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Quest Means Business

U.S. Markets Set To End Worst Quarter Since 2008; U.S. Health Expert Predicts Second Wave Of Infections; Aired 3-4p ET

Aired March 31, 2020 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:17]

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: A day when the Dow has been struggling for direction. Stocks are in the red after

yesterday's gains, and now a bit of profit taking. But it's not been all one way as you can see from the green that we saw earlier on. There it is.

The stocks -- and these are the reasons why.

A day like and a quarter like no other, now, the real economic challenges get underway.

The White House debates new rules on wearing masks, as companies try to keep up with demand.

And U.S. regulators want answers from Zoom about how it handles your privacy.

We are live from New York. It is the last day of March. I'm Richard Quest. And yes, even working from home, of course, I mean business.

All right, it is a quarter that most will certainly want to forget. But unfortunately, there's probably more still to come. A quarter that comes to

an end with the pandemic, and the economic pain being felt across the world.

From record highs in February. Let's remember, we may be in the doldrums now, but there were record highs in February and then it dropped as you see

from the chart, so the fastest bear market in history. And now unprecedented stimulus within the energy sector, particularly hard hit.

The Dow and the S&P are off 20 percent or so, that is well off the lows. They were down more than 30 percent, 34 percent at one point, but they are

still down technically as a bear market. The NASDAQ is the least bad, possibly because many of the stocks that are going to be beneficiaries of

this crisis are in the NASDAQ.

It is the S&P's worse quarter since 2008 and the Dow's worst quarter since 1974.

Goldman Sachs has lowered its economic estimates for the second quarter for the U.S. economy. This is what Goldman now says. It had more job losses

than previous estimates, 15 percent they're looking for. They have been between eight and 10 percent. GDP to contract 34 percent on an annualized

basis, and the silver lining, a stronger rebound in Q3.

Julia is with me. Julia Chatterley, not surprised by those revisions. Three quarters of the U.S. economy is now in some form of economic lockdown,

which all begs the question, how reliable can these forecasts be anyway?

JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Not reliable at all, quite frankly. Every economist and analysts out there, Richard, is

scrambling to try and get an estimate given that we've never seen what we're seeing before.

Huge swathes of the U.S. economy falling to sleep, and just to give you a sense of what we're talking about there when we're talking about a 34

percent, it's the equivalent of $2 trillion to $4 trillion, simply being wiped out in the space of three months.

So that gives you a relative gauge of the $2 trillion stimulus and perhaps what's going to be required, at least in my mind, but others are clearly

talking about this now to kick start the economy to the other side.

But, Richard, I'll bring it back to the only real data point that I think we can watch this week and that is those jobless claims on Thursday. With

Moody's Analytics suggesting we could see a further four and a half million people losing their jobs.

You know, swift rule of thumb here, one and a half million people losing their jobs equates to a one percentage point increase in unemployment. I

think we could already be it eight and a half to nine percent unemployment. They're in danger of looking overly optimistic with that 15 percent

unemployment rate perhaps.

QUEST: So, if we accept though that the artificial nature by which everything has been stopped, and we look forward, you and I were talking

about the V recovery, the V-shaped recovery, that some are forecasting, but I suppose, by definition, it will be a V because once you start the thing,

it will get up and running again. The question is how far the right leg of the V goes.

CHATTERLEY: Whether it's a V or a U, isn't it -- what we're trying to prevent here is an L-shape where you see this prolonged drawn out suffering

and that was why both the Central Bank and the U.S. government in addition to many governments around the world, let's be clear, tried to act

incredibly fast to stabilize and protect what they have simply because, again, this is an experiment to suppress the virus.

[15:05:18]

CHATTERLEY: We've never done the restart and the flick the switch on the economy to try and start it again. And at the core of that, what's left of

the economy? Confidence that we've got the virus under control, first and foremost, but of course, just how small, medium, large businesses utilize

the support they've been given and the confidence of those that are getting unemployment benefits and hopefully can get off on the other end, too. So

many unknowns.

QUEST: Julia, from what you're hearing in the market, how bad or how dangerous and worrying the underpinnings of things like the credit swaps,

the more exotic instruments that are out there that are under strain?

CHATTERLEY: Yes, it's a great question. Because what we're already seeing is investment grade to the highest quality companies coming back to market

raising money. So things are certainly unlocking, but the complication here and I'll keep coming back to this, Richard, is the fear of how long this

goes on for. The fear that you've got businesses and individuals going, I can't pay my rent, I'm struggling to pay my mortgage.

And it's those kind of more exotic products here that remain under a degree of threat, and I think until we've got that consolidated, I'll remain

cautious despite what we see in perhaps stock markets and beyond.

QUEST: Julia Chatterley with that. Julia, thank you.

Now, China's manufacturing sector unexpectedly grew in March. The number was -- the PMI rose to 52. It's hit a record low of 35.7. Now remember, of

course that coronavirus restrictions are being eased, and it's too soon, say too soon to call it an economic stabilization.

China's Huawei's profits kept rising in 2019. Though slowest in some three years. Earnings rose just five percent from the year earlier. The revenues

missed target. It blames the dollar shortfall on U.S. blacklisting.

Any Purdy is the Chief Security Officer at Huawei Technologies, USA. He joins me now. So, we are all working from home and we're all having to deal

with the sort of the technology and the issues arising from it.

What's the one thing that you are discovering? Because I know the F.B.I. is now warning about for example, wanting to know more details about video

conferencing, Zoom, in particular?

ANY PURDY, CHIEF SECURITY OFFICER, HUAWEI TECHNOLOGIES, USA: Well, it's critically important that we try to work together with private sector and

the governments to try to address some of the major issues regarding the virus, the monitoring, the quarantining, the treatment, trying to bring to

bear in collaboration with carriers and others how those technologies can help.

You talked about curves. The curve of how many were being sick, how many are going to die, those are the curves that have to be our priorities with

the economic issues, a longer term situation.

QUEST: Right, but what about the security issue? And by that, I mean, everybody -- obviously, the medical and the curve, and the way in which the

virus is being managed through staying at home.

But when you get the F.B.I. warning that hackers and computer viruses, a virus of a different type, they are also of a concern. Is there anything we

can do about this?

PURDY: Well, the warning from the F.B.I. was very important and some of the advice they were giving regarding, for example, Zoom is to take the

same kinds of cyber security precautions that you would have done in some of the older technologies. That you don't just want to put a link up, for

example, that becomes a public link then anyone can access your video conferencing.

As we get stronger and stronger in telemedicine, in terms of some of the AI enhanced diagnostics, it is all the more important that those be secure

connections so that they're available to make sure that data is accurate.

So the importance of strengthening that network security, the individual security and the authentication controls becomes all the greater, and

that's part of a broader message that the F.B.I. and Department of Homeland Security are communicating.

QUEST: The way in which our working life has changed is dramatic. The advantages that we are getting from technology and the innovation that we

are now doing is also dramatic. What are the ways and what are the aspects that have impressed you most?

[15:10:10]

PURDY: Well, I think some of the early uses, early relative to 5G and early relative to artificial intelligence, some of the early uses of

telemedicine, some of the aspects of monitoring, using special technologies to detect public activities and to get temperatures when people are walking

through the doors into buildings, for example.

The ability to have faster diagnostics, the ability to have 5G communication of 3D imaging such as an MRI, so that doctors who are so

enabled can remotely monitor and track and diagnose the patients and actually monitor their treatment and monitor people who are in quarantine.

So these are examples of some of the things -- we've got 20,000 people that are working in our R&D facilities, trying to help advance the use of these

technologies and trying to advance testing for example. We've been involved in testing of at least five new potential medications that are in trial.

So the idea of us all working together, sharing this information robustly, trying to make sure that everything is transparent as possible, but also

being secure is fundamentally important.

QUEST: And of course, as you rightly say, making sure one is all safe at the same time. Thank you, sir, for joining us. We much appreciate it.

Coming up next, a top warning in from the top U.S. health expert. The second coronavirus may be on its way this autumn.

(COMMERCIAL BREAK)

QUEST: The top U.S. health expert is predicting a second round of coronavirus infections later this year. But Dr. Anthony Fauci believes it

won't be as bad as this time around. The U.S. will be much better prepared. Hospitals will have better equipment.

And he says it's too early to know how well social distancing is working right now.

(BEGIN VIDEO CLIP)

DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: We hope, and I believe it will happen that we may start seeing a

turnaround, but we haven't seen it yet. We're just pushing on the mitigation to hope that we do see that turnaround.

So what we're starting to see right now is just the inklings and I don't want to put too much stock on it because you don't want to get

overconfident. We just want to keep pushing on what you're doing. You're starting to see that the daily increases are not in that steep incline.

They're starting to be able to possibly flatten out.

(END VIDEO CLIP)

[15:15:06]

QUEST: Our senior medical correspondent is Elizabeth Cohen. She's with me from the CNN Center. Let's pull this into two sections. Firstly, the idea

of whether the curve is being flattened at the moment.

I heard the Governor of New York said his models showed anywhere between seven and 21 days before the apex was reached in New York, and New York is

way ahead of the rest of the country.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: That's right. So let's think about this in two different ways. Months and months, or even maybe a

year from now, when we look back, we'll be able to see the social distancing that we're doing right now.

So for example, I'm coming to you from my home studio in Atlanta. The social distancing that all of us are doing right now, did it flatten the

curve? Did it slow down the spread to give doctors and hospitals time to prepare? We won't really know that for a truly for a while.

But what we do know, as Dr. Fauci said is that there's a little bit of an indication that it is working, and we should still keep doing this. But we

need to hold two kind of opposing ideas in our head. There's a glimmer, that's possibly that it's working, but it is still going to get worse.

I know sometimes it's tough to hold two opposing ideas in our head at the same time, but we have to do that. What we're doing does appear to be

having some effect, but the worst is still in front of us.

QUEST: Okay, and on the other side of that equation is this idea that we're going to be going through it all again, next year. Is this because --

I mean, if there isn't a vaccine, let's assume for the purpose of this question, there isn't a vaccine, then how will we be better prepared, other

than the fact there'll be some people who have an immunity?

COHEN: Oh, and that's a big deal, right? Because that's how we've protected ourselves as a species before, is that you have some degree of

herd immunity. This virus hit us with no immunity whatsoever. So to hit us with some immunity will indeed be a big help.

There are so many other things that we could do to prepare if indeed we do get hit a second time, whether it's this fall or next year. The hospitals

can have enough equipment. That is huge. That is really major. Hospitals can test their workers and say, you know what? You're immune and you're not

so you stay home, and we want you to work.

That's another thing and just even knowing for the rest of us, too, how many of us can walk around and not be as worried because we're immune. That

is huge.

There are so many other ways that we can certainly be more prepared. We can staff appropriately. We can have enough beds. We can have enough

ventilators. It would make a big difference.

QUEST: Elizabeth Cohen joining me from -- well, no, from your home studio. Very impressive, indeed. Thank you.

Now Dr. Fauci tells CNN that the White House Taskforce is discussing the possibility that every American could end up having to wear a face mask

during this crisis.

We already know that there aren't enough of them. There are many different creative ways in which face masks are being created, and worn.

(BEGIN VIDEOTAPE)

QUEST (voice over): It is the fashion accessory that could save lives. All around the world, masks are becoming a mandatory attire for health workers

in the time of COVID-19.

And where the economy is halted and manufacturers otherwise shuttered, companies large and small are kicking into overdrive, answering the call,

trying to meet the incredible demand for more masks.

In the United States, the White House says, there simply isn't enough supply for everyone to wear a mask. The nation's top Infectious Disease

doctor told CNN healthcare workers must come first.

(BEGIN VIDEO CLIP)

FAUCI: The one thing you don't want to do, you don't want to take masks away from the healthcare providers who are in a real and present danger of

getting infected. That would be the worst thing we do.

(END VIDEO CLIP)

QUEST (voice over): And so in an effort reminiscent of the Second World War, the likes of Gap, General Motors and even Major League Baseball say

they're opening their factories and getting to work.

When New York Governor Andrew Cuomo asked for help, calling on companies to be creative, the designer and Project Runway alumni, Christian Siriano put

his sewing staff to the task.

(BEGIN VIDEO CLIP)

CHRISTIAN SIRIANO, DESIGNER: We're up to almost 500 a day. So we will have a couple thousand by the end of the week, and we're really excited. I mean,

who knew that that was what we were going to be doing.

(END VIDEO CLIP)

QUEST (voice over): Italy has been amongst the hardest hit by coronavirus. It's also home to some of the world's top fashion houses.

Prada says it will make 100,000 masks by next week. Gucci says it will make more than a million in total.

[15:20:14]

QUEST (voice over): Throughout Europe, as leaders warn of shortages, the offers are rolling in. The owners of France's Yves Saint Laurent, Dior,

Louis Vuitton, and Givenchy, Zara and Balenciaga in Spain are all promising hundreds of thousands of masks.

In Greece, modern ingenuity is on full display. Startups they're using 3D printers to crank out face shields. These can go straight to doctors and

nurses on the front lines where having a mask is truly a matter of life and death.

The Tunisian fashion designer, Khalud Gezmi (ph) has retooled her small workshop in Tunis into a mask powerhouse. She has 30 tailors and is making

up to 1,500 reusable masks every day.

With so many people stuck inside, making a mask at home is turning into the perfect social distancing activity. Jan from sawitonline.com put out this

handy do it yourself guide.

(BEGIN VIDEO CLIP)

JAN, INSTRUCTOR, SEW IT ONLINE: What the hospitals have asked us for in masks is they want one side and a different side on the other side.

(END VIDEO CLIP)

QUEST (voice over): From mom and pop outfits to household names and multinationals that span the globe, companies are stepping up churning out

masks and trying to do their part in the fight against coronavirus.

(END VIDEOTAPE)

QUEST: Now, Bayard Winthrop is with me. He is CEO and co-founder of American Giant. Good to have you with us, sir. The way in which you are

making masks and the way in which you have turned your factory around to do this, tell me more?

BAYARD WINTHROP, CEO AND CO-FOUNDER, AMERICAN GIANT (via telephone): Well, we were asked to be a part of a domestic coalition of manufacturers to

address the need for medical masks, and we are part of about an eight- company effort that is hoping to be producing over a million masks a week, beginning next week or the following making H.H.S. certified medical masks

for frontline workers.

QUEST: How difficult was it for you to change production?

WINTHROP: Well, the actual production change, you know, we're a business that makes sweatshirts and t-shirts as part of our regular business. So

that part wasn't terribly difficult. The part that was more difficult was getting through all of the red tape and bureaucracy necessary to get

certified masks produced and out into the workers' hands that need them that are that are medically cleared by H.H.S. and that really was --

We were able to do that, because we've been working very closely with Peter Navarro's office in D.C. and companies like Parkdale and Haines and Fruit

of the Loom, have been very important conduits for us, helping us navigate that stuff.

So that part has been more difficult, but it's been handled by the coalition more broadly, and we've been able to move quite quickly on it.

QUEST: If the U.S. still had an apparel industry, it does, but not as big as it does. You know what I'm asking you. If the U.S. still had an apparel

industry, a manufacturing of cloth industry, do you think you'd be in the state you're in now?

WINTHROP: Well, I think that really raises a broader point, Richard. You know, we have as a country given up our ability to manufacture things over

the last 30 years and that has put us into a situation where we really are unable to make the things that we critically need right now.

Whether that's medical masks or ventilators or hospital beds, and so I think the apparel industry is a piece of the answer to that question. But I

think it is critically important that we take this moment as a country to really look at what capacity we still have domestically and change course,

frankly.

It is an unacceptable situation, in my view that we're having to transform industries like ours in the medical mass production, we've got to retain

that capability domestically.

It certainly helps if there's a healthy and vital apparel industry and other manufacturing industries to make that pivot.

QUEST: Doesn't that mean -- the problem, of course, is how you do it, isn't it? I mean, it feels -- I remember reading the phrase once that the

U.S. would still have a shoe industry, when Americans are prepared to pay more for shoes.

As long as the price is the determining factor there, then it's going to be very difficult, isn't it?

WINTHROP: I think there's a fair point there. I would separate out t- shirts and sweatshirts, maybe the business that we are in at American Giant and really talk more broadly about the critical things that we need.

[15:25:02]

WINTHROP: You know, the t-shirt and sweatshirt production is not critical to the country, certainly not at the moment. But there are a lot of

categories beyond that that place matters less.

Availability, quality, hitting the standards that we need matters much more, and I think for those industries, hospital gowns, ventilators, masks,

it is unacceptable I think that we've allowed that production to go offshore to the extent that we're having to do the things that we're doing

now and asking private industry to change their businesses to help meet this demand.

QUEST: Bayard, good to talk to you, sir. I appreciate it. Thank you for taking the time and good on you and your team, of course for all that you

are doing. Thank you, sir.

Now, as we continue on QUEST MEANS BUSINESS from my living room. There is of course much consternation in the airline industry, but passengers, well,

you may be one of them, I certainly am are holding tickets and they don't really know what to do with them.

The flight was canceled or didn't run. You're left with perhaps a credit. Maybe you've just left with a no show and you can't get through to the

airline.

The chief executive of KAYAK, with the warnings the airlines who owe billions in refunds. The CFO of KAYAK is next.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There is a lot more QUEST MEANS BUSINESS in just a moment. We'll take a look at our video conferencing and the apps

and how they could be sharing your data without your permission and what everybody can do about it.

And from New York to Las Vegas for $16.00. There is falling -- there are falling prices and bargains to be had, but of course the airlines

themselves are in deep problems.

We'll be talking to the CEO of KAYAK and I'll also be talking to the European Transport Commissioner in just a moment.

All of that in just a moment.

First though, this is CNN and on this network the facts --

[15:30:10]

HERE

[15:30:00]

RICHARD QUEST, CNN INTERNATIONAL HOST: And I'll also be talking to the European Transport Commissioner in just a moment. All of that in just a

moment. First, though, this is CNN. And on this network, the facts always come first.

The New York Governor -- the New York Governor Andrew Cuomo says coronavirus is more powerful and more dangerous than expected. More than

9,000 new cases reported in the state on Tuesday, the total number of cases are now past 75,000. New York has now passed China's Hubei Province as the

area with the most coronavirus cases in the pandemic. British officials say there are indications lockdown may be working. One official says there are

signs of rate of infections is flattening. The authorities are warning citizens must remain vigilant and continue social distancing.

The World Bank says the pandemic's economic fallout could throw 11 million people across Asia into poverty. Its new report warns East Asia and the

Pacific could suffer their worst downturn in two decades. It says much of Asia could face a prolonged recession.

IATA, that's the airline industry association. You're well familiar with it. It says airlines owe $35 billion, billion dollars in ticket refunds. At

the same time, they're, of course, expected to make a loss this year, as you're aware of over 250 billion the sudden collapse over the last quarter.

Now, IATA want governments to let carriers off of vouchers to preserve cash. The projects a net quarterly loss of $39 billion. As you know, Valean

is the European Commissioner for Transport. She's on the line now. Commissioner, amidst all the issues and all the problems, we're looking at

the collapse in airlines, too. Let's deal with airlines first, and then we'll deal with the refunds issue. What help at the commission level can

you offer airlines?

ADINA LOANA VALEAN, EUROPEAN COMMISSIONER FOR TRANSPORT (via telephone): Hello, Richard. So, of course, we are very worried about the transport

industry overall and the airline industry, in particular, with tremendous drops in numbers for the industry. We moved very quickly; we clarified

regulation on airport slots, so that we will avoid those ghost flights. And of course, losses in economic terms for airlines who need to keep their

slots on the airport. We moved very quickly to define the coronavirus as being an exceptional circumstance, so that according to the regulations

existing in Europe for air passenger rights, they won't need to pay the compensation for cancellations, or less than (INAUDIBLE)

(CROSSTALK)

QUEST: Right. But I take that -- I take that on board as to what's been done. But we're now at the point where many airlines, perhaps not the big

three airline groups, which are well-capitalized and have deep pockets. But are you prepared to countenance state aid to airlines so that national

governments can bail them out?

VALEAN: So, this is already done, Richard, and that's good news because we put up a new temporary framework for state aid, so that the member states

can flow money into the economics of the airlines. And if I may, I will mention some of the measures they can take, which would be of absolute

direct help because we are talking about here that they can, for example, make wage subsidies, suspension of payments of corporate, and the value

added taxes, order on social contribution. They have started to do so, they are member states already moving in helping airliners with the -- with the

actually a liquidity income. You want to say something?

QUEST: Commissioner, on this question now -- on this question now of refunds and the amount of money that will be given back and the

regulations, is this something your office is looking at where the potential to make a rule that people can get their money back?

VALEAN: So, the law right now, Richard, is very clear. It says that the money -- the people -- the customers need to be reimbursed or they can be

offered vouchers or other services with a specification that they need to agree to this.

[15:35:09]

So, if it's a contractual thing between the airline and the customer, the airline can offer something but the customer need to sign upon this offer.

If not, it needs to be reimbursed. That's the law right now. Of course, through the state aid measures, we are -- for example, specifying that

Member States, governments, national budgets can help, for example, to grant financial support directly to consumers for canceled services or for

tickets that are not reimbursed by the operators concerned. So, we are offering a way out through the help from the national member states. But I

would say, as a matter of principle, that we cannot move right now the problem from the standing liquidity of the companies, current liquidity of

consumers would find themselves not being reimbursed, even they would like to do -- to be.

QUEST: Right. Commissioner, thank you for joining us. We will pull up -- we will follow up. more on this. Thank you, Commissioner, for joining us. The

issue of air fares, of course, we follow the aviation industry very closely, and look at some of the fares now being offered in the United

States, at the moment. Round trip fares, round trip from New York leaving two weeks from now. Budget carriers to and from Los Angeles $48.00. Of

course, there are various issues. Las Vegas, $33.00, Chicago $35.00. On American Airlines, you can go Chicago, or Miami for $57.00. Now, before

anybody jumps on planes, we should all be social distancing, and not be taking trips anyway. But if you have got to travel and you are looking for

(INAUDIBLE) then there are some bargains now available.

Joining me now is the CEO of Kayak and OpenTable, Steve Hafner. Good to have you with us, Steve, thank you for joining us. And the -- let's talk

about the bargains that are out there. And the new things, for example that you're doing with OpenTable, to take advantage, or in the nicest way, to

help people in this situation.

STEVE HAFNER, CEO KAYAK & OPENTABLE: Sure. So, if you have to travel, certainly, the air fares have never been quite as low as they are now. But

I think if you do choose to travel that you should be prepared to stay wherever you're going for at least two weeks in self-quarantine. That seems

to be where the government is restricting that. So, you can still use Kayak to buy these great deals. Another thing you can do on Kayak is, we actually

have a filter for eliminating any fares from the display that aren't fully refundable or have cancellation penalties. So, that's still there.

On the OpenTable side of the business, we announced yesterday a very cool modification to our core software that does two neat things. First, it

allows restaurants who, as you know, have been very hard hit by this crisis, to actually pivot and turn themselves into grocery stores, local

grocery stores. So, a consumer can launch the OpenTable app and see what restaurants are selling fresh baked goods, desserts, staples, even like

toilet paper. The other thing that the new software app does is it allows grocery stores to start acting like restaurants. So, I don't know about

your neighborhood, but I'm sure your viewers have queued in line outside of grocery stores, which is a pretty weird feeling. But you can now use the

OpenTable app to actually reserve a spot to shop in a grocery store.

QUEST: That's interesting, here in New York, downtown New York, all the supermarkets have had lines outside. You're right. I want to come to this

point about travelers of which, you know, I've already said on this program, I am one who have reservations who had tickets, they either

counseled them all they got to fly credit. You can't get through to the airline. You can't get through to the travel agency. What is a passenger

supposed to do?

HAFNER: Well, I think, first and foremost, and by the way, you know, I work for Kayak and OpenTable which are both owned by booking holdings which has

very big worldwide presences and customer service departments. We're trying to do the right thing for customers to get them home or to get them to

where they're going, first and foremost, financial renumeration aside, even suppliers themselves, the airlines and hotel companies are in a really

tough spot. You know, their call centers are overwhelmed. Their cash flow positions are a little precarious. They're trying to do the right thing by

consumers, too. And I think all this will get to a good place.

There is going to be some angst and some consternation on the part of consumers until some of these short-term issues get sorted out. But I

guarantee you, you know, the big airlines and big hotel companies and even intermediaries like travel agents want to do right by consumers because not

only do we want to get them home now, but we want to make sure that they have the flexibility to go travel later when government restrictions are

lessened.

[15:40:15]

QUEST: I sort of get it, but no -- I understand that no provisions, no reasonable company would have put in place anything like the provisions

necessary to handle this sort of calamity. It just -- I mean, you'd to be mad to have made provisions or something on this scale, the amount of this.

But for you, as a CEO, and how are you finding working from home? How easy is it to manage a team? What's your biggest challenge as a chief exec

managing a large company from home?

HAFNER: Well, the -- you know, we -- I think, we were one of the first companies to actually look at our -- the health and well-being of our

employees and closed our offices before a lot of other companies did. And the first thing we had to do was make sure that they had the tools to be

productive from home. And that means we had to upgrade our security systems, upgrade the number of routers we had to support a lot, you know,

over 2,000, concurrent VPN sessions. So, we had to make sure that was all in place, we had to make sure that we have sufficient bandwidth to take

those connections.

And then, every employee had a laptop with the right amount of secure software on it. So, we did all that. Good news is at our company, you know,

we're global, we have over 30 offices, people are used to working in a very distributed way. And we haven't seen any drop off in productivity at all.

QUEST: Right. And as the CEO, do you feel if some -- in the future, when this is over, would you be willing to let more of your team work from home?

Is -- I mean, always promised it. We've always said it might happen. Well, now you've proven it can happen. So, would you be open to extending it to

your employees in the future?

HAFNER: We've always been very open minded in terms of having a flexible work-from-home policy. That said, we invest a ton of money into making our

offices really great places to be, and there's no substitute for interpersonal interaction with someone. So, yes, we're being very

productive right now, everyone's working from home. But as you can see, I'm in my dining room. I have a lot of conference calls every day now with 10

people in kids bedrooms or out on terraces, etc. That's great in the short- term, but long-term, there's just no substitute being all co-located.

QUEST: What's that picture behind you? Before I leave you. I just got to ask you, what is that picture?

HAFNER: Sure, it's funny. I'm here in Miami Beach, but you know, our beach is closed, which is right out this window. This is actually just a couple

of (INAUDIBLE) a beach in Greece.

QUEST: Excellent. Good points for the answer. Thank you, sir. Thank you very much indeed. I thank you. And for those who may be watching me, thank

you, sir. The picture behind me, well, that's something I picked up in Union Square a few years ago. It's limited value. The New York Attorney

General has written to Zoom, wanting more details of the company's security and privacy policies. As the app siege issue apparently, Zoom and House

Party are under fire over privacy concerns. House Party says it's the victim of a smear campaign. We'll talk about that after the break.

(COMMERCIAL BREAK)

[15:45:00]

QUEST: Zoom and House Party are in trouble. The New York Attorney General has written to both of them asking for more details on exactly their

privacy policies. Clare Sebastian is with me. What's the problem?

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Richard, Zoom, obviously in some ways hair victim of its own success. It has ballooned in terms of

users in the last few months. It's gone from a startup to really an essential part of the corporate furniture. Its stock price has more than

doubled. And there are security questions that are increasingly being raised. A New York Attorney General Letitia James has written to the

company as she's worried about what they're -- what they're doing as they're increasing in size to improve the security and privacy practices,

worried that they have been slowed to react.

There's also an FBI warning, which is from the Boston field office that was out this Monday, saying they are seeing an increasing number of intrusions

in online school classes. This is a phenomenon known as Zoom bombing, where hackers can sort of drop in. They say this is included hate and

pornographic material. So, this is an online school classes.

And we have a class action lawsuit in California where an individual is alleging that Zoom isn't taking enough care over the personal data of its

customers, that they are sharing it with third parties. Now, Zoom says it has corrected that, it no longer shares data with third parties, including

Facebook, but it is increasingly under fire. It does say in a statement there, Richard, that it takes -- its uses privacy, security and trust

extremely seriously. It also says it's working to show that hospitals, universities, and schools and other businesses can stay connected and

operational, and it is going to give the New York Attorney General all the information that she needs.

QUEST: I just wonder here, I mean, the Zoom bombing, I'm hearing more and more from people who say that this -- they've been in meetings and

organizations where this has happened. And but you can lock the meeting. And there are a variety of things you can -- is Zoom being unfairly

targeted here? After all, the company is suddenly the backbone of commerce and communication. And I'm just wondering if it's an easy target to jump on

the back off?

SEBASTIAN: So, Richard, I think there's two things going on here. One, I think it is fair in some ways to say that Zoom is in a sort of reactive

mode, it hasn't managed to get ahead of these problems. They did admit in that blog post on Friday that the reason that they issued that update that

stopped the app from sharing with (AUDIO GAP) third parties including Facebook was because an article published in motherboard, so they were

reacting to that.

But the other issue, which is crucial to understand at the moment is that we are incredibly vulnerable right now to hacks. Everyone -- a huge swathes

of the population of multiple countries are working from home from home, they're not protected by their corporate networks, and then they may be

using personal devices. And that has created a huge incentive according to cyber security experts for hackers to strike, particularly people in a

position of power. That makes the fact that Boris Johnson held a digital cabinet meeting on Zoom today, which is even more worthy of questions.

QUEST: Clare Sebastian with the story of Zoom. Clare, thank you. When we come back in just a moment, the voices of the crisis, it's one of the most

important parts of our evening conversation with you on business and economics. The South African winemaker who is not sure that they will be

able to continue. We need to find out more after the break.

(COMMERCIAL BREAK)

[15:50:00]

QUEST: And so to the voices of the crisis, the businesses, big and small, and how they are coping with what's happening. Tonight, we turn to the wine

industry and one particular winery in color in South Africa. Seven Sisters wineries is in South Africa. It was Seven Sisters Wines and it was already

in survival mode before the pandemic. Now, it's had to cancel events and come at the countrywide lockdown. Vivian McLean hands is the CEO and

founder of Seven Sisters Wines, joins me now via Skype from Stellenbosch in South Africa. Your main business was -- is and was wine tastings, pairings,

dinners, and the like. With the lockdown and the lack of tourism that's just about disappeared.

VIVIAN KLEYNHANS, CEO & FOUNDER, SEVEN SISTERS WINES (via Skype): Absolutely, Richard, there is absolutely nothing going on. It is so scary.

I'm not sure where this is going to end. Gates are closed, doors are closed. Nobody, obviously, we're in lockdown. And yes, we already been in

surviving mode. We just started in September of last year to gain traction again after we had a road construction for two years. And just about to get

on our feet when this hit us, and I'm telling you, it's distorting. We are -- we are down and out. We don't know what to do.

QUEST: And there are help from the government such as it is in South Africa. It's confusing, and you're not even sure when or if you'll get it,

is that right?

KLEYNHANS: Yes, that's exactly that. You must remember, there are millions of small businesses, and we all had to register on a database. And now we

have to wait and see whenever they're coming back to us, and we hope it's going to be soon. But even if they do come back to us, what is that

assistance going to be? I mean, I've already lost policies, I've lost -- couldn't pay accounts. I'm behind with water, with electricity. And yes,

it's just getting worse.

QUEST: The business that you were doing was building up, and I know that, particularly from a social aspect that your employees who you've trained to

work in this area, there really will be nothing for them in your locality if your build -- if your business fails. And look, I want to end on a

hopeful note. The -- in that note, what's keeping you going at the moment?

[15:55:03]

KLEYNHANS: Well, I'm waiting to hear from my local grocery stores, which is still open to see if we can supply them with baking of bread, and that will

give the locals still some work, which would be an essential to supplying the local communities. I mean, we in a rural area, we have a few farms with

farm workers that I've trained in the kitchen, you know, to be cooks and, yes, we were hoping to make some homemade meals and -- but, yes, nothing is

coming forth because everybody is still under lockdown.

QUEST: We'll talk more. I'll follow up with you as this continues. Thank you for joining us. And that is our report tonight. That's QUEST MEANS

BUSINESS for tonight. I'm Richard Quest in New York. Whatever your up to in the hours ahead, I hope it's profitable. I'll see you tomorrow.

(COMMERCIAL BREAK)

END