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QUEST MEANS BUSINESS
Trump To NRA: Time to Toughen Up; Wall St. Rallies for First Gains of the Week; IATA Hails Safe Year for Aviation; Trump Says He'll Take Action, But NRA Won't Budge; Florida Shooting Survivor Demand Action at CNN Town Hall; Facebook, YouTube Spread Conspiracy Theories; Dow Snaps Losing Streak; Dow, S&P 500 Close Higher; Major U.S. Markets, Close Higher; Amazon Ends Session at All-Time Closing High. 4-4:30P ET
Aired February 22, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN ANCHOR: --and now, one thing on strong second, that's repulsive of the 1% and that's the (INAUDIBLE) ringing the closing bell
with today the markets higher than Dow and the S&P and now one, two, three, yes, that's what she wants. Well, bravo on Thursday, it's the 22nd of
Tonight, no more business as usual, Donald Trump tells the NRA change is coming on gun control.
Wall Street is notching up its first games of the week. The Dow is up triple digits. We'll give some analysis on that.
And bon voyage, IATA hails a safe year for aviation, director general is live on this program.
I'm Richard Quest live in a very gloomy, I'm told New York is out there somewhat but it is still the world's financial capital, I mean business.
Good evening, we begin tonight, the chief executive of America's most powerful gun lobby says it will not yield its position on gun control, and
the man who wrote the "Art of the Deal" tells them they may have no choice. This could become Donald Trump versus the NRA. Wayne LaPierre of the
National Rifle Association made his first public comments since last week's school shooting in Florida. He won against massive government over reach
by reactive politicians. By his part of the White House, President Trump says he's told the NRA that things have to change.
DONALD TRUMP, PRESIDENT OF UNITED STATES: I spoke to them and they're ready to do things, they want to do things. You know, they're good people,
they're patriots, they love this country, but the NRA is ready to do things. And, you know, people like to blame them and they do have power
and all of that but they want to do things. They want to -- they actually came up with certain of the rules and regulations that we have now but
we're going to have to talk to -- I told them, I said we're going to have to toughen them up.
QUEST: Rebecca Berg is at the Conservative Political Action Conference, the CPAC in Maryland, this is fascinating isn't it, Donald Trump is in a
very tricky position, how does it play out?
REBECCA BERG, CNN POLITICAL REPORT: Yes there Richard, while no one knows how this plays out but Donald Trump potentially threatening a very tricky
political needle here between the NRA and reforming the nation's gun laws. Now way up here today at CPAC on the stage behind me, made no mention of
the President's tweet earlier today saying, he was the first reasoning background checks, to raised their minimum age to purchase a firearm and
banning bond stocks, all major reforms that the NRA would oppose, but there was a start very strong political message from the NRA in live here today.
Nevertheless, sending the message to the President and Republicans who would want to reform gun laws, that they would not support that, that they
would push back hard against it and that they are not going to roll over in this fight.
So this is all just getting started, this is a very significant political debate we're having. Republicans not showing us the shift prior to today,
this is a major development in the gun debate. We'll see how committed they are to this political fight.
QUEST: Within the room what was the move, what was the reaction to LaPierre? Did he get -- I mean obviously bearing in mind Florida and
others, how is he received?
BERG: Well, this is an enthusiastically pro-gun pro-Second Amendment crowd, and they receive him warmly. They gave him a standing ovation.
This is a stage by the way Richard where LaPierre has spoken for 10 years running a full decade, so he is like family to CPACs, to the conservative
activist who gather here each year. Not a big surprise that they would support him and support the message that he has spent on behalf of the NRA
for many, many years.
But I think what a significant in this debate is what is happening outside of this fall room with Republicans right now and not just with President
Trump but also Republican law makers on Capitol Hill having a discussion that they haven't had before.
QUEST: Rebecca in Maryland at CPAC, thank you.
Now the National Rifle Association has traditionally form brand of the attacks from the supporters of gun control, it's the lightning rod in many
ways for those critics of guns. Over the last two decades the NRA has used its deep pockets to make sure politics wouldn't hinder what is a very
profitable business. So the NRAs political spending has been estimated at more than $200 million across two decades since 1998, that's on the
[16:05:07] And in terms of direct contribution to Florida law makers in the last action cycle, well, excuse me, you'll see almost $200 million across
two decades since 1998, that's on the national level. And in terms of direct contribution to Florida law makers in the last selection cycle,
well, excuse me. You'll see almost all the NRA money went to Republicans. You can see the relatively small amounts of money as you can see, 9,000
here to Marco Rubio, just a thousand to Ted (INAUDIBLE) and those led to Republicans.
At a CNN Town Hall on Wednesday. You may want to see a school shooting survivor asked Senator Rubio who got the most money nearly 10,000, why he
continued to take NRA money?
CAMERON KASKY, SURVIVOR, STONEMAN DOUGLAS HIGH SCHOOL: Senator Rubio, can you tell me right now that you will not accept a single donation from the
SEN. MARCO RUBIO, (R) FLORIDA: The answer to the question is that people buying to my agenda and I do support the Second Amendment and I also
support the right of you and everyone here to be able to go to school and be safe. And I do support any law that would keep guns out of the hands of
the derange killer and that's why I support the things that I stood for and I fought for during my time today.
KASKY: More NRA money, more NRA money?
RUBIO: I -- there -- that is the wrong way to look, first of all, the answer is people buy into my agenda.
RUBIO: I -- the influence of these groups comes not from money, the influence comes from the millions of people that agree with the agenda.
QUEST: The millions of people who agree with your agenda as Senator Rubio said, his bigger concern is what the NRA thinks, it's what his constituents
thinks and this is where it gets really exciting or interesting in the sense of the debate. The polling shows many Americans agree with the NRA,
only a small majority favor stricter gun laws. Now, CNN polls from October if you take a look at Rubio's Republican base strongly opposes controls.
So in this argument, if you do your favor of composed gun control laws in favor oppose, you see the numbers. Marco Rubio arguably is mainly
reflecting the views of his base, that the pockets of the NRA coming part from gun manufacturers among some students in Florida are trying to stop
gun sales, the teachers are learning they may be funding the problem.
Head of the Florida Teacher's Union says she was second to learn that their pension fund, their pension owned half a million dollars worth of American
outdoor brands, it's formally Smith & Wesson. And in New Jersey, law makers are calling for band on pension funds making similar investments.
Tom Diaz is in Washington, the author of "Making a Killing: The Business of Guns". Good to see you sir, the reality is, I mean it was a fascinating
debate or discussion last night. It always crystalizes down to a really basic point, how far the gun owners will allow some form of control?
Fascinated always and that comes down to money.
TOM DIAZ, AUTHOR, MAKING A KILLING: THE BUSINESS OF GUNS: Yes, that's exactly right. It does come down to money and you have a very interesting
graphic up there that the amount of money that the NRA donates to any individual candidate is actually relatively small on the scheme of what
kind of political contributions are made across the system. The NRA however has been very adopt at writing a way, it's like one of these remora
fish that follows under a shark so it takes a lot of credit for wave elections in which the political right is very successful.
I think the NRA's real power is as Senator Rubio said, out in the Hinterland, it's extremely well organized, it has lots of followers, the
big question this country is facing right now though is have -- has that wave crested? Are we now seeing what some people call a tipping point?
QUEST: Right, why would you - I mean, you know, the (INAUDIBLE) tragic as this. If you couldn't get gun control after Utah and some in New York if
you couldn't get it after that occasion, what makes you think you can get better gun control with a Republican president who seems to follow the
stronger agenda of the NRA?
DIAZ: Yes, I think the answer to that is that in the underlying dynamics of what's going on in this country, the most optimistic view is that the
demographics are changing, we have younger voters who are coming up, we're not into the kind of older voter demographic that's been the base of the
NRA and of Donald Trumps sort of reactive nationalist base.
[16:10:11] There are two things I would point to directly. They were steam defeats for the NRA. The elections in Virginia recently and most
particularly the election in Alabama. The National Rifle Association put a lot of money into both of those races in states that were traditionally at
least in the recent past red states and they were thump from those dates.
QUEST: But funny, two of you are joining us around the world who remain perplex by this stubborn refusal for the most basic of regulation,
commonsense regulation. We have the trade minister from Australia here who was talking about the post-Tasmania incidents in Australia. You're all
well familiar with that awful massacre.
Explain it. What is the majority -- what do the majority of Americans want on this issue?
DIAZ: Well, I think the majority of Americans want what everybody else want, which is to be safe in their homes, in their schools, in their
shopping centers, in their places of worship. But what they haven't been able to understand and crystalize, in part because of the NRA's extremely
effective propaganda's, what do we do about it? There's so many things out there.
Do we have background checks? Absolutely yes. The background check system, you'll offer hear that one of these shooters pass the background
check, that's because it's a disaster. So we need that. We need to go away as Australia did after the Port Arthur massacre with high capacity
magazines and assault rifles. These are fundamental things that there is not bee a crystallization around.
And again, I go back to this new way of Generation Z, whatever you want to call it. People are just aware to that. The demographic of the National
Rifle Association is older. It helps to understand the National Rifle Association as one of its own executive directors said some years ago as a
DIAZ: And it is a religion whose gospel is the gospel of fear. That fits in with the gun industries' marketing, and with the -- the fright really
that underlies Donald Trump's base. They're afraid of change and differences. And the real question in my mind and I'm very optimistic
about it is has that way the President and now we're going to see the counter way back and I think we will.
QUEST: Good to see you, sir. Thank you for taking time to join us tonight. I appreciate.
DIAZ: Thank you. My pleasure.
QUEST: Sites like YouTube and Facebook had become sources of unexpected heartache in the Florida shooting. Both companies have been forced to
issue apologies after promoting false content, that content verified the survivors. Now, in the case of Facebook, they prioritize conspiracy
theories claiming student campaign is -- were paid actors.
Meanwhile, YouTube added videos pertaining those same conspiracies to its highly coveted trending page. You know, David Hughes dirty secret just
exposed. I'm not a crisis after blaming David Hughes. You get an idea of disgusting for endorsing fake story. It's not a first time this happened,
both companies did the same thing with previous tragedies. But Brian Stelter is here to make some sense out of all.
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: I'll try.
QUEST: But isn't the reality, we don't really know how this new media works. It still new.
STELTER: It is still new and the technology is so far ahead of us. The technology is so far ahead of our collective ability to understand and
manage and comprehend it.
QUEST: So it's inevitable that this sort of thing will happen because of the sizing scale.
QUEST: Think about the number of people. Look at the New York Times which might sell a couple of hundred of thousands, you know, print copies and
have a few million people reading it all night. You know, it's about tens, if not hundreds of millions of people on these billions on this. No
company can publish them.
STELTER: And you've got a few big companies that are particularly under the harsh spotlight right now. And so YouTube, which you just talked
about, it's Facebook and Twitter. Other social networks are factors here as well but we're seeing so much misinformation spreading on these three
platforms. These companies have a lot of catching up to do.
And, you know, Richard, they say all the right things, they say they know that's our problems. There algorithms are working on it, their involving
human editors as well. But the reality is that this fake news play, this misinformation play. It's getting a lot of worst before its getting
Right now, it's so easy for me to make up a lie about you, pretty easy for me to make that lie go viral and it's so hard for you to get justice.
That's the reality, whether it's a student in Parkland or a T.V. anchor or an obscure columnist.
QUEST: But I cannot immediately say away that those -- since you have pretty much open access to Facebook, right, right, so create your account.
QUEST: And you say something insidious thing, nasty --
[16:15:02] QUEST: -- and which is about me, and then it goes you created. How on earth can Facebook until I flog it and say warning, warning,
warning, I think this is untrue.
QUEST: How can I? How can they?
STELTER: We need a profound rethinking of how these sites exist, which could mean some fundamental changes to the Facebook and the Twitters of the
world. For example, right now, I can create 100 accounts on Twitter and I can post 100 things from 100 accounts and make myself look popular. Now
Twitter could -- try to control that and try to temp down on that but even if Twitter does that, other social networks will pop up. So this is
seriously a problem for society, not just from individual company.
And I think, Richard, it's a form of pollution, one way to think about this misinformation situation that David Haugh was a victim of this week. It is
a form of pollution that sickens the environment and sickens society. And, yes the people to consume the most pollution, they're going to get the
sickest. But an entire society is hurt when there is pollution being put out into the environment and that's what we're seeing on YouTube and
QUEST: But I can't see any easy --
QUEST: -- obvious or simple way to prevent it. I mean, you saw it with the Russian hacking.
QUEST: And there you have billion or millions being spent to prosecute that -- to prosecute it by the Russians to actually to do what they were
STELTER: Right. I didn't have an answer. You know, there's a rule for technology companies, there's a rule for newsrooms, there's a rule for
government, for the lawmakers, to the leaders on this and a lot of it is on us as individuals, as news consumers.
QUEST: Remind us how we sign up for your excellence.
STELTER: Reliablesources.com for all the latest news.
STELTER: Thanks for the plug.
QUEST: Oh please. It's my morning reading.
QUEST: Good to see you. As we continue. Streak of loses has come to end in Wall Street. At least for now, the Dow is up 165 point, the best
performance of the week so far, with more project (ph). We will come back.
QUEST: Let's go to the market. And the Dow and the S&P have snap a streak of loses. Let's have green as the color of the day. Why? We have two
greens and we have our red. And if you look, it's the Dow's biggest rise in a week. The movement in the point about it had been as much as 259
points. It did hold on to the gains a little bit of chipping and chopping around during the day.
The NASDAQ is barely down so it is green almost all the sectors. Obviously no records, it's been a while since we have that. If you look at the Fair
and Greed Index we can also think that's VIX, it's still down here at 18 which is in the realms of extreme fair.
So Ted Weisberg is with me. You are not are going to fair for man, are you, sir?
TED WEISBERG, PRESIDENT, SEAPORT SECURITIES: Never.
QUEST: Never. So today was interesting because the volatility continues, the bond sort of drop back a little bit just in the 2.9 but it's going to
3% it's just a matter of time because we know the Fed is going to raise rates.
QUEST: At the next meeting.
QUEST: Probably more, you know, but it's actually in the next meeting.
[16:20:10] WEISBERG: The volatility is in a big picture as exciting or as disturbing as it is, depending on what side of the equation you're on is
simply signaling to investors and to all of us, not investors and non- investors that the markets are going through a changed and it's trying to find its footing, I mean what the Fed is doing has been telegraphed for
months. The Fed is basically said they're going to gradually raise interest rates, they went from accommodative to neutral to restrictive,
it's a process that plays out overtime and you wrap that around a stock market that's traded an all time highs. We just need to go through this.
I don't know where the level is and I actually think stock is one trade higher but they're not going to trade higher for the moment.
QUEST: But the fascinating qualities that every time a stock comes under pressure whereas you might have seen it drop of central too, that could be
a normal 10%. And the volatility is -- has infected the whole market and it's not going away.
WEISBERG: No, and you either have to learn to embrace that volatility depending on what your approach is to the market and use it to your
advantage, or basically it can get so scary that they shouldn't even be there.
QUEST: So (INAUDIBLE) professional diamond in the market every single day. You can understand and follow work out strategies. So an ordinary investor
and not from a pension point now (INAUDIBLE) a little stock portfolio. What are you doing this, because you don't want to, you know, you may know
if claw (ph) back your losses.
QUEST: You're thinking of selling because let's put it to why are you doing it?
WEISBERG: Well, you need to somehow learn to live the volatility and if you are a long term case investor you can use the volatility to your
advantage because the volatility tends to misprice a lot of things because a lot of the stock are driven by algorithms, computers which have nothing
to do with fundamentals. And so when they sell them, they sell everything. When we were down a thousand points it wasn't one stock on my screen, we
followed 250 stocks that was green, they are all red. Stocks don't trade that way, computers trade that way but stocks don't trade that way. So
individual investors need to have a shopping list, need to have done their homework and use that volatility to buy stocks that have missed priced and
they just being patient and put them away.
QUEST: Really got (INAUDIBLE) thank you, good to see you sir, as always.
WEISBERG: Thank you.
QUEST: As we continue, Amazon ended the session at its highest closing price ever. Just put out the 1,500 mark indicates on Wednesday 1,486, we
think about 1,500 on Wednesday. The stock is out more than 25% this year and as the share price expand so does this workforce. It's gone from
56,000 employees, some not seven years ago, more than half a million.
Clare Sebastian visit one of Amazon's warehouses to find out the people who are and what they're doing and what it's actually like.
LEONARDO PENA, QUALITY ASSURANCE PRODUCTION ASSISTANT, AMAZON: Good morning guys, Happy Valentines Day.
CLARE SEBASTIAN, CNN CORRESPONDENT (voice-over): By 7:30 a.m. 20-year-old Leo Pena is already performing.
SEBASTIAN (voice-over): This is what Amazon called a standup meeting, stretching is required for safety.
PENA: Safety first, please make sure we are following a neutral wrist position, a few more announcement --
SEBASTIAN (voice-over): Amazon has become a way of life for Leo.
PENA: Amazon on three, let's go, bring it on Amazon.
UNIDENTIFIED MALE: One, two, three.
SEBASTIAN (voice-over): After joining straight out of high school two years ago, he's on process assistance with ambitions to become an area
PENA: I'll do one task and there's so many different pieces to that puzzle and once that puzzle is completed it's the masterpiece.
SEBASTIAN (voice-over): And that puzzle starts with people like Todd Peters.
TODD PETERS, PICKER, PICKER: Technically I'm a picker so that basically means you just literally pick the item from the pod and then you put it
into a tote there.
SEBASTIAN (voice-over): At 34 and with a degree in French literature he was forced to look for a job six months ago when he and his partner moved
to the area.
PETERS: You can't help but think about a warehouse type factory thing and not have the idea of a sweat shop but it's fairly not bad.
SEBASTIAN (voice-over): And yet Amazon has faced criticism to the transitions in the expenses. Lori Pelltier, head of the Connecticut
chapter of the AFL-CIO, a national organization of trade unions because she has been approached personally by some employees.
LORI PELLTIER, HEAD, CONNECTICUT CHAPTER OF THE AFL-CIO: There's a lot of pressure on these workers that timeframes, they need to get things out.
And so that's what we're concerned with, is what kind of atmosphere these workers are in these warehouses.
SEBASTIAN (on-camera): So what's the pressure like on the employees there?
RICHARD DYCE, DIRECTOR OF OPERATIONS, AMAZON: So what we do is -- so they're customer demands, right, at the end of the day they're customer
demand, we're on business, right? At the end of the day we're a call center and we have to be profitable so to speak so everything is cost
management from our perspective. A lot of the robotics here is really sort of leading towards that to help enhance the experience of the associate.
[16:25:12] SEBASTIAN (voice-over): Windsor (ph) is an eight generation performance center which means robots do a lot of the heavy lifting.
LANCE JACKSON, ASSISTANT, AMAZON: Send them that.
SEBASTIAN (voice-over): Up on the second, Lance Jackson is in charge of keeping them in check.
(on-camera): That's part of your job (inaudible).
JACKSON: Yes, yes.
JACKSON: Yes, yes.
SEBASTIAN (on-camera): And does that happen?
JACKSON: Yes, plenty of time.
SEBASTIAN (voice-over): The 34-year-old former post office mail sorter transferred from New Jersey to Connecticut nine months ago to supervise the
JACKSON: I didn't graduate from college yet but that is definitely one of my goals in the near future. I want to be a teacher. I like helping
SEBASTIAN (voice-over): Over in packing, 28-year-old Janice Rocher is also impatient to advance, before a nanny with two college degrees since just
hit her six months mark.
JANICE ROCHER, PICKER: I wanted to change, you know, a position where I could like move up and like, you know, expand my growth, you know, use my
mind a little bit more. The worse thing about working here is seeing what I pack, I mean like just this morning there was like an ice coffee maker.
I'm going to go home and order that tonight.
SEBASTIAN (voice-over): These are some of the more than 125,000 people in the U.S. who now work in Amazon's fulfillment centers, jobs fueled by a
revolution in how we shop.
QUEST: Clare, fascinating, don't ever seen that sort of in -- within Amazon before. Did you get a feeling for the place, from the people who
SEBASTIAN: You get a feeling Richard and this is something that I've learned not just from doing this but from reporting it on around the bids
for HQ2 and all of that, but does it-- there's a cache of working for Amazon, a little aura of opportunity. It would join and they look and then
think, where else could I go, the picker he's got a degree in Princeton and I think (INAUDIBLE) international opportunities, the packer who has a
degree in sustainability and maybe one day we'll (INAUDIBLE) and I can work there. It's just the sense that you can kind of move up within the
QUEST: But there has been criticism at New York Times, the -- a long article about the way Amazon, did the precious of working in the Amazon
SEBASTIAN: Right, and this performance network grows which it's continuing to do expanded by 30% last year in the U.S. is now more than 75 of those
standards. I think it's more important than ever, ready to keep looking into that as we assess the social impacts of Amazon's success. Yes, you
heard it, they spend it off unions from the beginning. The employees are not organizing, but that doesn't mean they haven't gone to the union.
That's what we found out (INAUDIBLE) in Connecticut. They've had reports from employees who said, you know, things are -- the atmosphere can be a
bit difficult. The pressure is high, but people are still lining up to work there.
QUEST: And that's really -- I mean you can't necessarily argue with the susceptible of that, can you?
SEBASTIAN: You can't, and you know, yes, I was inaccurate (ph) to their experience in this warehouse. We didn't have (INAUDIBLE), we would
supervise, but the people are, you know.
QUEST: But were you impressed, by the way, I mean the shear size, the amount of people and the technology that moves around.
SEBASTIAN: The two things, are the shear scale of it, its' 28 football fields worth of a million square foot and some extraordinary phase but also
the detail within it, every single process is carefully managed. That even the length of tape you get for each boxes carefully coated to match the box
QUEST: Good to see you, thank you, there what you need.
Now as we continue, planes has always been a safe way to travel, when we come back with the head of (INAUDIBLE), come and join me, we're going to
discuss travel, safety, join me in the seat --
[16:30:53] RICHARD QUEST, CNN ANCHOR: Hello, I'm Richard Quest. There more QUEST MEANS BUSINESS in just a moment. When the head of the
International Air Transport Association IATA is with us after a stellar year for aviation safety. The New Year hasn't been quite promising.
Theresa May's cabinet goes on a corporate retreat to try to get on the same page with Brexit. As we continue, this is CNN. And on this network the
facts always come first.
A week after the Florida school massacre President Trump is defending America's powerful in fund raising National Rifle Association saying he
believes the group is filled with patriots who want to do the right thing. Earlier, the NRA chief told supporters it could be frightened about
possible Democratic gains in this year's mid term elections.
Haiti's government has temporarily suspended international charge Oxfam from operations in his country. Haiti's chief admission (INAUDIBLE) London
has confirmed the decision following the allegations of sexual misconduct by some of Oxfam's employees.
British police are investigating a suspicious package reporting the address through Prince Harry and his fiance Meghan Markle and are treating it as a
racist hate crime. The package was received at St. James Palace, this report said it contained a racist letter in white powder which police test
later proved to be shown but non-toxic.
New numbers from IATA confirm that flying is getting safer if it wasn't already pretty safe. Last year there were zero fatal accidents for IATA
member airlines. The total number of accidents is down substantially compared to previous years, 19 fatalities in nearly 42 million flights.
And the industry itself continues on strong growth of profitability, although probably not profitable enough for Alexandre de Juniac the head of
IATA, good to see you sir.
Let start with safety, its unfortunate that you bring out this report on safety where there have been two fatal incidents, Iran and in Russia which
we don't know the causes of yet.
ALEXANDRE DE JUNIAC, CEO, IATA: Not yet, it means that the safety has to remain our first and top priority. When you had an airline when you're a
CEO an airline you have a red light blinking in your head every day starting when you get up and keeping blinking even when you are asleep.
QUEST: Now, as the former head of Air France-KLM, with the knowledge of it, how easy is it? I don't mean you become complacent by any means, but
you become overwhelmed by other issues here now with future investment, bond issuance, product developments, staffing issues, and all of a sudden
you haven't take -- you're just not as aware and you haven't got that message down.
DE JUNIAC: No, but you know, as a CEO you have a lot of even contradicting, you know, issues on your desk but there is one priority you
have every minute it is safety. You have a kind of a -- it's not an obligation, it's the basic of the contract, we have the passengers --
DE JUNIAC: -- which transports you safely all around the world.
QUEST: So IATA has you -- if you had your safety audit which is highly respected around the world. What more you think needs to be done if
anything or is it just a question of executing?
DE JUNIAC: No, it's two things. First of all we have to pay attention to and to draw the conclusions from every incident, accident, fatal or not,
and to try to avoid in the future what happened and what has lead to this accident first of all. And secondly it's a matter of execution,
discipline, rigor, every minute and it's a priority that not only to see you as in his mind. It's the millions employees of our airline they have
that in the DNA, everyday, believe me, everybody if you questioned an airline employee will tell them safety first.
[16:35:24] QUEST: On the question the other side of that coin, profitability for airlines, you got to admit, the airlines are making money
and not as much as -- but they had good times, few is starting to entrap now, cost are starting to entrap, competition, LCCs, ULCCs (INAUDIBLE) low
cost is getting more intense. Alexandre, as Christine Lagarde would say, have they probably repaired the roof in these funny times?
DE JUNIAC: I think so. They have, you know, our members in the airline in general, you know, for now 10 years as being doing enormous efforts to
improve their resilience and the solidity of the balance sheet in their PNL, enormous efforts, restructuring, investing in new technologies,
improving their operations, you know, everything has changed in the airline business (INAUDIBLE) you have not noticed that when you are passenger. But
you know, things are optimized up to a level which is incredible and even with that, we are making profit but which are limited. When (INAUDIBLE)
it's only a less than 5% return on sales.
QUEST: And these are the good times.
DE JUNIAC: And these are the good times. So I think still we must be proud of what we have done and we are structurally rebuilding a more
resilient industry but we are (INAUDIBLE) and the buffet is not very thick.
QUEST: So when you now talk to governments to seem to have a lot of taxing the industry like none of them.
DE JUNIAC: It's more than a lot, it's a passion.
QUEST: Unfortunately, but I mean the number of times I buy a ticket, I fly obviously in New York and London quite frequently and the ticket price is
less than the taxes.
DE JUNIAC: That's all for sure.
QUEST: You know, it's a hundred quid for the price of the proposition and the tax is 150 quid. How can you do -- what arguments can you advance to
DE JUNIAC: Well, first of all we always urge to government to lower taxes.
DE JUNIAC: First. But secondly, if taxes are needed, you know, to finance on something related to security, to safety or to whatever, to fund an
investment in (INAUDIBLE) we say, yes, provided first it is a reasonably fixed in the right level and talking to airlines to the taxpayer idea and
it could be useful first of all.
DE JUNIAC: And secondly the product, the money that is collected from these taxes should be entirely 100% invested in aviation and it's not
always the case.
QUEST: You're very diplomatic, that's always the case, good to see you.
DE JUNIAC: Thank you very much.
QUEST: Thank you very much indeed, thank you.
Now, we'll take a break, but before we do I need to bring you some breaking new (INAUDIBLE). The special counsel of Robert Mueller's team is issuing
new charges against two former Trump aides Paul Manafort and Rick Gates. The charges claimed the two men were involved in bank fraud and money
laundering. We need to understand more on that after the break.
[16:40:42] QUEST: Breaking news from Washington. The special counsel Robert Mueller's team is issuing new charges against two former Trump aides
Paul Manafort and Rick Gates. The charge is saying the two men were involved in bank fraud and money laundering.
CNN's Shimon Prokupecz is in Washington. I'm not being (INAUDIBLE) when I say, when I hear the phrase bank frauds and money laundering. That's
sounds like very serious stuff indeed. What have they said to have done?
SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: So this is -- these are new indictments we've been expecting these indictments to be handed down
and they were just filed moments ago, so we're still sort of getting. It is a little complicated for us but we're still trying to redo this but this
is generally is similar to the other charges these two men are facing here in Washington, D.C. and it really has to do with like you said bank fraud
and tax charges using offshore accounts, they were wiring money according to the indictment from their offshore accounts, some of the money that they
making was during the time that they were political consultants.
Remember, Paul Manafort did some work for the Ukrainian government for the president there, the Russian, the President Yanukovych, some of that money
according to this indictment was wired off to offshore accounts. He was then using some of that money here in the U.S. He was bringing it back to
the U.S so there are tax charges and fraud charges as they relate to that.
QUEST: These allegations I know they're not entirely dissimilar to the earlier charges within those but these charges, they remain ancillary to if
you like the fundamental allegation of Russian involvement or collusion, I mean these are things that's meant (ph) that Mueller's is picking up in
terms of the investigation, is that right?
PROKUPECZ: Yes, I know, that's exactly right. This is information, this is an investigation that have started long before special counsel was
formed and then was picked up by the special counsel. There was a lot of speculation that some of these charges are being brought to get the
cooperation of both these men. Remember that the President have talked about that this red line and that the special counsel to the investigation
is going to be on what he was supposed to go, which was looking at collusion and also obstruction. And now what we are seeing is another
indictment here where people are being charged with financial crimes.
So certainly, this is another interesting development. But Richard as we've been saying, Rick Gates was expected to plead guilty and offered his
cooperation to the special counsel and this seems to indicate that now is off, this also indicates perhaps that they're still trying to put a squeeze
on Paul Manafort to get and to cooperate in the special counsel investigation into Russia meddling and other issues.
QUEST: Shimon good to see you. Thank you. (INAUDIBLE).
Return to London why the British Prime Minister is holding 11 hour talks to resolve once handful of the government's position on the Brexit. Cabinet
ministers are held up with Theresa May's country retreat or checkers, they have to decide whether to abide by the EU's rule book or break away with a
Bianca Britton, is in London. Good grief, what have you got in there?
BIANCA BRITTON, CNN CORRESPONDENT: I have props for you Richard to illustrate what the UK's current position on Brexit is. So we're still
waiting to hear the outcome of this meeting and I spoke to Downing Street. We're expecting that in about 20 minutes.
BRITTON: But for now, so this is the latest iteration that we have of whether UK's stands on Brexit, this is what it's hoping for. It's called
the three basket strategy. Basket one, this is where the UK and the EU would have the same objectives and use the means to get there in the
future. An example of this, your favorite Richard, is planes. So for example the UK wants to stay in the European Aviation Security Agency --
Safety Agency --
BRITTON: -- because it's in their interest, so that would be basket one. That's nice and simple. Basket two would be when the UK and the EU have
the same objective but it doesn't mean it's getting that. An example of that could be animal welfare with this nice British bulldog demonstrating
that. Now, the UK thinks the EUs way of doing that is bit costly and (INAUDIBLE) so they say they meet the same standards but they do it
differently, that's basket two. Basket three, this is the contentious basket. This is the divergence basket where the UK has different
objectives and obviously different ways of getting that.
[16:45:08] Now, industry example to include future industries like A.I. and robots or fisheries, which is a very controversial issue.
QUEST: But Bianca, Bianca the problem with this of course as I was reading in my morning newspaper is, it's fine to have these three boxes or baskets,
but -- and it's fine for the British government within itself to argue about this, but they've got to convince the other EU27 to go along with
this. I'm going to ain't going to buy into three baskets with somebody agrees somebody maybe with different measures and somebody got no intention
of agreeing at all?
BRITTON: Well, the European commission have said today, they've slammed this tragedy and they said this is isn't consistent with the way that we do
things, but it's still the UK's position at the moment and of course the beauty of this Richard as you know is because the cabinet don't agree, so
this basket here it pleases the chancellor, because he doesn't want to diverge form the EU, this basket here it plays as Boris Johnson.
So of course this suits the Prime Minister, but like you say it's not just a negotiation between the cabinet getting them alongside to accept this
strategy, it's also have to get through the British parliament and then the EU have to sign it off.
So yes, the British Parliament might accept this, but the EU's not going to accept this, so this is the pick where they are in.
QUEST: Put you baskets back into the desk. Good, could put that your lodge back into -- all right not going to do that. With the baskets
excellence, thank you.
Stocks in London ended lower, the bonds it dropped by just about 100% despite of the 4% jump for the Britain's biggest banks and (INAUDIBLE).
The Italian markets was the worst performer of the day, stocks there have struggled in the lead up to next weeks election (INAUDIBLE) 1%, I'm joining
here by Fernando Napolitano, the chief executive of the Italian Business and Investment Initiative.
FERNANDO NAPOLITANO, PRESIDENT, ITALIAN BUSINESS & INVESTMENT INITIATIVE: Good evening.
QUEST: Good evening. This is election?
NAPOLITANO: Yes sir.
QUEST: Italy has managed to weather storms before, why was it, you know, the scrutiny, years of coalitions, but these seems to be a moment in time
with -- that meets the change needs to take place, would you agree?
NAPOLITANO: I do agree, I think that the overall scenario, Italy is very simple. We have a debt which is 132% of GDP, we have a deficit running, we
have an aging population and we have a great expert and we're about to lose money Mario Draghi the head of BC (ph) with rising interest rate. We
served that's growing nearly 4% of GPD, so the reason not much leeway, so the electoral campaign is the electoral campaign, but whether it's going to
be there it's going to be confronted with this scenario.
So we are in the business community pretty much relaxed, we're hearing all sorts of stories during this electoral campaign where they think that the
mandate is very easy and simple, number one, great alliance with Germany, and number two, in allowing France and Germany to belong with Europe.
QUEST: Well, hang on a second. Hang on, that's very controversial in Italy right isn't it? This idea of, you know, strengthen the Franken-
German alliance and then jump on border as well, but Italy to its credits, you know, has always been account to make to some extent.
NAPOLITANO: Yes and no, you know, if Italy has been a founding member of the Euro and of Europe of course, now Italy has to put a bit of house in
order -- in that order.
Quest: You know, the time for putting the house in order -- I was joined by Alexandre de Juniac just before you. The airlines of certain the last
10 years putting that house in order, Spain has had massive reform, now I presume your point to pension reform or minor changes in Italy, but there's
been no way near the full scale root and brunch reform of the Italian economy that there should have been to where the future source.
NAPOLITANO: Indeed we did something though, the pensions reforms are underway and I think we have the most talent system in Europe, the labor
law is been -- market has been reformed. We need to face that the justice system it has become quicker more aligned to European standards and I think
we'd also need to boost our interna consumption at the rather the investment. But I think overall the scenario of Italy if you take public
debt private debt and the way the accomplice and deleverage is one of the office economy in Europe.
QUEST: OK, now where do you think Italy will stand on the Brexit final, it's going to be up to lead just never mind what (INAUDIBLE) wants so badly
it want, is going to be up to leaders in the council to decide really how much Leeway that prepared to give the UK in a final Brexit deal. We know
that Spain because obviously or tourism we know France and Germany playing hard for Hungary, Poland and Spain may be slightly less. Where is Italy
going to be?
NAPOLITANO: What Italy is traditionally play the de-mediator.
[16:49:54] NAPOLITANO: And I think will only keep on doing that, we'll see what government we'll going to have, you know, we're been a historically
played a mediator role into Middle East and we still do. Our troops are 11only without Italian troops over there these scenarios would be much
worst. So I think that's we're going to be playing in this scenario with the two partners and I think that with a good relation we have with the UK.
QUEST: In a sentence, do you think in the election next week that they'll be any certainty as from the result?
NAPOLITANO: I think we're going to see a big surprise in the center (INAUDIBLE)
QUEST: Thank you sir (INAUDIBLE). Now, as we continue, Germany is addicted to diesel even on some calling the teller, a court wording could
start or put an end to that prediction. After the break, this is QUEST MEANS BUSINESS.
QUEST: German prosecutors are now targeting former executives at Audii over an alleged cheating on diesel immission tests. The police raids on
the homes of three new suspects throughout the investigations getting broader, on the same day as the German caught delayed its decision on
whether to band some diesel cars two major city centers.
CNN's Atika Shubert reports on why someone to ban.
ATIKA SHUBERT, CNN CORRESPONDENT (voice-over): Thejos Lucas (ph) loves his bike, he averages 250 kilometers a week in his home stood court, but there
is a problem.
THEJOS LUCAS (PH), STUTTGART RESIDENT: Well, I could smell that it wasn't cleaned. It does hurt in my nose, did hurt in the eyes.
SHUBERT (voice-over): Lucas is worried about No2 nitrogen dioxide from diesel exhaust. The EU says in 2014 an estimated 400,000 premature deaths
were caused by No2 and fine particular pollution. Lucas (ph) points to two plastic vials he's installed on his root designed to trap and measure No2.
There are more than 500 of these throughout the country.
But Lucas isn't just a concerned cyclist. He is also a car engineer. Germany's auto industry makes up nearly 15% of its GDP and employs more
LUCAS (PH): We are very car connected, I mean every person here is somehow getting money from the continent, if it's not me then it's my family that
earns money from the car industry, everything is connected and they'd be very proud of -- I'm very proud of the cost and the products we've make.
And -- but the idea we have that costs has to be run by petroleum and then everybody has to have it their own car in a city that's growing and then
kind of more and more compact. That setting has to change.
SHUBERT: Nearly half of new cars net EU are diesel, but in 2015 Volkswagen was caught cheating emissions test in California skewing No2 up to 40 times
Susanne Jallow says she wasn't surprised by that, she shows us the layer of smog that hangs over the city. Stuttgart is one of 28 cities across
Germany that regularly exceeds EU limits per No2.
[16:54:57] For years I set my kids out and told them to play outside when the weather was nice she says, but cold clear weather like we have now is
not good. The issue is that air stagnates underneath it's like a lead that sits on the smog and could not get out she say.
That's when she checks her particulate meter, a simple PVC pipe and circuit board device made for less than $40, one of hundreds across the country. A
grass rates initiative to measure the cost of car pollution.
In the last year or so things have changed she says, people now realize all citizens are affected.
Getting Germany to give up or at least put aside their beloved diesel cars may not work immediately, but citizens like Lucas (ph) and Jallow are
hoping their persistence pays off.
Atika Shubert, CNN Stuttgart, Germany.
QUEST: And we will take up profitable moment after the break.
QUEST: Oh it's on the program, we brought you class remarkable pictures from inside the Amazon factory, a rare opportunity to see just the share
size and scale. Note of disclosure here I do actually own some Amazon stock, but the point I want to make here is to understand Amazon and that
fact that its share price is now $1,500 give or take. Really, I only have to really understand what I did today.
I went online, I bought something from Amazon and it will be delivered tonight. Now we can have a discussion about whether this is good, bad or
indifferent, but you can't argue with the fact, it has revolutionized the retail industry.
Now that's QUEST MEAN BUSINESS for tonight. I'm Richard Quest in New York. Wherever you're up to (INAUDIBLE) happen. We'll see you again tomorrow.