Return to Transcripts main page
Quest Means Business
Boeing And Airbus Sound Alarm That Aerospace Sector Is In Crisis; Global Stocks Rally; Top Officials Contradict Each Other On U.S. Economy. Aired 3-4p ET
Aired April 27, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:00]
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: Start of a new week and the markets are strong. We have an hour to go before the end of
trading. If your look and see exactly how they are trading. Look at that, it's been up all day -- all day the 360 points then, one and a half percent
and it looks like we might end up the best of the day.
Those are the markets at the start of a new week. We need to understand the reason why.
Boeing sparks fury by Brazil after ditching a major deal. It's all about preserving cash.
Airbus says it is bleeding cash at an unprecedented rate. We'll talk about that as our lead story.
U.S. oil prices are on a steep drop towards zero once again. They May contract not doing any better than they did last month.
And Japan Central Bank is ready for another round of stimulus. We top former Central Banker to tell us what the thinking is. What's the best
stimulus that work?
We are alive from New York. It is Monday. It's April 27th. I'm Richard Quest and from my living room, of course, socially distanced, I'm in
business.
Good evening, you will be aware of course that aerospace aviation and airlines are always a top priority on QUEST MEANS BUSINESS, so tonight,
these all three are very much in the news.
The announcement that the aerospace duopoly, Boeing and Airbus -- the two largest plane makers face existential crises today, which has come into
sharp focus. They are the two largest commercial aircraft makers left in the West. They have decades of dominance, a duopoly that juxtaposes back
and forth depending on the year.
And now both -- Airbus and Boeing -- are saying they're in deep, deep trouble because of global aviation.
Boeing in the United States for instance, it's abandoned the deal with Embraer claiming there was some problem with the original agreement.
The CEO says the travel industry recovery will take two to three years if not more, and of course the MAX still isn't flying. Compensation being paid
to airlines, damages still looming.
As for Airbus, things aren't that much better. Six thousand employees have been furloughed in the U.K. and France. The CEO says it's bleeding cash at
an unprecedented speed, and the survival is at stake is the clear words coming from Airbus.
Taking the sides on the reporting from their respective transatlantic companies, Clare Sebastian is in New York for us tonight first is Boeing;
Anna Stewart is in Europe and London, she is Airbus.
Let's start with you, Claire first, Boeing, we know the problems, but why ditch the Embraer strategic takeover or stake?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, well, we have two different sides of the story, Richard. Boeing is saying that when they
reach the deadline of April 24th, by which they had to either extend or agree or terminate the deal, Embraer had not met the necessary conditions
so Boeing exercised its right to terminate.
Embraer has an entirely different side of the story. They say that it was wrongfully terminated. They say the Boeing has engaged in a systematic
pattern of delay and repeated violations of the agreement.
They say that Boeing did this because of their own financial situation, which was not something that was allowed under the deal.
And now, of course, looking at this, it is -- this was a $4.2 billion deal for 80 percent of Embraer's commercial aviation unit, Richard, and this is
a time when we know Boeing has to preserve cash this year.
The virtual shareholder meeting today said that they will have to borrow money over the next six months to keep liquidity flowing to the supply
chain.
He said that they're still weighing options for funding, not yet sure about government aid, even though the deadline is Friday. And so that does sort
of play into this picture. But Boeing is saying that this was simply because Embraer did not meet the terms of the agreement.
QUEST: Ana Stewart in Europe, who would bail out Airbus if bailout was necessary or desirable or decided to go forward?
ANNA STEWART, CNN REPORTER: Well, I think there would have to be a decision probably for the British and the French governments, but currently
what they're doing is furloughing over 6,000 workers as you said in France and the U.K., the majority of those wages will of course be paid by those
governments, by France and by the U.K..
[15:05:17]
STEWART: I think the big concern, speaking to analysts today isn't even the coming weeks and months, it's much, much longer term.
It feels like the order book for the next five, six years over aircraft is almost a work of fiction if you consider how many airlines need bailouts
and how many airlines probably won't get them -- consolidation.
And also, Richard, this big question that no one can answer. I feel like every question I've asked today has just posed five more questions. But
what will aviation look like even after restrictions are lifted? After the locked down as lifted? Will people want to take the skies and what kind of
balance will it be? What impact will it be on long haul and short haul? What kind of aircraft will airlines want?
And Airbus -- you've got to remember is already actually struggling going into this winding up their A380 production. They already had concerns in
terms of capacity and jobs.
QUEST: Ana, the Airbus is probably in a better position, maybe not on the balance sheet than Boeing because of the MAX. Where do we stand with the
MAX, Clare Sebastian?
I know that they have still continued to do the flight testing, even during the COVID crisis. Where do we stand?
SEBASTIAN: Richard, we haven't had an update to the timeline, which as of any of this year was stated to be sometime around the middle of the year,
they hope to get F.A.A. approval. Production is still suspended as of January, but as Boeing has tried to get some workers back into work after
various suspensions, that does include the 737 programs.
Some employees did return to work last week to work towards restarting production but like as of now, things are not really moving and I think
this is one of the things that plays into this.
People are going to have fear of traveling coming out of this pandemic and I think Boeing has a double issue when it comes to that because of trust in
the 737 MAX.
They had 150 orders cancelled in March, Richard, so obviously, they still have thousands in the backlog. But things are going to be deferred and
delayed as these airlines try to survive.
QUEST: Clare, thank you. And Ana, thank you. Let's turn to Cai von Rumohr who is the Managing Director and Senior Research Analyst at Cowen to put
this into deeper perspective. Good to have you with us joining us from Boston.
Okay, so between these two behemoths, Boeing and Airbus, who do you think is in more trouble?
CAI VON RUMOHR, MANAGING DIRECTOR AND SENIOR RESEARCH ANALYST, COWEN: Well, it's not who is in more trouble. They're both in trouble. Boeing
probably in a little bit more. Because as you pointed out, they have the situation with the MAX to deal with, which is a little thornier than
Airbus's situation.
QUEST: So, let's assume that they each in their own different ways get some form of cash infusion. Was it the right strategy of Boeing to ditch
the Embraer?
I've read your note on this, but bearing in mind, you know it could be a short-ish term liquidity versus a strategic longer term acquisition.
RUMOHR: Right. Well, strategically it made a lot of sense because it filled a niche at the bottom of Boeing's product line. But the issue was
$4.2 billion is basically close to two times what Embraer is commercial sales were last year and we know they're going to be lower this year
integrating an acquisition in the COVID environment is very, very difficult.
So really, the price was not anywhere near where the market was. Also, Boeing needs cash, so, you know, I don't know the particulars in terms of
did they violate the agreement? Did Embraer not meet all the conditions?
I can tell you, I believe that the contract called for if the deal was not completed by late October, there was a free walk away to both of them.
So, I don't know. But the other part of this deal is the KC-390, where that JV also gets scrapped. However, Boeing and Airbus have an agreement to team
where Boeing would sell those aircraft to the foreign markets, and that still makes sense for both parties.
QUEST: If we take Airbus, it seems highly likely that governments will have to step in as shareholders. But it also seems likely that Airbus and
Boeing are both going to lose considerable amounts of orders.
How long do you think it will be before aviation -- airlines if you're like, see anything like that -- I won't even say normality, but on the
approach to normality?
[15:10:14]
RUMOHR: Well, I agree with Boeing, it's at least two to three years, but until traffic gets back to 2019 levels, and the implications of that are
basically all these planes we deliver over the next couple of years are essentially superfluous to what the airlines need.
And currently, about 90 percent of the fleet is in storage, so the airlines are not interested in taking any planes at all today.
QUEST: Okay, in fact, do you see -- I mean, this is an exceptional circumstance. But I'm wondering, are we now reaping the rewards of
overcapacity in sheer number of aircraft that we knew coming into this crisis, there were too many planes chasing too few passengers and that's an
accident was going to happen. All that's actually happened is that calamities happen because of what's taken place?
RUMOHR: Well, that's an interesting question. If you look at wide bodies, the number of wide bodies in storage had been edging up before COVID, and
so clearly wide bodies wanted to come down and Airbus is bringing them down by about a third. I think Boeing will do the same, if not more.
Narrow bodies not so much. Remember, we were not delivering MAX so that the market really wanted some more. But if you look at every single cycle
that's ever happened, it's usually caused by an exogenous event, the Gulf War, 9/11, and so things are going along fine, you know, and your
projection of traffic is correct.
But that gets thrown into a contact because of some exogenous event.
COVID is a much larger exogenous event than we've ever seen in this industry.
QUEST: Good to see you, sir, we'll talk more. We'll need your help to understand this as it goes forward.
RUMOHR: Thank you.
QUEST: Thank you for joining us. When we come back in just a moment or two, New Zealand says it has eliminated, not eradicated COVID. Australia is
starting to plan the reopening. What have they been doing in the far South Pacific that has everybody saying they got it right?
After the break, Kevin Rudd, former Prime Minister of Australia is with me.
(COMMERCIAL BREAK)
[15:15:17]
QUEST: So, we're seeing a global rally in stocks, which might seem somewhat extraordinary when you look at the surroundings and the
uncertainty that exists.
But let's take Japan for instance, as Japan starts to look about opening the economy in some shape or form, the Bank of Japan extended stimulus and
that took the Nikkei up nearly three -- two and a quarter percent. And you see London, Frankfurt. Frankfurt, amazingly at three percent. That is
straightforwardly on the back of opening up the economy slowly, but surely.
We've also got Central Bankers meeting, the Federal will make a policy announcement on Wednesday and investors are watching to see what they said
-- what the Chair says about the economy.
If you look at what the White House is saying about the economy, well, there's definitely mixed messages between opening that and the need to be
cautious and things going much better.
(BEGIN VIDEO CLIP)
KEVIN HASSETT, WHITE HOUSE ECONOMIC ADVISER: You know, I think that the next couple of months are going to look terrible.
You're going to see numbers that are as bad as anything that we've ever see.
We're going to be looking at unemployment rate that approaches rates that we saw during the Great Depression.
STEVEN MNUCHIN, U.S. TREASURY SECRETARY: I think as we begin to reopen the economy in May in June. You're going to see the economy really bounce back
in July, August, September.
We've never seen anything like this. This is this is not the financial crisis.
(END VIDEO CLIP)
QUEST: Joining me now Phillipp Hildebrand. He is the Vice Chair of BlackRock and former Governor and Head of the Swiss National Bank. Good to
have you, Phillipp. Thank you very much.
What's your gut feeling for what happens particularly if you look at Europe where the reopening is underway, albeit tentative, as that picks up speed,
of course, there's going to be a bounce back. But how strong a bounce back do you estimate it is going to be?
PHILLIPP HILDEBRAND, VICE CHAIR OF BLACKROCK (via phone): Yes, Richard. Thank you for having me. Listen, I think we can certainly say that this is
nowhere near the end of this story where, at best, at the end of the beginning, we're now entering a critical phase, as you said, in Europe with
very gradual opening. Authorities will look at what happens with regard to infection rates.
And I think it all depends how disciplined people will be. This will be a combination of continued persistent social distancing, lots of testing,
adaptation of the economy and ultimately waiting for a vaccine which will take a long time.
QUEST: In terms of this next stage, what do you see as the role of the Central Banks having done the crisis management, not only on stimulus, but
also on financial plumbing, what do you believe their next role should be, whether it's the S.N.B., the E.C.B., the BOE or the F.O.M.C.?
HILDEBRAND: I think we have two big changes -- historic changes, I would say even revolutionary changes. One is, Central Banks have stepped in much
more forcefully than in 2008, which might seem hard to believe, but that's the fact that I would say a multiple of the extent to which Central Banks
are in this game now.
And secondly, we're in a place in most jurisdictions where you have more or less explicit coordination between the fiscal authorities, the politicians
and the Central Banks.
And I think that's very important, and that the context of the market rally that you're seeing today. There's an enormous amount of liquidity, enormous
underpinning Central Bank action. And my sense is that that will continue. It might even be expanded going further, certainly in the case of some of
the areas, not least the European Central Bank.
QUEST: Obviously, the policy rate, there's not really anywhere to go. They have fired every shot they can on that. What is left for Central Bankers to
do other than underpin fiscal actions, in some cases like at the Bank of England, actually monetize the government?
HILDEBRAND: Yes, it's three things. As you said, it's the plumbing, it's ensuring that there is plenty of liquidity so that there are no stress
points in commercial paper markets, money markets, in the plumbing of the financial markets.
Secondly, it is a form of monetization in many countries now, that some, as you said, explicit and then very closely linked to that and this is the
coordination game in a sense, is to ensure that as we pile up these huge levels of new debt, all across the world to build a bridge is then --
during this virus period.
The central banks will have a role to play to ensure that interest rates don't rise too rapidly in the face of this enormous and frankly historic
buildup of sovereign debt.
[15:20:06]
QUEST: Phillipp, before I let you go, I just want to get your thoughts. You are Vice Chair of BlackRock and you are a member of the Global
Executive Committee. What do you see as the role for BlackRock in all of this?
I'm starting to see, as you've seen the article in "The FT" this morning, starting to see some criticisms or suggestions that BlackRock is the new
Goldman, do you give any credence to these criticisms? Or are they criticisms to be roundly batted back?
HILDEBRAND: Well, they're not -- they are storytelling. The reality is we have a completely different business model from Goldman Sachs or any other
investment bank.
We have, you know, no balance sheet to speak of. We conduct all our business on behalf of our clients and we have a deeply fiduciary business
model.
We're profoundly grounded in the idea of being there for our clients. That's how we serve our clients and that's how we earn our money -- through
fees.
And so this is, you know, what we will continue. I think that's the -- it's the secret sauce of BlackRock. It's this the success story of BlackRock and
we are committed.
And I think above all, it is deeply committed to continuing that model of being a fiduciary.
QUEST: Well, you certainly can't argue with the success of it -- and the power of the moment. Good to talk to you, sir. Thank you.
We'll check in again, as Central Banks become the story in the stimulus and the recovery. We'll talk more about it with you. I am grateful that you've
given me time tonight, sir. Thank you.
Phillipp Hildebrand joining me there. Now, the issue of e-commerce going to come the issue of e commerce and the preparation of the economy, if there
is one economy that was well prepared for all of that, it is South Korea.
CNN's Paula Hancocks reports from Seoul.
(BEGIN VIDEOTAPE)
PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT (voice over): Staying at home means shopping from home, something says Koreans have done for years.
There was no panic buying, no empty shelves.
People here know they can get what they need online delivered within hours or at least the next day.
Coupang is the largest e-commerce platform in Korea. It saw its next day delivery orders jump from just over two million to 3.3 million a day when
the coronavirus hit.
(BEGIN VIDEO CLIP)
BOM KIM, CEO, COUPANG: We saw surge of demand across all categories, of course you would imagine fresh products, milk, eggs, basic necessities
surged more in the short term.
Equipment to work from home, educational toys for the children.
(END VIDEO CLIP)
HANCOCKS: South Korea has plenty of options to choose from when it comes to e-commerce. A recent study says last year alone 2.7 billion parcels were
delivered.
Maybe not that surprising for a country where nine out of 10 people own a smartphone.
(BEGIN VIDEO CLIP)
KIM: The mobile and internet infrastructure that existed and the ease with which customers are able to access technology. By the way, it's not just e-
commerce.
When you think about educational, you know, classes online or just consuming media and other services online.
(END VIDEO CLIP)
HANCOCKS (on camera): In some ways, South Korea has been setting itself up for social distancing for years. This is how a lot of people shop here,
myself included, and for the customer at least, it means that from start to finish, there is zero contact with another human being.
HANCOCKS (voice over): Delivery men and women are being praised for being on the frontline allowing people to stay home and social distance.
Coupang says even before the virus, it was delivering 1,200 products to customers every minute. Delivery men leaving a package outside the front
door, a photo and a text to let you know it's arrived. A faceless hero of the crisis.
HANCOCKS (on camera): Do you feel like a hero?
UNIDENTIFIED MALE: Yes.
HANCOCKS: Yes.
HANCOCKS (voice over): It's hard to know if this increased demand will stay once the crisis subsides. But it is clear the e-commerce industry made
social distancing in South Korea a lot easier.
Paula Hancocks, CNN, Kaesong, South Korea.
(END VIDEOTAPE)
QUEST: Let's stay in Asia and South Pacific. New Zealand claims that it has eliminated, not eradicated coronavirus.
The Prime Minister saying that one day -- reported just one new case today, easing restrictions. Businesses are already partially reopening as much as
they can. Four hundred thousand people have returned to work and schools are reopening only with limited capacity.
And some parts of Australia are also beginning to reopen this week, including Queensland and Western Australia. Obviously, New South Wales is
having more difficulties. That's where Sydney and the major metropolitan areas are.
Sydney's Bondi Beach will reopen on Tuesday. It's only for swimming and surfing.
Kevin Rudd is Queensland, former Australian Prime Minister and President of the Asia Society Policy Institute joins me now. Kevin, good to see you,
sir. I hope you and your family have weathered this crisis well.
Kevin, it's difficult, but besides geographical remoteness, to what do you attribute relative success of New Zealand and Australia in handling this?
[15:25:15]
KEVIN RUDD, FORMER AUSTRALIAN PRIME MINISTER: Well, I think you're right, Richard, being an island helps either a small island or as the New Zealand
has called us, the Big Island.
But the bottom line is there's also been a great creative dynamic between the New Zealand government and the Australian government, by which I mean
this.
Jacinda Ardern had early on -- the New Zealand Prime Minister -- adopted a policy, an official policy of virus elimination. Now that set in motion a
series of quite radical measures in terms of radical border closures, including with Australia, as well as early lockdown.
And the creative tension then across the Tasman Sea between the two was the Australian government fairly rapidly followed suit. And so as a
consequence, I think both countries have benefited from those sorts of actions.
But there are other factors at play in this as well -- Richard.
QUEST: Kevin, I want to talk about your recent article on who is really to blame in all of this. All right, you may take issue with my word of blame,
but you know what I mean. In terms of the fact that this pandemic got out of the gate, and the unrealistic for example, death numbers that we see out
of China, which leads to a lack of trust in the way China handled this at the beginning, and have reported numbers since.
RUDD: Yes, well, obviously, there are real problems which we still have to wrestle to the ground in terms of how all this came about in the first
place.
Richard, if you don't mind, I just like to add one or two things to my earlier answer and then come back to this one. The other thing just about
Australia particularly where I am, is that the government has benefited from one, a high degree of bipartisanship between opposition and
government.
But two, critically those in our Federation, those governments responsible for actually implementing, let's call it social isolation, lockdown and
school management on the ground are the Australian state governments.
And by and large state governments led by their premiers have put their own politics to one side and they've done a pretty good job of it.
But one caveat about Australia and New Zealand -- will there be a -- as it were delayed southern hemisphere effect, we don't know that, as the weather
cools down in the southern hemisphere, as we get towards May and June.
On the origins of the of the virus, Richard and the global blame game. Look, I think the smartest thing we can all do is put the scientist in
control of all of this.
How did they feel the virus first emerged in Wuhan, you know the contending theories as well as I do. Two, when did it get notified to Beijing and
three, was there a delay in getting the information through to the W.H.O.? And four, what did the W.H.O. do with it? These are the core questions.
QUEST: But, you know, we hear reports that the E.U. has just altered, watered down a report into the origins that was going to be critical of
China and the way because they feared China's repercussions in response.
China is sending out a message, except maybe to the U.S. and to Donald Trump, anyone who chooses to take truck with them over their handling will
face repercussions. This is not helpful.
RUDD: You're absolutely right, and the sort of what I describe as Wolf diplomacy that we've seen from elements of the Chinese Foreign Ministry,
including that ridiculous statement of the Chinese Foreign Ministry spokesman a month or so ago, inferring that the United States Army was
somehow ultimately responsible for the origin of the virus itself in the first place frankly does China no good at all.
The bottom line, China, together with the rest of the international community would be well served in simply letting the science speak for
itself, rather than any government one way or the other issuing threats against each other.
The science is frankly, what lies at the heart of solving this thing as well.
QUEST: Kevin Rudd joining us this afternoon or this morning, an early start for you on the Sunshine Coast, Kevin, thank you.
I appreciate it. Thank you.
As we continue, isn't that the beauty of international broadcasting, Kevin Rudd at 5:30 in the morning, here in New York it is 3:30 in the afternoon.
He is in the future, in the past, you're probably somewhere in the present.
After the break, Oil prices continue to fall. We could see negative again on the May contract. We'll discuss it with Lord John Browne, former head of
BP, in a moment.
(COMMERCIAL BREAK)
[15:30:08]
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. We have a lot more QUEST MEANS BUSINESS on this Monday, where the markets are looking pretty sharpish and rising quite
well. Today, we're going to hear from the former CEO of B.P. on oil prices and why he expects them to be down and remain low for a considerable
period. And an American woman tells CNN, her life has been upended after conspiracy theories on social media about how did she start COVID-19 if you
can believe that. We'll talk about that. And you'll hear all about that. This is CNN, and on this network, the news always comes first.
A number of people who have died from coronavirus has topped 200,000. And now, the number of confirmed cases around the world exceeds 3 million.
United States remains the worst-hit numerically, followed by several European countries. The British Prime Minister Boris Johnson's return to
work on Monday after recovering from his bout with COVID-19. Mr. Johnson said he knows that the economic shutdowns are hard, but he urged Britons to
remain vigilant. He warns now is the moment of maximum risk for the United Kingdom.
A source tells CNN that the White House may be moving away from daily Coronavirus taskforce meetings. Donald Trump has come under fire for making
unproven medical claims during the briefings with reporters. Initially, there was no briefing scheduled today. But the White House later announced
the President would speak to the media and that will take place in about 90 minutes from now, obviously, CNN will carry it.
Tyson Foods is warning there could be meat shortages in grocery stores across America. The company's blaming Coronavirus that forced it to shut
other meat -- to shut -- to force the company and other meat processing plants to shut down. With plants offline, farmers have no place to sell
their livestock.
[15:35:21]
QUEST: So, oil prices continue to fall having rallied last week, they were back down again 23 percent, down some $13.00 a barrel. That's what the
current price of WTI West Texas Intermediate. Let's remember, that's positive compared to what it was last week. The world's largest oil bank,
ETF, is selling June future contracts now. Producers racing to cap production and the global cuts (INAUDIBLE) kick in on Friday. The IMF is
claiming Middle East is vulnerable to dual shock of virus and plunging oil prices, and preparing -- regions must prepare for more impact.
(BEGIN VIDEO CLIP)
JIHAD AZOUR, MIDDLE EAST & CENTRAL ASIA DIRECTOR, IMF: What is important is to assess really the extent of the shock. And try to think about the second
and third round of impact. And this is something that we need to keep in mind, there will be a second round impact. There will be certain issues
that we don't see now, because in the middle of managing the emergency we don't see.
(END VIDEO CLIP)
QUEST: Now this week, we have earnings results from the majors. We've got on Tuesday, that's tomorrow, B.P. will report. On Thursday, Royal Dutch
Shell, and ConocoPhillips will report, and on Friday, we get the report from Exxon and Chevron. The key focus, of course, will be not past
earnings, but it will be the focus on dividends and what they expect the future performance at these new levels.
John Browne is executive chairman of L1 Energy, former chief executive of B.P. Lord Brown joins me now. The share dislocation that's saw prices go
negative for the first time. We get the distinct impression we're only a stone's throw away from that happening again. Would you agree?
LORD JOHN BROWNE, EXECUTIVE CHAIRMAN, L1 ENERGY (via Skype): It's quite possible we have too much supply and far too little demand. And the seeds
of this was sown before Coronavirus, the tragedy of Coronavirus hit the world. Very clearly, too much supply being constrained and then demand
really dropping like a stone, down 30 percent. That is a result of a collapse of economic activity as a result of the Coronavirus. So, we have a
vast amount of oil surplus to (INAUDIBLE) It's going into storage, the storage is pretty full. And so, if you produce it and there's no demand,
and there's no storage, you had to pay someone to take it away.
QUEST: What happens next then, because demand, even as economies open up, demand is going to be low, possibly for the foreseeable future, and even
allowing for OPEC Plus cuts, they'll still be a glut. So what happens, John?
BROWNE: So, this is not unsimilar to a period, I remember in '85 and '86. In '85, the price was maintained by everyone cutting back Australian
production. In the end, they said they couldn't, and the price just fell like a stone. And it stayed there, actually pretty low in today's terms
between $30.00 and $40.00 a barrel for about 15, 17 years. So, I think, you know, we've got a problem here. It takes time for demand to pick up.
Inventories are very, very high. And demand is in any event being pushed down as a result of concerns about the environment.
QUEST: It is difficult to make a case to the general public that oil, low oil prices are a problem, except for oil companies and those oil exporting
nations. So, what risks do you see to either companies or nations of a price that stays, say, under $25.00 a barrel?
BROWNE: There's no doubt it's good for consumers although consumers need to worry about how much oil they use, and how much carbon dioxide they
generate as a result of that. For oil producers, it's going to mean huge cutbacks in national budgets, where they're very dependent on oil. And for
oil companies who have been a source of positive cash flow and dividends, they have to rethink what they -- what they're investing in, and how to
probably produce oil by nott investing too much in it.
[15:40:03]
QUEST: So to be clear, you see the price staying down at these ultra-low levels for the foreseeable future?
BROWNE: Well, certainly, it's foolish to predict for very long term, but I see it certainly for the period that we can focus on, staying down,
inventories have to be absorbed, demand has to go up. And generally, people have to be built confidence that they can conduct their lives in the way
that they did before Coronavirus. And the producers have to be very disciplined. We never seem to run out of oil. We certainly run out of
demand.
QUEST: Lord John Browne, always good to have you on the program. Thank you, sir. I appreciate you taking time to talk to us. Kind of you.
BROWNE: Thank you. Thank you.
QUEST: In a moment, we're talking about the countries who are most affected. Nigeria is one of them, of course, as an oil-exporting country.
The budget there is expected to be destroyed as a result of this cut in oil prices or short cut in oil prices, leading to hunger. We're seeing evidence
of that. So, after the break, our "VOICE OF THE CRISIS" is a charity in Nigeria that's teaching over the airwaves. It's a different voice of the
crisis, and it'll be after the break.
(COMMERCIAL BREAK)
QUEST: Paraguay says it will keep schools closed until December. It gives you an idea of the state and seriousness of the crisis facing some
countries. Education systems worldwide remain under pressure. In Nigeria, there is a non-profit, not for profit, ACE Charity. It's for an extremely
unusual way of teaching. Radio school is teaching students at home. Now, the radio shows focus on reading, writing, maths, science. It's about 18
million listeners so far. It is a different "VOICE OF THE CRISIS."
Kiki James is the CEO and founder of ACE Charity. When this -- Oh, he joins me now -- Kiki joins me now, sorry, from Abuja. Kiki, good to see you.
Thank you, ma'am. And when this started, Kiki, you had to decide a way forward, and you had to get funding that was going to be able to at least
let you stay in business. How did you do it?
[15:45:01]
KIKI JAMES, CEO & FOUNDER, ACE CHARITY (via Skype): Hi Richard, thank you so much for having me, and good to see on air. Thank you so very much. We
work with the Malala Fund ACE Charity was set up in 2010. And we have to decide how to quickly respond to this crisis. So, what we did was,
normally, we set up Learning Resource Centers across Nigeria, where we have books required by the Nigerian curriculum, of computers and a generator, as
well as an LRC staff in the Learning Resource Center.
So when this happened, all we had to do ultimately was transfer knowledge, transfer skills on the radio, because we knew that children, a lot of
children in Nigeria don't have the luxury of online learning. And we contacted Malala Fund and said, We can't continue with our work at the
moment. We can't meet our deliverables. Can we have an online -- can we have a radio program? And they said yes, they supported us immediately and
we were able to do our first four weeks because of Malala Fund.
QUEST: What I find fascinating is that as obviously as many businesses are having difficulties and charities are finding it difficult. And the
fundraising ability of charities like yours is going to be extremely difficult. But you found a way around it. And the number of people
benefiting is very substantial.
JAMES: Yes, it is. We work with five radio stations, we air in about 12 states. And one of the radio station estimates they have about 18 million
listeners, some have 2.5, 1.5. And the benefits are not just children. You know, Richard, we have a high rate of out of school children. Before COVID-
19, UNICEF estimated that we had over 10 million out-of-school children. A report by Malala Fund shows that post COVID-19 we'll likely to have 10
million more. And we have unintended beneficiaries, such as illiterate adults, children, I mean, parents who didn't have the chance to go to
school, get to learn the fundamental.
QUEST: Have you discovered something that you can continue after this crisis is over?
JAMES: Absolutely, the ACE Radio School is here to stay. I just mentioned the unintended beneficiaries who are parents and adults, so we intend to
transition to adult learning because there are adults who want to go back to school but fortunately, didn't have the opportunity to do so.
QUEST: And I'm guessing that your biggest problem obviously be typing to keep your staff on and to keep the people who help and the teachers and the
advisors and all that. Your biggest problem is going to be funding and financing in a post-COVID world, where charitable donations may be lower.
JAMES: The beauty of this project is we -- I work with a great team and the team have been working 24/7. But to record the session, we've worked with
private school teachers because private school teachers have more experience and they're able to transfer knowledge to our local school
teachers who are listening on the radio. So, post-COVID-19, hopefully, we get to partner with more private schools and get their teachers to
hopefully record the sessions for free and them giving back, which is we have to find smart, innovative ways to stay afloat.
QUEST: All right. Kiki, we always end the "VOICE OF THE CRISIS" with a promise. The promise this time from QUEST MEANS BUSINESS, from me, find a
way that we can help you. All right? Whether it's give a lecture, give a talk, answer questions for your radio program, whatever it is, we will be
in touch. We always give a promise of "VOICE OF THE CRISIS," find a way, discuss with us how I can help you in some shape or form. How about, all
right?
JAMES: Thank you, Richard. Education is a currency, and we really, really hope that we can talk a lot more about not devaluing the currency but --
(CROSSTALK)
QUEST: Exactly.
JAMES: -- of literacy. (LAUGHTER)
QUEST: Now, you're talking my language, education is a currency and a profitable one. Kiki, thank you.
JAMES: Yes.
QUEST: As we continue after a break, the person claimed to be patient zero. Well, it's in the United States when it's all a matter of conspiracy
theories and the poor person is absolutely swamped and it's very nasty. After the break.
(COMMERCIAL BREAK)
[15:50:00]
QUEST: Conspiracy theories are falsely accusing one particular person of being patient zero in the United States for COVID. It's a woman and the
family is now facing extreme online abuse and threats. Donie O'Sullivan has this exclusive report when he spoke to the woman involved.
(BEGIN VIDEOTAPE)
MAATJE BENASSI, ACCUSED PATIENT ZERO OF CORONAVIRUS IN THE U.S.: It's like waking up from a bad dream going into a nightmare like day after day.
DONIE O'SULLIVAN, CNN REPORTER: This is Maatje Benassi. She and her husband Matt are in the center of an elaborate conspiracy theory promoted by George
Webb.
GEORGE WEBB, CONSPIRACY THEORIST: This goes back to our story here, which is patient zero, which is Maatje Benassi.
O'SULLIVAN: He's a conspiracy theorist who has nearly 100,000 subscribers on YouTube. He falsely claims without any evidence that Maatje brought the
virus to China during a cycling competition. Maatje is in the U.S. Army Reserve. And last October, she competed in the military World Games in
Wuhan, China.
Six months later, comments under Webb's YouTube videos about the Benassis have become the stuff of nightmares.
MATT BENASSI, HUSBAND OF MAATJE BENASSI: Execute them by firing squad. We need to be killing these key people. These people will get a bullet to the
skull.
WEBB: It's March 20th --
O'SULLIVAN: The conspiracy theory has even reached China. Webb has been featured in media controlled by the Chinese Communist Party, which has
sought to deflect blame for the Coronavirus.
MATT BENASSI: We've gone to law enforcement and because they're not direct threats, there's not a lot that they can actually do. And for folks like
us, it's just too expensive to litigate something like this.
O'SULLIVAN: Could you talk me through the specific evidence you have that she is, as you described, coronavirus patient zero?
WEBB: Yes. Well, I have to -- there's a lot of circumstantial evidence and then there's a source here that I cannot reveal.
O'SULLIVAN: So, specifically on Maatje Benassi, how do you know that she has the Coronavirus or has antibodies or how do you know that for sure?
WEBB: Well, I have a source at the Fort Belvoir Community Hospital. And she actually works at -- or I have someone saying that she works at the Fort
Belvoir Community Hospital, and she tested positive for other Coronavirus.
O'SULLIVAN: She denies that.
WEBB: She denies that? Did she deny that she works at the Fort Belvoir Community Hospital?
O'SULLIVAN: She denies that she's had the Coronavirus, that she had any symptoms of the Coronavirus.
A YouTube spokesperson told CNN the company is committed to promoting accurate information about the Coronavirus and taking down misinformation
when it's flagged by users. YouTube took down some trending comments under Webb's videos after CNN asked about them.
MATT BENASSI: A couple years ago, I was diagnosed with a rare cancer. Dealing with that situation is way easier than trying to deal with this
George Webb situation.
MAATJE BENASSI: It's getting out of hand and it needs to stop.
(END VIDEOTAPE)
QUEST: Donie is with me now. Donie, isn't it -- I mean, I feel for these people, but whose responsibility is it now to put it right?
[15:55:09]
O'SULLIVAN: Yes, Richard. Well, I mean, here in the United States, under federal law, a platform like YouTube has no responsibility. The
Communications Act here in the U.S. basically allows them to take no responsibility for what's on their platform. Now, of course, morally and
ethically, you would think that they would act, but I guess when they're running platforms this size, they don't -- they can't catch all this
content, I guess. But as you can see there, it's absolutely turning this family's life upside down, and they really are struggling to know why
something like this is allowed.
QUEST: Donie O'Sullivan. Donie, thank you. And a quick look at the final look at the markets for today. It's going to be a strong day. The markets
closing up. As you can see, the Dow is up, it's nearly the best of the day. Overall, we are up some 1.6 percent, 24,162. In fact, all three major
markets are up over one percent. And that is QUEST MEANS BUSINESS for today. I'm Richard Quest in New York. As always, whatever you're up to in
the hours ahead, I hope it's profitable and safe. I'll see you tomorrow.
(COMMERCIAL BREAK)
END
