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QUEST MEANS BUSINESS

SpaceX Rocket Explodes on Launch Pad; Hermine Now a Hurricane, Bearing Down on U.S. Coast; Apple Plans to Bring Money Home; KLM: Tim Cook Slams EU Tax Ruling"; Actually, We're an Airline; Trump Pushes New Immigration Agenda; Trump: No Amnesty for Undocumented Immigrants; IMF Chief Urges "Forceful Action"; Irish City Divided Over Apple Tax Ruling; Visits Apple's Irish Headquarters

Aired September 1, 2016 - 16:00:00   ET

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


RICHARD QUEST, CNN ANCHOR: The bell has rung, the gavel has been hit, the market is closed. The Dow Jones has finished up -- hang on -- finished up

16 points. It was largely down for most of the session but it has just managed to eke out a short gain in the final moments of trading. It is of

course today, Thursday, the 1st of September.

Tonight, three, two -- oh, dear. SpaceX blows up a rocket at Cape Canaveral.

Take your money and go home. Apple may move billions back to the United States following the tax bill in Ireland.

And is it a mineral? Is it a vegetable? What is KLM? And why do so many people have no idea that it's an airline? We'll be talking about that in

the program. I'm Richard Quest. We have an hour together. And I mean business.

Good evening. Today we had a vivid reminder, if such we need, that the path to space is difficult, dangerous, and expense. A rocket -- enjoy the

pictures. That was a rocket. owned by SpaceX, which exploded on its launch pad. The cause of the explosion is still unknown. It happened

during a pretest firing. There's a second explosion. Thank god, nobody was injured. The site of the explosion is the Space Launch Complex 40.

SpaceX has launched 25 rockets from that site over the last six years. Those rockets have carried satellites and supplies to the International

Space Station. CNN's Rachel Crane who covers space for us is following the story. What do we know happened? Those are extraordinary pictures.

RACHEL CRANE, CNN CORRESPONDENT: Just extraordinary. You know, SpaceX isn't revealing many details about the explosion yet. Because this is

still very early on in the investigation. They described it as an anomaly. Elon musk, the founder and CEO of SpaceX, tweeted recently saying that this

incident occurred during the propellant loading, which is typically a rather routine procedure and rather simple.

QUEST: Do we know whether this was one of the rockets that had been reused?

CRANE: No, it was not. A rocket is set to be relaunched at the end of this year. That was not this rocket. Of course that's all because Elon

Musk's main goal is reducing the cost of space exploration so we can one day put people on Mars. A huge part of that is being able to reuse

rockets. So he's successfully landed several rocket boosters this year on a moving ship intended to be reused. But this rocket was not one of those,

Richard.

QUEST: They've had a couple of dozen successful launches, so they know what they're doing, and they could hardly be called fly by night in that

sense.

CRANE: No of course, everybody is rooting for SpaceX. I mean they have a phenomenal track record. They had an explosion last year in June 2015.

That was a cargo mission that was headed to the International Space Station. But of course, as you pointed out, space is hard. There are

going to be these obstacles along the way. But SpaceX does have an incredible track record.

QUEST: Tell me about what it was carrying.

CRANE: So on this rocket there was a satellite that Facebook was one of the partners in that satellite. It was supposed to be beaming internet to

Africa once it was launched. Unfortunately, it won't be launched, it was destroyed, the payload was destroyed. But it's one of Facebook's main

initiatives, is to bring the 57 percent of the world that is not online, online via satellite.

QUEST: I saw mark Zuckerberg's statement.

CRANE: Yes.

QUEST: I'm not sure whether he intended to sound sort of mealy mouthed about it, but he talks about SpaceX's launch failure destroyed our

satellite. Do you think that's just a poor choice of words or do you think he's making a point?

CRANE: No, I think it must be a poor choice of words. I know they've been working together to try and pull these missions off. I'm sure that -- you

know, it's very early on. Maybe everybody is still -- emotions are running high. But I have a feeling they'll be able to successfully work together

to get these satellites off the ground.

QUEST: Rachel, when I look at these pictures, and they're mesmerizing to watch, one is immediately aware of the devastating consequences of failure

in space exploration.

CRANE: Well, with this test launch here, this is a routine test fire that they do because there was an upcoming launch. This rocket was supposed to

be launching this Saturday from Cape Canaveral. So they're always doing tests to make sure that everything is running smoothly. Of course, because

this was planned, there was nobody on the launch pad, so nobody was injured. Of course, you know, as I pointed out earlier, SpaceX's main goal

is to put boots on Mars. One of the major milestones into making that happen, is that SpaceX is one of the commercial companies that has been

contracted by NASA to bring people back to the International Space Station in 2017. Of course they're going to prioritize safety over making that

2017 goal.

QUEST: Thank you for giving us your perspective. We'll talk more about this. Space has always been a challenge.

(BEGIN VIDEO CLIP)

JOHN F. KENNEDY, FORMER U.S. PRESIDENT: We choose to go to the moon in this decade and do the other things. Not because they are easy, but

because they are hard. Because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one

that we're willing to accept, one we are unwilling to postpone, and one we intend to win.

(END VIDEO CLIP)

QUEST: Kennedy's words, 54 years ago, never truer than today, and particularly given a new relevance with the commercial exploitation and the

commercial ventures into space. Now that SpaceX's rocket has been turned into star dust, there is a whole constellation of companies that are

involved.

Let me show you. The rocket was carrying the Amos 6 satellite. The Amos 6 is owned by the satellite feed operator Spacecom. It was also of course,

Facebook is involved, and the French satellite company Eutelsat. The three of them, they would all have shared the satellite capacity and to some

extent the cost of the satellite and therefore the insurance risk of it. SpaceX, Amos 6, and these three.

The goal was to get Africa online. And that's part of internet.org's initiative. Mark Zuckerberg said he was deeply disappointed. Facebook

will rely on other technologies, as we were talking about. SpaceX is also taking over part of NASA's role along with all these other companies.

Boeing, SpaceX plans to deliver astronauts to the international space station. SpaceX's Elon Musk is looking further, hoping to land people on

Mars by 2025.

You start to get an idea of the different companies involved and the variety of companies. You have the traditional, Boeing and NASA. You have

the newbies, like SpaceX, but you have these companies who have no relationship to space, per se, like Facebook. Miles O'Brien has covered

NASA for years. He's CNN's aviation analyst and joins me now. Miles, in this part of our discussion, I really want to focus on this idea of risk

and reward, challenge and the difficulties of turning around the culture to a private enterprise culture.

MILES O'BRIEN, CNN AVIATION ANALYST: When you have a government monopoly for as many years as we've had in the space realm, the transition becomes

very tricky. You know, the analogy I always like to go back to is, you know, imagine if the internet were never opened up to the public until late

in the game. What would have happened? How would Silicon Valley -- what could Silicon Valley be right now? Probably some farms. This is the same

kind of transition. The government has created a certain amount of infrastructure and capability and now is trying to turn it over to the

private sector. Interestingly, a lot of the people at the top of these companies have Silicon Valley roots. I've talked to Elon Musk about this

many times, and he'll tell you time and again, this is a lot harder than software.

QUEST: Right, and I thinking today also of the Virgin Galactic, which of course, tragically had an accident in 2014. And on that occasion, Richard

Branson reiterated this idea of, it's not easy, there will be setbacks. Do you think that these setbacks are the inevitable price we must pay for

this?

O'BRIEN: Absolutely. As President Kennedy said, we're doing it because it is hard. The question is, can the business flourish in that sort of

environment? With that kind of risk? Now imagine, when the day comes, it won't be too long from now, whether it's Virgin Galactic or another player,

when some deep pocketed tourists strap themselves into one of these rockets. We'll be holding our breath, won't we. Hoping that goes well.

If one of those incidents turns into what we saw today, was that going to mean for the future of commercialization of space? The public has to

really understand the level of risk here and understand what we're getting into. The early days of aviation, there are a lot more crashes than we

have now.

QUEST: Right, but that's fascinating, because if you look at the Apollo that blew up, and you look at the two space shuttles that didn't make it.

In those cases, there was a feeling of whatever had gone wrong, it was government-led, therefore it needed an investigation, and properly so. But

do you think there was ever the question that private sector standards would not be as high when it comes to these issues?

O'BRIEN: The idea of having NASA get out of the business of being right on top of these contractors and being prescriptive about how they build it, is

generally good, because that's where the cost gets really high. If you have to answer to a NASA inspector every step of the way on the factory

floor, it's a much more expensive rocket.

Allowing The Likes of Elon Musk to do their own thing in the realm of safety, there is inherently in theory, more risk there. However, you know

for certain that a guy like Elon Musk and SpaceX knows it is certainly not good business sense to cut the corners on safety. But finding that balance

is the really tricky thing here. Because ultimately -- here it is right now to get anything into space, any human being into space on a human-rated

craft, $10,000 per pound. Everybody says the only way you'll make it a viable business enterprise is to decrease that by orders of magnitude, make

it $1,000 per pound. And that puts pressure on safety.

QUEST: So when you see events like today, dramatic pictures, when frankly there was nothing particularly revolutionary about the goal that they were

aiming for today. They were putting a satellite up there. What does it make you think?

O'BRIEN: It's still an experimental thing. We're deep into the space race, but we haven't had the tempo of launches to get to the point where

this could be called anything close to routine. It's not routine. We're pushing physics. We're pushing engineering. We're pushing material

science. Every time we push one of those rockets from zero to 17,500 miles an hour in 8 1/2 minutes. It's very intolerant of the slightest mistake.

QUEST: We're grateful Miles, that you've come to talk to us and put it into perspective. Thank you, sir.

O'BRIEN: Your welcome.

QUEST: Miles O'Brien, our space analyst.

Let's stay with the Cape Canaveral itself, because after today's diabolical it may soon be hit by extreme weather. A short time ago, Hermine was

upgraded to a hurricane. Landfall is expected in Florida within hours. I'm Hermine, I'm thinking of had he my -- Hermione, but it's Hermine.

The meteorologist Tom Sater Is at the CNN World Weather Center. How bad is Hermine?

TOM SATER, CNN METEOROLOGIST: Its category 1, not a massive storm. But you have to remember one very important thing, Richard, we have been

looking at a historic hurricane drought. We haven't seen a landfall hurricane in the U.S. since 2005. That was Wilma, that made landfall in

Florida. The same year that we had Katrina. I mean, that's 11 years.

Statistically to go 11 years without a landfall in the U.S., is like once every 270 years. Now the governor's concern because since then there are

many new citizens. Those that were kids during Wilma, in 2005, are well into their teens and that have never experienced something like this.

But there's a few more factors here. Notice the red box, tornado watch box. These systems spawn tornadoes, and we'll see them, there's no doubt.

Right now it's 80 kilometers south of Apalachicola. I went ahead and put that on here, but unfortunately it's the topography right now, and the

natural bend in the coastline that is going to be a big concern. Where the system is positioned, as you see the bands move in, Richard, it will throw

up a 2 to 3-meter storm surge. Typically, we wouldn't have that much with a category one hurricane, but it is moving in.

QUEST: Tom, let me interrupt you. I'm seeing that governor Pat McCrory has declared a state of emergency in North Carolina. So this is obviously

having potential for northward shift.

SATER: And it will. The trend, however, Richard, has been westward. And that's a concern. In Florida, 51 out of 67 counties are under a state of

emergency. There is a cold front coming in across Georgia and the Carolinas. When these two systems meet it's going to enhance the rain

fall. We've already seen Tampa getting 10 inches, 250 millimeters. They're going to see much more. But here's your Carolina coastline. And

that's why it's a problem. It's going to move up a little further.

QUEST: I'm guessing you won't have much rest over the next 48 hours. Stay on your duties, Tom.

As we continue our nightly conversation tonight, Apple's chief is not mincing at words when it comes to the EU's multibillion dollar tax ruling

against his company.

Tim Cook is using very un-chief-executive language to describe his feelings. We'll have that next on QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: An angry Tim Cook says the EU's huge tax bill is, in his words -- you may want to cover your ears if you're of sensitive disposition -- total

political crap. The Apple chief exec told the "Irish independent" newspaper the company did nothing wrong. He thinks there's something else

behind the EU's decision to fine Apple more than $14 billion in back taxes. He says, "I think that Apple was targeted here...And I think anti-U.S.

sentiment is one reason why we could have been targeted." However, the EU Competition Commissioner denies any political motive.

(BEGIN VIDEO CLIP)

MARGRETHE VESTAGER, EUROPEAN COMPETITION COMMISSIONER: This is a decision based on the facts of the case, looking at Apple's sales international.

How they are arranged within Ireland, and with the profit recorders there, how they're taxed. That's the case. And the thing is more in general,

that's actually the enforcement part of the competition portfolio does not really fit into any political picture.

(END VIDEO CLIP)

QUEST: Now Cook also said he's ready to transfer billions of dollars' Apple is holding offshore back to the U.S., and that could happen next

year. Paul la Monica is with us from the Stock Exchange. If Apple transfers the money back to the U.S., it would be taxable in the U.S.,

wouldn't it?

PAUL R LA MONICA, CNNMONEY CORRESPONDENT: It would, and at a higher rate, Richard, which is precisely the reason why so much of Apple's I-mountain of

cash is parked overseas. It's about $230 billion or so of cash overall, a big chunk of that is in European bank accounts.

QUEST: But that would create a jurisdictional nightmare, because the Irish would say, you know, you're now going to get -- the tax should have been

paid in Ireland, and you should have taken your tax credit to the U.S. against U.S. taxes, not the other way around.

LA MONICA: Exactly. And Apple and Ireland have already said that their relationship is something that they feel is beneficial to both the company

of Apple and the nation of Ireland, and it's been going back for decades. We have a story on CNNMoney today about many citizens in the city of Cork

who feel that Apple is being treated unfairly. One fishmonger said basically if it weren't for Apple and the pharmaceutical industry, that

city and much of Ireland would be in deeper trouble than it is right now.

QUEST: And they're still always the possibility that other countries where the sales of the actual Apple products, Italy, Germany, Austria, wherever

else it might be, they may jump on the bandwagon and say, no, Ireland, we want the tax. I mean, Apple is still going to have to pay the tax

somewhere.

LA MONICA: Apple is likely to have to pay a higher amount of taxes. They are going to appeal the EU's decision though. Ireland has not yet made up

its mind on what it's going to do. But there's a lot of expectations that they will join Apple in appeal as well.

QUEST: Paul, a quick look at the market. It took me by surprise, down all day, then at the last minute, last couple of minutes, ekes out this small

gain. Did anything weird happen?

LA MONICA: Nothing really weird happened, Richard. I think there is still a lot of anxiety and nervousness about tomorrow's big jobs number. We're

either going to get confirmation that the U.S. economy is in much shape than the rest of the world, or maybe some bad news, and that wouldn't be

good for the markets that have lately rallied over the past few months, back near all-time highs, on this perception that the Fed can go back to

normal, raise rates because the U.S. economy's in Ok shape.

QUEST: Paul, good to see you from the New York Stock Exchange.

The oil price dropped. That happened today. It hurt European shares. Most of the major indices ended lower, except the CAC and even that just

eked out to only a very small gain. De facto it was off as well. There was unexpectedly strong manufacturing data in the U.K. Boosted sterling

and that pushed the FTSE lower.

I have a little test for you. If I say the letters KLM, do you know what I'm talking about? Well, you know, the cognoscente amongst you may say,

Koninklijke Luchtvaart Maatschappij -- which if you lose all these words and just focus on this bit, you end up with KLM, which is Royal Dutch

Airlines. And because, they say, nobody seems to know what they do or who they are.

They've launched a new ad campaign in the United States, simply telling people KLM is airline. And the ads are poking fun at the fact that the

carrier, apparently is not widely known. Perhaps part of image problem involves what KLM stands for. Unless you're Dutch, you probably can't

pronounce this very easily. And the company involved doesn't mind. It does want you to do that it is an airline.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm coming in for a landing. Wheels down. KLM wants you to know one thing. It's an airline. It's an airline.

(END VIDEO CLIP)

QUEST: It's an airline. Koninklijke Luchtvaart Maatschappij. We talked to the streets of New York to find out if people knew what it all meant.

It's an unscientific poll that's very scientifically showing whether or not they know it's an airline.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: KLM, king something, maybe?

UNIDENTIFIED FEMALE: A clothing story or something?

UNIDENTIFIED FEMALE: KLM? A bank?

UNIDENTIFIED FEMALE: I don't know.

UNIDENTIFIED FEMALE: It looks like a TV station. It's an airline.

(END VIDEOTAPE)

QUEST: One person knew. Joining me now is Eric Caron, the U.S. general manager for Air France-KLM. Thank you, sir. Why the need for this? I was

surprised that people didn't know it's an airline.

ERIC CARON, U.S. GENERAL MANAGER, AIR FRANCE-KLM: Yes, I think that you made the right points. KLM as a name is not an obvious name for an

airline. And we have conducted recently a brand study just to understand where we stand towards the brand. It was actually quite surprising that a

lot of consumers do not know that it is an airline. So that was the starting point. And then we said, for KLM, the U.S. market is so

important, we're investing a lot. We're launching new routes like Miami to Amsterdam in the coming months. We have to ensure that this brand has

better awareness on the markets.

QUEST: You say you have to have better awareness. But the moment you have an advert that says KLM and it has a plane in it and an airfare, I'm sure

there's not a lot of people that know Etihad is an airline or even where Etihad is. What's the significance of people knowing it's an airline?

CARON: We have specificity on the U.S. market, that in the last 20 years, KLM has done some commercial partnership with an American partner, beats

Northwest first and then Delta.

QUEST: That partnership with Northwest was the first groundbreaking JV upon which everything else has been based.

CARON: Exactly. But the consequence is that we ask Northwest and then Delta to commercially represent us on the U.S. market, and that is also

part of the reason why KLM in terms of identity has lost a bit of awareness in the market.

QUEST: And then when you add in the Air France merger and it becomes Air France-KLM, or KLM-Air France, I'm never sure which way around it should be

said. That makes it even more difficult, doesn't it?

CARON: It's all about managing a brand portfolio. And then as you said, it is a challenge. Because you have KLM, you have Air France, you have

Italia, you have Delta, and that is a challenge for this market.

QUEST: Anybody who has flown KLM, and I have on many occasions, will be well familiar with these little chaps. Tell me what they are and why

passengers go gaga over them.

CARON: well actually this is what we called the Delft houses. And we give as a gift to thank our passengers traveling business class after every

flight. And every year we have a new model. And this is quite an obsession for a lot of passengers. They love it, and actually they love

KLM, but this is a kind of symbol of the friendly aspect of our airline.

QUEST: Not only do people like them, but they trade them. They refuse to get one if they've already got one. And they will swap them with other

passengers until you've got them all. And inside there is?

CARON: Liquor.

QUEST: And inside there is liquor. I'm not going to ask you to pronounce the full name of KLM.

CARON: Thanks for that. I'm not Dutch so it's better not to. Just one thing. We consider this campaign is a success so far. More than half a

million people, American people, have seen our campaign in only three days.

QUEST: Half a million have seen it. How many can pronounce what KLM stands for? Thank you very much, KLM, World Dutch Airlines.

As we continue our nightly conversation tonight, we'll turn to the very serious issue of yesterday's visit to Mexico by Donald Trump and the speech

he gave last night in Phoenix. Its QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

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

When Christine Lagarde sends a forceful message to the leaders of China having there for the G20. I'm going to take you to the world most famous

industrialist state. Apple's real European headquarters in Ireland. Before all of that, this is CNN. And here on this network, the news always

comes first.

The pictures tell their own tale. SpaceX says it doesn't know yet what caused its rocket to explode on a launch pad in Cape Canaveral. The

explosion happened during a test firing ahead of Saturday's launch. The rocket was carrying a satellite which Facebook planned to use to deliver

internet access to parts of Africa. SpaceX says no one was injured.

Tsunami warnings are in effect for parts of New Zealand apology a following an earthquake off its coast. The 7.1 magnitude quake struck deep in the

ocean some 560 kilometers' northeast of Wellington. Police are warning to stay away from beaches and shore areas.

Preparations in Florida are underway as hurricane Hermine gets ready to hit the U.S. coast. The storm is expected to make landfall early Friday.

Hermine will be the first hurricane to hit Florida in 11 years, that's a record for the state. A state of emergency has also been declared further

north, in North Carolina.

Dueling protests took over the streets of Venezuela's capital, with pro-and anti-government demonstrations held in Caracas. protests. Opponents of

President Nicolas Maduro are seeking a recall vote and removing him from office. They blame him for shortages in food and medical supplies, rolling

blackouts and a surge in crime.

Mosquitoes carrying the Zika virus has been found in Miami Beach. Florida officials say the positive samples came from an area that was already

designated as a region of local transmission. This is the first finding the Zika-carry mosquitoes in the continental United States.

Donald Trump insists he's still softening on immigration after delivering a speech last night that promised no amnesty for any illegal immigrants in

the United States. The Republican presidential candidate someone said took a hardline stance. He vowed to focus on deporting illegal immigrants, not

on creating paths to citizenship. Mr. Trump did say he would consider alternatives only after a massive crackdown.

Then and only then will we be in a position to consider the appropriate disposition of those individuals who remain. That discussion can take

place only in an atmosphere in which illegal immigration is a memory of the past, no longer with us, allowing us to weigh the different options

available based on the new circumstances at the time.

Scottie Neil Hughes is a CNN political commentator and a Trump supporter. Scottie we're very grateful that you're joining us to talk about this. I

need to understand. From last night's speech, how many people, how many illegal immigrants do you expect would be remaining for this appropriate

disposition of those who remain?

SCOTTIE NEIL HUGHES, CNN POLITICAL COMMENTATOR: Well, I think the number one priority, and it always has been, has been to get rid of all of the

criminals. Those that are repeat offenders, that are not legal citizens here of the United States. Mr. Trump has always said, America first, keep

our families, that includes all families that are here in America, safe. So if you're a criminal and are in this country, for some reason up until

now we have not been deporting all of those criminals back to their home countries and they continue to do repeated crimes here in the United

States.

QUEST: I accept all of that. And I accept that the number one priority is to get rid of the criminal aliens. And then there's the visa over stayers

and then there's the catch and release people, they all go back. But those numbers are a relatively small amount of the, say, 11 million undocumented

illegal aliens in this country. So how many people do you believe will be left to have to be dispensed with or disposed of under this last rule that

he says?

HUGHES: You're sitting here -- you're asking me to give you specific numbers. We don't even know specific numbers of how many are in this

country and what role that they play and how many of them are here, how many of them have had children that are now United States citizens. We

don't know. That's part of the problem, to be honest with you. So Mr. Trump has always said, you know what, we're going to go back to your home

country and make it as easy and as streamlined if you want to come back and join us as a citizen of the United States, we welcome you with open arms

and we're going to do that.

QUEST: With respect, that is not what he said last night. With respect, he did not say we are going to make it as easy and streamlined and

possible. With respect, he said they will have one route and only one route, to apply for reentry. Those who have to seek entry under this new

system will not be awarded surplus visas but will have to enter under the immigration caps to be established. It's not the same thing.

HUGHES: He always said that he was going to build a big wall but put a very big, gigantic door for them to cook back in. I think across the

board, whether you're Republican or Democrat, we have to agree, our immigration system is broken here in the United States. It's too hard.

It's too complicated. It's corrupt. That a part of that 10-point plan is to fix that system so if you legitimately want to be a citizen, he wants to

give you that chance.

QUEST: What I'm desperately trying to avoid in our discussion now is sort of a parsing of words to the nth degree. What I would like to hear from

you, though, is, to those illegal aliens or immigrants in this country at the moment who are not criminals. Who are -- they are not on benefits.

They're in work or they've managed to find work, and they are saying now, what the hell is going to happen to me? What is the answer?

HUGHES: In the past it would be wonderful if we were able to keep them here because they are obviously very valuable part citizens here in the

United States. Unfortunately, those illegals that are not paying into the system are costing the United States middle class taxpayers $13 billion per

year. We are $19 trillion in debt. We cannot afford to be as benevolent so far in the United States. So if they are willing to go back to their

home country and come back in like we were talking about and start paying into the system 100%. That means taxes, not only sales tax but also income

tax, other taxes, depending upon where they live, that they don't continue to take on government subsidies, or anything that is taxpayer funded.

Actually start to pay into system for education, for healthcare, and you're welcome in. That is just the system that we live in. There's 11 million,

like you pointed out, undocumented workers in the United States. There's 300 million Americans right now that are suffering underneath unfortunately

a horrible economic crisis that we're still trying to recover from.

QUEST: So to be clear on this, even if you have been here several decades, if you are -- again, let's put criminals to one side, I take your point on

that, I hear what you say. But to be clear, even if you've been here for several decades, if you are an undocumented illegal immigrant, you are

going to have to leave?

HUGHES: Well, several decades, 1986, you know, Ronald Reagan was supposed to solve this amnesty problem by granting blanket amnesty here in the

United States at that point. That was at 5 million undocumented workers. Now we're up to 11 million undocumented illegals that are here in this

country. Obviously just blanket amnesty does not work. So if they've been here several decades, and more than likely somehow they were attached to

that original 5 million amnesty that was given back in 1986, if they've come since then, why have you not applied? Why have you not tried to hire

a lawyer by this point and get into the system?

QUEST: But the answer to my question, let's say they came in 1990, I'll take your point about Ronald Reagan's amnesty. If they came in 1990,

they'll have to go back. I want one more question.

HUGHES: But why haven't they applied for citizenship since then? Why have they not tried to apply to become a part of the system since that point?

QUEST: I want to ask one final question, which I would love to have your interpretation and your analysis on, Scottie. It's good to have you with

us tonight to go into this in such detail.

HUGHES: Thank you.

QUEST: When I watched last night's speech, I found it to be particularly troubling in some ways because it seemed to me the opposite of giving me

your huddled masses yearning to be free. Do you think the tone was inappropriate?

HUGHES: I think the tone was a sign of leadership of strength. When we said give me your huddled masses, everybody was going through Ellis Island.

We knew exactly who was coming through this country, if they were sick, if they were healthy. We knew who entered the United States. Unfortunately,

we do not have an Ellis Island on the southern border. Maybe that's what we need to set up. But we need to know it. We have an accountability

factor, with the terrorism factor today, where people want to come into our country and harm us. We need to know exactly who is coming into the

country and make sure everybody is paying into the system. Because we just can't afford to be the world's safe haven anymore.

QUEST: Scottie, thank you very much for joining us. Please may I invite you to come back on QUEST MEANS BUSINESS in the future?

HUGHES: Any time, you're quite lovely, I'll be honest with you.

QUEST: There we are, there we are. I would blush if I didn't have makeup on. Thank you very much indeed. David Gergen has been a White House two

more presidents than I've had cups of hot tea.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Hello, Richard. She was quite credible until the last moment, when she said you're so lovely.

QUEST: Oh, geez. I do admit, I found that last question that I asked, I found it disturbing because the tone was so contrary in many ways to give

me your huddled masses.

GERGEN: Absolutely.

QUEST: But does it serve Trump's purpose?

GERGEN: You have to separate out the national interests from his political purposes. I think this has been such a strange, bizarre last couple of

weeks about where he stands on immigration. It seemed he was grown try to soften his stance in order to reach out to Hispanics and to others, to say

I'm more empathic than you think I am. I'm going to have a compassionate and rational system.

And he went down to Mexico City, was welcomed by the president, and for a moment you could envision a president Trump. That was well-executed, well

done. You have to give him credit for that.

But he snapped that. He just cut that memory short by coming back and giving this extremely hard line speech that so distressed you. I'll tell

what you it did politically for him, is it ended once and for all his capacity to really make inroads into the Hispanic community as voters. And

he basically is energizing his base. He's trying to protect his base.

QUEST: You can't get elected only on his base.

GERGEN: I agree.

QUEST: You tell me if I'm wrong.

GERGEN: I don't think he can get elected just with his base. He has to expand the voting numbers. The conventional wisdom is he has to get 40

percent of the Hispanic vote in order to win. A Republican has to do that. He's not going to come anywhere close to that.

QUEST: If he can't get that, white, middle class males, arguably he'll get some females, some white females on board. He might get some African-

Americans on board who do with his position on inner cities. But that's not enough, in your view?

GERGEN: No, it's not. There are two things that could still happen and why he remains in contention. He may be able to get more white voters than

have traditionally voted to come to the polls. There may be a hidden vote here. We don't know. Look at Brexit. There was a hidden vote in Brexit.

People didn't see it coming. That pro-Brexit vote was much bigger than anybody expected. You have to say there is that possibility with Trump.

The other thing is that Hillary Clinton is on the defensive. You know, you never know what's going to come in the next 70 days with regard to Hillary

Clinton. I thought one of his tactical mistakes in going to Mexico and doing all this humpty-dump over immigration yesterday was, he took all the

headlines away from Hillary. He could have had stories out there for the last 4 to 5 days asking the Clinton Foundation, the emails and all the

rest.

QUEST: The immigration speech, the core of it, the criminals, the visa over stayers, that's the easy bit to deal with. But the core of it is

this, then and only then in several years' time when we've accomplished all our goals, then and only then will we be in a position to consider the

appropriate disposition of those who remain.

GERGEN: Right. Ok. Now, listen. My math, it may be wrong, but let's start out with the proposition, there are an estimated 11 million who are

here, right? She said, and Trump has said, we think there are about 2 million people with criminal record out of that 11 million. They are going

to go. We're going to have a deportation force. Now others say the number with criminal records is actually much, much smaller than that. That's

what the Obama -- let's say 2 million. That leaves 9 million people here.

QUEST: Get rid of another million or two of over stayers.

GERGEN: Whatever reason, right.

QUEST: Seven million.

GERGEN: So you got down to 7 million. Those 7 million, as best as I can understand in his proposal, are in limbo. They can either stay as

undocumented individuals who if they get picked up on a traffic charge may get separated from their kids and thrown out. So they're in this never-

never land. Or they can choose to go back. They can choose to self- deport. Go back to central America or Mexico, and hope they can get in again and rejoin their families. And, you know, that idea has been

floating around, it hasn't been accepted on a bipartisan fashion for sure. So I think you've got 7 million people who are basically going to feel

stranded. It doesn't resolve the real issues. It leaves them unaddressed in effect for those 7 million.

QUEST: We're grateful to have you, David.

GERGEN: OK, Richard. Great to see you.

QUEST: As always.

The leaders of the G20 nations, a fine body of men and women, are due to meet in China few days' time.

And IMF head Christine Lagarde has warned they have their work cut out for them.

(COMMERCIAL BREAK)

QUEST: Christine Lagarde says the G20 must be forceful next week in order to stop the world from falling into what she called the low growth trap.

The managing director of the IMF is urging governments to invest in infrastructure and to agree on structural reforms when they meet in

Hangzhou. For the G20 overhauling the global economy, well, anybody who has looked at the G20 over many years, it's all very familiar.

(BEGIN VIDEOTAPE)

QUEST: The G20 isn't a group of 20 at all. It's actually 19 countries plus the European Union, and often an assortment of guest countries invited

along. The idea began in the late '90s when the Asian financial crisis rocked global markets. The first G20 was held in Berlin in 1999 and

consisted of finance ministers and central bank heads. Then almost a decade later, the world faced a far greater challenge, when the subprime

crisis triggered a near total financial collapse.

HENRY PAULSON, FORMER U.S. TREASURY SECRETARY: The stability of the financial system is of paramount importance. And today, there is a

heightened awareness of the fragility of the system.

QUEST: Fear was palpable. The G20 was turbo charged. Heads of government from member nations were called to action and met at crisis meetings in

Washington, London, and Pittsburgh. This was the golden age of the G20.

IAN BREMMER, PRESIDENT, EURASIA GROUP: For a brief flicker of a moment, the world was experiencing such incredible instability, the worst recession

that we've seen since the great depression, that everyone wanted to at least show the public that there was a level of agreement.

QUEST: During the financial crisis, the G20 leadership pledged about a trillion dollars in new stimulus. That goal was roughly met. But other

proposals went nowhere.

ROBERT KAHN, COUNCIL ON FOREIGN RELATIONS: You have to be honest and say it's a pretty poor grade over the last several years in terms of delivering

on these commitments that they've made.

QUEST: There's been a proliferation of G's in global diplomacy. You've got the famous G7. Then there's the G10, the G15 of developing countries.

There's even a G77, but frankly that's a bit big to be of any use. In reality, the G20 is thought to be the most inclusive and perhaps useful

since it represents around 90% of the global economy. All in all, there is some merit in the G20.

KAHN: I call it muscle memory. This is that countries meeting together get that practice of working on problems. And so should we have a major

crisis again, that infrastructure will be in place and ready to be utilized.

(END VIDEOTAPE)

QUEST: The G20. Now we'll continue our evening conversation. We're talking about apple and Cork and the little town that could, after you've

had a chance to make, create, oh, yes, and innovate.

(COMMERCIAL BREAK)

QUEST: The Irish cabinet is to meet again on Friday to decide whether to appeal against the EU's ruling on Apple's tax bill. Whatever happens,

Apple says it is committed to its headquarters in the city of Cork, from where CNN's Phil Black sent this dispatch.

(BEGIN VIDEOTAPE)

PHIL BLACK, CNN CORRESPONDENT: Sprawling, shiny, and still growing. This is Apple's Cork campus. A hub for almost 5,000 jobs, stretching between

one of the city's more deprived neighborhoods and some of Ireland's famous green pastures beyond.

Our camera was invited in to see what Apple was built here and what's still to come. A new wing will soon rise above this earth, accommodating another

1,000 workers. We were allowed to see the grounds. We were not allowed to talk to anyone about the EU's order for Apple to pay EUR 13 billion in

taxes, said to have been avoided through a deal with the Irish government.

But this tour carries a not very subtle message, like the image of its founder, Steve Jobs, visiting the company's original operation on this site

more than 35 years ago. Apple's message, all of this has nothing to do with tax dodging, rather it's proof that Apple is committed to Ireland,

that it's been here for decades, investing, changing people's lives. Here in Cork, it is very hard to find people who disagree with that.

On the streets of the city, there is an overwhelming sense of defiance. Many here believe the EU has overstepped, and they credit Apple with first

transforming Cork, and later helping the city recover from the dark days of the 2008 financial crisis. Pat O'Connell has been selling fish here since

the '60s. He says many of his customers work for Apple.

PAT O-CONNELL, FISH MERCHANT IN CORK, IRELAND: It's a phenomenal investment. It is now a huge part of Cork. Without Apple through this

recession, I don't think Cork would have survived as well as it did. We had two things which saved us, one was Apple, the other was our

pharmaceutical industry. Both very much foreign direct investment.

BLACK: Lord Mayor Des Cahill tells me Apple's investment encouraged other multinationals to invest in the region.

DES CAHILL, LORD MAYOR, CORK, IRELAND: We have a lot of the top brands here, Apple, Pfizer, we have a lot of the top brands here, certainly led by

Apple back in 1980, when Ford and Dunlop shut down.

BLACK: You can't escape the view here that Ireland should fight the EU and not take Apple's billions, because the tech giant already contributes

through creating wealth and jobs. But it's not a unanimous view. One of Ireland's key opposition parties, Sinn Fein, says the EU ruling should not

be appealed. Instead, Sinn Fein says Ireland should take the money and put it to good use.

DONNCHADH O LAOGHAIRE, SINN FEIN IRISH PARLIAMENT MEMBER: There's no question that we can continue to be a place that companies such as Apple

invest in and have healthy taxation base and invest in services.

BLACK: It is likely the EU ruling is just one step in a long legal process as Ireland and Apple send their lawyers to court. They both deny doing

anything wrong and both fear the ultimate consequence will be reduced foreign investment in a country whose economy now depends on it. Phil

Black, CNN, Cork, Ireland.

(END VIDEOTAPE)

QUEST: Profitable Moment, next.

(COMMERCIAL BREAK)

QUEST: Tonight's Profitable Moment. The picture is absolutely mesmerizing. The blowing up of the SpaceX rocket this morning in Florida.

A reminder that space is risky, dangerous, expensive, and yet it's the future. As Kennedy says, we choose to do these things not because they are

easy, but because they are hard. 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. We'll do it again tomorrow.

END