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QUEST MEANS BUSINESS

A U.S. Court Refuses to Speed Up ISIS Bride Case; Tesla Gears Up for Model Y Unveiling; SpaceX Makes History with First Commercial Docking at ISS; 3D Printing Takes on Traditional Manufacturing; Theresa May Unveils $2 Billion Fund for Pro-Brexit Towns; U.K.'s EU Departure Set to Lead to More Customs Regulations; Dow Plummets After Positive Trade News. Aired 3- 4p ET

Aired March 4, 2019 - 15:00   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: We're in the last hour of trade on Wall Street. The Dow which started higher went negative just before

11:00, lowest point of the day after lunch, and it is now trying to rally back some of the losses. But you can't escape if you look at the main

three indices exactly how bad the situation is.

Down 1% for the Dow. S&P slightly less. The NASDAQ slightly less even more. It is managing to hold its own. Put them all together, and this is

what has been moving the markets. The trade war that is costing you. We're going to hear from the economist who knows exactly or says he knows

how much. Huawei's Chief Financial Officer is suing Canada and more lawsuits are expected. And Tesla attempts T's, Elon Musk is looking to a

new SUV to drive growth. We haven't seen the car, we've just heard the promise. We're live from London on Monday, March 4th. I'm Richard Quest.

I mean business.

Good evening. Tonight a surge of optimism in Asia that turned into extreme gloom on Wall Street. What happened between the Pacific, the Atlantic, and

the U.S.? It's a mystery market as we enter the final hour. The Dow was up 130 points on talk of a deal between U.S. and China on trade. Then it

was down as much as 414 points. It's the worst day since January and all of the sectors are lower, and the Russell 2000, which is the broadest

market barometer, is once classed as a correction.

Nancy Davis, the Chief Investment Officer of Quadratic Capital joins me now. Well, Nancy, we'll do the bigger picture in just a second. First,

what did happen today at around 11:30 that turned the markets sour?

NANCY DAVIS, CHIEF INVESTMENT OFFICER, QUADRATIC CAPITAL: Yes. So the market has been experiencing a lot of volatility, and volatility works on

the down side as well as the upside. In 2019, we've had one of the best starts ever in the history of markets.

So I think having these bouts of volatility is normal and something investors should expect.

QUEST: But the bouts of volatility, whether rational or otherwise, is predicated by an event of some sort. The market sentiment appears to have

soured generally. Why?

DAVIS: So i wouldn't say the market sentiment has soured. The market in my opinion has been pretty euphoric. We've had a very big shift from

dovishness from Central Banks around the world really starting in mid- December from the Federal Reserve, and the sentiment has been very positive. I mean, we've had a tremendous amount of -- think about where we

are in December and where we are now.

So I would say today's little bit of market selloff is just a minor blip in otherwise a very positive sentiment that we've seen all year.

QUEST: Right. So if we take today as a blip, do you see any fundamental shift in optimism? Now, what I'm saying is from December the 28th lows

through January and through February, where we get eight weeks of gains, but what I'm asking whether in the last week or two you have detected in

the air a change or a shift in view.

DAVIS: So markets have been high. We've had a lot of asset price inflation both in equities as well in the credit and bond markets around

the world, and so I think investors should be prepared for more volatility and selloffs and really look to diversify their portfolios to other asset

classes and other ways of generating returns.

QUEST: All right, tell me which ones then, because the bond yield play, which was very much on the cards at the end of last year, where rates went

to 3%, 3.2%, that's still there at about 2.6, but not quite as optimistic.

Equities are under pressure or at least temporarily. So where is your -- what other assets?

DAVIS: So at Quadratic, we really like owning volatility as an asset class to help diversify investors' portfolios. A lot of investors historically

have used bonds induration to hedge their equity risk and I think what you've seen is this tremendous rally in the price of bonds, meaning yields

have gone lower and right now, it's a great opportunity to investors to diversify away from bond holdings and have other asset classes like

volatility that can help diversify their portfolios.

QUEST: So you're saying out of bonds back to equities?

[15:05:02]

DAVIS: No, I'm saying out of bonds into volatility actually as an asset class. So there are lots of different ways to own volatility as an asset

class, primarily that is expressed through owning optionality.

QUEST: Options in the mix. Thank you very much for joining us. Good to see you. Thank you.

DAVIS: Nice to see you.

QUEST: Much appreciated. Optimism about a U.S.-China trade deal is in the air which is good news for consumers, like you and me, we're the ones who

pay for the trade war.

Now, economists have figured out just how much. The U.S. real income is reduced by $1.4 billion each month, not overall, because of tariffs says a

new report. One of the authors, David Weinstein, joins me now. Where is that cost coming from, David Weinstein? That $1.4 billion, where -- how is

it being paid?

DAVID WEINSTEIN, PROFESSOR, COLUMBIA UNIVERSITY: Well, you can think of that cost as a loss for consumers, and the easiest way to get an

understanding of why tariffs generate these welfare losses for consumers is from just thinking about a simple example.

Imagine we import a good from China and it costs $100.00 the U.S. applies a 25% tariff to that good. The good's price is going to rise to $125.00 and

that is going to represent a transfer of $25.00 from consumers to the government in the form of tax revenues. However --

QUEST: Obviously, well, hang on. It's not obvious -- I see that, but I mean, obviously, in many cases the companies have eaten the margins.

They've decided to not pass on the bulk of that tariff.

WEINSTEIN: Yes. So what we're seeing is that foreign exporters are not lowering their prices in response to tariffs, so consumers are bearing the

full cost of the tariffs.

QUEST: Right. Donald Trump, have a listen to what the President says about the question of tariffs and how the government is making money out of

them.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It will be a lot of money coming into the coffers of the United States of America. A lot of money

coming in.

(END VIDEO CLIP)

QUEST: Now, he's also said it's millions and millions and billions and billions. So he's right to that extent, but your argument is what? It's

better for the consumer to have it rather than the government?

WEINSTEIN: Yes. So certainly that's one component. Right now consumers are spending an extra $3 billion to -- in higher prices due to the tariffs.

Now the government is getting that $3 billion, but it's probably better used in the hands of the consumers.

QUEST: At what point do these tariffs become unduly injurious to the economy? At the moment, they're manageable, but disagreeable. They are a

little bit unpleasant. But at what point do you think they become seriously damaging?

WEINSTEIN: Obviously, if the trade war expands, if we cover more goods, or if we think about -- or if China starts to retaliate not just against our

exports but also starts retaliating against our multinationals, then we're going to see some really serious costs arising.

The second component, which is something that relates to what you were talking about earlier, is that the degree of uncertainty in the economy is

rising to previously unseen levels because we just don't know what trade policy is going to look like.

At this point, we don't know whether tariffs against China are going to stay at 10%, are they going to go up to 25%, or are we going to get a deal

in which they're going to fall to zero? This makes it very hard for firms to make investment decisions.

QUEST: Right. A former USTR said to me that the real problem with these tariffs wasn't just the rate at which they're being imposed, but they added

that tariffs are easier to put on than take off. Do you agree?

WEINSTEIN: Yes, absolutely. One of the big question that we have is that, even if there is a deal struck with China, will the tariffs come off?

We've seen protection in steel and aluminum go back decades and what we found is that when we apply these tariffs, it becomes an entitlement to

these industries, and it's very hard to get rid of that entitlement.

QUEST: We're grateful you came in, sir, I apologize I wasn't in New York to be with you. But thank you. Thank you for joining us.

WEINSTEIN: Thank you.

QUEST: Tonight, the leader that is the world watching is Juan Guaido. He is urging his fellow countrymen to make Venezuela free.

The Venezuela's self-declared interim leader has arrived back into the country's capital, Caracas, where he risks arrest.

[15:10:01]

QUEST: He defied a travel ban by visiting other Latin American nations drumming up support and is calling on the embattled President Nicolas

Maduro to resign. Now, he says he's not afraid of anyone.

(BEGIN VIDEO CLIP)

JUAN GUAIDO, VENEZUELA'S SELF-DECLARED INTERIM PRESIDENT (Through a translator): Is there a little bit of fear? No. We were all threatened,

all of us who are here, you all saw it, of killing us and I say something, it hasn't been a persecution, it's not going to be through threats that we

are going to be stopped. We are here more united, more strong than ever. More stronger than ever.

(END VIDEO CLIP)

QUEST: The head of the U.N. is asking everyone in Venezuela to lower the tension. Going live now in Caracas with CNN's Patrick Oppmann. The mood

was obviously euphoric. But give me an idea of just what level of risk Guaido risks by coming back?

PATRICK OPPMANN, CORRESPONDENT, CNN: Well, he bet everything today, Richard, and he won, which is really the amazing thing because he could

have been arrested. He could have ended up being jailed for a very, very long time and had been taken off the scene, and he himself said last night

in a live broadcast on social media that he left instructions with supporters in case that did take place.

He knew that he was running a risk that there was some possibility that Nicolas Maduro could have had him arrested at the airport. Particularly

such a bold move coming on a commercial flight from Panama, landing at the airport. He was daring the government to arrest him, and yet they backed

off.

For the time being, we have to add, the government can pick him up at any time they want. That is a common practice here that they catch and release

people who are part of the opposition, just to show their power. So it would not be unheard of for him to disappear into prison, but for the time

being, Juan Guaido has defied the government here. He continues to say that he is the self-declared interim President of Venezuela. He just had a

foreign trip around the region where he was treated by other heads of state, by heads of state as a President, and tonight he's back in Caracas.

QUEST: So what does he do next with this, Patrick? He's back. He is getting jubilant crowds. The president to a certain extent can afford

maybe just let this play out, let the air and the oxygen go out of the balloon. What does he do?

OPPMANN: Well, Juan Guaido has got to continue to win the support of the people who previous opposition members did not have their support. We're

talking about the ex-Chavistas. You know, it's been years since I've been back here, Richard. I've been struck by how many people that I've talked

to in this deeply divided country who have said, they used to vote for Chavez, they supported Maduro, and now they go to the supermarket and there

is nothing to buy or nothing they can afford, they are thinking of switching their allegiances, so that is something new.

And more importantly, as Juan Guaido said himself today, he has got to win the support of the military. They are the king makers in this country. If

the top generals who have been treated so lavishly by Chavez and his successor, Maduro over the years have decided that enough is enough for the

good of the country, they need to force elections, then that's what will happen.

QUEST: Patrick Oppmann, at least not in Havana, of course, he's normally in Havana, now in Venezuela, in Caracas. Patrick, thank you. Still to

come, the man who founded Ted Baker is out and out of favor over harassment claims. Why the #MeToo movement looks more powerful than ever.

(COMMERCIAL BREAK)

[15:15:00]

QUEST: Ted Baker's Chief Executive is out. He is Ray Kelvin, who quit a short time ago. He was accused of forced hugging at the British fashion

retailer.

Kelvin had been on voluntary leave since December. Now, the former head of Ted Baker is far from alone. Here are just some of the other key execs who

have stepped down or who have been fired over #MeToo type allegations including some very well-known names such as Harvey Weinstein, of course;

John Lassiter who had to leave Pixar, Disney last year over claims of misconduct. And on it goes, Les Moonves, CBS; Roy Price, and even Russell

Simmons at Def Jam Records.

Tina Brown says the #MeToo movement won't end anytime soon. Now Tina is a former editor of "The New Yorker" of course and founder of "The Daily

Beast." She is now CEO of Tina Brown Live Media and Women in the World. And she is asking if women can save the world. She's been speaking with

women who are positioned to do just that. Now, she's talking to me live from New York. Good to see you, Tina, as always.

TINA BROWN, FOUNDER, TINA BROWN LIVE MEDIA: Good to see you, too, Richard.

QUEST: Again, I apologize, Brexit has brought me to London, otherwise I would be with you.

BROWN: I normally only see you in Davos, Richard, so I feel if it's snowing, it's Richard Quest.

QUEST: Tina, let's talk about this, so the forced hugging, or the forcible hugging at Ted Baker, I suppose one could have a wry smile, I mean, those

of us who grew up in a certain era would say, "Well, what's so wrong with that?" But you would -- and I would probably say the times have changed.

BROWN: They have definitely changed, and clearly Ted Baker just didn't get the memo because we're seeing major huge careers being ended and major CEOs

falling like statues of Saddam Hussein and crashing before us.

And the fact is, what is forcible hugging anyway? Are you chasing someone around the office and making them somehow yield? I mean, what is forcible

hugging? I'm not quite sure.

But the fact is, it's over, and anyone who thinks that the #MeToo movement is sort of an aberration and this, too, shall pass, I think there is now an

understanding that this is the next civil rights movement. It is a volcanic, seismic shift. And it's important that, you know, people

understand that now.

QUEST: Right, but what about, for example, those like Baroness Karen Brady, who you may have seen recently, ended up resigning from Sir Philip

Green's -- as Chair of Sir Philip Green's fashion shops or fashion organization, having initially said that she would stay on because of the

women and the employees who were there.

Two weeks later she decides to go. That doesn't do women -- that doesn't do the cause much good.

BROWN: Well, the problem is, we have a very complex series of events that happens now where women also are called enablers in a sense if they have

been in businesses in which the CEO is behaving extraordinarily badly and they were supposed to speak out. To me, that seems unfair because why

should we be blaming women in a sense for the malfeasance of the men who are in the job.

It's going to be complicated and there's going to be an awful lot of broken eggs here, but ultimately it's a housecleaning that needed to happen. It

just needed to get done.

QUEST: So when you look now at the 2020 race, and the diversity of the Democratic potential or candidates, what do you make of the field so far?

BROWN: Well, we've have four amazingly strong women candidates actually running now. Last week, I spoke to Hillary Clinton on my podcast, and she

was saying that in a sense, she has -- there is no doubt that ...

[15:20:10]

BROWN: ... everything that got thrown at her made it kind of easier for this lot, particularly, there is more than one this time, there's four,

which is actually better because it sort of diversifies all the sort of hatred and misogyny that is still out there.

This week has been kind of white guys week, right? I mean, we've had Governor John Hickenlooper suddenly announcing -- he is a very good guy.

We are going to get Biden any minute. There are a lot of very talented people, but the only question that I have is, to me, the only judging

thing, what are they going to look like on a stage with Donald Trump? The physicality is important, too.

We need somebody as big, somebody who can intimidate him right back. We need someone who can come back with their agenda that is going to kind of

make him sort of wither on the bow. A lot of those things are not necessarily to do with normal political basket of achievements. They are

actually something about how are they going to do in the gladiatorial moments with the great Incredible Hulk, the tangerine tyrant, who will be

sort of bearing down on them and sort of swerving behind them like jaws like he did with Hillary during the debate.

QUEST: You are the best person to ask this because you are the outsider who is an insider. But if you had to look hand on heart, do you think the

United States is ready to vote a woman as President?

BROWN: It's a very misogynistic place we discovered and we have learned. It's so huge that it has to kind of, you know, take into account so many

different cultures, arenas and areas that all sort of feel differently.

Whether it's ready or not, I don't know. I think that America is just ready for getting rid of Donald Trump, and I think if it's going to be a

woman, we'll get behind a woman. But this time it's really going to be about defeating Donald Trump. So I think at this moment, the issue of

everyone who must have a woman, I don't think this is as important this time as just defeating Donald Trump.

I think America is ready for a winning woman. I do. Kamala Harris, I think is doing incredibly well right now. Her rollout was superb. She's a

tough, though, fantastic woman. I think she has a good chance. I think people would be ready for Kamala.

QUEST: Good to see you. We will talk face-to-face next time, I promise. Thank you, Tina Brown.

Now, as China-U.S. tensions quiet on the trade front, they are heating up on another. The CFO of Huawei is suing Canada over her arrest. China is

accusing Canada and the United States of abusing their extradition agreement.

(BEGIN VIDEO CLIP)

LU KANG, CHINESE FOREIGN MINISTRY SPOKESMAN (Through a translator): We once again urge the U.S. side to immediately withdraw the arrest warrant

and extradition request for Ms. Meng Wanzhou, and urge the Canadian side to immediately release Ms. Meng Wanzhou and ensure that she returns to China

safe and sound, as well as effectively protect her legitimate rights and interests. Repeated mistakes should be avoided.

(END VIDEO CLIP)

QUEST: Samuel is with me. They are not going to release her as the Chinese suggested, but by the same token, the Canadians are saying, "Look,

it is a legitimate extradition warrant, therefore, we have no choice."

SAMUEL BURKE, BUSINESS AND TECHNOLOGY CORRESPONDENT, CNN: Richard, Meng Wanzhou has the money and by god, she has got the means to try and fight

this in Canada. What you have to realize, experts in Canada tell me that this has the very real potential of going to the Canadian Supreme Court and

that matter has to be rectified before they can complete extradition to the United States. That could slow down this process by years.

And when you think about the two scenarios, being out on bail in Canada in a very large home or the potential of being behind bars in the United

States, I know which one any of us would choose.

QUEST: Right, but at the end of the day, how do you get out of this mess? Because even if you're right, at some point the U.S. has to -- unless the

Supreme Court says it's not valid --

BURKE: That's one way to get out of the mess.

QUEST: That is one way to get out of the mess, but before then, at some point, the U.S. would have to say, "We are withdrawing our extradition

request."

BURKE: And so part of the strategy could be that they're trying to delay. Let the trade war go on. Let the trade war get solved. Let the issues

with Huawei even get solved. Stay in Canada for that amount of time, and then hopefully, if this is all resolved, and keep in mind that Donald Trump

did mix in the trade war with this situation of this woman, and so maybe that could all dissipate and also keep in mind that Huawei is planning on

suing the United States government according to all expectations.

There is a real expectation that next week, they would be in court going against the U.S. government and their decisions with Huawei, so a lot of

things could be cleared up first.

QUEST: It's going to be very difficult for the U.S. government to roll back either in the Meng case or on Huawei and security. Having

blisteringly told us that they were -- that the worst thing since the devil when it comes to technology, they could hardly turnaround and say, "Well,

it's all right to probably put their equipment in."

[15:25:09]

BURKE: They did the same thing about Huawei's brother company, you could say, ZTE. They brought it to its knees. It was basically shut down and

because of the work, I discovered really this past week in Mobile World Congress of American companies making sure that their chips could get into

the ZTE products, Donald Trump completely turned around in a matter of a few days and brought the company back to life. That's how the President of

the United States operates.

QUEST: Good to see you, sir. Thank you very much indeed.

BURKE: Nice to see you.

QUEST: We'll just smooth this out of harm's way before -- you're not qualified to operate this important tech. Not. Oh, what a timber. When

we come back, Elon Musk is not done making the headlines. The Chief Executive of Tesla says a new model is coming down the road. The Y. The

what's and the whys.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There's more "Quest Means Business" in just a moment. When Elon Musk completes the Tesla model lineup, he's

teasing with the Model Y and the SpaceX makes history. Investors look to the heavens for returns. As you and I continue together tonight, this is

CNN, and on this network the facts always come first.

The Venezuelan opposition leader, Juan Guaido has returned to his country despite threats from the government to arrest him. Thousands of people

turned out at the Caracas Airport to meet the man who has declared himself the Interim President. Guaido is calling for more anti-government protests

this week.

A U.S. House Committee has launched a sweeping investigation into President Trump's administration campaign, business and more. It is demanding

documents from 91 people and various entities including Mr. Trump's two adult sons. The President calls it a political hoax.

And staying in the U.S., a U.S. Federal judge has ruled against lawyers for a U.S.-born ISIS bride who wanted an expedited decision on whether she can

return to America. The Trump administration is trying to keep her out, the judge says there's no immediate proof that she's in any immediate danger

and there's no need to speed up the case.

Elon Musk is bringing sexy back or at least that's the way it looks, by attaching a date to unveiling his new Tesla. The model so far, you have

the "S", the 3 backwards, the X, and soon the Y. This is the only photo we have so far. Musk says the Y will be about 10 percent bigger than the 3

and cost more about 10 percent.

He'll show the car next Thursday in Los Angeles. Paul La Monica joins me now. Now, I need a bit of -- I need a bit of a tuition here, Paul, because

the car he's talking about -- now, is this the same -- he said it's going to be 10 percent bigger than the 3. Is this the same 3 that he told us at

only 35,000 was going to be almost impossible to make?

PAUL LA MONICA, CNN BUSINESS REPORTER: That is a great question. Obviously, he has talked about how it's going to be difficult for Tesla to

keep making that model 3 at that affordable $35,000 price. But you know, we now know that they are unfortunately going to be making some layoffs in

order to get that model 3 out there.

They're going to be only doing online orders for these cars. So Tesla has made a lot of changes in order to get that cheap, if you will, model 3 to

be something viable for the company. Now that model Y, if you say it's a 10 percent premium to the model 3, I guess that would start at about, you

know, $37,500 or $38,500.

So we'll see just whether or not it takes Tesla a long time to produce that Y at that price, or if they're going to start selling Y with custom

features that are more expensive first.

QUEST: Why are they doing the Y?

LA MONICA: Oh, I think Tesla realizes that they need to have more vehicles in production if it's going to be a mass market car company. They have

obviously done well on the luxury side with the model S and the model X Crossover. But in the same way that the model 3 is the quote, unquote,

"affordable sedan", now you have a more affordable SUV with the model Y. And I think Tesla has aspirations to be a major auto company along the

lines of GM, Volkswagen, Toyota, and many other global giants.

QUEST: How much of their lunch has already been eaten?

LA MONICA: I'm sorry?

QUEST: How much of their lunch has already been eaten by GM --

LA MONICA: Yes --

QUEST: And Ford and Chrysler?

LA MONICA: No, that is a great question. Obviously, there have been concerns that Tesla has already maybe been too late to the game with

regards to affordable electric cars. Because you have GM and the Bolt, you have the Volt, you also have Nissan and the leaf. There are a lot of

companies that are making cheaper electrical cars, including in China where there's a company called NIO that's very hot right now, that is doing

extremely well and possibly taking share from Tesla in China.

QUEST: We talked about that company when they IPO'd on the New York Stock Exchange a few months ago. Good to see you, Paul --

LA MONICA: Thank you --

QUEST: Paul La Monica, thank you. As we continue, Tesla's model Y seems low tech compared to Elon Musk's next trick. His rocket company docked a

ship at the ISS. It's a milestone in the private race to space, investors are watching carefully.

[15:35:00] (COMMERCIAL BREAK)

QUEST: This is the sight, 400 kilometers above the earth's surface as SpaceX completed its most important mission to date. The first commercial

ship capable of carrying humans into space that docked at the International Space Station. It is a milestone for an industry undergoing massive

change.

And if you look no further than the Florida coastline, all become clear, for half a century, only NASA was here, Cape Canaveral or Cape Kennedy

which became Cape Canaveral, only NASA was there. And from triumphs like the moon-landing and the first space station were launched by the U.S.

government from there.

Now NASA stopped flying in 2011, and the private space race has taken over. You have, of course, Elon Musk's SpaceX, you've got Jeff Bezos' Blue Origin

and a couple of other start-ups have all claimed real estate and takeoff rights from Florida. Anne McClain for example is an astronaut living on

the International Space Station tweeted this picture of the ship as it approached.

She says it's the dawn of a new era in human space flight. Now, Chad Anderson is the CEO of Space Angels which invests in these space start-ups

joins me now. How many of these space events or space ventures actually make money?

CHAD ANDERSON, CHIEF EXECUTIVE OFFICER, SPACE ANGELS: That's a good question. So we are tracking since 2009, which is when SpaceX first had

their first successful commercial launch, and they brought the price down considerably. And they published their pricing and brought some

transparency to the market.

That was really when we saw the barriers to entry come crashing down. Before 2009, there was only a couple of dozen privately-funded space

companies globally. And today, we've seen that number grow to 400-plus and $18 billion invested in those companies over that period of time.

So we're still relatively new, the barriers to entry came down not too long ago, and the balance of power has definitely shifted. We've seen a lot of

new companies coming on the scene. They're just starting to generate revenue now, but they're very much in the start-up phase. So --

QUEST: All right --

ANDERSON: Seed and series A is where the action is.

QUEST: So, the -- where is the money though? Is it in -- I mean, is it in for those companies who are providing widgets and bits, and you know,

let's face it, they're going to make money and profits regardless because there's enough people who want those sort of things or is it going to be

the end user, the Virgin Galactic, the Blue or the SpaceX?

ANDERSON: So I think everyone has a role to play, and there's money to make all along this space economy. Our alliance space is immeasurable.

We're just starting to measure it now, but it's enabled the global space -- the space economy has enabled the global marketplace that we see today.

Is GPS has enabled our financial markets through precision timing and enables our global shipping channels, you name it. And so Space has played

a fundamental role, and at least fundamental shifts that we are looking at and looking to invest in.

Launch was the first to get private investment --

QUEST: Right --

ANDERSON: And that has enabled the greater access to space. We've seen a lot of new companies come on the scene including satellite companies. And

we're investing --

QUEST: What about?

ANDERSON: Across that value chain as well.

[15:40:00] QUEST: OK, so what about space tourism? The sort of thing that you're investing in, and as I see, is really the commercial side of space.

ANDERSON: Certainly --

QUEST: It's the industrialization -- it's the industrialization of space to some extent or the private industrialization to be productive. But in

terms of space tourism, who do you think will be the first to send a tourist into space?

ANDERSON: So we said that 2019 would be the year of commercial space travel, and that is turning out to be true. This launch from SpaceX is a

key first step. And next up for them is an abort test and launching humans this Summer. Boeing is following closely behind, and they should be

launching astronauts to the space station this year as well.

And there's two other companies, Virgin Galactic and Blue Origin that are going to be launching astronauts to the edge of space later this year as

well. They're going to do that for somewhere around a quarter of a million dollars versus the tens of millions that it costs to go to the space

station.

But the key point here is that we're going from having, you know, a world where there's one vehicle, the Russian --

QUEST: Right --

ANDERSON: Soyuz that can take you to orbit to five vehicles later this year.

QUEST: You know, a question for a word and an answer. Would you go if I give you a ticket now, are you on your way or are you just a money man?

ANDERSON: One hundred percent, without a doubt, to the space station, to the moon, you name it.

QUEST: Right, well, just as well, I haven't got the -- I haven't got the money, so I'll have to come to you to borrow it and return it back to you.

Good to see you, sir, thank you --

ANDERSON: Thank you.

QUEST: Fascinating. Three-D printing is used extensively in the aerospace industry. Companies will also be using it to tackle a problem here on

earth. Brexit, for example, we'll explain that in a moment. First, the technology behind Stratasys, one of the world's biggest 3-D printing

companies is turning 30.

Now, before we meet the CEO who will be with me, Andy Middleton or the executive president for Europe, Andy Middleton will be here, we had to see

exactly how it works. So we took over a large part of the newsroom.

(BEGIN VIDEO CLIP)

ANDY MIDDLETON, EXECUTIVE PRESIDENT, STRATASYS EMEA: This machine is printing a 3D file, which has been created by a design engineer anywhere in

the world.

QUEST: Which meant -- essentially means making something like this.

MIDDLETON: It's making something like this and engineering great plastics.

QUEST: How long will it take to make something?

MIDDLETON: This particular model is one of our smaller models, we have models which are 10 times the build size. In this model, if you take that

part you have there, that would take about three hours.

QUEST: About three hours?

MIDDLETON: About three hours.

QUEST: Right, so it's not exactly speedy, but at the same time, this is a revolution. But what is the revolution?

MIDDLETON: The revolution is, that instead of print or manufacturing tens or hundreds or thousands of that part, and shipping them to the places

where they are needed, we can actually send the data and print them exactly where they are needed.

QUEST: The reality is traditional manufacturing has economies of scale within it. So if you need a thousand of these --

MIDDLETON: Yes --

QUEST: You're going to produce them in the -- in the traditional way surely.

MIDDLETON: It depends, it depends on what those costs are. If you want to have precisely the amount, without any obsolete inventory after the normal

manufacturing process, it may be better to have them 3D printed.

QUEST: How quickly can this machine be reprogrammed to -- from making pipes to making widgets, to making bits?

MIDDLETON: On the fly, on the fly. That for the printer, it's completely irrelevant which part it's printing and wireless printing this one, it's

already got the data set for the next widget.

QUEST: Right, but you must need to put new molds and all --

MIDDLETON: The materials are stored down here --

QUEST: Right --

MIDDLETON: On a filament, you can change those filaments if you require different characteristics.

QUEST: So, what are these?

MIDDLETON: These are armrests which are used in commercial aircraft.

QUEST: Right, well, why is it better to make them this way than the traditional, which is injection molding? You can make them quickly,

cheaply?

MIDDLETON: Sure, if you do them traditionally, if they are all the same, the costs of setting up an injection molding machine are phenomenal.

However, if you only need 200, or if Delta and Lufthansa and Singapore Airlines need them slightly different, then this is where 3D printing comes

in.

Because it's irrelevant, therefore the design is on a 3D printing machine and it's not on an injection molding machine.

(END VIDEO CLIP)

QUEST: I see no ships. And this is another thing you made. Joining me is Andy Middleton, good to see you, sir.

MIDDLETON: Good to see you, Richard --

QUEST: The long and short of it, how far are we into the revolution? Because on this program, about five or six or seven years ago, just over

there, we printed some little child's rubber duck or something, I mean, a plastic, really small little toy.

MIDDLETON: Yes --

QUEST: Isn't that the forefront. Talk about three weeks and --

[15:45:00] MIDDLETON: Right --

QUEST: The program was off the air by the end. Now, you're making these in a matter of hours, but how far is this resolution along the way?

MIDDLETON: We've moved on from rubber ducks and these parts, which are today in commercial aircraft. There's over 50,000 3D printing parts flying

around us as we speak in aircraft over commercial nature. So we've moved on tremendously since rubber ducks.

QUEST: Right, and as you've moved on, in terms of the total revolution, where do you think we are in the process? Are we just beginning to see its

potential or do we have a pretty good grasp on what it can do?

MIDDLETON: We had -- we had a great grasp on prototyping which was what 3D printing was used, now we've moved into manufacturing and particularly

aviation, aerospace and automotive. Those are the two which are pioneering the adoption in manufacturing.

QUEST: But you're saying of course, this could help in Brexit?

MIDDLETON: It could help in Brexit.

QUEST: How?

MIDDLETON: Quite simple. I just arrived this morning coming in from Germany, and the whole line of trucks queuing up to get into the country

before Brexit. Instead of shipping goods, parts and components by truck, ship, let's send the data and print it where it's needed.

QUEST: Indeed, but those machines are expensive, and you'll need lots of them. If it takes what? Five or six hours to make one --

MIDDLETON: Yes --

QUEST: And I need 10,000 --

MIDDLETON: Right.

QUEST: Then those machines -- admittedly they can go day or night. But you're talking about having to have dozens of these machines to get a

production run in a reasonable time.

MIDDLETON: Even dozens of those machines save so much money on logistics and physical inventory. So we are saying keep your inventory digital, not

physical, and send those files, have them printed and manufactured when and where you need them.

QUEST: Is it inevitably going to be for niche -- for niche products of high value that justify this? Now, I know that sounds stupid when I'm not

talking about a toilet pipe or a ventilation thing. But this is a toilet pipe or a ventilation thing for an aircraft, so --

MIDDLETON: Right --

QUEST: It's actually, you know, got a lot of five -- retardant properties, it's not cheap.

MIDDLETON: It's not cheap, but it meets all of the criteria --

QUEST: Right --

MIDDLETON: The aerospace require.

QUEST: Right, so is this ultimately going to be -- I know, this is --

MIDDLETON: An armrest.

QUEST: An arm -- this is another of the armrest.

MIDDLETON: Yes.

QUEST: Is there any limitations on 3D printing?

MIDDLETON: None whatsoever when we're talking geometry, 3D printing is the only technology that actually print, create and manufacture a geometry

without any limitations in comparison to today's conventional weather. The people design parts today based on how they can manufacture.

QUEST: And the idea of using them within aircraft --

MIDDLETON: Yes --

QUEST: Of course, certainly within the aircraft part, but those requiring metal parts --

MIDDLETON: Yes --

QUEST: Or aluminum parts --

MIDDLETON: Yes --

QUEST: Now you're into a bit of trouble.

MIDDLETON: I don't think we are. Today, the 3D printing technology is already producing aluminum, titanium and different alloys, and going

forward, you will see new technologies also --

Q UEST: What can't it do?

MIDDLETON: What can't it do?

QUEST: Yes.

MIDDLETON: It can't print today 10,000 pieces in an hour or in five hours. But what it can do is print those pieces where you need them, instead of

shipping them around the world. And I think, you know --

QUEST: All right --

MIDDLETON: The logistic costs are destined for what? Ten trillion in 2020?

QUEST: Yes --

MIDDLETON: Now, that's a lot of money which the consumer is paying for.

QUEST: I will appreciate it when it can make a decent cup of tea, good to see you, sir, thank you very much indeed.

MIDDLETON: My pleasure --

QUEST: Thank you very much.

MIDDLETON: Thank you very much.

QUEST: As we continue tonight, we'll go to the other side of the channel. France is preparing for the U.K. to leave, and we need to see exactly what

this means. It is QUEST MEANS BUSINESS tonight from London.

[15:50:00] (COMMERCIAL BREAK)

QUEST: We're in London ahead of the Brexit vote next week. Theresa May is being accused of Brexit bribery because of a $2 billion plan to send cash

to economically deprived and mainly Brexit-backing towns. The Prime Minister says the stronger towns fund will boost areas that don't get a

fair share of the country's prosperity.

Of course, Labor, the opposition says it's a cynical bid to buy lawmakers votes for her deal, which she needs to get over the line next month or this

month. Meanwhile, Brexit is worrying pet owners, Jim Bittermann reports no deal could affect all creatures great and small.

(BEGIN VIDEOTAPE)

JIM BITTERMANN, CNN CORRESPONDENT (voice-over): Oscar the Yorkie may not look too worried about Brexit, but his caretaker certainly is. Paul

Anderson runs a business called pets to go, regularly transporting thousands of pets a year from Europe to Britain and back again.

And like other animals, Oscar travels back and forth easily with a pet passport. But potentially after Brexit, more paperwork will be needed and

perhaps even a new blood test before he can re-enter into France.

PAUL ANDERSON, PETS2GO2: There doesn't seem to be any clarity on what is going to happen to our business or transporting as a general. It's a bit

of a mess.

BITTERMANN: With as many as 2,000 pets crossing the English Channel each day, according to animal control inspectors, any change in the rules means

added expenses and headaches for pet owners. For the three dogs of Ian Squirrell and Debby Lansley, this may be the last trip for a while.

DEBBY LANSLEY, PET OWNER: Until we know what's happening, I mean, some are saying that they're going to be needing rabies injections and obviously

they've got that, but they saying --

IAN SQUIRRELL, PET OWNER: Rabies test and blood test --

LANSLEY: They need blood tests, yes.

SQUIRRELL: And the English fixer charging 260 pounds for the blood test, which is quite a lot of money.

LANSLEY: When you've got three dogs.

SQUIRRELL: When you've got three dogs.

BITTERMANN: Even without a clear idea of which direction Brexit may take, it's already costing a lot of money. French Customs says it is spending

more than $68 million constructing new Customs facilities, hiring 700 more Customs agents, and hundreds more veterinarian inspectors.

(on camera): Customs officials here say they've been planning for the worst case scenario for years and that means going back to the bad old days

of Customs declaration, health and sanitary inspections, screening of animals for diseases and fruits and vegetables, for pesticides and weed

killers.

In short, re-establishing controls that haven't existed here for 25 years.

(voice-over): In the time since under European Union rules, Customs inspections have been carried out on a random basis. Sometimes quite

literally looking for the needle in the haystack. But after Brexit, French Customs inspectors are expected to be much more thorough.

The French produced a video, hoping to explain to people how they can avoid delays crossing by ferry or by Euro tunnel by going online in advance of

their trip. But those new facilities include expanded Customs and parking areas for any of the 8 million trucks crossing the channel which have not

completed proper paperwork in advance according to the Customs director for northern France.

THIBAUT ROUGELOT, CUSTOMS DIRECTOR FOR NORTHERN FRANCE (through translator): It's possible that with the Customs formalities, there will

be an added cost to transport. I don't know how the companies will react to this extra cost and restrictions on the circulations of merchandise.

BITTERMANN: Merchandise like fresh produce, for instance, at the moment the French imports about 55 percent of the lamb they consume much of it

from Britain according to agricultural statistics, and most after it has been slaughtered.

[15:55:00] Customs delays could mean fresh lamb would have to be frozen, putting British lamb in direct competition with countries as far away as

New Zealand.

TOM BUCKLE, SHEEP FARMER: It says no, they are, I think -- things will get complicated and anything could -- no one knows what will happen, really.

BITTERMANN: Some though are already making decisions without waiting. But STC transport which regulates moves thoroughbreds back and forth across the

channel for racing and breeding, one recent client canceled his horse's trip. The company believes others will follow.

SIMON BROSELETTE, STC TRANSPORT: The owners are reticent to travel at the moment, they both know the mares will stay -- understudying United Kingdom,

how will they return? How will they return from France?

BITTERMANN: So in spite or perhaps because of the political dither on the other side of the Channel, over in France, some are already voting on

Brexit with their feet. Jim Bittermann, CNN, Calais, France.

(END VIDEOTAPE)

QUEST: The last few moments of trading on Wall Street. The Dow seems to have hit an equilibrium round about, down 238 points. As we look at the

rest of the week and what you and I can expect, it's going to be a busy week one way or another, lots of earnings will be coming out on Tuesday.

We have Target, Kohl's and Ross Stores earnings. Wednesday, it's ten years of the bull market, an anniversary indeed to be celebrated. Thursday, some

earnings from Kroger's retailing on that H&R block. More of a bit of that, keep an eye on the Costco one, and the U.S. jobs report will round off one

of the very busy week. It's going to be you and I will have a profitable moment after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's profitable moment, it's fascinating the whole 3D printing revolution. It's one of the few things we've seen in our lifetime that we

saw it at the beginning, we saw the promises made, we've seen it develop, we've seen it improve and we're now seeing real benefits.

It's one of those things that one saw from the start, and you know roughly it has got a vast future ahead of us. And we've only just scratched the

surface of it as you saw tonight. I remember in this studio, we printed up a little rubber -- a little plastic toy.

And now they're printing up airline -- parts of airline seats and aeronautical bits. Who knows what they'll be printing up next. Just

earlier, 3D printing is fascinating to watch, learn and experience. And that is QUEST MEANS BUSINESS for tonight, I am Richard Quest in London.

Whatever you're up to in the hours ahead, I hope it is profitable.

(BELL RINGING)

Clap along, the day is over, the bell is ringing --

(CLAPPING)

END