President-elect Donald Trump recently named Rex Tillerson, CEO of ExxonMobil (NYSE:XOM), to be his nominee for secretary of state.
In this clip from Industry Focus: Energy, Sean O'Reilly and Taylor Muckerman explain why Tillerson was offered the job and why he took it, and why the public shouldn't worry too much about Tillerson's alleged oil-related ties to Russia.
A full transcript follows the video.
This podcast was recorded on Dec. 15, 2016.
Sean O'Reilly: Donald Trump made an interesting pick for his administration --
Taylor Muckerman: A couple, but we'll get into the biggest one first.
O'Reilly: Rex Tillerson, the CEO of ExxonMobil, for secretary of state. Like, this is the job that Thomas Jefferson had under George Washington. It's Rex Tillerson.
Muckerman: Well, history.
O'Reilly: I'm sorry, do you not appreciate the historical references?
Muckerman: No, it's great, I was excited. That's why I dropped a bomb. Acknowledgement bomb.
O'Reilly: Oh, OK. But seriously, why is this being done? Were you surprised? Is it humorous?
Muckerman: I think everybody was surprised.
O'Reilly: Why did he take the job? Was he bored?
Muckerman: Well, he's not bored at the moment, but he did announce he was retiring in March of 2017. That has been known. So he's out of a job in a few months; why not become the secretary of state for a few years?
O'Reilly: Why not?
Muckerman: And this was interesting -- I didn't realize this until I started doing some reading on the subject, but you can't be CEO of Exxon beyond the age of 65. It's mandatory retirement.
O'Reilly: That seems a little old-school and draconian. Correct me?
Muckerman: Yeah, no doubt. I haven't ever seen a mandatory retirement age, other than the Supreme Court. [Editor's note: There is no mandatory retirement age for U.S. Supreme Court justices.]
O'Reilly: I mean, Buffett is 84, he was born in '32. [Editor's note: Buffett is actually 86, born in 1930.]
Muckerman: Yeah, and he's still rocking. So, yeah, he was done in March --
O'Reilly: Can you imagine Berkshire Hathaway today if Buffett was forced to retire --
Muckerman: Well, Buffett wouldn't retire, because he would be forcing himself to retire by installing a mandatory retirement age.
O'Reilly: Listeners, if you're just listening on your phones, with just the audio, I have a look of sincere shock on my face.
Muckerman: I did, too. I read that, and it was like, I've never seen that before. But regardless, he was out of a job. But if you look at what Exxon has done since he was CEO, and even before -- because this is the only company he's ever worked for, he was with Exxon before it merged with Mobil and became what we know it today as. He's a dealmaker around the globe. That's pretty much why I think he was selected. Exxon produces oil in every continent except Antarctica and has offices or has cut deals in every major country around the world, and he's been a big part of that.
O'Reilly: So, a lot of people are in uproar, like, "Oh, they're picking him because he has ties to Russia and Putin and all this stuff --"
Muckerman: Well, sure he does, because Exxon has a pretty significant amount of their future business in Russia, but it's being frozen right now due to sanctions.
O'Reilly: Sure. I like the rebuttal -- obviously, we're not political here, I'm just saying -- I was reading yesterday that Henry Kissinger, the secretary of state under Nixon, he was saying, it's ridiculous, he would be useless to ExxonMobil were he not good at dealing with Russia and making oil deals and stuff, so, completely irrelevant.
Muckerman: I don't know how long they've been dealing with Russia, but I'm pretty sure he has not spent his whole career dealing with Russia.
O'Reilly: Well, no, certainly not.
Muckerman: So, he's obviously been successful outside of Siberia.
O'Reilly: In Soviet Russia, oil drills for you.
Muckerman: He did say that climate change is serious and warrants thoughtful action. So he's not a climate-change denier. But obviously, you would imagine, if push comes to shove, he's going to have the fossil-fuel industry's back. It's not a bad thing for the fossil-fuel industry that he is secretary of state. It's an asymmetric to the good side.
O'Reilly: He got endorsed by Condoleezza Rice. He got a number of very decent endorsements.