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Quest Means Business

Gas Explosion at Mexico City Maternity Hospital; Earnings Curb Expectations for 2015; Ford's "Solid Yet Challenging" Year; US Stocks Stage Rally; Germany Slips Into Deflation; German Warns Greece, Stick to the Program; Nobel Prize-Winning Economist Says Greek Stocks "Spectacular Investment"; Greek Government Creditors in Debt Showdown; Make, Create, Innovate: Humanity's Little Helpers; Dow Chemical CEO Says Low Oil Prices Not Necessarily Bad

Aired January 29, 2015 - 16:00   ET

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


(NEW YORK STOCK EXCHANGE CLOSING BELL)

MAGGIE LAKE, HOST: Triple-digit gains for the Dow as stocks break their losing streak. It's Thursday, the 29th of January.

Tonight, Wall Street rallies as earnings impress. We'll hear from the bosses at Ford and Dow Chemical.

The price is not right. Germany is in deflation for the first time in years.

And there's a new employee of the week at McDonald's. A British branding expert takes over the Golden Arches.

I'm Maggie Lake, this is QUEST MEANS BUSINESS.

Good evening. We'll bring you the day's business news in just a moment. We begin with the fatal explosion at a maternity hospital in

Mexico City.

(BEGIN VIDEO CLIP)

(EXPLOSION)

(PEOPLE SHOUTING IN SPANISH)

(END VIDEO CLIP)

LAKE: Two people are dead and many are wounded. Officials say the blast was caused by a leak from a truck that was supplying liquefied

petroleum gas to the hospital. Journalist Ioan Grillo from Time Magazine joins us on the line from Mexico City. And Ioan, what is the situation

right now in terms of activity at the building?

IOAN GRILLO, JOURNALIST, TIME MAGAZINE (via telephone): Well, it's a very chaotic situation. You've got every agency you can imagine, from

rescue workers to the army, all kinds of police and ambulances, and various sort of family members themselves here.

People are digging up the rubble. The gas tank is still burning. There's still a fire happening some eight hours after exploding. They had

to finally let the gas burn out. There's people moving around the ruble, trying to see if anyone is under there and trying to get anyone to safety.

LAKE: Ioan, we said that there were two confirmed dead. I know earlier this morning when I was talking to people on the scene, it was

thought that at least 22 children were injured. Do you have any update on those statistics, and do we know the condition of the children? We can

only image that many of them must be extremely young, since we're talking about a maternity hospital.

GRILLO: Yes, exactly. Very confusing figures. We had contradictory figures from different government officials. We're talking two, three,

seven. Also, there was apparently a collapse of the ward with about 40 cots. Now, I don't know how many babies were in those cots.

But that -- they had one said at least four of them had died, and then that -- they're not sure about that now. So, no real strong information.

One of the adults who was injured apparently had burning on more than 90 percent of his body. So, some quite serious injuries there, and those

concerned family members, family members around here in absolute panic. And a lot of the injured have been taken to other close-by hospitals, so

many family members are being diverted to those hospitals.

LAKE: It sounds like a fluid situation. Are officials confident that everyone who was believed to be in the hospital is accounted for? Or is

this still very much an active rescue -- search and rescue situation?

GRILLO: I would still call it a very active search and rescue situation. There are lot of confusion around here. There's a booth set up

and people coming to try and find family members.

Again, there's a lot of contradictory figures on the death toll. We've also had different figures on the number of injured and the number of

missing. So, I don't think we'll be sure, really, of the scale of this tragedy for several hours yet.

LAKE: Ioan, we're going to be entering into nighttime now. We know that makes the situation so much more difficult when we're talking about

any time of incident like this. Are they confident -- you mentioned that there was still a fire burning.

In addition to searching to try to make sure that there are no other victims there, are they confident that we are not going to see another

explosion? Is there a feeling that the situation is at least under control?

GRILLO: Well, I hope so. There was another gas explosion several years ago where exactly that happened. There was an initial explosion, and

then a second explosion.

I've been up on a roof watching the rescue workers around the flaming truck, and there's perhaps a hundred people around it. So, I really would

hope there's no second explosion. But they seem to be confident that wouldn't happen, but I really wouldn't discount anything.

LAKE: Certainly a very tense situation. Of course, our thoughts are with all of those family members who must be in an absolute panic right now

as they try to deal with this situation. Ioan, thank you for bringing us the very latest.

GRILLO: Thank you.

LAKE: And CNN will stay with that story and bring you developments as they come in.

Still ahead tonight, stocks close sharply higher, but plunging oil prices and a stronger dollar are eroding corporate profit. We're talking

to Ford's CFO this hour.

(COMMERCIAL BREAK)

LAKE: The corporate world is offering a not-so-great outlook for 2015. Earnings are mixed and expectations are down. Tech players like

Alibaba and Samsung reported today. Alibaba missed Wall Street targets, and the stock fell as much as 11 percent. Samsung edged lower in Seoul as

Apple draws level in the race to be the world's number one smartphone maker.

Industrial giants like Shell, Ford, and Dow also posted results. You'll hear from those executives right here tonight. And big companies

due out this hour: Amazon and Google. So, a lot for investors to digest.

Now, whatever the industry or country, three major factors could hit corporate profits this year. The first, a strong dollar. You'll hear US

companies warn of foreign exchange volatility as central banks around the world ease monetary policy while the Fed tightens.

Another factor, falling energy prices. For oil companies, it could mean cutting back on investment and spending, and that ultimately will hurt

economic activity.

And last but not least, international uncertainty. Think Greece, think Russia. Geopolitical risk could impact earnings as companies rely on

an interconnected world.

Well, strong in North America, weak in Europe, problems in South America. Ford's 2014 results reflect what it calls a "solid yet

challenging" year. I spoke to chief financial officer Bob Shanks. I asked him how a stronger dollar is affecting Ford.

(BEGIN VIDEOTAPE)

BOB SHANKS, CHIEF FINANCIAL OFFICER, FORD MOTOR COMPANY: I think the biggest concern we have about exchange is the improved competitive position

that it's given the Japanese manufacturers, particularly here in the United States, but in some of our other markets around the world as well.

The yen has devalued substantially over the last two, two and a half years. That's really changed the whole competitive landscape for the

Japanese vis-a-vis many other manufacturers. So, that's the one thing that we believe we're most at risk against and watching very closely.

LAKE: This is such a challenging global environment. I know you said that you had more of a negative impact from Russian than you expected. Is

that going to continue, and what are you going to do as a result of that? Is that going to change your strategy?

SHANKS: Well, we've done a lot of things already that you would expect one to do. We've cut expenses, we've taken shifts off, we've

reduced head count. We have revisited our investments, cutting expenses right across the board.

But we are continuing to invest in new product, because at the end of the day, product is what drives this business forward, and we do think that

over the medium-to-long-term that Russia will start to get traction again and start to come back.

But clearly in 2015, looking very, very difficult. So, we are having to provide some additional support, along with our partners in our joint

venture there. And that is one of the factors that's affecting our outlook for 2015 in Russia.

But that's contained within our overall guidance of much stronger profit for the overall company, $8.5 billion to $9.5 billion.

LAKE: Yes, you are sticking by your forecast. And that is -- considering that it's not just Russia, we have Europe. There's some fears

of deflation in Germany. Been a lot of concerns about Europe as a whole. How do you expect to sort of ride past that?

SHANKS: Well, we've actually seen a bit of traction in Europe. Even in 14, there was very, very modest growth in Europe. And certainly in the

industry, the industry sales grew. As we look at 2015, we do expect to see the euro area grow a little bit over 1 percent. We think we'll see

stronger growth in the UK.

So, I think in that part of Europe, even though modest, we do see some growth, and we expect that to flow through into industry sales as well.

And again, we've got a lot of new product coming in Europe that we think is going to help us, too.

(END VIDEOTAPE)

LAKE: US stocks staged a late rally today, led by other blue chips, like Boeing and McDonald's. CNN Money's digital correspondent Paul La

Monica joins us now.

And Paul, we were talking at the opening of the session today, and it seemed almost like we were going to get more selling. We barely had any

buyers. And then all of a sudden, you turn around, and we're up over 200 points. What's going on?

PAUL LA MONICA, CNN MONEY DIGITAL CORRESPONDENT: Yes, it's pretty stunning, because most of the day you had stocks just kind of flat-lining,

and it just seemed momentum picked up as the session wore on.

What's interesting, I think, Ford and Dow Chemical, you mentioned them already, they had some pretty solid numbers. Not fantastic, but better

than this sort of unrelenting stream of negativity we've been getting from companies like McDonald's and Microsoft --

(CROSSTALK)

LAKE: Alibaba a big disappointment.

LA MONICA: Alibaba. You know -- let's be careful, there. Alibaba just missed on sales, and it's a momentum stock.

LAKE: Right.

LA MONICA: I think the selling there, we want to differentiate that as opposed to something that's going on with some of the big blue chips.

(CROSSTALK)

LAKE: Right, so missed expectations --

LA MONICA: Correct.

LAKE: -- as opposed to real warnings about profit.

LA MONICA: Exactly. Whereas some of these blue chips -- and Hershey was another one today -- the strong dollar is really starting to hurt

corporate America, and I think that that's a big problem.

LAKE: We did get some economic data out today. People seem confused about where the US economy is. And they also seem to be confused about

whether good news should be good news or good news is bad news because it's going to force the Fed's hand. There's a lot of confusion, isn't there?

LA MONICA: Oh, definitely. I think the biggest problem right now is trying to figure out what the heck is going on around the world. Are we in

recession? Is it an expansion? Is there inflation? Is there deflation?

And obviously, central banks, I think, are just as confused as the rest of us, which is a big part of the problem. We know the ECB is going

to continue easing. The Fed is probably going to start raising rates at some point. The jobs numbers look good.

Hopefully, we'll get another good round of jobs numbers next Friday with the payroll report and that people will view it as good and not

through the lens of the Fed, uh-oh, good news is bad --

LAKE: Yes.

LA MONICA: -- because the Fed's going to raise rates.

LAKE: And it is different how Wall Street sees it and how Main Street sees it. Because we did get a really strong consumer confidence number

that was totally ignored, but consumers clearly feeling better because the job market is improving, because you have those low energy prices. That is

filtering into their fell-good factor. Whether that's enough for everyone seems to be unclear.

LA MONICA: Yes. The one thing that troubles me with consumer confidence is that it's a touchy-feely emotion. Sales, actual spending is

what matters. Not to be raining on everyone's parade, but remember how high consumer confidence was in 2007? Was just before the start of the

Great Recession --

LAKE: Right.

LA MONICA: -- so consumers, no offense, you're often wrong.

LAKE: Right, you're often wrong.

(LAUGHTER)

LAKE: Also, they are spending, it's just on iPhones and not on clothing. The shift of spending is kind of hard to track, and I think

morphing. Speaking of touchy-feely emotions, what does this kind of volatility do to investor sentiment? We know the professionals are used to

it, but honestly, even when I talk to some of them, they frankly have no idea what to do.

LA MONICA: It's very troubling right now, because some companies come out -- Alibaba's a perfect example -- 40 percent sales growth and the stock

tanks because it just wasn't strong enough. But by the same token, Apple just nailed it. They killed it with their quarter, the stock was up again

today.

So, I think right now, investors can't figure out what stock is going to go up on good news and which one isn't. Boeing's another one. Boeing

was the leader today. Their news is a couple days old, now.

So I think we're getting this weird sort of stock-pickers market, where some investors are focusing on a couple of companies, and they're the

ones that are getting rewarded, but maybe at the expense --

LAKE: Right.

LA MONICA: -- of everyone else.

LAKE: And when that happens, that means people are below their benchmark performance, and then they're going to scramble, and you get that

sort of herd mentality and these big swings we see as people try to not be on the wrong side of the bat --

(CROSSTALK)

LA MONICA: Right, it's just the end of January --

LAKE: -- for their clients --

LA MONICA: We're not even halfway through the first quarter yet --

LAKE: I know.

LA MONICA: -- and we may still be getting this --

LAKE: It's exhausting! I mean, enough already!

LA MONICA: -- window dressing already.

LAKE: All right, Paul, thank you so much. We'll talk tomorrow.

LA MONICA: Thank you.

LAKE: Paul La Monica for us.

Well, Europe's engine of growth has slipped into deflation. For the first time in five years, prices in Germany are down compared to a year

ago. The fall was faster than expected and was due largely to the drop in energy prices that we were just talking about.

Meanwhile, the German economy minister has issued a stern warning to the new Greek government. Speaking to the German parliament, Sigmar

Gabriel said Greece must stick to its program of structural reform and not burden the rest of Europe. Stocks in Athens rose after a heavy sell-off on

Wednesday.

Joining us now, Robert Shiller is a Nobel Prize-winning economist and author of "Irrational Exuberance," and he says Greek stocks may actually be

a "spectacular investment." Robert Shiller, thank you so much for joining us.

I guess the first thing I should ask you is, do you still feel that way, based on what we've seen over the course of this week?

ROBERT SHILLER, ECONOMICS PROFESSOR, YALE UNIVERSITY: Yes, well, Greek stocks are even lower. So, an even better bargain.

(LAUGHTER)

SHILLER: You know, I have this CAPE ratio, which is the measure of overpricing of stocks, and according to calculations from Barclay's, the --

Greece has the lowest-priced stock market by a wide margin in the world. It's under 4, a price earnings ratio under 4. Whereas we're, in the US,

it's like 26. So, we're like six times higher.

(CROSSTALK)

LAKE: I guess that works if you believe --

SHILLER: Now, I admit that things aren't looking well.

LAKE: Yes, I guess that works if you believe Greece is going to come out the other end of it. We have your book, "Irrational Exuberance." It

feels like the markets are suffering from irrational indecision or, at times, panic.

SHILLER: Right.

LAKE: We're seeing such sharp moves. Let's stay with Greece. Do you feel -- there's a lot of rhetoric -- if we cut down past all of that, do

you think that Greece and Europe will be able to find a compromise on the situation, and do they really have any choice?

SHILLER: Well, I guess what Tsipras is doing is showing defiance. He would like a restructuring. I think it would be perfectly sensible for

Germany to relent on this. There's a lot of political rhetoric right now, but Greece has been suffering with over 25 percent unemployment. I think

it would be a reasonable thing to do.

And Tsipras is -- seems to be a smart politician. He's looking pretty intense right now. It may ultimately come to a reasonable compromise.

LAKE: We saw the drop in the German inflation numbers today. What's your perspective of this? Is this a temporary situation? We know a lot of

it was due to energy, but is there the specter of deflation hanging over Europe? Is that something we should be worried about?

SHILLER: Yes, I think so. I think that the ECB's quantitative easing is called for. And I think this austerity program is still biting, and it

-- so what Tsipras is doing is kind of pointing out the contradiction.

What they want Greece to do is what they're doing to themselves in much of Europe, and it's still weak. And so, the -- I don't think the

quantitative easing is going to be the full solution.

LAKE: It's not. And I think Mario Draghi has been clear about that. The ECB is doing all it can. Most people would like to see the politicians

act. Europe is weak, Greece is struggling, everyone knows the eurozone needs to work. If you could give a directive to the politicians in Europe,

what would it be?

SHILLER: Well, I guess it varies by country. We're seeing some progress on a -- that even a free market direction. For example, in Italy,

Matteo Renzi is trying -- is actually making structural reforms that might free up free enterprise. So, that's one direction. In the other

direction, yes, is reducing this austerity campaign that's holding everything back.

LAKE: Well, we'll see if they heed that advice. Robert Shiller, thank you so much for joining us. Economist at Yale and author of

"Irrational Exuberance." Always nice to catch up with you.

Well, in Athens, the president of the European parliament met with the new Greek prime minister, Alexis Tsipras. Martin Schulz is the first

European leader to meet with the new prime minister. The real crunch meetings come on Friday, when the euro group chief comes to town. Jim

Boulden has the story.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT (voice-over): The party is firmly over. With shares of Greek banks plummeting and bond yields

jumping, Prime Minister Alexis Tsipras welcomes one of his first visitors, this man, Jeroen Dijsselbloem, who speaks for a big chunk of Greece's

creditors, the eurozone. Their meeting in Athens sets the tone for the tough talks over Greece's bailout.

JEROEN DIJSSELBLOEM, PRESIDENT OF THE EUROGROUP: And so, there is still major work to be done in which we will support the Greek government

on the basis of true cooperation and commitment. That's the basis on which we will work.

BOULDEN: That may sound conciliatory, but Dijsselbloem and other European leaders have not shied away from telling Greece like it is.

DIJSSELBLOEM: The problems are still there. They still have to be solved, and there are different approaches you can take. But the problems

have not changed overnight.

BOULDEN: One thing that did change overnight, the finance minister. Yanis Varoufakis moved from Texas back to Greece to become an MP. His

hard-left views, his anti-austerity blogs, and his turn of a colorful phrase may make him the lightning rod for the talks.

YANIS VAROUFAKIS, GREEK FINANCE MINISTER: Greece is absolutely, irreversibly committed to be staying in the eurozone. You see, the problem

is that once you're in, just like you will recall the Eagles' song "Hotel California," "You can check out anytime you like but you can never leave."

BOULDEN: So, what might they talk about over Greek coffee and biscuits?

RAOUL RUPAREL, HEAD OF ECONOMIC RESEARCH, OPEN EUROPE: It's going to be very much a fact-finding mission, I think. Feeling each other out. See

what they really are all about, what they really want. Because communicating as they have mostly through media and commentary is very

difficult. It's hard to get at the heart of what each other really believes.

BOULDEN: At his first cabinet meeting, Mr. Tsipras laid out his plans to quickly reverse some of the structural reforms that he said went too

far. He wants an end to what he calls "humiliation."

ALEXIS TSIPRAS, PRIME MINISTER OF GREECE (through translator): We won't get into a mutually destructive clash, but we will not continue a

policy of subjection.

BOULDEN: Finance Minister Varoufakis promises there won't be any threats.

VAROUFAKIS: We are open for discussions and we look forward to working with them.

BOULDEN: But the dance now begins between the creditor and the debtor. It may be a case of who blinks first.

Jim Boulden, CNN, London.

(END VIDEOTAPE)

LAKE: A tiny machine almost invisible to the eye. Check out these nanobots that will go where humans can't.

(COMMERCIAL BREAK)

LAKE: Robots are starting to look a lot more like you and me.

(BEGIN VIDEO CLIP)

MORGAN SPURLOCK, CNN HOST, "INSIDE MAN": That's creepy.

UNIDENTIFIED FEMALE: Do you feel comfortable talking to me?

SPURLOCK: I feel a little weird, because what happens is there'll be things --

(END VIDEO CLIP)

LAKE: Morgan Spurlock met some interesting characters for his CNN series "Inside Man," and you can see more about that online. Scientists

aren't just interested in making robots which look like us, they want to -- want them to get right under our skin, too.

Bring on the nanobots, miniature medics and pharmacists able to get right to where they're needed, even inside our own bodies. In this week's

Make, Create, Innovate, Nick Glass discovers that while these little guys may be small, they're extremely powerful.

(BEGIN VIDEOTAPE)

NICK GLASS, CNN INTERNATIONAL CORRESPONDENT (voice-over): When we think of robots, we think of factory floors and science fiction movies. Or

as we've shown you on past episodes of Make, Create, Innovate, the Roomba vacuum cleaner, or Bob the security guard.

GLASS (on camera): In these underground research labs in Zurich in Switzerland, the approach has been radically different. Robots so small,

so miniature, they're barely visible to the eye, and able to go places almost beyond our imagination.

BRAD NELSON, INSTITUTE FOR ROBOTICS AND INTELLIGENT SYSTEMS: We're making micro and nanorobots that are guided by externally-generated

magnetic fields for use in the human body.

GLASS (voice-over): Brad Nelson is a mechanical engineer that likes to think small. Very small. He's a pioneer in a field that's only existed

for the last decade or so, nanorobotics.

NELSON: To give you an idea of how small these are, if I had a teaspoon, I could fit about 3 billion of them in a teaspoon, so --

GLASS (on camera): Three billion? It's kind of unimaginable.

NELSON: It is kind of unimaginable, yes. Well, the first challenges were how to make these things move?

GLASS (voice-over): The inspiration comes from nature. The E. coli bacterium in particular, which is propelled along by a rotating tail, or

so-called flagellum.

NELSON: Now, we can't make that motor, we don't have the technology for that. But what we brought in were some lessons we'd learned about

magnetic fields and using magnetism to move these things.

So, we actually take these flagella and we magnetize them. And then we have a special rotating field, a special type of magnetic field we

generate, which allows them to swim.

GLASS: Having cracked propulsion, Nelson and his team worked on refining how the nanobots moved, how they danced. A waltz, orchestrated on

a nano scale. The nanobots are all manufactured in ultra-clean rooms like this, specially lit for the purpose. Machines to maneuver them about are

also being designed and built. The target market is health care.

NELSON: What you see on the screen here is an image through our ophthalmic microscope of an artificial eye. And in the middle of that is

what we call a microrobot. It's about a third of a millimeter in diameter, about a millimeter or so long. So, very, very tiny.

So, this particular device was made to carry drugs. And so we can move it to any location on the retina, and then as it sits there, cause it

to diffuse drugs off of it to a very particular location.

GLASS: As well as our eyes, Nelson is targeting our hearts. An operation to repair damaged heart tissue is already planned for later this

year. And from one vital organ to another, he hopes his machines could be used in the brain.

NELSON: So, we've looked at applications, for instance, in deep brain stimulation and implanting electrodes in the brain, and we've looked at

putting catheters within the vasculature of the brain.

GLASS: And this could just be the beginning for Nelson's nanobots. He believes they could help us environmentally, something microscopic to

tackle something massive, like an oil spill.

NELSON: These are very small. If we can create swarms of them that could go out, they can cover a broad area. Water treatment and

environmental clean-up, where you might be able to put hundreds, thousands, millions of these devices and have them swim through polluted water,

catalyze pollutants, and then collect them later back. That's a particular application that's exciting and that we're certainly focusing on here.

(END VIDEOTAPE)

LAKE: Weaker oil prices are not necessarily a bad thing, even for a petrochemical company. Dow Chemical made an adjusted profit of 85 cents a

share in the fourth quarter, up from 79 cents the year before. Revenue was flat at $14.4 billion.

Andrew Liveris is president, chairman, and CEO of Dow Chemical, and he joins us from the company's headquarters in Midland, Michigan. Andrew,

thank you so much for being with us. Terrific to see you, and congratulations. It sounds like a solid report. And you say, as we

mentioned, low oil prices not a problem for the company. That surprised many people. How's that so?

ANDREW LIVERIS, CEO, DOW CHEMICAL: Well, thank you for having me, Maggie. Yes, oil price being low, $40, $50, whatever the number is, at the

end of the day is a massive break for the consumer. And depending on the country around the world -- and we're in 160 countries -- different

discounts occur to the consumer. When it's regulated, not so much.

But in the United States, it immediately becomes a discount to the consumer, and they start spending more. We had strong underlying demand.

And just to correct you, the year ago number was 65 cents, so we had a 20- cent increase, or 31 percent in our profits.

Our four-year profits were up 25 percent, record financial performance for the company, finishing strong based on strong demand. Our operating

rate as a company was at 85 percent. That's the highest operating rate we've seen since 2007.

LAKE: And do you expect that momentum to continue, Andrew? Especially because we're hearing from a lot of other executives, they're

struggling with the impact of the strong dollar. How are you managing around that, and can we see those growth rates continue?

LIVERIS: The two-thirds of the company outside of the United States and most of our feed stocks -- our energy feed stocks board in dollars. We

have two very, very natural hedges against a strong dollar as it showed in the quarter.

Not to say we won't have pressures out of Europe in particular through the year, but we make and sell in the local jurisdiction, in Europe, for

example, where a third of our company is. And a strong underlying demand driven by low energy price is good for us in Europe.

So, we overcome it by operating at higher rates, maintaining some degree of price, even though we loose it in currency, and buying in US

dollars. So, we don't get affected as much as others, either on the way up or on the way down.

We never talk about currency. We just consider it a way of doing business because you're global. And frankly, the strength of our very much

diversified strategy showed through this quarter.

Where you can make money on some areas, and where you lose some money on the other, as long as you're overall increasing, as we showed, we're an

integrated, diversified, then it works.

LAKE: I'm glad you brought that up, Andrew, because there is a debate, isn't there, whether big is better or whether you need to be more

streamlined? How are you feeling about where the company is, and would you consider selling off some of your business lines? Are you comfortable

right now with the size and scope?

LIVERIS: Well, since 2006, we've actually sold a third of our company, and frankly, bought a third in or grew it. So we've had actually

a massive portfolio remake. If you add all those numbers up, that's about $50 billion of revenue in motion, including divestments we've already

announced that are going to happen in the next 18 months.

We've been streamlining, but as we streamline, we become much more singly focused on key markets, key geographies, and select out small and

things that distract us. Meantime, we've hired 20,000 people in the last five years, all of them age 30 or thereabouts.

LAKE: Yes.

LIVERIS: We've become more youthful and more agile. So, we've reinvented the company based on current market conditions, which is

volatility and uncertainty.

LAKE: And we certainly see those two --

(CROSSTALK)

LIVERIS: You can't plan on anything these days.

LAKE: No, that's exactly right, Andrew, and we have seen that. Andrew Liveris, CEO of Dow Chemical, thank you so much for joining us.

Look forward to catching up with you again.

Still to come, two perspectives on the effect of falling oil prices from Nigeria's aviation minister and the CEO of Shell.

(COMMERCIAL BREAK)

LAKE: Welcome back, I'm Maggie Lake. In the next half hour, I'll ask Nigeria's aviation minister if the government is doing enough to stop Boko

Haram. And McDonald's will soon have a new boss. We'll find out why investors are already celebrating. Before that, this is CNN and now it's

time for an update on the news.

At least two people have been killed and dozens more are wounded after a gas explosion at a maternity hospital in Mexico City. A hose attached to

a truck supplying natural gas to the hospital burst, causing the explosion. The truck's driver and two assistants have been detained.

In Egypt state media is reporting that at least six people have been killed in the Northern Sinai region after a car bomb and two mortar rounds

exploded. The blast went off near a security post in the el-Arish area. More than 30 people have been injured. The latest deadline set by ISIS

militants for a prisoner handover has passed. Jordan says it is still waiting for proof that its pilot captured by ISIS is still alive. A

government spokesman says Jordan will discuss the release of a convicted terrorist once that proof is provided.

Britain's Foreign Office has summoned the Russian ambassador after two Russian bombers were intercepted flying over the English Channel. The

British military says civil aviation was disrupted by the planes which are capable of carrying nuclear weapons. British fighter jets escorted the

bombers for more than an hour until they left the area.

The U.S. Senate has passed a bill authorizing the immediate construction of the controversial Keystone XL pipeline. The bill passed

with the support of eight Democrats. The pipeline is designed to bring oil from Canada's tar sands to the Gulf of Mexico. President Obama has

promised to veto the measure.

Nigeria's government denies that its military missed multiple warnings about Boko Haram attacks in the country. Thousands of Nigerians are

believed to have been killed in the recent onslaught of attacks by the terrorist group which has been active in Nigeria since 2009. Amnesty

International says it's time for the country's leaders to act and protect hundreds of thousands of civilians from the violence. To discuss this

further, I am joined by Osita Benjamin Chidoka, Nigeria's aviation minister. He joins us live from London. Thank you, sir, for being with us

tonight. Boko Haram does seem to be attacking at will. There are concerns they may attempt to take a major city in the Northeast part of your country

again. They've attempted it once. What is the government doing to try to stop this problem?

OSITA BENJAMIN CHIDOKA, NIGERIAN AVIATION MINISTER: Thank you very much, Maggie, and this is a very - this is a very new dimension in the

discussion about Nigeria and Boko Haram. The question - the language - has changed consistently from the show of terrorism down to the issue of

insurgency. There is no insurgency measure there, there is terrorism. And terrorism as they have been practiced by Boko Haram is creating severe

disruption to civil life.

And now the Nigerian military which is the go-to military in Africa -- the military that everybody goes to in times of peace-keeping, in times of

fighting rebels in Nigeria - are confronted with a new enemy. So what we see going on now is that the likelihood of them getting in a big city is

not there. The Nigerian military is up to task, but the challenge is that we're fighting a new enemy. We are fighting an enemy whose goal is to just

attack. It doesn't matter to them whether (inaudible) two or three, they kill more Muslims than they kill Christians, they attack without any

concern for women and children, they're using anti-aircraft missiles on human beings. So it is a new dimension, --

LAKE: What do you say -

CHIDOKA: -- but we are hopeful -

LAKE: -- what do you say - what do you say to the groups who say that they've given you warnings and the government has repeatedly failed to act

on them?

CHIDOKA: Well one of the things I keep - I try to explain to many people is that when you talk about the area of Borno (ph) State, you're

talking about an area twice the size of the state of Maryland in the U.S. We are talking about 98,000 square kilometer of space. The Nigeria

military and control of majority of Borno (ph) State and in most cases the distance between one place to the other is such that we cannot concede (ph)

the areas we have in pursuit of this attack. But sincerely speaking, no measure or information given to the Nigerian military has not been heeded

to.

LAKE: And the U.N. has suggested because of the nature of the threat you're facing that a multi-national force is needed if Nigeria is going to

stop the advance of Boko Haram and adequately protect your people. Is the government open to such a venture?

CHIDOKA: Well, the government is very open to the venture of a multi- country force in comprising - comprising of - Cameroon, of Chad, the countries bordering Nigeria working with Nigeria to push back the

terrorists. Part of the reason why that would be necessary is that we need to degrade the ability to move between these three countries. So I think

in terms of a multi-country coalition, Nigeria is very open to that with Cameroon and with Chad.

LAKE: Osito Benjamin Chidoko, aviation minister from Nigeria. Thank you very much for joining us.

CHIDOKA: Thank you very much.

LAKE: Appreciate your time tonight. Well following the huge slump in oil prices, Royal Dutch Shell has become the latest company to announce

spending cuts. The oil giant is slashing capital investment by $15 billion over the next three years after reporting a drop in profits. And while the

company did not give details of where the cuts would take place, it could affect Shell's projects around the world. Shell's CEO says it's time to

prioritize. CNN's Nina Dos Santos spoke to him earlier and asked him just how he plans to do this.

(BEGIN VIDEOCLIP)

BEN VAN BEURDEN, CEO, ROYAL DUTCH SHELL: We always said we have a program of continuously pruning our asset base in areas where we feel that

the assets have run out of steam or are difficult to get to the right level of performance. What we've said also is that going forward we will extend

the restructuring program, for instance in resources place for the unconventional oil and gas that we have in North America now to the

international business. We will also take a much harder look at what we call our mature upstream positions - the cash engines that we have in

upstream.

There will be some restructuring there as well and I'm sure there will be some areas that we want to get out of positions or where we have to

perhaps write some positions down. But it will be more a business as usual. The $15 billion-dollar divestment program that we have for the two

years effectively has been done but in one year.

NINA DOS SANTOS, NEWS ANCHOR AND CORRESPONDENT BASED IN LONDON FOR CNN INTERNATIONAL: Can you be a little bit more specific geographically on

where some of that pruning as you call it may come. There's been a lot of concerns about the viability for instance the mature oil fields in the

North Sea and jobs that could be on the line there. Will you be cutting more jobs and geographically where will you cut in response to this

persistently low oil price?

VAN BEURDEN: Let me take the persistently low oil price first. It's a matter of time perspectives, Nina. You may look at what has happened

over the last few weeks and months and say well the oil prices is persistently low. But bear in mind of course we have an investment

wavelength which is probably more in decades rather than months. So when we look at the oil price and we do our plans for investments, we actually

think what will the oil price be in a few years and maybe a decade from now. Then I think looking at that sort of wavelength, we believe supply

and demand fundamentals will reassert themselves and we will be looking at oil prices much closer to $90/$100 a barrel than the sort of prices we are

seeing today. So I do not think there is a reason to overreact or even panic. We want to preserve our investment program as much as we can but at

the same time we also want to preserve the flexibility to bring it further down.

If the oil price outlook warrants that in the medium term, well I think this is a matter of combining prudence indeed with confidence in the

future.

DOS SANTOS: Can you be clear on where you'd be most likely to cut? Will it be deep water? Will it be certain countries in the world where

it's more expensive to attract - extract - just one barrel of oil than elsewhere in the world?

VAN BEURDEN: So we will be looking our positions where the marginal cost is highest. You mentioned the North Sea - the North Sea is a pretty

tough place. It was already a tough place where we have an old asset base, we have reduced in production, we have a very, very high tax regime, so it

was tough already. It just got tougher with low oil prices. So that indeed will be an area where we will be looking how to improve our position

and maybe indeed even take some portfolio action.

We will also be looking at for instance the high costs of production that we will have in the unconventional place. So if you would dissect our

investment plans a little bit further, you will see that we will be trimming back our resources or unconventional investments in North America

and internationally as well. So it's basically going `round the portfolio, where do we have weakness? Where do we believe we have high marginal costs

and prune back the investments in those areas.

(END VIDEOCLIP)

LAKE: New numbers coming in to CNN this hour. We have a financial report card for Amazon and Google and shares are moving in opposite

directions. Samuel Burke is here with the breakdown. Where shall we start, Samuel?

SAMUEL BURKE, BUSINESS CORRESPONDENT: Let's start with Amazon. It's exciting times for them. Their stock is up about 8 percent right now. For

the first time in six quarters earnings per share actually beat expectations. So right now 45 cents on - for EPS versus 17 cents, Maggie,

even though revenue was $29.3 billion whereas the Street had expected $29.6 billion. But clearly the market likes what they're seeing. Main points -

cloud business is strong as usual, sales surged 15 percent. They're selling more goods at a higher price and selling more high-priced, that's

always good for the bottom line. And Prime - that service where you get video, music and of course the free two-day shipping - that's done very

well in spite of the fact that they raised costs, it's actually surged 53 percent when it comes to subscribers.

LAKE: That's a big move for stock like Amazon and it could be that finally Jeff Bezos isn't spending all that money - he's giving some back to

shareholders. So listen to that on the conference call. Google - so what's going on there?

BURKE: Opposite direction for Google. The stock is down after they announced revenue and earnings per share missed. Bottom line with this

company, people have moved to mobile and Google has been able to do that but people are paying less for ads on mobile. It's the same story that

we've seen for them quarter after quarter, so actually people are clicking more than before that increases but companies are trying out mobile for the

first time - putting their ads on mobile - and it's unfamiliar territory for them so they're not willing to fork out as much for ads on Google's

mobile sites than they did on desktop. So mobile helps companies like Facebook but right now it's hurting companies like Google.

LAKE: Yes, and I think Google would argue it's a market share thing and the pricing model will change when no one is clicking on a desk top

anymore. But for right now they're sort of stuck in that spot.

BURKE: And they still investing in parts of the company like robotics -

LAKE: Right.

BURKE: -- and driverless cars -

LAKE: Which may not be paying off yet, yes.

BURKE: -- not yet. Basically the drivers for them are still search YouTube.com and Google Play - their app store.

LAKE: All right, big names in tech. It's going to matter a lot. Sammy, thanks so much for breaking it down. Appreciate it. Well after

failing to supersize sales, McDonald's CEO is downsized. We'll see what's on the menu for the company's new leader and a PR expert will tell me how

bring the shine back to the golden arches.

(COMMERCIAL BREAK)

LAKE: McDonald's CEO is out and investors are `lovin' it.' Shares ended the day up more than 5 percent. The main - the man rather - taking

the top job now is Steve Easterbrook, the company's global brand officer. He's charged with getting those sales back up after a year-long slump. On

the menu for the new CEO, first get some items off the board. Restaurant operators say the huge menu confuses customers and slows down service.

Second, bring the shine back to the golden arches. So-called fast-casual restaurants like Chipotle and Five Guys are taking a bite out of McDonald's

sales.

The company had launched a publicity campaign to combat perceptions it serves unhealthy low-quality food. Finally, get the budget customers back.

As McDonald's has expanded the dollar menu, prices on the rest of the board have been creeping up and I guess people have been noticing. The company

has launched a new ad campaign to get its customers' love back. The series features arch enemies coming together to enjoy McDonald's food.

(BEGIN VIDEOCLIP OF MCDONALD'S COMMERCIAL/JINGLE)

Fourteen everything's a surprise, fifteen not a day that I regret. Love is endless.

(END VIDEOCLIP)

LAKE: Joining me now, Peter Shankman is the co-founder of the Shankman Hoenig Public Relations Company. It's also author of "Zombie

Loyalists - Using Great Service to Create Rabid Fans." Peter, great to see you again.

PETER SHANKMAN, CO-FOUNDER, SHANKMAN HONIG: (Inaudible) to be back -- thanks.

LAKE: It looks like McDonald's could use some of the mojo.

SHANKMAN: They could use some of those rabid fans, yes.

LAKE: So, what's going on? What do they need to do here?

SHANKMAN: Well, a lot of things have happened in the past several years. Number one, you know, McDonald's for several years now has really

been when you think of bad food, when you think of badly-processed food, when you think of unhealthy food and you go right there.

LAKE: Yes.

SHANKMAN: Secondly, a bunch of stores have creeped up quietly and just doing their stuff over and over again - from Five Guys to Shake Shack

- got a huge IPO.

LAKE: Which is IPO-ing, yes.

SHANKMAN: You know they have lines out the door every single day and it's the same burgers and fries, but they're quality food, it's better

food. People don't associate fast food with those kinds of stores - they seek good food from those kinds of stores.

LAKE: But the thing is, it feels like it's a little specific to McDonald's because -

SHANKMAN: It is.

LAKE: -- Burger King is doing better.

SHANKMAN: Well, the thing - but you don't even - when you think about fast food/bad food, it always, for whatever reason, people think about

McDonald's. Burger King's been doing OK, Wendy's been doing OK -

LAKE: You think they're a victim of the ubiquitous nature of their brand?

SHANKMAN: You know, McDonald's - look, McDonald's is fast food like Band-Aid is an adhesive cover -

LAKE: Yes, yes.

SHANKMAN: -- so there are always going to be problems with that. McDonald's has done several things, number one being the food, number two,

you know, they've been pushing the dollar menu for years now. And when you push a dollar menu and you get a core group of people in there willing to

pay $1 for one sweet tea or $1 for two burgers, trying to force feed them a $5.49 double quarter pounder with cheese is not going to work. And that's

a bottom line issue.

LAKE: So do they have to choose - do they have to choose who their customer is? Because it seems like they're trying to grab those

millennials, all those other people who are trading up while at the same time hang on to the budget. Can you have them both?

SHANKMAN: For years McDonald's is very much about family. Families come to dinner at McDonald's - you know, we all did -- as a kid my parents

take me to McDonald's once every month, whatever - it was a big deal, --

LAKE: Yes.

SHANKMAN: Right. But, you know, as time went on, McDonald's became the cheap go-to place for dinner. They had to focus on budget, budget,

budget. Can you feed a family of four for $10? OK, then we'll go to McDonald's. You know, but now they're doing that with the family with the

value meals and with the $1 - a dollar menu - people are not going to pay $20/$30 - if they're giving $20/$30/$35 for a family of four or five,

they're going to go somewhere else.

LAKE: So how does this new CEO go about changing perceptions? It's so ingrained, it's such a - as you say, we associate it so immediately.

How - what kind of message is he going to have to do to sort of break that cycle?

SHANKMAN: He definitely has his work cut out for him. He did a really good job in Europe. He brought up Europe sales tremendously which

is I think why they tapped him for this position. One of the things he really wants to focus on is the fact that McDonald's can't simply be the

cheap bad food place anymore. So I think we're going to see a lot more salads, I think we're going see a lot more healthy options that are going

to come back, focusing on kids and health I know is a big thing for them, you know. They were getting killed with diabetes and with Coca-Cola and

(inaudible) sticking a focus on smaller portions, healthier portions. The apples in the - in the --

LAKE: The kid box.

SHANKMAN: -- Happy Meals, you know, those were helpful as well. So I think we're going to see a lot of - a lot of - happiness and green start to

surface as well.

LAKE: Do they have to - what about their customer service? Because this came up and everybody sort of - you don't want to go in - you actually

want to go through the drive through because the place - it's so -

SHANKMAN: The problem with McDonald's is that they've always been - it's a McJob -

LAKE: Yes.

SHANKMAN: -- I mean they coined an industry phrase for God's sake, you know, so they're going to have to do a lot of retraining. They're

going to want to bring in a customer service company to really work with them and explain to the people working there the employees are the very

front line, that they are the face of the company. If They want to grow and succeed, you know, -- the people, their top level on them, usually

start at the bottom.

LAKE: Yes.

SHANKMAN: They do promote from within - they're very good at that.

LAKE: Right.

SHANKMAN: And I think they need to explain to them -- hey look, this isn't just a job to get you through high school. This could be a career -

LAKE: Right.

SHANKMAN: -- if you're willing to focus on it.

LAKE: And maybe - and maybe throw a little bit of money in terms of bonus --

SHANKMAN: Exactly

LAKE: -- in recognizing that performance -

SHANKMAN: Exactly.

LAKE: -- because I think that is one of the main -

SHANKMAN: No question.

LAKE: -- turnoffs. You got to get them at the door. Peter, great to see you -

SHANKMAN: And you, thank you.

LAKE: -- thank you so much. Good luck with the book -

SHANKMAN: Thank you.

LAKE: -- it's going to launch. Peter Shankman for us. Still to come, several U.S. airlines are bombarded with online threats, but does

Twitter speak the truth? We'll have more on that after the break.

(COMMERCIAL BREAK)

LAKE: The FBI is investigating a spike in bomb threats made against airlines in the U.S. since January 17th. Authorities have received more

than 50 online threats since then, all of which turned out to be fake. Rene Marsh has more from Washington.

(BEGIN VIDEOCLIP)

RENE MARSH, CNN'S AVIATION AND GOVERNMENT REGULATION CORRESPONDENT: Planes diverted, passengers evacuated. Law enforcement and bomb-sniffing

dogs close in all because of fake bomb threats on social media.

Female: We didn't know until we landed.

MARSH: It's happening more and more. But U.S. officials tell CNN online threats increased after a bomb scare on a flight from Atlanta to

Raleigh January 17th. Fifty similar incidents followed. In New York this flight swept for explosives. Military jets scrambled after a tweet said

bombs were on two planes bound for Atlanta. Brian Bennett was onboard.

BRIAN BENNETT, PASSENGER ON THREATENED PLANE: They did have canine units out on the tarmac as well as a number of police from different

agencies. I saw the Atlanta Police Department, TSA and some FBI agents out on the runway, and we were asked to place our items on the ground and have

the canine units go through them and check those first.

MARSH: And a tweet claiming to be from the terrorist group ISIS targeted a flight from San Diego to Dallas.

JEH JOHNSON, U.S. HOMELAND SECURITY SECRETARY: I want to see those are responsible for those - that kind of activity - tracked down and

prosecuted.

MARSH: The head of Homeland Security Jeh Johnson told CNN today even false threats are dangerous to public safety.

JOHNSON: They cause certain reactions, certain overreactions. Very often fighter jets are scrambled to address the situation.

MARSH: The FBI is now investigating these social media threats, tracing computer IP addresses.

JEFF PRICE, AVIATION SECURITY EXPERT: It could be a small group of people, it could just be one person with a few Twitter accounts and a

really dumb idea - no devices have been found. But we can see how much it disrupts the system.

MARSH: These threats tax law enforcement, airport and military resources. It's also costly for airlines and passengers.

PRICE: Every time a threat comes in, it has to be taken seriously - aircraft have to be turned around or landed at the nearest location,

thousands of dollars are lost every minute that that plane is unexpectedly delayed.

MARSH: Rene Marsh, CNN Washington.

(END VIDEOCLIP)

LAKE: When we come back, we'll stay on Twitter. Its founder has been using it to have a bit of a Twitter rant.

(COMMERCIAL BREAK)

LAKE: With no warning, no explanation and apparently no filter, Jack Dorsey, the co-founder of Twitter, has decided to go on a so-called `Tweet

storm.' It was a no holds barred as he fired off a total of 17 Tweets in rapid succession. Dorsey was full of praise for Twitter, hailing how it's

changed the global landscape. He also defended Twitter CEO Dick Costolo who has come under fire in recent months. That's it for "Quest Means

Business," I'm Maggie Lake. Thanks for joining me.

END