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QUEST MEANS BUSINESS
President Trump Claims Kurds in Northern Syria "are Much Safer Now"; Russian-Backed Syrian Troops Enter Key Border City; Hong Kong's Chief Executive Carrie Lam Abandons Policy Speech Amidst Heckling from Lawmakers. Aired 3-4p ET
Aired October 16, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST, QUEST MEANS BUSINESS: In 60 minutes' time, the bell will ring. The day will be over. And as we take a
look at the way the market has gone, well we're up just five and a half points at the moment.
But as you can see, it has been a choppy day. An hour to go. Those are the markets and these are the reasons why.
No deal tonight, though Germany's Angela Merkel says Brexit talks are in the homestretch.
Donald Trump plays down the U.S. row in Turkey's attack. He puts it bluntly, he says it's not our problem.
And GM strikes a deal that could bring one of the auto industry's longest strikes to an end.
Tonight, we're live from London on Wednesday, October the 16th, I'm Richard Quest and yes, I mean business.
Good evening tonight from London, closer and closer to a Brexit deal and the talks are going down to the wire. Over the last few moments, U.K.
government sources have told CNN an agreement is unlikely tonight. There are reports out of Brussels which say that all has been agreed accept the
VAT. We will get to the grips of what that is all about.
And earlier, President Macron said he wants to believe a deal is being finalized and could be agreed at tomorrow's European Council Summit. By
the way, we will be in Brussels of course. QUEST MEANS BUSINESS tomorrow night coming from the European Council.
The mixed signals in the last 24 hours driving the pound higher then lower, and even if negotiators reach an agreement, there are all sorts of
problems, not least or most, the British House of Commons, which has to pass it. The President of the European Council says it's not a sure bet.
(BEGIN VIDEO CLIP)
DONALD TUSK, PRESIDENT, EUROPEAN COUNCIL (through translator): Yesterday, I was ready to bet that the deal had been reached and was certain. Today,
some doubts appeared from the British side.
Well, the situation in British Parliament is complicated. I still hope, I'm hopeful through tears though, because for the rest of my life, I will
remain a supporter of the European Union with Brexit.
(END VIDEO CLIP)
QUEST: Now, we have correspondents of course on both sides of the story tonight. Over in Brussels is Nic Robertson. Hadas is in Downing Street.
Nic, I want to start with you. The rumor that E.U. Ambassadors have been told that it's all a done deal and only VAT remains.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes. And that hasn't already leaked out very far yet for us to get a real sense of what that
Look, we know this has been coming down to the customs issue whether or not Northern Ireland is in the Customs Union with the European Union or whether
it's part of the customs territory of the United Kingdom, that is the expected outcome.
What it really means is that you get a border down the Irish Sea, and then how do you navigate the issue of all goods that are perhaps going from the
U.K. over to Belfast and then down to Dublin, and one of those issues would be making sure that the VAT et cetera gets paid and filtering out what
stays in the north and what goes to the south.
So yes, the details on that yet to emerge. But that's one of the big contentious things for sure.
QUEST: Now, if that's what they're saying in Brussels, Number 10 is saying no deal tonight. But are they indicating Hadas that there is a deal, let's
HADAS GOLD, CNN BUSINESS REPORTER: Yes, I mean, it's not all negative news coming out of Downing Street. They are warning that there isn't
necessarily going to be a deal struck exactly tonight.
However, there is some words of positivity that we are hearing. This has been a busy day at Downing Street. There's a Cabinet meeting earlier today
and we've been watching important members of the Conservative Party coming in and out, all of whom are saying that they're not quite there yet, but
they are getting close and they want to see the full text, the full agreement.
Of course, there is a bit of a back and forth obviously with Brussels. We are seeing also some reports that Brussels might want to see some sort of
indicative vote from Parliament saying which way they would vote because Brussels doesn't want to have the same situation they've had before where
they agreed to a deal and then Parliament doesn't approve it either.
QUEST: So on that point, how far, Nic, in Brussels tomorrow, do you think they can go? Hadas, I'll be with you in just a second to talk about what
happens on Saturday. But what will Brussels give tomorrow that could be taken back to Hadas in London?
ROBERTSON: Well, they'd have to have this, they'd have to continue the negotiations behind closed doors. But what we've been told here, or what
we've been told by the Irish, certainly at least is that there will be no negotiations on the takes of the deal at the E.U. Leaders' Summit.
Now, does that mean they keep locked up behind the doors? I can see the windows from here, the right out there. Do they continue negotiating in
there tonight through the morning and do the leaders arrive and they keep on talking? It's not clear.
What certainly is clear is that the idea that things were really, really close, that seems to be slipping away a little.
QUEST: And Hadas, whatever Nic sends back from Brussels has to get into the -- get through the House of Commons. Now, as they do that, as they
manage to, what will survive?
GOLD" Well, they have to approve the deal in order to ensure the exit. We already know that the government plans to table a motion to get that
Saturday session happening where Parliament will sit from 9:00 a.m. until 2:30 p.m. The first time they've had a Saturday session since 1982, during
the Falklands War.
But there's still the very important question of the numbers. Do the numbers add up to pass this deal through whatever they bring back? And
there's a big question because we still don't have the agreement from the DUP, the Northern Ireland Party that props up the Boris Johnson struggles
If the DUP doesn't agree to it, then we lose the other sort of hard right Brexiteers who won't vote for it either. And that's not even thinking
about the opposition parties -- the Labour Party, the Lib-Democrats. We already aren't sure that they're going to be in favor of it either.
QUEST: Hadas at Downing Street, Nic in Brussels. I'll see you both in Brussels tomorrow. I'll see Nic in Brussels tomorrow. Thank you.
As the negotiations drag on in Brussels, Brexit is starting to resemble a game of Snakes and Ladders. So for instance, Theresa May had the first
turn at striking a deal and Theresa May, she got stuck into a loop as you can see over here. She got stuck into a loop, a never ending loop with
lawmakers, rolling the dice shuttling her between Brussels and Parliament - - that didn't go far.
Even with extra time, well, there she is, off she went out to the side. She eventually had to admit her strategy wasn't working and dropped out of
the game entirely.
Boris Johnson However, he joins in somewhat late. There you go. He got the ladder to Brussels very early. He made good progress because he knew
want Parliament would and wouldn't accept.
Now, if he clinches a deal with the E.U., he will then be where Theresa May was four months ago. She has an agreement with Brussels, but he still
doesn't know whether he can get it back through Parliament.
That's the way. We are still a very long way from anything like the potential for the final deal. John Peet is with me. He is the Political
Editor at "The Economist." Good to see you, sir. Thank you very much.
As you look at it tonight, our game of Snakes and Ladders. Just how close is Boris Johnson, do you think to actually getting to a ladder that will
take him to the top?
JOHN PEET, POLITICAL EDITOR, THE ECONOMIST: I think he will certainly get a deal because I think they've now got to a point where to say, we will
close but we couldn't agree on VAT. Or we couldn't agree on some technicality to do with customs. I think nobody wants that.
All sides want a deal. Nobody wants no deal. But I think there's a long way still to go in terms of if he gets an agreement in Brussels. When do
we see the legal texts? When do we see the text of the Withdrawal Act? And getting any of this stuff through Parliament is going to be a real
QUEST: Okay, but there's no point in the E.U. negotiating and Boris Johnson accepting if he doesn't think he can get it through, and that was
Theresa May's problem. She knew that the ERG would not go for 90 percent of what she was dealing with. She hoped that she could run the clock down.
PEET: She certainly did. But I mean, one of the problems was that she told her fellow European leaders, if you give me this deal, I can get it
through. And they believed her, and then she proved wrong.
And they are worried the same thing could happen again.
QUEST: It could.
PEET: Boris does not have a majority. Indeed, he has lost quite a lot of members of his own party, he still has a problem with the Democratic
Unionists in Northern Ireland. There are very little signs, I think that many Labour MPs will ride to his rescue.
So getting a majority for what he's agreed will be really, really difficult. And I'm not even sure you can do it on Saturday.
Besides which, beyond this, there's a much more serious problem. You can get one vote through, but to get the Withdrawal Bill through requires
probably 40 or 50 separate votes, and every time this happens, we're quite likely to find his majority disappears.
QUEST: Okay. But if you get the principle through, you're leaving the date to be established because they'll probably will have to be a technical
extension to allow for these 30 or 40 withdrawal votes. I mean, there's no point in frustrating the first vote, if you're not going to pass the
second, third and fourth on the 30th.
PEET: That's true. But Brexit doesn't legally happen until the Withdrawal Implementation Bill itself is passed. So you could get to a position where
you agreed in principle, but then you haven't passed the necessary legislation.
I think we're going to be in for sort of two or three months of quite a lot of torturous negotiation over this. And the idea that we can leave on
October 31st, I think has gone out of the window.
QUEST: Okay. So no leaving on October, the 31st, or at least, that goes off. But do you see -- as this -- I mean, the crucial point is once
they've got a deal, and that first vote is through Parliament, that first vote is won, everything else flows thereafter. But that does pretty much
mean the U.K. is leaving.
PEET: I think that's correct. I mean --
QUEST: That's the big difference, isn't it? Once you've got that bit, you're dealing with the plumbing as leaving rather than a principle.
PEET: That's correct. It's just possible that there could be some little negotiations about whether they want to approve this thing on Saturday ...
QUEST: Do you think no?
PEET: ... subject to another referendum. I mean, there are some people are saying, we will attach the requirements saying we vote for it, but
there has to be another referendum.
And then of course, it could be an election. I mean, Boris said he wants - - Boris Johnson wants an election. We could have an election that could change the whole picture in the next two months.
QUEST: If they -- this is -- let's just go straight into the realms of rampant speculation here. If they do a deal and it passes Parliament, do
you think they would go for an election before leaving? In other words to now and Christmas or Wood Johnson more likely, wait until the U.K. has
left, then do the election? Fearing exactly what you've just said.
PEET: I think he would like to go for an election as soon as he can get one because frankly, the poll numbers look quite good for him and they look
very bad for Labour.
But for the same reason, Labour will resist an election. So we could get through to a position where it's still quite complicated, difficult,
passing unnecessary legislation. He hasn't got a majority to do anything in Parliament, but we still can't have an election to sort things out until
QUEST: Good to see you, sir. I appreciate it. Thank you. Investors in Europe has reacted to the uncertainty over the negotiations and a mixed
London was down. Franklin was up. The FTSE's fall. It was partly due to a rise in the pound and what that does to the competitiveness, but London
was in line with the rest of Europe. It was the FTSE -- sorry -- it was the DAX that had a bit of the day, bearing in mind how it's been beaten up.
IS Donald Trump channeling Turkey's President Erdogan? His latest rationale for changing tack in Syria, sees him bad mouthing the Kurds as no
Also a second term for Donald Trump? That's where the smart money is going according to a highly respected forecaster. He'll give you the details in
QUEST: To northern Syria now where those defending, say artillery air strikes and mortar fire are raining down on them.
In Washington, President Trump is in effect saying don't shed too many tears for the Kurds. Until very recently, of course, America's allies in
the fight against ISIS.
It was an extraordinary news conference alongside the President of Italy and earlier, a remarkable session in the Oval Office and the two of them
sat side-by-side and Donald Trump played down the significance of moving U.S. forces aside, clearing the attack for Turkey's assault.
He all but endorsed Turkey's description of the Kurds as terrorists.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: If you look at the Kurds and again, I say this with great respect, they are no angels. If you look
at PKK -- take a look at PKK. ISIS respects PKK. You know why? Because they are tough or tougher than ISIS.
You take a look at a lot of the things having to do, you have to say it, nobody wants to say it, we are making the Kurds look like they're angels.
(END VIDEO CLIP)
QUEST: Jeremy Diamond joins me from the White House. As the day wore on, the eyebrows were raised further, and you could just feel this White House
digging the hole deeper.
JEREMY DIAMOND, CNN WHITE HOUSE REPORTER: Yes, the President is certainly doubling down on his decision to pull out those troops from Northern Syria
and his -- the way in which he made that decision, and he is pushing back on the criticism that he is facing bipartisan criticism now, particularly
from one of his closest allies in the Senate, the Republican Senator, Lindsey Graham.
The President is now in the face of a formal, bipartisan condemnation. The House actually just passed a joint resolution condemning the President's
decision to withdraw those troops from northern Syria with only 60 dissenting votes in the 400-plus member House of Representatives.
So as the President continues to face this onslaught of criticism, he is really sticking to his guns on this and insisting that it was a
strategically brilliant move. But as you know, Richard, there are a lot of dissenting voices on that.
QUEST: Sure. But I listened very, very closely to the news conference and there was one long answer right at the beginning, where he went through the
reasons why American troops will not remain in all these theaters of aggression or war. He said Americans don't want their troops there. I
mean, he is onto something here.
DIAMOND: Look, there are certainly arguments that can be made about whether or not it's the place of the United States to have troops in the
Middle East, to have troops in Syria.
The concern that's largely being expressed beyond those who believe that that's a dangerous decision that's going to hurt American influence in that
region. There is also the criticism simply of the process and the way in which the President went about this.
And I think it's important to underscore that the President's decision to essentially tell Erdogan, okay, you're going to go forward with this, I'll
pull my troops and allow you to move forward. That came against the advice of the President's own adviser, who for weeks before, had been working on a
security mechanism in Northern Syria, had been working to try and forestall this Turkish invasion of Syria and the President simply followed his own
Again, perhaps he is tapping into something in the American public, a latitude of those foreign interventions. But the President's actions on,
you know, the way in which he did that kind of undermines any kind of broader strategic argument that he may try and make.
QUEST: Jeremy, thank you. Jeremy Diamond, who is at the White House for us tonight.
Meanwhile, U.S. Democrats vying for the job in the White House were on the debate stage on Tuesday. A survey by Evercore ISI released before the
debate, says 70 percent of investors believe Elizabeth Warren will win the party's nomination.
Well, now she has got a taste of what it's like to be the front runner. Her rivals questioned how she would pay for the changes that she wants to
(BEGIN VIDEO CLIP)
PETE BUTTIGIEG, (D-IN), MAYOR, PRESIDENTIAL CANDIDATE: Your signature, Senator, is to have a plan for everything except this.
SEN. AMY KLOBUCHAR (D-MN), PRESIDENTIAL CANDIDATE: And I'm sorry, Elizabeth, but you have not said that. And I think we owe it to the
American people to tell them where we're going to send the invoice.
I want to give a reality check here to Elizabeth because no one on this stage wants to protect billionaires, not even the billionaire wants to
BETO O'ROURKE (D), PRESIDENTIAL CANDIDATE: Sometimes I think that Senator Warren is more focused on being punitive or pitting some part of the
country against the other, instead of lifting people up.
(END VIDEO CLIP)
QUEST: Moody's Analytics says there's a strong chance Donald Trump will win reelection anyway. Moody's has a record as one of the most reliable
forecasters in the U.S. It got it wrong on 2016 because of voting numbers, not the underlying thesis.
Now, it uses three separate models to predict how a state will vote. It uses data on personal finance, the stock market and unemployment.
Note, policies of the candidates are irrelevant here. On each basis, it says Mr. Trump will garner enough electoral votes not only to cross the
winning line of 270 electoral votes, but on to a landslide.
Dan White, he is head of Fiscal Policy Research at Moody's Analytics, co- author of the report. Dan, when you get your numbers, and you realize what the conclusion was, you knew this was going to be controversial.
DAN WHITE, HEAD OF FISCAL POLICY RESEARCH, MOODY'S ANALYTICS: Yes, Richard, it's always fun to walk into a room and know that you're
immediately going to excite half the people and disappoint half the people. It's always a pleasure.
QUEST: Now, the importance of your work is that it doesn't rest on the candidates or the policies. It's already based on existing demographics
and economics within the state.
WHITE: Well, yes, its existing demographics in economics, but it's also the forecast for economics as well. So keep in mind that this is just a
forecast. All of the economic data between now and Election Day is based on a forecast.
So if the economy falls further or more quickly than we think it might, then these results can certainly change.
QUEST: But you have factored in, for example, the China-U.S. trade war, the effect that's having on growth, the effect, of course, of the Fed's
easing of monetary policy. So how do you come to this conclusion?
WHITE: So as you mentioned, we have three different models. Each of them looks at varying levels of economic forecasts, based on what we think is
the most likely outcome of what the economy is going to do.
And the bottom line is it doesn't look like the economy can fall quickly enough to really turn the election towards Democrats.
And I think that our model does a better job than some other models that are out there in doing that, because as you mentioned, it really focuses on
the state level demographics.
So we look at what the difference in gas prices does to voters in North Dakota versus California. It looks at what the impact of unemployment
being below the full unemployment rate in Kansas is different than the foreign employment rate in Pennsylvania. And that allows us to really not
just try and predict the outcome of the election, but really focus in on which states are the most important.
Right now, we look at states that President Trump won in 2016 for the first time in a very long time, like Pennsylvania, like Wisconsin, like Michigan,
and we can see that the economics in those states are doing very well, and to the marginal voter that might be enough to get him over the finish line.
QUEST: Now, you see that, that's interesting, because the received wisdom amongst the political elites is that it was only 100,000 votes that won
President Trump the election, and it was across in those three states.
What you're saying is, if that wisdom is true, then it's the same wisdom that could benefit him next time around -- a smaller number of votes
because of the economics that gets him across the line.
WHITE: Absolutely, and one thing that we did do differently this year than we've done in previous election cycles is we actually looked at
demographics. As you mentioned -- or sorry, at voter turnout.
One of the things that we -- the main reasons why we missed the 2016 election was the voter turnout patterns were very different than we had
seen in previous elections. Especially in, you know, those hundred thousand voters that you talk about.
And so when we looked at those different scenarios, we see that the only way that Democrats really have a plausible way of being competitive outside
of some, you know, shock to the economy or shock to politics is to make sure that they have better turnout in those particular states.
QUEST: Finally, how do you factor in the aberrant factor? I mean, the fact that this is a Maverick president. Now, yes, he was Maverick in
previous election. But now, the U.S. voter has seen four years or will have seen four years of stop, start, reverse, back up, down every which way
and backwards policymaking, the Trump way of governing. How do you factor that in?
WHITE: Yes, well, we looked at a Trump added factor, trust me and we couldn't find anything statistically significant, unfortunately. But one
way that we do -- we are able to bring that into the model is we actually include the President's approval rating in the model. And that's one of
the things that's actually very fascinating about Donald Trump is it's no secret that his approval rating has not been as high as previous
WHITE: But one thing that is really extraordinary when you look at his numbers is, it doesn't move at all. It's very difficult to convince
somebody who is a strong Donald Trump supporter to not be a Donald Trump supporter.
So for previous presidents, we've seen, you know, up to, you know, 40 to 50 basis points change in there. There are percentage point changes in their
approval rating. Donald Trump is moving in a very narrow band. There's about 40 to 45 percent of the country that's a very strong believer in
Donald Trump, and it's very difficult to convince them otherwise.
And so really the question is, what happens to that other, you know, five to ten percent of folks in between that can be persuaded one way or the
other, where the model banks on those being the marginal voters who will be most impacted by economics and with economics looking very good for the
next year, that really paves the way for a very successful 2020 for Donald Trump.
QUEST: You can't argue with success and you have an exceptionally good record of it, but we can say that you will be proved right or wrong come
next November, one way or another. And we thank you for joining us this morning. Obviously, things will change. Thank you, sir. We appreciate
it. Kind of you to be with us tonight.
WHITE: Thank you very much, Richard.
QUEST: Now we have a deal. Well, that's nothing to do with Brexit. It's GM and the United Auto Workers who have settled their differences. A 31-
day strike and more than a billion dollars in lost production. After the break.
QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in a moment. We will be live in Detroit as the GM strikes a deal that could end
one of the auto industry's longest strikes.
Ahead of the U.N. World Poverty Day, an economist who won the Nobel Prize for groundbreaking work on inequality.
As we continue tonight, this is CNN and here, the facts always come fast.
The U.S. President claims that Kurds in Northern Syria are much safer now, despite his decision to pull U.S. troops out of the region.
At a news conference earlier today, Mr. Trump said Turkey's operations in northern Syria is between those two countries, and said they're fighting
over land that has nothing to do with us.
Syrian government troops backed by Russia have now entered Kobani as the key Kurdish border city where the remaining U.S. forces have been
consolidating as they prepare to withdraw. U.S. has said Turkey promised not to attack Kobani. Turkish forces have come very close to the coalition
Hong Kong leader Carrie Lam has abandoned her annual policy speech to the legislative council amid a chorus of criticism. She walked out as pro
democracy lawmakers repeatedly heckled her, yelling, she should step down. She's now shelved the Extradition Bill that triggered months of unrest.
She delivered the speech in a later televised address.
The family of a British teenager Harry Dunn say they feel defiled after watching President Trump's news conference where he talked about the boy.
Dunn was killed in a car crash supposedly involving the wife of an American diplomat. Dunn's family met with Donald Trump yesterday. He surprised
them by revealing that the diplomat's wife was in a nearby room. They refused to meet with her.
Fifteen days, three hours, twenty eight minutes and we can't really keep up with the seconds. That's the deadline, the deadline by the way that was
set by Brussels at the last major Brexit-EU Summit some months ago. Well, now, that deadline is very close and the British government says getting
businesses ready is a top priority. Better late than never. Hurry along.
A new research shows more than a third of U.K. companies haven't made sufficient or decent plans. CNN's Anna Stewart has our report.
UNIDENTIFIED FEMALE: Get ready for Brexit on the 31st of October.
BORIS JOHNSON, PRIME MINISTER, UNITED KINGDOM: Let's get it done because delay is so pointless and expensive.
UNIDENTIFIED FEMALE: My urgent priority in this new job has been getting business ready for Brexit.
UNIDENTIFIED MALE: Ninety percent of the companies are measured by value, they trade with the EU, also trade with countries outside the EU, they are
in a position to be ready.
ANNA STEWART, CNN REPORTER (voice-over): The government says British businesses are ready. This one, a fruit and vegetable crisp maker in Kent
NIMISHA RAJA, FOUNDER, NIM'S FRUIT CRISPS: Oh, I'm a business person, I import, I export. I'm not ready, I don't feel ready. We don't even know
what the rules and regulations are going to be, we don't know under what terms we're going to leave.
STEWART: Nimisha Raja's business has grown from a garage to a factory, and now it exports to the EU. When the last Brexit deadline approached in
March, Raja battened down the hatches.
RAJA: We stockpiled and processed 24 tons of peaches and then nothing happened.
STEWART: This time, Nims isn't stockpiling. It's expensive, it may be unnecessary and Brexit is already costing them.
RAJA: We buy a lot of produce sent from the EU and also from South America. So the pound jumping up and down has been an absolute nightmare,
then invariably, the day after I pay the invoice or 10 minutes after I pay the invoice, the pound jumped up, you know, and I've lost a little bit of
money. But yes, so there's a huge amount of uncertainty. So buying is costing me a lot more.
STEWART: Raja doesn't want to raise prices, but worries she may have to, and she isn't alone, Santander Bank says Brexit has already had a negative
impact on 63 percent of British businesses.
JOHN CARROLL, SANTANDER: One-third of companies plan to reduce staff by the next year as a consequence of Brexit. One third also plan to increase
prices as a way of preparing as well. So, these are very real negative impacts. So, I definitely believe there's a potential for this to happen.
STEWART: Annual report finds that over a third of British businesses aren't ready for Brexit. The U.K. government told CNN, it's a top
priority. It says it spent $136 million to support business and it's holding events around the country, so it can speak directly to business
RAJA: The government thinks they've published 750 pieces of information for businesses to read. I have absolutely no time.
CARROLL: And with the deadline of October 31st fast approaching, these businesses are running out of time. Anna Stewart, CNN, Kent.
QUEST: I have to say those crisping and chips are extremely good. She lost some badly off, it went like a wildfire. General Motors and the
United Auto Workers Union have reached a tentative deal that could end the month-long strike at GM. The company's shares are up more than 1 percent
which is turning in itself 1.3 percent.
If the strike ends this week, it will have cost GM an estimated $1.5 billion. Vanessa Yurkevich is with me from Detroit in Michigan. That's
always the bargaining point, isn't it? Between what it will take to settle and the cost of staying out. You've been following this, do the scales,
weigh it up for me.
VANESSA YURKEVICH, CNN BUSINESS CORRESPONDENT: Hey there, Richard, yes, this comes after five weeks of these picketers behind me being on these
strike lines here and across the country. We know that GM has lost $1.5 billion in profits, and we know that wages lost from workers is totaling
about $800 million.
So, a lot of loss on both sides, but this is good news. The agreement has been made and we're waiting for that agreement to be voted upon tomorrow by
the National Council. That's members of the union. We spoke to two workers here who combined have work experience of nearly 80 years at this
factory behind me, we got their reaction right after this deal was announced. Take a listen to them.
(BEGIN VIDEO CLIP)
JOHN HATLINE, GM WORKER: This plant was scheduled to close. It was allocated, and in this contract, I'm hoping to see something there that we
retain a new product as the plant is going to stay open for our membership and their families.
MAURICE FAUST, GM WORKER: This is my last year here, and I guess out of the 42 years that I've been here, the longest that I've really been out on
strike is probably like about, you know, a couple of days, but you know, I guess it's something to look back at and knowing that this is what it took
to get to what we wanted and what we -- you know, we asked for -- hey, it's -- I feel like it's worth it.
(END VIDEO CLIP)
QUEST: And I know Vanessa, quite often, an agreement with one is often used as a bellwether for other auto companies, Ford, Fiat-Chrysler, even
those -- will this be the case here?
YURKEVICH: Absolutely, this contract was not only important for GM and the union members, but it's also really a signal for the future of what's to
come between the other big U.S. automakers. This will set the precedent for what is to come between negotiations with their union members and Ford
and Chrysler as you mentioned.
And really, Richard, the crux of this, this was a battle for the future. What is the future of GM going to look like? And what is the future for
these workers going to look like? And these deal seems to have settled it for both sides, and as these details start to emerge, we'll start to see
what the future of U.S. automakers will look like. Richard?
QUEST: Vanessa, thank you in Detroit. Looks very cold there today, but well, more coal down -- but, thank you for staying for us. Now, the
traders piled into Bank of America stock this session and for good reason. There was a strong earnings report. The shares are up 2 percent after
profits held up better-than-expected despite slowing economic growth and lower rates.
News of Warren Buffett's Berkshire Hathaway could buy more shares help boost that stock price. Matt Egan is in New York. Bank of America, the
stock price just bounces around that same 30, it never goes up much, it never goes down much. The company -- the bank hasn't broken out. Does
this result suggest it is about to?
MATT EGAN, CNN BUSINESS WRITER: It might. Bank of America really did impress shareholders with these results, better-than-expected as you
mentioned. I think there were really two very important highlights. One, despite the low interest rate environment, Bank of America was actually
able to increase its lending profits from a year ago.
That's pretty impressive and something that some of the other banks have not been able to do. The other really important thing here is that Bank of
America is lending a lot. It reported a strong increase in consumer loans, another strong increase in business lending as well. And the CEO Brian
Moynihan, he really did talk up the economy.
He said that he thinks the economy is still in good shape despite all those concerns about the trade war and lower business --
QUEST: Right --
EGAN: Sentiment. So, Richard, I mean, if there's a recession coming, it's certainly not showing up in Bank of America's numbers.
QUEST: And the more I looked at the banks, the more I saw now a story of two halves, basically, between those who did well, and though, we talked
about it yesterday. As a tester for the earnings season, can we glean anything from the banks? Bearing in mind they are so specifically affected
by macro-economic issues?
EGAN: Well, I think they will -- we can say is that maybe some of the sentiment around the economy might be too negative. When the banks are
actually looking at the hard numbers, they're on the front lines of the economy. They see what companies are doing every day. And they're not
reporting any sort of red flags, during the conference calls, the banks' CFOs have said the credit quality is very strong.
They're not seeing indications of any sort of the spike in default. And so, that's good news going forward when we hear from other companies. So
far in earnings season, we've seen that 86 percent of the S&P 500, they've beaten estimates in terms of earnings that's quoted in a Refinitiv. So,
that is a great start.
But you know, it's early, Richard, less than 10 percent of the companies have reported its earnings so far.
QUEST: We've got a glut to come, including Netflix as well. All right, thank you, sir, I very much appreciate it.
QUEST: Virgin Galactic could be months away from its first commercial space flight. And now, well, what do you wear when you're in space? You
wear something created by Under Armour and then announce what passengers will be getting. By the way, they get a free suit, well, that's what you
Sir Richard Branson and the CEO of Under Armour after the break.
QUEST: What does the well-dressed astronaut wear? Well, you want something smart, something with epaulets, something that gives you a feeling of,
well, fashion. Now Under Armour and Virgin Galactic are getting ready for take-off and have unveiled the space suits for Virgin's first commercial
flight and astronauts.
Bearing in mind you'll pay $250,000 for a ride on Galactic. I spoke to Virgin Galactic founder Sir Richard Branson and Under Armour's CEO Kevin
Plank. And Kevin Plank told me what it was like to hear that they were going to be designing some attire for space.
(BEGIN VIDEO CLIP)
KEVIN PLANK, CHIEF EXECUTIVE OFFICER, UNDER ARMOUR: And for a company who has built our mantra around being the human performance company and the
most incredible innovative products in the world. This is a kind of phone call you can only dream of. When Richard calls and says, can you help us
with our suits and what the astronauts are going to wear into space. So, it was the opportunity of a lifetime.
It won -- frankly, it was -- it was really no different than we looked at our outfit or Kit Out, one of our -- one of our teams. Just the approach
began with the consumer or the athlete or the astronaut in this case. And then we backed it up with what's the problems that we're solving for. And
it began with everything from variability back-and-forth with temperature, what that might mean and for just comfort. So, we were able to take in-
line, about eight in-line technologies and actually utilize them to build the, you know, the dozens --
QUEST: Right --
PLANK: Of components that went into building this actual suit, so --
QUEST: Kevin, do you think having something like this distinguishes Under Armour from your competitors who are -- who often are very sports-specific
versus overall performance specific?
PLANK: Yes, of course. And so, you know, we like to say is that, we've been really positioning ourselves as performance being the heart and soul
of this brand. And the people have asked us about what that means from a trend standpoint. You know, there's nothing that we will build, we'd like
to say that without beauty, there is no performance.
And I think that's something that comes through in this suit which again won't be going in, actually be put into use for, you know, several more
months into 2020. And the same thing I think you'll see with the line coming out from Under Armour is that we will have a performance --
QUEST: Right --
PLANK: When you see Under Armour, it's the brand that you have to confirm is that an Under Armour top? Not just because it's got a big logo, but
because it's incredible looking. And then the next question naturally has to be, if it's Under Armour, well, what does it do?
QUEST: Right --
PLANK: So for in this case, you know, this suit basically does everything. The top I'm wearing right now, it's helping my muscles recover as well as
giving me great stretch, and if I walked into a rainstorm, I'd be perfectly fine right now.
QUEST: Perfect. You should make it in pinstripes --
RICHARD BRANSON, CHIEF EXECUTIVE OFFICER, VIRGIN GROUP: And you have to buy a ticket, Richard, none of this is getting a free suit.
QUEST: Well, I was just about to ask you, Richard, please, tell me that for a quarter of a million dollars for the ride, you do throw in the suit
BRANSON: We do throw in the suit for free. So if I was you, I would buy a space ticket and we'll then be delighted to fit you out or Under Armour
will be delighted to fit you out.
QUEST: Now, you're giving away his stuff. No, Sir Richard, it must be getting exciting, it must be -- you know, there must be a real frisson for
you that this is now real and it's getting closer and this is going to happen.
BRANSON: Well look, it's tremendously exciting. I haven't let myself get excited for the last 14 years because it's been a long haul to get here.
But now we're getting so close, it's incredibly exciting. And you know, in the next couple of weeks, we're going to be --
QUEST: Right --
BRANSON: Turning Virgin Galactic into a public company, and involving, you know, the public institutions and other people in the first-ever space
company. So --
QUEST: Right --
BRANSON: Exciting few weeks ahead and few months.
QUEST: Richard and Kevin, thank you, gentlemen, for joining us, I won't wait for the suit in the mail for this space -- but I'll stick to my
pinstripes instead. Gentlemen --
PLANK: Thank you, Richard --
QUEST: Thank you very much indeed.
(END VIDEO CLIP)
QUEST: When we return, well, pinstripes, nothing wrong with them. When we return, I'll be joined by one of the recipients of this year's Nobel Prize
in Economics, Michael Kremer tells me about his award-winning work on poverty.
QUEST: No one suggests you can end poverty in a single day though. Tomorrow, the U.N. shine a light on the issue for World Poverty Day. More
than 700 million people live in extreme poverty, and that's the bad news. The good news is it's falling as a proportion of the population. It's
under 10 percent compared to 36 percent a quarter of a century earlier.
My next guest is helping to turn the tide. Michael Kremer is one of the three economists awarded the Nobel Prize for his work on alleviating
poverty in emerging economies. He joins me now, congratulations, sir, honored --
MICHAEL KREMER, ECONOMIST, HARVARD UNIVERSITY: Thank you, thank you --
QUEST: I'm so honored to have you with us --
KREMER: Oh --
QUEST: The work that you've done is not just about alleviating poverty, but it's a different mechanism, modality for studying economics. It's in
the field, it's large-scale, it's not sitting in computer labs or running formula.
KREMER: I think that's -- I think that's right. The -- I wouldn't say that it's not doing those things, but it's not only doing those things.
It's not only we use data, we use models, but we also put a lot of emphasis on addressing practical problems and on spending time in the field working
with the people who are involved. Whether that's farmers or nonprofit organizations or --
QUEST: So, coffee farmers for example --
KREMER: Right --
QUEST: Which are already using -- you have used for your research, and are using the results of your research to improve crops.
KREMER: So, I'll give you one example --
QUEST: Please --
KREMER: Of something that I'm testing this with coffee farmers now. So, doing now, the developing world is very different than it was as you say 25
years ago. Now, most people, even in very poor countries have access to mobile phones. And that opens up all sorts of opportunities for digital
development. And that includes in agriculture.
So for example, there are a number of scientific advances about how you can improve farming practices. So, that could include simple things like
adding -- if you have acidic soils, adding lime. Many farmers don't know about this. But they have mobile phones, so we can -- you can get messages
QUEST: But what are the economic principles that you've distilled out of this?
KREMER: So, I'll give you a few examples.
QUEST: Sure --
KREMER: So, let me say a bit about the approach, the approach involves talking to the people on the ground, learning what they think are possible
solutions, trying them out and doing that for example with this mobile phone messages just the way a tech firm would do AB test to try to improve
their messages, you can do that with messages to farmers as well.
So, what are some of the lessons that are coming out? Let me give you an example from a different area, from health care. So, there had been a big
debate in international development that about whether to charge for --
QUEST: Right --
KREMER: Health goods. And there's a view that, well, it's really important to charge because that way the people are really going to use the
mosquito net or how to --
QUEST: Yes --
KREMER: The water --
QUEST: Right --
KREMER: The water, you know, the water --
QUEST: Purify --
KREMER: Purify --
QUEST: Yes --
KREMER: Thank you, are going to -- they'll pay for it and the other --
QUEST: Yes --
KREMER: People won't. And what we found was, and this was in case after case. It turns out that when you charge many fewer people use it. You
don't actually raise that much revenue because hardly --
QUEST: Right --
KREMER: Anybody is using it, and you lose that big health benefit.
QUEST: Where do you see the roles -- I know you've done some work with the World Bank and you were to pay for it recently comprehensive with the World
Bank. Where do you see the roles of big institutions like the World Bank which is going under a real soul-searching at the moment for what the
poverty alleviation responsibilities are.
KREMER: So, I feel like the World Bank is -- can play a very useful role - -
QUEST: You do?
KREMER: And look, it's made all sorts of mistakes over the years, everybody has. But I feel like they've actually been one of the big
supporters and funders of this type of research to try and regress the test, what works and what doesn't. And in many cases, they've adjusted
their policies. And this example of charging for preventive health that is a case in point.
There are people in the World Bank who did want to charge for that. Now, the -- really, the policies have shifted and many of these products are
being provided for free.
QUEST: What does it mean to win the Nobel? I mean, it is pardon, the gold standard. What does it mean?
KREMER: Well, I'm very happy right now, you can say that. It's just been a couple of days, so I don't know what it's going to be like. But I
think, you know, I've spoken to colleagues who have won before and they say it's transformative. And I hope that this will encourage -- you know, I'm
very pleased for myself. But I hope that it will encourage, you know, more people to go into economics.
QUEST: Well, not just -- well, let's clarify that, not just economics, but economics that are put into some sort of purposeful use.
KREMER: That's correct. And I think that -- I think that there's some people who perceive economics as -- I'm all about finance --
QUEST: Right --
KREMER: And so on. It's super interesting and super important. But economics can do a whole bunch of different things. And I think that there
are people who are concerned about problems of --
QUEST: Right --
KREMER: Developing world, there's a role for them in economics as well. And I think also, this will help encourage governments to start adopting
some of these policies where there's evidence. And we're seeing that already, and I think we'll see more.
QUEST: Congratulations, sir --
KREMER: Thank you --
QUEST: Thank you so much for taking time to come and see us, thank you very much indeed. We will take a profitable moment after the break.
QUEST: Tonight's profitable moment. I have lost track of the number of council summits in Brussels I've been to or crunch meetings where the deal
must or could or may be done. Well, 15 days until the latest deadline. And that deadline really isn't that significant because of various
legislative stuff in Britain.
But they do want to do a deal, that's what we're seeing tonight. Everybody wants a deal. As the Prime Minister said, you know, other day in Britain,
it's time to do this once and for all. Everybody seems to accept, now is the moment which is why we'll be in Brussels tomorrow night to see can they
do a deal that will not only satisfy all the Europeans, the Irish and the council, but also the British.
And they can get through the parliament in London. Don't forget the fiascos that we've seen so far. It won't be easy, but tonight, there's a
feeling, I can just feel it in the air. That if there's going to be an agreement, this is probably the moment with a new Prime Minister.
But, I've been wrong before, and we'll find out tomorrow when you and I join together in Brussels. And that's QUEST MEANS BUSINESS for tonight, I
am Richard Quest in London, whatever you're up to in the hours ahead, I hope it's profitable.
The bell is ringing, the day is done.