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First Move with Julia Chatterley
Cash Crunch Payments Come Due As Moody Says Millions More In The U.S. Out Of Work; A Glimmer Of Hope In Coronavirus Growth Rates From Italy And Spain; Zoom, The Video Conferencing App Under The Pressure Over Privacy. Aired 9-10a ET
Aired March 31, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:21]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here's your need to know.
Cash crunch payments come due as Moody says millions more in the U.S. out of work.
Slowing infections. A glimmer of hope in coronavirus growth rates from Italy and Spain.
And a Zoom bomb. The video conferencing app under the pressure over privacy.
It's Tuesday. Let's make a move.
A warm welcome as always to our FIRST MOVErs around the globe. We have a jam packed show for you today and I'm glad to say, it's full of innovation
in times of crisis.
Plus a look at the quarter that was. What a journey the last few months have been, ending of course with the global war against the coronavirus.
Let me bring you up to speed because we began through a record top in mid- February and the Dow at 30,000. The NASDAQ, 10,000 within striking distance.
Then, we saw the fastest descent into bear market territory on record. Truly, one of the most tumultuous three months in Wall Street and of course
health history, too.
At the moment, we're looking at a lower open for U.S. stocks after Monday's three percent advance. Europe has turned mostly lower, too, but all eyes on
China's data first today as they begin to kick start their economy.
Chinese manufacturing survey data bounced from a record low in February. Any number just to give you above 50 means that manufacturing is what we
call in expansionary territory.
Now, I've read plenty of skepticism about these numbers, primarily because they're from China, but let's just be clear, they don't reflect the level
of business activity, simply the direction.
So a small rebound from last month will give you this kind of lift. The bottom line is that the rebound that we're hoping to see will take time,
but business is resuming, and I do think that's key to recognize here.
Now, during the Asia session, Hong Kong and South Korean stocks were the out performers yet on the quarter. The Nikkei fell some 20 percent. The
Hang Seng was down 16 percent, and Chinese stocks, in fact with a relative outperformer, down just -- and I say just under 10 percent.
China remains a beacon of hope for those elsewhere and they continue to fight the virus. And of course, as we watch the economic costs amount up.
Let's get to the drivers as Christine Romans joins me now. Christine, that data from China is one thing, this week, particularly if we hone in on
expectations for the claims for unemployment benefits in the United States, some estimates now -- Moody's Analytics saying four and a half million
people, an additional to the 3.3 we saw last week.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Millions and millions of Americans are out of work, are losing their jobs. They are
being laid off. They're also being furloughed.
You look at some of the companies with furloughs, Gannet, Marriott, Hilton, Hyatt, Macy's and Kohl's. The interesting thing about those furloughs is
they keep their healthcare through their company and the government will pay their unemployment benefits as close to their full salary as possible
for four months.
So the U.S. government has designed a rescue, a Band-Aid package here to keep people, as many people as possible kind of running in place, at least
over the next few weeks and months.
So those layoffs and those furloughs are just devastating, but the government is trying to get the money out there.
Now this week, you're absolutely right. I mean, the money isn't out yet and people are out of work. The bills are due. It's the end of the first
quarter, companies have bills at quarter end, and tomorrow is April 1st, rent and mortgage is due.
CHATTERLEY: Yes, it's painful. Most of the data though this week is from a parallel universe before we saw the lockdown happen. So it's why I sort of
reiterated that claims number, even the payrolls on Friday not really of relevance because the timing period of when the data is collected, it
brings to mind the Goldman Sachs report that came out and they've been scrambling to keep up to speed with their predictions here. Their Q3
estimates look incredibly rosy in my mind.
ROMANS: IT looks like a V, not a U. I'm hearing a lot of U-shaped recession, you know, a gradual recovery. But Goldman Sachs is saying a nine
percent contraction in the first quarter of the economy of the U.S., 34 percent in the second and then a bounce back in the third of some 19
percent or so.
And, you know, we've got a really big unemployment rate, too, you know, for the middle of the summer. I think that the unemployment rate targets at
this point, Julia, are anybody's guess. They're going to be big.
We're going to have a historic summer after a historic quarter, quite frankly, something we've never seen before here. These numbers are going to
be ugly in the near term. Stimulus is going to be key here. And I'm sure you're hearing the chatter that this $2.3 trillion, it hasn't even gone out
the door yet, there's going to have to be more on top of that.
[09:05:21]
CHATTERLEY: Yes, if this is the stabilization part, this money, this is to try and hold things together, what ultimately kick starts the recovery.
Once we get the other side of this, and hopefully we've mitigated too much damage in the interim, whether or not we need more money, I think at the
back end is an open question, and as you and I seem to agree here, more will be required.
ROMANS: Yes, we are just going to have to beat the virus first and then try to figure out what the new normal is going to be. We don't know what --
the economy that comes out late fall, it will be a different economy than a year ago, don't you think?
I mean, you're going to have a reassessment of consumer patterns, and as you've pointed out so many times, confidence is key. We must be competent
in the health situation before the economy can come back.
CHATTERLEY: Absolutely. Christine Romans, great to have you with us. Thank you.
All right, now to the latest on the battle against coronavirus, the world's biggest outbreak in the United States is getting worse. The country record
its highest daily death count overnight. The total now stands at more than 3,000 lives lost.
New York is driving the surge, almost half the country's fatalities are recorded in the state in the scramble to increase hospital capacity. New
York City has set up extensive care units in Central Park and that's what you're looking at right now.
In Belgium, authorities reported the death of a 12-year-old girl, this amid numerous reports of the virus striking younger people. New Zealand says 26
percent of its patients are in their 20s.
As the U.S. and Europe grapple with quickly rising death toll, a glimmer of hope seems to be emerging. New infection rates in Spain and Italy appear to
be slowing since the shutdown measures went into place. Spanish health officials say the peak may be close if it's not already here.
Elizabeth Cohen joins me now on this. There's so much information there, Elizabeth. Let's hone in to what we're seeing in in the likes of Italy and
Spain. Are we suggesting that the growth rate here in the number of cases is slowing?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Right, Julia. That is possible. That is what they're hoping they're seeing. They see the peak
maybe soon, but they're not actually sure. And I want to stress here. This is new territory for everyone.
And so when you hear these projections, remember that they are projections and that nobody has a crystal ball. But that is certainly what they're
thinking. They're thinking that all of this social distancing, all of these rules may be finally paying off.
CHATTERLEY: Yes, it's hope. We're just looking for glimmers of hope wherever we can find them. Elizabeth, I want to turn to the number of
counts of younger people that we're hearing.
It's certainly a topic of conversation here in the United States in particular. And I just -- my mind went back to a discussion that we were
having a few months ago about an epidemic of vaping, of use of things like marijuana in this country, is that in any way perhaps connected to what
we're seeing among young people? It is a lung disease after all, or are we grasping at straws here?
COHEN: You know, Julia, we really just don't know. Is it possible? Yes, it's possible because anything that damages the lungs is going to put you
at a higher risk for getting very sick or for dying in this outbreak.
Let's look at France, for example, they've had about 30 people under the age of 44 end up in the ICU, about half of those have had underlying
conditions and half of them haven't. Underlying conditions are things like obesity or lung problems or heart problems.
Now, the interesting question is, why are people ending -- why are young people without underlying conditions ending up in the ICU? And the answer
is that we sort of have to turn to, for example, flu.
Every flu season, we report on young people, children, people in their teens, their 20s, 30s, 40s, who end up in intensive care or who sadly end
up dying. And when you ask Infectious Disease experts, why? Why this person? They were perfectly fine beforehand. They say we don't know.
All we know is that some young people do have very robust immune systems, and that it actually comes to hurt them. It's not even so much the virus,
in this case, coronavirus that kills them. It's actually their response to it. It becomes sort of overblown and that ends up hurting the body.
We're not sure that that's what's happening here with coronavirus because no one has had time to study it. This is so new and happening at such a
frantic pace. But that may be what we're seeing here.
CHATTERLEY: Yes, it is so hard to study the data when you're so busy trying to save lives. Elizabeth Cohen, great to have you with us. Thank you
so much for your insight.
COHEN: Thanks.
CHATTERLEY: All right, there are signs that the world's second largest economy is restarting its engines. Chinese government data suggests
manufacturing activity has rebounded in March. John Defterios has all the details for us.
[09:10:10]
CHATTERLEY: John, I mentioned earlier on the show, what's not captured here is the amount of activity, but the change in direction i.e. a kick
start to the economy is captured, and that's crucial.
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: It is for planning and the order books going forward, at least in the domestic economy, I
think we have to be careful about what the demand will be in China on the ground there on the Mainland, and then outbound and I'll explain that in a
second.
But we're coming off their worst performance since they created those figures back in 2005, Julia, so 52 is above the line, a positive nature in
terms of purchase orders going forward, but I wouldn't call it a V-shaped recovery.
We're expecting a contraction in the first quarter since 1976 when they had the Cultural Revolution that caused some chaos for the economy.
Now, my hesitation here is because of export orders, they were down 17 percent in February, we'll get the data in mid-April, but you have to think
because of the state of play in the United States and Europe right now, we're going to see a similar contraction for export orders. So I'm not very
confident.
Xiaomi, the telecom equipment manufacturers suggesting though that they are about 80 to 90 percent of capacity right now in terms of manufacturing. So
that is a positive.
The one thing I'm surprised by so far, at least, the Central Bank and the Ministry of Finance not announcing anything, in terms of the scale of what
we've seen within the G-7 in terms of stimulus, when do they decide to bring out the big guns after they see the data throughout April here and
say, look, we need to give it a lift, going into the second quarter and the second half of 2020 or not. We're waiting for that.
CHATTERLEY: You raise such a great point there as well though, about who they ultimately sell to, if their production internally is for others
internally, then that growth is reinforcing, but with the rest of the world seemingly struggling still with the virus and in lockdown, who can they
sell to, at least in the short term, which is such an important point.
The other issue here for nations around China is when China slows down, everyone feels that they have a voracious appetite for all sorts of things,
including commodities and some very stark warnings from the World Bank today about the poverty risk in other nations as a result of China slowing.
DEFTERIOS: Well, it's a great point to bring up here because the World Bank is putting into paper what we were talking about for the last couple
of weeks, Julia.
The slowdown in China, the impact of the coronavirus showing up in the numbers that they're outlining for all of 2020. We had an East Asia growth
of better than six percent in 2019.
The base case scenario for the World Bank is just over two percent. They're saying the worst case -- get this -- 0.1 percent or a contraction. So a
swing of six percent. No surprise it is going to have an impact on poverty going forward.
And quite a swing here, Julia, 46 million, see if I can explain it correctly. They're expected to see 35 million come out of poverty in 2020.
As a result of the coronavirus, that could expand the poverty, it will grow by 11 million.
So that's the swing of 46 million right now. Let's not bury the headline here. They had an outlook on China, which grew just over six percent in
2019. They're expecting above two percent, which is awful to say, and worst case scenario 0.1 percent for 2020. And they're saying and I think this is
very difficult for the developing countries like Indonesia and Philippines, step on the healthcare, move into urgent action. That's very hard to do
when the crisis is in your face already.
CHATTERLEY: Yes, but John, to your point as well about China, we're always a bit cautious about them over stimulating the economy. Now is not a time
to be shy, particularly in targeted areas like that, for example.
John Defterios, great to have you with us. Thank you so much.
Now from G-20 world leaders reportedly using it to kindergarten kids, it seems. Just about everyone is using the video conferencing app, Zoom to
bridge the gap in our social distancing age.
But as a previously unknown company becomes a household name, some say we may be forgetting the privacy risks familiar for more traditional social
media.
Clare Sebastian joins me now. Clare, what are you hearing about the potential privacy risks here associated with Zoom?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Julia. An increasing number of questions are being asked as this app surges in popularity. The
stock price by the way, up some 120 percent this year, even as the rest of the market as you know, has cratered.
Right now, you know, there's a class action suit that was launched Monday in California where an individual alleges that Zoom, as it has grown in
popularity is failing to safeguard the personal data of its customers.
It says that when you log in, it discloses certain information to third parties like Facebook. Now, this is something that Zoom has addressed. They
put out a blog post last week where they admitted that if you log into Zoom via Facebook, it does share some personal information, things like your
device model, your IP address.
But they released an update, they say they patched it. They encourage users to download that update. The class action, though says the damage is
already done to people and to their trust.
So this is something that zoom is increasingly facing. They are at a sort of a defining moment for the company, as you say the G-20, things like U.K.
Cabinet meetings are being held on it. They've made it available to a lot of different schools.
[09:15:25]
CHATTERLEY: And meanwhile, we've seen security issues, a phenomenon known as Zoom Bombing, where hackers have sort of dropped in uninvited to
meetings and displayed graphic content and things like that.
So even as Zoom increases in popularity, they are under increasing pressure to try to deal with these issues that come out of this popularity -- Julia.
CHATTERLEY: Yes, so not necessarily as we're showing you pictures there of the G-20 meetings, not necessarily dropping bombs in those G-20 meetings
all reportedly there of course on the use there.
Interesting times, and of course, very much tied to the fact that so many people are working from home now including big corporations, and a vast
majority of their staff.
Clare Sebastian, thank you so much for that.
All right, Amazon has fired the employee behind Monday's walkout at a New York fulfillment center.
Amazon say Christian Smalls was supposed to be at home under quarantine with pay after he was in close contact with another employee that had
tested positive for coronavirus.
Smalls had demanded the facility be closed and sanitized. He says he is being punished by Amazon and that it reflects the company's culture.
Much more ahead on FIRST MOVE. Coming up, a race to make ventilators. A growing number of companies joining the effort, including an aerospace
firm.
Plus, one of the largest 3D printing companies in the United States is now helping to make medical supplies. Innovation in times of crisis, coming up.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE where we are still on track for a lower open for U.S. markets this morning.
Lots of data to come this week. That's the thing to keep an eye on, on both health and on the ailing U.S. economy. As we've discussed, those jobless
claims on Thursday perhaps the key.
[09:20:12]
CHATTERLEY: Oil, finishing up the first quarter with modest gains after falling to 18 year lows on Monday. Brent and U.S. crude have tumbled more
than 60 percent since January. That's the worst quarter for oil on record. Growth concerns and supply -- excess supply of course, too.
Manufacturers from different industries meanwhile, around the world are answering the call for more medical equipment. In the United States,
General Motors says it expects to deliver its first 20,000 masks to frontline workers next week. Ford says it will build 50,000 life-saving
ventilators in 100 days.
To the U.K. now where Dyson is designing new ventilators and helping traditional medical supply providers to ramp up their production.
And in France, Peugeot maker, PSA has teamed up with three other companies to produce 10,000 respirators by mid-May.
Another company in focus, Smile Direct Club is the first direct to consumer medical tech platform for teeth straightening. In the space of a week, they
turned around their 3D printing prowess to make 1,000 face shields per day.
Joining us now is Smile Direct Club's Head of Global Supply Chain. Dan Baker.
Dan, fantastic to have you with us. Just talk to me about the decision making process and how you suddenly in the space of just a handful of days
decided to do this.
DAN BAKER, HEAD OF GLOBAL SUPPLY CHAIN, SMILE DIRECT CLUB: Yes. Good morning, Julia, thanks for having me. You know, we saw the -- obviously,
the pandemic start to really spread across the world and particularly here in the U.S. back at the start of March, and our executive leadership team
had the foresight to say, you know, we're going to be asked to help here. And so what do we -- what do we need to do?
So my team in Manufacturing and in R&D, started to look at some of the shortness that we were seeing in medical supplies that was being well
reported and we started to switch gear to investigate face shields and face masks because that was really where the chronic supply shortage was going
to be.
And in the space of sort of, as you say, 10 days, we pivoted, we repurposed a lot of our manufacturing assets here. I've got 60 industrial sized HP
printers, and, you know, we started to produce face shields last week and I've got an example here, the 3D printed part at the top, and at the
bottom, a simple piece of PET, rubber bands. And lo and behold, you know, the medical professional has some very simple but effective extra
precaution to be able to treat the patients.
I will say it's more than 1,000 per day, Julia. It's actually 7,500 per day.
CHATTERLEY: Wow.
BAKER: And it's the real benefit of Smile Direct, right? We've got one of the -- probably the, you know, the world's largest but certainly one of the
largest 3D print shops here in the U.S., so it's our scale that allows us to make such a big immediate impact.
CHATTERLEY: I mean, this is incredible. You're also -- and we've talked about this a lot throughout the last few weeks -- a swab shortage, and
you're also trying to tackle that as well.
BAKER: Correct. You know, swabs, if you think about it, there's 350 million people just here in the U.S., and it's great to see the number of
tests obviously increasing in the last week or so. But there's still going to be a shortage for swabs.
So swabs is one product we've made. It obviously requires some more testing, and we're working with the authorities to see how we move forward
and get a final design approved so that we can help that shortage as well.
And of course, the third part that we've been making is essentially face masks. And this is a good example of our sort of preferred prototype that's
going through testing. It's as simple sort of slam together like pieces of Lego design.
And the great thing about this, Julia is, it should be reusable. You know if we can find a way to sterilize this and work with the authorities on the
design of it, as well as the efficacy and hygiene to be able to sterilize it, it is then reusable time and time again.
And one of the reasons for the shortfall is that a lot of the current masks, used once and then done.
CHATTERLEY: Yes, we were talking on the show about perhaps using radiation or ozone to try and clean the ones that are out there. So you just
mentioned that you've got to get approval to be able to get these out to frontline workers. Do you have any sense of how long it could take to see
all healthcare workers using your product?
BAKER: You know, there's been some really good forums and collaborations between the medical professions and the suppliers over the last week. I'm
hopeful that with the work that's been done in the last week, we're only days away rather than months away.
And so, you know, there is a lot of really good intent and collaboration, but obviously, you know, the people that are the experts want to make sure
that the efficacy and the sterilization is really in place and proven, as well as some pragmatism.
You know, if there's a shortage and there's nothing, then I think, you know, some of these designs will get more and more attention and actually
the approval might be accelerated to prove the efficacy improved via the hygiene and sterilization. So we're hopeful it's days rather than months.
CHATTERLEY: We'll keep fingers crossed for you. What about your workers? Have you managed to retain all the workers that you had before? And we're
just hearing more and more stories of workers that are still in offices and in plants like your own, saying, we're a little bit cautious about our own
health and safety here. So what are you doing to protect your own workers at this moment?
[09:25:32]
BAKER: Yes, rightly so. You know, our own workers. We put in an edict last week where anybody on site, and I'm the exception at the moment because I'm
sitting in a conference room doing an interview with you guys.
But to be honest, every worker that's in the facility where I am currently here in Nashville, is wearing gloves and a face mask. And we put that in
place since last week, and we've got a very good supply. Again, our procurement team saw this epidemic and pandemic coming a few months ago and
started to get ahead of it.
So from a worker point of view, you know, we've given them the personal protective equipment to do their role. We've also significantly stepped up
our own hygiene procedures here, including, you know, more regular sweeping of the areas to clean the floors with the approved chemicals, as well as
all the high context surfaces, in the break rooms, in the bathrooms, in the workplace. And, you know, we really double down on that.
And we're not stopping, you know, we're keeping up to speed with all the latest guidelines from the C.D.C. as that changes and evolves and we learn
more. So we really are, you know, trying to make our workers feel incredibly safe during a very difficult time. But it's an evolving
situation, so we've got to stay on top of it.
CHATTERLEY: Yes. And you have to protect your staff and yourself of course, too. Very quickly, money? Who is paying for this? Are you as a
company paying for this and do you have any guarantees of whether the innovation and the work that you're putting in here will, in the end at
least allow you to break even and pay your workers? How is it working with the financials?
BAKER: Yes, so you know as well as the face masks and face shields, this face shield retails for like 10 bucks 50 cents and the intent there is very
much just to cover our costs. We're not looking to make a profit here. We're just looking to do the right thing.
And as well as you know, some of the volume will also be donated by the owners of this business to causes that they sponsor and are interested in
across the U.S. from coast to coast and border to border.
So we're absolutely not looking to make a profit here. Remember, too, of course that our everyday business is still very much open for business. So
you know whether you're an existing customer going through a treatment plan of teeth alignment, or whether you're a new customer looking to start a
treatment plan and have the smile you've always dreamed of, you can simply go on online to the Smile Direct website and request an impression kit.
And in the comfort and safety of your own home, you can take a 3D mold of your current teeth, send that back to us and then we'll send you an e-mail
within a few days that will give, you know, a link to the graphics that show how your teeth and your smile will improve with your treatment plan.
So it's really our everyday business that's keeping us afloat, and you know, we've seen an uptick in impression kits being ordered, which is
great. And, you know, the masks and the shields are and then, you know, an additional activity as well.
CHATTERLEY: Interesting. People are looking to fix the teeth while they're at home. So that's a good sign of people hoping to see the end of this
pretty soon.
Dan, well, thank you.
BAKER: All right, I'll let you go.
CHATTERLEY: I have to go. You and I can keep talking, but I have to take a break and get to the market open. Great to have you with us. Mask on,
gloves on again, please. Stay safe.
BAKER: Thanks. Thank you.
CHATTERLEY: Dan Baker. Head of Global Supply Chain at Smile Direct Club.
The market opens, next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. I am Julia Chatterley live from New York and we do see a lower open for U.S. stocks. We actually missed the
bell this morning because I was so entranced by that 3D printing conversation, but that is the snapshot as we set off on the final trading
day of the first quarter.
The Dow and the S&P are coming off their fourth gain in five sessions, but we're still looking at steep losses for the quarter coming into this
session. The Dow had fallen some 21 percent. The S&P 500 not far behind as you can see, and as awful as those stats are, it would have been far worse
without the gains that we saw in last week's session. And I can just give you a quick look at that, too.
Hard hit retail will be in focus once again. Shares of Macy's, Kohl's, and Gap all falling sharply yesterday after hundreds and thousands of workers
were furloughed.
Visa also lowered its outlook today saying consumer spending has sharply declined even online. Richard Quest joins me now. Richard, no surprise to
see workers furloughed from the big retail companies, some of them struggling already.
Visa saying consumer confidence has clearly taken a knock here. The question for me and it ties to Goldman Sachs's report this morning. They're
predicting a V-shaped recovery into the third quarter. What do we think of that?
RICHARD QUEST, CNN BUSINESS ANCHOR, EDITOR-AT-LARGE: All right. So I think we need to look at the technicalities of what people are saying when they
mean a V-shaped recovery. If you switch it on, if you switch the U.S. economy on again, all of a sudden, you will get a V-shape.
Just logically, you've gone down very sharply because you stopped overnight, and you will come back very sharply because you will have
started that whole thing on again.
Remember, Julia, many of the millions of people who have been furloughed will be taken immediately back on again, when the companies reopen, most of
these companies are not going out of business, they are merely shedding their workforce temporarily to cut costs.
So when you switch the whole thing on again, you will get a V-shape. However, will you get to V that goes all the way back to where we were? No,
is the answer. You'll get a sort of a weird looking V-shape, a very sudden start that will taper off into a bend as we get to a new normal as more
companies realize the longer term damage.
CHATTERLEY: Absolutely. And of course, and we always bring it back to this, as we start to kick start the economy. Does it happen on a staggered
basis? What does confidence look like at that stage and how confident are people that we're on top of the virus and that's going to come down to
medical science?
QUEST: You've got it the right way around. Absolutely. The first question is, are they -- are we beating the virus? Everything else flows from that.
It's a virus economy, as I think you've been saying. Everything flows, are we defeating the virus?
If we are, then a V-shape sooner becomes possible. If we're not, then a V- shape later in the year becomes more likely, and related to that, all the guidance, all the numbers, all the sort of prognostications from companies
they are meaningless.
[09:35:30]
QUEST: At the moment, they have got absolutely no vision on how their trading position is at the moment, what the real numbers look like, other
than immediate sales, and how they're able to draw down on their cash lines.
Other than that, my understanding is, most companies are flying in the dark. The numbers are too unreliable,
CHATTERLEY: And many of them are pulling guidance as a result because they simply can't forecast. Richard Quest, a pleasure. As always, thank you.
QUEST: Thank you.
CHATTERLEY: Now, some major companies racing to produce much needed ventilators. Ford says it plans to buy 50,000 -- build 50,000 ventilators -
- my apologies -- by early July, and GM is expected to produce 10,000 per month starting next month.
Tesla and Dyson are also working to make them and they're now joined by aerospace company, Virgin Orbit once it gets approval from the F.D.A. The
California based rocket startup says it can quickly manufacture ventilators on a large scale.
Joining us now is Virgin Orbit President and CEO, Dan Hart. Dan fantastic to have you with us. This is incredible for me. I mean, the backdrop says
everything. Normally you guys build rockets.
You recognized a problem. You went to the Governor of California and said, how can we help?
DAN HART, PRESIDENT AND CEO, VIRGIN ORBIT: Exactly. You know, we're not usually medical specialists, so we sat around and said, you know, we have
some incredibly innovative engineers. We've got a factory. We've got manufacturing capability.
We reached out said, you know, what can we do? We were connected with a team who are from universities, University of California Irvine and
University of Texas Austin, working on how to take what is normally in an ambulance, an ambu bag, it's a breathing apparatus that they squeeze
manually, how do we automate that simply and get something produced?
And so we went to work and we put together a prototype and we're getting ready to produce it.
CHATTERLEY: I mean, we're sharing our viewers images now of what you've created. And just to be clear, these are not like the ventilators that the
worst patients that are the most restricted in terms of breathing go on. These perhaps will allow those ventilators to be saved for the worst
affected patients, and those that just need some breathing support can use your ventilators, is that right?
HART: That's exactly right. Yes. The idea that these doctors came up with was, you know, how do we create something for the moderately infected
patient -- which is most of the patients? And that way the really high costs and difficult to acquire items are reserved for ICUs.
CHATTERLEY: And how many of these can you produce a week?
HART: You know, we're figuring that out right now. But we can start off producing hundreds, and then we feel that very quickly, we can get into
thousands, we will bring in other manufacturers, and we think we can really pump these out. They're very simple to make.
CHATTERLEY: And what's the cost of one device? And I asked the question in my conversation before, how do you get compensated? Even if it's just a
cost? Is the state going to support you in making these or do you have to wear some of the cost yourself as a company?
HART: I think it'll be a mix of that. And we're in the process of figuring out what the early unit costs are, which is a little higher because there's
a lot of overhead associated with them, and then how do we really normalize to a lower cost device.
CHATTERLEY: And talk to me about F.D.A. approval because this is the key. I know they're operating under emergency procedures. So they're fast
tracking devices such as these, what are you hearing from the F.D.A.?
HART: Well, I mean, the good news is, it's clear that devices like this have the attention of the highest levels. I was on the phone yesterday with
the Deputy Secretary for H.H.S., and we've had discussions with the White House.
So there's huge interest in identifying and moving things forward. There is a process to go through that we're working through and at the same time,
we're working with the State of California to see what they can do.
CHATTERLEY: And in a best case scenario, what do you think in terms of production time? How long it takes to produce one of these things and then
hopefully, getting approval and getting them into hospitals because that's the key.
HART: We want to get a hundred plus of these built next week, and we will ramp up very, very rapidly from there. So we're hoping and certainly the
medical community and the regulation is important. Assuming that goes well, we hope to have these in use in a couple of weeks.
[09:40:17]
CHATTERLEY: This is incredible. So even if it takes, let's say, three weeks, are you going to still try and produce a hundred every week until
then, simply so that you're ready with the maximum available once you get that approval to push them out?
HART: Our pedal is to the metal. So we plan on ramping quickly. And the team is working 24/7. I've never seen them more motivated than right now.
CHATTERLEY: Just talk to me about how you're protecting your workers, too, because this is an ongoing issue for all workers. It's a different front
line, but it's a frontline in this crisis, nonetheless. How are you protecting your workers?
HART: You know, we stopped last week, and we spent the entire week redesigning how we can work. And so we're separate -- we've separated our
workers. We've added more air purification and air flow. We've added some protective equipment. We normally use protective equipment because we use
liquid oxygen and other rocket fuels, so we have to use it. We're now using it routinely.
So we're taking many, many steps like that. And of course, most of the team is working virtually and that helps tremendously.
CHATTERLEY: Yes, your --
HART: It is a challenge with communication, but we are learning.
CHATTERLEY: Can I just ask a quick question about communication, not just at the state level, but you also said you're now speaking to the White
House. There's been a lot of cautious criticism that perhaps we could produce some of this medical equipment that we have severe shortages of
around the country, quicker if they were better top down, communication and coordination between potential producers and device makers and component
makers.
Is that your experience? Or is your experience different?
HART: You know, we're just getting into those discussions. But so far, we've been able to access the right people. We're hopeful that that we can
move forward, and I know that at the state level, at the Federal level, I mean, let's face it, everybody is swamped.
And so we're doing everything we can to push the information as fast and as clearly as we can, so the right decisions can get made.
CHATTERLEY: Dan, thank you so much for joining us. And thank you to you and your team. It's great to have your innovation. Thank you.
HART: Have a great morning.
CHATTERLEY: You, too. All right, coming up on FIRST MOVE, the company tracking fevers, to keep an eye on the spread of the coronavirus and to
push out resources where they may be required.
The CEO and founder of Kinsa joins us next to explain.
(COMMERCIAL BREAK)
[09:46:02]
CHATTERLEY: Welcome back to the show. Testing, testing, testing. I'm quoting the World Health Organization. We are all aware that testing for
coronavirus cases is critical to tackling and controlling the spread.
Well, one company is taking an alternative route to tracking these outbreaks. Kinsa is using smart thermometers and AI to follow fevers,
identify hotspots and create heat maps like the one you're seeing now. That tech even shows how social distancing can have an impact.
Watch very carefully. This graph shows the climbing rate of fevers in New York, and then it shows the drop off as distancing measures are introduced.
Very clever.
For more, I'm joined by Inder Singh, he is founder and CEO of Kinsa. Great to have you with, Inder. Thank you so much for him for joining us today.
Just explain to us in more detail how you are tracking fevers.
INDER SINGH, FOUNDER AND CEO, KINSA: So we make this. We invented the connected thermometer about eight years ago. What do you do when you get
sick? You grab the thermometer. And if you have a fever, you take your temperature.
And so, it's not just a tool that helps you respond. Our product does far more than an ordinary thermometer. It connects into a Health app, and it
provides guidance based on your age, your symptoms, but it's also a predictive tool.
And over the past eight years, and the whole idea of starting the company was not only could we help someone who had just fallen ill, we could get
the necessary data to map where outbreaks were occurring and predict who was going to get sick.
And over the past eight years, that's exactly what we've done with flu. So for the past eight years, we've been mapping that data and predicting flu
many weeks in advance.
Today, we can predict the rest of flu season from September 15th on a city by city basis, and that's a significant breakthrough that's happened with
us in the last year.
What we've then done about two weeks ago, three weeks ago now we started retooling that effort, and what we're doing is looking for where fever
clusters or where people are getting sick, we're moving out the ordinary cold and flu from that signature, and what's leftover is unusual levels of
fever.
And what we found, and we've mapped that on healthweather.us, whatr we've found is those hotspots of unusual levels of people are highly correlated
with COVID-19 case increases. So it is a predictive tool in that way.
CHATTERLEY: But it's reliant on people having one of these thermometers and doing a temperature check, and then that data feeding back into your
systems, just because we were talking about the data for New York, how many people have actually got these in New York that allows you to track this
data.
SINGH: So we have about a million thermometers across the United States. Typically, it's one smart thermometer per household, so we often have many
users per household. It's often used by households of three, four people.
Last week alone, we got over 1,580,000 temperatures in one week, and so that's -- it is a sample of the population. But again, over the past eight
years, what we've done is correlate that to historical data to confirm that it's an accurate predictor of what's happening with flu.
And again, we've retooled this year to remove the cold and flu signature out of it to see what is unusual, the unusual levels of fever that are
occurring across the country.
CHATTERLEY: It is quite fascinating because for me, what, this is clearly doing is collecting data far quicker than perhaps the C.D.C. can because
they're going to have to wait for data that comes from Urgent Care reports, from hospitals themselves and the number of people walking in with fevers.
This is far quicker.
SINGH: Yes, those data sets are unfortunately delayed on multiple levels. Not only does it not -- not only do people not go to the doctor right away,
and not everyone goes to the doctor, but then there's a subsequent delay after that and aggregating the data.
[09:50:03]
SINGH: So when we started the company that was the idea, how do you get real time data from someone who has just fallen ill -- because that is the
missing ingredient data set, if you had that you could identify where people were getting sick, how fast it was spreading amongst those people?
And that's what you need to curve an outbreak. You know where people are starting to get sick. It's like a flashlight going off.
It's saying, hey, there is a group of people getting sick. Send the test kits in, send the virologists in and investigate. It's not telling you
specifically what it is, but it's giving you a strong indicator that something unusual is happening.
And that's the purpose of healthweather.us. It is to say these are where the resources need to go now, and you know, if I look at healthweather.us
my biggest concern if I'm being honest here is in Florida. We saw a massive rise of fevers over the course of a week. It more than doubled the ordinary
levels of fever that we would expect.
That's concerning, in and of itself, but it's even more concerning because Florida has a demographic population, it has elderly and a lot of
vulnerable people that are potentially susceptible to COVID-19, and it's spreading. And so that was concerning.
It's also of course -- we're also seeing hotspots across the U.S., in addition to Florida, but Florida in particular was rather concerning
because of how fast that fever level rose, and the demographics that are there.
CHATTERLEY: That was exactly the question that I was going to ask you, and whether you're seeing stories -- just given the reports that we've seen of
people flooding into Florida, even from New York to try and get away from what we're seeing here and the risk of that it is heating up there in terms
of those that could potentially be affected.
What about shelter in place -- very quickly -- in California? Have you seen the impact of the stringent restrictions that they've put in place there
dampening the fever count that we're seeing?
SINGH: I can't imagine how hard it is for government officials to make decisions that are pitting livelihood versus lives. And that's the false --
you know, you don't need to do -- you don't need pit livelihood versus lives.
In this particular case, what we saw in California was quite amazing. The unusual fever levels, just -- it just got up a little bit above what you
would ordinarily expect, and because shelter-in-place was implemented so early, you immediately saw a curbing of the fever levels in California.
That's not to say people don't have COVID-19. There was definitely a small spike above the usual levels of fever, but what we're clearly seeing in the
data is that people's sacrifices are working.
You know, people are staying at home and they're saying, gosh, I don't know anyone who is sick. You know, why am I sitting here by myself? But people
need to know their sacrifices are helping. We are breaking the chain of infection, shelter in place is working.
And it's clear amongst in the data, every place that has implemented it, we're seeing that.
CHATTERLEY: The message is stay at home and to stay in touch. I've got more questions for you. So I'm going to come back to you after the show
finishes, but for now, great to hear what you're doing. Inder Singh, founder and CEO of Kinsa Thank you for joining us th ere.
Coming up on FIRST MOVE, we go to Italy, where a deafening silence is honoring the victims of the coronavirus pandemic.
(COMMERCIAL BREAK)
[09:55:16]
CHATTERLEY: The cities and towns of Italy fell yet more silent today. The European epicenter for the coronavirus outbreak held a minute of silence in
honor of those struck down by the disease.
So far COVID-19 has killed more than 10,000 people in Italy. Flags flew at half-staff, half-mast across the country, and at the Vatican in remembrance
of those lost. We remember them, too.
Goodbye and thank you for joining us.
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[10:00:00]
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