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Michigan Passes Right to Work Bill; HSBC to Pay Huge Fine, But No U.S. Prosecution over Money Laundering; Superstars Signing Big Marketing Deals; Rock and Roll Hall of Fame Inductees Announced

Aired December 11, 2012 - 15:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

BROOKE BALDWIN, CNN: Bottom of the hour here, I'm Brooke Baldwin.

It was a noisy, crowded, crowded scene here, but the demonstrations simply did not work. Union supporters suffer a blow in a state known as the ultimate union stronghold, Michigan.

They continue to protest even after the Michigan house passed not just one, but two right-to-work bills today. The legislation allows employees in both private and public workplaces opt out of paying union dues, opt out of being a member of the union.

Republican Governor Rick Snyder is expected to sign it into law, perhaps as early as tomorrow, but in the last couple of hours here, you've heard a national union leader weigh in on what this means, as well as the Michigan Republican party chair here, both of them on this show.

But now we have a different voice for you, a union member who is a Republican and supports Michigan's right-to-work laws.

Terry Bowman is president and founder of Union Conservatives and welcome, Terry, welcome to you.

As we mentioned, Republican, in a union, you support the bill. Many of your co-workers don't. Why?

TERRY BOWMAN, MEMBER, UNITED AUTO WORKERS: Well, first of all, thank you for having me. But guess what? Many of my co-workers do support this bill.

Unfortunately, you've seen the protests. You've seen how loud and obnoxious some of the people can be. So there is a reason why many of the people who support this bill are not out here protesting, as well. It can get pretty scary.

But right-to-work ...

BALDWIN: So, you're not an anomaly? You are not an anomaly? You're just one of the few willing to share your opinion on national television.

BOWMAN: Absolutely. I think I represent a huge crowd of union workers, Michigan has 671,000 union workers in our state and I would bet easily that well over 250,000 of those members are happy and supportive of the right to work bill today.

BALDWIN: I talked to, just getting the other side of the story, the Teamsters, the head of the Teamsters union here, Jim Hoffa. He blamed politics for the legislation.

He told me, you know, the governor is basically bowing down to extreme Republicans, told me this is the beginning of a civil war here.

What would you say to him?

BOWMAN: Well, I would actually flip that around and say that it is actually politics at that is trying to defeat this bill.

Because, remember, right-to-work, it does not get rid of unions. It does not affect collectively bargaining whatsoever.

All it does is that it gives employees the freedom to choose whether or not they want to financially support a union, so that's -- it's a freedom issue on our side.

However, on the other side, with Mr. Hoffa and the party that he supports, it's very much political because what this does is it takes away the guaranteed income stream from union officials that, of course, much of that goes towards the Democrat Party.

So, I think on their side it is very political.

BALDWIN: And I know you point out it doesn't get rid of unions. It just means you can opt in, you can opt out. You know, you don't have to pay that chunk of change, I know, to the union, which many argue is protective for them and their families.

But, if this ends up weakening unions in Michigan, Terry, do you think that that's a bad thing?

BOWMAN: Well, I don't think it will weaken unions in Michigan at all. In fact, my argument from day one has been that it will actually make unions stronger and this is why.

Because what right-to-work does is it injects free-market principles or competition into the union marketplace and now unions are going to have to, instead of taking workers for granted -- because, remember, in Michigan, a forced unionism state, the union officials don't have to work very hard for their members because they know that members are forced as a condition of employment to continue to financially support them.

However, in a right-to-work state, all of a sudden unions have to reinvent themselves and become much more service- and product-oriented and really take care of their members.

So, in the long run, what right-to-work really does is it strengthens unions out of necessity.

BALDWIN: It's a perspective we had yet to hear today. Terry Bowman, thank you. Coming up next, what will the world look like in 2030, 18 years from now? One report has some pretty interesting predictions, including one about the American economy.

Ali Velshi, giving business news, it matters to you. Ali is next.

(COMMERCIAL BREAK)

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: From the CNN Money Newsroom in New York, I'm Ali Velshi. This is "Your Money."

Big news today. HSBC to pay out billions over money laundering, but escapes criminal charges. The U.S. stands to make a profit off of insurance giant AIG four years after a record bailout. Delta takes a stake in Virgin. And China is ready to overtake the U.S. sooner than you think.

But first, forget the fiscal cliff because the economy is coming back. Americans are feeling more optimistic about 2013 and, if we play our cards right, we're going to see a new economic renaissance.

D Ameritrade recently surveyed folks on their outlook for the new year. Forty-three percent say they are downright optimistic about the economy and believe we're headed for a rebound.

Forty-five percent are feeling good about their own finances, but we already know that things are starting to get better.

Look, we're adding jobs every month. Consumer debt continues to shrink. Stock markets are up. Longer term, though, America will reap the rewards of its domestic energy boom as more oil and gas gets extracted from shale rock through fracking and other technologies.

The drop in the price of natural gas is already helping utilities and factories compete. That's creating more American jobs.

And there's more. Housing will be the golden lining to the economic cloud that is hanging over this country. Mortgage rates are at a historic low and they should stay that way for the next two years but home prices have finally seen their bottom and are heading back up. When they do, confidence goes up, too, because most Americans continue to build their wealth through home ownership.

All of these things put together could launch another economic boom with real prosperity for years to come. We need to play our cards right, though. Our elected officials in Washington shouldn't mess things up by failing to reach a deal to avert the fiscal cliff.

But still, don't let it stop you from being really optimistic about the future.

On the money menu today, Delta Airlines announced it's going to buy up a 49 percent stake in Virgin Atlantic for $360 million. The deal creates a new joint venture between the two airlines spanning the Atlantic Ocean. Virgin's founder, Sir Richard Branson, is keeping his 51 percent stake in the company, but the move will significantly boost Delta's international reach.

I talked to Delta CEO Richard Anderson earlier today. He says this is a move for more business and, despite some rumors out there that Delta wants to swallow up Virgin, that simply doesn't make sense.

And talking about other things that don't make sense, Anderson told me he'd be in hot water if he ran Delta like Washington runs America. He also told me Delta is getting ready for the fiscal cliff he hopes we don't go over.

(BEGIN VIDEO CLIP)

RICHARD ANDERSON, CEO, DELTA AIRLINES: You know, for the airline industry we almost have a perfect hedge against it because fuel prices will drop precipitously and that's our largest cost. So we're a bit hedged against it.

But if we, you know, we have contingency plans in place to cut capex, reduce capacity, preserve cash, put investments on hold, and keep our hedge book -- our fuel hedging book relatively open because you don't know what volatility will enter markets.

So, it's difficult to predict. I don't have -- you have a better prediction of what is going to happen.

VELSHI: And I have no better idea than you do at this point.

ANDERSON: I don't know. I know is that it really ought to be solved.

VELSHI: Right.

(END VIDEO CLIP)

VELSHI: Well, it doesn't pay to cheat. Just ask HSBC.

The British bank agreed to pay out a record fine of $1.92 billion to U.S. agencies over allegations that it laundered money from Mexican drug cartels and violated U.S. sanctions on countries like Iran.

Despite all of that, HSBC avoids any criminal prosecution with what is arguably the biggest bank settlement in U.S. history. That's a slap on the wrist, says Neil Barofsky, the former watchdog for banks bailed out during the financial crisis.

(BEGIN VIDEO CLIP)

NEIL BAROFSKY, FORMER SPECIAL INSPECTOR GENERAL, TARP: It is essentially telling the executives in these institutions, crime pays.

Go ahead, do whatever you want to do, enjoy your profits and the worst thing that happens, well, you have some fines that really make up a matter of a couple of weeks of profits that you lose.

(END VIDEO CLIP)

VELSHI: HSBC joins a long list of foreign banks that have run afoul of U.S. regulators.

And bail a firm out today, make money on it tomorrow. That's what the U.S. Treasury did with insurance giant, AIG. It announced today it's going to sell its final stake in the insurance giant at a profit.

Four years ago, you'll remember, in the middle of the financial crisis, the government was forced to step in and bail out AIG to the tune of $182 billion.

With this final sale of its 15.9 percent stake in the company, the government now stands to recover its money, plus a cool profit of more than $22 million. Not the way you want to make money, but not bad.

Finally, you need to know that Asia is set to surpass the U.S. and Europe in terms of global power by the year 2030. China is set to lead that charge, according to a report from the National Intelligence Council.

That news from a report prepared every four years. This is by 17 different American intelligence agencies.

The report says within 17 years you'll see Asia surpassing both North America and Europe in terms of GDP, population size, military spending and technological investment.

China, in particular, will be the largest economy in the world and for the first time ever the majority of the planet's inhabitants will not be living in poverty.

The report also says, look to India which will mimic the growth that we're seeing in China today.

So, an ascendant Asia could mean more global competition for America, but it doesn't necessarily mean an America in decline. Like I said, if we play our cards right, we will see an economic renaissance in this country, regardless.

From the CNN Money Newsroom in New York, I'm Ali Velshi. I'm out. Same time tomorrow.

(COMMERCIAL BREAK)

BALDWIN: Ah, a mere near decade ago, pop superstar Beyonce Knowles first appeared in an ad for Pepsi.

(BEGIN VIDEO CLIP)

BEYONCE KNOWLES, SINGER: Hi, can you tell me how to get back to the interstate?

(END VIDEO CLIP)

BALDWIN: I'm thinking that sold some soda. Well, this new deal taking pop star endorsements really to a whole other level because now Beyonce has signed a $50 million contract with Pepsi to become global partners.

So, this basically means Beyonce is much more than merely a brand ambassador for Pepsi. Pepsi becomes a brand ambassador for Beyonce.

So, we wanted to bring in branding and social media consultant Peter Shankman, our go-to guy on all this kind of stuff.

So, Peter, we know that her hubby, Jay-Z did a little something similar, right, striking up deals, getting a little bit more creative control.

You've talked to Pepsi. Give me the skinny.

PETER SHANKMAN, BRANDING AND SOCIAL MEDIA CONSULTANT: Yeah, Pepsi sent me some info on this.

You know, I think the big mistake when you hear Beyonce in a $50 million deal with Pepsi, you assume that Pepsi is writing a $50 million check to Beyonce. That's actually not the case.

The majority of that money, according to Pepsi, is going to go into a creative development fund that will work -- that will create events, events around the world, branding opportunities, probably promotions, probably in store, probably in concert halls, venues, things like that, where they can share the spotlight.

So, it's a great thing for Pepsi. Pepsi gets a lot of exposure at Beyonce's events and concerts. Beyonce gets a lot of exposure on the sides of millions and millions and millions of Pepsi cans.

BALDWIN: So, how many people -- I mean, there are not many Beyonces out there that get this sort of like mutual endorsement deal. I mean, if we're talking Beyonce, we're talking Jay-Z. Is this just a select few?

SHANKMAN: It really is. You know, think about this. Pepsi started this in 1984 with Michael Jackson and everyone remembers that. And that was groundbreaking at the time to give creative control to an artist back in the '80s was almost unheard of for commercial play.

What's really interesting about this, though, is that, you know, Beyonce has a company along with Jay-Z, Parkwood Entertainment, and they have been doing lots of other things behind the scenes from movies to TV to videos to commercials, so this isn't anything new.

But the extent and the scope of this is pretty impressive, especially for someone like Pepsi. Pepsi is the second largest beverage -- food and beverage company in the world.

BALDWIN: Wow.

SHANKMAN: You know, you do a -- you're Beyonce, you're walking on air today. BALDWIN: Globally. Global air.

Let me ask you, Peter, about this potential game-changer in the music industry because we heard today, Rolling Stones, they're trying this whole new idea of basically these pay-per-view concerts.

So, if you can't, you know, fork over -- I don't know -- multiple hundreds of dollars to see them, you know, in person, for 40 bucks you can watch the concert from home, maybe your phone.

I love a good live show. When you hear about this, what does this say to you about the future of live music?

SHANKMAN: You know, they tried this about 20, 25 years ago. The problem was you had to be in front of a TV at your home at a very specific time. Quality wasn't that great.

Now, you know, you can be walking down the street, jamming out to The Stones. I think it is a good idea.

And, hey, let's face it, The Rolling Stones, it's not like they're not going to sell out their concerts, but this is another added revenue stream. Pretty, pretty big on here.

BALDWIN: I can see me going to a show and then also, you know ...

SHANKMAN: I guarantee you a lot of people are going to be doing that. Look, it's a two-second delay.

BALDWIN: Have the memory. Have the music memory.

Peter Shankman, always a pleasure. Thank you so much.

SHANKMAN: Thank you, Brooke. All right.

BALDWIN: Coming up, rock star royalty has just been announced. The 2013 inductees to The Rock and Roll Hall of Fame are out.

Donna Summer, Joan Jett, they were among the nominees. Did they get the votes to get in? The full list, moments away.

(COMMERCIAL BREAK)

BALDWIN: Former NFL Commissioner Paul Tagliabue has overturned the suspensions of all of the players involved in the league's bounty scandal. Tagliabue was called in to hear the appeals of four current and former New Orleans Saints players accused of participating in a program that paid money for injured opponents.

Minutes ago, the announcement was made via Twitter. Tagliabue ruled to, quote, "vacate all player discipline," end quote, but noting that the investigation was, in his words, "contaminated by the coaches and others in the Saints organization," his words.

The decision here means that the players will have their suspensions tossed out and get to play the remainder of the season. And I love music, play a little guitar, grew up at home with a jukebox full of Motown on vinyl and one of my favorite times of the year, I have to admit, is today. Because The Rock and Roll Hall of Fame inductees were just announced.

I was there in Cleveland at the induction ceremony last year. It was amazing. Red Hot Chili Peppers, among other groups, received the honor.

So speaking of The Peppers, the lead singer, Flea, returned to announce who will be joining him this year, so take a look. Here he is, far right, in his red sweater with some of the winner.

Two men on the left, music-producing greats, you have Lou Adler and Quincy Jones. The women in the center, "Crazy on You," "Magic Man," yep, I'm talking about Heart, Ann Wilson and Nancy Wilson.

And who else was inducted, you ask? Take a look -- Donna Summer, "Queen of Disco," passed away in May. And the full list includes blues guitarist Albert King, country singer Randy Newman, hip hop group Public Enemy and Canadian rock band, Rush.

The induction ceremony happens this year in Los Angeles in April. Our sister network, HBO, will broadcast the event in May, so congrats to all the inductees.

Another development in that prank phone call that turned to tragedy. Find out what these Australian radio station -- what the deejays -- what they want to do for the nurse's family.

(COMMERCIAL BREAK)

BALDWIN: Hugo Chavez undergoing surgery in Cuba today, an operation that we were told was, quote/unquote, "delicate."

The Venezuelan president's current health is a bit of a mystery, but we do know he had surgery last year to remove a cancerous tumor. It's not yet clear what kind of operation he had today. Updates as we get them.

And as millions of fans on both sides of the U.S. and Mexico border are mourning the death of singer Jenni Rivera, crews are combing through the plane wreckage trying to figure out what caused it go down and crash in northern Mexico.

Investigators say they have found human remains at the crash site, but her family continues to hold on to a sliver of a hope for a miracle.

(BEGIN VIDEO CLIP)

JUAN RIVERA, JENNI RIVERA'S BROTHER: In our eyes, we still have faith that my sister will be OK. We have no confirmation of her body being recovered, dead or alive.

I'd like to thank you from the bottom of my heart, all the fans that have supported my family, that have supported our sister. We just ask for a little bit of patience and understanding of you guys. Our family's going through a very difficult time.

We are strong and we will continue to stay strong and we thank God for the life that he has given my daughter -- I mean, my sister -- for all of the triumphs and successes that she has had and we expect that there will be more in the future.

(END VIDEO CLIP)

BALDWIN: We're told her family will be going to Mexico. Police say collecting evidence at the scene could take up to 10 days.

And the Australian radio station behind that prank call that tricked a nurse that later died in an apparent suicide is now donating $500,000 to her family.

The nurse allowed this radio hoax call through to the ward where the duchess of Cambridge was being treated for morning sickness. That nurse was found dead, days later.

These two Australian deejays have since made a tearful apology and have been taken off the air. London police say an autopsy is being be carried out on the nurse today.

And before I let you go, I just want to remind you that any interviews that you missed or that I'm tweeting about, @BrookeBCNN, many times you ask me about it, you can find them. Just go to the Brooke Blog, as we call it. Go to CNN.com/brooke.

And, that my Twitter handler, @BrookeBCNN.

And that'll do it for me here in Atlanta. I'm Brooke Baldwin at the CNN World Headquarters. Thank you so much for being with me. Be back, same time tomorrow.

Let's go to Washington now. "THE SITUATION ROOM" with Wolf Blitzer begins now.