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QUEST MEANS BUSINESS
Debate Dissected; Spanish Rescue Plan; Federal Reserve Minutes; ECB Says Bond-Buying Ready; British QE Under Review; Wall Street Up, European Markets Mixed; Iran Currency Crisis; Oil Outlook; Euro at Two-Week High; Plan B for Business; College Conundrum
Aired October 4, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Round one to the red corner. Tonight, did the first debate change the landscape of the US election?
Holding and waiting. The ECB and the Bank of England leave rates unchanged.
The Fed minutes are out -- now.
And a population of one billion. But if Facebook were a country, would you want to live there?
I'm Richard Quest. I mean business.
Good evening. In the last few hours, the US president has gone on the attack and said the American people deserve the truth, and that they didn't get it from Mitt Romney. Barack Obama's comments came after the first debate where, of course, the economy was the key.
What did we learn from last night's face off, the first of the two candidates? While new details about policies were thin on the ground, we saw something that might be more important. Mitt Romney can stand up to Barack Obama face-to-face, toe-to-toe. At each opportunity, the challenger appeared on the offensive.
If you join me at the CNN super screen, you'll see what I mean. All right. The best way to analyze it, we tipped the entire debate transcript into the super screen word cloud.
Now, on the issue of taxes, where polls show voters trust Obama over Romney, you see taxes was actually mentioned 60 times during it. The Republican stressed again and again, his goal is to ease the squeeze on the middle income families.
(BEGIN VIDEO CLIP)
MITT ROMNEY (R), US PRESIDENTIAL CANDIDATE: I'm not looking to cut massive taxes and to reduce the revenues going to the government. My number one principle is there'll be no tax cut that adds to the deficit. I want to underline that: no tax cut that adds to the deficit.
But I do want to reduce the burden being paid by middle-income Americans. And I have -- and to do that, that also means I cannot reduce the burden paid by high-income Americans.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now, he says that he's going to close deductions and loopholes for his tax plan. That's how it's going to be paid for, but we don't know the details.
(END VIDEO CLIP)
QUEST: Now, the other big issue, health care, was always going to be key to the debate. Mitt Romney rammed home his opposition message to Obamacare, and if you look at the number of times that came up, 52 times in the transcript. The president accused Romney of having no better idea.
(BEGIN VIDEO CLIP)
ROMNEY: There was a survey done of small businesses across the country, said what's been the effect of Obamacare on your hiring plans? And three-quarters of them said it makes us less likely to hire people.
I just don't know how the president could come into office facing 23 million people out of work, rising unemployment, an economic crisis at the kitchen table, and spent his energy and passion for two years fighting for Obamacare instead of fighting for jobs for the American people. It has killed jobs.
OBAMA: Governor Romney says we should replace it. I'm just going to repeal it, but we can replace it with something. But the problem is, he hasn't described what exactly we'd replace it with other than saying we're going to leave it to the states.
(END VIDEO CLIP)
QUEST: The two views that you'll hear again and again. Ken Rogoff is a Harvard professor and former chief economist at the IMF. Ken joins me from the Kennedy School in Cambridge, Massachusetts.
Well. Did we learn anything last night about the policies and direction of either man and party that we didn't know already?
KEN ROGOFF, PROFESSOR OF PUBLIC POLICY AND ECONOMICS, HARVARD: Well, I think a little bit. I think Governor Romney clearly tilted to the center in some of his comments, although he sort of left open how he was going to square the circle. I think implicit is that he's expecting a lot of growth.
But Richard, it was a very wonkish debate. I'm just not sure how much voters got out of all this detail. I watched it with my daughter, Juliana, and she said, "The president's got a blue tie, Mitt Romney has a red tie, they're wearing white shirts. It's like the flag." And I worry she got more out of the debate than many viewers.
QUEST: And that's really the problem, isn't it? Because as long as both sides simply repeat the platitudes -- I mean, you don't expect them necessarily to get into the fiscal niceties, but you do expect, perhaps, more detail from the challenger on his manifesto than we've had so far.
ROGOFF: Yes. He did leak one detail, where he said, "I'm thinking of capping deductions." That would be really striking. That would be a much higher average tax rate on the wealthy without necessarily changing their marginal tax rate, so they're incentives will be -- but that seems like a good idea, but he didn't flesh it out very much.
QUEST: And did you see -- did you feel, as you watched -- again, from an economic point of view -- that the president gave a satisfactory excuse- slash-explanation-slash-justification for the fact that the economy is not performing better after four years on his watch?
ROGOFF: Well, I think he could have taken a little more initiative on that. He started out by saying, "Look, I inherited this, it's not easy to fix." I think he could have pushed that point more. Governor Romney was successful in saying it's Obamacare, it's your policies.
I personally don't agree. I think it's the aftermath of a financial crisis. Although there are real differences going forward, where we're going from now, the president might have been more forceful on defending and saying, look, this was a mess.
QUEST: Ken, need you to stay with me on the economics front. Ali Velshi joins me, our Chief Business Correspondent. When we need to understand, Ali, where this goes next, the next debate, what the American people and what's being said about it, economically, I need you to interpret that.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, Richard, the question is -- I have to agree with Ken. When Ken says something is a wonky discussion, you know that it's a wonky discussion, because he actually dwells and enjoys that world.
The problem is, we didn't -- we were slim on specifics. Mitt Romney did get a little more specific, but his presentation was really what everybody is talking about today, the fact that he looked authoritative. President Obama seemed a little tentative and a little lackluster.
VELSHI: But the bottom line is, this does come down to two views of what's going to happen, and fundamentally, the issue of taxes, he was associating everything with job creation which, as you know, is the intractable problem of the American economy at the moment, and he kept on suggesting that his take on taxes would increase job creation.
QUEST: All right. Ali. But the core point is, if Romney does not move the needle on the back of a successful debate --
QUEST: -- he's in more trouble than the president.
VELSHI: Right. And the problem -- the complaint about Mitt Romney for the last several months is that he has a -- he has put out an almost 60-point economic plan that is thin on the specific details.
The specific detail in question right now is whether or not a reduction of tax rates across the board and on corporations is actually going to spur people to take the money that they're not paying to the US government and create jobs with it.
History has suggested that may not actually be the case, and it's been 20 years or more, Ken can tell us for sure, since we have had massive corporate tax reform in the United States. So, it's not clear what people in an uncertain economy will do with money that they're not paying in taxes. Not clear they'll create jobs, Richard.
QUEST: Ali, well thank you. You'll be with us, of course, over the next few weeks --
QUEST: -- to help us understand this. We'll say good-bye to Ali. Ken, you'll be with me for a few more minutes, if you'd be as kind. I need your analysis on another development on the eurozone crisis.
As for you, if you missed the presidential debate first time around, a full replay in a couple of hours. It's at 9:00 in London, midnight in Abu Dhabi. Wherever you are, it is right here on CNN.
So, Spain does not need help, according to reported comments from the Spanish economy minister. Luis de Guindos is said to have told an audience at the London School of Economics a short time ago, in his words, "Spain does not need a bailout at all."
We haven't been able to independently verify those comments, but we have certainly seen them on Twitter. We've even heard that after he said them, the audience laughed and applauded.
Ken Rogoff, so, would you be surprised that he says -- well, maybe not that he says -- do you believe that Spain does not need a bailout?
ROGOFF: Well, I think the fact is, Spain has been getting a bailout through the back door. The ECB, by saying we're ready to act when they ask for one, calms the markets a lot. But of course, eventually they have to ask for one. I don't think this can go on indefinitely.
No government likes to admit that they need help. No government likes to have anyone come in, the IMF, the other Europeans. But I think in this situation, with their fiscal mess, it's inevitable.
QUEST: Is Spain -- and by definition, the eurozone -- at serious risk of making the same mistake that they made with Greece-slash-Portugal-slash- Ireland, waiting too long before putting out a small fire before it becomes a conflagration?
ROGOFF: Well, I think it is a pretty big fire already. The ECB took giant steps, so certainly a lot has happened, and it wouldn't take a lot to stabilize things for a while. But I don't think there's anywhere near an end to this.
For one thing, I think there are going to have to be further write- downs of debt in a big way across the periphery countries. This idea of austerity and more austerity ultimately leading to I don't know what, that's not going to stabilize the situation indefinitely.
QUEST: And next time, we will get your daughter's view on austerity. I'm sure she's got some views on what people will think about that. Many thanks for joining us. Good to see you, as always, and you will help us understand the election. Ken Rogoff joining me from Harvard.
QUEST: So, about ten minutes ago, the Fed minutes came out. It's a busy day for central bankers. We've got Fed minutes, ECB, and Bank of England. We'll give you a full briefing next. QUEST MEANS BUSINESS, good evening to you.
QUEST: I'm just going through the Fed minutes, which have just come out, on a day when two other central banks have made the headlines. So, if you join me in the library, together, we can get to grips with the minutes of the Fed.
This was the meeting, of course, last month when -- in September -- when QE3 was launched. It's otherwise known as Q-Eternity, because the bond-buying program will continue for some time.
The minutes, which we already knew, of course, only Jeffrey Lacker opposed more QE. But if you look at the comments, particularly members expressed skepticism that further accommodation could help spur an economy that they saw -- a few members -- that they saw held back by uncertainties and structural problems.
Others said that made it complicated to eventually stop asset purchases. But be that as it may, we all know the vote, the vote was overwhelmingly in favor of QE3.
The ECB met today and left rates unchanged. This -- the meeting was held in Slovenia. Open Market Transactions is ready to go, the bond-buying scheme.
President Draghi said it's prepared to -- but also, interestingly, President Draghi said that OMTs would not be available for countries in program, like Portugal and Ireland, until they were -- had full access once again to the bond market, which of course, clarified an issue. Even so, OMTs, ready to go.
(BEGIN VIDEO CLIP)
MARIO DRAGHI, PRESIDENT, EUROPEAN CENTRAL BANK: Let me repeat again what I've said in past months. We act strictly within our mandate to maintain price stability over the medium term. We act independently in determining monetary policy, and the euro is irreversible. We are ready to undertake OMTs once all the prerequisites are in place.
(END VIDEO CLIP)
QUEST: And the Bank of England left rates unchanged, steady, no increase of QE. QE3 asset purchases are to be completed by one month. The bank said that it would all be kept under review but, frankly, the market is expecting, perhaps, more before too long, certainly if the UK economy maintains the weakness.
So, an extremely busy day in terms of central banks, which are, frankly, now becoming as -- in the absence of strong fiscal measure, the only game in town.
Banking stocks took heart from the comments of President Draghi, and that's pushing the Dow higher, up 77 points after such a lackluster session yesterday, over 13,500. Factory orders in the US came in higher than had been thought.
It was a very mixed -- literally mixed -- two up, two down, looks quite neat. Virtually unchanged fro the FTSE, a little bit down there, a little bit up there. No major movements, so a cautious reaction to president Draghi.
One encouraging bit of news on the Spanish question: Spain did raise the amount of money it sought at its latest debt auction.
Now, in Tehran, police are patrolling the streets where they clashed with protesters on Wednesday. These are the marchers streaming past a bank in central Tehran. There is fury over Iran's plunging currency, which is driving up the price of basic goods.
Merchants and conservative politicians are blaming the government for the crisis. President Ahmadinejad had been blaming speculators. He's now acknowledged Western sanctions are hitting the economy. Restrictions have slashed oil revenues and forced the country to cut imports.
Oil is soaring. NYMEX and Brent are up more than $3 higher, MYMEX trading hands at $91, Brent is more at $111.
The head of GE, General Electric, Jeffrey Immelt, says high oil prices are a pretty safe bet for the foreseeable future. The CEO told CNN's John Defterios if you believe the middle class expanding, you believe oil prices will continue to rise.
JEFFREY IMMELT, CEO, GENERAL ELECTRIC: Oil tends to be harder to find today. And therefore, I think oil pricing could stay relatively high. And oil will probably always be the fuel of choice for cars and things like that.
Gas has become plentiful. The gas finds are amazing. The gas finds in the US are amazing. And so, I think those pricing could be decoupled. Now, I think oil will be at historic highs versus gas for a period of time.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: So, $80 to $100 is something that's sustainable, you think?
IMMELT: I think so, John. I think it's actually -- in other words, to bet on high oil prices is the same bet as that there's going to be a billion people joining the middle class in the next ten years, right? If you believe in one, you believe in the other.
DEFTERIOS: Should some of the governments rethink the strategy of going into nuclear energy in the Middle East because of the high costs?
IMMELT: The advantage of being a big company is we've got nuclear, we've got solar, we've got wind, we've got gas, we've got -- they're all going to find their place. And I think it's good for people to experiment with nuclear power as time goes on.
DEFTERIOS: It's a costly experiment.
IMMELT: It's very costly, and I think if you really believe that all this shale gas exists, and it exists not just in the United States, but it exists in China or Europe and things like that, the price of doing gas- powered generation versus nuclear is just going to be extraordinary.
So, I think people -- people are going to have to rethink the nuclear investments as time goes on just from a general cost standpoint.
QUEST: Jeffrey Immelt, GE's chief exec, talking to John Defterios.
A presidential Currency Conundrum for you now. Before the last election, a company outside the US was awarded a lucrative contract to strike commemorative Barack Obama coins. Where was that company based? Taiwan, Ottawa in Canada, or Birmingham England? The answer's later in the program.
The euro's hovering around a two-week high. The single currency's back above $1.30. The pound is also higher against the dollar, up three- quarters of a cent. Those are the rates --
QUEST: This is the break.
QUEST: Profit is not enough, business needs a Plan B. So says Richard Branson of Virgin and PUMA's Jochen Zeitz. They've joined forces to persuade corporations to look beyond the money, the quarterly reporting season, and they want to focus on social and environmental gains, as well.
So, perhaps somewhat -- some would say appropriately, others might say otherwise -- they're calling themselves the "B Team." They were speaking to me from the New York Stock Exchange, and Jochen Zeitz began by telling me he wants to change things from the inside out.
JOCHEN ZEITZ, CHAIRMAN, PUMA: Well, first of all, we've been CEOs for many decades, so we think that there are some flaws in the system that we can help to overcome, and the B Team is all about trying to find actions in order to stay solutions, in order to make business a force for better.
We all know that business has had since industrialization a lot of positive impact on the world. But there are in recent decades a lot of negatives that come along with business.
Whether it's the short-term focus, whether it's the fact that our environment is degrading, the fact that our population is growing and we're not finding problems -- or solutions to the problems we have. And we want, as a B Team, bringing CEOs, entrepreneurs together to find solutions.
QUEST: Richard Branson, very easy to say. Very difficult to do.
RICHARD BRANSON, CHAIRMAN, VIRGIN GROUP: It is difficult to do, but unless you actually try to do something like this, nothing will happen. So, we've pulled the two of us together, we're going to pull ten other, I think, formidable women entrepreneurs and male entrepreneurs from around the world, and then we'll take on the challenge.
We'll get out there and work together to try to get on top of some of the problems that we all know exist. If I just give you one example, since we're standing in the New York Stock Exchange, quarterly accounting. Quarterly accounting means very short-term thinking.
As a private company, I can think long-term, so we're trying to move - - move institutions to accept six-monthly accounting or even longer so that people can actually start thinking long-term. That's just one example of what I think the B Team can try to change.
QUEST: You took the words right out of my mouth, there, Richard. I was about to say, gentlemen, do you feel a bit like interlopers. You're actually announcing this in the very jaws of the animal that's part of the problem, Jochen.
ZEITZ: Well, that's the great thing, that we can actually be here to talk about problems, as well. And as businessmen, as two individuals that have been CEOs and running companies for decades, I think it also gives us the credibility to assemble a team that wants to tackle the very problems that we're also experiencing on the trading floor.
So, I think that's the whole idea. We are not outsiders, we're insiders. We're trying to help the model to evolve and business to get better. We've seen a lot of impact -- positive impact -- but there is collateral damage that is happening that we just have to address, and we want to scale the solutions.
QUEST: A case in point that Jochen Zeitz was talking about. While Mr. Zeitz is a graduate of the European Business School, Sir Richard Branson never went to university, but they're both chief executives of very successful companies. With the cost of a university degree soaring, young people around the world are now asking themselves -- and with some justification -- whether it is worth it after all. Isa Soares reports now on the College Conundrum.
ISA SOARES, CNN INTERNATIONAL CORRESPONDENT (voice-over): Two young women, both alike in age and ambition, with two very different career paths. Twenty-four-year-old Amaya has been window shopping for a job as an art director for more than a year.
AMAYA DUCRU CLOUTHIER, UNEMPLOYED GRADUATE: I interned, I assisted, I worked in production companies.
SOARES: But even with three degrees, three years of work experience, four languages, and five job interviews, she's still unemployed.
CLOUTHIER: You do need to intern and get out there to get a job, but then, sometimes some companies would be at odds. If you intern too much or if you're an intern, then you're an intern.
SOARES: Frustrated and desperate.
CLOUTHIER: It is tiring. It is getting very tiring.
SOARES: Amaya's started to use some new tactics to find a job.
CLOUTHIER: I have a lot of people that tell me I'm too young and overqualified, so I don't put my date of birth. I started putting my education on the bottom of my CV, so it's the last thing they see and they first see my work to show that I'm not necessarily that young, either.
SOARES: There's no doubt many believe Amaya's route is still the most effective. Accounting giant KPMG says 80 percent of its intake are university graduates.
KATE HOULT, UK PEOPLE DIRECTOR, KPMG: Every individual student needs to make their own decision about what they want to do and how they are best to study and what to study and academic route they want to take.
I think they gain a broad range of skills and experiences at university that are valuable to them, not just in the workplace, but as an individual.
SOARES (on camera): With the economic crisis, companies are cutting back on hiring. This means that when they do hire, competition is fierce. According to the Association of Graduate Recruiters here in the UK, there's on average 73 graduates per job vacancy. With so much uncertainty, it begs the question: is university still worth it?
SOARES (voice-over): For Hayley Russell, it wasn't. Unlike Amaya, she has climbed her way to the top without a degree.
HAYLEY RUSSELL, EMPLOYED NON-GRADUATE: I couldn't think of a useful degree that I wanted to do, whether that could be a non-factor, if you like, because the degree is going to get me so far ahead.
SOARES: So, she finished school and focused entirely on her career. That decision has paid off. At only 24 years of age, she's already in senior management.
RUSSELL: I've had -- most of my friends say that I'm ahead on the job ladder as well as financially.
SOARES: For entrepreneur Simon Dolan, university is a complete waste of time. For him, younger and brighter candidates are more employable than graduates.
SIMON DOLAN, AUTHOR, "HOW TO MAKE MILLIONS WITHOUT A DEGREE": They've been told that if you have a degree, you are going to go out and get a good job. And so, they come to you with certain expectations, certain salary expectations, and expectations of the level of work that they should be doing.
Whereas, a schoolie, they kind of expect to start on the front desk and open the post and make tea.
SOARES: Degree or not, the surest way to pass this crisis is to work at it, keep evolving, learning, and persevering.
Isa Soares, CNN, London.
QUEST: Interesting stuff, to degree or not to degree? In a moment, Greek protesters strike at the military, shipyard workers storm the Defense Ministry in Athens, and we'll have an update for you. QUEST MEANS BUSINESS.
QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in a moment. This is CNN and, on this network, the news always comes first.
Syria's ambassador to the United Nations is expressing his condolences over a deadly attack on a Turkish village on Wednesday. He says his government is not seeking any escalation with any of its neighbors, including Turkey. Bashar Ja'afari says they were, in his words, "undisciplined armed groups operating along the border."
Meanwhile, Turkey's prime minister says his nation is capable of defending its citizens and borders and its determination should not be tested.
Also on Thursday, an explosion at a military housing unit in a Damascus suburb killed at least 21 Republican Guards. The area's been the site of fierce fighting between rebels and regime forces. The opposition says the rebels probably used a small explosive device to launch the attack.
Day after the first U.S. presidential debate, and Barack Obama's hitting back at his political challenger, Mitt Romney, from the campaign trail. Analysts say Romney won the debate. President Obama told a crowd of supporters Romney's arguments did not match his real political views.
America's professional ice hockey league, the NHL, has canceled upcoming games until October the 24th due to the ongoing labor dispute with players. The regular season was due to begin a week from today. Eighty- two games have been canceled in total. The lockout is in force due to the league's failure to agree on a new collective bargaining agreement with the players.
QUEST: Protesters have stormed the Greek defense ministry over a pay dispute between shipyard workers and the government. Riot police had to scatter demonstrators who had forced their way into the military compound. Some workers from the Skaramanagas shipyard outside Athens say they haven't been paid by the government for months.
Greece is in the process of privatizing its real estate outfits. It's supposed to raise $25 billion by 2015. Here we are in October, and Greece has only just secured its first privatization deal of the year. It's leasing an old broadcast center to LAMDA Development for $100 million. The company's CEO, Odysseas Athanasiou, joins me now from Athens.
Sir, congratulations on getting this broadcast center. What are you going to do with it?
ODYSSEAS ATHANASIOU, CEO, LAMDA DEVELOPMENT: Good evening to you. First of all, the asset was at a strategic location, next to one of the shopping centers we own in Athens. So we're going to use it in a way that would be complementary to the shopping center. Plus it was a great deal that made financial sense for us.
And we wanted us, the main shareholder of the group, the Lads (ph) family, want to show the support to this transformation point of the Greek economy, which we believe is a turning point.
QUEST: Where do you think -- and I know you're not a politician as such and you're not a sort of you're not buried in the economics of the country, but where do you think Greece is in this crisis? Do you see things turning around in business?
ATHANASIOU: It all has to do with determination the new government is going to show. If you ask my opinion, I believe we have a prime minister now who is determined to turn around a climate that was against investments, against enterprising and against -- and against the private sector.
The problem with Greece was that the public's head (ph) was not only too big, but it was a state controlled economy mentality wise.
ATHANASIOU: So if you ask me what -- at what point we are now, we're at a turning if this determination proves to be real.
QUEST: You have -- you've put your money or the family's money and the company's money where your mouth is. Isn't there a real danger that the culture doesn't change? You know, once the pain wears down or wears off in the future, you're back to the races of the old ways?
ATHANASIOU: I'll tell you what: in Greece, you have and what is portrayed, for the right reasons, internationally, is a culture that is against what I said before, investments and a culture that doesn't change. This is half of the truth, or hopefully, less than half the truth. The other part of the truth is that we have a private sector that is not doing bad at all.
If you look at the debt of the private sector, for example, it's less than international -- than any international benchmark. The (inaudible) are doing very well. The problem is to reduce the public sector. And this is going to be shown in the next 3-4 months. Now we're at the end of this. If we're going to do well, or things (inaudible) are going to stay the way they used to be for the (inaudible).
QUEST: Ah, now, so I gather from what you're saying you still have your checkbook ready and there are still investors who will happily come with you to buy other privatized assets. And if so, what are you interested in?
ATHANASIOU: Absolutely so. First of all, as a company, me personally, we talk -- and we've been talking with many financial investors who would be very willing to invest big amounts in money if they saw a change, as I said, in our determination.
(Inaudible) invest especially in one sector that has to do with big touristic resort developments, the kind of which we don't have in Greece. We're talking about here are grand golf resorts. And here, as you can see, as you can imagine, we have huge untapped potential.
QUEST: Thank you for joining us, sir. We'll talk again as these developments continue. But very good to have you on our program tonight.
The private sector view, which we don't always hear too much about coming from Greece tonight.
In a moment, the private sector, well, the public sector of Facebook. We'll look at the vital statistics of country (inaudible).
(BEGIN VIDEO CLIP)
QUEST (voice-over): The answer to the "Conundrum," before the last election, a company outside the U.S. was awarded the contract to strike commemorative Barack Obama coins. Was that company -- well, I'll tell you where it was. Birmingham in England. The contract was worth $162,000.
(END VIDEO CLIP)
QUEST: Someone else who hails from the British Midlands -- doesn't have a commemorative coin in her honor, but she probably could do a (inaudible) accent if we ask her very nicely, Jenny Harrison's with us.
JENNY HARRISON, CNN METEOROLOGIST: I could. Hello, Richard. I'm not going to do it --
QUEST: Go on. Go on.
HARRISON: -- no, you haven't asked -- no, and I'm not going to do it; you haven't asked nicely enough. No. I'll save that for another day.
Right, weather, weather. Let's look at what's going on. Very nice across the southern half of Europe. We've got high pressure in control, sunny skies, good temperatures, not too cold across the north and the west, despite all this cloud and a rather blustery conditions that are coming through.
Look at this, the last few hours, pushing through the Low Countries on through Germany, some very heavy amounts of rain. And then here comes the next round of rain, pushing across Ireland. This is southwest of the U.K.
So it's fairly scattered, really, those showers, but they could be heavy at times. But this is why it's actually feeling quite warm. There's the high pressure. The winds coming up from the warm southwest, and really just filtering that warm air right the way even as far as the southwest of the U.K. So temperatures just a little bit above average.
Now the downside with all of this on Friday, because of those blustery conditions, we could see some fairly lengthy delays at the major airports, Brussels and later Frankfurt, on into Berlin in the evening hours, very heavy rain, too, possibly in the morning hours, London, Gatwick, Heathrow, the delays aren't as long but again we could see that rain.
And then Amsterdam and Paris, but also be slightly impacted by those strong winds and then where we haven't got the winds, we've got a lot of low cloud. So Moscow, for example, and also back into central Europe across in Prague. So be prepared for all of that.
But this is what I mean about it not feeling particularly chilly. We've got, you know, temperatures sort of average or just a bit above, even as far as the northwest, and in fact, much of France temperatures are a few degrees above, despite as I say, all this rain that's coming in, in particular as heavier spells.
A little bit of cloud just beginning to bubble up into the western Med, but no real rain coming in with that, not for the next couple of days. So these are temperatures on Friday, 14 in London, little (inaudible) you have the last couple of days and 20 Celsius in Paris. Now that really is feeling very nice compared to what the people across areas of North America are dealing with.
We've got North Dakota, (inaudible) Manitoba in Canada. We've had some very heavy amounts of snow. Let me just show you, first of all, the numbers that have been -- oh, no; we're going to show you this as well. OK, this is it coming down. It's the first proper snowfall of the season.
And I know it's North Dakota, but even so, by the time this is all done and dusted, we're looking at about 30 centimeters -- a foot of snow -- and in fact a couple of locations, if we come back to me, I can show you that a couple of locations already picking up 8 and 9 centimeters (inaudible) say there is more on the way, not only that. It is very cold. Be prepared if you're traveling to the U.S.
Yes, it's going to be pretty cold. Temperatures as much as 15 degrees below the average (inaudible) all sorts of things to the numbers, for example, St. Louis, look at this, 12 degrees, the average is 23. That cold air filtering south, a few showers and thunderstorms the dividing line, but still very nice across the South, 28 in Atlanta on Friday with some very nice sunshine. But it will get colder, Richard.
QUEST: Thank you, Jenny. Next week we will be talking about American Quest and the journey across America, so I'll need some forecasts for various places in the Midwest. We'll talk about that in our program next week.
Every month, a seventh of the world's population uses Facebook. The cofounder and chief exec, Mark Zuckerberg, revealed that number today and said his social network has a billion -- a billion monthly users. It's a major milestone for Facebook and Zuckerberg says there's plenty of room for improvement.
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MARK ZUCKERBERG, COFOUNDER AND CEO, FACEBOOK: It's grown quickly. I mean, where the next billion is coming from, I mean, there are 5 billion people in the world who have mobile phones, and I think that that's a big part of the story going forward. What you might not know is that already 600 million people use Facebook on their mobile phones every month.
And that's growing incredibly quickly. So for us, that's really one of the key things over the next few years that we need to execute on, is just making the best mobile product. And we think that that's just going to be a big opportunity.
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QUEST: If Facebook was a country, this is what it would look like. The country profile for Facebook, a population of 1 billion users that has doubled in just two years. It would have a market cap of $14.1 billion, which would make it the 133rd largest country in the world, bigger than Malawi.
We know the government of Facebook, it's the CEO Zuckerberg, COO Sandberg, CFO -- but they would be the cabinet total. And of course, the public sector of Facebook. The public sector, those workers, 3,000 staff. The United States has 16 million. The country profile if Facebook was a nation in its own right. And the billion users were all part of one big country.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable. I'll see you (inaudible).
Hello and welcome to the Paris Motor Show. I'm Nina dos Santos (inaudible) MARKETPLACE EUROPE. Well, fasten your seatbelts, because the European car industry is having a rough ride these days as the Eurozone crisis continues to dent consumer confidence, stalling the market. New car sales across Europe are currently at a 20-year low.
In fact, so far this year, car manufacturers like these have shifted 8 percent fewer vehicles, and that's got the hazard lights firmly flashing. It's an industry that's (inaudible) capacity, and that's got some automakers to be feverishly searching out a road map for the future.
DOS SANTOS (voice-over): Coming up, why Nissan is speeding up production with a $200 million investment at its plant in the northeast of England. And the CEO of Daimler on staying ahead of the competition.
DIETER ZETSCHE, CEO, DAIMLER AG: We have to reinvolve (ph) efforts on the cost-cutting, on the efficiency improving side.
DOS SANTOS: Despite the glitz and glamor that you inevitably see at a motor show like this, for the prospects for Europe's car industry at anything but rosy these days. Manufacturers face an uphill struggle (inaudible) cash-strapped consumers to help them to reverse a decline in sales.
Both Ford and Peugeot have announced they're going to be cutting jobs and production. Further down the horizons, there are some bright lights. Isa Soares has been to a Nissan factory in the northeast of England, which is one of several U.K. firms to be bucking the trend.
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ISA SOARES, CNN CORRESPONDENT (voice-over): Don't let the snail pace deceive you. Here there's life and enterprise like no other. There's drilling (ph), fitting, joining, everything here is moving faster than a European average. That's because production is soaring at this Nissan factory in Sunderland, England.
And like many of its competitors, Nissan is hiring and expanding. For its vice president, that's reason enough to cheer.
UNIDENTIFIED MALE: (Inaudible) production levels. We've just had a lot of announcements (inaudible) future investment. We're going to be launching about four new cars in the next two years. So all in all, it's very exciting times here.
SOARES (voice-over): With four new models, Nissan has had to up production to 'round the clock. This year alone, it has created more than 3,000 jobs nationwide.
UNIDENTIFIED MALE: The plant's very efficient, staff are very committed and flexible. We've also got (inaudible) strategic advantages. We're very close to a deep seaport and we do export 80 percent of our product. So being very close to a deep seaport comes with a big logistics advantage, which is what we're trying to exploit. Last year, we did 480,000 cars.
SOARES: Four hundred eighty-thousand?
UNIDENTIFIED MALE: Yes. This year we plan to beat that.
UNIDENTIFIED MALE: On line 1, where we make (inaudible), we run for 24 hours a day for five days a week. And we make about 10,000 cars a week.
SOARES (voice-over): For those still doing the math, that's 83 cars an hour, an impressive feat at a time when the rest of Europe is shutting plants and laying off staff.
According to European Automobile Manufacturers Association, all in all, car sales in the European Union have fallen over 7 percent year-on- year.
The secretary-general of the ACA (ph) blames the European crisis for Europe's sales slump. Its rise in labor costs and its lack of competitiveness. But he won't go as far to suggest European needs (inaudible).
UNIDENTIFIED MALE: Nobody is basically making money in Europe. So we have to deal with the (inaudible) capacity that there's no doubt about it. Can we do the same thing as the Americans? Extremely difficult. This is not one country; this is 27 member states. The over-capacity and the structure problem is not the same in every country.
SOARES (voice-over): The U.K., meanwhile, is taking measures into its own hands, thanks in part to a government grant, a weaker currency and a complete manufacturing operation that allows them to make compact cars at competitive prices.
UNIDENTIFIED MALE: For a long time, the U.K. economy was based on services. I think they have realized, Cameron (ph) has realized that we need a manufacturing base. That means production. That means industry. So he is creating conditions for it.
And the company is now going there. It's not only the automotive industry in (inaudible) BMW and others, Jaguar Land Rover is doing reasonably well. Other industries are as well. It's the change in the philosophy of the U.K. government that finally came to the conclusion that you need a real economy, that you cannot base your economy on services.
SOARES (voice-over): This recognition is evident at Nissan's Sunderland plant. Here, workers revel at the work. Their boss at their success.
UNIDENTIFIED MALE: I think Nissan's legacy (inaudible) modernized itself. That's absolutely vital that we just keep on reinventing ourselves; we don't stand still or become complacent because the industry is always changing and the marketplace is always changing.
SOARES (voice-over): Wise words for government and European automakers. The sooner they accept this alternative vision, the quicker they connect to the crisis.
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DOS SANTOS: Isa Soares there at the Nissan plant in the northeast of England.
Coming up after the break, I speak with the CEO of Daimler, the world's third largest luxury carmaker, about what the prospects are like as a premium (inaudible) market.
DOS SANTOS: Hello, and welcome back to the Paris Motor Show. Well, traditionally, high-end carmakers have managed to stay in the fast lane despite these recessionary times. But now even they've had to shift down a gear. Porsche will be producing fewer cars next year while Daimler has had to issue a profit warning for its Mercedes-Benz division.
DOS SANTOS (voice-over): The German automaker, Daimler, is one of the world's biggest producers of premium cars and commercial vehicles. The group, which includes Mercedes-Benz cars and vans and the financial service division has production sites on five continents, with a global workforce of 271,000, the company sold 2.1 million vehicles in 2011, with annual revenues of over $8 billion.
ZETSCHE: (Inaudible) and (inaudible) revolutionary and the results, we've had a reaction from the market is unbelievable. We have 70,000 orders already after the first weekend of presenting this vehicle.
So that is the new compact car line, a very emotional (ph) design, fantastic consumption, 3.8 L fuel consumption. So technically, emotionally (ph), this is a whole new world, and we'll translate the Mercedes into a much more dynamic and growth-oriented company.
DOS SANTOS: You have had to issue a profit warning for your Mercedes- Benz division and critics have said that, well, frankly, some of the Mercedes cars were looking a little bit staid. Is this how you're going to change things and (inaudible)?
ZETSCHE: Without wanting to correct you, it was not a profit warning, but we modified the guidance for the remainder of the year, basically within the expectations of the market. But anyway, it's clear that we have a growth strategy, and we need more efficiency accompanying the growth.
That where we set up a program but the core of future success will be the product and just as you said, there's styling, the very dynamic, emotional (ph) styling, is getting more momentum to the brand and therefore to the company altogether.
DOS SANTOS: European auto sales are down; the premium end of the market seems to be holding up a bit. But it's still important to try and keep an eye on costs. In fact, you recently opened up a plant in Budapest. How important is cutting costs?
ZETSCHE: Well, in the auto industry, that is an ongoing effort. There are sometimes with more focus on it, sometimes a little less. But we have to do that all the time, become more efficient with the deteriorating environment, be it in Europe, be it to some extent in China, still growing, but a little less so.
We have to reinvolve (ph) our efforts on the cost-cutting, on the efficiency improving side. That's exactly what we are doing.
DOS SANTOS: How is the outlook looking like for growth? If we look further down the road, are there bumps on the horizon in the road? Or is it looking relatively clear from here on?
ZETSCHE: Definitely, the short term, we have a lot of risks there which are currently where there's the euro crisis, whether it's political worries in between Iran and what the elections bring in the U.S. and so on.
On the other hand, we have a midterm perspective, across the end of this decade, which are (inaudible) from all people making prognoses wonderful growth opportunities. So we are investing heavily (inaudible) future and capacity (inaudible) additional products.
And at the same time, we have to sail through current clouds on the sky, more demanding situation. And that's exactly the art of our business, to balance the investment through the future with good results in the present. And I think we are very well positioned to do exactly that.
DOS SANTOS: (Inaudible) car market holding up? Because it seems to be doing all right. How's it managing to do so during such difficult circumstances?
ZETSCHE: Well, first of all, we have a more stable business model on the premium car market. If you look at Europe, the market is 10 percent down. We have Mercedes at 2 percent up. So we clearly are able to create demand with exciting product.
These are no commodities. These are products you want to own and our clientele has some more means and ways to (inaudible) their wishes and therefore we have a more stable business model.
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DOS SANTOS: Dieter Zetsche, the CEO of Daimler.
And that's almost it for this edition of MARKETPLACE EUROPE. Thanks for watching and goodbye.
I wonder if I can sneak out with this sporty little number without anybody noticing?