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QUEST MEANS BUSINESS
U.S. Markets Close at New Records; Physical Stores Still Dominate Retail; World Shops on Black Friday; Trump Transition. French Republicans Pick Their Nominee; Lufthansa Pilots' Strike Grounds Flights; Wisconsin Has Recount Request; Iceland versus Iceland. Aired 4-5p ET
Aired November 25, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
ISA SOARES, CNN HOST (voice-over): And who better to ring in a new record on Wall Street than the big man himself, Santa. The closing bell rang a
few hours ago in New York. Traders took the afternoon off for the Thanksgiving weekend.
It is Friday, November 25th.
(END VIDEO CLIP)
SOARES (voice-over): Tonight: bargains galore. Stock markets rise to record highs on Black Friday.
Take a chance on me: Francois Fillon (INAUDIBLE) tells France to have faith in his economic plan.
Cold War over Iceland: it's supermarket versus nation state.
I'm Isa Soares and I, too, mean business.
SOARES: Good evening to you.
Tonight, American consumers and investors alike have one thing on their minds and it seems to be buy, buy and buy some more. Shoppers are taking
part in the Black Friday shopping binge. The National Retail Federation projects sales will rise more than 3.5 percent this year.
On Wall Street traders did buying of their own, it seems. U.S. markets closed out at yet another record, as you can see there, just over 19,000.
The CEO of Macy's told CNN he thinks the American economy is set up for an even bigger bonanza.
(BEGIN VIDEO CLIP)
CEO OF MACYS: The good news about the consumer in America is that savings accounts are generally positive here. Unemployment is near record lows.
We're basically at full employment here in the United States. You have income and wages growing. So all of the signs are there for a positive
response from consumers.
And so we're just waiting at this point for that to happen, for that to occur and for consumers to be responsive and to shop the way they look like
they're doing now.
We're also a very, very large online retailer, the third largest in America in our categories. And so we have that advantage as well. So we feel good
about the prospects of consumption in this final stretch of the holiday season.
(END VIDEO CLIP)
SOARES: Macy's CEO speaking there to CNN. Well, on Wall Street seems investors also broke out the checkbooks. The three major indices all
closed at new records even though it is Black Friday.
Look at the numbers there, retail stocks ended the day mostly flat. You see the Dow just over 0.3 percent. S&P also roughly hopping on the same
number as is that Nasdaq.
It was a short session you heard me say earlier due with light trading due to the fact that it is Thanksgiving holiday in the U.S. And it was a third
straight week of gains for U.S. stocks. The Dow and the S&P are both up 8 percent or more for the year.
The tech-heavy Nasdaq is just behind at 7.8 percent as you see there.
Joining me now to put all of this into perspective, Andy Serwer. He's the editor and chief at Yahoo! Finance.
Andy, thank you very much for joining us. I was looking at some of the numbers. We broke them down there. But I believe this is the eighth
record since the U.S. election.
Are these post election rallies, Andy, still being driven by bullishness following the election or is this related to Black Friday or is this just a
buy-buy spirit out there?
ANDY SERWER, YAHOO! FINANCE: Well, I think mostly it goes back to the election. In the 12 trading days since Donald Trump was elected, the
markets have climbed steadily higher up about 4 percent overall since that point.
And you know it was a little bit unexpected that the markets would go up, Isa, like this, after the election. Some people said they would crash if
Donald Trump was elected.
And I think people had focused too much on some of the negatives about Donald Trump's economic policies with regard to immigration and trade wars
and forgot that he would cut taxes and deregulate. And that would stimulate businesses and people are now focusing on that.
SOARES: How long can this Trump honeymoon last, this rally?
How can it be sustained, Andy?
Where do you see the Dow going?
Are we looking at 20,000?
SERWER: Of course, no one can really answer that question. It will last as long as it lasts. But what usually happen in these cases is what's
called buy on the rumor, sell on the news. So in other words, Trump has not really done anything, right?
He is not even president. And he hasn't really named a Commerce Secretary or a Treasury Secretary even. So I think the market right now is moving up
in anticipation of some of these moves after he is elected, after he becomes president, I should say, inaugurated in January and after he enacts
or tries to enact some of these policy changes that I was mentioning, in terms of taxation and deregulation.
SOARES: The market not being moved so much by the --
SOARES: -- many on Earth (ph) because there are many unknowns, Andy, surely I would have thought at this point the market would be looking for
some sort of policy direction from the government.
SERWER: Well, I think there are a few concrete things here that have happened.
Number one, the election, of course, not only did Trump get elected but Republicans took both houses of Congress here in the United States. That
was a little unexpected, too. So that means he has a clear mandate and he should be able to enact those policies without much problem.
Some infighting in the Republican Party but it sort of gives him a clear, clear runway.
And also, as Terry Lundgren (ph) from Macy's was suggesting, the economy is in very good shape. People are looking still like the glass was half
empty, now they're looking back with this election of Trump, saying maybe the glass is half full and we can take off from here.
But there are a lot of positive signs about the U.S. economy.
SOARES: Do you think, Andy, this rally, the markets could hit a roadblock of sorts?
We have seen the market priced in Federal Reserve rate hike. And we may not price in more aggressive tightening by the central bank, though.
Where do you stand on this?
SERWER: There is an expression on Wall Street, price for perfection. I think we're getting there. Stocks are very high right now. Sure, we could
keep growing, the stock market could go up more but it can't go to the skies.
And we've had some pretty good gains. The bull market here in the United States is six years-plus old now. And it is just not going to go on
forever. As you said, you used the word honeymoon, we're clearly in a honeymoon period right now and at some point we will hit some reality,
whether it's between now and New Year's probably unlikely.
But once Trump is inaugurated in January and starts doing things, reality will set in. I'm not saying the market's going to go down after that but
at some point we will take a pause at the very at least.
SOARES: But (INAUDIBLE) having a look at some of the numbers on consumer confidence, I think it's risen six-month high in November. This of course,
is a good economic indicator.
What does it tell us about the U.S. economy and the sentiment at home?
SERWER: That is a very positive sign. People were saying during the election it's ironic, isn't it, that they said we're voting for Donald
Trump because we feel so bad and we feel left behind and he will make America great again.
Now people are saying I feel OK, I feel great. Maybe that goes back to the fact that they believe Trump will take the country to new heights and they
feel good about Trump being president.
We have to be careful about when the surveys were taken, when the data was collected. But it does suggest that people are confident, feeling better
and when they're confident they go out and spend, they go out and hire new employees, they invest in their businesses.
And that all becomes sort of self-fulfilling and really can help drive the economy forward.
SOARES: We shall see whether U.S. President-Elect Trump can sustain this optimism, this momentum in the U.S. economy.
Andy Serwer, always great to have you on the show, thank you very much.
SERWER: Thank you, Isa.
SOARES: Target's CEO says the shopping weekend is off to a great start. Some more optimism. Brian Cornell (ph) began Black Friday by ringing the
opening bell at the New York Stock Exchange with some help from Bull's Eye (ph), the company's mascot.
Speaking with me from the floor of the exchange, he said he is optimistic about what the holiday season has in store.
(BEGIN VIDEO CLIP)
BRIAN CORNELL (PH), CEO, TARGET: We got off to a great start yesterday with our digital sales and we saw literally millions of guests lining up
and shopping our stores last night. So a great start and it actually was our biggest digital sales day ever.
So we feel like we're off to a great start. It is still very early in the season, we'll know a lot more on Monday night. But we feel like we're off
to a great start and we're excited and optimistic about the shopping season.
SOARES: Talk to us a bit about the most popular items.
What are you selling the most?
CORNELL (PH): Yesterday, when we think about our online sales, electronics were clearly very important. There was a point in time we were selling
over 3,000 TVs every minute. So electronics were critically important. We saw a lot of our guests shopping for Apple products, both iPads and new
New gaming systems from Xbox and Nintendo were very popular but we also saw guest shopping in our apparel collection, buying sleepwear; they were
buying toys. And while there's a lot of electronics, they were also buying things like board games.
So we saw them shopping the entire store online and we saw a similar experience when I was in stores last night. Guests coming in for those big
door busters. But then once they have one or two items that they were looking for, they were shopping throughout our store.
So we're off to a great start, I'm excited about the weekend, and we're looking forward to the shopping season.
SOARES: How much of what you sell is sold in a --
SOARES: -- physical store?
CORNELL (PH): Over 92 percent of our sales will be done in a physical store. And in the U.S., retail industry this year, we expect about 90
percent of all retail to be done in a physical store.
So stores still matter to the consumer. They matter to the Target guest and we have to make sure we provide a great in-store experience. We will
spend millions of dollars to continue to update and remodel our physical stores while we elevate that experience online. So we're investing on both
planks. We want to make sure of the great in-store experience but also continue to improve our digital and online capabilities.
SOARES: I was looking at consumer stocks, they're doing particularly well. One because it is holiday season, also because of earnings but I suspect
also because U.S. elections are out of the way.
Do you think that President-Elect Donald Trump is good for business?
CORNELL: Well, I am very optimistic about the state of the U.S. consumer. I think right now we're seeing good GDP growth. I expect that to expand
over the next 12 months.
Obviously unemployment rates are low. Inflation in categories like food, actually we're seeing deflation in food. And if you're at the pump looking
for fuel, we're seeing very low prices.
So I think it is a great time to be a U.S. consumer, which means it's a terrific time to be a retailer. So I think this is an opportunity for us
to continue to win market share drive traffic to our stores and visit store sites. So I'm very optimistic about the state of the U.S. economy.
And I think is a great time for a U.S. consumer.
SOARES: And how is the consumer?
Let's talk a bit about the consumer, Mr. Cornell.
What's consumer sentiment like?
How would you describe it?
CORNELL: Well, obviously it has been a very unusual period of time in the last 30 days but, again, as we look inside of our stores last night and saw
the activity online, it is a consumer that seems to be out there, in the holiday spirit.
They were out shopping, they were out spending so I think there is a sense of optimism and I hope that translates into a really positive holiday
SOARES: Brian Cornell, the CEO of Target, speaking to me earlier.
As with most American pop culture, the rest of the world is dipping its toes in Black Friday frenzy. It is a frenzy. This was a scene in Sao
Paolo in Brazil. It looks positively American. And I can tell you it happened also here in London. I saw it this morning as I was coming into
Some British-style shopping mayhem was (INAUDIBLE) the rest of the world, with a slightly busier-than-average shopping day of the year. One retail
analyst says Black Friday spending in the U.K. will be up 16 percent from last year.
So we have got Black Friday but no Thanksgiving food. Of course, the United States is still the gold standard for the early Black Friday rush,
as our Alison Kosik found out.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT (voice-over): This year's Black Friday frenzy, kicking off with hundreds jamming the streets outside Macy's
flagship store in New York City.
Early bird shoppers taking over entire departments in search of steep discounts. It's that time of year when all-out chaos ensues over jumbo-
And shoppers battle it out over who gets the biggest deals. This excited crowd caught clamoring over electronics at a Walmart in Columbus,
Mississippi, even though Walmart is trying to reduce the brawls by handing out wristbands to a limited number of customers for hot items and
Still, across the country, retailers are welcoming the long lines, ushering in eager bargain hunters. And customers are braving inclement weather.
Shoppers at this Best Buy in Portland, standing in the rain for hours.
UNIDENTIFIED MALE: I'm soaking wet and I'm still here.
KOSIK (voice-over): Foregoing Thanksgiving dinner to flood the aisles in search of big-ticket items, ready with cash in hand. The National Retail
Federation says holiday sales this year are expected to top $650 billion, a 3.6 percent increase from 2015.
And on Cyber Monday, at least 36 percent of consumers plan to nab their deals online.
SOARES: And that was CNNMoney's Alison Kosik.
Now a host of billionaires could soon be sitting around the White House with the most powerful man on Earth. Donald Trump's cabinet is starting to
take shape and we will take you live to the state in Florida.
Plus we've been talking to one of Trump's transition team. That's next.
SOARES: Well, after a breather, Donald Trump's transition team has been busy making more staff announcements. Don McGahn, a campaign finance
lawyer, has been tapped as White House counsel -- you're looking at him there -- he'll be busy sorting out Trump's business assets and any
conflict of interest issues.
McGahn is also former chairman of the Federal Election Commission. The president-elect has already named one billionaire to his cabinet, according
to CNN sources. There may be others to come.
They've told us Wilbur Ross is likely to be Commerce Secretary. He has a net worth of almost $3 billion. Chicago Cubs co-owner Todd Ricketts, part
of the mega-rich family, is likely to be Deputy Commerce Secretary.
But most buzz is around Mitt Romney. He may be named secretary of state and he would be one of the poorer members of the administration, believe it
or not, worth only $250 million.
Donald Trump is spending the Thanksgiving holiday weekend at his Florida estate. That's where CNN's Ryan Nobles (ph) is there for us. He joins me
now from Palm Beach, very lucky.
Very good to see you.
What can you tell us about these two appointments in his cabinet, Don McGahn and KT McFarland?
Should be we surprised?
RYAN NOBLES, CNN CORRESPONDENT: No, we really shouldn't, Isa. There are our two names that have been floating around for some time in the
transition of Donald Trump's presidency.
KT McFarland is someone who has been a pretty vocal Trump supporter. She has a long record of working in both national security and in foreign
affairs in Republican administrations. She worked in the Nixon administration, the Ford administration and the Reagan administration.
She even worked under former secretary of state Henry Kissinger. So this is someone who Trump knows and someone who Trump trusts. So it's not
surprising she has been given the title of deputy national security advisor.
The other guy, Don McGahn, is an interesting pick because he's somebody that is kind of a polar opposite of what Donald Trump has been talking
about throughout the campaign, when he talks about draining the Washington swamp.
This is a guy that is a Beltway insider. He spent a lot of time walking -- working in Washington. He works at the powerful D.C. law firm Jones Day.
But he's someone who gained Trump's trust during the campaign. He is an election law expert. He's going to serve as White House counsel in the new
administration. So it is someone that Trump trusts and feels can give him that leg up in dealing with Washington, which is something that Donald
Trump doesn't have too much experience with.
SOARES: Of course, Ryan, I expect McGahn also has a tough job of putting the distance between the president-elect and his myriad business interests.
Is he experienced to deal with this?
NOBLES: That's not his specific level of expertise; he is definitely someone who is more adept at dealing with campaign laws and campaign
finance, that is his level of expertise. He doesn't really deal all that much with ethics laws, he has not worked that closely in an White House
So this will a level of education that he's going to need as well. But he is widely regarded as a very smart man who understands the law in general.
And someone that will have Donald Trump's back and put him in a position where he's not going to make a mistake, especially when it comes to
conflicts of interest, something that has very concerned in the early days of this Trump transition.
SOARES: Just before I started talking to you, they had me talking a bit about some of the billionaires that may be tapped to join the cabinet.
Wilbur Ross likely to be Commerce Secretary, net worth of almost $3 billion.
What do ordinary middle class Americans that voted overwhelmingly for Donald Trump think of this billionaire cabinet?
NOBLES: That was always a big question in the campaign, right?
How is it that this million billionaire, who has lived his entire life in New York City, how is it that has he been able to connect with Middle
America, people that live in Kansas, Michigan and Pennsylvania?
But somehow he had a message that resonated with them and his chief message was that it wasn't about Washington and he was going to bring people that
weren't a part of Washington with him to the Capitol to try and fix things.
And that is what he is trying to sell with many of these wealthy billionaires, who may end up in cabinet positions. They have one common
thread. They're all people without a ton of government experience and not a ton of experience in Washington in general.
So Trump's hope is that he can convince these supporters that these are the kind of smart people, people who he believes have kind of made themselves
into the type of wealthy individuals that they are and they can bring that common sense business sense to Washington and, as he always says, make
America great again.
Now whether or not that resonates with them, we'll have to see. But that is least the pitch that Trump made throughout the campaign and that seems
to be what is extending now to this transition process.
SOARES: Very much changing the status quo. Ryan Nobles there in Palm Beach, Florida. Thank you very much, Ryan.
Anthony Scaramucci says Donald Trump will find the right blend of business experience and academics in his cabinet. Scaramucci is a hedge fund
manager and also the vice chair of Donald Trump's inaugural committee. He spoke to CNN's Brianna Keilar about getting the right group around the
president-elect. Take a listen.
ANTHONY SCARAMUCCI, TRUMP INAUGURAL COMMITTEE: The process and the discipline that we're taking in terms of going through agency by agency and
making sure we have a blend of business people, governmental people and academics, and so I think the American people will be very happy with the
eventual staff positions, not just the top 20 or 30 staff positions, Brianna, but the 4,700 staff positions that we're working on right now.
What we have found is that if you can bring in some business people, some academics and then people that have really good governmental experience,
that blend will probably be the one that will intersect appropriately to make the Trump agenda flourish in the first six months of the
So that is what we're working on. Unfortunately, we have to wait for these staff assignments and appointments because the president-elect likes doing
that himself with a few of the people at the top of the food chain. And got to let him do that.
BRIANNA KEILAR, CNN SR. WHITE HOUSE CORRESPONDENT: OK, so you said academics, that's pretty interesting. So tell us a little bit more about
that. Because what we have seen so far in terms of the people announced and the people who seem to be in the lead for some of these positions is
that they have been in government or they are in business. But you're talking about academics.
What specifically are you looking for?
SCARAMUCCI: So basically I think one of the things that Jared Kushner has done it he's brought in a couple of his professors from Harvard that us, on
the transition team at the executive committee level are interacting with to just make sure we have the right organizational structure around the
president-elect in terms of the way he manages, what his management style is like.
Additionally, we want to make sure that -- if you look at the blend of past presidential administrations, you typically have a blend, if you want to
talk about Ronald Reagan, as an example, he had 55 percent business, 30-ish percent governmental and the rest were academics.
I think if you look at the current administration, they've been more tilted toward the academic community, the legal community and less so the business
And so, again, I just want to make this one of the resonating messages, that we're not only looking at business people. We're looking at people
from all walks of life. Mr. Trump has made it very clear -- the president- elect, excuse me -- has made it very clear that we're to pick the A-plus- plus players, irrespective of what their prior roles were, but just as long as they're with us.
One of the other big things the president-elect has said to us is we want to have people that are energetic, that can do more with less. If you just
think about the way we ran the campaign, we were probably outspent 4:1, 5:1, we had one-sixth of the staff and we still won the general election.
I think it's a message from Mr. Trump that we can do more with less if we find the right people.
And so that is the goal of our executive transition team.
SOARES: Now Vice-President Elect Mike Pence is reportedly the man that will lead negotiations with a company making air conditioners in Indiana
over its plan to move manufacturing jobs to Mexico.
Trump tweeted over Thanksgiving that he is personally trying to keep the plant, run by a company called Carrier, in the state of Indiana, along with
SOARES: Philip Jennings is the general secretary of UNI Global Union representing 20 million members from over 900 trade unions and he joins us
now from New York.
Mr. Jennings, thank you very much for taking the time to speak with us here on QUEST MEANS BUSINESS.
We have seen Donald Trump take once again to Twitter, I just mentioned, this time to really get involved with individual companies. To me, this
How do you feel about this, companies basically being badgered by government?
PHILIP JENNINGS, GENERAL SECRETARY, UNI GLOBAL UNION: First of all, can I say, in connection with the previous article that was screened, Mr. Trump
was talking about draining the swamp. To me it looks like he is draining it to make place for the yachts and to make the financially great even
If he is going to be really meaningful about making the American worker greater, he has to give them a greater say on the job. I would like to
have not just Mike Pence intervening with a company but working people, union representatives having a chance to say, no, stop, reflect, reconsider
and involve the working people in those decisions about factory closures and about future investment.
No, it is not unprecedented that government have plays an interventionist role of this kind. But we would also like to see an empowerment, an
economic empowerment of working people and their unions.
And I would also like to interventions being made with the entire American business community. If you're going to make America great again, you're
going to have to make America pay great again.
SOARES: But, Mr. Jennings, this is the second time that the president- elect has indeed asserted that he can intervene to keep a manufacturing plant from leaving the country. And I believe last week he said he helped
persuade Ford Motor to keep a plant in Kentucky.
Do you worry this potentially leads to protectionism?
JENNINGS: No, this is the kind of intervention that I think that working people around the world would like to see, in the sense that they're making
businesses think again, making them think about business decisions once again.
But what is required here, if he is giving this empowerment, this message to business, he needs to empower working people.
JENNINGS: -- about this administration is, is he prepared to take the same bold steps to ensure that workers have a voice on pay, have a worker's
voice on investment decisions, on the hours they work?
And that is boldness. That is brave and that is fulfilling some of the pledges that he made during the course of the bitter and difficult
He has to make a difference to the world of work for American people. And I'm worried that with some of the people that are surrounding him, that
we're going to feel more oppression, suppression of the worker voice and their union organizations.
SOARES: So you're calling for empowerment for ordinary workers. I suspect from your tone, Mr. Jennings, you're not at all pleased with media reports
that he is surrounding himself in his cabinet with billionaires?
They do not represent the voice of ordinary Americans.
JENNINGS: It looks like he is already walking back from some of those campaign promises. They would come with a fresh view and a fresh look.
What he did understand during the campaign was that sense of the American worker being left behind, of a sense of being dispossessed, of the sense
that the system is not working for them.
And in the global polling that we have done across the developing countries around the world is that the political class is not speaking for people at
work, not responding to their hopes and their ambitions for their families. And therefore, for him all of a sudden to surround himself with
billionaires who come from another part of an economic culture, who don't come from the factory and the shop floor in many cases.
If he's going to make a real difference to make America great again, he needs to make that American worker voice great again, and to ensure that he
works with the unions, develops a dialogue with them, that they're able to converse about their futures and their hopes
And then the message is being sent as well, look, that was a campaign, now I'm in government and I'm taking care of the insiders. I'm taking care of
the wealthy. And this worries me in terms of trickle-down.
Who is going to win from these tax breaks?
The people that he's surrounding himself with.
Donald, you have got another 60 days before you inauguration. You can change tack. You should be sending a different message to those people
that voted for you.
SOARES: And I suspect from your (INAUDIBLE), Mr. Jennings, that you have not heard from anyone in the Trump administration. But let me ask you
this, let me ask you this, there is one concern and that perhaps this is what we're seeing with President-Elect Donald Trump being involved in this
way with individual companies, that you really -- there's a fair risk that you could pit workers against each other right around the world, is it not?
JENNINGS: Well, I'm a general secretary of an organization with union members in 150 countries and we have our values, we have our notion of
solidarity. But what we have seen in this process of globalization is exactly as you say, a race to the bottom. And for America to be great
again and for those American workers to have a chance again, he has to begin a process to take a race to the top on trade.
Stronger labor clauses and social clauses and trade agreements which ensure that workers can share in the improvement in a standard of living.
I want Donald Trump to talk to the American labor movement here to try and begin a conversation about investment, about changing the business model.
Look, how much money has the American business community spent on shared buybacks and on dividends?
In some cases, it's outpaced their net income. It dwarfs the level of investment. Investment required, R&D required and to make America great
again, make America --
SOARES: Mr. Jennings, I'll have to -- thank you very much, sir, always great to have you on the show. Thank you.
JENNINGS: Thank you.
SOARES: Now two former prime ministers fight to the finish.
SOARES (voice-over): We'll have more after a short break (INAUDIBLE).
SOARES: Hello, I'm Isa Soares in London. Coming up in the next half hour, QUEST MEANS BUSINESS, more misery for passengers in Germany as Lufthansa
strike looks set to continue into the weekend.
And cleanup in aisle three. Things are heating up in the suit between Iceland, the supermarket, and Iceland, the country. I will speak to
Iceland's foreign minister.
First, these are the top news headlines we're following for your this hour.
SOARES: Now two former prime ministers are vying to be the next presidential candidate of France's Republican Party. Francois Fillon
appealed to voters to take a chance on him after facing Alain Juppe in a TV debate on Thursday night.
The party goes to the polls to pick their candidate this weekend. On the campaign trail today, Fillon says voters need to be bold. Take a listen.
(BEGIN VIDEO CLIP)
FRANCOIS FILLON, FRENCH REPUBLICAN PRESIDENTIAL CANDIDATE (through translator): Wrongly, Alain Juppe thinks my project is too radical, too
risky. Well, I'm telling him that if we're not radical now, I wonder when we will be? I'm saying that if we don't take all the risks right now, I
wonder when we will take them?
(END VIDEO CLIP)
SOARES: Well, Fillon has promised to shake up France with his economic plan that includes hundreds of thousands of job cuts for the civil service.
CNN's Melissa Bell has more on the Republican primary that has defied expectations thus far.
MELISSA BELL, CNN CORRESPONDENT (voice-over): As they cast their ballots in the first round of voting, Nicolas Sarkozy and Alain Juppe were the
favorites to win. But they were in for a surprise.
UNIDENTIFIED MALE: (Speaking French).
BELL (voice-over): Francois Fillon came out of nowhere to win, leaving Juppe in second place. For the first time, Republican voters have been
given their say. And they did not choose the man who had been widely expected to become the party's presidential candidate in next spring's
BRUNO CAUTRES, POLITICAL ANALYST: (INAUDIBLE) was to select the best candidate to do their first issue, not the one which is to eliminate
Francois Hollande from the Elysee. They want to get the seat of the Elysee Palace. They want their candidate to be the next French president.
BELL (voice-over): Overwhelmingly in the first round, they chose Fillon, an economic and social conservative who won, say his supporters, by meeting
with people away from the cameras.
UNIDENTIFIED MALE (through translator): A very constructive, precise, serious project, a very sincere and free personality, an anti-system
candidate who distances himself from the media, who has the opportunity to act freely. No doubt this is what appealed to the French.
BELL (voice-over): If Fillon's on the hard Right, by comparison, Juppe is the more moderate, the man who had been expected to draw broader support in
a primary that was opened beyond the Republican Party.
UNIDENTIFIED FEMALE: He would always say, my aim is to gather the French people, to radiate a positive view of our people, take adversity and the
French population as a richness, as something very positive.
BELL (voice-over): The two very different visions of the party and more broadly of France were pitted against one another on Thursday night.
UNIDENTIFIED MALE (through translator): France will need a solid president of the republic, a president who can implement brave, fast, credible
reforms but without brutality.
UNIDENTIFIED MALE (through translator): There are more than 7,000 French people who helped me put together the project I'm defending today. It's a
precise, powerful project for our country's transformation but in line with the values that are ours.
BELL: When the result of the Republicans' first-ever primary is announced here on Sunday night, it will be much more than simply the nominee's name
that is given, it will also be the positioning of the entire party, whether it will be more moderate or further to the right, as it looks ahead to next
spring's presidential election -- Melissa Bell, CNN, Paris.
SOARES: With the ruling Socialist train badly in the polls, the winner of this weekend's Republican primary is expected to face the leader of the far
right National Front Party, and that's Marine Le Pen in next year's election. I asked Dominique Marzi (ph) of the French Institute French
National Affairs (ph) if there could be a rift in the Republican Party over choosing the candidate.
(BEGIN VIDEO CLIP)
DOMINIQUE MARZI (PH): I think the party will fight Marine Le Pen united. Now the problem is that if Fillon goes too far to the right of the
political spectrum, some elements of the left --
MARZI (PH): -- animated by politics of anger and the culture of fear may simply decide that they will vote for Marine Le Pen, who will play the
cards of nationalism, socialism and secularism.
SOARES: Mr. Fillon dedicated a lot of his time focusing on the French economy.
Do you think the other candidates missed the trick by not focusing so much on that?
MARZI (PH): Well, it depends who the other candidates are going to be. I think Mr. Macon (ph), for example, will also focus on the need to reform
the economy but in a different, more social, democratic way. Some people are presenting Mr. Fillon in France as the Margaret Thatcher of the 21st
So the need to do the reform and the need to do them at all costs.
SOARES: And of course many would say that France probably does need a bit of shock therapy when it comes to the economy. We know unemployment stuck
at around 10 percent and then you have public debt as well nearing around 100 percent, I think, of economic output.
Do you think that the French economy is in need of shock therapy?
MARZI (PH): I think the French economy is in need of major structural reforms. Now the problem is how to do that.
How do you propose that?
Because there is another imperative for France and that is not to bring Marine Le Pen and the populists to power in the Elysee in the name of very
strong structural reforms.
Yes, France needs economic reform very badly. But, above all, France does not want to be lead by a populist leader like Marine Le Pen.
SOARES: What is the number one concern for French voters?
It seems like everyone liked what the economy, what Mr. Fillon was saying. That resounded.
But what else are they caring about?
MARZI (PH): I would say identity. The question of refugees, even if France has not accepted refugees the way Germany did. The question of
security, of course, we have been the primary target of terrorists.
And how do you protect France better from inside and from the outside?
So by the end of the day, the economy is an important concern and employment is an important concern. But I would conclude by saying that
security and identity may be, at that present juncture, more important in the eyes of a majority of French men than the economy itself.
SOARES: Dominique Marzi (ph), speaking to me earlier from Paris.
Now it's bad news for Lufthansa passengers, a strike, it seems, will go on. Pilots say their walkout will go on throughout Saturday over a bitter pay
dispute, we'll have you -- we'll bring the latest -- next.
SOARES: Welcome back to QUEST MEANS BUSINESS.
A strike by Lufthansa pilots looks set to grind on into a fourth day on Saturday, keeping long-haul flights on the ground and bringing misery to
thousands of travelers.
The pilots' union says they have not seen a pay rise for five years. They're asking for a hike of 3.7 percent. Lufthansa says it offered
arbitration to resolve the dispute but instead the union chose to strike. Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (through translator): We have made a number of offers. The union turned down arbitration because they're saying arbitration won't
get us a solution. So I'm asking you, if arbitration is no solution and if our positions are so far apart, what else can be done?
We can't exchange the offers via radio and television. We must return to the negotiating table. We're ready and we call on V.C. (ph) do the same.
UNIDENTIFIED MALE (through translator): If Mr. Swor (ph) says there is no leeway to find a solution and that Lufthansa will go bankrupt if we pay
pilots even just one year or more, then I ask myself how serious their arbitration offer can be.
(END VIDEO CLIP)
SOARES: Lufthansa says a special flight schedule will be in place on Saturday. It's offering train tickets on the Deutschebahn (ph) to
passengers and routes books flights inside Germany. And Atika Shubert reports, the strike has turned into an expensive problem.
ATIKA SHUBERT, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, unhappy news for travelers. It looks like that Lufthansa strike will go into the
weekend, into Saturday. Hopefully, maybe an end by Sunday.
But so far there doesn't seem to be any sort of solution or end in sight at this point. This is the 14th strike that Lufthansa has had to deal with
Previous ones with ground crew and other air staff but this pilot strike is really hitting them hard. It is costing them an estimated 10 million euros
a day. So they've already lost about 30 million; now they're looking at 40 million.
And it is changing the way people book their flights. The knock-on effect here is that hubs like Frankfurt, people are scrambling to find other
flights, it's delayed other flights of course, so what it means is that people are now looking when they're booking their travel plans, saying can
we book Lufthansa?
Or are we simply going to encounter a strike?
So it looks like, for travelers, bad news if you're booked on Lufthansa but with any luck it may end by this weekend -- Atika Shubert, CNN, Berlin.
SOARES: And shares Lufthansa ended today slightly lower.
Now governing should not be a popularity contest, according to Italy's former prime minister, Mario Monti. And he argues if you treat it like
one, you put should sound economics in jeopardy. He was speaking a week before Italy holds a referendum on constitutional reforms that vote that
could bring an end to the government of Matteo Renzi.
Nina dos Santos asked Mario Monti about the economic problems behind the current instability.
(BEGIN VIDEO CLIP)
MARIO MONTI, FMR. ITALIAN PRIME MINISTER: In my view, what has impeded Italy's economic growth in the last few decades and what has contributed to
the increase in the public debt has not been imperfections in the institutional system. It has been much more the search for popularity or
the fear for unpopularity that most governments have been having.
So I believe that that is a real important aspect. And -- yes?
NINA DOS SANTOS, CNNMONEY EUROPE EDITOR: I want to ask you also, just for a second, if I may, the prime minister, Matteo Renzi, has staked his
political career on this, he said he would resign if a no vote prevails.
You've said you don't think that he should resign.
Do you think that that is a realistic prospect he has made, the promise that he will resign?
Why don't you think he should resign?
MONTI: Well, there is nothing in the constitution, either the current one or the proposed new one or, in the tradition in the country, that asks him
to resign. He has very boldly asserted at the beginning that he'll do so.
But now he seems to regret that.
(END VIDEO CLIP)
SOARES: We have some breaking news coming into us right here at CNN. The Wisconsin --
SOARES: -- Election Commission says they have received a recount petition from Jill Stein. Stein is the U.S. Green Party's candidate. She is
pushing for recounts in three U.S. states.
An online campaign has raised more than $5 million so far. Recount petitions for Michigan and Pennsylvania are due next week.
We'll keep on top of that breaking news for you. As soon as we have more, we shall bring it to you, of course.
Now a whole country takes on a retail chain in a legal battle dubbed the Cold War. The clue is in the word "cold." First a highlight from "Make,
SOARES: Iceland, the country, is launching legal action against Iceland, a U.K. supermarket chain -- so you don't get confused. It is all about who
owns the name Iceland. The supermarket has a legal trademark on the word and the country says that prevent Icelandic companies from it.
I spoke to Iceland's foreign minister and asked her why the legal case has been launched now.
(BEGIN VIDEO CLIP)
FOREIGN MINISTER, ICELAND: They have registered the name of Iceland Foods. So it actually prevents Icelandic companies to use any reference to Iceland
in their products. And we feel that is completely unacceptable.
This is the first time either Icelandic Authority or the Icelandic government goes into a legal -- takes a legal actions against the
supermarket chain. And we're doing that in order to promote the Icelandic companies to use the name, which they have not been able to do, due to the
fact that this has been a registered trademark within the European Union Intellectual Property Office.
So we're basically taking the case there and asking for invalidation of the act because we believe that the name Iceland is too broad and it cannot be
registered to a single company. And that's why we're doing it.
And also because what the supermarket chain has been doing is basically they've been going after the Icelandic companies with legal action,
preventing them to use the name.
SOARES: So let me get this right: you're not asking Iceland, the supermarket, to get rid of or to change its name; it's purely about the
MINISTER: Truly just about the trademark and that Icelandic companies can use and refer to the trademark, to the country of origin, where the --
MINISTER: -- products are being made here in Iceland and they're being exported into the European Union and we cannot refer to the country of
origin due to the illegal actions taken by the supermarket chain.
SOARES: You've said several times, Minister, that this is unacceptable. But Iceland, the supermarket, they've been trading here in the U.K. for
some 46 years with that brand and they say they're basically -- the name is not confusing, it doesn't give any sort of conflict.
So why now?
MINISTER: I'm basically -- we think that we need to address this now because this is preventing Icelandic companies to use the name Iceland in
We are not saying that they can't use the name. But we are asking them or basically going to the European Union Intellectual Property Office to
invalidate the registration because this does not -- we don't have the scope for the Icelandic companies to use the name.
And this should not be difficult for the supermarket chain because we're not saying that you can't use the name, but we're basically saying
Icelandic companies should be able to use the country's name. And I think actually -- and we all know that we have been here a lot longer, the
country, Iceland, than the supermarket chain.
(END VIDEO CLIP)
SOARES: Very good point. That is Iceland's foreign minister, speaking to me earlier.
The threat over an international lawsuit hasn't stopped the supermarket's Twitter account from having some fun with the story earlier today. It
tweeted the following, "If you're wondering about our stance on this court case, we're firmly on the side of Iceland."
It looks like they're not done making mischief. A few hours later they tweeted an account promoting travel in Greenland, asking, can you give us a
call about a business opportunity? Thanks.
And that's it for this edition of QUEST MEANS BUSINESS. I'm Isa Soares. We'll see you again next week, while I'll be joining you from New York.
Have a wonderful weekend. Bye-bye.