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The Future of Electric Cars Is Looking Bright. Tesla Unveils Entry Level "Model 3"; Nissan Brings Micro Electric Car to New York; Anbang Withdraws Bid For Starwood; Pamela Anderson on Aging in the Digital World; Anderson on Cover of Last Nude Playboy Issue. Aired 4-5p ET

Aired April 1, 2016 - 16:00:00   ET



BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The fight against ISIL will continue to be difficult but together we are making real progress and I am

absolutely confidence that we will prevail and destroy this vile organization.

As compared to ISIL's vision of death and destruction, I believe our nations together offer a hopeful vision focused on what we can build for

our people. With that, what I'd like to do is ask the press to depart. We will then be showing a video that focuses attention on possible scenarios

that might emerge with respect to terrorist networks. It will give us a good opportunity to test those areas where we still have work to do and how

we can strengthen our collective effort against these networks. So if I could ask the press to depart promptly, please.


RICHARD QUEST, HOST: So President Obama there chairing the final session of the Nuclear Security Summit in Washington. You've been listening to the

ways in which the President has said the countries involved are all coming together. He particularly points out the Iraq agreement with the various

countries as being a success following on from the promises and the commitments that were made in Prague several years ago which he said have

shown when the international community works together, the benefits can be seen.

The President also there referring to ISIL and now of course briefing the other countries and the other countries telling the U.S. President what

they believe is the next stage in the measures against not only nuclear nonproliferation by states but also of course the issues of terrorists

attempting to acquire nuclear weapons or nuclear capabilities.

We'll talk about that in just a moment and we'll talk about what the President's nuclear summit in Washington did besides grandstanding perhaps

as some people suggest.

Let's turn to our business agenda and all signs now pointing to a strong U.S. economy. The U.S. economy added 215,000 jobs in March.


QUEST: Better than expected. An employment number ticked up slightly. It was ticked up about 5 percent but that's because more people are joining

the workforce so although that has gone up, it's not seen as necessarily a negative.

Wages grew just 2.3 percent and that wage growth and the number of hours worked and the utilization rate have all been persistent problems.

Now if we take a look at the broader economy and we're seeing more encouraging data. U.S. auto sales are up sharply. Manufacturing grew for

the first time in some seven months.


Leanne Swonk is in Chicago, The Founder and Chief Executive of DS Economics and excellent to see you as always.

These numbers, OK, 215,000 or whatever, give or take, they are -- I think the best way to describe the employment numbers are respectable. I mean,

they're not rip roaring and they're not dreadful, they are respectable. But taken with what we heard earlier in the week from Janet Yellen on interest

rates, the dovish tone, does her comment still stand?

DIANE SWONK, FOUNDER, AND CEO, DS ECONOMICS: Absolutely. What we're seeing in these numbers is they're solid employment gains but there still is

actually invalidating Janet Yellen. The increased participation in the labor force, people are actually out there, that slack that she refers to

in the labor force is still there.

Many people had thought once we hit 4.9 percent unemployment, wages would accelerate rapidly. They've actually decelerated a bit from where they were

in the fourth quarter, and it's because there's more people throwing their hat in the ring and actually looking for a job.

Women in particular picked up their participation in the labor force. We also saw some younger and older male workers pick up their participation.

But it really has been men's participation rate in their prime age groups all the way from, say, 35 to 54, where the shortfall has been. Record lows

participation rate there and that's why you're seeing the rage at the polls here in the United States as well.

QUEST: So inequality, income inequality, wage stagnation, these are all the issues that we're seeing voters rebel against. But Diane, what is now the

big worry for the U.S. economy because frankly growth may be 2.5 to 3 percent, maybe you know 2 to 2.5 percent, whatever it is in the U.S. but

the U.S. is motoring really rather well, so what's your big concern?


SWONK: Well certainly Yellen reflected what the concern is that China in its transition, in its slow down, it may not be as smooth transition, that

you know could be really rocky for financial markets. And if China doesn't quite navigate its transition to more domestically driven demand as opposed

to export, they could have a much rockier hit. In fact we saw China's bond ratings actually reduced in recent days. And I think that's important

because there is concern worldwide the slowdown in China will not be as orderly as the Chinese government would like.

QUEST: OK, but that China -- we've had China on the back burner now or the front burner depending on the month for some months. But let's look at the

market today and how Wall Street performed during the course of today's session.


QUEST: I mean, we're up over 107 points. You have a bit of a hiccup in the morning and then they seem to get into their stride. Comfortably over

17,500, 18,000 on the way. So, Diane, the U.S. market seems to be shrugging off those very worries that we were concerned about before.

SWONK: And I think they're allowing Janet Yellen to bear the burden of the worries for them. I think that's the exact point, is they think the Fed can

play savior here.


SWONK: I, you know, certainly am encouraged by the fact that I do think Yellen is correct and validated that you can reengage a lot of the un and

under-employed by allowing unemployment to fall lower. But let's face it, monetary policy is what we've relied on for a very long time, and it's not

the only game in town. We really haven't seen any real measurable reforms at all, if anything a lack of reforms out of Washington. And structural

reforms globally are what we really need to see going forward and that's not what we're seeing.

So I think that's a concern as well. We have seen central banks come out. Certainly the ECB has company out and said it that they need more fiscal

policy, more fiscal reforms. And I think that's where some of the concern is. But certainly Wall Street's willing to let Janet Yellen bear those

burdens as opposed to them.

QUEST: Diane, DS Economics, how good to see you, thank you for joining us.

SWONK: Good to see you too, Richard.

QUEST: Now while wage growth in the U.S. may be sluggish. Governments across the country and around the world are now raising the so call minimum



QUEST: A new law took effect in the United Kingdom on Friday. It raised the minimum -- they don't call it that, it's known as the living wage. It's a

new construct from the Conservative government and it's now around $10 an hour. Over the past week, Russia's also announced similar plans. And the

state of California and the state of New York, well, they are planning to raise their minimum wage within the state to $15 an hour. It's a highly

controversial move.


QUEST: The Republican party and many of those in business are vehemently against major increases to their minimum wage. So to put this in

perspective I spoke to Robert Reich, the former U.S. Labor Secretary, currently a professor of public policy at the University of California at

Berkeley. And I said that the rise in the minimum wage in his view, he sees it as a moral point.

ROBERT REICH, FORMER U.S. LABOR SECRETARY: Well it is certainly an economic point as well. But there is a moral undertone and foundation to the

arguments. And that is that nobody should be working full time in the United States, in my view, and in the view of many other people, and yet

still be impoverished. If you are playing by the game by the rules of the game, in terms of American capitalism, you should be out of poverty, your

family should be out of poverty, and that requires, in most places in the country, at least $15 an hour minimum wage.

QUEST: The discrepancies, I'm just going to read you, and these are arguments that you have known and faced your entire professional life on

this issue. But the Restaurant Association of California says a "dramatic wage hike will force business owners and many others to make tough choices

such as cutting hours, eliminating jobs or even closing our doors."

REICH: I simply don't think that's the case. What we've seen where there have been increases in the minimum wage is that more people are drawn into

the labor market which gives employers more choice of whom to hire. And that means greater employer loyalty, employee loyalty and also lower

turnover. That saves employers money.

The alternative for some employers is that if everybody in the industry, if they're restaurants or if they're retailers, it doesn't matter, if all

their competitors are facing the same increase in the minimum wage, they suffer no competitive injury themselves and they simply pass on the

increase to consumers.

So either the minimum wage is going to be absorbed and save employers money in terms of employee loyalty and less turnover, or to the extent that it

doesn't, it's going to be passed on to consumers.

QUEST: And yet those who are against it still says -- described the minimum wage as a tax on jobs that to those who may receive it, there may be

benefit. But we will never really know how many hours were cut or how many jobs were not created because of it.


REICH: Well, that's been the case since 1938 when the minimum wage was officially created in the United States. Every time it's been raised,

usually, inflation has cut into its value, the restaurant owners or the fast food or the restaurant -- other restaurant or the retailers say no,

you must not do this, because it's going to cost jobs. The history of the minimum wage in this country is that it has not cost jobs, it has actually

put more money into the hands of people who are going to spend that money. And the spending of that money by lower-income people actually has the

effect of multiplying the number of jobs in a local area. And so most of the arguments, in fact, all of the arguments to date against increasing the

minimum wage have been proven absolutely wrong.

QUEST: Robert Reich, joining me on the line from Berkeley.

All the signs point to one company being behind the Apple iPhone hack. Remember, we're talking now about the company that managed to hack into the

Apple phone. It's an Israeli firm it's called Cellebrite and is believed to have helped the FBI get into the terrorist's phone. After the break.


QUEST: An Israeli company is believed to be behind the hacking of a San Bernardino terrorist's iPhone. A source has confirmed to CNN money that an

elite group of engineers from the firm Cellebrite helped the FBI.

Now that name, Cellebrite, came up when interviewed the Cyber Security Expert John McAfee on this program on Tuesday.

JOHN MCAFEE, CYBERSECURITY EXPERT: It's an Israeli company called Cellebrite. They've had a contract with the FBI since 2013 really and they

have a mobile forensics division which creates a device that -- about this big that you can plug a phone into, any phone, and they will, in fact,

decrypt it.

QUEST: U.S. Government records show that Cellebrite landed its biggest contract ever with the FBI on the very same day the bureau announced it had

successfully hacked Sayeed Farook's iPhone. Is it a connection, is it a coincidence? Most probably not. So we sent CNN'S Oren Leibermann, to take a

look at Cellebrite.


OREN LEIBERMANN, CNN CORRESPONDENT: Four months after the terrorist attack, the iPhone remained a critical but inaccessible piece of evidence. An ugly

legal battle between the FBI and Apple suddenly ended when the FBI found a different way to get into the iPhone. An Israeli newspaper citing industry

sources said the company that did the work was called Cellebrite.

Cellebrite's offices are here behind me in this high-tech park just outside of Tel Aviv. Now neither the FBI nor Cellebrite will comment on the

company's involvement but Cellebrite specializes in mobile division data extraction and decryption, phone hacking. And that's exactly what the FBI

needed in this case.

We reached out to Cellebrite and the FBI repeatedly. Cellebrite didn't return our calls. And the FBI wouldn't comment about the company. The FBI

has said only that used a "outside company" but the FBI signed a $200,000 contract with Cellebrite the same day the FBI announced it had gained

access to the content in the shooter's phone.


LEIBERMANN: Shares of Cellebrite's parent company soared. At a tech conference in 2014, Cellebrite's forensics technical director, Yuval Ben-

Moshe, told CNN about the work.

YUVAL BEN-MOSHE, CELLEBRITE'S FORENSIC TECHICAL DIRECTOR: We allow -- law enforcement a very deep and detailed access to a lot of information that is

on the mobile device and then it allows them to deduct who did what when. Which is the essence of any investigation when you look at it.

LEIBERMANN: Cellebrite's technology isn't just a hack on the iPhone. Critics say it's a hack on privacy. Ben-Moshe says his company has been

challenged in court.

BEN-MOSHE: You've got to make sure that whatever you bring into court can stand there and can stand any cross-examination. There are very, very

strict rules, the guidelines with most of the countries, and we meet those. We meet those to the best of our knowledge.

LEIBERMANN: To learn more about mobile device security, we meet Michael Shaylov. He is a mobile technology expert at Checkpoint, an Israeli cyber

security phone. What are the weak points of an iPhone or any other mobile device that you can access the phone through?

MICHAEL SHAULOV, CHECK POINT SOFTWARE TECHNOLOGIES: When you connect the cable to the phone, then you can abuse all kind of protocols that the

iPhone can communicate with the laptops and then using by hijacking or manipulating those protocols, you can actually unlock the phone.

LEIBERMANN: If I give you my iPhone, if I hand it to you, how long will it take you to hack this iPhone?

SHAULOV: It will probably take me, faster to hack your phone when it's actually in your hands rather than when you give me the phone. It's much

easier to conduct a social engineering attack, basically to send you something that you will click on and you will install something on your

phone rather than I will try to actually guess or break your pass code.

LEIBERMANN: This is the flip side in the startup nation, innovation used to build security now used to exploit vulnerabilities.

Is Cellebrite the company behind the U.S. government's iPhone hack? They will not say. But notably the company that signed the FBI contract and was

enthusiastically touting its technology not long ago, has now gone silent.

Oren Leibermann, CNN, Tel Aviv.


QUEST: Did Cellebrite do the deed? Jose Pagliery, is CNN Moneys cyber security correspondent. You've got plenty of work to keep you busy at the


JOSE PAGLIERY, CNN MONEY'S CYBER SECURITY CORRESPONDENT: Yes, I do. So let's talk about it because there are conflicting reports. I talked to two

people who were in direct contact with a team at Cellebrite, including who they say was a genius, brilliant engineer in Seattle who pulled this off

for the FBI.


PAGLIERY: They told me absolutely it's Cellebrite. And again, now we've got two anonymous law enforcement sources telling CNN absolutely it's not

Cellebrite. Cellebrite's staying quiet. The government won't go on the record.

QUEST: If it's not -- look, it's a relatively small world, the cyber security world, as I understand it. If it's not Cellebrite, then it will be

an eye-raising opener if it's somebody that nobody else -- because that's the only name I've heard people talk about.

PAGLIERY: Well, let's just look at the evidence we've got. For the last seven years, Cellebrite has been the FBI's go to phone unlocker, all right,

they make this device, this handheld device --

QUEST: Yes, what does it do?

PAGLIERY: Well, this is really interesting. So let's talk about who Cellebrite is. Right?

QUEST: (inaudible)

PAGLIERY: So they have this device that just plugs into your iPhone. Boom, you plug it in and it cracks into that phone and extracts all of the data

on that phone. So anything that's on here deleted text messages, deleted pictures, anything you thought you were through with, it's theirs. It's

theirs. And so they have perfected this over the years. Now, this would have been a huge challenge for them. Because Apple made it so that their

phone could not be cracked. If they're the ones who did it, they did something incredible.

QUEST: But it's something to do with the chip isn't it and cloning the chip and going backwards and forwards.

PAGLIERY: it's - Cellebrite got started as a company that would make a device that would move data from one phone to another. So they've

understood how phones store data and how they protect it since day one.

QUEST: So if Apple is now, we're on the 6, whatever it is --

PAGLIERY: IPhone 6-s.

QUEST: Well, maybe for you all but not me. Apple's on the 6 and the 7 is next or whatever. And the goal is constantly an unbreakable phone.

PAGLIERY: That's the goal.

QUEST: You think it can't be done?

PAGLIERY: Well, it's really -- anything can be broken. It's an arms race. It's always and arms race. It's like the 1930s when you had police using

pistols and then criminals came in with machine guns so police started using machine guns. That's how it is in the computer world, you try to make

an unbreakable device and the FBI and criminals will try to figure out how to break in. The FBI to solve crimes, the criminals to commit them.

QUEST: Right, and the FBI of course, and I mean, Apple has to actually handle the question when people - and I've asked you this before, when

people say to Apple, you know why are you making a phone that law enforcement can't get into?

PAGLIERY: They're making a phone that no one can get into to protect privacy.

QUEST: Yes, but they have a public duty surely as well.


PAGLIERY: What they -- well, wait a minute what phones are FBI agents using? I'm pretty sure that they want an unbreakable phone, right? And so

the question is can a company try to make the best secure product possible? That's Apple's job. The FBI job is they've got to solve crimes, they're

going to try to break in. This is one instant that shows that well, they pulled it off.

QUEST: Is it Cellebrite?

PAGLIERY: There are a lot of indications it was.

QUEST: Have a good weekend, sir.

PAGLIERY: Thank you.

QUEST: The issues that Apple is dealing with today are very different. Public policy in that sense to what they had to deal with in 1976.


QUEST: Oh, look at this. 1976. 40 years ago today, Steve Jobs, Steve Wozniak and Ronald Wayne founded Apple. So let's look at the evolution of

tech giant through its products.

Now Apple was - in 1976 this was the original. Just look at the board, the keyboard and the monitor.

Go to '84 and you're starting to see style, elegance, a certain sophistication. Those of us of a certain age will recognize the original

Mac in 1984. Then in 1998, you move forward to the i-Mac. And that's the first time perhaps that we're seeing ting the "i" coming up once truly into

the Apple products.

By the time you get to the 21st century, things are very different. You are now seeing style, you're seeing substance, you're seeing form. You've got

the iPod which comes along in 2001. And then the iPad.

The iPad of course is revolutionary. Because in 2010, I beg you -- the iPhone first of all in 2007 and then the iPad. Because the iPad is somewhat

revolutionary as a completely new device.

The iPad gave us something the table, that we didn't even know we needed or even wanted. And possibly some would say the iWatch or the Apple Watch as

it is in 2015 is doing the same. But it hasn't had anything like the same take-up as the other ones.

John Sculley was the Chief Executive of Apple. He was there for a decade from 1983. And look at the photo of him back then in the middle with the

co-founders of Jobs and Woziak. Now, he's now a partner at Sculley Advisors. Eleni Giokos said when he spoke the current CEO is handling the

iPhone hacking case well.

JOHN SCULLEY, FORMER APPLE CEO: Well, I think Tim Cook has been just brilliant in how he's handled that situation. You know CEOs sometimes have

major crises that they never plan to have to deal with. But Tim handled this one with brilliance. I think everyone in the tech industry admires

the, you know, careful moderated way which he handled this issue. It was in the best interest of Apple, the tech industry, and I think the whole

country. And it's so far had a good outcome for everyone, including the government. And I think that encryption and security, privacy, is going to

continue to be an issue because hackers only get better and then security and privacy technology has to get better too. So, this is not a story

that's over but Tim's done a terrific job so far.

ELENI GIOKOS, CNN CORRESPONDENT: John, what is your prognosis on the way that this could develop? Is it something you're watching on the sidelines

and are pretty much concerned about?

SCULLEY: Well, I think it's an issue that is going to be with us for many, many years. That's why I think Tim Cook said, you know, we've got to get

more clarity. Which may mean new laws from congress, it may mean these laws being tested by the Supreme Court. That obviously takes a period of time.

So the fact we have this intermission in the fact that the government has said we have a solution that doesn't require Apple, I think it gives us,

you know, sometime, maybe several years, to be able to sort those issues out and get the precedent law.

But I think right now, imagine how the Chinese would feel if they knew that the FBI had a back door into the iPhone and this is Apple's largest market

in the world. So it has huge ramifications beyond societal issues, it has huge implications for the whole tech industry.

GIOKOS: So John, watching, you know, the future of Apple, there's so much innovation out there, there's you know, just so much competition. Do you

think that we've seen and hit perhaps a glass ceiling when it comes to innovation? And where do you see Apple fitting into the greater scheme of


SCULLEY: No, I have a very optimistic view for Apple. I think the leadership's been clear at Apple that they are trying to be the first,

they're trying to be the best, it's always about user experience.

So take something like a virtual reality. Obviously there's some other companies that were out there first. Facebook is a good example of that.

Samsung's another example of that. So is Sony. But my bet is it will play out much the way the iPod did. Apple wasn't the first one with an mp3

player but they were the first one in to figure out an experience and to figure out iTunes as a way to reconceptualize music. And I believe that

Apple will be a big player in VR at the right time but they're always about best user experience, focus on beautiful design, no compromises and I don't

expect they'll change that at all.



QUEST: John Sculley. There have been few laughs for Google's April fool's joke. The tech company designed a feature that was designed to end these

never ending e-mail chains. It attached a gif of an angry minion dropping a microphone.


QUEST: There you are, there you see it. Now here it is, it's meant to effectively shut down any conversation. When you drop the mic, that's the

end of it. But it placed the button for the mic drop option next to the regular send button on Google mail, or Gmail. It angered some after a

number of people accidentally clicked the wrong button while sending professional e-mails.

One twitter said, "note to self don't send anything important in G-Mail today because of the stupid mic drop button." Google recognized the

problem, shut it down and said, "well, it looked like we pranked ourselves this year. Due to a bug, the mic drop feature inadvertent caused more

headaches than laughs. We're truly sorry."

Shelly Palmer is here. You're laughing.


SHELLY PALMER, HOST, SHELLY PALMER DIGITAL LIVING: I am. But no, Google really made a gigantic mistake. And whatever the intention was, the

consequences were clearly unintended. What happened was, as you described, you'd send an e-mail and if you inadvertently hit the mic drop send button

as opposed to the regular send button, they were next to one another, then you finished your communication and this little minion comes out, drops the

mic, and the person who you sent it to couldn't respond to you. It was over. The conversation was over. So some people claim they lost their job.

They sent - they were unable to -- they sent stuff in on deadline and were unable to communicate back and forth with their colleagues about whether

the messages have been received. Google really got themselves in some hot water today.

QUEST: Why is this different to say Microsoft's Tay debacle? In the sense they're both sort of unintended mistakes. You know, what to you is the


PALMER: I think there's a huge difference. One is an experiment about -- that's set up to be an experiment. It's an artificial intelligence thing.

They came out and say we're making -- we're trying this and it got pranked and it didn't -- it said a lot about society. But it didn't say much about


This is April fool's day. Google is notorious for awesome April fool's day pranks. This was -

QUEST: So they got this wrong?

PALMER: And this is just a bad idea that didn't go right. This was very well intentioned and really poorly executed. And it hurt a lot of people.

So yes, they're pretty different.

QUEST: You do wonder what - I mean we don't really know whether or not it was intended to stop future e-mails or just sort of meant to be just a -we

don't know. But anything that could potentially interfere with somebody's ability to do their whatever is a bad idea.

PALMER: Look, I'll tell you what it tells us. It tells us that we are woefully, horrifyingly addicted to e-mail communication. G-mail.

QUEST: You speak to yourself!

PALMER: Critically important -

QUEST: You speak for yourself Mr. Palmer -

PALMER: critically important and when someone inhabits our ability to communicate, we don't have a sense of humor about ourselves. And

truthfully, business communication shouldn't be pranked and Google should have known better, shame on them. But they apologized.

I think they did more harm than good and maybe the people in the pranking department for April fool's day will learn a valuable lesson, don't mess

with my e-mail please. You want to prank me, prank me on your homepage. Give me search results like that brand-new Richard Quest awesome computer

system that you guys are bringing out, I think that's fantastic. Oh that was an April fool's joke. Sorry. [ bell rings ]

QUEST: Good to see you Shelly, thank you very much. Shelly Palmer, and we'll talk about those other issues later.

PALMER: We will.

QUEST: The orders are flooding in for Elon Musk's latest Tesla.


QUEST: We already had the model S. Then we got the model X. Now we have the model 3. And if you reverse the 3, what do you get?



QUEST: Hello, I'm Richard Quest. There's more of QUEST MEANS BUSINESS in just a moment.

Elon Musk celebrates billions of dollars in orders for a car that doesn't even exist yet. And from the cover of playboy, there's something more raw

and ugly. Pamela Anderson tells me about reinventing her career. Before that, this is CNN and on this network, the news comes first.

Barack Obama says the international coalition against ISIS is making progress. The U.S. President spoke ahead of the final section of the

nuclear security summit in Washington focusing on the terror group. Mr. Obama is chairing that session right now. He says more work is needed to

stop foreign fighters from entering Syria.

Jacob Zuma is getting the backing of his party. It came after South African President apologized. Mr. Zuma was found to have misused state

money on his private estate. Speaking in a televised address, he said he didn't mean to mislead the public and would respect this week's court

ruling that he had broken the law.


JACOB ZUMA, SOUTH AFTRICA PRESIDENT: The matter has caused a lot of frustration and confusion for which I apologize on my behalf and on behalf

of government. I urge all parties to respect the judgment and abide by it. Let us use the judgment to build and further strengthen our democracy.


QUEST: The construction company linked to the deadly overpass collapse in Calcutta now is facing charges of attempted murder and criminal conspiracy.

These have brought in 12 people from the company brought in for questioning. At least 24 people were killed when the overpass came

crashing down on Thursday.

A despite over security means Brussels airport has not reopened as planned. The airport had hoped to be operating some passenger flights on Friday.

Instead, Belgium police have threaten to strike unless tougher security procedures are put in place. The airport's been closed since last week's

suicide bombings in the departure hall.

The former German Foreign Minister, Hans-Dietrich Genscher, has died. A giant of German politics, he played a pivotal role in the fall of the focus

is and later saw the reunification of Germany, said to be his ultimate professional goal. He was 89 years old.

The future of electric cars is looking bright. That's the tweet from Elon Musk. After he said there were 200,000 orders for the new Tesla. Just 24

hours and bringing in more than $7 billion in sales. This is it. It's the Model 3, which tell Tesla is going to introduce. It was really announced

on Thursday night in California. The price is $35,000. So it's targeting entry level buyers. It can travel up to 350 kilometers on a single charge

of its batteries. And of course the reason people love Tesla is the performance. It goes 0 to 60 in under 6 seconds.

Available at the end of 2017. If the dates -- it may slip the date, but when the Model 3 comes into production and on the road, it will round out

the growing line. So the model 3 is in the middle. But first, you had the model S. It started at around $70,000. But by the time you got to it, it

was 100,000 on the road right now. Which gives you an idea of the popularity, a 100,000 for the Model S. Then you have more recently the

model X, the SUV model. That comes in at around $81,200. The delivery is in the second half of 2016. So yes, more than one person has pointed out,

you have the "S" and the "X" and the 3 in the middle so you know whether it's going to make. Musk says his new car is the best you can buy for the



ELON MUSK, CEO, TESLA MOTORS: I want to emphasize that even if you buy it no options at all, this will still be an amazing car. You will not be able

to buy a better car for $35,000 or even close even if you get no options.


QUEST: John Davis is the Host and Executive Producer at MotorWeek.. He joins me now from Owings Mills in Maryland. So, sir what do you make of

the Model 3?

JOHN DAVIS, CREATOR, HOST AND EXECUTIVE PRODUCER, MOTORWEEK: Well Richard, I think he hopes it'll be as popular as what you referred to with check

turning the three around. Surely, I think he's off to a great start. The challenge was to show everyone a car that would look like an entry-level

luxury car. And maintain that Tesla mystique I think the profile of the car does that. The front of the car kind of plain and reminds me of an old

Renault Caravel, anybody that's into old cars will know what that looks like. But I think he's off to a good start. The flush door handles and

the big screen on the inside, the touch screen, they're all very reminiscent of the more expensive "S" and "X." so right off the bat it

looks pretty good at this point.

QUEST: OK, so the model, it looks good, at $35,000, it's priced into that area correctly. And I guess the old issue is, you know, do you really want

to have a car that everybody else has a car of, of the same car? Wasn't the beauty of Tesla, the 80,000, the 50,000, it was an elite car.

DAVIS: Well, you put your head right on the nail, because to maintain that kind of exclusivity, I mean, Elon Musk made Tesla a premium brand in

basically a decade. That's unheard of. And to maintain that while you're now going to start making, say, 100,000 of these a year and who knows how

many of the small SUV that will go with it, that's very tough. Even if you look at the Europeans who have been doing this for a long time, take BMW.

Their 3 series, generally considered the car in the compact European class done in this country. They sell about 100,000 of those a year, but that's

kind of where it tops off. So he's got a big challenge to sell that car. And anything approaching $35,000.

QUEST: What's his biggest challenge besides selling the vehicle in terms of his ability? Because the issue with Tesla has traditionally been the

ability to make the car, to produce it in volume, particularly obviously the batteries. We know about the battery factory that's coming online. So

how difficult will it be to create the model, to build the model 3 in the volumes necessary?

I don't think to actually build it it's going to be too much of a problem. The plant that he has used to be run by Toyota and before that GM. It

could make a 500,000 vehicles a year, so he's got the space. The problem's going to be after he sells the vehicle. Are there enough chargers to cross

the country? Will people that have an "S," a much more expensive car, feel like they should be first at line at some of his super charges before the

folks with the middle car? Maintenance, he doesn't have a traditional dealer network with service departments. They had some problems with the

early S. Now you're talking about a much bigger audience. So I think most of the issues may come after the cars are sold.

QUEST: Finally, sir, are you waiting to drive one?

DAVIS: Yes, I am. Although I must say, like most electric cars, it tends to be a little underwhelming, except for the speed aspect. And that's

something that Tesla has done very well. Most folks before they came along thought electric cars were slow. And of course they're not. They

instantaneously make power. So I guess, I am.

QUEST: When you're next in New York, please come and join us here. We need to go for a spin in a car

DAVIS: Anytime Richard, thanks for having me on.

QUEST: You choose the car. You do - wait, wait - I'll choose the car and you do the driving.

DAVIS: You choose the car.

QUEST: the driving. And the fastest Tesla goes is 250 kilometers an hour and will run you more than $100,000. The all electric Nissan Scoot has

been liken to a jump up golf buggy. It's targeting drivers in crowded cities where space is a premium and there's no real need for speed. Maggie

Lake has been scooting.


MAGGIE LAKE, CNN ANCHOR/CORRESPONDENT: If you're sick of driving around for hours looking for a parking spot, or spending a bunch of money filling

up your car. Nissan thinks they have the vehicle for you. Where Rachel, what are these things? Are they golf carts?

RACHAEL NGUYEN, DIRECTOR, NISSAN FUTURE LAB: It's a vehicle, I'm happy to introduce for the first time on the streets of New York our Nissan new

mobility concept.

LAKE: It kind of looks like a toy or like a go-cart. What can this thing do?

NGUYEN: It's a production vehicle. Its top speed is 25 miles per hour, and it's electric, no gas, 100 percent electric. So part of the cool

factors our scissor doors.

LAKE: Very nice. This is very race car feeling I think.

NGUYEN: It's pretty simple.

LAKE: All right, get in and go.

This feels good. I have to say. You definitely have the bumpy feel. Where does this fall between bike and Zip cars out.

NGUYEN: This car's really evolved to be get out in the city.

LAKE: So this is more in city all day in and out, parking quickly.


UNIDENTIFIED MALE: I want to drive that.

LAKE AND NGUYEN: You like it?


UNIDENTIFIED MALE: This looks interesting. I don't know about my 6 foot frame fitting in there.

LAKE: Well, let's see.

NYGUYEN: How does it feel?

UNIDENTIFIED MALE: It feels good. Put the pedal to the metal.


QUEST: Absolutely got to try one of those. Look, when we come back, the Starwood love triangle is over and Marriott is left holding the price.


QUEST: China's Anbang has dropped its $14 billion bid for Starwood Hotels and so brings a close to a three-week superb good old-fashioned takeover

battle. A whirlwind moment that could have lured Starwood stray from the likely marriage with Marriott. Now creates a union of the world's largest

hotel group .So this is how the dalliance, the dance, the courtship, how it all came together, after Starwood made known it was looking to settle down.

First of all, Marriott moves in with a really nice bid in November, offering $72 a share outside the bedroom of Starwood. Starwood accepted,

but they weren't exclusive, not just yet. They were being a little promiscuous in the hotel business. Because Anbang managed to come in and

swoop an unsolicited offer higher than Marriott's $78 a share. Now you've got good old-fashioned love triangle. So Marriott sweetens the deal, and

goes up to $79.53. But no, not to be thwarted with the flowers, Anbang comes straight back in again. More flowers, more noise, $82.75 a share.

And suddenly it looks as if a marriage is on the cards between Anbang and Starwood, poor old Marriott. Then all of a sudden, out of nowhere, in the

last 24 hours, Anbang takes its flowers away and jumps ship. It leaves Marriott and Starwood to potentially consummate their deal with an

agreement that says do not disturb. Starwood shares fell nearly 5 percent on Friday. Claire Sebastian has been following this. Did you see it

ending like this?

CLARE SEBASTIAN, CNN CORRESPONDENT: I don't think anyone saw it ending like this Richard. This came as a huge surprise.

QUEST: Anbang raised the price got rid of Marriott twice and then pulled out.

SEBASTIAN: You have to read between the lines essentially to see what was going on here. The last bid that came in from Anbang, which is just this

week, just days before they came in -- before they walked away, was nonbinding. This was a crucial point .it was the nonbinding offer. Their

first bid was binding. This one, Starwood said it was still discussing non-price terms of that deal with unbind. So we can only assume that

they'd never reached a final agreement on that.

QUEST: Anbang says it's withdrawing the offer on market conditions. What do they mean?

SEBASTIAN: That was all they gave us, those three words. Various market considerations.

QUEST: What did they mean?

SEBASTIAN: Well, honestly, we don't know for sure. A source close to the company told us there could be unforeseen costs. As they see it it would

be execution of the deal. But Anbang is staying extremely tightlipped. They're not talking publicly about why. We do have a little bit more color

that came from the investor call this morning from the Starwood CEO, Tom Mangus. He said that this was a very serious business, a very serious

offer, much more than just a dalliance and you don't discount the party that turns up with a fully financed offer of more than $13 billion share.

QUEST: So Starwood and Marriott together, these are just the Starwood Hotels, this is just New York, you've got the Jersey Starwood properties,

the "W" and the likes, and you've got the ones -- and of course you've always got the Marriott properties that are also in New York. Look at

that, you've got Starwood. I mean, that's extraordinary. Look at the Midtown coverage that the two have got. What does it mean for those people

in the Loyalty Program?

SEBASTIAN: This is the whole point in this entire thing. This M&A battle that we saw playing out was not just about the final price. This is an

enormous boom to both Starwood and Marriott. Because of their preferred rewards customer loyalty schemes, there's 55 million people belong to the

Marriott rewards points. Over 21 million to the Starwood preferred guest scheme. Together that's more than the population of the United Kingdom.

So this is an enormous potential for these two companies. They're not only trying to increase their own market share by giving their customers more

choice, but they're trying to steal away from likes of ISG and Hilton and the other major hotel chains out there.

QUEST: So I make the combined -- 76 million. Which is the population roughly of the United Kingdom of Great Britain and Northern Ireland. Or

the population of Texas State and New York State combined. That's powerful.

SEBASTIAN: Puts it in perspective.

QUEST: Excellent, thank you very much. Good work on following this. Good old-fashioned takeovers. Thank you.

When we come back, Pamela Anderson is going to be joining us and giving us a very different look at the Playboy playmate and how her roles have

changed in recent years. After you've had a moment with "MAKING, CREATING, INNOVATING."


QUEST: She is the sex symbol of a generation. Racy stuff on QUEST MEANS BUSINESS. Be still your beating heart. Pamela Anderson will always be

known for her role in "Bay Watch." In the iconic red swimsuit. Decades later, her newest film is called "Connected" and it explores how women of a

certain age grapple with aging and self-perception. All in a world dominated by social media and technology.


UNIDENTIFIED FEMALE (voice-over): In the new world, you will be reinvented. Your identity evaporated. You will be blank the past. And

let it go.

PAMELA ANDERSON, ACTOR: I want to feel connected.


QUEST: I want to feel connected. Pamela and the filmmaker, Luke Gilford, join me in the C suite. Ms. Anderson told me the subject matter in the

film is something she identifies with personally.


ANDERSON: Firstly, someone in my business and someone who's gotten the attention that I've gotten for all different reasons, that I thought it was

something interesting to touch on, to talk about aging and, you know, searching for meaning. And now losing your husband. You know, your kids

are going off to school, you feel alone. There's this really kind of vulnerability we wanted to explore. And I love he came to me with this

project because I haven't had the opportunity to be able to do something like this in my career. So I was excited to really get raw and ugly.

QUEST: Were you nervous?

ANDERSON: I was nervous, yes, in a few places. I caught the screen every once in a while and some of the darkest moments or the parts I thought were

less beautiful or maybe were the most beautiful. Because of the way he shot it. And knew that Luke has such -- this incredible director and

incredible photographer. And has this really kind of sci-fi thing and I knew in the ugliest moments it would be really interesting and pretty.

LUKE GULFORD, FILMMAKER: Also, as you see her in a way, and a side to her no one's seen before. And that's something we wanted to work on together.

We worked hard at pulling out this vulnerable performance. It's exciting for people to see this.

QUEST: How did you make her vulnerable?

GILFORD: Well --

ANDERSON: He yelled at me.

GILFORD: I think we built a lot of trust together. We also, we worked hard with acting classes together. We worked on the script together. I

think you'll see a side to her you've never seen before. She's in a scene without makeup on.

QUEST: Were you really without makeup?

ANDERSON: I was really without makeup. I barely wearing any makeup now.

QUEST: The contradiction in all of this comes perhaps in the film and what you're talking about now, comes at the same time, give or take, as you do

the last nude of "Playboy" and the last cover of "Playboy." What difference was there for you -- I'd read the stories about how you were

throwing up the first time. Is that true?

ANDERSON: it is true. Yes, I was very nauseous when I did my first "Playboy" cover. I hadn't done anything like that. I was painfully shy.

I am still kind of shy, which is hard to believe, but -- and yes, I learned that really nobody cares about what you look like. Nobody cares if you're

running down the street naked. You finally realize that really I'm my own worst critic and my career has just been a bizarre journey and doing the

last cover of "Playboy," which is my 15th cover. Didn't expect Heffner to call me and say I have to have you on the last cover. I asked my kids to

make sure it was okay with them, and sad I have to do it.

GILFORD: We love that, you know, that's really what people remember of her this Barbie Doll image this larger than life kind of image that is

associated with Pamela Anderson. And we wanted to show the more human side, the real side of what it's like to be someone as they're aging and

how they deal with self-perception. In the film, she turns to technology to try to answer some of those questions. So that is something we're all

kind of grappling with now, the era that she became famous in. Social media and things like iPhone didn't exist.


QUEST: Pamela Anderson on a Friday evening. You don't get that on other business programs. You don't get a Profitable Moment after the break



QUEST: Tonight's Profitable Moment as Pamela Anderson shown on this program sex always sells. And indeed proving that we're avoid to going to

the groin. That's where were going to talk about the Tesla story. The naysayers are out in force. No sooner has Musk announced the Tesla Model

3, and incidentally if you look at the way it's been written the three. It's designed specifically so that it creates an "E." he couldn't get "E"

therefore he's gone for "3" and it still creates the word sex. But the naysayers are out in force. There are already saying, "he can produce the

car and enough numbers. They'll be battery problems. They'll be issues with those who have got more expensive cars and maintenance. Oh, he's

never going to be able to sell it. Oh, the share price will go down." Well guess what? The share price is up one percent or there about year to

date, 26 percent over the last 12 months. And the reality is whether sex or otherwise they are lining up to buy a Tesla. So a Model 3 at $35,000,

with all the teething problems that will come along is likely to be a body spurning, roaring success. And that's not my view that's the common view.

So to the naysayers who don't want any sex in their motoring, don't go for the Model 3.

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead I hope it's profitable.

Let's come together on Monday.