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First Move with Julia Chatterley
EU Considers ways to Ramp Up Military Support to Moldova; Police Break Down Apartment Door During COVID Crackdown; Lindner: Ukraine Fights for our Common Values; U.S. Awards AeroVironment $19.7M for Ukraine Drones; Maersk withdraws from Russia over Ukraine Invasion; Volatile Trading on Wall Street as Fed Gets Set to Raise Rates. Aired 9-10a ET
Aired May 04, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: You're watching CNN, I'm Julia Chatterley in New York. Putin has a price to pay a high price to pay for
brutal aggression in the words of European Commission President Ursula Von Der Leyen as she announced a sixth round of sanctions against Russia.
The EU is now proposing a ban on Russian oil imports and the removal of Russia's biggest bank from the Swift payment network. The package of
measures must be approved by all EU member States. We'll have more on this shortly.
Meanwhile, in Ukraine, heavy battles are being fought at the Azovstal Steel Plant according to Mariupol's Mayor he says contact has been lost with the
last Ukrainian defenders there. Hundreds of civilians remain trapped although officials say more evacuations are underway.
A convoy of buses are currently making the 140 mile journey northwest to Zaporizhzhia in efforts led by the UN and the Red Cross. Officials say
private vehicles will be able to join them. And new video shows Ukrainian forces targeting Russian military positions on Snake Island using a drone.
The strikes appear to land between a building and a communications tower. Another location appears to have housed explosives. It's unclear exactly
when the attacks took place. Though CNN has geo located and verified the video as authentic.
Later in the show, we'll hear from the CEO of Drone Manufacturer AeroVironment on how technology is changing the face of war? For now, let's
talk EU sanctions package six with Clare Sebastian. Clare, the EU Commission President pulling no punches. Just take a listen.
(BEGIN VIDEO CLIP)
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: This sends another important signal to all perpetrators of the Kremlin. We know who you are?
We will hold you accountable. You're not getting away with this. Putin must pay a price a high price for his brutal aggression.
(END VIDEO CLIP)
CHATTERLEY: Clare, we have to be specific. This is an oil embargo. It's not gas, which of course has the greater power but it is still something very
important. The question is, are all nations on board?
SEBASTIAN: No is the answer to that, Julia? Yes, this is one of if not the most powerful weapon that the EU is set to deploy against Russia in its
sort of economic war that it's been waging. But they do need unanimity in the council discussions are going on right now.
And we know that, for example, Hungary has said all along that they do not want to bring in an embargo on Russian energy. They said they just cannot
do without it so reliant are they on this? And we have a somewhat ominous tweet from the government spokesperson today Zoltan Kovacs has said we
don't see any plans or guarantees on.
We don't see any plans or guarantees on how it transitioned could be managed based on the current proposals he said, and how Hungary's energy
security would be guaranteed. So despite reports, you know that perhaps there could be an exemption for Hungary and possibly also Slovakia which is
very reliant on Russian energy, perhaps an extension of this phased out embargo.
He seems to suggest that they are not currently seeing anything that would be satisfactory to them in these proposals. We won't know of course, until
we see the final tax until perhaps the EU Council adopts this which will come after anonymity. So it's still not clear as of yet, but it's not
looking like Unity right now.
CHATTERLEY: And the ambassador's meeting today as well. So we'll watch to see what they say. The EU is also, I saw looking at ways perhaps to provide
military to sport to neighboring Moldova as well, clearly. I'm sure they're going to want to be very careful to make this look like defense, not
offense, but an interesting move nonetheless.
SEBASTIAN: Yes, they've been careful what they say here. This came from EU Council President Charles Michel, who met with Moldova's President today,
he said that some decisions have already been taken to enhance support in the fields of the likes of logistics and cyber defense, but he wouldn't go
any further than that.
He said, at risk of escalation. The context here of you can see is that Moldova obviously borders Ukraine, and the government in Moldova is pro EU,
but there is a pro-Russian separatist territory called Transnistria which borders Ukraine there have been some explosions in that territory recently,
which sort of both side has blamed on each other.
But there was a comment cited by state media from a Russian General, recently you said that control of the southern border of Ukraine could give
them access to Transnistria. And that has raised concerns Julia that Russia may open up another front in this conflict. So clearly something that the
EU wants to try to sort of buffer Moldova against.
CHATTERLEY: Yes, and this time acting early perhaps rather than late. Clare Sebastian thank you for that! Now back to that breaking news.
[09:05:00]
CHATTERLEY: This morning Mariupol's Mayor says heavy battles have broken out at the Azovstal Steel Plant and contact has been lost with Ukrainian
defenders. Scott McLean is in Lviv and joins us with the latest. Scott, what do we know about the situation there? Clearly, it's at the same time
as those evacuation attempts continue.
SCOTT MCLEAN, CNN CORRESPONDENT: Yes, exactly. Julia, so first on the evacuation tents, a local official said earlier today that there are some
convoys moving out of the city. They'll make several stops in route to Zaporizhzhia what was not made clear, though, is whether or not anyone on
those convoys is coming from the Azovstal Steel Plant?
People were evacuated from there over the weekend, more than 100 people they just arrived in Zaporizhzhia yesterday but at this stage, there is no
indication that there's going to be a second round of evacuations. And there are still perhaps hundreds of people trapped inside of that steel
plant.
The Mayor of Mariupol, saying just today, Julia that there are 30 children in there and making the point that people continue to die, including two
young women, we're not entirely certain of their ages, but who were killed earlier this week in some of the strikes on that site.
And so even though people are underground, given the level of bombardment, given the fact that there's rubble and parts of it that are caving in, it
is anything but safe at this stage of the game. And the mayor said that things are only getting worse.
He says that the Russians are now hitting it with artillery tanks, air bombing as well. And they've even moved a ship closer to the plant, which
is on the coast of Mariupol. And now they're hitting it using that ship as well. So the mayor says that he has lost contact with the fighters on the
ground. That is certainly not a good sign for those evacuation corridors right now Julia.
CHATTERLEY: No one will presume they're busy as well in defense. Scott, very quickly, I want to ask you about your experience being in Lviv last
night there were explosions there too.
MCLEAN: Yes, that's right. So these came just before dark, I heard three explosions myself. And the sound was absolutely unmistakable. We're in the
center of the city. It turns out the closest one was about four miles here, six kilometers roughly. From this area, there were strikes in the east, and
the south and the west. And shortly after those, those explosions were heard; you could hear the dark smoke rising on the horizon in several
different directions.
It turns out that these were electrical power substations, the one that we were at was right next to a set of rail tracks, the rail tracks themselves
that appears we're not actually damaged. But the power was lost to large swaths of the city according to the mayor, who says that it has now all
been restored.
There were also briefly some issues with water because that those power stations supplied power to the pumping stations which provide the water for
the city, the city before the war had already built a backup generator for those so the water was turned on pretty quickly.
The power now also on as well, it appears at least according to the Pentagon Spokesperson that the Russians are trying their best to hit rail
infrastructure to try to cut off perhaps movement east west of weapons. The Moscow made it clear again today that any shipment of weapons that is
moving throughout Ukraine, even if it is from NATO that is fair game for airstrikes. And so it is it is very likely we'll see these kinds of strikes
again, Julia.
CHATTERLEY: Yes. And it's a reminder that wherever you are nowhere is truly safe, particularly when we're talking about key infrastructure. Scott,
quickly, some extraordinary comments from Pope Francis in an Italian newspaper interview, telling the Head of the Russian Orthodox Church not to
be Putin's altar, boy, what do we make of this?
MCLEAN: There's a lot coming out of this interview Julia. Yesterday, the Pope was talking about May 9th in his conversations with Viktor Orban of
Hungary and the fact that he said that maybe the war would be over by May 9th.
Now we have these revelations. And the Pope's really striking criticism of the Leader of the Russian Orthodox Church who has found all kinds of
reasons to justify this war, essentially saying that it is an extension of the culture clash between Russia and the very liberal west as Russia would
put it. And so the Pope said that he had a conversation with him for about 40 minutes for the first 20 minutes he said that he listened while he was
telling him all these things and the reasons for justifying the war.
And he said bluntly, look, we don't work for the state, we work for Jesus. And so making all of these justifications on behalf of Putin is not what we
ought to be doing and that he shouldn't be Putin's altar boy, meaning that the head of the church obviously should retain the power to make moral
judgments on things not Vladimir Putin Julia.
CHATTERLEY: Yes, all sorts of implications there and I will say I believe in the latest EU sanctions package number six.
[09:10:00]
CHATTERLEY: The Head of the Russian Orthodox Church may be included in those sanctions and targeted specifically. So we'll wait for more details
on that. Scott great to have you with us thank you, Scott McLean there live in Lviv.
Now the UN says over 5.6 million people have fled Ukraine since the Russian invasion began. It expects that number to increase to more than 8 million
people. The number of people displaced within the country even greater. Many who refuse to leave have already lost everything, including their
homes as Sam Kiley reports.
(BEGIN VIDEOTAPE)
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): Since Russian rockets destroyed her home, killed her brother, all she has left is
her mother and her life.
LUDMILLA, INJURED IN RUSSIAN ARTILLERY ATTACK: All at once. Grad started falling one by one. They were explosions everywhere also the kitchen in the
house the windows in the room. We were standing there. My brother was making the sign of the cross and I'm shouting. I turned away from him to
look at the house. And then another rocket hit.
And I was trapped under rubble. I can't see my brother anymore. I fell and I don't even know how I woke up and started pulling myself out. I'm all
scratched and battered I yelled - but he was gone.
KILEY (voice over): Ludmilla's home was flattened - during the battle for - which is now in Russian hands. Putin's forces have been driving southeast
along the Donetsk River and south from Izyum. Russia's stated aim is to capture all of the Donbas and that includes Luhansk and Donetsk provinces.
The Governor of Luhansk says that Ukraine can hold the Russians back for now; He says we need powerful long range artillery. And that unfortunately
is not here yet. And it could completely change the whole war. Without the heavy weapons already promised by the U.S. and other Western allies, he
says the Russians will destroy everything with artillery and mortars.
They destroy with aircraft that use helicopters. They're just wiping everything off the face of the earth, so there's nothing left to hang on
to. For Ukraine, this is an existential battle.
Reinforcements are being rushed to the front lines. But there's no sign of the heavy weapons needed to block a Russian advance, much less reverse it.
The doctor says Ludmilla will be moved west for more treatment, but her fate and that of a 96-year-old mother is unknown.
We simply cannot physically handle so many wounded with such severe injuries he says. This elderly woman a victim of Russian shelling that
morning joins the ward. And more than 13 million other Ukrainians have fled their homes to escape Ludmilla's fate.
LUDMILLA: I was brought here naked. I have nothing at all. No money, no documents nothing.
KILEY (voice over): Yet a very survival is a small victory over Putin because he has been neither beggared nor beaten. Sam Kiley, CNN.
(END VIDEOTAPE)
CHATTERLEY: OK, let me bring you up to speed with some of the other stories making headlines around the world. A disturbing new video from Shanghai
fueling accusations of police mismanagement and heavy handedness amid China's COVID crisis police has been barging into an apartment and removing
two women who officials claim it tested positive for the disease. The women were sent to a quarantine center they said their tests were inconclusive.
Selina Wang joins us now from Kunming, China where she herself is in quarantine. Selina I'm counting for you. It's day 12 though I know you
don't need reminding. You know when you look at videos like that it's no surprise they're being accused of heavy handedness particularly as we start
to see COVID numbers coming down it seems according to their data.
SELINA WANG, CNN CORRESPONDENT: Well, what that video really points to as so many conversations I've had with people in Shanghai, which is that
they're not so much scared of getting COVID but what's going to happen to them if they test positive because all positive COVID cases in Shanghai
with no exception are sent to government quarantine facilities and many of them are in poor unsanitary conditions with many, many beds crammed
together not exactly a place where you want to go to recover for COVID.
So in that video, you saw those police literally kicking down breaking this residence door into pieces barging in to say that she needed to be
transferred to this quarantine facility.
[09:15:00]
WANG: And that she needed to wait for that result to come back because of course she doesn't want to get sent to that quarantine facility. Now, we
don't know Julia, what ultimately ended up happening to this woman but no surprise, it's fueling a lot of frustration.
And residents really see it as an example of the dysfunction of the lockdown in Shanghai many have been locked in their homes for more than a
month now. And as the days drag on, anxiety grows, and all of this as Beijing continuing to ramp up restrictions in the capital, they're
effectively shutting down the city's biggest district - which is home to a lot of key business and diplomatic areas.
They're suspending transportation there. They're telling people to work from home. This is as the capital has also indefinitely extended the
closure of large entertainment venues, as well as banning in restaurant dining. So Beijing trying to desperately avoid the failures of that lock
down in Shanghai.
CHATTERLEY: It's a vital point Selina well-made it's not COVID anymore. It's what happens afterwards in the handling of it. Selina Wang, thank you,
as always. South Korea and Japan say North Korea has fired a ballistic missile off its eastern coast it flew around 500 kilometers before falling
into the sea. This is Pyongyang's first launch since Kim Jong-Un pledged to further develop its nuclear arms. CNN's Will Ripley joins us now from
Taipei? Will, it may be the first since then but it's the 14th launch I believe this year? They well and truly have ramped up the number of
launches that they're carrying out?
WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think it'll only be a matter of time Julia, before we get to 14. This is actually technically
the 13th weapon test of the year but still, that number is more than 2020 and 2021 combined. There was also a failed test back in March as well a
missile that they believe they tried to launch but it's blew up shortly after takeoff.
This one that was not the case you mentioned how far it traveled. 470 kilometers or so landing in the waters outside of Japan's exclusive
economic zone at a maximum altitude Julia of more than 780 kilometers that's, you know, basically almost 500 miles above the earth which puts
this missile potentially in ICBM Intercontinental Ballistic Missile range.
Now, we won't know for sure what kind of missile North Korea claims they launch until their state media publishes a news report and photos that
usually happens about 24 hours after the launch. So we'll certainly be looking in the early evening hour's Eastern Time early morning hours here
in the region to see if the - newspaper publishes any images of this and gives more details.
But if this isn't ICBM, this, of course, would be yet another major provocation for North Korea. They tested an ICBM back on March the 24th. It
was the first test of a weapon that big in more than four years Julia, the question, why is Kim doing this? Why is he vowing to grow his nuclear
arsenal as he plotting something?
Well, every indication I've had talking to analysts and also my trips to North Korea is that no, these weapons are for deterrence to try to prevent
the United States from moving in, much like Russia has moved into Ukraine. Ironically, North Korea believes that the United States could do that if
they gave up their nukes and so they say these weapons are for deterrence, but that they're not afraid Julia to use them if they feel provoked.
CHATTERLEY: And that's the challenge. Will, good job. I've got you tracking this accurately for me. Thank you for that. Will Ripley in Taipei there
great to have you with us. OK, across to the United States now. Tempers on both sides of the political aisle continue to flare over a Supreme Court
draft opinion that was leaked late Monday.
It shows the court may be poised to overturn law that protects abortion rights nationwide. Some critics say striking down Roe versus Wade could
impact other civil rights laws. Others argue the breach could damage the courts integrity.
Johnny Depp's ex-wife Amber Heard is expected to testify soon in a courtroom in Virginia. Depp is suing her for $50 million, saying she
falsely accused him of committing domestic violence. Hurt is countersuing. The judge denied her motion to dismiss the case yesterday after Depp's
attorneys rested their case.
And straight ahead weapons, weapons and more weapons. That was what Ukraine wanted from the West Germany's Finance Minister on Berlin's response. And
drones are such a game changer for Ukraine that people are devoting songs to them and naming pets after them. I speak to the CEO behind the
switchblade kamikaze drone that's coming up stay with CNN.
(COMMERCIAL BREAK)
[09:20:00]
CHATTERLEY: Welcome back! As the EU unveils more sanctions on Russia, including an oil embargo, the focus now shifts to May 9th and what Putin
may decide to do to mark Victory Day adding pressure on the west to provide more vital weaponry? That of course has been a challenge for Germany.
Earlier this week in my exclusive interview with Finance Minister Christian Lindner I asked him if Berlin's relative restraint was endangering the
security of Ukraine, Germany and NATO?
(BEGIN VIDEOTAPE)
CHRISTIAN LINDNER, GERMAN FINANCE MINISTER: We don't feel pushed by our allies and our partners. I don't feel any feeling of being pushed, frankly.
We are cooperating very closely with our partners in NATO and G7 and European Union. Germany is doing what others are doing, not less, not more
at the moment because we need this very close cooperation because we are threatened by a nuclear power that Russia still is.
On the other end, we can supply Ukraine with military equipment by using the equipment from Former Soviet Union origins in Europe and we are
strengthening these partnerships. And well a key priority for us is to stay together with the U.S. with our NATO allies and we do what they do. We seek
for close cooperation in supporting Ukraine when it comes to military supplies and economically.
And we share the perspective that Ukraine has to win this war because they are fighting not only for their lives to choose their way in the future.
They are fighting for our common values as liberal democracies.
CHATTERLEY: What does it mean if they don't Minister if Ukraine doesn't win this war?
LINDNER: They will win this war and Putin won't win this war. Putin achieved only one thing. He brought the liberal democracies closer together
in the G7 in NATO and in European Union.
[09:25:00]
LINDNER: And I would be happy if this is - lasting achievement of Putin, bringing the liberal democracies together and to open paths for Ukraine in
the close partnership to European Union and other members of the League of liberal democracies in the world.
CHATTERLEY: And as a minister, finally, are you on a personal crusade to end Germany's indirect funding of this war and to end its reliance on
Russian energy?
LINDNER: Well, it is a very complex question. And it's very difficult to answer it only left or right. Our advantage in this tension with Russia in
the time of a terrible war in Ukraine, and the only responsibility for this war is Putin the only one who is responsible is Putin. It's very, very
difficult to answer your question only one way left or right.
I'm convinced our economic strength is an advantage in this situation. We are stronger than Russia than Putin's Russia is, and it would not be
responsible to risk our strengths as advantage in comparison to Russia. We need since economic strength to support Ukraine and to support Ukraine
after the war when it comes to building up the country and to lead Ukraine or to invite Ukraine to a close partnership to European Union.
(END VIDEOTAPE)
CHATTERLEY: More to come stay with CNN.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back. And the opening bell just ringing on Wall Street all the major averages advancing for a third street session even as the
Federal Reserve gets set to raise rates by half a percentage point later today.
The Fed of course, though not the only Central Bank, pulling economic support to contain inflation spikes. India Central Bank announcing almost
half a percentage point rate hike today Australia, also rising rates for the first time in more than a decade.
And the Bank of England also set to raise rates for the fourth straight time tomorrow. In earnings Starbucks results holding up well in the face of
inflationary pressures. Shares, as you can see higher by some 6.8 percent after the firm beat on sales.
That said they did pull their full year guidance due to uncertainty over China Chinese sales falling more than 20 percent last quarter due to the
COVID lock downs.
And a reminder of our top story today, the EU is discussing a fixed round of sanctions against Moscow including a proposal to ban Russian oil. EU
Commission President Ursula von der Leyen saying Putin must pay a high price.
And in Mariupol, Ukraine the mayor says new battles have broken out at the Azovstal plant where many civilians remain trapped.
Meanwhile, Ukrainian officials say more evacuations are underway today and also strong words from Pope Francis, the pontiff warning the leader of the
Russian Orthodox Church not to become "Putin's altar boy".
Now Ukraine has released a new video of drone strikes on at least two military positions on the Russian occupied sneak island. The island was one
of the first targets taken by Russians. Now drones are helping Ukraine fight back.
Drones are a key part of military aid packages being sent to Ukraine by the West. Among them is the switchblade kamikaze drone. It's made by
AeroVironment, the leading drone supplier to the U.S. military, its switchblade drones come in two sizes.
The switchblade 300 light and can carry be carried in a backpack and have a 15 minute flying range. The bigger switchblade 600 can fly for up to 14
minutes, and can take out tanks and armored vehicles.
The firm has also won a $90 million worth of U.S. defense contracts to provide reconnaissance drones to Ukraine. Joining us to discuss is Wahid
Nawabi. He's Chairman, President and CEO of AeroVironment.
Wahid, fantastic to have you on the show with us, just explain why drones have become so pivotal in Ukraine's defense against the Russian invasion.
WAHID NAWABI, CHAIRMAN, PRESIDENT AND CEO, AEROVIRONMENT: Good to be with you Julia. Switchblade is a new and disruptive class of missiles called
loitering missiles. And these missiles have very unique features, unlike any other missile category in its history.
First and foremost, you can launch it without having a target already identified; you can go away from the launch site within minutes, so you can
disappear. It'll fly 10 times further than a javelin to switchblade 600 for example.
And then you can look for the target in you almost have a little bit less than an hour to look in loiter to find the right target. And once the
operator designates the target the computer system and this highly sophisticated sensors on board essentially does the rest.
And then the operator can designate the target. And then Switchblade is extremely, extremely precise, and lethal. And it also has another patent
pending technology which allows you to actually wave off and regret or come out of that mission all the way till the last few seconds of the mission.
This is unheard of in any other classes of missile and that's why drones are kamikaze drones as they refer to loitering missiles like switchblade
has become so, so important in this conflict.
CHATTERLEY: I mean it looks like you're changing the direction and making decisions in real time there. How easy is it perhaps to try and shoot them
down or in some way disrupt them via cyber technology?
NAWABI: So it is extremely difficult if not even impossible. These drones are electrically powered; they have very, very low radar signatures. They
travel lower speeds relative to other rocket launch missiles, they can loiter and their electric motors on them.
So the ability for the adversary or enemy to detect them or even identify them is extremely low. Shooting them down is even more difficult. And we do
not know a single case in the history of switchblade for decade plus that any of these missiles have been ever shot down from the sky. And their
ethnicity is incredibly, incredibly unique.
[09:35:00]
NAWABI: You're talking a missile that has software and algorithms that you can pinpoint at the angle in which direction and what altitude, you want to
hit the target.
And if you don't like it, you can, as an operator, you can always go back out, loiter, and come back from a different angle, a different time and a
different method of achieving the same outcome.
CHATTERLEY: Wow, I think is my response to that. Can you give us a sense of numbers? How many have already been provided in terms of that the 300, the
smaller and the 600?
And Wahid, how many could you provide hypothetically, assuming the supply chain holds up? Because I'm imagining when I'm looking at this kind of
technology, micro processes, supply chain challenges today also surely must feature into what you can produce and what you can provide in terms of
numbers. Does this kind of technology need to be a segregated and you prioritize if we want to provide more?
NAWABI: Absolutely. So the first question is the U.S. military has publicly stated that they have so far provided hundreds of these switch weighed 300
and 600. I'm not in a position to disclose the details because of the safety and security of our customers and their missions.
We are working directly with the State Department with the Pentagon and with the White House on helping them equip the Ukrainians with more of
these. I've also been in touch with the ambassador of Ukraine with the military attache with the Minister of Defense of Ukraine, who would like to
have thousands of these because they know how unique and how disruptive this missile is.
Besides its ability to take out the target with high precision from long standoff distances and with incredible, incredible efficacy, it is also
something that actually affects the psyche of the war fighter on your enemy side.
Because it's a missile, you can't see you can't tell where it's coming from, you can't detect it, and you cannot hear it. All of that really,
really creates havoc in the minds and morale of the troops if you're the adversary.
So in this regard, they would like thousands of these. And in terms of your last question, we have the capacity to manufacture thousands of these and
dedicated manufacturing site.
You're right here in the United States. These are designed and manufactured on U.S. However, we do need help with two things, one, expedited
contracting from the U.S. DOD to be able to procure these and provide these to our customers and to priority orders.
There are different levels of priority within the U.S. defense industry, or organization for the priority of orders. A DO or DX order will put you on
the top of the supply chain. Since we use the most advanced microprocessors and semiconductors and microtones, we do need priority because some of the
components on these devices, they're made by the millions, however, the supply is increasingly in high demand.
And we need priority to produce these faster. However, the production capacity that we have is really, really significant. We can manage that
quite well. But we need help with expedited contracts with higher degree of priority.
And we need to help with supply chain prioritization. So we can get the parts to make more of these faster.
CHATTERLEY: Got it, it's an important message to be sending. I can't help as we're having this discussion, reminding myself and I'm sure many of our
viewers will be thinking the same.
We're talking about the manufacturer of technology that is being used, potentially to kill people, whoever's side and the wrongs and the rights of
the situation is, Wahid.
So I do think it's important for us to understand and tick to get your sense of that, but also, to understand your story, which is quite
astonishing, because you were born in Afghanistan, you were forced to flee.
As a 14 year old boy, you had three sisters, who you personally as a child, man of 14 managed to get safely from Afghanistan to India. And I've read
your story and it's quite breathtaking what you managed to do as a child.
So your journey to this point has been very long and this kind of situation is very personal to you. And I do think it's important for our viewers to
understand that too and the responsibility that you have today.
NAWABI: Absolutely, Julia. So first and foremost, we take the decision of what we make and design providers an organization very seriously, a moral
responsibility. Switchblade is the least collateral damage missile system that I've ever known and it's ever known in the entire industry of
missiles.
The fact that you can pinpoint it, you can wave it off and regret and come back out. It literally saves lives, it has in the last decade save
thousands and thousands and thousands of innocent lives. And it actually is incredibly effective and taken out the adversaries the bad guys.
[09:40:00]
NAWABI: So this is the best option that you would have to defend yourself in our view. And that's why we're really focused and committed to this
product. And that's why it's so disruptive.
In terms of personal, of course, this is business. And this is a moral responsibility that we all have in the west, and around the world to
protect our freedoms, our values, and what we stand for.
But I did leave Afghanistan in the early 80s, as a 14 year old, with three younger sisters alone fled the country to because of the Soviet invasion of
Afghanistan. The pain and the suffering that the Afghans have gone through for the last four decades, started with the Russian invasion of
Afghanistan. And we all know what happened in Afghanistan.
And I'm a firm believer that this, the Ukrainians are going to prevail. And they are going to fight just like as hard as the Afghans did. And we're
here to support them, and we defend them.
And we stand by our country, by our allies and with the Ukrainian people. I have seen it firsthand. I mean, I left with nothing, literally, my life
changed in a matter of two days, took me 48 days by many, many different means to get out of Afghanistan, through Pakistan into India, and ran into
by my parents in New Delhi, in a bus station.
And so came to United States. And, you know, life has very mysterious ways of working itself out in coincidences. And you know, but that's just my
personal story. And it's not the most remarkable one whatsoever.
There are millions of other stories like mine, in Afghanistan today, in the last four decades, and also in Ukraine today, and many other parts of the
world. And we as countries who are free, who enjoy these freedoms and have the ability to help.
We need to do this as a moral and ethical responsibility more than anything else. CHATTERLEY: Wahid, great to have you on the show. Wahid Nawabi there,
Chairman, President and CEO of AeroVironment, sir and we'll stay in touch. Thank you.
NAWABI: Good to be with you, Julia.
CHATTERLEY: Good to have you. Coming up, despite challenges caused by Russia's war on Ukraine Maersk delivering its best earnings quarter, the
CEO of the shipping giant next.
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[09:45:00]
CHATTERLEY: Welcome back. Shipping giant Maersk posting a record profit in the first quarter despite taking a $700 million hit to its earnings tied to
Russia, the company's net profit more than doubled to $6.8 billion.
Revenues jumped 55 percent. As container freight costs continue to rise last week Maersk raised its outlook for the full year. And I'm pleased to
say joining us now the CEO of Maersk, Soren Skou, Soren, fantastic to have you on the show, as always, and congrats on another great quarter.
We'll talk about that in a second. But I do want to hone in on what's going on in Russia. I think my take away from this is it's difficult to manage at
the best of times, it's difficult to exit a business and you're being incredibly conservative and taking the value of those assets down to zero
in the interim.
SOREN SKOU, CEO, MAERSK: Yes, we decided quite early, after Russia invaded that we had to get out of Russia. We simply cannot continue to serve and
provide critical infrastructure for a country that is invading it's table.
So we just started to unwind our business and we had our last ship call to Russia earlier this week. So we are now completely out of Russia. The
essence we have in the country, we have written down to zero and we're in the process of selling them as best we possibly can in the coming months
and quarters.
CHATTERLEY: Are you worried about those assets being confiscated, taken?
SKOU: That we don't think so the biggest single asset we have is 30 upon 31 percent stake in a company that owns ports in Russia.
That's actually a company that is domiciled in Cyprus, and so we don't necessarily think that they will be confiscated at this point, at least.
CHATTERLEY: You also said that you're trying to do this responsibly. And I do think that's important. It ties to your employees there. How are you
handling this situation for them too, because that is also delicate?
SKOU: Well, first, let me say that we do not hold our employees and colleagues in Russia responsible for the actions of their president. So we
want to do this in a responsible manner.
About a third of our office based colleagues in Russia, we have actually offered jobs outside Russia. And for the remaining we have provided quite,
if you will generous severance packages to hopefully tide them over until they get a better situation.
CHATTERLEY: Yes, and I know you've also been helping uplift --GM and Ford ship vehicles transport vehicles to Ukraine to assist with evacuations, to
which I wanted to note for our viewers.
And let's talk about your broader numbers now as well. I mean, I mentioned that you'd raise guidance for the full year. You also talked about perhaps
a stabilization of shipping costs in the second half of this year, or at least the presumption, is that based on bottlenecks, perhaps still
challenges in that regard? Or is it based on perhaps slowing growth or both?
SKOU: Well, we have, we actually have quite low visibility to the second half, there are many factors at play. We do expect demand to come down
driven by a number of factors.
But certainly if we look at Consumer Confidence Index, if you look at PMI numbers, they're trending clearly down, we have inflation. And in China, we
also have a very, you know, tough Corona policy web where even small outbreaks are responded to by hot lockdown measures, which also has the
potential to reduce volume.
So we see the likelihood of demand coming down. And that will ease, help ease congestion and potentially already from the beginning of the second
half. But that part is more an assumption file guidance than it is prediction because it's really hard to tell.
CHATTERLEY: Yes, of course, how dramatic is that slowdown that sort of demand pulse that you're seeing, particularly in the China region? Because
you have everyone I think perhaps have the best sense of that given the number of ports and port access that you have there?
Because I know one of the big questions we're asking here is whether as we see Central Bank start to rise interest rates and clamp down on some of the
pricing pressures.
The risk is that perhaps they go too far and creates a recession or recessionary environment. How concerned are you by that? Is that is that a
risk on your radar?
SKOU: Well, I'm not a macro economist, but we clearly also in most see that there's some risk of a recession in 2023 or perhaps even already in the
very last quarter of this year, but it's only some risk. It's not a sure thing. We clearly see all these drivers of demand trending negative.
[09:50:00]
SKOU: So recession risk, consumer confidence, PMI confidence, at the same time supply side constraints in China, potentially because of the cause of
Corona. And then finally, I think most of us probably have shopped more goods during the pandemic than we need.
And we can't buy any more furniture or new TV screens or whatnot. So we probably see the risk on the demand side in the coming six to 12 months in
our business.
CHATTERLEY: Yes guilty on the over acquiring point that you just made there. And you may not be a macro economist in your book but you've got a
real field so you've valued more highly on the show, I promise you, Soren, great to chat to you sir. Congrats again on another great quarter, the CEO
of Maersk there.
SKOU: Thanks for having me.
CHATTERLEY: Thank you for joining us. OK, coming up, the fed strikes back, - Jerome Powell aiming his light saber at inflation on this May the fourth
today's interest rate decision not so far, far away. Stay with us.
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CHATTERLEY: So today is May the fourth better known as Star Wars day for fans, a key day for the inflation was to the U.S. Federal Reserve hopes the
fourth is with them.
As members get set to raise rates by the largest amount in decades and begin the process of winding down their multi trillion dollar balance
sheet. U.S. stocks pretty volatile in early trade as we await the Central Bank decision.
And the first in-person news conference from Fed Chair Powell since the pandemic began. Our Rahel Solomon joins us now has her own light saber
ready, great to have you with us.
We are expecting him to raise interest rates by half a percentage point today but that's not really the question. The question is, can they hike
interest rates without getting a Death star outcome here for those that know and that is creating a recession? What does history tell us for how?
RAHEL SOLOMON, CNN CORRESPONDENT: Julia, it's a great point. We haven't seen rates go up this much since 2000, some 22 years ago, but guess the
question on everyone's mind is can they do it? Can they sort of achieve a soft landing, as it's called raise inflation or raise rather rates without
triggering a recession?
Well, Jerome Powell, the Fed Chair says that history provides some grounds for optimism. Bill Dudley, however the former president of the New York
Federal Reserve Bank, not so optimistic, take a listen.
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BILL DUDLEY, FORMER NEW YORK FED PRESIDENT: The chances of pulling off are very, very low because they have to push up the unemployment rate. And in
the past when you've pushed up the unemployment rate, you've almost never been able to avoid a full-fledged recession.
(END VIDEO CLIP)
SOLOMON: So in a speech in late March, Fed Chair Powell pointed to three episodes that pointed or provided some grounds for optimism. He pointed to
1965, 1984 and 1994 as examples of when the Fed was able to raise rates and not trigger a recession.
[09:55:00]
SOLOMON: But Julia, even those dates are in dispute with some like Piper Sandler and others saying that really only 1994 is a true example of a soft
landing. Listen, whether it's one example in recent history or three, Julie, I think everyone can agree this is going to be a challenging landing
for the Fed in this environment that we found ourselves in.
In fact, even Powell in that late speech that late March speech saying that listen, no one expects that bringing about a soft landing will be
straightforward in the current context.
Very little is straightforward in the current context, adding my colleagues and I will do our very best to succeed in this challenging task and Julia,
May the Fourth, for sure be with him?
CHATTERLEY: Yes. And everybody else is we hang on tight, quite frankly. Rahel, great job, thank you. Are you a Star Wars fan by the way?
SOLOMON: I can't say that I am, and I am just ready for the Twitter hate mail now that I made it that.
CHATTERLEY: Thank you, alright, and finally from drones to dogs on this show and another sign of how Western allies are helping Ukrainians defend
their country. Police dog trainers in the United States are providing body armor for dogs, working in dangerous areas with Police officers combat
engineers and border guards.
Ukrainian officials say the best stone interfere with the dog's movement that protects them from debris, weapons and bullets. They're very brief
animals and isolate them.
That's it for the show. If you've missed any of our interviews today, there'll be on my Twitter and Instagram pages search for
@juliachatterleycnn "Connect the World" with Becky Anderson up next.
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