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CNN This Morning
White House Braces for Midterm Losses; Ed Bastian is Interviewed about the Economy, Jobs and the Midterms. Aired 8:30-9a ET
Aired November 07, 2022 - 08:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[08:30:00]
KAITLAN COLLINS, CNN ANCHOR: Is going to join us next to react to what these voters are saying.
DON LEMON, CNN ANCHOR: Van Jones.
COLLINS: Which race he thinks is going to determine how Democrats will do tomorrow night.
LEMON: This studio is not big enough for the both of us, Van Jones.
(COMMERCIAL BREAK)
COLLINS: All right, President Biden has one last rally to go before the midterm elections as he is predicting that Democrats will keep the House and the Senate, but also warning it will be a horrible two years if they don't. That's a quote from President Biden over the weekend. Some Democrats fear that the party's messaging on the economy hasn't hit the mark though.
(BEGIN VIDEO CLIP)
HILARY ROSEN, DEMOCRATIC STRATEGIST: And I think we're going to have a bad night. And, you know, this conversation is not going to have much impact on Tuesday, but I hope it has an impact going forward because when voters tell you over and over and over again that they care mostly about the economy, listen to them. Stop talking about democracy being at stake. Democracy is at stake because people are fighting so much about what elections mean. I mean voters have told us what they wanted to hear, and I don't think Democrats have really delivered this cycle.
(END VIDEO CLIP)
[08:35:03]
COLLINS: Joining us now is CNN political commentator Van Jones.
Is Hilary Rosen right, that Democrats aren't listening to their voters?
LEMON: Hi, Van. Good morning. Thanks - VAN JONES, CNN POLITICAL COMMENTATOR: Good morning. Good morning.
POPPY HARLOW, CNN ANCHOR: Don is our good morning reminder on this program.
JONES: I know. Good (INAUDIBLE).
LEMON: I hate when mommy and daddy are fighting.
You know, Hilary Rosen is basically saying, you know --
JONES: Yes. Well, hey, listen, I think that there was a moment where it felt like, hey, maybe we could talk about abortion and democracy. It turns out that was fool's gold.
When people are sitting on a white hot stove of economic pain, they want to know what you're going to do for them.
I think the reality is, it's not over. People are going to be -- some people are making up their mind right now what to do. If -- what I think Democrats should be saying right now is, if you think it's bad now, wait until the Republicans jack up your prescription drug prices, wait until they hold the government hostage with the debt ceiling and take away Social Security and Medicare for your - for your grandma.
HARLOW: I don't - I - yes.
JONES: If you think it's bad now, it could get worse, and will. And lean into the argument that the - that the actual economic proposals for the Republicans are terrible. We haven't done that yet, but people still got a long time to vote.
LEMON: You -- wait, wait, wait, a long time to vote. It's tomorrow, man.
JONES: That's a long time to vote. So, for the people, if you haven't voted, it's a long time.
HARLOW: I'm like -
LEMON: Do you - do you think it's - do you think that is - there is time to pivot for --
JONES: Yes. Hey, listen, there are people right now who have not made up their mind. And I think that - we've got to - we've got the airwaves.
LEMON: True.
JONES: I'm telling you, if you think it's bad now, wait until your grandma has got to move in with you because Social Security and Medicare has been knocked out. Wait until you prescription drug prices go through the roof. Wait until your kid comes home from school not with a degree but with a baby because she can't get an abortion. You think it's bad now, it can get worse. That's what we should be talking about. LEMON: Too soon for the premortem as David Axelrod said (ph)?
JONES: Yes. Hey, listen, I don't - people have not voted. As - until the last person votes, we should be making the case. And I - and I think we should not have run from the economic argument. I think we should lean into it.
HARLOW: Why didn't they make - I mean why -
JONES: Because folks were scared.
HARLOW: Why didn't they make the case and say, these are the Republican senators who are, you know, wanting to vote every year, every five years on Medicare and Social Security? Why aren't they making the case, why aren't they talking more about infrastructure? I don't get it.
JONES: Because folks were scared of talking about the economy, because people felt like, hey, if you talk about the economy, that's Republican. If you talk about crime, that's Republican. Let's talk about our own stuff.
Now, that doesn't make sense now. But you can't blame people for hoping. But the reality is this, we have -- the Democratic Party has a lot to be proud of when it comes to 10 million jobs, a lot to be proud of when it comes to standing up to China on the Chips Act. There's a lot of -- infrastructure. We didn't lean in yet, but we should lean in today and tomorrow.
HARLOW: Van's like, we've got a long time.
LEMON: Just one more - one more thing before we - we were going to move on to another - but there is - so how do you balance that because there is truth about democracy. There's truth about abortion. There's a -
JONES: Yes.
LEMON: Those are things that Democrats should be speaking of.
JONES: I agree. I agree with that.
LEMON: You have to - what's the balance here?
JONES: And I'm tired of people being mad at Obama and Biden for speaking about democracy. When you're the head of state, you've got to tell people what they want to hear, and also what they need to hear. You can't be head of state or former president and not talk about (INAUDIBLE). That doesn't make any sense.
LEMON: One second. Let me just interrupt you a bit. If you look at what John Avlon just put up on the screen, you look at the election deniers around the country who could be - who could win -
JONES: It's a threat.
LEMON: That is democracy on the ballot.
Sorry, go on.
JONES: That's the threat. And I think -- here's the thing, you can do both. And I think you should do both. I don't think it's right to tell the president of the United States not to defend democracy or to tell somebody like Obama, who's spent his whole life fighting for it, to shut up about it. That's not right. You've got to just do both. You go with both barrels. We went with one barrel.
COLLINS: So, one thing that one Democrat wants President Biden not to talk about is a comment he made that kind of flew under the radar in California about coal plants.
JONES: Oh, yes. That one.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: We're going to be shutting these plants down all across America and having wind and solar.
(END VIDEO CLIP)
COLLINS: Joe Manchin did not like that. He sent out a statement blasting Biden, notably in days before the midterm elections, and said that comment was, quote, not only outrageous and divorced from reality, it ignores the severe economic pain that the American people are feeling because of rising energy costs. The White House put out a statement saying, you know, if someone was basically offended by this, we didn't - we didn't mean that. What do you make of that?
LEMON: Unforced error?
JONES: Yes, unforced error. I don't know why Biden said that. And the thing that people aren't thinking about is, the kind of coal that comes out of West Virginia is metallurgical coal. In other words, it's a coal that melts steel. What do you need steel for? The solar panel arrays. What do you need steel for? Wind turbines. What do you need steel for? Electric cars.
So, Joe Manchin's coal is coal you need for the green revolution. Say that and don't say dumb stuff.
LEMON: So then why aren't you out there - then who is advising people?
JONES: I don't know.
LEMON: Van Jones, perhaps you should go back in your former role as a Democratic adviser. They need you.
JONES: Hey, listen, I'll answer the call.
But, listen, there - we - I just hate when you do dumb stuff at the end, but I love this president.
HARLOW: All right. JONES: I love what he's done that's smart. And he has done smart stuff. We should brag on him for the smart stuff Biden's done.
HARLOW: Right.
LEMON: Yes.
HARLOW: Thank you.
COLLINS: It's fascinating to see a statement like that coming from Manchin just days before the election.
HARLOW: Totally.
LEMON: Yes.
COLLINS: I was told that the White House got a heads up that that was coming.
LEMON: Yes.
COLLINS: Van Jones -
JONES: Yes.
COLLINS: As always, thank you for your insights.
HARLOW: Thanks, Van.
LEMON: Thank you, Van.
JONES: Good to see you.
LEMON: Good to see you. Get your rest. Are you ready for this?
[08:40:00]
JONES: I'm ready.
LEMON: All right.
JONES: I'm ready.
HARLOW: All right, coming up, companies across America are laying off workers as economic warnings get louder. What about the airline industry? How are they navigating it? Guess who is here in set - on set, in studio with us? Ed Bastian, the CEO of Delta.
LEMON: I've got to talk about my miler status.
HARLOW: This is not about you.
(COMMERCIAL BREAK)
HARLOW: All right, more industries across the nation laying off workers as economic warnings get a lot louder. In just the past few days, look at those companies, tech companies including Twitter and Amazon. Some are just talking, I want to be clear, about hiring freezes, like Amazon and Microsoft. Others laying off a lot of workers.
What about the airline industry, so hard hit during the pandemic, has really come back. So, let's talk about this and a lot more with the CEO of Delta Air Lines, Ed Bastian.
Ed, good to have you.
ED BASTIAN, CEO, DELTA AIR LINES: Poppy, good to be with you.
HARLOW: Thank you for coming.
BASTIAN: Congratulations on the new - the new show. This is awesome.
LEMON: Thank you very much.
COLLINS: Thanks.
HARLOW: We're having a good time.
LEMON: We are really are glad that you're here this morning.
HARLOW: Yes, we're really - really glad you're on set.
BASTIAN: Thank you. I'm glad I'm here too.
HARLOW: So, there are so many scary signs right now.
[08:45:01]
Lay-offs, hiring freezes. What about Delta and what do you think more broadly about this economy?
BASTIAN: You know, the economy is in an unusual place. There are certain technology companies that are having some challenges. We're just the opposite. We're hiring and we're still hiring a lot. We've hired 25,000 people since the start of last year, and we're continuing to hire because the demand for the service economy has been suppressed the last couple of years. People can't go places. You know, they have stuff all over the place and they don't want any more stuff, which I think is hurting certain retailers. But if you're in the experience sector, if you're in travel, hospitality, restaurants, entertainment, it's off the charts.
LEMON: Are you having a hard time finding people?
BASTIAN: We're really not, Don. The value of running a great company with a great brand, people want to come. And they realize there's -- this is like a once-in-a-generation opportunity to get inside a high - because we usually only hire 3,000 or 4,000 people a year. And so hiring 25,000 is unreal.
HARLOW: So does that mean - I mean so many big name CEOs, especially ones who are pretty good about predicting where this economy is going, are really worried. I mean Jamie Dimon, JP Morgan, just a few weeks ago said it's likely the U.S. will fall into recession in the next six to nine months. Do you agree with him?
BASTIAN: It could. I think there's likely that we're going to see a soft patch. Whether it's hard landing or a soft landing, I don't know. But what we're seeing is we're in a counter cyclical - you know, because we've had a recession the last two years. I mean our business was cut off at the knees. And so if you're in the service sector, you're actually looking to grow and continue to grow. Delta, we expect to grow probably about 15 percent between now and next year.
LEMON: Wow.
COLLINS: And what is the question when it comes to what that recession could potentially look like? Because this is a conversation, you know, we have with White House officials all the time.
HARLOW: Yes.
COLLINS: You know, they say, we're not preparing for one, we're not having meetings, acting like there's going to be one, but it makes a difference what kind of recession it could potentially be. So, how does that affect your planning?
BASTIAN: Well, again, our planning is probably a little bit, again, recession-proof because we're -- we're down about 15 percent from where we should be already. So, we're not having that. Companies, business travel is usually where we get impacted the most. Business travel is already down from historical levels, so there's really nothing to cut. In fact, businesses need to be out with their customers. As I tell CEOs, if you're not out with your customers right now because everybody's traveling, somebody else is.
HARLOW: So - so -
BASTIAN: And so there's a - there - you know, there's countercyclical effects here that are happening. It's going to be interesting to watch.
HARLOW: You are, though, dealing with potentially down the road a pilot strike. You've got 96 percent of your pilots voted and 99 percent of those said that they would strike if you guys can't work out the contract negotiations, OK. They watch you guys making a lot of money after the pandemic and they say you've rebounded, you're stronger than ever. You know, and their -- their quote, the ball is in management's court to get this deal done.
Should people worry about a strike?
BASTIAN: Absolutely not. First of all, it would be illegal to have a strike anytime soon.
HARLOW: Because there's a cooling off, mediation period --
BASTIAN: There's - there's -- we're making great progress at the table. This is a tactic that all the unions, the airline unions, have gone though. The pilots at the other properties have done the same thing. It's really trying to drive some attention at the issue. We're already at the table trying to work out a deal.
The Delta pilots are the best paid in the industry. They are -- and they deserve to be such. They will be the best paid coming through this. So, I think this is a normal step.
But there's quite a few stages that have to go before a federal mediator and then a presidential emergency board would approve the strike. So, we're nowhere close. And, by the way, they don't want a strike. We don't want a strike. It's not going to happen.
LEMON: Are you the largest employer in Georgia?
HARLOW: Georgia, yes.
BASTIAN: I think we are.
LEMON: So - and our company is based in Georgia. So, as you know, we use Delta a lot. And being on your airline, I notice that you have a very diverse workforce.
BASTIAN: Yes.
LEMON: Georgia's been the center of politics for the last couple of years. You have not been afraid to speak out on issues as it relates to -- and standing up for your employees.
How do you feel about CEOs doing that about - because there are - there is a belief that CEOs should not weigh in on this and it should be sort of non-partisan. But do you think it's important to stand up for your diverse workforce? (INAUDIBLE).
BASTIAN: I think when you see something happening in the world that runs counter to your values, runs against really the interest of your business and your people, you have to ask yourself the question, how do you engage? And sometimes you have to speak up. Candidly, Don, we've all been trained growing up in this business not to speak up. You don't want to see your face on the news or whatnot. And you want all -- everybody to love you, not just your customers. You want to try to be a good - a good citizen. But there's sometimes where you have to speak and -
LEMON: How do you feel about the criticism to that? Because you - you know, it's got - it's got to be tough for you. And does it affect your business? Do you see an impact?
BASTIAN: I would say that the times I've spoken, and there's been a couple times.
HARLOW: Well, you took on the NRA. You spoke out on the Georgia voting bill.
BASTIAN: Uh-huh. We have not seen a significant impact. In fact, the business continues. I think people realize that a company that has purpose and has values out, people want to stand by that company. What I'll tell you, though, at the same time is that if you're not
always talking about it -- I always try to be talking about the purpose and the values of why we do what we do.
[08:50:04]
If you don't, and then you just decide to speak, that's when you probably rightfully are criticized.
LEMON: Do you think that's part of the reason that you are having success? I mean, obviously, the people are spending money. Even the possibility of a recession. People are still spending money on travel.
BASTIAN: Yes.
LEMON: Do you think it's part of the reason for your success, because you stand up for the values of your employees and what you believe in?
BASTIAN: I think people love the brand. They primarily love our people. And it's the people that make the difference in our business, in the airline business. It's a service business.
And so we -
LEMON: So what's the lesson or other people? You say people love your brand. And if you were not true to your brand, we've seen people and companies who are not true to their brand and they lose their loyal customers, they lose their fans.
BASTIAN: Yes. Yes.
LEMON: Their fan base.
BASTIAN: Yes. Yes. And we're -- and we carry 200 million people a year. So, we have a large international fan base, if you think about it. But if you're out there and you're talking and speaking to your customers and your people about what you are for, rather than what you are against, when something happens, you know, you get into trouble when people are surprised. They say, where did that come from? That's when trouble hits. But if there's something that's consistent with what you talk about -- so you're always trying to play offense in this area, always talk about what you're for so that people won't be surprised about what you -- who you are when you have to speak.
COLLINS: And, of course, all this factors into your day to day decisions. I know one question that people have had about the industry is, when do you think it's going to be back to 2019 flight levels, and does that factor into Delta adding more flights going through Atlanta, because one big concern that people have had is affordability because prices have skyrocketed.
LEMON: Yes.
HARLOW: It's expensive.
LEMON: Yes. COLLINS: And it's really hard -- people have to travel. They really have no option but to do airline travel. But it's hard to afford it right now for a lot of people.
LEMON: Yes, I mean look at - look at -- the numbers are up on the screen now.
COLLINS: Yes.
BASTIAN: There are three things. First of all, the demand is already back. The raw demand. You know, the interest in travel. And you can see that. Everyone felt once the pandemic subsided they needed to go someplace. And, by the way, whatever price it took, they were - they were just - they needed to get out. So, the demand is driving the principle factor in pricing.
Fuel prices. Our fuel prices are up 50 percent above where they were in 2019.
LEMON: Oh, wow.
BASTIAN: That's our single biggest cost. It's not even people, it's fuel prices. That also has to be covered in the pricing.
And the third thing is that we're not all the way back yet. So, we're going to grow 15 percent between now and next summer and a lot of that growth is going into Atlanta. And so that's going to take some of the pressure off pricing to bring all the routes back (INAUDIBLE). But we don't want to grow until we have the resources capable of handling that high demand.
HARLOW: It -- and part of the reason flights are really expensive also is this, there's less capacity, right, but that's very frustrating when you're on planes and you feel like they're very full and it costs a lot.
This summer, I just want to reflect, if you could, on this summer, the flight woes, what Americans went through on travel, the back and forth between you guys and the Biden administration, Secretary Buttigieg namely. What's the lesson from all of that and are we past it for good do you think?
BASTIAN: I'm not sure there's a real lesson. I mean you -- we're overcoming a pandemic.
LEMON: Right.
HARLOW: Yes.
BASTIAN: We started the year with omicron, right, the first couple months of the year.
LEMON: Yes.
HARLOW: Yes. BASTIAN: And then once omicron seemed like it wasn't going to be a -- and we were only 50 percent full, by the way, at that time. We went from 50 percent full to 100 percent full overnight.
HARLOW: You kept your middle seats empty I think longer than anyone.
BASTIAN: We did. We did.
HARLOW: You hired a chief medical officer.
BASTIAN: Yes.
LEMON: But you're having the same -- it's the same issue for you as for oil companies.
BASTIAN: Yes.
LEMON: You see oil companies - Americans see oil companies - the prices of gas going up and they see oil companies making record profits. They see airline prices going up but yet they see you on here saying, we're doing well.
BASTIAN: Yes.
LEMON: So -
BASTIAN: We're doing well on revenue. We're not - we're not anywhere close to record profits, I just want to be clear on that. We're - we're down meaningfully in terms of profits because we don't have our full demand set back in terms of the utilization of the aircraft and fuel prices are really, really high.
LEMON: So talk about possible inflation. Is that hurting you at all? Do you think it - do you think it hurts or helps?
BASTIAN: On the - on the margin. On the margin. The thing with inflation is also -- there's currency effects. And so the other thing we're seeing is we're seeing more demand to Europe than ever before.
LEMON: Did I say inflation? I meant possible recession. Sorry, go on. But the possibility of a recession, is that - you know, is that --
BASTIAN: Well, I think -- again, I think it's more of a business traveler that would be mindful of that, but business travel is already down. The other thing with the recession is that typically when recessions hit, oil prices start to subside.
LEMON: Yes.
HARLOW: Right.
BASTIAN: And so we're a bit hedged for that.
COLLINS: Quickly, can we ask you about seat sizes.
HARLOW: Kaitlan wants to know. COLLINS: This is a big - this is a big thing that people do care about
because they feel like the seats are getting smaller.
BASTIAN: Sure. They should.
COLLINS: I know you said Delta has not made their seats smaller.
BASTIAN: Right.
COLLINS: The FAA, you believe this is ultimately up to them, you know, should they regulate the seat sizes though?
BASTIAN: Well, the FAA already tests seat sizes and they test, you know, compliance. Anytime you change anything on aircraft, the FAA has to approve it.
COLLINS: Right.
BASTIAN: Delta hasn't changed seat sizes in years. In fact, the only changes we've made is to make them bigger, extra room. Every plane we're taking today, and this year we'll take probably 75 planes, we're having one-third of our planes with extra-large seating, wider seating, Delta One, Comfort Plus, Premium - so that's where the economy is going.
[08:55:08]
If there was a lesson, I -- you're talking about lessons from the pandemic.
HARLOW: Yes. Yes.
BASTIAN: One of the real lessons of people value their experience on our brand.
LEMON: Yes.
BASTIAN: And so they're willing - and, by the way, they're willing to pay a premium for that.
HARLOW: Did you think you'd be able to get out of -- when you were leading during Covid, I know there were days when you were wondering what is going to happen here. Did you think you'd be sitting here and the company would be where it is today after all that?
BASTIAN: I was confident we'd get there. We came back a little sooner than I thought.
HARLOW: Ed Bastian -
LEMON: I've got to tell you that -
HARLOW: We've got - we've got to go -
LEMON: That - that - yes, we've got to go because Poppy - and, well, Kaitlan mostly, I know you're a big Georgia fan. BASTIAN: I am.
LEMON: So, thank you, Ed Bastian. We appreciate you joining us.
HARLOW: Thank you, Ed, very much.
COLLINS: Thanks so much.
LEMON: But this is why Kaitlan doesn't want to talk about what's happened. She keeps asking the CEO questions. So, sorry, Kaitlan, it is time to gloat. My LSU Tigers beat Kaitlan's Alabama Crimson Tide this weekend in an overtime thriller.
Kaitlan, the jersey is waiting for you. LSU jersey.
COLLINS: I won't be wearing a jersey. If you need to go to commercial, feel free.
HARLOW: Thank you.
(COMMERCIAL BREAK)
[09:00:12]
HARLOW: I'm just staying out of this.
LEMON: Kaitlan --
COLLINS: Sorry, I'm reading Twitter.
LEMON: Here you go, Kaitlan. What happened this weekend? Do you - which jersey - do you want to wear the jersey or the hat?
COLLINS: You know, it says a lot about how you act when you win.
LEMON: (INAUDIBLE) - I did not gloat.
COLLINS: Gloating. Gloating.
LEMON: I did not gloat when we beat --
COLLINS: Don called me within 30 seconds of the end of the game.
LEMON: Did I gloat?
COLLINS: Yes, it was a little bit of gloating.
LEMON: Yes.
HARLOW: He sent a video, too.
COLLINS: You know what - you know what, the play calling was not great. You know, it was a struggle for Alabama. And I hated --
LEMON: Yes, you guys had referees on your team. You had extra men on the field.
COLLINS: (INAUDIBLE).
LEMON: Thanks for watching. Congratulations. Go, Tigers.
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