Return to Transcripts main page
QUEST MEANS BUSINESS
US Logs Worst Jobs Growth Since December 2013; Worrying Signs for US Economy; US Dollar, Bond Yields Fall Sharply; US Wage Growth Sluggish; Warren Buffett on US Economy; Iran Prepares to Benefit From Deal; Make, Create, Innovate: Ultrahaptics
Aired April 3, 2015 - 16:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:10] PAULA NEWTON, CNN HOST: Well, we're all pretty lucky that markets were closed for Good Friday as the US is stunned by an absolutely
miserable March jobs report. It's Friday, the 3rd the April.
Tonight, March Madness. The US recovery is thrown off course by a dire jobs number.
As Iran hails its nuclear deal, I'll speak live to the US energy secretary.
And mixing business with ethics. How corporate America drove the debate on religious freedom.
I'm Paula Newton, and this is QUEST MEANS BUSINESS.
Good evening. Tonight, a sharp slowdown in US jobs growth raises fears about the world's largest economy. Now, the US added 126,000 jobs in
March. That's only about half what economists expected, and it's the worst level since December of 2013. Now, unemployment did remain at 5.5 percent.
The US labor secretary says a combination of bad weather and low oil prices may have hurt some parts of the labor market. Alison Kosik asked him why
these latest numbers were so much worse than anyone predicted.
THOMAS PEREZ, US LABOR SECRETARY: In the aggregate, lower gas prices are great for consumers. There are undeniably pockets of the economy that are
adversely affected by that. You go up to the northeast. If you're building something, you weren't working a lot last month, if you're in
Boston and other places in New England.
So, weather is certainly a factor in certain sectors of the country. So, again, the first quarter of this year is slightly better than the first
quarter of last year. And so, when I look at the trend data, I see that this last month lower than expectations, but the trends continue to move, I
think, in a very positive direction. And that's why were able to sustain a 5.5 percent unemployment rate.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: How do you -- how concerned are you about the softer areas of the US economy? I'm talking about GDP,
durable goods orders, housing. We're seeing a lot of softness in those areas of the economy, and that of course can come around and impact jobs
PEREZ: Well, our first time claims for unemployment are actually near a 15-year low, and that's a very important bellwether of growth. And we
still see fairly robust consumer spending, and that's a big part of keeping our economy going.
And so, we continue to monitor all the leading indicators, and I think they continue to point to an economy that's moving in the right direction. If
you told me a year ago when the unemployment rate was 6.6 percent that we would be at 5.5 April of 2015, I would have said that's an April Fool's
And now, we've moved there, and we've got to keep plugging away. And the thing about it is we know some things that can continue to pick up the pace
of growth. We know that if we invest in transportation infrastructure that that's going to put people to work right away.
Because even though we've seen construction growth over the last year, we have a lot more work to do to reach those pre-recession levels, and we know
how to do it. Have a long-term transportation funding bill, and the president's going to be talking about that relentlessly in the coming
months, because that's how we get this economy moving even faster.
NEWTON: Now, as you heard there, the Obama administration is looking to accelerate the economy, but there are signs it may be slowing instead.
First, economic growth slowed in the last quarter of 2014, and the Federal Reserve Bank of Atlanta is forecasting zero growth for the first quarter of
Consumer spending accounts for about two-thirds of GDP, and it's absolutely stuck close to zero yet again. Now, retail sales are down, and new home
construction has missed expectations. Manufacturing growth slowed for the fifth month in a row in March, and the strong dollar and a slowdown in the
west coast ports has hurt exporters.
And finally, like we needed more bad news here, the economy needs about 250,000 new jobs each and every month to be considered healthy. In March,
as we were saying, it created just half that.
The weak jobs report caused an immediate fall in the value of the dollar. It's down around one percent against the euro for the day. Investors hope
the weak report will prompt the Fed to keep interest rates near zero. US Treasury yields fell sharply as well.
[16:05:02] Gillian Tett is the US managing editor at the "Financial Times." She joins us now, live from New York. Gillian, as we were saying,
it was a good thing the markets have had more time to digest this. What do you think, Gillian? Is this a temporary blip, or is this a sign that the
US economy is nowhere near as strong as anyone was predicting?
GILLIAN TETT, US MANAGING EDITOR, "FINANCIAL TIMES": Well, the labor market data tends to be volatile. It's pushed around by things like
weather. And it is the case that you can have a lot of good run of good data, and then suddenly get a freak month.
So, nobody should panic too soon. But I think what's really worrying people is that this number comes after a number of indications that the
strengthening of the dollar, the weakness in the global economic picture, and all the chatter about potential interest rate rises has caused a lot of
companies to put hiring plans on hold, and also maybe to put some investment plans on hold.
It comes alongside some signs that actually companies' earnings are not going to be quite as good as many analysts and investors were hoping, or at
NEWTON: And I'll tell you what worries me, Gillian. You tell me if you think this is right. Companies have been sitting on a boatload of cash for
years now. We thought that maybe finally they were going to loosen the purse strings, spend more on wages, spend more on hiring, spend more on
just, quite frankly, corporate investment.
NEWTON: What do you think?
TETT: You're completely --
NEWTON: How jittery --
TETT: You're completely right.
NEWTON: -- will they be now?
TETT: You're completely right. There is a $2 trillion mystery hanging over the US economy right now, which is why won't companies spend that
money? Is it because they're hoarding it because of some sort of rainy day reason, they're worried about the future? Is it because they just can't
find productive and exciting things to do with that money?
We've seen investment tick up a little bit recently, but not nearly as much as you would expect in this time of the cycle. And I think the problem is
right now that people are so battered and bruised by the events of the last six, seven years that it doesn't take very much for the cynics inside
people to essentially overwhelm the optimists and so oh no, here we go again, it's going to be slowdown.
So, it's going to be a very, very difficult challenge for the Federal Reserve to work. Janet Yellen's indicated that she's keen to get on with
raising rates. Some people on the Fed board were keen to get moving in June. I think we can say a June raise is pretty much out of the picture
TETT: But September is going to be the big month that people are watching for.
NEWTON: And Gillian, you took words out of my mouth. We're bruised and battered from the financial crisis still. We're all traumatized,
corporations included. If we look at the global picture here, the one bright spot was the US economy.
If you look at Europe, if you look at slowing growth in Asia, what do you see, Gillian? Do you see something to be concerned about here, or again,
perhaps just a few speed bumps, but we will continue growth into the next five-year cycle?
TETT: Well, it's never good news, and we're not -- no one's falling off the cliff right now. What you have, really, is a picture in Europe of
continued stagnation, sort of muddled stagnation in Japan. Europe is improving a it. So, it's not disaster.
But the really interesting question right now is not just what's happening in the real economy, but also what it means for policy. Because one of the
things that have been driving quantitative easing Europe is very much a desire to weaken the euro. It's partly driven -- or it's largely driven by
You're seeing Japan that's going out right now and trying to weaken the yen. You're seeing many emerging market countries that are also trying to
weaken their currency.
Up until now, there's been a presumption that the US Federal Reserve and the US government are willing to tolerate a stronger dollar because the US
economy was stronger. And people were even talking about a sort of re- balancing of the global economy through these currency swings.
But the question they're going to be asking themselves right now is that if even the US cannot cope with a strong dollar, what does that mean for
currencies going forward? Are we actually going to see a new round of competitive devaluation pressures? And what on Earth is that going to do
to the wider G7 group?
NEWTON: And Gillian, that is pressing a lot of people now, also worried about currency wars on the horizon. Gillian, thanks so much, really
appreciate you joining us this evening --
TETT: Thank you.
NEWTON: -- on what was an abysmal day for the jobs report. Appreciate it.
TETT: Thank you.
NEWTON: One of the most concerning parts of that job report was wages aren't growing. One year ago, the average American made $24.34 each hour.
Now, it's $24.86. That works out to a raise of a measly 2 percent rise over the past 12 months.
That's well before the -- well below the target of 3.5 percent, and it means Americans are likely to spend less as well. Now, there are glimmers
of hope. McDonald's this week raised wages for about 90,000 employees. After the hike, the average worker will make around $10 an hour.
[16:09:55] Now, despite the warning signs, Warren Buffett says the US is doing just fine. The so-called Oracle of Omaha spoke to CNN's Poppy Harlow
earlier this week.
POPPY HARLOW, CNN CORRESPONDENT: We're seeing some recent cracks in the US economy, right? You've got retail and auto sales down, you've got
forecasts for first quarter earnings looking lower than has been expected to fall for the first time since 2012. Is this a blip, or is this the
beginning of a bigger shift?
WARREN BUFFETT, CEO, BERKSHIRE HATHAWAY: I don't see any real weakness in the economy. Home building has been slow and it continues to slow, but the
economy's been improving since the fall of 2009, and it continues to improve.
So, I just don't see it. And I've seen the February figures for our companies, and -- there's parts that are a little stronger than others.
But that's been the case ever since the fall of 2009, we've been on an upward course, and people talk about double dips and they talk about
acceleration. In the end, it just keeps moving ahead.
And I think it's quite a tribute, actually, to our policymakers all the way back to the fall of 2008 that we've recovered like we have from what was an
HARLOW: Fed Chair Janet Yellen said on Friday if underlying conditions had truly returned to normal, the economy should be booming. Where's the risk?
BUFFETT: I don't think there's a particular risk in the economy over time. We will have recessions from time to time, and we had a real doozy in the
fall of 2008 and early 2009, and that has had more consequences than other recessions have had post World War II.
But the American economy is a wonderful machine. It really works. It's worked since 1776, and it'll continue to work. But we will continue to
have ups and downs.
HARLOW: Because for some Americans, they listen to that and they say it's not working for me.
HARLOW: And they see stagnant wage growth, and they feel like it's getting increasingly hard to get by year by year. So, who's winning? Wall Street?
BUFFETT: Well, the extreme rich are clearly winning. If you look at the Forbes 400, they had an aggregate net worth of $92 billion in 1982. It's
$2.3 trillion today, 25 times as much. So, the very rich have done exceptionally well in this economy.
Other people have done OK on balance, but it's certainly the super rich, it's really been concentrated. You can just look at that figure from $92
billion to $2.3 trillion.
NEWTON: Yesterday's deal with Iran spells out specific limits on its nuclear equipment. The US energy secretary explains why he believes the
agreement will work. It's up next.
NEWTON: After Thursday's agreement on a nuclear deal with Iran, the country shows signs it is preparing to join the world economy. Now,
President Hassan Rouhani says a deal to lift sanctions on Iran will remove a major obstacle for businesses.
Rouhani pledges to hold up Iran's end of the nuclear agreement and cooperate with the world after decades of isolation. He added that he
expects other nations to uphold their side of the deal as well. News of the deal drove oil prices down Friday after a volatile week as investors
eyed the possibility of Iranian oil flooding global markets.
[16:15:03] U.S. energy secretary Ernest Moniz was at the negotiating table throughout these talks. Moniz met with his Iranian counterpart to
establish the, quote, "technical underpinnings" for yesterday's framework agreement. Moniz says that he is extremely confident the deal will be a
success, and he joins us now, live from Washington.
And not to put too fine a point of it, but what you did or didn't do, I saw you sitting there to Secretary Kerry's left most of the time, and you're
going to be under the gun here to prove that technically this is a good deal. What can you tell Americans and the world to assure them that, look,
they're not fooling us about anything here.
ERNEST MONIZ, US SECRETARY OF ENERGY: Well, we came into this to block off all four pathways that we are concerned about in terms of Iran potentially
developing a weapon. Clearly they have stated they want a peaceful program, but we want to make sure about that.
And a key is that we limit their production capacity, we limit their holdings of uranium, we have their plutonium going out of the country, and
very importantly, we have unprecedented measures for increasing access, transparency, and monitoring of all nuclear activities throughout Iran.
NEWTON: Secretary Moniz, many people will look at this and say, look, what happened today -- and you know that there were celebrations, they were
greeted as heroes today when they returned to Iran, Minister Zarif when he went back there.
But when you look at this deal, why did you leave this nuclear infrastructure intact? And I think that's what some people are pointing to
to say look, Iran was able to go out today and say, look, our capability is intact. We are still a nuclear nation.
MONIZ: Well, first of all, I must say, I think it's hopeful for the future if young people in Iran are looking forward to rejoining more effectively
the community of nations in the West.
In terms of the nuclear infrastructure, the -- with any deal, at the end of the deal, Iran presumably, if it has in fact developed international
confidence in its program as peaceful, would be back as a nation under the non-proliferation treaty with a nuclear power program.
What we did is we established at the beginning a very stringent set of constraints so that we could be assured that if Iran were to try to break
out towards a nuclear weapon, we would know it very soon, and we would have enough time -- at least a year -- to be able to respond diplomatically or
potentially with other measures.
And so, the issue was to make sure we had those constraints in place. We are very confident about that. And then to design a program that would
transition us from that period to the longer-term period to the longer-term period 15 or more years down the road when they would be developing a
nuclear power program with the confidence internationally that it is peaceful.
NEWTON: Secretary Moniz, though, this is all still sounding very much like a pitch, and Israel has been very vocal, as you know, on the record, saying
look, this is not going to make us safer. This is going to be more dangerous for our country.
How do you allay those fears? What are you banking on? Are you banking on the impromptu inspections? Are you banking on the fact that a lot of these
-- a lot of this nuclear infrastructure will be disabled? What are you counting on to make sure that Iran holds up its end of the bargain?
MONIZ: Well first of all, I think it's worth noticing that -- and there certainly has been very widespread surprise at the degree of specificity of
the place that we have come to. These were not vague promises and statements of principle.
We have numbers attached to almost everything. So we know exactly what the program will be when this agreement is put in place, or there won't be an
agreement. But I think we're quite confident in that.
Secondly, as you said, the combination of limited and considerable reduction in both infrastructure and very importantly, the amount of
uranium that they will be holding combined with the impromptu inspections, again, is what gives us the confidence that any breakout from that scenario
will be recognized very, very soon.
And that we will have the time to respond ideally initially diplomatically to resolve issues, but in the longer term, during that breakout period,
with whatever tools that we wish to deploy, including the snap back of the sever sanctions under which Iran is operating.
NEWTON: OK, which is something that maybe is a point of ambiguity at this point with Iran. Before I let you go, we mentioned that oil prices, of
course, are down considering Iran entering the market. It's just another factor leading oil prices down.
[16:19:57] What are you comfortable with in terms of the price of oil for the United States and for the development of the industry? Are you
comfortable with $20 a barrel? Are you comfortable with $25?
MONIZ: Well, I'm not going to speculate about a precise price --
NEWTON: I'm not asking you to speculate on a number. I'm saying, if it went to $20 or $25, what do you think?
MONIZ: I think what we need is an oil price that reflects the market realities, that is good for consumers, and clearly the reduction of oil
prices from $100 a barrel has really helped consumers and has helped our economy and others.
It's supply-demand. We all know that today we have oversupply, we have enormous reserves stock in the United States. When Iran comes back online,
it won't be soon, but in the longer term, it will add to the supply. We will see what happens on the demand side with the hope for recovery in the
NEWTON: I'm sorry, I really have to pin you down on this. Do you think $20 or $25, do you think it will absolutely dismantle a lot of the
investment in US energy? You know that US energy right now is being touted as something that continues to keep the country secure. It is a national
security issue to have that energy industry in play.
MONIZ: Look, we're down now in the $40s, and what we have seen is production has not slowed down. Quite the contrary, our Energy Information
Agency predicts an increase in oil production over this next year.
Now clearly, if prices fall substantially further, in the longer term, we will see less production. That is the usual ebb and flow of supply and
NEWTON: All right, Secretary, appreciate your time today. Appreciate it. Thank you.
MONIZ: Thank you.
NEWTON: Up next, if you roll down your car windows, there is an app for that. We will bring you smart cars attached to their smartphones.
NEWTON: A new technology could replace your smartphone's touch screen with buttons. And I'm not talking about going back to the clunky old keyboard.
You know, I like the clunky old keyboard. Now, these buttons appear out of thin air to float above your screen. Nick Glass shows us in this edition
of Make, Create, Innovate.
NICK GLASS, CNN INTERNATIONAL CORRESPONDENT (voice-over): Where once we used to type, we now tap, swipe, and pinch. We're needing to touch our
devices less and less.
GLASS (on camera): Here in Bristol in the southwest of England, a small start-up company has made a tantalizing breakthrough involving our sense of
touch. We still get to use our hands, but we get control our devices remotely using sound waves.
TOM CARTER, CO-FOUNDER, ULTRAHAPTICS: We ultrasound waves to let you gesture or reach out and feel what's not really there.
GLASS (voice-over): At 26, Tom Carter is the youngest inventor we've spoken to on Make, Create, Innovate. He was about to complete his PhD in
ultrasound research when he sensed a business opportunity.
CARTER: So, I spent six months working on trying to create ultrasounds tactile feedback, and whether this could be a business and could be
genuinely useful in the real world.
GLASS: We know about ultrasound from baby scans, checking their health in the womb using harmless sound waves. But Carter has re-imagined how we
could use the power of sound.
[16:25:02] CARTER: So, we use a small collection of ultrasonic speakers, so we have little speakers emitting ultrasound. And if we want to create a
point in space that you can feel, we make all of the sound waves from the speakers arrive at the same point at the same time. It actually emits
enough of a force on your hands to just slightly displace your skin.
GLASS: Naturally enough, it can be rather difficult to explain something that's invisible. So this is how they demonstrate the technology to
CARTER: It's really hard to see what's actually happening. So, we've got a bath of oil here representing your hand. And then the ultrasound is
focusing on the oil, and we've got a triangle spinning around, so you can see what you would be feeling.
GLASS: I was keen to get a feel for it, gesturing in thin air, a conductor on an ultrasonic orchestra, popping bubbles.
GLASS (on camera): Oh! It's almost like being tickled.
GLASS (voice-over): Pushing through a force field.
GLASS (on camera): Ooh, yes! Gosh, you can actually feel something. I though it was like my hands being blown up, pushed up. A rush of air, I
GLASS (voice-over): Carter and his team are developing applications for their technology. A growing team realizing a future we can almost touch.
CARTER: If you take a car, you go driving, and you want to turn the music up, for example, you don't have to take your eyes off the road. You hold
your hand out, the control sticks to your hand so you can feel it.
Smartphones have very small screens, and they do an awful lot. So, if you can expand that space and control the phone in this big area above it and
also get feeling for what you're doing, I think that would be really cool feature.
GLASS: Carter's not alone in his sound thinking. Companies like Elliptic Labs in the US are exploring uses for ultrasound in technology. But he
believes Ultrahaptics is leading the field with their approach, devices using sound to keep us in touch, invisibly, sensationally, magically.
GLASS (on camera): I imagined one would walk into your house of the future and you'd be gesturing around, like you'd open the curtains like this, or
switch on the light like this, the telly, the internet, whatever. It would just be almost like being a conductor.
CARTER: A wizard, yes. Yes, exactly, this is all -- it's all completely possible.
NEWTON: And as we were telling you before, if you want to control your car through your smartphone, there's an app for that. Smartphone-connected
cars at the New York International Auto Show. We'll show you what they can do, up next.
[16:30:02] NEWTON: Hello, I'm Paula Newton. Coming up in the next half hour of QUEST MEANS BUSINESS, how to interact with your car from anywhere.
Jaguar unveils its latest innovation.
And the week where business took a stand. We debate the risks of mixing corporate interests with the religions freedom laws in the United States.
Before that, though, here are the top news headlines we're following this hour.
Iran's president has vowed his country will keep its promises that are part of the nuclear deal framework. Now in a televised speech, Hassan Rouhani
praised the breakthrough reached Thursday in Switzerland. He said he hopes the final deal will ease regional tensions. Minister Rouhani pointed out
Iran will still enrich uranium while being freed of crippling economic sanctions.
(BEGIN VIDEO CLIP)
HASSAN ROUHANI, IRANIAN PRESIDENT, VIA INTERPRETER: They say that enrichment process and all-new nuclear technology is solely for progress
and developments of Iran and this enrichment and technology against no countries in the region or the world - it will not be against them. And
nowadays the world has acknowledged that Iran is pursuing peaceful objectives within this framework.
(END VIDEO CLIP)
NEWTON: Students are being flown home from the college town of Garissa, Kenya after a brutal attack by al-Shabaab militants on their campus left
147 people dead. Now four gunmen were killed. Attackers say - the attackers targeted - Christians and a man who was not a student has been
taken into custody and is being treated as a suspect. Now, prayers were held in the capital Nairobi today.
New Saudi-led airstrikes have force Houthi rebels from the presidential palace in Aden. Warplanes are now being -- also dropping weapons and
supplies to anti-Houthi fighters. The Saudi-led coalition is trying to roll back a rebel advance so Yemen's deposed president can return to power.
French investigators say the co-pilot of Germanwings flight 9525 used controls in the cockpit to speed up the plane's descent before it crashed.
That information came from the flight data recorder. It was found at the crash site in the French Alps on Thursday.
Pope Francis is observing Good Friday. These now are live pictures from Rome where he is attending the Way of the Cross ceremony. Now the
procession reenacts the route taken by Jesus to his crucifixion. Today's services remembered the 147 victims in the attacks in Kenya.
Now, the number of jobs created in the United States last month came in far worse than expected. Only 126,000 jobs were added in March, making it the
worst month in more than a year. And despite the disappointing number, the U.S. Labor Secretary Tom Perez told CNN he's optimistic about the U.S.
economy's long-term future.
(BEGIN VIDEO CLIP)
THOMAS PEREZ U.S. LABOR SECRETARY: We continue to monitor all of the leading indicators and I think they continue to point to an economy that's
moving in the right direction. And, you know, if you told me a year ago when the unemployment rate was 6.6 percent that we would be at 5.5 April of
2015, I would've said that's an April Fool's joke. And now, you know, we've moved there and we've got to keep plugging away.
(END VIDEO CLIP)
NEWTON: Now, connectivity is the buzz word as you can imagine at the opening of the News York International Auto Show today. Jaguar unveiled
its new Land Rover and the app it says will allow you to interact with your car from anywhere.
And I asked the company's CEO and its tech guru about the innovations under the hood of its latest model.
(BEGIN VIDEO CLIP)
JOE EBERHARDT, PRESIDENT AND CEO, JAGUAR LAND ROVER NORTH AMERICA: We're truly excited about this model because it is really the pinnacle of the
Range Rover family within the Land Rover brand. And we've had truly a remarkable success story in the last couple of years growing the Land Rover
brand year-over-year successfully.
In this particular car we have added additional performance, we have added craftsmanship in every little detail you can think of - whether it is the
way leather is stitched, whether it is in the instrumentation. It's just handcrafted from beginning to end.
We also use this to showcase new technology which is going to play an increasingly important part for Jaguar Land Rover in general and for the
Land Rover brand as well. So with this car like with many others, we will be fully connected to a technology called In Control Apps which is going to
lead the way for us going forward.
[16:35:05] NEWTON: When we talk about these in control apps, we're going to bring in Peter Virk who is the head of Connected Technology -
EBERHARDT: Absolutely, you wouldn't want me to explain that.
NEWTON: -- here to - oh, we've had Peter on hand - lucky you. He gets to tell us, you are the expert. What is this all about? What can I do from
my smartphone to control this kind of a car?
PETER VIRK, HEAD OF CONNECTED TECHNOLOGIES AND APPS, JAGUAR LAND ROVER: Sure. So we believe smartphones and our connectivity is key for our
customers. And this is both when you're outside the vehicle and inside the car.
So when you're outside the vehicle, we've got this remote application where, once I launch it, I can check my fuel status, I can check my mileage
but I also can check where I parked my vehicle. And if I'm, let's just say, coming back from a flight and at the airport I can get it to beep and
flash to let me know.
It also gives me other additional information such as my screen wash is low and - hey - maybe I even left my windows open and the ability to then
And the other thing I really like is I do a lot of business and personal mileage. It tells me what mileage I've done, so again I can tie (ph) my
expenses back very efficiently going forwards.
NEWTON: There have been some concerns from governments about the privacy of these things. Have you guys looked into that? I mean, are there any
privacy controls you can put into this so that you're not --
VIRK: Of course. So, you know, data security and privacy is one of our key paramount things. And one of the things that we offer is when you set
up the application, the user gets a choice to opt in or obviously opt out. And all the data that we share and link to the vehicle is all security
protected. We use the latest level of SSL security and encryption. So, again, we're making sure that we give that data to the customer so it's their information if they choose to use it or not.
EBERHARDT: I think it's everywhere. As I said before, it's an expectation customers have in their home, in their office and ultimately in the vehicle
(END VIDEO CLIP)
NEWTON: Now after the break, I speak to a CEO who is considering pulling her business out of Indiana because of the controversial religious freedom
NEWTON: Jews around the world are observing Passover and preparations for the holiday include removing and even burning all bread and leavened food
in the household. Now Jews here in the Eastern United States will be sitting down for dinner as the sun goes down. For one historic New York
business, the holiday this year is bitter sweet. Claire Sebastian has more.
(BEGIN VIDEO CLIP)
CLAIRE SEBASTIAN, CNN PRODUCER: It's the busiest time of the year for Streit's Matzo Factory. Every hour 900 pounds of the traditional
flatbreads roll off this line.
Some of this machinery dates back as far as the 1930s -- the old cooling system, even the way they pack the boxes. But in just a few weeks, this
little piece of New York history will fall silent.
ALAN ADLER, COO, STREIT'S MATZOS: The ovens have slowed down substantially and we can't get anybody to work on them or fix them. It's just not
economically feasible to remain in Manhattan at this location.
SEBASTIAN: Alan Adler's great grandfather brought his bakery to this site in 1925. Ninety years on, some estimate the business produces 40 percent
of all Matzo in the U.S. They're not closing, just relocating out of the city. It's little consolation to staff like Anthony Zapata.
[16:40:11] ANTHONY ZAPATA, STREIT'S EMPLOYEE: Actually I don't know what I'm really going to do after this. I know it's going to be unemployment
but I don't know what's going to come after that.
ADLER: It will be sad. I mean, with all the headaches of working in Manhattan like this, there's a certain charm to Manhattan that you don't
find anywhere else.
SEBASTIAN: Streit's is one of the last bastions of Jewish culture on New York's Lower East Side - an area that was once a haven for Jewish
immigrants from Europe. Now hip bars and restaurants are pricing out the old guard.
Thank you very much. At lunch time only the century-old Yona Schimmel's Knishery offered a taste of times past. At Streit's the recipe isn't
changing, just the scenery.
ADLER: That does taste nice coming fresh out of the oven. My mother told me during the Great Depression we did very well, plus Matzo would last
forever where bread would go stale in a week.
SEBASTIAN: It's a product and a business still has survived (ph). Claire Sebastian, CNN New York.
(END VIDEO CLIP)
NEWTON: And we will have much more of "Quest Means Business" when we return.
NEWTON: Business leaders this week rallied against controversial religious freedom laws in the United States - sorry - in the U.S. states of Indiana
and Arkansas. Now, critics say the laws legalize discrimination by allowing companies to deny services to gays and lesbians on religious grounds.
Now, after the firestorm, Indiana's governor signed a revised bill prohibiting discrimination based on sexual orientation and gender identity.
Now, the CEO of GenCon, one of the country's largest gaming conventions, has threatened to pull its event from Indiana. I asked Adrian Swartout if
the fix went far enough.
(BEGIN VIDEO CLIP)
ADRIAN SWARTOUT, GENCON CEO: It's a really important first step. We're contracted currently through 2020 and this fix certainly makes it easier to
stay longer term. But we're going to be working closely with the mayor's office, the Chamber, the visitor's association over the next few months and
even throughout the next year so that we can continue to kind of turn the dial on this conversation. Because it's just a first step and there's a
number of additional steps that need to be taken.
NEWTON: Now, throughout this entire week we saw businesses really leverage their clout in the state to get things changed. This is not really a
traditional role of corporations. Do you believe that people should be stepping out in the corporate world to do what they've done this week on
more social issues? It's not a comfortable position for many people.
SWARTOUT: No. It's not. I think, yes, the answer is yes. We are in a far different world than - for business - than 20 years ago. And things
change daily and I believe that CEOs and corporations have the responsibility to do the right thing and to push for freedom and equality
[16:45:01] It's really important because, you know, I would just say that discrimination is economic poison and corporations they're about making
money and serving people. So what's good for the business is good for the people.
NEWTON: And some people would say that's not true - they don't want corporations to be interfering with things like religious freedom - that
there should always be that dividing line between how you make money and what you do in your personal life.
SWARTOUT: Right. Well, how you make money though also relates to what your consumers want. And for us, our event is 56,000 people who come from
all 50 states and 40 different countries. And while certainly our position does not represent every single GenCon attendee, we were inundated with
phone calls and e-mails and requests from my customers saying, 'Oh my gosh, you need to do something about this. Please help us.'
So, in doing so, we were doing the right thing by our attendees and giving a voice to the majority of them. And it's something that we had to do. So
in those cases, it's we're - you know - corporations doing the right thing for their clients and their consumers is often doing the right thing in
NEWTON: You know some described it as a watershed moment in the United States this week, the fact that you had corporations speak out so
resoundingly and strongly and to actually effect change. Do you think it really was transformative?
SWARTOUT: I do, I really do. I think that we are now having a conversation and a national level and a really good conversation - one that
perhaps started very divisive, started with misinformation all across the board. And I think we're all asking really good questions now. And it is
absolutely a watershed moment.
(END VIDEO CLIP)
NEWTON: Now, GenCon is just one organization that has been outspoken in this debate. As we found over the course of this week, businesses that
raised their voices were uniformly against the Indiana legislation.
(BEGIN VIDEO CLIP)
MARC BENIOFF, CEO, SALESFORCE: This law is brutal, it's unfair, it's unjust and it has to change.
WILLIAM OESTERLE, CEO, ANGIE'S LIST: We believe that what that bill does to our efforts to recruit good talent into Indiana is significant.
MAX LEVCHIN, CO-FOUNDER, PAYPAL: Discrimination is not OK. We're way past that historically and we have no reason to go back.
MIKE PENCE, INDIANA GOVERNOR: Was I expecting this kind of backlash? Heavens no.
(PROTESTORS SHOUTING): No hate in our state!
ED MURRAY, MAYOR OF SEATTLE: This law was a radically different law. It actually gave for-profit businesses the right to discriminate - an issue
that many of us thought was settled in the 1960s.
LUTHER LOWE, VICE PRESIDENT OF PUBLIC POLICY, YELP: And we said listen, you can't have active discrimination in the state where we've employed so
many people. It's -
RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Right.
LOWE: -- simply unconscionable and we couldn't sit on the sidelines.
BENIOFF: What I want to see is that there will not be discrimination in Indiana, and certainly that discrimination will not be amplified. I want
our employees and our customers to be protected. Politicians need to stop getting in the way of progress.
(END VIDEO CLIP)
NEWTON: Now, just to discuss all of this a little bit further is Deena Fidas is the director of Workplace Equality Program for the Human Rights
Campaign which published the letter signed by many tech CEOs including some of those you just heard from. Mark Kennedy is director of the Graduate
School of Political Management at George Washington University. They both join me now from Washington.
Deena, I want to start with you. In terms of actually getting these tech CEOs to sign this kind of a letter, what has changed? Because I can tell
you I have been interviewing CEOs for many, many years. When it comes to social issues, they completely clam up, it's better safe than sorry,
they've normally been silent.
DEENA FIDAS, DIRECTOR OF WORKPLACE EQUALITY, HUMAN RIGHTS CAMPAIGN: Well I think that's actually precisely what has changed. The fact is that LGBT
equality from a business standpoint is squarely a business issue.
It's not a hypothetical, it's not an intellectual debate about social issues. But what businesses have demonstrated over the last decade and a
half in fact is that they want to attract and retain a diverse talent pool. They want to connect with consumers.
And so it's actually a bit of a false dichotomy that on the one hand we have LGBT social - so-called social issues and on the other hand we have
bona fide business issues. Prior to this week, we have seen an incredible amount of corporate championship of public policy that directly relates to
the LGBT community.
[16:50:06] Just a couple of weeks ago in fact a couple hundred major businesses signed onto amicus briefs before the Supreme Court affirming
that for example marriage equality is in fact good for business.
NEWTON: Now Mark Kennedy, with everything that you have seen this week, you have made the point that, look, you feel that CEOs perhaps were showing
what you call 'selective indignation.' And you're not the only one. There were a few that espoused that this week but you weren't the only one.
I mean, do you think this is disingenuous? Do you have a problem because you think they did it because it was good for business or do you think that
indignation is misplaced?
MARK KENNEDY, GEORGE WASHINGTON UNIVERSITY: I think the companies that have acted have acted because they have the diversity that Deena spoke of
as being a core differentiating aspect of their business or they happened to be based in those states where having a diverse group of customers as
GenCon was talking about or having a diverse group coming to your headquarters was vitally important to them.
So I think this is an important issue for every company but they can't speak out on every political issue. Those that did have found that there
are incremental benefits to them to doing so.
NEWTON: Deena, what do you think of that opinion?
FIDAS: Well again, I think that whether we're saying that issues of fundamental fairness are political issues or social issues, you know, I
think it doesn't really matter what the commentators say, let's look at what business has done.
Business has, over the last ten years, for example, majority of the Fortune 500 have extended domestic partner benefits. A majority have extended
explicit protections for the LGBT community, meaning they have sexual orientation and gender identity called out as part of their personnel
policies. So the notion that this is somehow and overnight trend just isn't borne out when you look at the momentum and the data over the last
And I also would point out the sheer diversity of businesses that spoke out. When is the last time you saw Yelp and Walmart and Salesforce on the
same list? You know, this is something that the business community has decidedly conveyed to the public. This is not so much a social issue
although there are merits to that case. This is also a business issue. We want to attract and retain top talent. We want the ease (ph) of mobility
NEWTON: Mark -- Mark's trying to say - Mark, if you can just come back at that. You're saying it's a business issue for only those who found an
opportunistic cause in there. That they did it because it was expedient?
KENNEDY: It's a business issue for everyone. Diversity is important for all companies to embrace. It's an important issue for them to do. And
there's a cost of them not acting politically and there will be people that will be upset if they don't ask - act - politically.
But there's also a cost if they do act politically. They're not focused on a different issue. The governor of the largest - the CEO of the largest -
company in the state can only call the governor on so many issues, and if you act on one issue, you're going to be even more penalized if you don't
act on another issue. So there's a cost. What I'm saying is if you look at the diverse group that Deena referred to, they all fit one of two categories - they're
competing for talent in a very competitive Silicon Valley where there's competition for talent and that talent has a heightened appreciation for
diversity. Or they're in a state - Indiana or Arkansas - Salesforce in Indiana, Walmart in Arkansas - that want to make sure they can attract a
diverse workforce to their headquarters.
So those -
NEWTON: You're -
KENNEDY: -- more companies should talk frankly than do politically. That's what I teach in my business in a political age. But as they do,
they're going through a cost/benefit analysis and those in this case went through a cost/benefit analysis and came to the conclusion it's in their
benefit to speak out.
NEWTON: So it wasn't a moral issue, it was expedient, they were looking at the bottom line.
KENNEDY: Businesses have to act morally but they're in the business of business and there are times - there are many moral issues they could speak
out on. Which ones they do is a function of which one aligns most with their differentiated purpose for their business.
NEWTON: Deena, where do you think the dividing line is there? Because some people, you know, get a little bit creeped out - to use a term - when
they think about their company getting involved with any of these social issues - whether it's this or something else.
I mean, it has that kind of tinge of big brother to it. Do you think that is not a valid argument in this case?
FIDAS: No, it's not. The idea that somehow business rose up and is somehow on the opposing side of a moral or religious discourse is just flat
out inaccurate. I mean, what we saw with these bills - and they're not limited unfortunately to what happened to Indiana and Arkansas - we at the
Human Rights Campaign are dealing with a number of bills across the country to which we're having to mobilize voices on the offense.
But, you know, these - essentially what these bills did is they inserted a debate and a set of sanctions into the investment community that weren't
there before. And so businesses were simply standing their ground and saying, look, not only do we affirmatively protect all of our employees
from discrimination, we've actively worked to better communities in which we operate and, you know, the question about it is allowable, permissible
to discriminate against customers or against fellow employees - that's not an abstract moral issue. That is squarely a personnel and a business
[16:55:34] NEWTON: OK. And we're going to have to leave it there and I'm sure we'll be hearing much more about this debate in the weeks and months
to come. Appreciate your time.
FIDAS: Thank you, Paula.
NEWTON: Now, the war of words between Britain's party leaders has fallen silent for now. So, how did the British public react to the biggest
televised election debate in history?
NEWTON: Now, the two frontrunners in Britain's upcoming election appear to have emerged relatively unscathed from the first major debate of the
campaign. Now, polls showed Nicola Sturgeon of the Scottish National Party - she was the winner of Thursday's TV debate (AUDIO GAP) polls seven main
Now, from a new poll from Survation suggests that hasn't affected support for British Prime Minister David Cameron whose polling at about 31 percent,
and his main rival Ed Miliband of Labor who holds a slight lead with 33 percent.
Now, as for the debate itself, a YouGov poll asked the question "Leaving aside your own political preference, who do you think performed best
overall in this debate?" Nicola Sturgeon was the clear winner followed by UKIP's Nigel Farage. David Cameron and Ed Miliband - no surprise - were
neck and neck, given the poll's 3 percent margin of error.
Green Party leader Natalie Bennett and Plaid Cymru's Leanne Wood failed to impress, winning only 5 percent or less.
That is QUEST MEANS BUSINESS for now. I'm Paula Newton. Thanks for watching and have a great weekend.