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FIRST MOVE WITH JULIA CHATTERLEY

The U.S. Government Reviewing Oracle's Deal With TikTok This Week; UAE, Bahrain To Sign Normalization Pacts With Israel; Delta Air Lines To Save Jobs And Boost Diversity. Aired 9-10a ET

Aired September 15, 2020 - 09:00   ET

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


[09:00:19]

JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here's what you need to know.

TikTok timeline. The U.S. government reviewing Oracle's deal this week.

Fraud fears. Nikola Motors defend itself. We'll hear from leading critic, Andrew Left.

And Delta's decision. The CEO speaking exclusively to CNN about saving jobs and boosting diversity.

It's Tuesday. Let's make a move.

Welcome once again to all our FIRST MOVErs around the globe. We have got a high flying show for you, Tuesday, as I mentioned.

As I mentioned, too, the CEO of Delta Airlines joining us to discuss jobs, diversity and the of course, the ongoing travel turbulence.

Meanwhile, on track for takeoff, U.S. stocks looking to the snap back rally yesterday with tech recapturing around half now of last week's losses, and

without the help of heavyweight FAANG stocks like Amazon, Facebook, Alphabet and Netflix.

You can see the close there, Apple though providing some juice, up three percent in anticipation perhaps of today's virtual product launch. Details

on that coming right up.

We also saw a Tesla turnaround. It was up some 12 percent, like last week's pullback virtually never happened.

Vaccine news and deal making in the technology space, also helping sentiment here, but so apparently is the economic outlook in Germany,

investor confidence at 20-year highs. That's also given a lift to markets.

In China, too, August retail sales rose for the first time this year. The industrial production numbers there looking strong, too. That all helping

to take the yuan to its highest levels of 2020.

We've also got fresh signs that the U.S. consumer remains resilient, too. JPMorgan CEO, Jamie Dimon reportedly saying the bank could release some of

the billions of dollars' worth of loan reserves that they had held in case loans went bad. So that would be a positive sign, too, but you can still

expect the Federal Reserve policymakers to strike a continued cautious tone.

Their two-day policy meetings begins today, especially, of course, given that we're likely to see fresh financial aid before the U.S. Presidential

Election.

No end of things to discuss today. Let's get to the drivers.

We begin with the U.S. Treasury Department reviewing TikTok's plan to partner with American software giant, Oracle. It's unclear if the deal,

which is not described as an outright sale will resolve the security concerns that the U.S. government says it has.

Selena Wang joins us now from Hong Kong on this. Selena, I know you've been following this incredibly closely. For me, it is a question of, is this a

security risk or not? If it is, we need a more comprehensive deal like Microsoft was offering. If it isn't, then the U.S. government here has to

back down and allow the Oracle babysitting deal to go ahead. What do we make of this?

SELINA WANG, CNN CORRESPONDENT: Julia, we've been talking about this deal for weeks, and in the beginning, Trump was saying that he demanded this app

be sold off, divested or shut down.

Now, what we're seeing, Julia is a very much watered down version of what Trump had initially asked for. We're seeing a partnership where Oracle

would be the quote, "trusted technology" partner of ByteDance.

Now, sources have told me that that means this wouldn't be an outright sale, Oracle could be providing some Cloud services, Cloud computing

provider to TikTok, that it could also be storing some American user data on its servers.

But this was a far cry from what Trump had initially asked for, and you're already seeing criticism coming from lawmakers, including Republican

Senator Josh Hawley who said that ByteDance still should pursue a full sale, urging CFIUS to not approve this deal, saying that this app should be

quote, "rebuilt from the ground up to remove any trace of Chinese Communist Party influence."

CHATTERLEY: Yes. So it's going to come down to the Treasury Secretary and the U.S. administration to decide what they're happy with after all the

accusations of security risks. Is it one or isn't it?

Selena, does Beijing, who clearly likes the idea of the Oracle deal more than Microsoft, did they even need the United States? I am just looking at

some of the numbers of how many users they've got in China now, and actually how those content creators are monetizing this platform, do they

even care that much about U.S. users?

WANG: Well, Julia, I first want to mention what you earlier said about Treasury Secretary Steven Mnuchin saying this would potentially lead to

20,000 jobs in the United States, suggesting that CFIUS is currently reviewing it.

Beijing also may have some leverage over this, as you reference to Beijing probably prefers this deal because it may not result in the transfer of the

very coveted important artificial intelligence recommendation algorithm for ByteDance.

[09:05:26]

WANG: As for whether or not it needs the United States, this is certainly not what ByteDance founder, Zhang Yiming had envisioned. He wanted to build

this into the first truly global Chinese consumer technology company that can compete with the Facebooks, the Amazons, and the Googles of the world.

It's not just facing these hurdles in the United States, they are dealing with an app ban in India, where it is was one of more than 100 Chinese apps

to be banned by the Indian government on the grounds of national security.

These Chinese companies, as they are going global are realizing just how damaging these geopolitical dramas between China and many other countries

are proving for their global ambitions, not to mention that there is a ton of competition in China and it faces a lot of slowdown as well. The economy

in China is not growing as fast as it used to be. Digital consumption is starting to reach saturation.

CHATTERLEY: Yes, it's so fascinating, isn't it? You've been wanting to build a giant that could compete in places like the United States with the

likes of Amazon and Facebook, as you mentioned, and yet, those guys can't compete in China because the doors are locked.

Fascinating. We shall see, Selena. Plenty more column inches and discussions to be dedicated to this story, I am sure. Selena Wang, thank

you so much for that.

All right, Amazon hiring once again. The company looking to recruit 100,000 workers to meet surging levels of e-commerce demand. FedEx is also hiring

70,000, mostly temporary workers, in the run-up to the holidays. Those two stories very much connected.

Matt Egan joins me now. It is great to have the capacity for consumers and to make sure that we can get things over the internet rather than having to

be in shops during COVID. But there is a cost for this, and that is lots of smaller retail businesses are being lost and the power is being

consolidated in the hands of these giants.

MATT EGAN, CNN BUSINESS SENIOR WRITER: I think that's right, Julia. I think there are two big takeaways here. One, the pandemic has dramatically

accelerated the rise of e-commerce. I don't know about you, Julia, but I mean, I am buying everything online these days, everything from baby food

to furniture to groceries.

But I was always doing a lot of online shopping. What's interesting is the health crisis has forced a lot of people who were maybe reluctant, they

wanted to go in person. They're doing more shopping now on Amazon, Target, Walmart, and all of those goods have to get shipped, and so that's why

we've seen Amazon and FedEx ramp up their hiring.

What's interesting is that FedEx is hiring this holiday ramp-up that they do every year. It's 27 percent more than they hired a year ago.

But the other big takeaway is, to your point, big companies are booming right now. I mean, Amazon is worth $1.5 trillion. Small businesses, many of

them are struggling.

There was a study out just last week showing that something like two-thirds of New York restaurants would go out of business as soon as January if they

didn't get any more government support.

We talk a lot about stock market records falling, but what gets lost in those headlines is that the Russell 2000, which tracks smaller companies,

is down eight percent this year, is getting left behind by the S&P 500 which is up five percent; Amazon, of course is up 68 percent, and so

basically, the big companies are getting bigger, the smaller are struggling just to survive, and Julia, to your point, that really does concentrate

power among the biggest companies.

Those companies have the power and the influence to set worker conditions and wages, so we need to watch this trend play out.

CHATTERLEY: Yes, and therein lies the key. When you have that power, you get to choose whether you pay them more or you pay them less.

Matt Egan, thank you so much for that.

Now, historic ceremony taking place at the White House today, Israel will sign an accord to normalize ties with not one, but two Arab nations, the

United Arab Emirates and Bahrain.

John Defterios is in Abu Dhabi with all of the details. The message here, John, I think strong together, whether that's tackling other big worrying

nations like Iran or economic ties, trade ties going forward. Talk us through this.

JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Well, it always helps to have a common enemy. It's an incentive, let's put it that way, although

I think the security tensions will rise in the region as a result of these alignments that are taking place, but business can be the glue that keeps

the Gulf States and Israel closer together, and I think the club will expand, Julia, as well, to extend west to Morocco.

[09:10:08]

DEFTERIOS: The King of Morocco and the Crown Prince of Abu Dhabi, by the way, were childhood friends. So it seems like a common next step here in

terms of motivations.

But let's look at the two principals that first signed on to this, the UAE and Israel and it really boils down to -- and you have to think about this,

the phone lines were blocked two months ago, and now, we are at normalization. This is a simple strategy, a very strategic one, but the EAU

position is: we have to occupy the seat at the table.

Here's the Minister of State for Foreign Affairs.

(BEGIN VIDEO CLIP)

ARWAR GARGASH, UNITED ARAB EMIRATES MINISTER OF STATE FOR FOREIGN AFFAIRS: In our assessment, it has not worked and you know, we look, really, at the

Egyptian peace overtures and initiatives of the late '70s and '80s as a successful episode in Arab-Israeli sort of narrative, and we look also at

the Jordan Agreement overall as also successful.

So what do you draw from that? You draw from that is that the empty chair approach, the no communication approach, the sort of high rhetoric approach

doesn't really help anybody.

(END VIDEO CLIP)

DEFTERIOS: Anwar Gargash with our Becky Anderson. You'll hear the full interview in the next hour on "Connect the World," a special coverage over

the next three hours of the signing ceremony in Washington.

So what do we have here, Julia? At the heart of the Gulf, a deal with Israel. And what did they build? The first priorities. Let's take a quick

look here.

Medical, technology and banking. Don't look at the dollar amount. This is about strategies going forward, how they leverage each other. It opens up a

market for Israel, if you think about it. The broader air world of 400 million consumers, UAE with better than a trillion dollars of sovereign

wealth looking for technologies, security, defense strategies from Israel.

This could be something that is much wider ranging as time goes on. And adding the other Gulf States, we have to watch Saudi Arabia very carefully

going forward. They opened up the air space, but did they really sign on to normalization going forward? We have to see.

CHATTERLEY: Very quickly here, John, because we were just showing a chart of Iran, and I think this is really important, some of the facts and

figures on Iran here. The priority here simply is to limit their powers and isolate them more on an economic basis, surely.

DEFTERIOS: Yes, I don't mean to sound cynical, Julia, but I think this normalization is also a hedge against the election in November if Donald

Trump survives or not. So they want to maintain that pressure on Iran.

You saw the numbers there, contraction six percent this year, but 20 percent over three years, unemployment is 16 percent. Oil production down

from 3.5 million down to 1.9 million.

Again, this will be tense as it goes forward, but already Donald Trump was threatening Iran saying any strike against the U.S. in any way will have a

heavy response. That's kind of the language after this normalization for sure.

CHATTERLEY: Yes, we'll be cynics together, John. John Defterios in Abu Dhabi. Thank you for that.

We'll have a lot more coverage as John said of the events throughout the day on CNN including the next edition of "Connect the World" around that

signing ceremony.

In the meantime, more stories making headlines around the world. This was the scene in Phoenix, Arizona on Monday where President Trump supporters

packed together for an indoor rally aimed at courting Latino voters.

As you can see, very few masks, no social distancing. It comes as nearly 195,000 Americans have died from coronavirus.

Now, before heading to Phoenix, the President traveled to California for a briefing on the wildfires ravaging the Western United States. At least 36

people have died in dozens of fires that have now decimated nearly two million hectares.

But the President refused to acknowledge the role of climate change is likely playing in fueling the flames. He said he expects conditions to

improve.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It will start getting cooler, you just watch.

UNIDENTIFIED MALE: I wish science agreed with you.

TRUMP: Well, I don't think science knows, actually.

(END VIDEO CLIP)

CHATTERLEY: Now, while wildfires burn in the west, a hurricane is threatening the southeastern U.S. Sally is crawling towards the Gulf Coast,

already dropping pounding rain on the area as it nears landfall.

A hurricane hunter's aircraft flew over the storm to give us this close-up look.

Ed Lavandera is in Mississippi for us. Ed, great to have you with us. What more can we expect in the coming hours? Just talk us through it.

ED LAVANDERA, CNN CORRESPONDENT: Well, in the immediate hours, it is just a wait and see game, and that is because Hurricane Sally sits off the

Mississippi-Alabama Gulf Coast and is just moving at a painfully slow pace. And so it is going to take some time for that storm to make it ashore.

In fact, the eye of this hurricane might not come ashore until sometime tomorrow morning, on Wednesday, so that raises the concerns here. Not only

is it a low-level hurricane strength storm, but as the amount of rain will continue to fall on this area, flooding will become a major story in the

coming days.

So far we haven't seen much rain on the coast and on the shoreline so far. The storm sits out this way to the east of us where we are in Gulf Port,

Mississippi, and that is where many people here who have spent the last few days preparing for this hurricane are simply just waiting.

[09:15:34]

LAVANDERA: So they are filling up sandbags, fortifying their businesses and homes, because inland is where all of this water is going to get pushed

north into Mississippi, Alabama, parts of Florida and Southeast Louisiana as well. So that is going to be the concern.

We have seen residents preparing for this, and it's a reminder that 15 years ago, this is the exact same part of the Gulf Coast that was dealing

with the horror and the tragedy of Hurricane Katrina that leveled so much devastation on this region of the Gulf Coast.

But many residents here will tell you anything below a Category 2 Hurricane, they are willing to ride it out, so we have seen very few people

evacuating this region.

They say they are willing to stick it out and ride out this storm here so you're not seeing mass evacuations, but right now it's just a wait and see

game as emergency officials have urged people to make sure they have enough emergency supplies to last for several days, because once the storm comes

ashore, if it keeps moving as slow as it's moving right now, the flooding and the extended amount of rain is going to be what causes the most concern

here over the next couple days -- Julia.

CHATTERLEY: Absolutely. Get prepared as -- or at least as prepared as you can right now.

Ed, great to have you with us. Thank you for that and stay safe.

Ed Lavandera there in Gulf Port, Mississippi.

All right, still to come here on FIRST MOVE, no more furloughs. That's the message from Delta to flight attendants and ground crew. We'll speak

exclusively to the CEO.

And we also have got famed short seller Citron Research's take on electric truck maker, Nikola Motors. This, as accusations of fraud fly back and

forth. That's next. Stay with us.

(COMMERCIAL BREAK)

[09:20:16]

CHATTERLEY: Welcome back to FIRST MOVE live from New York where U.S. stocks are set to rise for a second straight session.

Not so, though, Nikola Motors once again under pressure premarket. Noted short seller, Andrew Left of Citron Research pledged to cover half of any

legal expenses for another research firm, Hindenburg, which has publicly accused the electric vehicle company, Nikola of fraud.

This comes three months after Citron tackled Nikola itself, comparing its technical achievements unfavorably with Tesla at a similar stage.

Shortly after Nikola's IPO when its shares were trading at around $65.00, Citron tweeted, "Nikola back to $40.00 in a month." The anti-Tesla, if you

buy here, you deserve to lose your dollars considering Milton sold just a week ago at $10.00 when Tesla had this market cap. The Model S was scaled

and the X was produced.

We've got that tweet, we'll show it to you if we can find it. Joining us now, founder of Citron Research, Andrew Left.

Andrew, fantastic to have you with us. I feel like you saw this one coming. Good morning and great to have you with us.

ANDREW LEFT, FOUNDER, CITRON RESEARCH: I understand investors have an appetite for the next Tesla, but we have to remember that before Tesla's

stock actually became a phenomenon, that company went IPO, they had to actually produce the car. The car was under rave reviews by consumer

reports, widely accepted, and mass produced Model S, and then the stock followed suit.

So with Nikola, we had the complete opposite. And also, please, never confuse Elon Musk with Trevor Milton. So those are two major factors.

CHATTERLEY: Why?

LEFT: They are two different people. For me, I saw Trevor's response on Twitter to the criticism of his company two days ago, and that's really all

you had to see.

He put on a three-minute profanity laced rant that was childish, amateurish, had no intellectual vigor to it whatsoever, and not at all what

Elon Musk would do.

Just deliver the vehicles. That's all you have to do. It's not a schoolyard fight, it's not "I'm richer than you." This is the stock market. Deliver

your vehicles.

CHATTERLEY: I mean, to be fair to Milton, they did put out a number of points where they said, look, this is not true. I mean, we've got a few of

these here. They mischaracterized the quote by a Bosch employee that was talking about future production plans; that they had been designing and

engineering and working on their own inverters.

There was something else, the accusation was they were just relabeling someone else's. They said that Hindenburg misrepresents their historic

position on battery technology. I think what the most visual one was, it was the Nikola won their first prototype where they acknowledged that when

we saw a video of this vehicle moving, it wasn't under its own propulsion.

They've moved on, obviously, from the Nikola 1, but this, I think, is a problem for them.

LEFT: Well, it just shows the quality of the company and the honesty of the company. When you're paying $10 billion or $15 billion for a startup

company with an unproven product, you would like to think what they put out is actually true and what you see -- what your eyes see is actually what it

is.

So now them backtracking and saying, well, we never actually said the truck was moving on its own propulsion. It doesn't hold much weight with

investors, and like I said, when you hear Trevor respond to it, it just does not give you the comfort that I would want as an investor.

So that alone, when I see the company's response and their body language makes me think they're covering more things up. Mind you, of course, there

are going to be wrong things. If Hindenburg put out a story or any short story puts out a hundred points, can I go ahead and have a straw man

argument and take three or four that might not be true? Of course.

But it doesn't take away from the quality of the point that this company is not what it says it is.

CHATTERLEY: You were already raising concerns, and I think that's the point I wanted to make. Will you short this stock? Because then we saw the GM

deal announced, the $2 billion investment. The stock price soared and then Hindenburg came out and were like, hang on a second, we think this is

fraud. Will you short?

LEFT: After I read the report, I guess I shorted the stock. I thought it was quite obvious. The GM deal was not what it appeared to be. GM got a

sweetheart deal with production and manufacturing. It wasn't a straight deal.

People remember like Mercedes and Toyota who were both early investors in Tesla, it was a whole different dynamic. So I think investors, in their

search for the next Tesla are grabbing onto anything, and in this case it is Nikola.

There are many EV makers. I just think the quality of management, the quality of their claims that they have made have really fallen short.

We have to remember, where was Tesla before the market gave it a $10 billion to $12 billion market cap?

Trevor, be quiet. Stop threatening people. Produce your vehicles. That's it.

[09:25:18]

CHATTERLEY: I guess he would argue that that is what this GM deal is about given that they are using their technology, their battery technology in

particular.

Andrew, you're still short, because I do think this is important. It's a really expensive short now.

LEFT: Well, I'm still short to stock. There is always an ability to pull a rabbit out of a hat, and I have to respect the retail investor on the other

side who will bid up anything, so when you say, am I still short? Yes. The size of position is not as big as I probably want it to be. For that

reason, just out of respect to the market.

But I believe that Nikola is definitely covering something up and the company's responses, their body language, and most of all, watch on his own

Twitter, watch Trevor's response and it will make you, as a shareholder, kind of cringe in your seat a little bit.

CHATTERLEY: Well, we've put an offer out to Trevor Milton and to Hindenburg to come on and talk us through this. They have the opportunity to come on.

Andrew, Jim Chanos called this period of time that we're in the Golden Age of Fraud where we've got all of this stimulus sloshing around that

effectively lifts all boats. It's tough to pick out the bad eggs or the companies that you have issues with, particularly in this case when it's so

expensive to get hold of the stock to be able to short it.

Is there a risk we see a sort of Hertz-like situation here even when the company is bankrupt, the stock goes up. There is a risk here that people

get burned if they short this stock.

LEFT: Well, if you mean Nikola, the answer is yes. I mean, retail investors can buy the stock and the stock market is a game of supply and demand.

As for the Golden Age of Fraud, most definitely it is. We're saying, oh, it is not say fraud, we'll say misleading or dreams or unrealistic

expectations. But you know, that's what the Fed has created and that's the market that the people are invested in, so as long as they're cautious and

not too heavily invested in any one speculative investment, investors can be okay with it.

But as a short seller, it's truly dangerous and interesting times. I spend more -- my book is definitely more long biased than short, and all my short

names have definitive catalysts attached to them, or my conviction level is just way beyond things that I've never seen before.

CHATTERLEY: Yes, you have to be -- you have to have high convictions in this market if you're going to go against the tide. And just to your point,

because you're calibrated, you think Nikola is fraud.

LEFT: No doubt. That's what I believe, yes.

CHATTERLEY: Andrew, great to have you with us. Come back and talk to us soon because there's always a million other things I can talk about. This

is just one specific story. Come back please, soon, sir. And thank you for waking up so early.

LEFT: You're welcome.

CHATTERLEY: Andrew Left there from Citron Research. And as I mentioned, open invitation for Nikola and Hindenburg to get back on the show and come

talk to us about both of these issues.

Stay with us. We're back after this.

(COMMERCIAL BREAK)

[09:31:14]

CHATTERLEY: Welcome back to FIRST MOVE and U.S. stock markets are up and running this Tuesday. As expected, it's a higher open. The technology

sector adding to Monday's near two percent jump. Goldman Sachs, Deutsche Bank saying last week's tech trouncing has run its course. Morgan Stanley

Wealth management says the selloff was technical in nature and not a broader sentiment shift.

Also helping that sentiment, a positive reading on the Chinese consumer, retail sales there rising for the first time this year for the month of

August, and in the United States, dare I say, it is a glimpse of stimulus hope as well.

A bipartisan -- yes, bipartisan group of House members proposing a sweeping $2 trillion emergency aid proposal in the hopes of jumpstarting stalled

negotiations. Extended benefits to jobless workers have virtually dried up since August.

On that note, news breaking this hour, too, Delta Airlines is announcing it will not furlough any more flight attendants or ground-based employees. In

the U.S., workers that are furloughed are typically unpaid. They get to keep their benefits such as health insurance if they have it.

The company says voluntary redundancies taken by 20 percent of its workforce have saved other jobs.

And I'm pleased to say, we're joined by Delta CEO Ed Bastian for an exclusive interview. Ed, fantastic to have you back with us and great to

have you back with us with some welcomed good news here. A huge effort, I think by the company, to save more jobs.

ED BASTIAN, CEO, DELTA AIR LINES: Well, thanks, Julia, great to be with you. Yes, it was really good news that we could share with the vast

majority of our people that their hard work throughout the pandemic and the voluntary unpaid leaves of absence that up to 40,000 of our people have

taken during this period of time, plus we also had a very large subscription to early retirement offers and other job sharing opportunities

that shared sacrifice is going to enable us to eliminate the need for any furloughs of any of our ground staff, any of our flight attendants.

We're still working with our pilots union. We still have a couple weeks. Hopefully, we can get some progress made to save jobs on the pilot ranks as

well, but for many, many Delta people, it is great news and I'm really appreciative of their sacrifice and shared sacrifice at that.

CHATTERLEY: Yes. You're emphasizing the word "sacrifice" and it's sad to see any amount of workers go, but it is clearly an incredibly difficult

time.

You mentioned the pilots. Is the probability, the likelihood still that you'll have to let some of them go?

BASTIAN: If we don't get progress made in the discussions, we are talking to the union. We still have a couple week before the CARES Act furlough

protection expires at the end of September. We have 1,900 pilots that we have been forced to issue warn notices to.

I'm hopeful we can make progress to mitigate as many of those furloughs as possible. We still have time.

CHATTERLEY: Can I just assume -- can we assume that this decision in the news this morning is not dependent on even a clean extension of the

financial aid that the government has provided. It's irrespective of whether you get that or you don't.

BASTIAN: That's correct, Julia. We did know where the government -- we still don't know where the government is going to come out with a CARES Act

2 stimulus extension, so we needed to take matters into our own hands, and the people of Delta did what they always do, it's what we call the Delta

Difference.

They stepped up and they made sacrifices to protect the jobs of so many, and I am really appreciative of the great work.

CHATTERLEY: You know, it is interesting I have read the whole memo. I've got it here in front of me and you're saying, look, we're still flying just

30 percent of the passenger volumes that we had this time last year, the cash burn still $750 million a month here.

Despite the financial challenges, I know the other sort of big news that you've announced in the past week or so is the extended fee waiver for

changing flights.

Beyond 2020 for domestic flights in the United States, if people want to change their flights, you're saying, look, effectively you can do it for

free. This is big news, too. It goes back to your point about people before profits.

[09:35:35]

BASTIAN: Yes, it does. We've been looking at that for some time. We had told the market we were considering making changes to any fees that our

customers view as punitive and finding other ways by which we can provide value to them.

When the pandemic hit, it was a perfect time to eliminate change fees for the year, giving people peace of mind to be able to book their travel

during an uncertain period, and as we saw customers' reactions and the strength of that decision, we decided to eliminate change fees permanently

from our structure.

So one more reason why customers can book on Delta confident that we will be there for them, and if their plans change, they won't have to go through

a punitive fee that they view as something that doesn't create the flexibility they need in their travels.

CHATTERLEY: Ed, given all the challenges you're facing and the battles not just now, but beyond in this industry, I think it would be an easy -- it

would be forgiven, perhaps to let important issues like looking at diversity in the company slide.

But I know you're not. I've been reading another memo you sent out to say, look, we have got an action plan to tackle this, and I've had many

conversations with CEOs on and off TV that said they thought they were doing really well with diversity, but then they broke it down to their

African-American employment, particularly at higher levels of leadership, and they realized they had more work to do. Talk us through the action

plan.

BASTIAN: That's absolutely correct, Julia, and being here in Atlanta, the birthplace in our country for the Civil Rights movement, we have a special

responsibility to take care of our black colleagues and black community.

We look at people of color within Delta, they make up over 40 percent of our employee base, and we're doing relatively well in total on diversity.

About 35 percent of our leadership are people are color and about close to 20 percent of our officers are people of color.

But when you disaggregate that, and that's been one of the big learnings for me to get deeper into the data during this period of time and see the

specific numbers for our black colleagues, you're right, we've got about 20 percent of our employees who are black, yet only seven percent of the

officers, the top 100 people in the company are black.

So we know we've got a lot of work to do. The leadership levels are about 15 percent are black, but we have major steps that we're taking. So

everything from understanding better the plight and the challenge that our black community face to scrubbing hiring specs and qualification standards

to make sure that we don't overstate the qualification requirements.

For our leadership jobs, there are many leadership jobs in this company that do not require four-year degrees or even any merit employee job at

all, really questioning any of those barriers, those hidden barriers to bringing the black community forward to making certain that we're well

represented throughout the community, whether it's in hiring with Historically Black Colleges and Universities, many of which we have here in

the Southeast, and make us certain we're doing everything we can, because we know it's a long journey.

This is something that's going to take time. This is something the pandemic has taught us, a lesson of humility, a lesson of vulnerability, and it has

allowed for us to hear their voices more clear than ever, and it's time for us to step up.

CHATTERLEY: Yes, you know, I think the point about the benchmarks for leadership hiring and college degrees, we've talked about this on the show

before. This is such a critical component.

So we certainly welcome that, and I know you're doing all sorts of literacy programs in the community there as well in Atlanta, and you have an

internship for female pilots for minority communities, which I love, too.

Ed, how do we benchmark this? How do we make sure that even when you say, look, this is our new talent strategy, this is the pipeline. We're going to

be talking to suppliers of minority communities as well and businesses in those communities, how do you benchmark progress? What's the plan there?

BASTIAN: I think that's a good question, Julia. I don't quite know how we can benchmark progress against others because a lot of the data isn't out

there.

We've tried to increase the transparency, so we'll be benchmarking against ourselves. We've put out a goal for some time on the supplier community

that we want to be a member of what's called the $1 Billion Roundtable or Club. $1 billion as a supplier partner investment within the company, and

we'll hit that and hopefully we'll be increasing that.

[09:40:27]

BASTIAN: But the benchmark for me is within our own family here. I take this personally. All 75,000 of our employees within Delta I consider part

of my family where we treat our colleagues the way we want to be treated ourselves, and that puts them in great position to take great care of

customers.

When you take it personally, you realize how much work we've got to do. So we're overcoming not decades, but centuries, of disadvantage here. And

being in a position of privilege that we are, we have a higher responsibility to act than ever before.

CHATTERLEY: Yes. I like that idea. Benchmarking again, so that perhaps you end up doing the minimum. If you benchmark against yourself, then you fly

the flag.

Ed, always a pleasure to chat with you. Thank you so much for that.

Ed Bastian, CEO of Delta Airlines.

BASTIAN: Thanks, Julia. Great to be with you.

CHATTERLEY: We will continue the conversation no doubt. Thank you, sir. Bye.

All right, up next, the Fintech company, dLocal providing the rails for Amazon, Uber and Spotify to access Latin America. We'll speak to the CEO of

Uruguay's newest unicorn. Stay with us.

(COMMERCIAL BREAK)

CHATTERLEY: Welcome back to FIRST MOVE. dLocal is Fintech's latest unicorn. It is also Uruguay's first. The platform connects emerging market payment

methods, a whole host of them to international banking systems.

It's basically a bridge for global companies like Amazon, Uber and Spotify to buy and sell services in markets where money doesn't move through

traditional banking channels.

All right, joining us now is Sebastian Kanovich. He is cofounder and CEO of dLocal. Fantastic to have you on the show. Did I get the explanation right

there of what you guys provide?

SEBASTIAN KANOVICH, CEO, DLOCAL: Julia, first of all, thanks very much for having me. Yes, I think the explanation you gave is exactly accurate.

Fundamentally, we like to think of ourselves as an infrastructural pair, so you mentioned the bridge, and that's definitely what we do. We help

international companies like Amazon, like Spotify to collect payments on pay in markets like Nigeria, Brazil, India, Turkey, so essentially those

which are outside of the U.S. and Europe.

CHATTERLEY: I mean, these companies have enough to do connecting with local businesses, setting up themselves and operating their own business. If they

have to worry about what payment -- what digital payments can be used, what credit cards, what individual nation, particularly of the nations that

aren't or have a high degree of people who are unbanked. If they have to worry about that, it's an additional headache.

You basically take care of that and give them one system.

KANOVICH: Sure. So, in some of the markets where we operate, up to 80 percent of the population won't have an international credit card. I know

these are markets that are becoming more and more relevant for international companies.

We mentioned Amazon. We mentioned Uber. But this also applies to Chinese companies which are growing heavily into emerging markets. So what we do is

to make sure that users are being able to pay with their preferred payment method.

If anything we've seen, there are more and more payment methods appearing, there is more fragmentation and it just becomes impossible from a merchant

perspective to accept all of those without a company like ours and others that help bridge that gap.

CHATTERLEY: And now you're operating with 450 merchants in 20 different countries, I believe. The connectivity to more than 300 alternative payment

methods.

Up until this point, you have not raised money. You've bootstrapped. You've grown that big with your own resources. Why take money now? And what are

you going to do with it?

KANOVICH: Number one, we are obviously very proud of the path we've taken we decided to bootstrap this company. To be honest, we started out of

Uruguay and there wasn't a lot of venture funding available. So it is that we have much more options but to go down this route.

We love the partners we brought on board. We love what GA brings to the table. We love what additional analytics bring. We love the experience we

have with previous companies, so we thought that at this scale, it was a time to really get an international global partner that would help us

continue to scale.

So that rolled the decision. The idea going forward is we are going to stick to our mission and vision of helping this top 540 companies, but

hopefully get them across today, it is 20 markets, hopefully in 19-month time, it is going to be 35 markets, and that's what we're going to be

doing.

CHATTERLEY: I mean, this is pretty phenomenal in terms of the rate of growth that we're talking about.

I think all of our viewers and people understand that COVID and the challenges that have presented have accelerated the push towards e-

commerce, to the use of digital payments, for example, but you know, are you biting off more than you can chew, increasing to a further 15 markets

over the space of -- what -- 18 months you mentioned there? That's a lot of work.

KANOVICH: It's a great question, and that's something we ask ourselves a lot with the team, but if you look at it, we still say, today, it is 20

markets, it is going to be 35, but we are not saying we will do 190 markets. We acknowledge that we live in a very special niche which is

emerging markets. We don't do any payments processing in the U.S. We don't do any payments processing in the Western Europe.

So, we acknowledge that this is a niche that it is only becoming bigger, so provided that we continue to execute, listening very closely to our

customers and with our merchants and at the same time, time listening to the preferences from the end users, we'll be okay.

We hope we are not going to be chewing more than what we can bite and really continue in our markets.

CHATTERLEY: I certainly have to say, it is a big bite. I also noticed, you've have an office in Shenzhen in China. I am assuming again, to your

point, it is big companies outside of China accessing smaller companies or operating within China. How has that been?

KANOVICH: I think what we have recognized a few years back is that obviously, a bill of merchants are looking for growth in new ports, so U.S.

companies are desperate for growth outside of the U.S. Obviously, that growth is probably not going to come from China given the existing context.

By the way, the same applies to Chinese companies. So we understood that China, we wanted to make sure we were leveraging it, so we made a decision

three years back to open our first commercial hub in Shenzhen. At some point, we added a team in Shanghai. We also have a team in Hong Kong today.

Fundamentally, the idea is that there are going to be winners from both sides and we want to make sure we are leveraging that trend as much as we

can.

[09:50:17]

CHATTERLEY: Yes, it is going to be fascinating to watch what you do. Great idea. Incredible growth. Watch this space. Sebastian, come back and talk to

us soon. Cofounder and CEO of dLocal there.

All right, after the break, cooking new Apple products. But is the iPhone 12 on today's virtual menu? Find out next.

(COMMERCIAL BREAK)

CHATTERLEY: Welcome back to FIRST MOVE. Apple is set to hold a virtual event in around three hours' time. The company expects to reveal updates to

the Apple Watch and the iPad.

Paul La Monica has all the details. They've pointed us in that direction by calling it Time Flies, Paul. Notable absence though, not expecting any

details on the iPhone 12?

PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, we should not get anything about the iPhone 12, a 5G iPhone and what have you. The rumors are that is

something that there could be an event perhaps as early as October and maybe a new product being unveiled and released later this year.

But today's event really is going to be focused on some of those other peripheral Apple products.

CHATTERLEY: Not so peripheral. I was just looking at CNN Business's right on this. Last year, Apple sold 35 million watches. It's bigger than the

entire Swiss Watch industry in 2019. This is a big deal now.

LA MONICA: Yes, it's a great point. I mean, I think Apple, to its credit under Tim Cook has expanded beyond being a one trick pony, even though that

pony is kind of like secretariat in the iPhone.

The good news for Apple is that not just the Apple Watch and obviously things like the iPad still selling, Apple's services are really big as

well, so I think it's going to be interesting to see if the company talks at all about things like Apple Music, Apple TV Plus, some of those products

that they hook you and get you to subscribe for these monthly or annual price plans, and that's a very big chunk of Apple revenue now.

And I think it's one of the reasons why Apple stock is still doing really well. It's up 60 percent this year, $2 trillion market cap. It's pulled

back in the past week and a half or so with a lot of tech stocks, but still one of the bright spots of the market this year.

CHATTERLEY: Yes. Can they harness -- I'm going for a pony and horse related words now -- can they harness excitement over the Apple 1 Bundle which is

what you're talking about there as well.

Just to cycle back, though to the watches and what we're looking at here. I don't think there's ever been a better time, perhaps, to be talking about

health updates which is something that perhaps we are going to hear from them today as well, given everybody is super focused on their health and at

least tracking their daily health, given we're currently in a pandemic.

This is important, it feels important at this moment in time.

LA MONICA: Yes. I think it is entirely possible that Apple will choose when it highlights some of the new features of the Apple Watch what the health

implications, the health tracking ramifications are of using the Apple Watch and having it hooked up to your iPhone or another device.

I think a lot of people obviously are very cognizant right now of things like their pulse ox, their oxygen level, their heart rate, and things of

that nature, because we're all in this COVID-obsessed world right now.

[09:55:46]

LA MONICA: Not everyone has been tested, but you can use mobile devices to help monitor some of the daily aspects of your life that could hint at a

health problem, even if it's not necessarily COVID related.

CHATTERLEY: Yes. Absolutely. The changes matter, too. Paul La Monica. Three hours and counting. We shall see. Great to have you with us. Thank you.

All right, that's it for the show. You've been watching FIRST MOVE. I'm Julia Chatterley. Stay safe and we'll see you tomorrow.

(COMMERCIAL BREAK)

[10:00:00]

END