Return to Transcripts main page
QUEST MEANS BUSINESS
Thousands Await Rescue After Deadly Indonesia Quake; U.S. Poised to Reimpose Iran Sanctions; A Source Tells Cnn There's a Strong Possibility of a Second Trump-Kim Summit; Saudi Airline Suspends Canada Flights in Diplomatic Row; CEOs Face Dilemma About Revealing Extent of Health Issues; Pepsico CEO Indira Nooyi Stepping Down. Aired 4-5p ET
Aired August 6, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: The hour is up, the other markets are up. Stuart and Frankel leading the closing bell because of the
46th anniversary since founding, and oh that's enough, sir. Well, there we are. I think we have a firm limited gavel. Trading is now over. You and
I start a new week together. It is Monday, it is August the 8th.
Another CEO - female CEO - is gone. Pepsi's Indra Nooyi stepping down, leaving only a handful of women at the helm of Fortune 500 companies.
Saudi Arabia snapped and leaving Canada in the cold. Saudi is freezing trade and investment and now even, Saudi flights are being cancelled to
And US sanctions on Iran return in just hours. President Rouhani says Washington will regret it. I am Richard Quest, live in the world's
financial capital, New York City - hot, humid and steaming as it is today - where of course I mean business.
It is the end of an era for Pepsi. Good evening, Indra Nooyi is stepping down as Chief Executive after 12 years. And she is leaving an exclusive
and shrinking club of female Fortune 500 leaders. We will talk about that aspect of it in a moment. The future of female CEOs.
Whilst we continue though, we must look at Indra Nooyi's legacy after 12 years of leading one of the world's top drink companies. Now, this is the
company she inherited. Sugary drinks and salty snacks galore, and during her period, well, we have to say, yes, this is the eponymous Pepsi bottle,
but it had - sales were up some 80% during her tenure. The shares though, even though the sales were up, the shares have been lagging recently.
There was growth through acquisition. Quaker Oats became part of the Pepsi family, as indeed Gatorade, but the trend that Nooyi will best be
remembered for was maybe moving away a little bit from this and catering to healthy tastes. Pepsi once sales growth of healthy products - products lie
these in the Pepsi arsenal to outpace traditional snacks. Yes, Naked, a blend of four juices with the added ingredients and other natural flavors.
It's still 320 calories, but you've also got Tropicana and things like that.
So, who takes over? Replaced by Pepsi's Global Operations Chief and as Nooyi goes, leaves just 24 women left leading Fortune 500 companies. And
Nooyi told Poppy Harlow making women's voices heard is a challenge.
(BEGIN VIDEO CLIP)
INDRA NOOYI, FORMER CEO OF PEPSICO: I have the privilege of being a CEO, right, but there are not too many of women CEOs around the world, so we're
going to bring other senior executives, but we have to figure out ways to make them feel included. That's our next challenge, but you know, we are
up to challenges.
POPPY HARLOW, ANCHOR, CNN: And you have said that women in business are a force to be reckoned with.
NOOYI: Absolutely. You know, when I was a (inaudible), a reporter asked me a question, which I'll never forget. He said, "What if most of the
important positions in the world are run by women? How different would the world be?"
NOOYI: I thought about this and said, wow, what a wonderful world. There'd be less wars, there'd be less arguments, there'd be ethics all over
the place. It will be a kinder, gentler world. Man, I can't wait for this world.
(END VIDEO CLIP)
QUEST: She would have to wait a bit longer, certainly in the corporate world because Nooyi is just the latest female Chief Executive to quit.
These are the others. You've got Nooyi gone, Denise Morrison from Campbell Soup left, Meg Whitman left HP having split the company, but she still
split afterwards. Sheri McCoy left Avon, and last year, Iren Rosenfeld of Mondolez left, and of course, Marissa Mayer left Yahoo after it was sold to
And in the course of what these women leaving, every resignation matters because with these departures, now less than 5% of Fortune 500 companies
have female CEOs. Let's talk about this with Ilene Lang, she is the interim CEO of Catalyst, a group that promotes workplace opportunities for
women. She joins me now.
Can you hear me?
ILEN LANG, INTERIM CEO, CATALYST: Yes, I can. Hello.
QUEST: Hello, right. So, I suppose we have to look underneath the headlines as to why there are more female CEOs moving into positions where
they can take over?
LANG: Right, the pipeline is a little leaky at this point. And I think that what we look at is that women have become more and more educated, they
are at parity with men, if not ahead. Women are in the labor force. They up through middle management. They are at parity, but we still have what
you might call a glass ceiling above that and for women of color, it's a concrete ceiling. So, it's a rare individual who makes it to the top.
QUEST: Right, but for the last - the thing I don't understand is for the last 10 to 15 years, we have known about this problem, policies have been
put in place in many major companies to somehow, at least attempt to deal with it, and yet 24% fewer female CEOs, so have those policies failed?
LANG: I would say the policies haven't gone far enough. I think there are starters and there's recognition that just assuming that we can break down
all the barriers that have been around in our societies and in our corporations for decades, they'll just go away with a few policies, and
it's workplace culture that makes the biggest difference and whether, in the culture, there are assumptions that women can do as much as men.
QUEST: Right. As a man who sort of has had to cover this, and always treads on thin ice when one does. What is the culture that has to change?
I mean, you say that women - you say that there has to be a culture that women can do just as well as men and are just as capable and can progress
as far in the spot, but companies including my own, have policies about this. But arguably, what you're saying is, they are not being effective,
so that begs the question, what next?
LANG: So the reason they are not being effective is that they're not being applied in ways that would make a difference, and let me give you an
example. There is documentation that men are promoted much more quickly than women are, that women have to prove themselves over and over again
before they are taken as seriously as men. We call it, men are promoted on potential, women are promoted on proven performance.
Women need more sponsors than they get. People who - men and women - who behind closed doors will say, "She can do this job, I put my credibility on
the line to support her." We don't have enough of that.
QUEST: Understood. We will talk more about it. It's a subject important to us here on "Quest Means Business." Thank you very much indeed. As for
Pepsi shares, I'm not sure if you were the CEO who just announced your resignation, it might have wanted to drop a percent maybe, just out of ego,
anyway, Pepsi shares ended the day up 1%, which means we need to put the perspective of the market in the trading post.
So it was a busy day on the markets, and Facebook for example - Facebook shares lifted the NASDAQ. Look at the numbers. The Dow was up, the S&P,
the NASDAQ, good gains all across three. Dan the man, the lighting man, green please. And let there be light, and no records - they remain the
same, 11, 14, 25, 9, 1 and 2. But the oil prices roughly about 1% to 2% higher and that's come off its top from where it was. It has been higher
earlier in the session.
Saudi output dropped and there was the Iranian sanctions to snap back, which we're talking about later. The Iranian sanctions coming back, that
raises questions. This hour, it's just a half a percent, although that's Brent, by the way, whereas Texas, the WTI blend was what much was up,
double that. So the doubled WTI blend because of the distance and the nature of the blend was higher.
Market moves driven by earnings, and the share case as you can see tracks the sorts of movements and the sort of earnings that we've seen. So, over
on this side, these are the companies that gained 4% to 6% in the 24 hours after reporting. A good strong crop of companies.
You've got those in the middle that really didn't perform. These are some of the banks and I suppose, one can make a strong argument for saying that
it looks Even Stevens, but I guess, my gut feeling says that there are more companies that are on the upper end than on the lower end.
QUEST: Anyway, the first one we've got is, and I think this is going to be pointed out by this, Tyson has reported higher profits and warned of
tariffs, which is exacerbating the meat cut, but the shares are up 3%, which is just about there. A little bit tight, just about there. Newell,
which owns Rubbermaid, Sunbeam, Elmer's, Sharpie, Yankee Candle - now this is a strong, solid brand company, and yet, it says tariffs will cost the
company $100 million and the shares initially are down 14% which means we have to put them way over here along with the others.
Finally, HSBC, the global bank, down 1% on this one. No impact yet from tariffs, perhaps, not expected to be. Profits are growing, expanding into
tech and into China, so HSBC is down just 1% which is there.
You're starting to get it? Busy week for earnings ahead. As we look here, we've got Viacom still to come, News Corp, 21st Century Fox, Sinclair - you
can see all the big ones to watch out for tomorrow is Disney and Snap obviously - well, we'll talk about that sort of on a private brief between
us, Marriot, Avis and Hertz. So, we'll get to all of those tomorrow.
Now, the world's top tech companies are getting rid of Alex Jones. Facebook, Apple and YouTube have all taken down content from Jones and his
Infowars channel. Jones has become notorious about his conspiracy theories. Oliver Darcy is with me. Good to see you, Oliver.
OLIVER DARCY, SENIOR MEDIA REPORTER, CNN: Good to see you as well.
QUEST: Why are they taking it down?
DARCY: They're saying that it violates their community standards. Facebook, Google, Apple - they all have community standards in place that
regulate content - offensive content, hate speech and so each of these platforms are saying that Jones and Infowars violated these policies.
That's notable because they've been in the news recently for spreading misinformation, but that's not why these tech platforms are saying they are
removing the content.
QUEST: Right, but these are two different issues, isn't it?
QUEST: It's completely - one is misinformation, fakes news and that - this is about - they are not removing him and others for that, they're removing
him for simple - they don't like what he's saying.
DARCY: Right. And what's notable though is that Facebook did not act on its own here. Apple did not act on its own. Twitter - well, they're not
acting at all, but these platforms, they were really prompted to enforce their own standards by media outlets for weeks asking, you know, you say
that this violated your community standards, why have these videos been allowed to say online?
QUEST: All right, but here's the - I alluded to this earlier when we spoke earlier in the day. The critics now say, hang on a second, the Facebooks
and YouTubes are now the new town squares, okay? They are now the new town squares where people can express their views. But who told Facebook and
Google or YouTube about community standards? Why should we all conform to their standard? Because I noticed what Facebook said in its - what Apple
said. They basically said that we promote debate and dissent as long as it is respectful.
DARCY: Right, well, they might - you know, you might think it's a town square and a lot of people might say this is a town square, the bottom line
is, this is a private company and the company has decided that these are the regulations they are going to put into place to regulate their
platform, and Alex Jones they are saying has violated these policies and as such, they are going to remove his content.
QUEST: But I've got a bag on about this, but where - what about those occasions where people do feel to make unreasonable, unpleasant, offensive
comments, but that's what happens in a democracy? You have the right to offend.
DARCY: Right, I think that's something they're going to have to answer moving forward, and I think it's also going to be interesting to see
they've now removed Alex Jones's content, but now I think others are going to fly with other content that might violate standards and can they equally
apply these standards across the platform to people on the left? To people on the right? I think that's going to be something you're going to want to
pay attention to moving forward.
QUEST: Good to see you. Thank you, sir.
DARCY: Thank you.
QUEST: The company behind Apple's chips has suffered a devastating virus over the weekend and the firm is TSMC, which is the Taiwan Semiconductor
Manufacturing Company. It is warning they are likely going to be shipping delays and it could wipe out a couple of hundred million dollars in
revenue, but that's probably the least of their problems. Samuel Burke is in London. Will this have any actual effect on Apple's products?
SAMUEL BURKE, BUSINESS AND TECHNOLOGY CORRESPONDENT, CNN: Well, Apple - they're stock is up, so investors don't seem to care though analysts say it
could have a small effect though not huge.
But Richard, what's really interesting here is that when you hear virus, they were just taking a look at how Apple stock is so far up. It's still
past that trillion mark, so don't worry about them. But what's interesting here is, usually when you hear about a virus, you think an attack or some
type of hack.
BURKE: Here, the company is saying there was no such thing. They're saying it was a mis-operation, a virus inside their system somehow. I
think that could be even worse. At least, if it were somebody else trying to do this, this would be like you saying, "My famous bell was missing,"
but nobody else was in the studio except for you, Richard, and all of a sudden, the bell has gone missing.
So, I think analysts need a lot more information here to try and figure out how this chip and processor maker, one of the key makers in the world for
Apple, iPhone, iPad and other companies suddenly has what they are calling a mis-operation. I didn't even know that was a word.
QUEST: All right, well, it's not, I don't believe. I am sure somebody will correct me and as for the existential question of my bell, I'll even -
I won't think about that in the shower tomorrow morning. I want to get your take, Samuel on the debate I was just having - or discussion I was
having with Oliver Darcy and this idea that Facebook and Apple and others are removing Alex Jones who may be repugnant, who may have objectionable
views and defensive views, but until they are illegal, one question - this whole concept of you know, I disagree with what you say, but I'll fight to
the death for your right to say it.
BURKE: Well, this is not the case of the Nazis can march in Skokie, Illinois - the famous case in the United States. Let's just say this plain
simple. Facebook is making it up as it goes along. Sometimes, this speech is okay, sometimes it's not. I think they're just looking at each of these
cases. The pressure from CNN when they report on some of the repugnant things that Alex Jones says, and they feel enough pressure and they say,
If you're looking for a guideline from Facebook, which I think what you were trying to get at with Oliver Darcy, what are the exact guidelines.
There aren't any. They're just caves and so that's - they have the right to do this as Oliver pointed out, but I don't think that there's a real
rhyme or reason to anything they're doing, it's just public pressure.
QUEST: At what point does Facebook and others become more than just a private company and we are entitled to treat them to a different standard
because they are effectively the town square? They are the soap box upon which people will put argument?
BURKE: Well, I think the tide completely changed for them. They used to be able to make this argument that, "Well, it's out there. People have
their freedom of speech." Once the whole fake news wave happened after the 2016 election, they realized that however much they would like to be
passive, and that is exactly what Mark Zuckerberg would want, that they just can't do it.
But to your point, isn't it supposed to be a democracy? No, there is nothing democratic about it. They decide at the end of the day, and it's
hard to see which direction they're going to decide most of the time quite frankly.
QUEST: Samuel Burke in London. Thank you, sir. Coming up. We are in Sturgis in South Dakota, home of the largest motorcycle rally in the world.
We asked if they're siding with Harley-Davidson or President Trump after tariffs forced jobs and production overseas.
QUEST: One of the biggest opponents of the new US tariffs is Harley- Davidson Motorcycles, and that's left riders having to choose between their bike and their President. CNN's Bill Weir rolled up to the biggest bike
rally in the world to discover which side the bikers are on.
(BEGIN VIDEO TAPE)
BILL WEIR, CORRESPONDENT, CNN: They rumble in from all points on the compass and for one week each summer, this little town of 7,000 explode to
half a million. But this is one city that looks nothing like the rest of America. You can go hours without seeing a person of color. In Sturgis, a
minority is a white guy on a foreign bike.
There are no debates over gun control here or the ethics of the #MeToo Movement and there is no doubt who is the leader of this pack.
But you're a fan of the President. You think he's doing a good job?
JOHN SANS, POSTAL WORKER: Of course, he's doing a lot better than what Obama did.
WEIR: This ghost rider reveals himself as John Sans, a postal worker who rides from Kentucky each year and like so many I talk to, sees proof of
Trump's brilliance in the booming economy.
ROD WOODRUFF, OWNER, STURGIS BUFFALO CHIP: What they'll tell you is that Trump buffed the economy, it's so good, people are feeling so good.
WEIR: Rod Woodruff is the owner of the sprawling Buffalo Chip, a Disneyland for bikers and says his campers have an average income of
$95,000.00 a year.
WOODRUFF: Seventy-seven percent are homeowners in the United States, lots of people own multiple motorcycles.
UNIDENTIFIED FEMALE: They have a tattoo parlor up here, we've got food, pizza, anything you want and that's a free access process.
WEIR: No jail?
UNIDENTIFIED FEMALE: No. We don't need one.
WEIR: You don't need one. Violence and unrest are incredibly rare for a crowd this size. One reason is that most folks share the same values, and
those that don't, keep it to themselves.
MICHAEL LICHTER, MOTORCYCLE & COMMERCIAL PHOTOGRAPHER AND EXHIBITION CURATOR: What I see here in motorcycling is a microcosm for the whole
country, and I get the feeling sometimes that people that don't believe in what's going on is right, they become very quiet.
UNIDENTIFIED FEMALE: I think there's a lot of hypocrisy going on in the country now because I just feel like everybody wants freedom and they want
rights, but God forbid, somebody disagree with you because then you'll get your head bitten off.
WEIR: A couple months back, the President aimed his Twitter and trade war guns at Harley-Davidson. Even though they got a huge tax break, the
company shut down a factory in Kansas City, laid off hundreds of workers and said because of the tariffs, they'd have to start production in a new
country overseas, which begs the question, is this the ultimate loyalty test for his base? Do these folks pledge allegiance to the President or
MARK HALVORSON, GREAT BEND, KANSAS: Well, I'm going to have to go with what's going to make America better, and if Harley wants to choose to go
somewhere else, then I'll choose to buy different bikes. I personally love the man. I think he's doing a wonderful job.
WEIR: Despite the President's disdain for my profession, they could not be nicer. Do I strike you as an enemy of the people?
HALVORSON: Not whatsoever, not one bit. We're sure glad to have you here.
WEIR: But it's obvious that no amount of earnest reporting will change their minds. Because if you look at Russia and the Mueller investigation
and there's a lot of red flags and dark clouds.
HALVORSON: Well, that's usually from a lot of politicians, but we're wondering you're picking on him because he's on the outside. I mean, if
you look at the Clintons, how come they can do things and no one else can?
WEIR: I mean, I'm old enough to remember when the base loved Harley- Davidson and hated Russia and it seems like it's flipped a little bit.
HALVORSON: I don't think there's any reason for him to call him out or make him - we should try to be friendly with everyone and if they don't
want to be friends, then it's a whole another story.
WEIR: Even Vladimir Putin? Even the dictator? A murderer?
HALVORSON: Well, he met with Kim-Jong un as well.
UNIDENTIFIED MALE: Another fake news, we all know it.
WEIR: Touch me. Touch me.
UNIDENTIFIED MALE: (Inaudible).
WEIR: Back downtown, our presence sparks a debate between some Fox News fans from Texas and Bonnie from Nebraska.
UNIDENTIFIED FEMALE: They don't know what they're talking about.
UNIDENTIFIED MALE: Come on.
UNIDENTIFIED MALE: Yes, we do. You're an American, too. You're not on the other side.
UNIDENTIFIED FEMALE: That's not true. I watch both.
UNIDENTIFIED FEMALE: I go either way.
WEIR: Which proves we now live in a media age where people can choose their own facts.
UNIDENTIFIED FEMALE: I have a friend who is very much opposed, and I go, "Uh, yes. I agree with you. No problem."
UNIDENTIFIED FEMALE: Everybody has their opinion, isn't that right?
WEIR: That's true.
UNIDENTIFIED FEMALE: It's like [bleep], everybody has one.
WEIR: As long as they don't start shooting at each other, right? But then, the heckling is interrupted by a hero falling from the sky. Sergeant
Dana Bowman, an Army golden knight who lost both legs in a midair collision. He lands will all glory, and just for a moment, it feels like
we are all in this together.
(END VIDEO CLIP)
QUEST: Now, last week, the Chinese called the US actions blackmail, today, it's full-fledged extortion. The Chinese say, the trade war serves only to
hurt the United States. President Trump is tweeting his tariffs are in his words, working big time. Cristina Alesci is with me, so you've heard that
excellent report from Bill Weir.
CRISTINA ALESCI, MONEY AND POLITICS CORRESPONDENT, CNN: Yes.
QUEST: People are in between on their views. They're not going to change their views one way or the other, but these tariffs, the President says,
they're working big time.
ALESCI: That's not true. Right now, anyway, but if we take a report card at this moment in time, the tariffs are not working in the sense that they
aren't benefiting the average American, right? They are benefiting some specific industries, so I don't want to paint the broad brush here, but if
you look on the whole, like the fuel and aluminum industry for example, but if you look in the whole - there are some negatives to these tariffs.
One being, we don't have a trade deal yet, right? And that was the purpose of imposing tariffs to begin with, right? A trade deal for the benefit of
the American worker.
QUEST: Right, but there is an argument, I would say, we are either in the beginning or the middle of this negotiation, and therefore, you're trying
to sort of say, you're trying to see how the book ends before you got to Chapter 4.
ALESCI: Yes, but he is claiming victory before Chapter 4, so that's the problem here, right? We're grading him - he is claiming victory before the
book has ended, so yes, it could be a successful strategy and tariffs could work, but right now, consumer prices may be going up. There are some
companies as you know who are warning about profit losses because of these tariffs, and consumers may have to pay more for items like dishwashers and
So, that is not a good thing heading into midterm elections. Look, to your point, it's not over. The story has a lot more to it than what we see now.
One thing is for sure though, the way that the President is framing this is making it sound like only the foreigners or only the other countries are
going to pay and that's just not true.
QUEST: Let's just quickly remind ourselves, what is the next step in this deadline terms? When do the next tariffs come in?
ALESCI: Well, we have that $15 billion on Chinese goods that are still - at the end of the comment period, so they are probably going to be imposed
at some point. Everybody is waiting for that, but the next big shoe to drop is the $200 billion.
QUEST: And that is ...
ALESCI: That - the comment period is open, the company is going to come forward and say why or why not they should have these tariffs? Why we
should impose them? Why we shouldn't impose them and that by the end of the month, that comment period will be closed and the administration will
take action or not take action.
QUEST: Cristina, thank you.
ALESCI: Thank you.
QUEST: Thank you. As we continue tonight, diplomacy is quickly deteriorating between Canada and Saudi Arabia. All trade deals have been
frozen. Not flights from Saudi to Toronto are suspended.
John Defterios will be with us after the break to help us understand what has happened. Why Saudi and Canada fallen out so badly so quickly?
[16:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I'm Richard Quest, there's more QUEST MEANS BUSINESS in just a moment. When it's Saudi
Arabia versus Canada and the Saudi state airline has stopped -- has decided to stop flying to Toronto for the time being.
It's Iran versus the United States as President Rouhani is warning Washington about the return of U.S. sanctions. As we continue, this is
CNN, and here, the facts always come first.
Thousands of people are stranded on several Indonesian islands following a second deadly earthquake in a week. Officials are racing to ferry to
safety those who want a need to leave. This as rescuers trying out to locate those still trapped underneath the rubble.
At least 90 people have been killed and more than 200 injured in Sunday's magnitude 6.9 quake. U.S. is poised to reinstate financial sanctions on
Iran just a few hours from now. But Iran's president is rejecting it, saying Iran is willing to talk with the Trump administration that only if
they're honest and sincere, he says the U.S. has already rejected an Iranian offer of dialogue.
A source is telling Cnn that North Korea believes there's a strong possibility of a second summit between its leader Kim Jong-un and President
Trump. Officials cite a recent exchange of letters between the two as a positive sign.
In the last hour, the Saudi airlines Saudia has suspended flights to and from Toronto and Canada in a diplomatic rift with Ottawa. In this tweet,
Canada's foreign minister called for the release of the jailed civil rights activist including Samar Badawi; a prominent activist advocate for women's
We urge the Saudi authorities to immediately release, in response, Saudi has frozen new trade deals, and now the airline has decided to stop flying
to Canada. Joining me now is the former U.S. ambassador to Canada, Bruce Heyman.
And Bruce Heyman, why is -- I mean, Canada's comments -- do you think they were aware that it would have such a vitriolic reaction from the Saudis?
BRUCE HEYMAN, FORMER UNITED STATES AMBASSADOR TO CANADA: Oh, I think it was an extreme reaction, but who in the world today -- who in the world
today is speaking up for human rights? Who is taken the mantle for women minorities, the religiously persecuted?
The people of different sexual orientation, the people who want to have free speech, that was the place of the United States of America, but the
last year and a half, we have been all too silent on this. And I think it's opened the gap for others to take the mantle.
But Canada all along, this is not new, Canada has always been a promoter of women's rights and human rights and this is not a surprise that they would
do this, but the reaction was quite extreme I think.
QUEST: Right, and we'll -- we need to analyze that from the other side as to why the Saudis with its 2030 vision would take such an extreme measure.
But now Canada has the tricky task of deciding what to do in the face of Saudis anger. What do you think they'll do?
HEYMAN: Well, you know, the Canadians are very diplomatic, they will find paths for conversation and discussion. But I think the real stress is
going to come at the U.S. side. Secretary Pompeo needs to get involved here. And I know when I worked for Secretary Kerry, this is something that
he would have interjected himself because we have two friends, both allies of the United States --
[16:35:00] QUEST: Right --
HEYMAN: While we have differences, we would have found a space. But I am afraid that the U.S. is too silent today, I'm hopeful --
QUEST: Well, hang on a second --
HEYMAN: That we find a path to get involved --
QUEST: The U.S. -- the U.S. is unable to intervene or act as an honest broker here. Surely, since they're well and truly annoyed and arguably
offended the Canadians, firstly, with the national security reason for tariffs and secondly, for the way they spoke about the Prime Minister
HEYMAN: Oh, I am in complete agreement with you there and I've been a defender of a U.S.-Canada relationship because I believe for the United
States of America while we have a lot of allies and friends around the world, there's no better friend that we have than Canada, and the treatment
that the president has had toward the Canadian people and the prime minister is you know, across the line.
And I think we need to find paths of de-escalating both here and North America. But my guess is, with the president's actions that is giving
leeway to the Saudis to act more aggressively than they would have.
QUEST: Right, this is the argument that also says that the continued use of fake news gives every dictator a shield to use against or at least an
excuse in the same way that the Saudis used it recently and others have used it recently.
HEYMAN: Yes, it's an unfortunate portray of what news is and isn't, and the president has worked very hard to make all news fake news especially
when it contradicts anything that he believes.
QUEST: Good to see you, sir, thank you.
HEYMAN: Good to see you as well.
QUEST: As we continue tonight, we will turn our attention to Iran and the sanctions, the sanctions came into force tonight and the issue really is
how the individual companies who have already signed up to do business are going to handle this, particularly the U.S. is threatening them, promising
retribution and retaliation. In a moment.
QUEST: The first wave of U.S. sanctions will be reimposed on Iran just after the stroke of midnight tonight in Washington just a few hours from
now. And the sanctions, this is what they hate.
Iran's ability, particularly the central bank to purchase U.S. dollars, trading gold, steal and coal, Iran's auto sector and President Rouhani says
Iran will make America regret it.
[16:40:00] John Defterios is our emerging markets editor, he's in London for us tonight. So Iran -- so the sanctions come in, but it's the third
party relationship to the sanctions that most is worrying global business, which is of course how companies for example in Europe or in the United
States will be hit regardless.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Yes, indeed, Richard, and I think this is what's going to hold back the European companies, but let's
take a step back here. First, it was the rhetoric of these snapback sanctions going into place, now it's the reality that has set in.
President Rouhani had an interview on state television suggesting -- and he used quite a bold analogy here saying, an opponent takes a knife, stabs
you, pulls the knife out and says they want to have dialogue. This is a nasty business they say Washington is engaging in right now.
He says there's a lack of sincerity, the mistrust level is very high at this stage, Richard. You bring up the issue of the European companies, we
know -- in the first wave here, we saw Siemens, Alstom, Peugeot, Renault, Total, all decided to try to go in to the Iranian market and then the
business realities set in as the CEO of Siemens told me, we have our values and then we have --
QUEST: Right --
DEFTERIOS: Our interests, we have to balance out the two at this stage and read between the lines. They need to raise money from institutional
investors in the capital markets in the United States. And even though the European Union put in this blocking statute that this backed in 1996, they
reinstated this time around on the Iranian sanctions, blocking the European company from staying out of Iran and following outside legislation.
I think this is going to be a huge challenge, but I think the U.S. sanctions will prevail in the end.
QUEST: Right, I think you're right, but the issue -- this is fascinating because the blocking statute requires, forbids EU residents from complying
with the listed extra territorial legislation. So it puts companies in the position of either being caught by the U.S. sanctions, you know, the U.S.
regime for breaking them or the Europeans for not following or for allowing it to go ahead.
Now, I'm guessing that companies are more afraid of the U.S. than they are of the EU.
DEFTERIOS: And I think you're guessing correctly, Richard. The European Union today put out a statement saying all the right political maneuvers
here, we want to keep the agreement intact, we're going to support the Iranian people, we tried to provide subsidies to smaller and medium-size
But at the end of the day, it's going to be the large --
QUEST: Right --
DEFTERIOS: Corporations that will make a difference in Iran. There's not a doubt about that. And Richard, I would argue tonight, many were
downplaying this first wave of sanctions, I think that's a miscalculation.
The weight of the U.S. Federal Reserve and the U.S. Treasury to block the trade of dollars in the market --
QUEST: Right --
DEFTERIOS: Will have a very big impact and look at the fall of the rial 50 percent in less than --
QUEST: So --
DEFTERIOS: Six months of trade, a sharp drop of 12 percent in one day of trading yesterday, I think that's the best lead indicator of the impact of
U.S. sanctions --
QUEST: Well, let's just talk about that a little bit further briefly, John. How badly are the existing sanctions or likely the new sanctions
because there are still some sanctions that are already in place on other issues. But on the new sanctions, how badly will they hit ordinary people?
DEFTERIOS: Well, many people overlook the fact that Iran is a major industrial player, so these sanctions target the steel sector and the auto
sector, try to prevent parts going in, this will hit jobs. The rial fall or the plummet of the rial is boosting up inflation, it's boosting up
unemployment, particularly youth unemployment.
Richard, we're even seeing water and power shortages due to the lack of infrastructure investment. So we have the pot of gold that at the end of
the rainbow that President Rouhani was promising growth in 2016 of 12 percent, solid growth in 2017.
I think the sanctions could push them into a recession in 2019 that the full force of the first wave --
QUEST: Right --
DEFTERIOS: And then the oil and gas sanctions come into place next year.
QUEST: John in London, thank you. Now, the most punitive measures against Iran are still to come. Take all the second set of sanctions that know
will hit the oil and energy sector and they will introduce in November.
Fereidun Fesharaki is a pioneering Middle East oil analyst, he's the founder and chairman of FACTS Global Energy and at the National Petroleum
Council in the U.S., he joins me from a delightful place, from Hawaii and we're glad to have you with us, sir.
So the sanctions -- the second set of sanctions when they come in on the oil and gas industry, how seriously will they hit?
FEREIDUN FESHARAKI, FOUNDER & CHAIRMAN, FACTS GLOBAL ENERGY, NATIONAL PETROLEUM COUNCIL, UNITED STATES: Well, they will hit the markets very
seriously. Iran is the next portal of crude products, condensates of about 3 million barrels per day.
The U.S. says I want to bring it to zero. Under Obama administration sanctions, what Iran lost was only 1.2 million barrels per day, this time
they're aiming a 3 million barrels per day. And on top of that, Richard, is the issue of the Venezuelan collapse.
[16:45:00] Venezuela oil production has gone down by 700,000 barrels per day, you'll be looking at another 300,000 barrels per day. So combine Iran
and Venezuela, 4 million barrels per day of volume is lost and the demand is going up by 1.5 million barrels per day.
So we need 5.5 million barrels per day of oil, we cannot find in the market, it doesn't exist.
QUEST: So Iran is banned by U.S. sanctions, and obviously, third party corporations and third countries don't want to trade with Iran because that
could be as I understand it fallen foul of the secondary sanctions that are being in place.
Why are other countries like China and India and the -- why are they following these sanctions? Why don't they just trade anyway?
FESHARAKI: But you know, we need to understand that the U.S. military is not as critical as the U.S. Treasury. U.S. Treasury can target a company,
they cannot do any business anywhere last time around than under the Obama sanctions which were not so severe.
But still China and India complied(ph). Everybody complain, people complain, mourn while they complied(ph), it's the same story that they hear
in Europe, there's no way that any European company is going to sanction.
The countries are not sanctioned, the companies are sanctioned. So they cannot survive it under their treasury sanctions that everybody there
QUEST: And this idea that eventually this will bring the Iranians either to a better nuclear agreement than the JCPOA, do you buy that?
FESHARAKI: Well, it's possible, you know, the situation needs to get some backed force. Actually, there's very little impact on the Iranian oil
export as of yet. That's what you're going to see after November 4, so the impact is in 2019.
I think that it's possible, the Iranians are watching the special prosecutor investigation to see whether that which is to fear with the
sanctions are not. But beyond that, I think that they may have no choice of either restarting something very difficult and the military intervention
or they have to come to the table.
QUEST: And on that point, the state of the Iranian economy is not good, we saw the recent strike of the famous market in Tehran where basically,
market traders says there's no business here, we're shutting up shops. So you know, are the chickens coming home to roost here?
Is the Iranian government in deep trouble?
FESHARAKI: I think they are in serious trouble and that this is today the sixth day that the riots continue from cities. However, the government has
plenty of tools to strongly suppress any kind of protesting. They haven't used it so far yet for this group of protest.
But I don't think they are prepared to hand over the key and leave the country. They are going to stay and they have to try and find the way to
negotiate the situation. But the option of all of this thing is that the price of oil is going to go up --
QUEST: Right --
FESHARAKI: And lots of other countries will benefit a lot.
QUEST: Good to see you sir, thank you for joining us from Hawaii, we much appreciate it.
QUEST: CEOs, when you get to the top and you become the CEO, you could expect a right to privacy when it comes to your fitness for office.
However, hiding health problems, particularly mental health problems will create an entire wrath of challenges and issues of their own. After the
break, we'll discuss one major health issue facing executives.
[16:50:00] (COMMERCIAL BREAK)
QUEST: You join me in the C-Suite. We call it the C-Suite because only those who get interviewed, they have chief somewhere in their name or
president or minister, chief of this, chief of that, somewhere in the higher echelons of a company, the people who run the company.
And executives here, well, when they're here and in the board room, they open up about their earnings. Executives today are much more resident to
open up about revealing their own personal struggles. Success and money are no cure for depression, that's often compounded by a fear of looking
The recent suicide of colleague Anthony Bourdain and Kate Spade have brought mental health issues sharp into focus. The executive coach,
Elizabeth Koraca joins me from Los Angeles, good to see you, thank you. The --
ELIZABETH KORACA, EXECUTIVE COACH & CAREER STRATEGIST: Good to see you, Richard.
QUEST: I can think of times -- I mean, I think of the bank CEO in the U.K. that admitted that he had mental health issues or challenges and it was
very difficult for the market and for investors to understand and accept that.
KORACA: Yes, I mean, you know what? It happens all the time. When you're at the top, when you're an executive, when you're a CEO, you feel very
isolated, people expect you to know everything and know what to do at all times because you're at the top.
But the bottom line is you don't always know what to do. So you want to have trusted advisors, you want to have a coach, potentially, you want to
have a therapist. People that you can reach out to and trust to help give you a different perspective.
QUEST: Right, except that I can see the board being so much horrified, erroneously horrified if they find out that the chief exec has a therapist
and may -- I mean, you know, these people have got to where they are because they've taken no prisoners and they plan to (INAUDIBLE) every
cliche in the book.
Now, we're suddenly discovering they've got feet of clay?
KORACA: You know what? I just don't think that's realistic. I feel that people have other issues other than what's going on at work. They have
lives beyond work, divorce, death, you know, aging parents, kids on drugs, sometimes we need that extra help.
So we are more focused, and so we can improve our comfort of our lives --
QUEST: But I hear, I understand what you're saying and it seems and it makes sense, but if you -- I am not -- I suppose I'm sort of saying the man
or woman at the top has to be superman or woman, but if you are responsible, let's say 250,000 employees and a trillion dollars worth of
goods and orders, do you really enjoy the luxury of saying I'm feeling a bit down today?
KORACA: You know what? Why do you have to share that? Why can't you have a therapist or have an executive coach and keep it to yourself? Why do you
have to broadcast it? I mean, I have clients that are open with having an executive coach and I have clients that don't anyone to know about it, and
that's their business.
[16:55:00] But I think it's smart for them to reach out for help, and I think it's important that as in society, change that stigma that there's
something wrong with you if you have a therapist. I mean, living in New York City, everybody has a therapist, no big deal.
QUEST: Well, before we finish, I do need to just question you, forgive me, it's straight out the blue, a bit of an ambush here, but you'll be all
right. The -- you resorted today, Indra Nooyi retiring as CEO of Pepsi. Now that the number of women in the C-Suite Fortune 500 and the chief
executive, I believe is dropping quite sharply.
What's gone wrong?
KORACA: Well, what's gone wrong -- I mean, look, there's a lot of things that are happening and the dialogue and the conversation is changing. So I
feel like it's really important from an HR perspective for companies and firms to be bringing women up to the C-Suite and to be looking at all the
Not just kind of a traditional, you know, white male path that's been happening for so many decades. And I think it's also important for women
to put their name in the hat --
QUEST: Right --
KORACA: To put their name in the ring, to be considered for these positions.
QUEST: Thank you, good for you to -- it's good to see you, enjoy Los Angeles, and we've been talking about some very --
KORACA: Thank you, Richard --
QUEST: Detailed issues and if you needed some help or path for you or someone else, then you can -- in the United States, it's mentalhealth.gov,
office advice and information and of course there will be a equivalent ones in your country and organizations that can assist. We'll have a profitable
moment after the break.
QUEST: Tonight's profitable moment, and then there was one less, Indra Nooyi retiring as CEO of Pepsi joining the others, females who have given
up the top jobs. On tonight's program we're discussing some detail of exactly why women have not reached to the C-Suite to become chief
And the issue here is that so many policies have been put in place over so many years that begs the question, what's gone wrong? Well, we've heard
again and again the variety of issues. But it really does come down to a cultural issue.
At what point, at what opportunity for women to stay in the workplace throughout the course of their career? That's the trick. And that's QUEST
MEANS BUSINESS for tonight, I am Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable, I'll see you