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QUEST MEANS BUSINESS

Russia Responds to Hacking Hearing; Giuliani and Blackberry Fight Cyberattacks; Trump Tweets Target Toyota; Sears, Macy's, Kohl Report Dismal Holiday Sales; NASDAQ Closes at Record High; Self-Driving Technology Take Spotlight at CES; Cadillac Launches On-Demand Subscription Service; Carnival Get Personal with New Device; T-Mobile CEO Takes on Trump. Aired 4-5p ET

Aired January 5, 2017 - 16:00:00   ET

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


[16:00:00] RICHARD QUEST, CNN ANCHOR: Yes, I think we can declare that to be a firm gavel that brought trading to a close. Today is Thursday. It's

the 5th January.

Tonight, Russia responds to the Senate's hearing on hacking. And the U.S. Senator tells me tonight the cyber-attacks could still be going on.

Rudy Giuliani teams up with a Blackberry boss to help companies stay secure. You'll hear from both men on this program.

And Trump turns his tweets towards Toyota and the new Mexican car factory and the company responds. I'm Richard Quest. It is simply a very busy

day. And of course, I mean business.

Good evening. Tonight, in the past few minutes, a Russian state media has again denied that the country carried out cyber espionage against the

United States during the presidential election. It comes as the U.S. intelligence is rejecting the view of President-elect Donald Trump and says

more certain than ever that hacking during the U.S. election could only have been authorized by Russia's senior-most officials.

Testifying on Capitol Hill, the nation's top intelligence officials and lawmakers were united. They said Russia poses a major threat to the United

States. It's a charge that President-elect Trump has continually dismissed. The chair of the Senate Armed Services Committee, Senator John

McCain, says, there's no escaping the fact, the hacking was an unprecedented attack on U.S. democracy.

Now, if we take a look at what the intelligence leaders have been describing, they were talking about an entire wide range of threats. So,

you had them from Russia, from China, from Iran, from North Korea, all were cited as cyber threats against the United States. For example, in the case

of Russia, the quote is, "It's full-scope cyber actor." Most of the time in the hearing was spent talking about Russia and indeed, President

Vladimir Putin. The Kremlin in its response now says, it is sick and tired of irresponsible allegations. However, Senator Lindsey Graham says more

robust policy is need against this man, Vladimir Putin.

(BEGIN VIDEO CLIP)

LINDSEY GRAHAM, U.S. SENATE REPUBLICAN: Ladies and gentlemen, it is time now not to throw pebbles, but to throw rocks. I wish we were not here. If

it was up to me, we would all live in peace. But Putin's up to no good and he better be stopped. And Mr. President-elect, when you listen to these

people, you can be skeptical, but understand they're the best among us and they're trying to protect us. Thank you all.

JOHN MCCAIN, U.S. SENATE REPUBLICAN: Would you have any response to that diatribe.

JAMES CLAPPER, DIRECTOR OF U.S. NATIONAL INTELLIGENCE: The senator and I have had our innings before, uh be I find myself in completely agreement

with what he just said and I appreciate it.

(END VIDEO CLIP)

QUEST: Senators critical of Trump's reluctance to blame Russia want broader investigations. Now, the intelligence leaders say that Russia

requires vigilance instead of moving on. So, when we turn to the President-elect, and remember, he will be in charge, he will be the

commander in chief of this wide, vast array of intelligence agencies. When we come to that, General James Clapper, the director of U.S. National

Intelligence. He says, foreign countries are concerned about Trump's criticism of U.S. community and he says public trust and confidence is

crucial.

(BEGIN VIDEO CLIP)

CLAPPER: Both in this country and I think the dependence that other countries, other nations have on the U.S. Intelligence Community. And I

have received many expressions of concern from foreign counterparts about, you know, the disparagement of the U.S. Intelligence Community, or I should

say, what has been interpreted as disparagement of the intelligence community.

(END VIDEO CLIP)

QUEST: There seems to be a certain bipartisan agreement, whether or not on Donald Trump's comments, but at least about the activities of countries

like Russia. Jack Reed is the top Democrat on the Senate Armed Forces Committee. Shortly before we came on air, he joined me. And I said,

Senator, was he shocked by the consensus that Russia is to blame for so many cyber-attacks?

(BEGIN VIDEOTAPE)

[16:05:00] JACK REED, U.S. SENATE DEMOCRAT: Well, I think it was a very clear statement of Russian involvement, and it is very sobering, not just

the terms of the their involvement, but the scope of it. One of the aspects that became more apparent today is that this was not just taking

some hacked emails and putting them out. This involved very elaborate use of twitter feeds, of bot mechanisms so you could disseminate this

information through thousands of different sources. That complexity together with promulgating fake news stories, I think that was one of the

takeaways that was most revealing and also most disturbing.

QUEST: And do you find that there is agreement, pretty much, on both sides of the aisle? Forget the President-elect for the moment. Are you finding

that there's agreement between yourself and your Republican colleagues about this?

REED: I think there is agreement. I think there's agreement that Russia was deliberately, consciously involved in the election, that they had a

comprehensive strategy involving not just hacking into some computers, but also fake news stories. Getting through a network of different sources

through social media, that they had a definite motivation and purpose. All of that will become more clear in the next few days as the reports are

released. But this is something that I think both sides agree.

QUEST: Do you agree with Senator McCain or rather, Director Clapper, when he says, whether or not what they did constitutes an act of war is a heavy,

heavy policy call that I don't think the intelligence community should make. Do you believe the Russian actions were de facto an act of war?

REED: I think what has been illustrated by this debate and by the whole series of questions is that we have not yet clearly defined in the

cyberspace what constitutes the rules of the road, if you will. If something is an act of war, if something is a use of espionage, for

example, which General Clapper recognized is used by every major country. I think that's part of what we have to do as a nation, as a Congress, so to

find -- and as a world community, to define what the rules are. The President-elect, his disdain, some would say, for the intelligence

conclusions, not the raw intelligence. How damaging has his comments been, do you believe, to the intelligence community?

REED: Well, I think they've been quite damages. General Clapper noted, he's been receiving calls from his foreign colleagues, who rely upon the

United States Intelligence Community for support, for direction and cooperation. Also, I think in terms of the community itself. Thousands of

very courageous people, who are risking their lives, many of them, now feel as if their efforts are not worthy of recognition.

QUEST: Senator, I guess the question is obviously, when this report comes out, or is the unclassified version, there has to be more, would you agree,

than just restating the fact? Because the public now need to know and merely saying we believe this, that, or the other, won't cut it?

REED: Well, I think what will come out is not only the facts and the confidence they have in those facts, but also the motivation of the Russian

government. To some extent, the degree of involvement, as specifically as possible, of the Russian government. But also, I think, the warning that

this activity is still going on. It's going on in other countries as they prepare for elections. If we don't prepare ourselves, it will be something

we'll have to consider as we go forward with our election. This is the fundamental basis of our democracy, these elections. And I think people

are increasingly uncomfortable when they're beginning to recognize that influences other than debates and discussions and the merits of the

candidates could have played a role in the campaign.

(END VIDEOTAPE)

QUEST: Senator Jack Reed joining me from Congress earlier. Later in this program, you'll hear from the chief executive of Blackberry, John Chen.

And the former mayor of New York, Rudy Giuliani. They're teaming up on a new cybersecurity venture, and they've put in perspective for us exactly

the severity of the cybersecurity threat.

Donald Trump once again taking aim at the world's biggest carmakers. This time he's telling Toyota, no way, over a new plant in Mexico.

[16:10:00] And he says, "Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for the U.S. NO WAY! Build plant in U.S. or

pay big border tax."

So, he has now, the President-elect, taken aim at three of the world's biggest car companies. Toyota for its factory up there. You'll be

familiar with General Motors over their plan for the Cruz cars, the hatchbacks to import. And Ford, Ford canceled plans for its Mexican

factory and instead said it will recreate the jobs and investment up in Michigan.

Toyota shares took a noticeable dip right after the tweet. Just look at that. That's what you call a presidential drop. Straight down it goes.

It does recover, but it doesn't recover all the way. In a statement to CNN, Toyota says it looks forward to working with the Trump administration,

and then goes into a line description of just how much investment it has in the U.S., how many employees. All of which brings me elegantly to Peter

Valdes-Dapena, who is CNNMoney's senior automotive reporter. Good evening, sir. From this bash against Toyota. What do we make of it?

PETER VALDES-DAPENA, CNNMONEY SENIOR AUTOMOTIVE REPORTER: Well, right now, I think it's unlikely Toyota is building a plant in Mexico, primarily to

feed Corollas to the U.S. Right now Corollas made in the U.S. are made in Mississippi and Ontario, Canada. It's the best-selling car in the world.

And there are markets all over the world. South America and Europe that also buy Corollas.

QUEST: So, what he's basically saying is, right. Assuming as indeed it was the case General Motors, the factory that makes the Cruise. Most of

those cars are exported to other parts of the world. Surely, what the Trump President-elect is saying, well that's fair enough, just don't import

them into the U.S.

VALDES-DAPENA: He could say that. And Toyota may get away with not importing those Corollas into the U.S. Fine, we just won't import them

into the U.S. We can add in our other factories and continue supplying the cars that way. Toyota also make trucks in Mexico that it also makes in the

U.S. as a support.

QUEST: How much of this is a bash against the company versus a bash against NAFTA itself? Isn't that really was behind it?

VALDES-DAPENA: Yes, really what I think he's objecting to is the fact, that you can make vehicles in Mexico, any company can make vehicles in

Mexico. And he's right, it is much less expensive to produce in Mexico than in the U.S. and he's also right as you're seeing new car factories

being opened up, they're not being opened up here in the states, they're being opened up in Mexico. So, he's correct to say that there is possibly

an issue there.

QUEST: So, pull the strands together. Ford basically capitulated. However, they want to frame it. The way they put it, even congratulating

and saying they had confidence. General Motors is still deciding what to do. Now you've got Toyota. What are the car companies saying amongst

themselves?

VALDES-DAPENA: What I think they're saying amongst themselves? It's interesting to go back in time and look at the press releases. When Toyota

first announced this factory, they weren't shy about it. They said, we're building this great new factory in Mexico. No one thought it was a

problem. All of a sudden, they're being confronted with it as a an embarrassment, as a bad thing. I'm sure their scrambling around, trying to

see what to do. Toyota has already laid groundwork on this factory. They can't back out now. So they're going to have to figure out how to make

this look good or hope people just forget about it over time.

QUEST: Right. Good to see you, sir, thank you.

Online shopping has vanquished the department store as Sears and Macy's close stores. Amazon is moving into the mall. Isn't that an interesting

dynamic. Why should one be leaving, the other arriving and we're all still buying so much online.

[16:15:00] (COMMERCIAL BREAK)

QUEST: The music of the shopping mall, as we're looking to see where we're going to spend our money. Step into the QUEST MEANS BUSINESS mall. And

now the big three U.S. department stores all reported dismal holiday sales. Sears is closing 150 stores. Macy's is closing 68 stores and cutting

10,000 jobs. And the clue to it all is here in the mall.

You have disappointing sales from Sears, Macy's, and Kohl' s. You have Sears closing all those stores. You have Macy's closing 10 percent of all

their stores nationwide, across the United States. And the reason, of course, are all these new smaller stores across the shopping mall. For

example, UPS, it is very busy tonight. It's called national returns day. It's believed post holidays, customer will send back 1.3 million packages.

That's that sweater and socks on their way back.

UPS. can thank Amazon for all the packages that are going. But Amazon, perhaps perversely, is opening a bookstore with real books, not virtual

ones, right here in the Time Warner Center this year. Part of a trend from bricks and mortar from Amazon. And Amazon says it may extend into American

apparel, which of course, is thinking of making an offer for the bankrupt retailer. How odd if Amazon buys a clothing store that has real bricks and

mortar.

As for our old friend Apple, the virtual store got busier than ever, as more users went to the app store for their new phones. New Year's Day was

the busiest day ever. So, as you can see, the shopping mall is a story of retailing in the 21st century.

The market itself tells a very difficult story of what's happening. Down 42 points on the Dow Jones industrials. Much sharply lower earlier in the

session, but it did rally back up toward the close. Not hugely, 20,000, still a very difficult level to reach. Paul La Monica is with us. Why is

the market finding it so difficult to reach 20,000?

PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: It is odd. I think it is an important psychological number and maybe you're seeing some resistance

there. To be fair, even with the sell-off that we had today, markets off to a nice start for the first two days, first week of the year. And of

course, as you mentioned, we have that big jobs report tomorrow. I don't think anyone wants to --

QUEST: What are we expecting on the jobs report?

LA MONICA: A little more than 170,000 jobs added, which again, is good, but not great. Unemployment rate maybe ticking up a tiny bit. But at 4.7

percent, President Obama can leave office knowing that his job as a job creator was a pretty good one, even though he doesn't deserve all the

credit, of course.

QUEST: Right. Now, the NASDAQ closed at a high.

LA MONICA: All-time high to close, yes.

QUEST: But it's interesting because post Trump -- immediate Trump victory, it was the NASDAQ that was in heavy water, trying to make progress, because

of worries about the supply chain in a trade war. The Dow in the more traditional, now we seem to be seeing a bit of a difference there.

LA MONICA: Yes, I think fundamentals are once again taking control. And despite all of any animosity that might be between Trump and leaders in

Silicon Valley, I think smart investors realize that Donald Trump is not going to try to kill Apple and Facebook and Amazon and Google. It's not in

his best interest to obviously do that. Those are four fantastic companies with great earnings and revenue potential. That's why they're rebounding

this year. Netflix has started to rebound.

[16:20:00] QUEST: And when he had that meeting at Trump Tower with the digital summit, he made that clear to them. But at the same time, he's

also bashing away at those markets where they are growing and hope to grow further, and which are part of their supply chain. China, of course, is

the one I'm thinking of.

LA MONICA: Without question. I think investors have to be nervous about that. They have to be wary of the tough talk on immigration, whether or

not that winds up potentially hurting tech companies, which do rely on HB1 visas for attracting a certain amount of talent. But I think at the end of

the day, most savvy investors realize no matter what Trump tweets. And ironically enough, he's using one of the most sad, publicly traded tech

companies as his vessel, Twitter, to attack all these other companies. Everyone else is doing just fine.

QUEST: I promise I won't hold this to you.

LA MONICA: Hold to what?

QUEST: Give me a date for Dow 20,000?

LA MONICA: Oh, Dow 20,000. It's not going to be tomorrow. Of course, that means it will be tomorrow.

QUEST: If it's tomorrow, it's got a long way to go. Only it's only got 101 points.

LA MONICA: One hundred and one points --

QUEST: We're going to -- all right. We don't have a view one way or the other. But I'll look at all the emails you sent. Those of you who sent on

the Dow 20,000.

CES, Consumer Electronic Show, is officially open in Las Vegas. And if the future of self-driving cars that are on display. Harmon was recently

bought by Samsung, is presenting an entire section on autonomous cars. There are ten companies on the floor show, unveiling self-driving

technology. Dinesh Paliwal, is the CEO of Harmon International. Good to see you, sir. And a core issue here is, we know the autonomous vehicle,

self-driving, let's keep it nice in English. We know the self-driving car is coming. When does it probably get here, do you think?

We may be having a little bit of difficulty there. Can you hear me, sir? We seem to have having a little bit of difficulty with that. We'll

continue to talk to Paul La Monica here on the U.S. markets. Just as well he didn't go off anywhere.

Back to the Fed yesterday. The Fed -- "The New York Times" put this succinctly when it said this morning, the Fed sees a pickup or a super

bump, but it doesn't see a major boost to the economy as a result of Donald Trump.

LA MONICA: I think the -- I'm not sure I would go that far. I think what the Fed is acknowledging is that there is a difference between campaign

talk and tweets and actual proposals, actual regulations and things that are going to become law. So, we need to find out what Trump and the

Republican Congress, what that stimulus plan is going to look like. Is it really going to be $1 trillion? Is it really going to focus mostly on old

infrastructure like roads and highways and bridges and not so much on the new economy? I think that --

QUEST: Right, but --

LA MONICA: -- I think that if you wind up getting a mix of boosting new businesses and not just trying to resurrect dying 20th century businesses,

then that might be something that the Fed would even approve of.

QUEST: OK, but, the counterbalancing forces here. If you take, for example, inflation rate which is heading towards 2 percent. If growth

starts moving further and faster, then interest rates will rise more quickly than the Fed otherwise would have anticipated. I mean, that's the

conundrum here. To prevent this turning into a full-throttled boom.

LA MONICA: Right. The Fed realizes that they're going to be in a bit of a tough spot, especially because Donald Trump politicized the Fed during the

campaign. Janet Yellen, whether or not she ends up sticking around for another term, while she's still there, she doesn't want to be accused by

anyone of either trying to curry favor with Trump to keep her job or doing something to sabotage him. So, I think what's going to be interesting is,

as we've talked before, will Yellen and whoever else succeeds her at the Fed end up being Paul Volcker, who didn't sabotage Ronald Reagan's chances

of being reelected, or will they be Greenspan, who many still blame for George H.W. Bush being just a one-term president.

QUEST: Good to see you, Paul.

LA MONICA: Thank you.

QUEST: Don't go too far. We'll have more in just a moment. QUEST MEANS BUSINESS, good evening to you.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. And you are watching CNN and always on this network, the

news comes first.

In Izmir, Turkey's third largest city, suspected Kurdish militants blew up a car and got into a shoot-out with police at a courthouse checkpoint,

according to state media. A police officer and a employee were killed, along with two of the assailants. Officials say weapons found at the scene

indicate a much larger attack was in the works.

Three top U.S. intelligence officials told a U.S. Senate Committee, they have no doubt Russia tried to interfere in the U.S. presidential election.

Their testimony rebuts President-elect Donald Trump's doubts that the country was involved.

And the director of national intelligence has criticized those who appear to disparage U.S. intelligence agencies.

Police in Chicago have charged four people over the torture of a special needs teenager. The disturbing video was streamed live on Facebook. It

showed the man bound and gagged. The suspects have been charged with kidnapping and hate crimes.

Now back to CES in Las Vegas. Dinesh Paliwal, is the CEO of Harmon International. Sir, my apologies that you couldn't hear me earlier. Some

would say that's a blessing, but I think in an interview, it's a prerequisite that we hear each other. Let me ask you straight out, we'll

call them driving cars for want of a better phrase. When will we see the true self-driving vehicle, do you think?

DINESH PALIWAL, CEO HARMON INTERNATIONAL: Richard, can you please come again. I think it's very noisy, probably, my side. But I'll try to answer

it. I think I heard autonomous driving, but I couldn't hear whole sentence.

QUEST: Can you hear me now, sir? Is that better?

PALIWAL: Yes, that's a little better. Please come again.

QUEST: Right. So, self-driving cars, how soon are we going to see them?

PALIWAL: Richard, that's a great question. And I would actually say, in reality, the technology is here, but the infrastructure is not. So, if you

were to really drive in selected safe lanes in London, San Francisco, Austin, or anywhere. I think you have the technology. But for the mass

commercialization, I think we are five to ten years out. And again, key technology pillars are here. And that's what we are demonstrating here in

CES. One of the missing pieces is cybersecurity.

[16:30:00] Because we all continue to sort of not pay so much attention that you cannot have connected car autonomous driving, which would be

driven from the cloud servers. And right now, the cyber security has been one of the weakest link in the automotive industry and like banking sector.

QUEST: That is very important bearing in mind what we are talking about today with Russia hacking. Is there a real fear that somebody can cyber

hack into one of these autonomous vehicles?

PALIWAL: I think it's very real. In fact, every year in Las Vegas in June, they do an event where they actually just try to hack almost every

car. And frankly, cars were never designed to be connected, so they are very vulnerable. And right now, the new generation technology, the new

platforms, the OEMs, the car companies are coming up with, they need to be embedded with software which can be kept current. Because we all know, no

matter what software you have, if not current, it can be hacked. We've seen it plenty in the U.S. politics. There was a lot of hacking scandals.

I think this is one thing, we have invested heavily, Richard, and NICSA, here in the United States, conducted a study of all the worldwide cyber

security companies four automotive, and we came out on the top. But I would say we're not going to declare victory. This is a running journey.

We need to stay alert and paranoid. Besides cybersecurity, I think the cloud applications and the customization. Another thing, Richard, that's

important as more and more technology comes in, we have to be careful not to make it monotonous environment in the car or home. So, customization

and personalization is very important, which again makes cybersecurity very important, because we're exposing our personal data.

QUEST: Sir, good to see you, thank you for bearing with us for technical difficulties and the noise that is at CES. We much appreciated it.

While we're talking about vehicles, when I heard this story, I thought, this is fascinating. General Motors has launched a Cadillac subscription

service. It's an app that lets you reserve any model you want, wherever you want, for $1,500 a month. If you want to buy a top of the range car,

it's around $90,000. Like the one that you're seeing in this video. So, that's around 60 monthly installments. But instead, you could just

basically -- you're not renting, you're not leasing. Melody Lee is here as Cadillacs brand director. You're not renting and you're not leasing and

you're not buying. What are you doing?

MELODY LEE, BRAND DIRECTOR, CADILLAC: We think there's this opportunity between that traditional ownership model, which is what you've just said,

that's leasing, that's financing, that's buying. On the other hand, you have ride sharing and car sharing and rental. In the middle, we think

there's a desire and a demand for something like book by Cadillac. This is a subscription service for a luxury vehicle. Think of it as similar to a

Netflix or a Spotify premium.

QUEST: Do you have to take it for a year or three years or whatever?

LEE: No. I think that's one of the beauties of Book by Cadillac, which is the flexibility. It is a month-to-month commitment.

QUEST: You've priced this at around $1,500 a month.

LEE: It's correct.

QUEST: What does that equate to in terms of buying a car. Is that what it would cost roughly on the payments of buying it?

LEE: We looked at a range of financial models starting with leasing and purchasing and we wanted to price this very competitively. Included in

that $1,500 is registration, taxes, insurance, and routine maintenance. We're taking all of the pain of ownership away, and giving you the

opportunity to just enjoy the joy of ownership.

QUEST: Right. But unlike Zipcar or the other ride sharing, I don't have to park it back at a particular place, do I? As long as I'm paying the

monthly subscription, it's my car, in everything, except ownership.

LEE: A Cadillac from Book by Cadillac is always in your possession, until your needs change. So, once you are done with your ski trip and your

escalade, you can turn the car back in for a CT-6 sedan to drive more people around the town. So, depending upon your needs, you exchange it for

a different Cadillac.

QUEST: Who are you aiming this at? Because people who are sort of maybe live in urban areas like New York or London would use Zipcar. And those

people who live in rural areas or the suburbs would need a car full-time. Who's your client here?

LEE: We think there's a demand for having a car in your possession, but eliminating a lot of the hassles of ownership. We're targeting this at

this new gen-XY target, this rising class of people, who still want to feel as if they're experiencing a vehicle. Maybe not in a way that is provided

by Zipcar or Lyft, Uber, those kinds of companies. I think this puts a luxury lens on top of it, as well.

QUEST: Fascinating. Please -- it's something different. We've not seen this before, which is why we'd love to have you on the program tonight.

Please come back and tell us how going.

LEE: Absolutely. Happy to.

QUEST: Thank you very much, indeed.

We've talked a lot about -- whichever route we have taken tonight, we have heard cybersecurity, even down to self-driving cars in our last interview.

[16:35:00] Rudy Giuliani, the former mayor of New York, says hacking is the fastest growing form of cybercrime. The former New York mayor is launching

his own initiative to crack down on the problem and he's with Blackberry, and we'll talk to both chief execs after the break.

(COMMERCIAL BREAK)

QUEST: Former mayor of New York, Rudy Giuliani, says he wants to see the documentation before he'll accuse Russia of hacking. It all happened on

the day when the focus was squarely on cyber security. Now, Giuliani and Partners, the consultancy security company that he has, announcing it will

join forces with Blackberry to fight cybercrime. I was joined by both the former mayor and the CEO of Blackberry and I asked Mr. Mayor his assessment

of today's intelligence community claims that Russia, well, Russia was up to it.

(BEGIN VIDEOTAPE)

RUDY GIULIANI, CHAIRMAN & CEO, GIULIANI PARTNERS: My opinion on that could only be based upon my reading the documents and therefore, knowing what

they used, how they did it, what the signatures were. So as a technical, somewhat of an expert, I would say that I would have to leave that to once

these documents are released, I'll read them, and I'll tell you what I think.

QUEST: John Chen, your company, having perhaps been, I think, the word "beleaguered" in recent years might sum it up nicely. But you really are

now in the sweet spot, aren't you, of having sort of the right product at the right time, for the right menace.

JOHN CHEN, CEO, BLACKBERRY: Yes, I believe so. Cybersecurity has always been our strong suit. Security has been with us for 30 years. We own

patents, know-how, skills, technology, and we are prior to this in many other areas including the car show that we're coming to, the CES. So yes,

we're right now at the right place at the right time.

QUEST: So, Rudy Giuliani, what does this deal with Blackberry give you? There's lot of security software. What are you going to be getting from

them that you can then give to your clients?

GIULIANI: OK, so we have -- Giuliani Partners has been in the security business for 16 years. We have been involved in cybersecurity in one way

or another for 13 years. It's the number one form of crime growing in the world. It's a national security menace. Many of my clients that I do

security consulting for, that security consulting over the years has turned to cybersecurity. In other words, that's where their major needs are. And

as we investigated, we found that Blackberry has just about the best available solutions to many of their problems.

[16:40:00] So, what we will be able to do now is have the Blackberry team and my team analyze their problems. Tell them what else they need, in

order to defend themselves against cyber intrusion, and put them in the best possible position to be defended. And also, put them in the best

possible position to pick up an intrusion early. Because that's important, too. If you don't pick it up early, that's when you get the 20 million

identities taken. If you can get it in a week or a month, you can cut it down. But if let it go on for 10 months or 11 or 12, then you're really

finished.

QUEST: John Chen, are you gearing your security protocols to private hackers or state-sponsored intrusions? Because if, as we heard today in

Congress, states act as the Russians, the Chinese, and as the mayor basically says, everybody's at it. Well, you've got to be able to keep

everybody out. And that means governments, too.

CHEN: Yes, I don't think our software and our practice in ALTOSA, differentiates whether you're a country or you're an individual. What

we're doing is to protect institution, in the best security possible. So, it's not as beyond whether you're a country or a private sector or an

individual.

QUEST: Mr. Mayor, is it helpful for the President-elect to cast aspersions and cast doubt over the intelligence agencies before he takes office?

GIULIANI: Well, look, the reality is, he hasn't taken office yet. He can raise the questions that he wants to raise. He probably wants to do a

major reorganization of intelligence, and how intelligence is gathered. Given the fact we've had some serious problems over the last, really now 10

to 12 years, look at the hacking into OPM, where the background checks of all of those people -- the FBI background checks -- were taken. Something

serious has to be done about it. And until he gets in there with his team, it's going to be hard for him to be able to say exactly what needs to be

done.

And as John pointed out, when we look at companies to figure out if they're secure and when we suggest solutions, we just go wherever the evidence

takes us. It takes us to an individual, it takes us to a country, it takes us to a company, it takes us to just a site and then we've got to go to

another site. So, we're open -- our problem and our issue is to solve the problem for our client. And we think we can do it better than anyone else.

(END VIDEOTAPE)

QUEST: Two titans of security. John Chen of Blackberry, and of course, Rudy Giuliani, the former mayor of New York. They're at CES, where we were

also seeing some new gadgets and devices. Carnival Cruises has unveiled a wearable device that apparently knows your every need. It's called the

"Ocean Medallion". Well, there's the ocean and there's the medallion. And apparently, you can wear -- that lady's got it around her neck. People are

wearing them all over.

Apparently, this is your key to a new experience when taking a cruise. It will unlock your door, just by walking up to the door. You can buy things

with it, it will even remember your favorite cocktail. And it will allow the staff of the ship to keep track of where people, so, of course, they

can deploy staff accordingly. Our good friend, Arnold Donald, is the chief executive of Carnival and joins me now from CES. The "Ocean Medallion". I

mean, is this not just another -- you know I'm going to be skeptical here, Arnold. Is this not just another piece of technology for me to lose and

wonder what to do with?

ARNOLD DONALD, CEO, CARNIVAL: Not at all, Richard. Good afternoon to you. This is it. This is the "Ocean Medallion". And it's not about this. This

is actually just an enabler, as most technology is, because we're in the hospitality business. We're in a people to people business. And it

enhances our crew to anticipate your need and allows you to have very personalized travel with no extra effort. You just wear this. You can

carried in your pocket. You clip it on your lapel and you walk around.

There's no data in here. It actually transmits through other censors on the ship. And it allows you to have a seamless vacation, where you can

order a drink at one bar, go to another bar, the bartender there knows your name and knows what drink you just ordered. You decide to take a walk out

on the balcony and the crew member will find you and bring the drink to you.

[16:45:00] QUEST: Now, this was based, obviously, wearable, this sort of data has been very much in demand. The man who brought this to you, and

the man who brought it along with the concept with him introduced something very similar at Disney, which I did a story about, some years ago, which

revolutionized the way they were able to manage the guest experience.

DONALD: Absolutely. John Pageant. John is chief innovation officer for us and guest experience officer. He did come from Disney. He led the

teams that did originally the Fast Pass and later the Magic Wand. But this is another level. So, what this is, the Magic Wand gives you access. This

gives you access in a much more seamless and -- but more importantly, it then converts that into personalized service. And for us, it's all about

exceeding guest expectations. This is for the guest. There's no charge. You know, we give it to the guests. Guests can choose to use it or not.

And if they do, they have a window of adventure and special moments available to them. Otherwise, they would not have that scale.

QUEST: For you as the chief exec, you have a real challenge here now. Because on the one hand, you're going to get a whole load of data that you

can use. You're going to get serious, big data about the way in which these are being used in the information. But you're also making a promise,

Arnold, about the guest experience that you have to deliver in the back of this. And that's not -- that is something that you and your team have to

work at.

DONALD: Not only that, we already do. We already exceed guest expectations with our crew and our staff. What this does is not big data.

This is personal data. It's not in this device pinpoint just allows your personal data to be viewed by people who can then deliver you what you

want, when you want it, how you want it. That's what it is. We're not collecting a lot of data, it's just real-time in the moment data, that

allows us to anticipate that, hey, you have a yoga class, you're at breakfast. A crew member will say, your yoga class starts in ten minutes

if you've forgotten or you want to go on a different excursion, or you want to know where your kids are. You can opt in and have all the family

included for every member can see the others, or you can opt out. And say no, everybody wants to be on their own. They don't want to know where

everybody is. If you do that, you know what your kids are instantaneously. So, it's for the guests. It's not for us, not for big data. It's for the

guests.

QUEST: And we're delighted to see -- I swear, running a cruise ship, it must do something. Because you look younger every time you're on the

program.

DONALD: Richard. You're very kind. Thank you.

QUEST: I'm in the wrong job. All right, thank you Arnold, it's good to see you. As always.

DONALD: Good to see you. Be safe.

QUEST: India's finance minister says the country is better placed in a fragile world economy. That's despite the recent bank note recall you'll

be well familiar, and the fact that female employment is incredibly low. One entrepreneur is right to change that in this week's "India: Twenty

Under Forty."

(BEGIN VIDEOTAPE)

SAIREE CHAHAI, FOUNDER SHEROS: I always joked that entrepreneurs need to be slightly deaf and there's tons of advice out there, which is great, but

you need not take all of it.

Hi, my name is Sairee Chahal, I'm 40 and I'm founded Sheros. Sheros is a career platform for women. We want to put every woman's aspiration, her

potential on the map. The fact remains that a lot of other things that aligned to women and their choices. Sometimes it's family, sometimes care

giving, sometimes social conditioning and therefore the need to put together something that allows a more custom-fit version of success.

All you need is either a cell phone or a laptop. You put together what we call a Sheros profile. And then you become part of the ecosystem, where

you get access to mentorship, your support, and very tangibly, opportunities.

We basically have women logging in from villages, from small town, from places you don't have on career maps. And this wouldn't be possible if you

were trying to do this. A few years ago, technology is just now unleashing a lot of resources, a lot of options, just opening up the doors for

everyone.

Women are not part of the whole process of creation the way they can be. If we just look at data, women on internet, women with bank accounts, women

in leadership roles. All these numbers don't add up yet. Yet, great companies, great start-ups, build things around latent potential.

[16:50:00] A Tesla, Uber, Airbnb did it. Because then once the floodgates open, once the vats open, there's no stopping them.

(END VIDEOTAPE)

QUEST: "Twenty Under Forty" from India.

John Legere has gone tweet for tweet in feuds with Donald Trump, but now T- Mobile CEO says he's optimistic about the incoming administration. Also from CES will talk to him after the break.

(COMMERCIAL BREAK)

QUEST: Shares in the parent company of this network, Time Warner, took a very nasty sudden downturn after reports that Donald Trump remains opposed

to Time Warner's merger with AT&T. The shares are off nearly 1.7 percent. As you can see there, $95 and change, which is quite a bit under the $105

to $110 that's the agreed price between AT&T and Time Warner.

Samuel Burke joins me from CES, with chief executive who knows so much about the power of tweets. Has his own emoji, and it's always good to have

John Legere on QUEST MEANS BUSINESS.

SAMUEL BURKE, CNN CORRESPONDENT: Mr. Legere -- Richard, nice to see you. Mr. Legere, you've here at the Consumer Electronics Show, because you

announced some changes in the United States. You're making it that when you see the bottom line on a price plan, you know that's the bottom line.

There are no taxes or anything after that. But I've got to tell you, you're obviously doing this thinking about the future of your company. And

as you look toward the future, what I'm hearing from a lot of tech CEOs here and a lot of big players in business like you, is that they're excited

at of Donald Trump administration because there might be a rollback in regulations. Could Trump be good for T-Mobile?

JOHN LEGERE, CEO, T-MOBILE: Of course, he can. There's a lot of optimism. Amongst the things, we announced today that roll into this, is that we

announced our results for the quarter and for the year, which are phenomenal. We grew faster than anybody else in the wireless industry.

And it's kind of a four-year celebration of the young carrier. As you said, the rules that we announced today are a change required because the

mobile internet is now how all content is absorbed. Here's the rules, what you see should be what you pay. All taxes and fees are included. And we

also announced a kickback, which is a way that if you add an additional line, you don't use two gigs or more, were going to give a rollback.

BURKE: You think that's going to be good for your company, obviously, but do you think Trump specifically will be good for your company?

LEGERE: Yes, listen, there's a lot of optimism, there's a lot expectation about less regulation, a lot of positive issues for the industry structure

possibilities. And for the kind of edges that wave been pushing. So yes, I do believe there'll be less regulation. I believe we'll have a positive

tax environment. And our business plan assumes a renewed vigor and economic growth and deregulation. And yes, it's positive times.

BURKE: Richard, you heard the CEO of T-Mobile saying he thinks there will be growth under Trump. But now I've got to ask you, you have the rare

distinction, although it's becoming less rare, of being in a Twitter feud with Donald Trump. And you had some not so kind words for each other, but

said you moved past that. But I have heard from tech leaders and business leaders here at this conference that they have a contingency plan, in case

Donald Trump tweets about their company the way he has about Ford, the way he has about Boeing, today Toyota. Are you ready for the Donald Trump

tweet, which is at 3:00 a.m. in the morning here, because Trump tweets from his tower at 6:00 a.m. eastern time.

LEGERE: Most companies and executives need a Twitter strategy, because they're not social media savvy.

BURKE: A Twitter strategy.

LEGERE: And I didn't have a feud with President-elect Trump. We had an exchange that is indicative of who we both are in social. And he's got

social game. He has dethroned me, but it's another way of communicating. I understand what he does with Twitter. I do the same thing as well.

[16:55:00] BURKE: There you hear it, Richard, a Twitter strategy that's not too dissimilar from what I'm hearing from a lot of people here. Seems

like they're ready for that Trump tweet, whether it's about Toyota or about T-Mobile.

QUEST: All right. Good to see you and give John my best. I know he can't hear me. Give John my best.

We'll have a Profitable Moment after the break and it will be on cybersecurity, which of course, is the subject of the day.

(COMMERCIAL BREAK)

QUEST: Tonight's Profitable Moment. Whether Russia hacked the DNC in the U.S. presidential election really isn't totally the issue. As we've heard

tonight if Mayor Giuliani, from John Chen, from a whole variety of guests, the issue here is cybersecurity and it's the single-biggest threat facing

individuals, countries and of course, corporations. The CEO who does not take cybersecurity as the single-most important issue on their plate, is

doing a disservice to shareholders and probably won't be in the job for much longer. The reality is cybersecurity at every level is the key number

one issue. Now, where did I put those passwords? And that's QUEST MEANS BUSINESS for tonight. I'm Richard quest in New York. Whatever you're up

to in the hours ahead, hope it's profitable and we'll do it all again tomorrow.

END