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QUEST MEANS BUSINESS
U.S. Economy Shows Signs of Weakening; AOL's Profits AWOL
Aired May 4, 2011 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: It is a case of rain in New York and a washout on the markets.
The U.S. economy shows signs of weakening and higher prices at the pump causing more pain.
Tonight we look at the world of energy and AOL's profits have gone AWOL. What's gone wrong at American Online?
I'm Richard Quest, tonight, live from Columbus Circle, where yes, I mean business.
Good evening to you tonight, from New York.
Economic cycles are often made or broken by energy prices. We will be considering that in some detail in tonight's program.
We will also be taking you to Washington just as soon as the White House briefing gets underway. This is the scene in Washington at the moment, as we wait. It is the White House briefing room, which I would imagine they are getting quite close to the briefing getting underway. The chairs at the front and the middle are empty, then all of a sudden everybody rushes in. As soon as Jay Carney arrives we will be there. You will miss nothing of what happens in Washington.
On tonight's program, from what we will have of it, the signs are pointing to an economic slowdown. Job growth is losing momentum. (AUDIO GAP) it seems are losing heart. If you are hunting for a job, spring is certainly not sprung. The prospects are likely to be poor and more narrow than many people had hoped. The jobless rate still remains high. The payroll firm ADP says the private sector created 179,000 new jobs last month. Excuse me. That is fewer than the market expected and down on the previous month. The U.S. service sector is growing at its slowest pace in eight months, that is according to the Institute for Supply Management.
Now traders are also worried that China is about to tighten its monetary policy to curb and to choke off inflation. That could choke off demand as well. China, the economic demand (ph), with an economy growing nearly 10 percent. Either way demand is going to suffer and that will take its toll on many other countries as well. The Organization for Cooperation and Development, the OECD, says prices are rising at an average rate of 2.7 percent in its member countries, blaming higher energy and food prices; they are to blame.
As we put more concern into this. Let's look at the price of crude, oil prices, in just a moment. First, though, we will catch up with Alison Kosik at the New York Stock Exchange.
Alison, the day is miserable on the weather, and I'm afraid you haven't got much better on the numbers.
ALISON KOSIK, CNN FINANCIAL CORRESPONDENT: Exactly, it is a complete down day here on Wall Street. I mean, you look at stocks. Stocks are off their lows, for the Dow down 93. Oil down, gold down, silver is down. What set everybody off to go into this dour mood? Well, this ISM number that you were talking about. The Institute for Supply Management, it is really questioning the pace of the recovery.
And what it is doing today here on Wall Street it is raising worries about the jobs report that is coming out Friday. Because the service sector number is the biggest part of the jobs market. It accounts for 80 percent of the U.S. jobs and there are strong signs from this report, Richard, that the service sector is slowing down. It shows that the economy just isn't that healthy. And that really has Wall Street selling today. They are also just taking profits. I mean, the markets have had quite a run up lately and this is really the excuse to go ahead and take some profits off the table, Richard.
QUEST: Profits off the table, for the investors who are showing gains, but the companies and the earnings, as I just alluded to there, they're not yet coming from the United States. The U.S. economy, the sluggish 1.8 percent growth in Q1 that we saw, is still not necessarily generating that money, Alison.
KOSIK: Exactly. It is coming from overseas. Sure, if companies are even making products here and they are exporting those products. Yes, it is not being generated from the U.S. and that is really the big issue here. And Wall Street sees that this is happening. That we're not having a robust growth at all, in fact, it is slowing down. It really is becoming quite a drag. I mean, we see these earnings, even. These earnings have been quite stellar this quarter. But the problem is, you know, it is not translating into the economic data. Now Wall Street wants to see better data. It is just not getting that good data. And that is also why we are seeing a drag on the numbers today, Richard.
QUEST: Alison Kosik, who is at the New York Stock Exchange for us, this evening.
Now to the price of energy and the price of oil: Crude oil down just a few dollars, that is momentary relief on what has been a pretty awful time for oil traders and consumers, alike. The U.S. stockpiles rose last week, suggesting consumer demand is actually coming down somewhat. And don't forget that over in the U.K. gas prices-well, both in the U.S. and the U.K., gas prices have been rising very sharply, the price at the pump.
Today the price of Brent crude is 37 percent higher than it was exactly 12 months ago. And as you can see, the major growth spurts came earlier in the year, as the Arab spring raised fears of a supply squeeze. And that included the Federal Reserve Chairman Ben Bernanke, who also cited demand from emerging markets.
The weak dollar helped to push up prices as well. A lot of people think that is because decisions made by the Fed. Some motorists are blaming policymakers for this chart. It shows NYMEX crude getting almost 30 percent in the last year.
We need to begin our look at energy and the various affects of energy with one of the largest retail and business producers of energy in the United States. With millions of customers, Duke Energy has a portfolio of different generating systems, from nuclear to gas, a little bit of oil, and an enormous amount of coal.
The chief executive of Duke Energy joined me earlier. And it was a perfect place to start as we look a nuclear, after what happened in Japan, at Fukushima. How could he seriously say that nuclear energy was still the way of the future?
JIM ROGERS, CEO, DUKE ENERGY: Nuclear is a key to the future. It cannot be taken off the table. One thing that people need to know, around the world, that embedded deep in our culture is safety, and continuous learning. And in the Japanese incident we will learn from that. We will be better for that. And as a consequence our business will be even safer.
QUEST: What have you personally learned from the way TEPCO have handled, or not handled this, in terms of a crisis, and the failure to communicate?
ROGERS: I think it is critical in this day and age to have communications, as much communications as you can give. Now they have had a difficult time trying to get to the root causes of the problems and try to explain them in a way that people can understand it. But if you are going to be a nuclear operator you have got to have the ability to do that. It is a key to getting support from the community. Support from the leaders across the country and around the world.
QUEST: Do you agree that there does need to be a review of process, procedure, and ultimately the safety and security of the industry?
ROGERS: I think it is very important for us to take a pause, with respect to the 104 reactors that are generating electricity in the United States, to take a look at specific issues. Auxiliary power would be one. Also, taking a look at the spent fuel that is in our pools. Should we accelerate the movement to dry-cast storage, would be another issue that we need to take a look at.
But most importantly, I believe, is that nuclear is key to the future. It is the only technology that produces electricity 24/7, with zero greenhouse gasses.
QUEST: Have we now moved into an era where cheap oil is a thing of the past?
ROGERS: I personally believe cheap oil is a thing of the past. And one of the things that in our country that we did in the late `70s, when over 20 percent of our electricity came from oil, we made the decision to wean ourselves from oil. And today, only de minimus amount of electricity is produced from oil. It is predominantly from nuclear, from coal, from gas, from renewables, and increasingly from energy efficiency.
QUEST: If I look at your creation of energy, the generation of power, a relatively-still it is still relatively small. If your 35,000 megawatts of power generation, very small amount is from alternative energies. Growing to be sure, but it is still not sizable in any meaningful way.
ROGERS: You are absolutely right about that. Renewables are a small portion. One of the challenges for the wind industry and the solar industry is to really make their products affordable. Today, they have significant subsidies in the United States. We are an operator and a developer of wind and solar, so we understand the subsidies and the costs, but at the end of the day, to compete with other sources, they have to drive the cost of these renewables down.
QUEST: Whenever I think of energy policy my eyes glaze over. And I sort of start to yawn, because so much hot air is spoken about it, but do you, sir, now see an urgency by regulators, and government to actually do something. Or are you still stuck in this wind tunnel of noise?
ROGERS: It is critical for the policymakers in the U.S. and around the world to roll up their sleeves, to go to work, to address these issues, and not punt them to regulatory agencies to solve.
QUEST: Jim Rogers of Duke Energy, giving us an overview of energy policy and also on this program tonight, you will hear from wind energy, and hopefully, also we'll hear about nuclear power as well, as we take a slightly closer look at the world of energy and also, at the pump.
Now one company had a rocket fuel ride today. Launched on the stock exchange and went higher immediately. Renren made its debut on the New York Stock Exchange. We'll talk to the chief executive after the break. QUEST MEANS BUSINESS live from New York.
QUEST: Now China's biggest social networking site has a lot to celebrate this evening. Its shares are much in demand on the New York Stock Exchange. When it opened this morning, the exchange, these were the gentlemen ringing the opening bell.
(BEGIN VIDEO CLIP)
(OPENING BELL CLANGING, CROWD CHEERING)
QUEST: Shares of the company were offered for sale at $14. It raised a $250,000 for the company. If you bought at that price, well, they are now worth $19. Renren's chief executive Joe Chen is obviously pleased, and joins me from the New York Stock Exchange.
A nice little fill up, a nice little gain, if you like, on the course of the day. Long-term, now, where does Renren go? What is the strategy as you build your company and try and take market share?
JOSEPH CHEN, CHAIRMAN & CEO, RENREN, INC.: Well, we are in the business of the real -- real name-based social networks. And only less than a quarter of the user base -- well, only, less than a quarter of the Chinese Internet user base are our users, so we have a lot of room to grow, in the next -- in the days to come. And most importantly China is going through sweeping innovation on the mobile Internet space. When really low- cost smart phones penetration are growing really fast, so we experienced very rapid growth on the mobile Internet space, and that is where we are going to focus our strategy on. And we are going to leverage we are the largest open platform in China, to help us do that as well.
QUEST: OK, All right, Mr. Chen. But does your main competition come do you think from the Facebooks of this world, and other companies, that may eventually get access -- may eventually get access? Or is it more homegrown competition within China, do you think?
CHEN: I think inevitably, you know, because the China market is so big, right? I think inevitably all the large global Internet companies will be going to China. And that is part of the reality, because a lot of international companies have come to China. But the landscape in China is very different from other parts of the world where local competition is very strong, because the size of the large market allows it, allows local competitors to grow to a very large size, such as, you know, BIDU and (inaudible) all feature $40 to $50 billion market cap, with a large user base, very strong financial resources.
So in our case, we being in this business for six years now and we have been growing very rapidly and we think that the scalability of a platform as well as the critical mass of user base will allow us to continue to compete very efficiently in the progress of this market.
QUEST: All right. Mr. Chen, many thanks indeed. We are going to have to cut it a little bit short, there.
Joe Chen, who is joining us there -- to the White House now and as you can see from the podium, the Jay Carney will be joining it there. We are on a warning and this is the White House briefing, which of course, happens every day but has taken on vastly more importance in the last couple of days. Today the issues no doubt will be why, apparently, President Obama has decided that the pictures or photographs of Osama bin Laden, the dead body of bin Laden, should not be released. We know the reasons that have been given. Now, we can expect that to be put to the test in the White House briefing.
We would also expect to hear him talk about anymore details of what was known in terms of the actual raid itself. How the relationships existing and how the U.S. administration is going to take forward its relationship with the Pakistani government as it is now becoming ever more clear that the house where bin Laden was located-for several years, by all accounts-less than a stone's throw, in relatively-in relative terms, relatively around the corner from Pakistan's main military academy.
Jay Carney will be with us very shortly to give us that briefing.
The Dow Jones, while we wait for that, let me warn you is down 64 points at the moment. The market has been slightly knocked aside by economic news on the jobs front and on earnings front. Interestingly- interestingly, there has not been at the moment any fill up (ph) to either economic growth, or indeed, to investors from what took place at the weekend. Anyone who thought that the market was going to have a rally was seriously mistaken.
Jay Carney is the White House press secretary. The briefing begins right now.
(WHITE HOUSE PRESS BRIEFING)
QUEST: That is Jay Carney, the White House press secretary, with the daily briefing. And allow me just a few seconds to recap what we heard.
Most of the new information, of course, comes concerning the pictures of Obama, the dead body. Apparently, it was President Obama's personal decision, a strong decision, says Carney, that those pictures would not be released for the time being, if at all. He says, apparently, they are very graphic. It would be an incite -- it could be an incitement to violence. It could be a propaganda tool to those who would use them and they don't want to they don't want to take that sort of risk -- a national security risk in the way Mr. Carney described it.
You -- summing up, basically, those who believe whether or not Obama - - whether or not Osama bin Laden was killed, whether or not the whole thing has been just a conspiracy, Carney says, you will not see bin Laden walk on this earth again.
QUEST MEANS BUSINESS.
We are live in New York tonight.
When we come back in just a moment, an update on the headlines and, of course, we're going to turn to the world of AOL and what happened with their results, in a moment.
QUEST: This is CNN.
I'm Richard Quest in New York.
A reminder of what we just heard from the White House press briefing, where the press secretary, Jay Carney, said that it was President Obama's decision not to release the photographs of Osama bin Laden's body, saying that they didn't want to give an incitement to violence and that it could have been a national security risk to release the photos.
(BEGIN VIDEO CLIP)
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: There's no doubt that Osama -- that bin Laden is dead. Certainly, there is doubt -- no doubt among al Qaeda members that he is dead. And so we don't think that a photograph, in and of itself, is going to make any difference.
There are going to be some folks who deny it. The fact of the matter is, you will not see bin Laden walking on this earth again.
(END VIDEO CLIP)
QUEST: And Mr. Carney there reading answers and responses from President Obama to questions on that issue.
We turn our attention back to our business agenda.
You have heard of AOL, the company that used to be called America Online and, that, of course, in many ways, brought us you've got mail, as well.
Well, AOL remains confident itself that it can turn itself around in spite of some numbers that, frankly, are disappointing at best.
Net profit, $4.7 million, a fall of 86 percent, compared to the same period last year.
Some sign of life, though. Display appetizing saw a slight growth, for example, the first time since its growth in 2007.
The chief executive of AOL is Tim Armstrong and he joins me now.
And, Tim, you must be weary of people like me saying to you, how are you going to turn this thing around, getting that hull beneath the water line...
TIM ARMSTRONG, CHAIRMAN AND CEO, AOL: Well, I...
ARMSTRONG: Well, first of all, it's nice to see you in New York and nice to see you in the Time Warner Center...
ARMSTRONG: -- where my career and AOL started.
Look, we're very excited about the future of the company. And I think we expect all the tough questions on the turnaround.
But today is a really important milestone day for the company. It's the first time the company has shown global advertising and display growth as a business since 2007. And that's really the future of what our company is built on. But that's...
QUEST: What went wrong with the headline number?
ARMSTRONG: The -- the headline number is, you know, takes into account our access business and it takes into account a lot of one time charges we took on some of the acquisitions we've done and compensation.
QUEST: So is -- so is this what we used to call a kitchen sink quarter...
ARMSTRONG: Yes, actually.
QUEST: You threw everything in?
That would mean that next quarter, you won't be able to use the same excuses.
ARMSTRONG: Well, look it, we're working very hard. We expect next quarter to be another good quarter for AOL. And we just spoke to all our investors this morning and I'll say the same thing to you that I said to them, which is, you know, really, it's about unique visitor growth to our properties. It's our great advertising growth. And we're going to have a huge product in the United States called Patch, which we're digitizing to communities in the United States.
QUEST: But as more of us become more familiar with the Internet and we go to our own portals, we go to different areas on there, where does AOL fit into that?
I mean I go to 53 million different Web sites to look for different things.
Why would I come to you?
ARMSTRONG: The average Internet user only actually goes to about 20 sites a month. They use 10 religiously. So as the Internet is expanding, actually, brand preference for consumers -- consumers are using fewer brands more often on the Internet. And we have about 50 major brands at AOL. And we really want to be the next digital global media company or the next really scaled global media company.
So we're building out the world's most significant brands for the Internet and expecting that the Internet grows but contracts around brands, we're going to be the central point of brands.
QUEST: You do know, of course, the skeptics are out there and the skeptics say too late, it's what -- you know, the -- the boat has gone.
ARMSTRONG: You know, look it, our boat is just leaving the dock right now. And I think our results today point to that. We -- first of all, we have 5,000 energized employees at AOL. And from the standpoint of us, we just became number two in video...
ARMSTRONG: -- we just became number one in women's content in the United States.
So if you look beyond these headline results and, you know, what's in there from the accounting treatments and look at the results and you look at the companies ahead of us, we're number five in traffic. If you look at four, three, two one, those are tens of billions of dollars worth of companies who are only $2 billion. I think we're the best investment on the Internet.
QUEST: We'll follow that one up. You'll be -- you'll have to come back and justify those comments in a year or two.
ARMSTRONG: We will. We will.
QUEST: All right, many thanks, indeed.
ARMSTRONG: Thanks, Richard.
QUEST: Tim joining me there from AOL.
It's a very busy day one way or another. Wherever we look, there are stories to bring to your attention.
Portugal let's continue its sovereign debt crisis. Portugal has agreed to the terms of its rescue package with the European Union and the IMF. Now, with a month to go looming in June not only of repayment, but also of elections, there wasn't a moment to lose as the debt repackaging was put together.
The final deal is worth $115 billion. It is spread over 53 -- over three years. Almost $18 billion of that goes to the country's banks, as they try to improve their capital ratios. The deal gives
Portugal a longer leash than the one afforded to other bailouts, Greece and Ireland. Portugal gets extra time to reduce its deficit to a level acceptable.
To which Prime Minister Jose Socrates, who faces an election next month, says the plan works well for the Portuguese people.
(BEGIN VIDEO CLIP)
JOSE SOCRATES, PORTUGUESE PRIME MINISTER (through translator): The government got a good deal. This is an agreement that defends Portugal. Of course, there are no financial assistance programs. They don't exist. In the times we live in, we continue to lead the effort and engage in hard work. No one doubts that.
(END VIDEO CLIP)
QUEST: That's the caretaker prime minister, who faces his election in June. Whichever way this falls, there will be austerity and pain for the Portuguese people.
I was joined earlier via broadband via Skype by the former finance minister of Portugal.
And I asked him whatever happens, are there going to be more bankruptcies?
LUIS CAMPOS E CUNHA, FORMER PORTUGUESE FINANCE MINISTER: Most of the credit assessment made in the past by Portuguese banks was relatively well done. In fact, in 2009, the Portuguese banks did rather well comparing with all the other countries in Europe and the United States.
So I presume that great assessment still prevails now. And I think that, though, of course, a depressing period always takes a bite to -- to a bank's profits, they will be able to cope with that.
QUEST: The issue of debt restructuring or some form of -- of shifting of the existing debt, whether in maturity date, haircut, do you think, as far as Portugal is concerned, that is no longer a live issue, but perhaps just one for the theory books?
CUNHA: Well, I think that in the Portuguese case, it is a very mild case comparing with other cases, especially Greece. And in my view, it's completely out of the question any sort of restructuring of the Portuguese public debt as long as this problem is acquired (ph).
QUEST: If we look at the pain that is about to be inflicted on the Portuguese people, even though the proposed -- the proposed cuts do spare those that have been -- those least well off, how angry do you think people are going to be?
CUNHA: Well, when the Portuguese are squeezed by these kind of measures, it's not the first time in our -- in our lives. They don't get angry, they get depressed. So I think we'll -- we will -- you will see very depressed people and sad, but there will be no risk of any sort of violence or riots or whatever. There will be demonstrations, but they will be -- I'm absolutely sure they will be rather peaceful ones, as this is -- as there have been in the recent past.
QUEST: And, finally, how does this play out for an election?
CUNHA: Well, it depends a lot on the credibility of the opposition party. Of course, this -- this government basically led Portugal to the edge of bankruptcy. And, of course, the opposition party has to get the credibility enough to just be credible enough to defeat the ruling party. We will see in June, you know, on June 5th.
But so far, they are running a race that is very much neck to neck. But the registration is increasing, at least according to opinion polls, and the registration level is very, very high.
QUEST: We are live from New York City. Without a doubt, it's one of the style capitals of the world. Now, when it comes to doing business here, I'm afraid it's still brocades and brogues and everything had better be ship shape.
However, one man in Hong Kong wants to change all of that. He literally wants to break the mold.
MARCK CHO, MENSWEAR RETAILER: I like this too much. And I always wanted to do it. I used to work in real estate. I used to sell real estate and houses in China. It's good work and it's interesting work, it just wasn't working for me, that's all.
I think I was just getting a bit fed up with it altogether. You know, I like clothes a lot. And when I see people dressed well, it really makes my day.
We specialize here in like what I like to call old man clothes, because this is the aesthetic that we love the most and this is what we've always wanted to do. It was sort of a curiosity and an interest that -- that never went away and ended up being a store. So there you go.
This is an aesthetic that I really like and I think actually suits a lot of men. And I think men should wear it more. I think a lot of people are held back by the fact that they think it is old man clothes.
I like these because they are probably about as close to a bespoked shoe as you're going to get for a ready to wear shoe. They think ah, it's too formal, it's too this, it's too that.
Like it's not at all.
I mean as long as you wear it in a natural way that you feel comfortable in, then, you know, what's all about that?
The jacket I'm wearing today, this is a Librano (ph) and it's from Florence. And, you know, knowing that this -- the old man who cuts it and knowing the city, like, this is a jacket that could only be born out of Florence. I like things like that, like things with authenticity and things that could only spring out of one place.
It's almost like the apple approach to clothing. Like, you don't give people 50 choices. You give people three choices and they're all good choices and they're all choices that you curated for that person and that you think are right for that person.
It's kind of fun to watch things get made, you know?
I think people -- people are interested in where things come from and how they're put together. And it's fun to see one person doing it by himself, because, actually, everything here is made one by one by one person. It's not split into stages. It's actually one suit (ph) who takes care of one entire jacket or one entire pair of trousers.
It definitely is a very old school way of doing it. I believe in -- in the idea that, you know, when you shop, it should be a nice experience. And plus, this is becoming kind of a social hub for a lot of people, which is what we were really intending it to be.
For the Librano and stuff like, it's always nice to wear it...
UNIDENTIFIED MALE: Shorter?
CHO: -- a little bit shorter. Yes.
UNIDENTIFIED MALE: Why not?
CHO: We wanted guys who really enjoyed this sort of clothing and, you know, wanted a place to be able to share that passion to be able to come here and sit down have a tea or have a whiskey or whatever.
That's right there.
We're all enthusiasts and it's nice that they're enthusiasts and that there's someone to talk to about it. It's a lot rougher, a lot -- a lot more rustic, but there is a certain type of guy out there that's -- he doesn't want to be fashionable. He just wants to look good. And that sort of guy like really fits this aesthetic, you know?
They don't need things to change a lot. They just want it to be nice. And that's the sort of guy that we like to deal with and it's also the sort of guy that we'd like to raise (INAUDIBLE).
(END VIDEO TAPE)
QUEST: Breaking the mold -- whatever happens, you can't beat pinstripes.
When we come back in just a moment, the chief executive of the wind turbine company, Vestas, on why wind isn't all just hot air, in a moment.
QUEST: Earlier on the program, the chief executive of Duke Energy told us that to become viable over the long-term and certainly sustainable, wind energy needs to become a great deal cheaper. The turbines are simply too expensive.
So, consequently, the amount of energy being generated by wind is still relatively low.
It was a point I put to the chief executive of Vestas, one of the world's largest wind turbine companies, a company that admits, at the moment, things are tough going.
(BEGIN VIDEO CLIP)
DITLEV ENGEL, PRESIDENT AND CEO, VESTAS WIND SYSTEMS: Well, I think it's -- it's clear that we're living in a world where there is a lot of uncertainty going on. And it's clear that if you look at our order intake in the first quarter, it was lower also than we anticipated. But if you look at Vestas' overall competitiveness, we still believe we'll get to a -- to a strong order intake in 2011.
But, of course, it is, as I said, a rough and tough environment. But we also told the market today that in the first half of 2011, we expect a break even, where we actually last year, in the second half, had a deficit of 220 million euros.
So at least, seen from that perspective, I would say things are improving.
QUEST: On the wider issues of alternative and sustainable energy sources, cola is dirty, in many cases, nuclear has a bad name now following Fukushima in Japan.
And yet, is this the moment when wind and other alternatives come into their own or it is going to be another case of failing to -- for the -- for wind power and such, failing to make the grade?
ENGEL: Well, I think, you know, Richard, we need to differentiate between the technologies we have and don't use and the technologies we would like to develop. Of course, at the same time -- and here I'm talking about 2011, there is still a rough and tough environment and there is also, of course, physical issues and others to relate to.
But if you look at the little longer horizon, at the longer perspective, I would say we have just recently seen, in Germany, a new proposal is going to come out here in June because of the very tragic event in Japan. The fossil fuel prices keeps going up. And actually we're seeing, also, that the debate of energy is now taking...
QUEST: Yes, but...
ENGEL: -- a bigger front (INAUDIBLE).
QUEST: Right, but...
QUEST: But -- but -- but the problem is you have all these other issues that should be mitigating in your favor, but it doesn't. The investment and -- and never mind the temporary factors, but I'm talking about the long-term direction of wind as a sustainable alternative fuel, still never seems to actually get to where it potentially could go.
ENGEL: And here is, of course, are very important political decisions to be made. And because at least if you look at -- if you take just the EU as an example, we paid more than $70 billion for fossil fuel in '10 than we did in '09, money we already have spent.
If you look at, if you want to have a new energy future, we also have to be able to take some bold decisions. And let me just give you an example about this. We have developed a new wind offshore turbine called the V164, a seven megawatt turbine. And, actually, if you take an area in the North Sea of 141 times 141 kilometers...
ENGEL: -- you will have enough space to power all of the EU, more than 500 million people and their households, just based upon that area. But it will take a completely different regulatory approach than just by keeping on doing what we always have done.
(END VIDEO TAPE)
QUEST: The chief executive of Vestas.
Final, a Profitable Moment, a shorter one.
Rarely has the world of energy been in such crisis. Gas is -- gasoline is at just about record highs and causing pain for all. Nuclear energy is discredited and one wonders where that's going next. And alternatives like wind power simply have failed to capitalize on the opportunities they have at their disposal.
We all know that we can't continue to use fossil fuels as we have until now. But frankly, so far, the alternatives are anything but.
And that is QUEST MEANS BUSINESS for tonight from New York.
I'm Richard Quest reporting from the Time Warner Center.
Whatever you're up to in the hours ahead, I hope it's profitable.
I'll see you back in London tomorrow.