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QUEST MEANS BUSINESS
Caribbean Islands Reeling After Irma; Apple Shows Off New iPhone X; Clashes in Paris Over Macron Reforms; Trump Not Sure if North Korean Sanctions "Has Any Impact"; BMW Rolls Out New Electric Car. Aired 4-5p ET
Aired September 12, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] ZAIN ASHER, CNN HOST: Let's take a look at what the markets did. End of the day just shy, just shy of a record high. Still if you can
see, throughout much of the day, solidly in the green. Fears about North Korea and hurricane Irma seem to have subsided. And then you have the U.S.
Treasury Secretary, Steve Mnuchin, basically saying that he expects tax reforms before the end of the year.
It is Tuesday, the 12th of September. Tonight, what Irma left behind, it's a race to get aid to the Caribbean after that brutal hurricane we've been
talking to you about.
Also, Apple's iPhone reaches double figures. And the new one will actually cost you four figures. Yes, you heard me correctly.
And violent protests in Paris against President Macron's economic plans. We'll be live for you in the French capital in just a few minutes.
Hello, everyone. I'm Zain Asher and this my friend is QUEST MEANS BUSINESS.
Good evening, and a warm welcome to all of you at home. I want to bring you our top story tonight. The humanitarian crisis in the Caribbean is
deepening as I speak. With Irma having pass by, the devastation as you can see from this video has been laid bare for all to see.
We now know at least 36 people have been confirmed dead. You can see from the video here the buildings have been flattened. A lot of these islands
by the way are pretty much unrecognizable. Food running out. In some cases, in some cases a breakdown of law and order.
The tropical storm that hit Florida actually arrived on these islands we've seen talking to you about as a category five hurricane, on St. Thomas, St.
John and Water Island. Residents have been without power for five days now. And on St. Martin, food, fuel and clean water remain scarce, as I
speak. And on Antigua and Barbuda that was pretty much some of the worst devastation I saw there last week. And estimated 95 percent of buildings
have been damaged or destroyed.
Aid is flowing in from the Netherlands, the U.S., the U.K. and France. The French President arrives in the region on Tuesday. Emmanuel Macron has
defended his government's response and pledged to rebuild better than before. CNN's Polo Sandoval is in Tortola in the British Virgin Islands.
He joins us on the phone there. So, Polo, it really is one thing to watch a hurricane on TV from the comfort of your living room, it's another thing
to actually live through it, experience it and then spend several months afterwards picking up the pieces. Just walk us through what residents
where you are going to be facing over the next few months.
POLO SANDOVAL, CNN CORRESPONDENT (via telephone): What you mentioned there, Zain, is the reality for the people here in Tortola. This is going
to take if not months, perhaps even years to try to get back up and running. But they say they will get back up again. Particularly because
they rely heavily on tourism so that's very important.
But let me set the scene for you a little bit. I'm in one of several marinas that have just been devastated on the island of Tortola. Where
specifically, here on Road Town, which is really one of the largest municipalities and one of the largest islands of the British Virgin
Islands. Home to 24,000 people throughout the region here. And you just see devastation as far as the eye can see here.
Also, the landscape that makes this such a beautiful place is essentially gone. Usually there are lush, rolling green hills. The trees, though on
those skills have been stripped of their leaves. I've described it before as winter in the Caribbean, because that's pretty much what it looks like.
Several of these homes also have been heavily damaged as well. There are people already rebuilding. There are people already beginning the very
lengthy process of cleaning up and rebuilding.
But then there's that humanitarian massive effort that you just mentioned. The people who perhaps have not been able to find their provisions, the
bare essentials, something to eat or drink, are hoping to be able to clear passage perhaps to nearby Puerto Rico, a place that has not as hard hit by
Irma. Those are the different faces of the story that we have seen here on the ground in the short time we've spent here.
There are those who are deciding to stay behind and love this place so much they want to rebuild it. But then there are those, particularly those with
children, who are left with no choice but to leave this area. But the other headline is the resilience of these individuals. Yes, they have been
hard hit. But yes, they say they will get back up again. It is just going to take some time -- Zain.
ASHER: By the way, the resilience, when I hear stories of how resilient people are despite what they've experienced and what they live through, it
really is so inspiring. For the people who have chosen to stay that you talked about, what would you say was the greatest need?
SANDOVAL: Food. Food is certainly something that people need badly here. Yes, as you mentioned a little while ago, there are resources coming in
from the United States, parts of Europe.
[16:05:00] Food and aid and water are coming in. In fact, the flight that we were on, we shared with a supply of drinking water. So those kinds of
supplies are coming in really by the minute here and they are badly needed. But at the same time, I witness something just a few moments ago, Zain, at
this Marina that we're at, a local pulled up in his vehicle and offered us a bowl of chicken and rice. And that just goes to show you that these
families, these people who are still here, they do have some resources but it's certainly not at the level that many people would like to have it be.
Particularly because many of them have perhaps had to wait for hours in line for some of that chicken and for some of that rice.
So, I think it will be interesting to see how much additional aid we are able to see here in some of these islands. And it's not just here in
Tortola, but also, several of the surrounding ones that have faced serious challenges before. Particularly in security with some looting. But I can
tell you here after speaking to locals in Tortola, it seems that it's not the case anymore. Particularly with the British military now in place.
ASHER: And the hope going forward is that the international community is going to really rally together to help these islands out.
ASHER: Polo Sandoval, live for us there. Thank you so much.
Speaking of which, speaking of the international community rallied together, European governments are under pressure to get aid into their
territories in the Caribbean. These islands, as Polo was just mentioning, so need every bit of help they can get. Clare Sebastian is tracking the
devastation. So, Clare, all of these islands aren't actually overseas territories of the UK, France and the Netherlands as well. What does that
mean in terms of guaranteed aid?
CLARE SEBASTIAN, CNNMONEY CORRESPONDENT: Well, they face a particular responsibility here, Zain. I want to show you on the map, because this
patchwork of Caribbean islands is really controlled mostly by four countries. That's the UK, the U.S., the Netherlands and France. And this
here in the Eastern Caribbean is where I want to home into, because the World Food Programme says 200,000 people have been affected here. This was
the first area that was hit last week on September 6th by hurricane Irma.
Let's go back to the British Virgin Islands where we just found Polo Sandoval just now. Tortola is the largest and most populous island there.
This is a before picture. This is the damage. Now the British government in terms of aid has announced a $42 million aid package. They've sent in
40 tons of aid and say there's more to come. They say almost a thousand U.K. military personnel are now in the Caribbean. They face some criticism
for being too slow. They have refuted that.
But moving on to more of these islands. Down here in Antigua and Barbuda. This is Barbuda before the storm. Now we see it after. One of the worst
affected islands around 95 percent of buildings hit. This is a sovereign country, Antiqua and Barbuda is not an overseas territory. So, it is
relying mostly on humanitarian agencies and other international aid. We know the World Food Programme has set up a hub there and airlifted in food
supplies. The U.N. and USAID are also operating there. The Canadian Prime Minister said that he spoke to the leader of Antigua and Barbuda today and
offered his help. Couldn't be needed more as you can see by those pictures.
And finally, St. Martin, which is a territory that's half a French overseas territory and half controlled by the Netherlands, not only getting
aid and military personnel there to control the security situation, but also a physical reassurance. The French President, Emmanuel Macron, was
there today. The Dutch King also there. This is the French side of the island before Irma. Now you can see after. So, you can see just how much
they need this. I've spoken to UNICEF as well. They say that they've launched an appeal over the weekend for $2.3 million in aid. They say they
haven't heard much from that yet. They are worried people are waiting for concrete numbers before pledging aid. They say they shouldn't be doing
that. More aid is needed from the international community and not from the countries that have overseas territories in this region -- Zain.
ASHER: All right, Clare Sebastian, thank you so much.
Well, it's little comfort to those whose lives have been destroyed. Insurers say Irma could have been even more destructive in just simply
financial terms. It certainly could have been a lot worse in terms of damage. As the storm gathered strength last week, initial loss estimates
topped the $100 billion mark as Irma's path shifted and its intensity weekend. It was reduced from a category five as it came closer to Florida.
The estimates came down to between 20 and 40 billion, still relatively high. But certainly, better than what was anticipated.
Reinsurers, the companies that back the frontline insurers that you and I buy policies from, were expected to suffer the biggest losses. Eric Smith
is the President and CEO for Americas at SwissRe. He joins us live now. So, it does appear these hurricanes seem to be coming more and more
frequent. We are dealing with Harvey, then Irma, then Jose. What could be done from your perspective to limit the catastrophic potential damage of
[16:10:00] ERIC SMITH, PRESIDENT AND CEO OF AMERICAS, SWISSRE: That's a great question. Zain, and we appreciate being part of the dialogue in such
a critical topic. It's all about resilience. As our societies have changed over the last hundred years and so many of our individuals and our
businesses and our infrastructures have moved into areas that have always been hit by hurricanes and floods and earthquakes. It's important that we
work together, individuals and governments, that we come together and we find ways to create more resilient towns, more resilient cities. Because
the devastation is going to continue.
The storms are, for whatever reasons, the storms are getting worse. The ocean levels are rising. So, there's going to be more flooding. So, the
best thing we can do is to plan in advance. We can look at building standards, we can look at -- after hurricane Sandy, SwissRe was part of the
effort to think through what can New York City do and some of the surrounding areas to prepare better, so next time the floods are as bad,
the water doesn't get into the subway tunnels.
ASHER: It is also about where the build are in the first place? There's a lot of high-rise beautiful stunning hotels, condominiums on these coastal
areas that surely as a reinsurer you must be thinking, wow, if a category five storm were to hit tomorrow, that could cause obvious catastrophic
SMITH: Right. So, you know, a rich part of the debate is do we always build where we should be building? You know, it's a -- what's happened
today in the U.S., in this country, we have a of condominiums, but as well as summer houses built very close to the water's edge. You know, that's
probably OK as long as individuals that live there don't expect other people to pay for their damage. So, that's where the policy becomes a bit
convoluted in that the national flood program, which is something that we help back, so the folks that do buy their coverage tend to be those that
are the most exposed. And so, they are subsidized by others.
ASHER: One issue that you guys have to deal with is obviously, the protection gap. The amount of coverage people should be buying versus what
they do end up buying. The frequency of the storms that I talked about, how will that change the protection gap do you think? What can be done to
lessen the gap?
SMITH: Well, when we look at -- once we get the final numbers on Harvey and Irma together, it's going to be a tremendously large number for both
primary insurers and reassures. And so -- but as well as we protect, as well as our insurers working together, the primary companies and the
reassurance companies, much of the loss, the financial loss will not be covered by any insurance. And that is the protection gap. So, in the
U.S., in a flood situation, it will be substantial what's not protected. But in other parts of the world, almost none of the damage is protected by
So yes, we think a lot about the protection gap. And one of the things that a little bit different about what we do at SwissRe is that we're
working with our clients to come up with different solutions. So, one of the things you'll see in the future is because of the way that smart
devices and the digital platform is expanded around the world, we know that we can -- we've tested and we've been successful at deploying parametric
coverage. So, in the future individuals can sign up for relatively low- cost ways that they can be reimbursed rather quickly through their smart device for some temporary -- whether they need money to flee a storm or
whether they need some extra help as they returned from the storm and things are expensive and what have you.
ASHER: Technology coming to the rescue.
SMITH: Technology coming to the rescue, right.
ASHER: Let's leave it there. But thank you so much. Appreciate you coming.
SMITH: Thank you, Zain.
ASHER: You're very welcome.
Insurance stocks extended Monday's gains and that help push the three major U.S. indices to record closes. It's been about 13 minutes since the stock
market officially closed. And that 30 minutes we've had the number settle and they did come in at record highs. The Dow topped its previous record
by just half a point. Thanks to a last-minute rally. The broader S&P and the Nasdaq saw slightly bigger gains. They each rose .3 percent.
After the break, on QUEST MEANS BUSINESS, holy hardware. Would you spend, would you spend $1,000 on a cell phone? Would you spend that?
And one of the most widely leaked product launches ever, Apple unveils what he calls the phone of the future, the iPhone 10. That's next.
[16:15:00] (COMMERCIAL BREAK)
ASHER: Welcome back, everybody. So, you may have heard in the last couple of hours Apple unveiled a brand-new crop of iPhones they're called the
iPhone 8, and 8 Plus and a luxury version called the iPhone 10, because it's been 10 years since the first iPhone came to the market. Let's take a
look at Apple's messaging on these. As expected, they come with wireless charging, catching up with the rivals. The displays, speakers and the
cameras have certainly been improved. The iPhone 10 ask has no traditional home button and features edge to edge glass. It's unlocked using face ID.
So, it recognizes your face. That's how you unlock the phone.
What about the prices? You might want to sit down when I tell you the prices. You're looking at $699 for the cheapest iPhone 8 and $799 for the
cheapest iPhone 8 Plus. The 10, the iPhone 10 is a whopping $1,000. Apple CEO Tim Cook said it's a tribute to Steve Jobs and the 10 years of the
(BEGIN VIDEO CLIP)
TIM COOK, CEO, APPLE: The first iPhone revolutionized a decade of technology and change the world in the process. Now, 10 years later, it is
only fitting that we are here in this place, on this day to reveal a product that will set the path for technology for the next decade.
(END VIDEO CLIP)
ASHER: So, the launch, you just saw Tim Cook there. The launch was actually held in the new Steve Jobs Theater at the Apple Park Campus in
Cupertino, California. Samuel Burke traveled there all the way from my hometown London. Samuel, good to see you. So, what are the three most
important things that the world should know about the iPhone 10 would you say?
SAMUEL BURKE, CNN TECH, BUSINESS AND TECHNOLOGY CORRESPONDENT: Well, listen, the $1,000 price tag is what's going to stand out to everyone. But
at the end of the day a lot of competitors, like Samsung, already have phones just around that price range. And some of the older iPhones that
have bigger memory 256 gigabytes, well they already cost almost $1,000. But it is a lot of money. You have the options for the other ones. The
number one thing that differentiates the cheaper ones, although $700 and $800 isn't that cheap, from the thousand-dollar iPhone 10 is that screen,
the infinity screen, which you can see right away. You'll notice which friends have it and which friends don't. Which is exactly what Apple
And then you have facial recognition. I've been playing around with it. It's really cool what the camera can do there. But you can see problems.
You know, on the tube now, in your hometown of London, I use Apple pay and I always have my thumb on it like that, because you set it right there. On
the tube spot where you normally have an oyster card. Now I can't have my face like that over it. It's going to be difficult to use. So, maybe it
won't work for everybody. And I think having to relearn to use your thumb with the new phone -- not using your thumb on the home button -- could be a
challenge for some people -- Zain.
ASHER: All right, Samuel Burke life for us, thank you so much. Good to see you as always.
Today's announcement is hugely important to Apple. The iPhone accounts for 70 percent of its revenue. Jeffrey Cole is the director at the USC
Annenberg Center for the Digital Future. Jeffrey, so, would you spend $1,000 on a phone? Would you?
[16:20:05] JEFFERY COLE, DIRECTOR, USC ANNENBERG CENTER FOR THE DIGITAL FUTURE: Sure. Phones are at the center of our lives.
ASHER: You would. You would?
ASHER: You're in the minority, possibly.
COLE: Well, we're spending close to $1000 as we heard in the piece are ready. The iPhone 7 was in the $700, $800 range. I don't think that's the
big problem with the iPhone 8 and 10 today.
ASHER: What is the big problem then?
COLE: I think the big problem is it's a great incremental improvement. But I don't think a CEO in history has ever faced the burden Tim Cook faced
today. What people wanted to see was to see him in a pair of jeans on stage -- it used to be at the Moscone Center -- coming to the end of his
presentation saying, oh, and one more thing in introducing the product, the game changer that change the world, even though they didn't know what game
it was they wanted changed. He got the costume right. He got the one more thing right. But it is an incremental improvement. A good one. It's not
a game changer.
ASHER: The issue is that we keep on expecting Tim Cook to live up to Steve Jobs. Shouldn't we just accept the fact that there is never going to be
another Steve Jobs in that way?
COLE: If we accept that Apple's just another technology company, and that's not what Apple wants us to think. Apple really has introduced
something no company ever has, three game changers with the iPod, the iPhone, and the iPad. And last fall when the iPhone 7 came out, and people
were disappointed. It had a slightly better camera and processor. They completely pivoted and said, well, next year is the 10th anniversary.
They're saving the great stuff for the next year that which was today. And everything we've seen, it's a great incremental improvement. But
everything we've seen, facial recognition, wireless charging, Samsung has had for a couple of years.
ASHER: When you listen to the announcement and I watched the whole thing with my entire team of producers, was there anything at all, I'm talking
about the iPhone 10 specifically, was there anything to you that stood out that made you say, you know what, actually that is in interesting change.
That is a good idea.
COLE: I don't think there was anything other than a nice incremental --
ASHER: Not the fun Snapchat filters?
COLE: I think people wanted a game changer. And I don't think it's fair to hold them to that standard, but that's the standard they've set. The
phone will do in incredibly well. People still stand in line. None of this has to do with the profitability of Apple. What this has to do with
is reputation as the world's best innovator.
ASHER: I want to actually pull up some video of a key moment during the announcement whereby they sort of introduced all these fun emojis and the
Snapchat filters and all that. It's a $1000. It's not cheap. You would pay for it, but it certainly not cheap. Who is this phone for?
COLE: The phone is trying to be for everybody. It's trying to be for business people. It's trying to be for 13-year-olds who will save or
terrorize their parents until they get it. Its audience is everyone who wants a smart phone, which is almost everybody over the age of 12.
ASHER: With the Apple watch, though, I did like the fact that they came out and said, you know, what, you don't need a phone to activate this
watch. I think that will help it sell more. What are your thoughts?
COLE: I was really impressed with the watch announcement. Because the biggest problem with the watch until now, it's the best smartwatch ever
created, the old version. But it had a small battery and people don't want another device they have to charge every night and it required a Bluetooth
connection to a smart phone. Who needs the watch if you have to have this one. And this does have a cell connection and really impressive what they
were able to make that. That's more than incremental.
ASHER: They did something that made you happy today?
COLE: I think it's incredible engineering credit. They just didn't dazzle their fan base. It's not a must-have. It's a I want to have.
ASHER: Yes, it's unfortunate. But I guess we have to leave it there. Thank you so much. Great to see you and hear your thoughts. I had a
feeling you were going to be quite negative on them. But thank you.
COLE: Thank you.
ASHER: Rupert Murdoch's 21st Century Fox says it's surprised and disappointed by the British government after they delayed the company's $15
million bid for Sky TV. They are concerned it would give the Murdochs too much power, too many sway over the British media and a lot of worries about
broadcasting standards. It marks the third time this deal has been blown off course by outside factors. In 2012 a phone hacking scandal at
Murdoch's News of the World in the UK, forced him to stop the deal. In 2016 Murdoch's Fox News was put in the spotlight when it's CEO Roger Ailes
resigned amid sexual harassment allegations. And this year the rise of fake news has raised alarms of the new sources, such as, Sky falling into
the wrong hands. Let's talk about that with Brian Stelter. So, Brian, is Murdoch ever going to get his deal through?
[16:25:00] BRIAN STELTER, CNNMONEY, SENIOR MEDIA CORRESPONDENT: It's looking less and less likely. I saw an analyst today saying maybe less
than a 50 percent chance at this point that the deal will ever go through. 21st Century Fox is trying to be positive. They're saying it looks like
next June 2018. That's when they expect it to close now. But there's been setback after setback. And at the core of this it's Fox News here in the
United States. The success of Fox News, this incredible profit machine. This conservative powerhouse megaphone. It's powerful for Murdoch in the
U.S. but hurting him in other parts of the world.
Even though he tried to rectify the situation, I mean, getting rid of Roger Ailes, for example, getting rid of Bill O'Reilly, settling although sexual
harassment lawsuits. It's not enough clearly.
STELTER: Even taking Fox News off of Sky in the U.K. Recently took Fox News off. Said it was because of low viewership but it seems to be a
reaction to the continued scrutiny of the Sky deal. Murdoch as you said, has wanted this for long time. The last time he was trying the phone
hacking scandal derailed his plans. Now it seems these scandals in the United States involving Fox News are at the heart of the matter.
There are also concerns about plurality, or media consolidation. The idea that the Murdochs simply own way too much and they would own way too much
in the United Kingdom if they were to own the rest of Sky. But broadcasting standards was one of the focus of today's announcement. The
idea that maybe they're not the right owners of Sky or big papers for that matter.
It's interesting because you were just talking about Apple. Apple, Google, Facebook, those are the companies the Murdochs worry about. The Murdochs
believe it is those tech companies, those tech company giants that are the real threat to the media landscape, not their own personal politics. They
worry a lot about Google and Apple. But here we are today, Apple making these splashy announcements. Google and Facebook continuing to be
swallowing up advertising revenue and its Fox that is really coming under scrutiny for this attempt to buy Sky.
ASHER: So, what is next for Murdoch in his attempt to get this deal through. In terms of how they're going to scrutinize this deal going
forward. What are they going to be looking for that they haven't already seen?
STELTER: This is going to be referred now to another commission, another group of regulators to review in terms of broadcast standards to look at
Fox News, to look at whether the company has really address the problems there. There are still a lot of pending lawsuits against Fox News here in
the U.S. involving discrimination and other matters, sexual harassment and other matters. The company has try to move on. By gosh, the ratings are
still strong. The profits are stronger than ever. As a business, Fox News is fantastic for the Murdochs, but reputationally it has been a real
problem. And that's what seems to be the issue for Sky.
ASHER: Why do British regulators and politicians just sort of continue to delay a response. Kick the can down the road as opposed to just say, nom
you're not going to get the rest of Sky.
STELTER: Right. I think because if they're going to eventually say no, they want to prove they did all their due diligence. Considered all the
angles. They've given the Murdochs plenty of time to respond. The response today you read was pretty simple. We're disappointed by this. We
don't think it's right.
ASHER: Understatement of the year.
STELTER: Right, but we're going through six more months of review of this deal. It is something that for the Murdochs. They have come quite close
to getting Sky several times and have not been able to get there. It's a puzzle for Rupert Murdoch and something that has been dragging him down for
ASHER: Yes, he wants it so badly. All right, Brian Stelter, good see you, my friend, thank you so much.
The French President, Emmanuel Macron, swept to power on the promise of reform. Now he is trying to reform the country's labor laws, and
protesters are taking to the streets. Will be with our reporter Melissa Bell after the break. Don't go away.
[16:30:00] (COMMERCIAL BREAK)
ASHER: Hello, everyone, I'm Zain Asher. Coming up on the next half hour of QUEST MEANS BUSINESS. Donald Trump says he's not sure about new
sanctions on North Korea. We'll be live in Pyongyang with CNN's Will Ripley, is the only Western journalists on the ground.
And I'll ask one of BMW's board members if it's curtains for the combustion engine. Before that though, these are the top headlines that we are
following for you at this hour.
French President Emmanuelle Macron is now in the Caribbean where he's looking to ease concerns after hurricane Irma devastated the island. Mr.
Macron is pledged to rebuild the French territories and says running water and electricity would be restored very soon.
U.S. President Donald Trump will visit Fort Myers, Florida, Thursday to survey the damage caused by hurricane Irma. The deadly storm made landfall
in Southwest Florida during the weekend. It left a trail of destruction across the entire state days after slamming a lot of Caribbean islands in
The UN says 370,000 Rohingya Muslims have fled Myanmar for Bangladesh since August 25. That's when the Myanmar government began a harsh crackdown in
response to attacks by Rohingya militants. Refugee camps in makeshift settlements near the Myanmar border are being overwhelmed.
The UK is putting Rupert Murdoch's takeover of Sky TV on hold because of concerns about broadcasting standards at Fox News. The British Culture
Secretary intends to order an extensive review of the $15 billion deal. Fox will have to pay Sky $265 million if the deal falls apart.
And Disney has announced Hollywood director JJ Abrams is going to finish the "Star Wars" trilogy. He started later than expected. Episode nine was
expected to come out May of 2019. Now it's been pushed back by about six months. Abrams first "Star Wars" film, "The Force Awakens" grossed more
than $2 billion worldwide.
With Emmanuel Macron in Saint Martin, as I speak, overseeing the response to hurricane Irma, there have been clashes back in Paris over his policies
at home. The French President wants to loosen the country's labor laws. The proposal would give companies a little bit more flexibility in their
hiring and firing of workers. Small companies with fewer than 50 employees would be able to bypass unions and pay negotiations. And severance
packages would increase by 25 percent. Seen as a huge sweetener from the government.
Let's bring in our Melissa Bell, who is live for us in Paris tonight. So, Melissa, this has been basically the first major test of Emmanuel Macron
and clearly, despite the protests, despite how angry some people are, he's not backing down.
MELISSA BELL, CNN PARIS CORRESPONDENT: No, he's not backing down, Zain. He knew very much that this was in the French President's DNA. This was
what was behind his presidential run. This was the center of his message when he was economy minister here in France. There was no doubt that
Emmanuelle Macron, having stood on a pledge of transforming France, was going to take on first and foremost these overly rigid labor laws. I mean,
so many presidents have tried and failed to reform them before. Every single President I can think of since Francois Mitterrand, has tried and
failed to go as far as he has attended to go.
Emmanuel Macron had clearly signaled that he would be the one to do this. Today his real first, as you say, real test, and the question is really,
how strongly those who oppose these measures feel. This was the first day that they were out in the streets. Now France's main union took part, but
a couple of France's big other unions have chosen not to take part. And yet branches representatives of the unions were on the streets today and it
seems that the unions didn't do too badly in getting people out there. There were skirmishes but they by no means took over what was largely a
[16:35:00] And according to official figures -- and it was always going to be about the figures today -- 223,000 people took part in the country,
throughout the country. That compares to 400,000 that the unions claim. But the official figures even 223,000, that is a pretty big number when you
look at the last set of protests against the reform of these particular laws as well last year in 2016. There were 10 days of protests last
spring. And you remember, they were very traumatic. The first big day of protests attracted 224,000 nationwide, according to official figures. So,
as you see, the numbers on the streets today as big as the beginning of those protests last year.
The question is will they have the stamina to see it through as they did last year. Ten days of protests that really led to Francoise Hollande
rolling back on some of his controversial measures. The question is whether the opposition we know Emmanuelle Macron intends to stay the
course, how strongly will the trade unions feel? And will they be able to get out similar numbers on the future days of protests. Already called for
21 September, and a big old march on 23 September led by one of the unlucky presidential candidates, the Far Left's, Melenchon. So, the question will
be to see whether really what we saw today on the streets of France can last.
ASHER: All right, but what we saw today, I mean it's still a significant number. As you mentioned, over 200,000 people out there. How much
division is there. Melissa, within the labor movement itself in terms of the people, who, let's say, might be willing to compromise. Might be
willing to sort of say, Ok, enough is enough. Let's listen to what Macron has to say, versus people who are going to remain headstrong. What are
BELL: That's exactly the right question actually, Zain. As I said, a couple of France's biggest unions have chosen not to take part today. They
had not happened last year at all. So, there is serious division within the trade union movement. There's two major trade unions have said that
they will continue speaking to the government, which has played a very shrewd game this time of having consultations throughout the course of the
summer. Emmanuel Macron is trying to bring in these charges by executive order. So, it was about his ability to convince the unions that through
dialogue, through conversation, through that critical sweetener, that you mentioned a moment ago, they were all heading in the same direction.
Equally, these measures have been welcomed by French business and French economist. So, Emmanuel Macron appears to have appeased enough of the
trade union movement on one hand, to have appeal to those who were calling for change on the other and seems for the time being to be winning this
argument. Which was, as you say, the first big test of his presidency and a serious challenge.
I mean, no one has managed it before. He appears to be arriving at the right time with the right message and perhaps the right approach. As I
say, the question of how those who will not be swayed will behave going forward. And of course, this is the first of the other crucial reforms
that Emmanuel Macron has said he wants to see through. There are those who say, well wait a minute, the unions are simply waiting for the bigger fight
that lies ahead. Things like reform to France's employment insurance. Things like reform to France's professional training, both of which will
affect the unions in their very funding and, therefore existentially. So, these are some of the big battles to come. But as you say Emmanuelle
Macron has made it clear that he intends to see this through -- Zain.
ASHER: Oh, yes, he's clearly not backing down. Melissa Bell, life for us there, thank you so much. Appreciate that.
The pound has jumped to its strongest level against the dollar in years as prices rise faster in the U.K. The consumer price index rose 2.9 percent
in August. That's the joint highest level in more than five years, and it's putting the Bank of England under pressure to raise rates.
The Archbishop of Canterbury says Britain's economic model is broken and is creating neither prosperity or justice. Justin Welby's remarks are part of
a report by the center-l microphone off me says center-left Institute of Public Policy Research. Tom Kibasi is director and joins us live now from
London. Tom, just give us your take in terms of this report on how we can ensure that everybody in Britain, including the lower income folks, can
partake in a much more prosperous future.
TOM KIBASI, DIRECTOR, INSTITUTE FOR PUBLIC POLICY RESEARCH: Well, good evening, Zain. The story of our report is that beneath the headline
figures, if you look at GDP growth and you look at unemployment, the economy isn't really performing as it should. Most people haven't had a
pay raise in 10 years. An outside of London and the southeast, not a single region of the U.K. has seen a return to pre-crisis economic
ASHER: So, what is the solution then?
KIBASI: Well the commission identifies that we don't have a British economic model. That we have an economic model. That means that we put
aside some really fantastic strengths in our economy alongside really profound weaknesses. And that we need really fundamental reform to change
the way the economy functions. So that fundamentally means finding ways to get wages to go up and make sure all regions of the country have a chance
for a positive economic future.
ASHER: Should there be as much focus on education reforms as well as labor reforms then?
[16:40:00] KIBASI: It's going to be a broad package of reforms. This is our interim report. The Archbishop leads a 24-person panel, the Commission
on Economic Justice. The panel as a whole includes representatives from British business, from trade unions, from civil society, so across all
different parts of our country. What we're working on is a package of reforms to really look at how to improve the way the labor market
functions. How to make British business more successful. What does a really good industrial strategy look like. And then also, how to make sure
the gains are more fairly shared. So, the labor share of income in our economy isn't now down to its lowest level since the second world war.
This really is something that we've not really seen in decades now. And the case is unanswerable that we need fundamental economic reform.
ASHER: It is too early, though, Tom, to know what exactly the reforms -- what exactly reforms should be until after we really assess the impacts of
a post-Brexit Britain?
KIBASI: It's a great question. And Brexit certainly makes things more complicated. But I would say this, part of the reason that the British
public voted to leave the European Union was that they voted against the status quo that simply wasn't working for them. An economy that was deeply
unfair. And they were given a chance to cast a vote and they said we are not putting up with this. We won't stomach this anymore and we want things
to change. So, it was a very profound vote for change.
The other thing that we find in our report is that the weakness in the British economy, investment that's far too low, productivity that's behind
the G7 and really behind our main competitors. Real problems in our public finances and a really difficult position on international trade. What's
really striking about these problems in the British economy is that actually they go back for decades. They're not new problems. These are
Brexit forces us to face the diagnosis, but these problems predated Brexit. And after Brexit, they'll still be there unless we are prepared to take
them on and solve them. But Brexit will certainly make it difficult, more difficult to address some of the problems and certainly for the British
political establishment and economic decision makers, it's a huge distraction.
ASHER: And Brexit will certainly put the resilience of the U.K. economy to the test. Tom Kibasi live for us, thank you so much for being with us.
KIBASI: Thank you very much.
ASHER: All right, we just have some pretty significant news just into CNN that I have to report. The Mayor of Seattle has just announced his
resignation. Ed Murray says that allegations against him of sexual abuse of minors are not true. This announcement comes hours after new
allegations surfaced. The mayor says he doesn't want his personal issues to affect the city's government abilities to function. The resignation is
effective at 5:00 p.m. tomorrow.
After a week of negotiating and a unanimous vote in favor of new sanctions against North Korea, Donald Trump says he's not sure -- he's not exactly
sure these sanctions will do much at all to stop Kim Jong-un. We're live in Pyongyang with our Will Ripley next.
[16:45:08] ASHER: Japan's Prime Minister said new UN sanctions add unprecedented pressure on North Korea. Donald Trump says he's not sure if
they will actually have any impact whatsoever. The Security Council voted unanimously to North Korea's oil imports, ban its exports of textiles, and
suppressed smuggling as well. Trump says it's nothing compared to what ultimately will have to happen.
Will Ripley is the only Western TV journalist in North Korea live from Pyongyang. Will, a week ago Nikki Haley called for the toughest possible
sanctions against North Korea, she had a very no-nonsense tone when she said it, the entire world thought she was very serious. And now a week
later we end up with this watered-down version. The last thing the U.S. wants is a boy who cried Wolf scenario. The next time she calls for tough
sanctions will North Korea actually believe her?
[16:45:00] WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Well, North Korea doesn't really -- sanctions do not seem to faze North Korea, they infuriate
North Korea, but North Korea's economy grew by almost 4 percent last year despite round after round of increasingly strong sanctions. We have seen
no evidence on the ground here at least in the capital of Pyongyang that sanctions have had a negative effect on the economy.
In fact, quite the opposite, every time that we come in things seem to be bustling even more. That doesn't mean that long-term the sanctions won't
hurt, obviously, putting a cap on oil imports into the country, banning textiles, adding textiles to the long list of items they can no longer
sell, in addition to lead and coal, and iron and seafood. And then also ending these overseas labor contracts where they bring in a lot of money by
having tens of thousands of workers working on construction projects and other types of things overseas. So, putting an end to all of that. Could
really hurt the regime's cash flow here, Zain. But North Korea has defiantly reiterated time and time again that economic pressure, sanctions
and whatnot is absolutely not going to stop their nuclear program. We have said that time and time again, they have been very clear on that.
So, officials here in Pyongyang while they continue to threaten the United States with retribution as a result of these sanctions, they also think the
idea that somehow now that they would just change course because of additional economic pressure is frankly absurd. And that is what we are
hearing them say repeatedly.
ASHER: So then as you say, it basically emboldens them, makes them much more defiant, so then you are on the ground there, are we going to see
another missile test in early October when they celebrate the founding of the Worker's Party?
RIPLEY: We never know, Zain, when North Korea is going to launch another missile but we do know that they will. And it's just a matter of when not
a matter of if. South Korean intelligence and U.S. intelligence as well, they believe there could have been an intercontinental ballistic launch
this past weekend. It seems as if North Korea may be ready for such a launch at what they deem as the appropriate time. When that will be and
for what reason that is uncertain but what is certain is that it will happen.
And to hear President Trump say that the sanctions are nothing after his ambassador to the UN tottered how strong they are how effective they would
be if enforced, it is a real contradiction in messages from the United States. But it seems as if the United States President does not feel that
the sanctions are going to work either. And certainly, the North Koreans would say the same thing.
What this is eventually leading to, what the president is alluding to that is the big unknown and that is what has a lot of nerves frayed around the
ASHER: Yes, tough talk from Nikki Haley last week, this week as you mentioned even tougher talk from Donald Trump well so says that he agrees
that the sanctions as you say don't work. All right, Will Ripley, live for us there, thank you.
It has been five days since the massive Equifax breach was made public, and still customers outside the United States are in the dark about whether
their personal information has been hacked. We will have more on that story next.
[16:50:00] (COMMERCIAL BREAK)
ASHER: Welcome back everybody, Equifax is just getting around to working out exactly which countries outside of the United States were affected by
that massive data breach we brought you last week. The credit reporting agencies firms, Canadian website was only updated today, the page admits
that some Canadians were affected, meaning their most sensitive personal information may have indeed been compromised. Equifax says it's working
day and night to assess what happened.
Leo Taddeo is the chief information security officer at Cyxtera, a data security firm. And joins us live now from Washington. Leo, thank you so
much for being with us, the fact that this breach took six weeks to come into the spotlight, I mean how will that change government regulation of
how these credit reporting agencies handle private data?
LEO TADDEO, CHIEF INFORMATION SECURITY OFFICER, CYXTERA: Well, Zain, I would not focus too heavily on how long it took Equifax to report it.
Sometimes an investigative agency will ask a victim not to publicly disclose the breach so that there is time to investigate, so I do not think
that the six-week mark is really something we can make a judgment on until we know more about what happened and when.
ZAIN: In terms of what changes overall there will be in terms of government regulation, how these agencies handle data, what do you think
will be the changes?
TADDEO: There is quite a robust regulatory regime governing sensitive data such as consumer data, to add to that would be particularly burdensome.
What the government needs to do is create an environment where companies are incentivized to protect themselves. Having more regulators to go in
and check systems to make sure that they are compliant has been tried. It's really not adding security, it adds to costs but as many security
professionals know compliance is not security. What the government needs to do is create an atmosphere where there is more sharing, where there is
more investment, and there is more focus on security by these big companies.
ASHER: So, right now as things stand right now, how do a lot of these credit reporting agencies actually test for vulnerabilities on a periodic
TADDEO: Well, many of them have vulnerability testing programs that bring in both inside penetration testers and outside penetration testers. But
you can imagine that those can be done in a variety of ways, some are more effective than others. And you can create your own test and pass your own
test, so the ability to find a vulnerability is not very hard, it's how hard are you looking for the real types of vulnerabilities that the cyber
adversaries are going to find and exploit?
ASHER: Leo, you and I both know that this is not going to be last time that we see a massive data breach. Actually, to be honest the scale of
this one really surprised me, 143 million people. But how can we all better prepared to handle something like this? I am talking about the
average everyday person watching from home.
TADDEO: The average person can safely assume that their sensitive information is in the hands of people that shouldn't have it. And on a day
to day basis when we are doing business online, we should be very circumspect about who we are sharing truly sensitive information like our
account numbers and our passwords. There is really no perfect security for a consumer. It's really a shared responsibility between the enterprise and
the consumer, but we think the idea of having a ground-up design for security is the way to go. That is what I think the future calls for.
ASHER: Leo Taddeo, thank you so much, I appreciate you joining us this afternoon.
TADDEO: Thank you.
ASHER: BMW put the focus on electric cars at this week's Frankfurt Auto Show, the German car giant unveiled a new concept car, the i Vision
Dynamics, yet the company's head of sales, Ian Robertson told me, that while electric cars are certainly the priority, decompression engine isn't
dead just yet.
[16:55:00] (BEGIN VIDEOTAPE)
IAN ROBERTSON, HEAD OF SALES, BMW: Over the last 10 years or so this has been a high agenda item for BMW. This year we have nine electric models on
the marketplace and we are going to sell roughly hundred thousand vehicles by year end. This is something where we have been moving in this
direction, we will continue to move in this direction, at the same time, we will have combustion engines in our mix as well.
ASHER: Overall, the writing is clearly, and you guys obviously focus on electric cars, the writing is clearly on the wall for gasoline and diesel-
powered cars. Look into your crystal ball, when do you think those sorts of cars will eventually die out?
ROBERTSON: I see for the years to come and over the next decade, we are going to see a very strong mix of combustion engines, probably in a higher
proportion compared to electro-mobility. But I also see though you're going to see more and more the overlay of electro-mobility onto the
combustion engine. So plug-in hybrids and some form of hybridization will go across the range of vehicles in the years to come. It is not any time
soon that the combustion engine is not going to be part of our makeup. This is something both diesel and gasoline we will continue to see good
sales from, and you know, our customers still have a very strong affinity to both forms of combustion engine. But they have an eye to how electro-
mobility can actually enhance the driver experience as well.
ASHER: Talking to me there about the future of hybrid cars and the fact that diesel and gasoline, it's not over for those guys just yet.
If you have missed part of tonight's program or you just want to take us on the road with you, you can of course now download our show as a podcast.
It is available from all of the major providers or you can go to CNN.com/podcast.
That is quest means business, I am Zain Asher, I will see you tomorrow.