumer Staples up by. 4 right now. For the annual coke conference is under way in california. Jeff bezos speaking last night and making a the love headlines. What he said about Artificial Intelligence next. Plus, Sundar Pichai will give us an interview in a few moments. With usaa is awesome. Homeowners insurance Life Insurance automobile insurance i spent 20 years active duty they still refer to me as Gunnery Sergeant when i call being a usaa member because of my service in the military to pass that on to my kids something that makes me happy my name is roger zapata and im a usaa member for life. Usaa. We know what it means to serve. Get an insurance quote and see why 92 of our members plan to stay for life. My m. About my toothpasteice. She eveand mouthwash. Ice. But shes a dentist so. I kind of have to listen. She said jen, go pro with crest prohealth advanced. Advance to healthier gums. And stronger teeth from day one. Using crest toothpaste and mouthwash makes my. Whole mouth feel awesome. And my teeth are stronger too. Crestpro health advanced. Is superior to colgate total. In these 5 areas dentists check. This check up . So good. Go pro with crest prohealth advanced. Moms right. Again great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. I think its gigantic. I think National Language and Artificial Intelligence, this its probably hard to overstate how big of an impact its going to have on society over the next 20 years. So it is big. It is it doesnt mean that, you know, phones are going to go away or anything like. That its not like its not like voice interfaces are going to replace screens. That was jeff bezos speaking at the code conference. Is he right . Lets bring in andrew macfee. Good to have you here. It was so interesting to hear jeff bezos talk about the implementation of ai. The discussions about Artificial Intelligence thus far have been driven by people like mark cuban or elan musk who say they are worried about robots taking over. Whose viewpoint is correct or are they boning correct . Im with jevon this one. This tl are two really important things unfolding in front of us. We can interact with computers on our terms using our voices, using our ears and eyes. As opposed to on their terms with keyboards and mice and desktop icons and things like that. Its a great change. Its going to influence how we deal with technology out there in the world. The second thing, which i think is even more profound, for the First Time Ever we have a global, an artificial Second Opinion who can look at a bunch of evidence and reach some conclusion or see some patterns in that. And help us with our work. Help me visualize how it is in my home. We cant play the whole section. But jeff bezos says well have many ais in our house, same way we have maybe several ipadors whatever format or several kinds of apps under many apps an our phone. Well have many ais that specialize in different ai functions. What does that mean in my real life down the road . You may have a peefs background working on your schedule and travel. Youll have a different one making sure the household staples stay in stock so you dont run out of stuff. You may have a different one to help you in your professional life or get writing or research done. There is this invisible army of antibiotics in the background help you get your work done and increasingly interacting with you in the term that you freer if. That sounds to me like really super fast computing. But when i think of ai, when people talk about the fears of Artificial Intelligence, its robots that can think and act like humans. This is going to sound weird. I took a whole seminar once on ai. The professor said he dreamed of creating a robot, a robot with feelings. And went on to say when we invented, we probably wont know it. We dont know even today if frogs have feelings. So the day of robot has feelings, maybe we dont know it. But thats where people on the cutting edge really want to go. Its not about an app for my schedule. Its about something much bigger. I talked to the guys on the cutting edge, the people making the technologies. And they tell me over and over, there is nothing on our current trajectory that gets us