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QUEST MEANS BUSINESS
Israeli Lockdown Imminent, Prime Minister In White House For Deal With UAE And Bahrain; German Hotel And Food Service Turnover Up 22 Percent From June; Apple Unveils New Watch, iPad Air, And Subscription Bundle; Kim Kardashian West To Join Instagram Boycott; WTO Rules U.S. Tariffs On China Violate Trade Regulations. Aired 3-4p ET
Aired September 15, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: It is a strong day on the market today as we have 60 minutes left of trading before the closing bell.
In the final hour, the Dow Jones, as you can see, is higher. Just a quarter of a point. Now, you say that's not much to get excited about, but look at
the broader markets. Look at both the S&P and the NASDAQ with the triple stack and you see best gains of the day, coming up one and a third percent
from the NASDAQ which is now over 11,200.
So, the market is busy and the news that has been in the business world as follows. Germany says a vaccine won't be available for most people until
the middle of next year, 2021.
Apple is unveiling new watches, tablets and a subscription bundle.
And Delta's Chief Executive tells CNN he won't be furloughing any more frontline staff.
We are live tonight in London. It is a Tuesday. It is September the 15th, middle of the month. I'm Richard Quest, and of course, I mean business.
Good evening. Tonight, there are two notes of history for Israel tonight. One worthy of celebration, the other most definitely not. Firstly, of
course, in Washington where they signed Peace Treaties with the UAE and Bahrain. But then back at home, where COVID has now reached huge
proportions -- record proportions.
If we look at the performance of Israel, a country of barely nine million people, and you compare it on a per capita basis, obviously, to other hot
spots, the U.S., Brazil, India, Israel's new cases have exploded. More than 4,000 cases as a percentage of per capita you can see there vis-a-vis
India, Brazil and the United States. As a result, a lockdown will return on Friday just ahead of the Jewish High Holy Days.
The Prime Minister, Benjamin Netanyahu, is not in Israel today. He is in Washington to sign his Treaty with Donald Trump at the White House
normalizing relations with the UAE and Bahrain. There was no mask wearing and there was no mention of the virus, which is all the more remarkable.
Israel will enter a second lockdown on Friday.
Back in the second quarter, when Israel was very quick to lock down the economy, it shrank by about 30 percent. Israel then reopened in a measure
that many would say was foolhardy and is now paying the price. The cost of a new lockdown is likely to be $2 billion. It will last three weeks, which
is just slightly more than the duration of the Jewish holidays, Rosh Hashanah, the New Year and Yom Kippur, the Day of Atonement.
Benjamin Netanyahu said on Sunday, business will be hurt.
(BEGIN VIDEO CLIP)
BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER (through translator): I know those measure will exact a heavy price on us all. This is not the kind of
Holiday we are used to, and we certainly won't be able to celebrate with our extended families and there will also be those affected by the
lockdown, such as business owners and others.
(END VIDEO CLIP)
QUEST: Oren Liebermann is in Jerusalem. Elizabeth Cohen is with us as well. Oren, let's look at first of all -- Elizabeth will talk us through how the
situation has gotten so bad in Israel at the moment.
But Oren, first to yourself on the question of the Prime Minister going to Washington. I understand fully the importance of the treaty with the UAE
and with Bahrain. But if I am not mistaken, the others haven't sent their heads of state. Shouldn't -- is the feeling in Israel that Benjamin
Netanyahu should have stayed at home to manage it and send somebody else?
OREN LIEBERMANN, CNN CORRESPONDENT: Perhaps that answer is yes, but this was never an opportunity that Prime Minister Benjamin Netanyahu was going
to pass up.
By Israeli law and Israeli precedent, when it comes to foreign treaties, it should be the Foreign Minister who is there as it was for Bahrain and the
UAE especially perhaps when you look at what is happening domestically here in this country from wide scale protests, very high unemployment and as you
pointed out, coronavirus basically out of control and a second lockdown coming.
But Netanyahu, ever the politician, was never going to pass up the chance to stand with these Foreign Ministers from Bahrain and the UAE and he was
certainly never going to pass up a chance to stand alongside President Donald Trump.
Netanyahu did have to ask for power of attorney from the Foreign Minister to make sure that he was allowed to be the one to sign as required by
Israeli law, and we've learned that the Foreign Minister here said, okay, as long as you bring the treaty to the government for approval.
LIEBERMANN: Worth nothing, nobody outside of those few people there have actually seen what the treaties entail, what's in these normalization
As of right now, we just have a ceremony, a historic ceremony no doubt, but one where very few people outside of the signatories know what's in it. But
again, Netanyahu was never going pass this up even as coronavirus is out of control here and he comes back to a country about to enter a lockdown.
Completely different stories, Richard, foreign policy and foreign issues versus domestic policy and domestic issues right now.
QUEST: So, let's turn to Elizabeth Cohen. Help me understand because Israel had a brutal lockdown to start with. I know, my niece was well and truly
caught up in it, and still is.
But thereafter, what went wrong? How has Israel got numbers -- a population of nine million, it has more cases than the U.K. with 60 million to 70
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: All right, Prime Minister Netanyahu held up Israel as an example last spring saying
basically, look what we did. We got it down to just a handful of new case as day.
And in many ways, he was right. It really was that Israel was a great example in many ways for other countries. But here's where things went
The Prime Minister essentially told people to sort of go out and celebrate like phew, we got through it. It's over was the message that many Israelis
Weddings for example, and other events like that were allowed to commence with hundreds of people. Children were sent back to school in June, the
academic year in Israel ends at the very end of June and children went whack to school. Children are huge disease vectors.
So those two things are two of the major reasons why the numbers started climbing, June, July, and August. Now in September, we are seeing these
incredibly high numbers and that is why they are putting this lockdown into use again.
QUEST: Oren, I see that one member of the government or the Cabinet from the Ultra-Religious Party resigned because the lockdown does cover Rosh
Hashanah and Yom Kippur. What did the religious parties except that they were going to do? I mean, if the situation is catastrophic, even the
Almighty says you do what you have to, to save lives.
LIEBERMANN: His perspective, of course, the ultraorthodox perspective is there is essentially nothing more important than the High Holidays. His
argument and in his statement for resigning, he said this, he said, look, if the numbers were this bad, the lockdown should have been a month ago
such that Israel could have been open and the Jewish holidays could have been open and people could have attended services in synagogue. That was
But it gets to a much bigger issue in the government that there is a whole heck of a lot of blaming everyone else for the mistakes including the
coronavirus czar who hasn't even in his position that long and very few people taking responsibility and saying, we should have done this. We
screwed up. Here was our mistake.
Notably, Netanyahu before he announced or as he announced this lockdown was asked the question, whose failure is this that Israel is returning to a
second general lockdown? His answer was, there are no failures here, only achievements. That answer gives you a sense of the bickering, the arguing
and the refusal to take responsibility here and the reason the country is about to lock down again for weeks, and perhaps more than a month.
QUEST: Oren, you will keep watching there. Thank you. I will let you go back to your duties. We will stay with Elizabeth Cohen because Donald Trump
says that a vaccine could be ready -- will be ready within a matter of weeks.
That's not the view taken by the German government through its Health Minister. The German Health Minister says that no vaccine will be broadly
available until the middle of next year and he says the safety of the German population is the priority.
(BEGIN VIDEO CLIP)
JENS SPAHN, GERMAN HEALTH MINISTER (through translator): We want a safe and effective vaccine and not just to be the first. It is not about being the
first or the fastest. It is about producing a safe and effective vaccine.
Yes, as quickly as possible, but this is not the main priority. As with vaccines, it is vital that there is trust in it.
(END VIDEO CLIP)
QUEST: Elizabeth, Bill Gates said, he believes Pfizer could -- he used the word could -- be first out of the gate to be ready. But my gut feeling is
now that all of the major players here are basically saying, not so fast, it will be ready when it's ready.
COHEN: Right. I think it will be ready when it's ready is really the best way to think about this. Let's think back to January when Dr. Anthony Fauci
at the National Institutes of Health in the United States said 12 to 18 months. That puts us at the very end of this year or the first half of next
year and he is still holding to that timeline.
I have not spoken to a single expert, a single scientist who says that we can have shots in arms by November 3rd, Election Day, in the United States.
As a matter of fact, I spoke with a Federal official who works in Donald Trump's government who said, I have never heard a scientist say we can have
shots in arms by November 3rd.
COHEN: So Donald Trump is effectively saying that, but scientists aren't saying that. So we get to choose who we listen to, scientists or Donald
QUEST: Right, but is there a way that Donald Trump, with the N.I.H. and over the -- or with the collusion -- my word -- of the F.D.A. can finagle a
way to make an announcement before November 3rd?
COHEN: That is the concern. So, you know, these clinical trials are going on now. Data is being gather and the F.D.A. and regulatory authorities in
other countries will look at the data and make a decision.
The experts who I have spoken with are not worried about the data itself. They are not worried about how this is being gathered. They are not worried
about the F.D.A. scientist who is are going to evaluate. These are career scientists who have evaluated vaccine after vaccine over the years.
What they are worried about is that there is going to be a vaccine that the scientists within the F.D.A. are not enthusiastic about, because either it
is not effective or because there is some kind of a safety signal, there is some kind of concern that it might be causing something bad and that then
Donald Trump would swoop in and would try to influence the head of the F.D.A. and say, look, it's good enough, let's just get it out there. That's
QUEST: Elizabeth Cohen, thank you.
As we continue tonight, Delta Airlines says it can avoid involuntary furloughs, in other words forcing people out because of the measures it has
taken so far. And it could be a long, cold winter for the hotel industry once the leisure -- summer leisure travel stops.
Best Western's CEO is with me after the break. It's QUEST MEANS BUSINESS, of course, ever stronger.
QUEST: The numbers from Germany on hotel bookings and occupancies were mildly optimistic during -- or gave cause for optimism during June and July
which saw an increase of around 22 percent from month-to-month. And that was a trend that was followed across Europe. But that, of course, was at
the height the northern hemisphere summer.
Now occupancy rates in hotels are ticking back up. June is down 77 percent from last year, July down only 52 percent from last year. You see the
QUEST: Best Western has more than 4.5 thousand hotels, of course, a hundred different countries and territories. The CEO is David Kong who joins me
from Phoenix, Arizona. He joins me via Skype.
David, it is good to talk to you again on this. You are a vast hospitality company. And I know you have seen better numbers in June, July, and August.
But what happens now as we go into winter -- September, October, and November? How worried are you?
DAVID KONG, CEO, BEST WESTERN: Well, you are right. We saw a pretty decent recovery right after Memorial Weekend. However, that was compromised almost
immediately by the resurgence of the virus, and so the recovery has been, I would say was anemic. The Labor Day weekend was decent.
But now, as we mentioned, as we head into fall, it is again very disconcerting. And the reason is, usually in the fall, the leisure business
is replaced by the business -- corporate travel business. And this year, because of the pandemic, a lot of companies are still closed. They have
still closed offices and they are allowing their employees to travel.
So the corporate segment is going to be very challenged. On top of it is, almost no meetings or convention business to speak of. So the fall is going
to be a very difficult season for us, and winter is traditionally slow for our industry. So the next six months will be very, very challenging for our
QUEST: As you look for assistance, obviously, you have circled your own wagons, raised money, drawn down lines of credit, as I always say, shaken
the sofa and got everything you liked, but what more are you going to need? Who do you -- who are you going to look to, to help you get out of this?
KONG: Yes, so let me just describe the situation. For most of the hotels, they are owned by you know, families and they are small businesses. They
are hard working men and women trying to make an honest living, and so they have limited means. They have really poured their life savings into their
Now with PPP money having run out and loan forbearance coming to an end, they are really in dire straits. They really need assistance and I am very
concerned that many hotels will actually go under. They are not going to be able to make their loan payments.
And this is a very, very distressful situation, and very sad, because as I mentioned these are small businesses and they are the heart and soul of
many communities. And in terms of assistance, I think the Congress really need to stay attuned to the needs here.
It's very sad that they can't work something out for the small businesses and so many of them are suffering so tremendously. It would be wonderful if
they can just work out some compromise to provide some liquidity to these small businesses on how to survive this pandemic, an extension of the PPP
with additional funds would be extremely helpful.
And aside from that, I think the government should also think about how they prevent lawsuits already being filed. There are hundreds of lawsuits
already filed against hotels and these are really frivolous lawsuits, you know, under the guise of the pandemic and people catching it staying at our
And it is a sad situation because these frivolous lawsuits are really filled by unscrupulous lawyers who are hoping for a settlement. There is
really no merit to these lawsuits, but --
QUEST: From your perspective in terms of, if you like, you are the franchise. You could be looking at the -- I won't say wholesale
destruction, but certainly, serious damage being done to your network of properties, offerings at different grades, which has taken years to put
together and that could ultimately put you at a very great disadvantage in the future.
KONG: Well, that is true, but that is happening to all the major hotel companies. There is a reason, you know, you look at the newspaper with
Hilton and Marriott are shutting down hundreds of thousands of jobs. I mean, who is not suffering through this pandemic? You are right, all of
these businesses took many, many years to build and it could all evaporate if we don't get some help from our Congress.
QUEST: Sir, I appreciate you taking time to talk to me. We will check in again as the winter gets closer and moves on to see how thing are going to
get an update from you. I am grateful always for your time.
QUEST: To the airlines now, Delta Airlines is now saying that it doesn't believe it will need to furlough -- force furlough, if you like, any of its
frontline staff because of the various measures that have been taken so far and the accommodating nature of the staff in agreeing to various cuts and
the like after buyouts, shorter hours, reduced working.
So he says, he won't furlough flight attendants, all ground based employees. However, 2,000 pilots are at risk. American Airlines and United
have also pledged mass furloughs and say it is dependent on Federal aid.
Speaking to Julia Chatterley earlier on "First Move," Delta's CEO, Ed Bastian said that he was able to make this promise and this offer because
of the shared support from the staff.
(BEGIN VIDEO CLIP)
ED BASTIAN, CEO, DELTA AIR LINES: 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
and shared sacrifice is going to enable to us eliminate the need for any furloughs of any of our ground staff, any of our flight attendants.
We are still working with our pilots union. We still have a couple of weeks. Hopefully, we can get progress made to save jobs on the pilot rans
as well, but for many, many Delta people, it is great news and I am really appreciative of their sacrifice and shared sacrifice at that.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR: Yes, you are emphasizing the word sacrifice and it is 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 will 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 of weeks 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 am hopeful that we can make
progress to mitigate as many of those furloughs as possible. We still have time.
CHATTERLEY: And can I just assume -- can we assume that this decision, and the news this morning is not dependent on even a clean extension of the
financial aid that the government has provided? It is irrespective of whether you get that or you don't?
BASTIAN: That's correct, Julia. We didn't know where the government -- we still don't know whether 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 is what we call the
They stepped up and they made sacrifices to protect the jobs of so many and I am appreciative of their great work.
(END VIDEO CLIP)
QUEST: Ed Bastion of Delta. There are some of us of course who are also having to travel for work. I crossed the Atlantic 10 days ago. Second time
I have had to do that in the last couple of months.
A call out to the rest of you, the fellow road warriors. "Business Traveler" this month, we are looking at how we are getting about and those
of us who are traveling again, what our experience is, what we are thinking about, the way we are going about it, our thoughts, and impressions.
If you are one of those people who is out and about traveling domestically -- it doesn't have to be by air. It can be by train or by car. If you are
back on the road and would like to join in our discussion -- our online discussion, which we will broadcast, please, send me an e-mail,
We can talk about these things together.
Now Rome Fiumicino Airport has earned the Hygiene Award, five starts from Skytrax with coronavirus precautions. It gave it the world's first COVID-19
five-star rating. It was based on hygiene tests, efficiency, and ease of information. So on and so forth. Only three other airports were rated so
far. Malaga; in Nice, Cote d'Azur, and London Heathrow. All of them earned three stars each which means, just acceptable.
Well, Marco Troncone is the CEO of Rome Airport and joins me now. Congratulations, sir. Congratulations. I mean, it's one of those strange
awards, isn't it? You wish you didn't have to win it, but it's very nice to get it. What are you doing that's different?
MARCO TRONCONE, CEO, ROME AIRPORT: First of all, yes, it's good to have it. It certainly is a very clear and strong recognitions of all the efforts we
put in this incredibly challenging crisis by all the people working in the Rome Airport.
Do how do we do it? Basically, a number of measures. We put in place and a span of actions we embraced in terms of breadth and depth are impressive.
So for simple areas I will point out. Sanitization, certainly. We sanitize the whole airport. We sanitize all terminal surfaces, toilets, check-in
desks, trolleys, security baskets, even the bags arriving from the aircraft stows and on the carousels are sanitized before passengers actually collect
them and we do that up to six times a day.
QUEST: You also do a testing regime which is very impressive. There is huge disagreement on testing, pretesting, post testing, first test, second test,
third test, but you've decided testing is a way forward?
TRONCONE: Absolutely. We have a clear mind on that. There are many -- yes, as you say, many opinions. We have a -- we think -- we believe that the
testing should be rolled out on a massive basis but on departure. So we certainly deploy testing on arrival from a number of countries because the
legislation currently provides for.
But we actually think that the testing on departure allowing for COVID-free flights, if you like are actually the way forward. In that same respect, we
deploy through Fiumicino a new drive-in testing facility in our airport in the long term parking allowing for a new capacity for testing, and that's
an actual fact open to all citizens, but this is actually a further option for our passengers.
QUEST: So one of the fine works -- because I know you are also concerned with the Association of Airports in Italy. If we look at Alitalia's
decision to pull out of Malpensa, this is a fundamental structural change in Italian aviation that won't easily be reversed once COVID sort of
TRONCONE: Well, we have actually considered this as an incredible relevant piece of news because basically, almost 100 percent of the connecting
activity of Alitalia is actually based out of Rome.
What is more important to point out regarding Alitalia is something that would be happening that's from tomorrow. This is a very important piece of
news, I think. We have been working closely with Alitalia and with the local authorities to start 100 percent COVID tested flights that's from
tomorrow on the Rome-Milan route actually so that there would be two flights out of seven in which passengers wishing to fly on a fully clean,
if you like, COVID-free flight, they can do so.
Of course, they will have to get their test and have result negative and they are sure to sit aside tested negative passengers.
TRONCONE: And that's actually --
QUEST: Do you know, sir -- do you know -- firstly, is there a premium on that flight? Secondly, is the load factor on those two flights looking to
be higher than the others?
TRONCONE: Look, there is no premium on those flights. Actually, today the cost of that test is actually not on passengers, so maybe there is a
premium to passengers. Secondly, it is a bit too early now to call about those factors as those flights would be starting just tomorrow. But those
promises to be important results.
It is a very important result, Marco. Absolutely. Absolutely. It is very important, Marco because these are the different innovative and
inspirational ways in which we will get through this in terms of travel.
Marco, I thank you for joining us tonight. Congratulations on the five Skytrax stars. It is appreciated.
When we come back after the break, Apple, the world's most valuable company, it's made some new announcements, and once again, the shift
towards subscriptions. Bundling up. We will bundle after the break.
QUEST: Hello, I'm Richard Quest. There's a lot more QUEST MEANS BUSINESS as we went our merry way through the evening. Tonight, Apple shares give up
all of today's gains as they unveil new products.
The subscription service seems to be core to the future. And as the U.S. takes some tariffs off the table from Canada, I'll talk to Kenya's
candidates to lead the WTO. And Kenya's candidate is one of the frontrunners in the eight-person race to lead the World Trade Organization.
All of that is still to come. Because before we go a moment further, this is CNN, and on this network, the news always comes first.
The Russian opposition leader Alexei Navalny has posted this picture from his hospital bed in Berlin. It shows him sitting up surrounded by family.
He wrote on Instagram that he's now able to breathe on his own. Germany says tests proved Navalny was poisoned by a nerve agent. The spokesman says
he plans to return to Russia.
The city of Louisville, Kentucky has settled a wrongful death lawsuit filed by the family of Breonna Taylor, worth $12 million. Taylor was shot and
killed by police in her home six months ago. None of the three officers involved have yet been charged with a crime.
U.S. Gulf Coast is getting pounded by heavy rains and high winds, as Hurricane Sally is nearing landfall. It's a category one storm, and it's
moving so slowly. Sally could cause historic flooding in Mississippi, Alabama and Florida, as well as life-threatening storm surges.
The World Economic Forum, the West says the current system of funding may mean manufacturing capacity won't meet global demands for COVID-19 vaccine.
The forum's top health official suggests partnerships with the many vaccine developers and manufacturers to broaden availability rather than larger
nations investing to secure their own supply.
And a former Nissan executive accused of helping Carlos Ghosn hide his salary, has pleaded not guilty in a Tokyo court. Greg Kelly was arrested
alongside the ex-chief executive. Ghosn accused of underreporting his pay by tens of millions of dollars. He fled last year to Lebanon and remains a
Apple is the world's most valuable company, $2 trillion in value, but it gave up much of the gains of recent days, as it announced new hardware at
its conference today. So, what did it announce? Well, there was no iPhone. But this is what it did go for. Firstly, the Apple Watch Series 6. Now, the
focus is on health and fitness. It includes a blood oxygen monitor, the new look iPad Air, the fourth generation, it's reminiscent of the iPad Pro.
iPad sales have surged during the pandemic.
And this, I think, is the biggie, Apple One, which bundles together subscription services, Apple Music, TV, Plus, Arcade all under one roof.
Paul La Monica in New York is with me. Here we go, Paul La Monica, bundling.
PAUL LA MONICA, CNN BUSINESS DIGITAL CORRESPONDENT: Yes, it is funny, Richard, how everyone talked in the cable world of, oh, we need a la carte
and no one wants to pay one price for a service that they may not use.
But here we are, with Apple, basically taking the old KBT -- cable T.V. model and announcing this bundle about 29.99 a month for the priciest one.
That will include Apple News as well as the new Apple Fitness program that they are incorporating along with the Apple Watch. So, I think it's going
to probably give Peloton a run for its money. Going to be interesting to see how Peloton reacts.
QUEST: What about T.V.? Has that been shoved in there, too? Or, are they still looking upon that as being an even greater revenue raiser?
LA MONICA: Yes, T.V. is a separate service that you can buy on its own but the Apple One, the highest priced premium bundle that includes the TV+
service, it includes Arcade, includes Music, a limited amount of storage under iCloud, as well. So, it's six services in total if you get the
priciest Apple One bundle.
QUEST: Which I'm sure the La Monica family will have for one and all and maybe, maybe not. Look, Kim Kardashian has been tweeting. She's been
tweeting that she is going to freeze her Facebook and Instagram over hate speech. What's this about?
LA MONICA: Yes, Kim Kardashian West joining many of the others in America and I think around the world that are dismayed with the amount of toxic
hate speech and very rancorous comments that you can find on Facebook and Instagram. And Kim Kardashian is one of the most, you know, influential
people on these social media platforms. She has nearly 190 million Instagram followers. So, if she can gain some traction here and have other
people join her, it might send a message to Mark Zuckerberg.
But of course, to play devil's advocate, what does freezing mean? Does it mean for a day or two, she plays lip service to some of the anti-Facebook
calls, and then she's back on Instagram? And also, Facebook has really weathered all of these criticisms before, amazingly enough, this is a stock
that's only down about 10 to 15 percent from its all-time highs.
It's had a great year. Every time people criticize Zuckerberg, he says the right things temporarily. Facebook goes back to business as usual. And
everyone's still there, posting everything about their lives on Facebook and Instagram.
QUEST: Paul La Monica, very grateful. Thank you very much. Now, the western economies we know that consumer spending has been a real problem. China was
seeing some increases in consumer spending. CEO of Breitling, makers of excellent but expensive watches will be with me after the break.
QUEST: Luxury brands are hoping that China will be an oasis of success in an otherwise very difficult world, as the Chinese economy seems to be
rebounding faster from COVID than anywhere else. Georges Kern is the CEO of Breitling, whose watches are sold in boutiques across China.
Georges joins me from Geneva in Switzerland. It's very difficult days for - - well, I'm -- well, actually, I'm presuming here. And when we look at the luxury brand light Breitling, how do you perform in such difficult times?
GEORGES KERN, CEO, BREITLING (via Skype): Actually, surprisingly good, Richard. Indeed, China is rebounding quickly. And most of the brands have
even three-digit growth in China. But let's not forget that there are over 100 billion in spendings of Chinese tourists this year, which are not spent
in countries like France, or the U.S. or Europe, in general.
And that obviously not the full amount of the spendings are made this year in domestic consumption in China. So, there will be -- bottom line, there
will be losses. But some other countries are doing extremely well in Europe, Germany, for instance, or the U.K. and even France.
QUEST: Georges, how do you manage a luxury item like watches at a time when -- I mean, everybody's being hit. And I know that maybe the wealthy haven't
been hit as much as others because they've kept jobs. They've -- those who've got investments have seen those investments rise if they were clever
during the worst of the pandemic, but the discretionary spend of an expensive watch is still something that has to be borne in mind.
KERN: Absolutely, but what happened is that today, you have high disposable income from many consumers because they have been in the lockdown in many
countries haven't been spending money. They are not traveling in summer, and there is a kind also in a way of catch up or even if you would say
frustration, and therefore actually the sales are quite good in all these countries.
QUEST: Georges and I will be forever grateful to you and for allowing me to go up when you have the sponsorship of the -- of the -- of the Jets, the
Breitling Jet Team. We -- it was a truly exciting time as I'm looking at video of the -- of the whole experience now.
That take off, I think, is (INAUDIBLE) you decided at the end of last year that the sponsorship was not going to continue. And what do you do now?
First of all, where will you put your firepower? Pardon the pun.
KERN: I think it is very important to be close to our customers. We call this inclusive luxury. We want to represent casual luxury, and also
sustainable luxury. Therefore, we work with squad's always talents and assets like (INAUDIBLE) for instance, who support us in our efforts to
fight for instance, plastics in the oceans.
We have now a triathlon squad. We just launched a sports watch. We will always be involved in aviation. In civil aviation, we have big commitments
whereas for instance, Swiss Airlines or any -- and many other airlines.
We support the Swiss Jet Team at the Frecce Tricolori in Italy. So, yes, we will be involved and stay involved in aviation, but try to enlarge, I would
say, our commitments and our involvement in other areas of the society which are also relevant.
QUEST: That's key, isn't it? Because what we're all discovering, it's not just climate change or sustainability or post-COVID. What we're all
discovering is that there has to be something a little more meaning to (INAUDIBLE)
KERN: Absolutely, and I think there is a deep change in consumers' behavior. People, as I said, are more keen in being involved with
companies, which are -- which produce also sustainable products. You need to get these elements of changes into society within your communication.
Obviously, as a luxury company, you cannot change the world, but you can contribute to the solution and not be part of the problem.
QUEST: Good to talk to you, Georges. Please always come back and talk to us again here on QUEST MEANS BUSINESS.
KERN: Thank you very much, Richard. A pleasure.
QUEST: We appreciate you. Thank you. Now, the WTO dispute panel has ruled against United States, and its tariffs against China. After the break,
we'll talk to one of the candidates hoping to be the new director general of the World Trade Organization, the Kenya candidate, in a moment.
QUEST: Welcome back. Today, the WTO ruled against the United States and said that its tariffs on China were illegal, and that the Chinese in theory
could of course retaliate.
However, the U.S. is likely to appeal which will go nowhere, because the appellate body isn't functioning properly, because Washington hasn't
nominated members to it. And there you have the problems of the WTO in one case, to put, the United States not willing to play parts, the WTO in a
mess. Can a new Deputy Director -- can a new Secretary General do something about it?
Amina Mohamed is Kenya's candidate to lead the organization. She is currently the U.N. Deputy Secretary General. She joins me now. And Good to
see you, ma'am. The -- today's announcement by the WTO dispute panel, this is -- this is emblematic of the problem. Comes up with a ruling, nothing
will ever happen with it.
It will be kicked down the road. 10 years down the road, something or nothing will take place and everybody will have forgotten what it's about.
Why are you the right person to put the WTO back on the tracks?
AMINA MOHAMED, CANDIDATE FOR DIRECTOR GENERAL, WTO: Well, Richard, first I have to correct you. I am not the Assistant Secretary General of the U.N.
I'm actually a minister in the government of President Uhuru Kenyatta in Kenya. I'm the Minister for Sports, Culture and Heritage. And yes, I do
want this job, because I know that I can make a contribution. I have been involved in trade most of my professional life, and at the most critical
levels of trade that you can imagine.
For most of my career, I have worked either with the WTO at the WTO, or for the WTO at ministerial conferences. I have seen firsthand as Minister of
Foreign Affairs and international trade of my country, what trade can do for ordinary people, and I know that you, too, have seen that, that it has
created millions of jobs, that it has lifted thousands, millions out of poverty, it has transformed lives and circumstances in both rich and poor
countries. It has stabilized and expanded the global system. And, yes, it has --
QUEST: Oh, but -- Minister?
QUEST: First of all, I take full responsibility for that -- for that shortfall in your title, that's my fault. And -- but on the -- on the WTO,
it's going nowhere. Yes, I know there was an agreement in 2015, which you help broker, but the reality is -- the reality is the last few years have
shown the impotence of the WTO.
MOHAMED: Well, you know, Richard, look, there's absolutely no doubt and what the WTO is in dire need of, reform. It's actually ailing. And it needs
a safe, experienced, trusted pair of hands, that is committed to reform that has delivered concrete results for the multilateral system, not just
on one occasion, not on two, but on many occasions. That's what we need today.
And it will -- with these really serious conversations, it needs massive political will, a clear sense of purpose. If we have those ingredients in
one place, and the director general who's energetic, who's passionate about the multilateral trading system (INAUDIBLE) turn it into a robust, dynamic,
active place once more, the problems will start to dissipate.
QUEST: Why can -- look, you're the frontrunner, you and Ngozi from (INAUDIBLE). You are -- you are the frontrunners in all of this, and the
feeling is that it's highly likely that China will back one of the African candidates. But that's just merely means, you know, it's one continent's
turn versus the other. It doesn't address why you. What will you bring to this table that the other candidates don't bring?
MOHAMED: I will bring my political experience. I will bring my diplomatic skills. I will bring my track record of concrete delivery of results for
the WTO and its membership. And I will bring my negotiating skills, my institutional expertise.
Richard, I'll bring everything that is required to ensure that this system actually begins to work as it should effective, efficient, it should be
fair, it will be equitable, and it will serve all its members, and ensure that benefits of multilateral trade system are across every one of them.
And I've done that --
QUEST: Do you -- do you fear that the whole process is -- do you fear that the whole -- do you feel that the whole process is just going to get bogged
up, because really no decision can be taken properly until after the presidential election, they're going to keep forcing this down?
MOHAMED: I don't -- I don't believe that to be true. I think that there's a process that's in place right now. And I am convinced that that process
will run its course, and that we will have results at the end of the process. And we'll actually have members that always rise to the occasion.
They're wise enough to choose the right candidate for this -- for this job. The WTO needs reforms. It needs reforms in its negotiating pillar. It also
needs reforms in dispute settlement machinery.
You've just mentioned, you know, the case that the panel has ruled on now that, of course, I cannot comment on because the job that I'm looking for
is Director General of the WTO. And the director general does not comment on specific cases.
But the WTO definitely need a consensus builder, a bridge builder, one who can bring members together to engage, find commonalities, settle their
differences, move the process forward, so that it can help recover. It's going to help the globe recover from the effects of the pandemic.
QUEST: Minister, thank you, we wish you luck in your endeavors, and should you be successful, I promise you one or two things, you're always welcome
here on QUEST MEANS BUSINESS, and we will get your title right every time. I can't say fairer than that. Good to see you, as always.
MOHAMED: Richard, I hope that --
QUEST: No. No.
MOHAMED: Richard, if I get selected, I hope that you'll come to Geneva.
QUEST: If I get -- if you get selected, I'll come to Geneva. I think I've just made a bargain there. Look, she said she was a negotiator. She appears
to have bargained me to Geneva. A quick look at the markets. We'll take a break. After the break, a "PROFITABLE MOMENT."
QUEST: Tonight's "PROFITABLE MOMENT." Israel and the plight of what's happening in Israel is somewhat extraordinary. Having had a very good, if
you like, COVID response initially. Then, to falter in the reopening to the point where now, if you look at the number of cases, new cases, 14-day
rolling average per hundred thousand is one of the worst in the world.
And another lockdown starts on Friday over the Jewish holidays. Take at this at the same time as you hear from Best Western on tonight's program,
about the winter in the Northern Hemisphere and the travel problems that are going to happen in the hotels.
Look, I don't want to be depressing. I don't want to be a downer. We all know how bad the situation is. But as we started the Rule of Six in the
U.K., and France has got high numbers and the United States has testing problems. I think it behooves us all to have a dose of reality and not some
Pollyanna view that it's all going to be fine by Christmas.
This is going to last quite some suitable time to go. And that means you and I will continue to meet every evening, right here to chew it all over
and try to make some sense of it all. And that's QUEST MEANS BUSINESS for tonight, I'm Richard Quest in London. Whatever you're up to in the hours
ahead, I hope it's profitable. The bell is ringing. The day is done.