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First Move with Julia Chatterley
Beijing makes Sweeping Changes to Pandemic Response; Trump's Endorsement Fails to Swing Georgia for Walker; Bremmer: Russia trying to Starve Ukraine into Submission; GSK, Sanofi Shares Jump after Judge Rejects Zantac Lawsuits; Brightdrop CEO: Companies are Committing to Zero Emissions; Morocco: 1st Team from an Arab Country to make Quarterfinals. Aired 9-10a ET
Aired December 07, 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: A warm welcome to "First Move". Great to have you with us on another day filled with recession fears, all
market tears and Beijing shifting gears and that's where we begin the Chinese government making sweeping changes to zero COVID policies including
a significant easing of quarantine rules.
Today's moves, raising hopes of an eventual growth rebound. It could also help to call the anger of people across China but one of the risks now to
the health system, if it means a surge in COVID cases during the winter. That policy shifts however, doing little to boost market sentiment in Asia
where the HANG SENG tumbled more than 3 percent.
Context though, as always is key we are up 30 percent in that market from the October lows of all Chinese reopening, of course too will take time and
while we wait, the economy continues to weaken. Beijing today reporting dismal import and export numbers the worst trade data in fact, in well over
two years.
The IMF also warning yesterday that China's financial outlook has "darkened noticeably" or this enough clearly to trigger fresh volatility across all
markets both Brent and U.S. crude trading near their lowest levels of the year we're actually back to pre-Ukraine war crisis levels, who better and
to help make sensible of these developments. And Ian Bremmer, the President and Founder of GZERO media will talk the latest from Ukraine.
The moves in China, and also get his perspective on the likelihood of a softening stance from the Iranian regime too, amid clearly deep skepticism.
Now in the meantime, recession, fears continue to weigh on U.S. and European markets with more Wall Street executives warning of tough times
ahead. We've got the latest on that U.S. stocks set for further losses after four straight losing sessions for the S&P 500 and as you can see, pre
market were off another three tenths of 1 percent.
More on all of that in just a moment, but first we begin in China and Beijing's significant COVID strategy shifts. Something that government says
is about "Keeping pace with the times". Ivan Watson joins us now with more.
Ivan we've talked about this now for a number of days. It seems a clear relaxation of the guidelines now at the Beijing level at the national
level, but it does come in midwinter and of course the concerns now rose about the capacity of the healthcare system to respond if COVID cases
spike.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, I mean, this has been greeted but with excitement by many Chinese who are just exhausted by
months and months of lockdowns and quarantines and all these restrictions. But it also brings some new challenges to China on the health care front.
First of all, this is the first time that the national government has announced a substantial relaxation of these onerous restrictions.
One of them for example, is that asymptomatic COVID cases, people with mild symptoms and close contacts of COVID cases no longer have to go into
government quarantine where there have been reports of kind of unsanitary conditions and poor food and hygiene. They can do home quarantine, that's
just one of 10 changes take a listen to some more announced by a Senior Health Official.
(BEGIN VIDEO CLIP)
MI FENG, CHINESE NATIONAL HEALTH COMMISSION: Outside Nursing Homes, Welfare Homes, Medical Institutions, Child Care Institutions, Primary and Secondary
Schools and other special places. Proof of negative nucleic acid results health claims and travel codes will no longer be required. There will also
be no more checks on people who move across regions. People will no longer be required to carry out COVID testing upon arrival at another city.
(END VIDEO CLIP)
WATSON: This is a big deal removing the restrictions on travel within China. I spoke with a friend in Shanghai informed her about this new
measure and she said wow; I'm going to get to see my parents for the first time in months who live in another province. I should go and look and try
to find some plane tickets.
And in fact, the search volume for plane tickets on the travel platform sea trip surged today by 160 percent, giving you a sense of all that pent up
demand that is about to be broken loose. On the flip side of this, there is some concern because for years now the Chinese government has been warning
its population of the threat the dangers of long COVID. And almost overnight, that narrative has changed in the state media to hey, this new
omicron variant isn't so lethal.
We can live with it. We might have 80 percent of the population getting it and that's a bit of whiplash. Some Chinese are worried that now with the
restrictions being removed.
[09:05:00]
WATSON: They may be vulnerable to the illness and that is a fact that epidemiologists are warning about. They're saying, Julia that there is very
low immunity within the Chinese population. And in fact, there are large numbers of Chinese in the most vulnerable bracket that are not vaccinated
at all.
Take a look at this statistic. Only about 23 percent of Chinese citizens over the age of 80 are completely unvaccinated. We think that's more than 8
million people who now could face this illness. And there are some models out there suggesting that there could be more than a million deaths in the
months to come.
This is coming as winter is coming. It's a tough time when you already have flu moving around. These are some major challenges that China will have to
cope with. One of the measures it's also adopting is saying it's going to try to ramp up vaccinations for these most vulnerable segments of society,
Julia.
CHATTERLEY: Yes, so excitement and buoyancy among some parts of the population. Perhaps some real concerns in other parts. Ivan, we shall see,
thank you so much for that report there Ivan Watson.
And China's COVID challenges as we were discussing just one of the many key issues weighing on global markets. U.S. stocks on pace for another week
open after a 1.5 percent drop for the S&P as I mentioned already on Tuesday, a 2 percent sell off in tech stocks too.
All this as the heads of Goldman Sachs and JP Morgan warn once again, about the outlook for U.S. growth. Paul R LA Monica joins us on this. Paul, it
was the Walmart boss yesterday, the Goldman Sachs CEO, JP Morgan CEO, Jamie Dimon, all warning about challenges for the economic outlook.
If you look at what we saw earlier this week, we also had strong data and the investors sold stocks on that as well concerned that perhaps that means
higher rates rather than lower rates. So it just feels very nervy to me at the moment.
PAUL R. LA MONICA, CNN REPORTER: It's incredibly jittery right now, Julia. I think that the market is still holding out. Hope somewhat perversely,
that if the economy deteriorates so rapidly in 2023, that maybe the Fed will reverse course, stop the rate hikes sooner rather than later and then
maybe even begin to cut rates at the end of 2023.
That might be a bit premature, but clearly, we are seeing signs of nervousness from leaders of corporate America. You mentioned David Solomon
of Goldman Sachs, his comments about the possibility that maybe there needs to be a lower level of bonuses for investment bankers at Goldman Sachs. I'm
sure a lot of viewers are really not shedding tears over that, but still, it's not a great sign.
JP Morgan Chase CEO, Jamie Dimon continuing to be gloomy, taking some breaks from bashing crypto to talk about how he sees potentially you know,
more sluggishness ahead for the U.S. economy. So you add all that up and you can understand why the market after this huge rally since mid-October
and in through November might be taking a pause.
CHATTERLEY: I mean, gosh, we could spend a whole show talking about some of the comments actually, that he made. I think he called crypto pet rocks. He
compared it to a pet rocks, which is a classic Jamie Dimon's --. Yes, we won't even go there.
I do think the broader context is important. Actually, in one of my bright sparks on my team was just showing the yearly chart for some of these stock
markets in the United States and I do think that's very important. It's been almost like a yo-yo trip and we have actually bounced quite
significantly if you look at those November lows. So we also have to put these daily changes into context too, I think.
MONICA: Exactly, I mean, the Dow amazingly enough, again, it's only 30 companies, but it's only down about 8 percent this year. I wrote, you know,
I think it was last week that it's not out of the realm of possibility with a major "Santa Claus Rally", that the Dow could finish close to break even
or maybe even positive.
It's going to take a lot but it could happen. Not going to happen for the S&P or the NASDAQ, S&P is still down 17 percent, NASDAQ down nearly 30
percent. Obviously investors are still worried about the Fed and rate hikes even though bond yields have come back from their highs earlier this year
as well. We're hovering around 3.5 on the 10 year. That's down from a high of around 4.3 in late October, but at the beginning of this year, rates
were only 1.5 percent.
CHATTERLEY: Yes, the context on this is key. Paul, great to chat to you, thank you. Paul R LA Monica there! OK, let's move on police arresting
extremists in Germany where 25 followers of a far right group are suspected of plotting to overthrow the government. Prosecutors claim the group's
member's fraud conspiracy myths and QAnon ideology. Nic Robertson joins us now. Nic, when I was reading through the details of this story.
[09:10:00]
CHATTERLEY: It sort of blew my mind these guys have been plotting a violent coup since 2021, I believe, planning to storm parliament and seize power.
What more can you tell us about one how this coup was prevented and these individuals were found?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, it seems to be an intelligence driven operation. The police say that they went after 52
people; they got 25 of them, 22 of them all Germans. Members, they believe suspected to be members of this far right group.
Three of them supporters are the groups that are 27 still out there ostensibly on the run, or police have yet to announce that they called
them. What they were planning to do is, as you say, staggering the violent overthrow of the Parliament, the Bundestag, this is a group - that doesn't
believe in the legitimacy of the German government, but not happy with going out and protesting about it on the streets.
Some of their members were former members of the German Military and the Attorney General, who's been laying out some of the details today, has
described what would have been a potential violent attack on the Bundestag to try to take control of it. And then this group had their own set of
people that they were going to put it into ministerial positions and to run the army as well. So this was not an idle group sitting at home twiddling
their thumbs.
The states, the Federal Chief Justice has ordered that eight so far of the members of this group that have been arrested, continue to be detained,
including someone they call Heinrich PR. He is believed to be the ringleader of the group. So they were going to install themselves as
another government by violent means.
CHATTERLEY: Astonishing, we will continue to follow developments in this story and yes, eyes wide open. Nic Robertson, thank you so much for that
report there. Now Democrats in the United States rounded off the midterm election season with a win.
CNN is projecting Georgia Senator Raphael Warnock has held on to his seat defeating the Republican Herschel Walker in a runoff election. It's a win
that will give Democrats greater leverage in the Senate next year. Senator Warnock got emotional as he thanked supporters on Tuesday night.
(BEGIN VIDEO CLIP)
SEN. RAPHAEL WARNOCK (D-GA): My roots, like the roots of those oak trees go deep down into the soil of Savannah and Waycross and Scriven County and
Burke County. I am Georgia.
(END VIDEO CLIP)
CHATTERLEY: CNN's Amara Walker joins us now. A victory on many counts for the Senator himself, for the Democrats, of course in terms of control in
the Senate, but also, I think a loss once again for a Trump picked candidate or at least a Trump backed candidate in these elections.
AMARA WALKER, CNN REPORTER: Yes, Julia, Herschel Walker was handpicked by the Former President Trump. So this is obviously a big loss for Trump and
also for the Republican Party because clearly, it was rappelled Warnock's message. Competence and character which was he was hammering home that
really seemed to have resonated with the voters.
So the Democrat Raphael Warnock prevailing to this six-year full term in the Senate. His wind really underscores several things. First off, Georgia,
the state we are in now is truly a swing state. This is something that Georgia, Democrats have been looking at very closely, and they will use
this win as a blueprint.
As they try to win in 2024, Georgia is absolutely a crucial battleground state now. It also highlights the Democrats ground game. This was something
that was set up by Stacey Abrams, who successfully ran for Governor again, this time around, but there was this controversial voting law that Georgia
lawmakers passed after the presidential election in 2020.
That shortens the period between the general election and the runoff from nine weeks to four weeks. It also reduced the number of early voting days
pretty significantly, and what the Senator Raphael Warnock was hoping for was a big early voting turnout. He was hoping that turnout would really
give them enough cushion to win on Election Day and that's exactly what happened for him.
But Julia turnout was robust. We're talking about 3.5 million people turning out. Although that is slightly less than the general of 3.9 million
but again, keep in mind this was a runoff up that just shows how much interest and enthusiasm there was in this Senate runoff, Julia.
CHATTERLEY: Amara Walker, thank you so much for that. Get your name right the second time around my apologies for that OK, straight ahead. Moscow
blames Ukraine for drone strikes inside Russia. President and Founder of GZERO media Ian Bremmer joins us after this, to discuss.
[09:15:00]
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". TIME has picked his Person of the Year for 2022. And the winner is Ukrainian President Volodymyr Zelenskyy
and the spirit of Ukraine TIME recognizing his leadership during the war with Russia and the resilience that the nation has shown.
At the same time a powerful statement coming from his office saying Russia is resorting to using "Cheap" methods of waging war. The Ukrainian Military
says it shut down 14 Iranian attack drones overnight. Those comments just one day after Russia claimed Ukraine carried out three drone strikes on its
air bases, two of which were inside Russian territory.
Ukraine hasn't taken responsibility for those attacks. Joining us now Ian Bremmer, President and Founder of GZERO media he's also the author of The
Power of crisis, how three threats and our response will change the world.
Ian, fantastic to have you on the show I want to start talking about what we've seen in recent days. I mentioned Ukraine hasn't taken responsibility
for those attacks. But one of the strikes, I believe 160 kilometers away from Moscow. Should and does Russia feel more vulnerable as a result?
IAN BREMMER, PRESIDENT & FOUNDER OF GZERO MEDIA: Absolutely, this is particularly an attack against one of the most important military bases
that Russia has to be used against Ukraine with longer range bombers. And the fact that the Ukrainians are able and willing to hit it matters, of
course. But I want to go back for just a moment and offer my congratulations to Volodymyr Zelenskyy.
It's the right choice. Julia, I remember back at the Munich Security Conference days before the war started, and French President Macron
directly offered to Zelenskyy, that they would provide safe haven, provide special forces to get him out of Kyiv and bring him to Poland, bring him to
Lviv. The Americans were supportive, NATO was supportive and what Zelenskyy said as his country was about to be invaded.
He said I don't need a plane, I need ammo and if there's been one message that we've heard from the Ukrainian President over the last year as he has
fought and let his people bravely against Russian assault. It is that he's willing to risk his life alongside his attacks co citizens to try to do
their best to defend Ukraine's independence. And that's been a pretty staggering story this year.
[09:20:00]
BREMMER: I'm glad that my colleagues at TIME made that decision.
CHATTERLEY: You know you raised such an important point and forgive me actually for not asking your opinion on this to begin with. It's tough to
predict what would have happened had the situation been different, but had he decided to take that plane?
Or at least if he'd have been a different leader in this situation, do you think the West would have provided the support that they have, and held
together in the provision of that support? Had this been a different one?
BREMMER: There's no way. In fact, the sanctions against Russia would be considerably more limited than they are today. Perversely, if Ukraine had
lost if Zelenskyy had folded, it would look a lot more like what we saw after 2014 than what we see this year.
It's precisely because Zelenskyy stood up for his people, that he would got the Americans and American allies to rally behind Ukraine to send billions
and billions of dollars of military equipment of humanitarian support to invite Ukraine to become a member of the European Union.
All 27 states voted in favor of that, to put unprecedented levels of sanctions against Russia. A country that the world needs economically for
food, for fuel, for fertilizer eight rounds of sanctions, 27 European countries, and the Americans and the Canadians and the U.K., all supporting
those sanctions.
None of that was going to happen if Zelenskyy had taken that plan. That's what 2022 is all about. Occasionally, people matter. Even a Former Comedian
who was on Dancing with the Stars running a country that wasn't particularly well governed that most people in America had never spent any
time thinking about next year, probably even the most important international story on the global stage.
CHATTERLEY: Underestimated, by many quarters, underestimated less today, to your point and clearly, in the beginning, and perhaps throughout this
crisis underestimated by Vladimir Putin himself, too. If we circle back to I think the importance of those drone attacks on Russian territory.
Is the Kremlin vulnerable, when we're talking about a strike 160 kilometers away from Moscow? I'm just throwing it out there even just out of interest,
perhaps more than anything else. Whether or not Ukraine would decide to do something or someone else?
BREMMER: Well, look, I don't think so. And sort of when you say someone else, we need to recognize that NATO has not wanted this war to expand
beyond Ukraine.
And that's what's limited NATO from providing a no fly zone or from putting troops on the ground or taking a whole bunch of other steps, including
providing more advanced weaponry that would allow Ukraine to more easily strike deeply inside Russian territory, because they're concerned about how
Russia might react if they felt existentially threatened the way by the way, the Ukrainians have felt existentially threatened pretty much every
day of this crisis.
So of course, you know, is this fair? No, none of this is fair, but you understand that the United States and the European Union states are not
Ukraine and the citizens of NATO are not suffering and facing the consequences the Ukrainians are every day. So it's understandable that they
would respond differently.
The Ukrainian government certainly is trying their hardest to give back as good as they're getting. But they are not committing tens of thousands of
war crimes against the Russians. In fact, when we talk about war crimes committed by Ukraine, we talk about the assassination of Aleksandr Dugin's
daughter, for example. When they tried to do good himself as Steve Bannon try in Russia?
That's a war crime, but it's an end it should be condemned. But it pales compared to what the Ukrainians have been dealing with literally every day
of this crisis. The fact that their civilian infrastructure is presently being attacked every day by the Russians with Russian ballistic missiles,
with Iranian drones, with the intention to terrorize the Ukrainians to literally starve and freeze them into submission this winter.
So there is no comparison between the way the Russians are fighting this war and the way the Ukrainians are. The extraordinary thing is that the
Russians are no longer capable of regaining significant territory on the ground. So these horrific decisions that the Russians are taking against
the civilians, in part comes from desperation and part comes because Putin has announced these annexations of territory, most of which he doesn't
actually control.
He's announced this special military operation won't call it a war. That he can't actually win and yet he's unprepared to accept anything less than at
least to date. Then then capturing wholesale large swaths of Ukrainian territory and that's why we continue to see this damage play out every day
in our headlines.
[09:25:00]
CHATTERLEY: One more question on this because I want to get your views on another subjects too, and it's pointed that you rose recently. And I think
it's a very interesting one and the risk perhaps that Russia does step forward knowing full well.
That won't be accepted by the other side and calls for a truce, but then puts the Ukrainian President in a position where he has to turn around and
say, no, we're not giving any ground and no, we're not going to call a truce at this moment, and then perhaps faces pressure from certain quarters
for not being willing to negotiate at all. How high is that risk?
BREMMER: You've seen a bit of that with, you know, the Russians talking about the fact that no, the Ukrainians are the ones that refuse to
negotiate. And certainly, over the course of the winter, I've heard from NATO leaders, I've heard from leaders of G7 states, including the United
States that there is concern that Putin would announce that he wants a truce with absolutely no intention of implementing one.
Because he knows that the Ukrainian government could never accept it, because they could politically and also because Russia still occupies large
swaths of territory they've taken since February 24. And the question is might someone like Emmanuel Macron, who's been saying, oh, the Chinese need
to be involved in negotiations.
Oh, the Russians need to be provided guarantees and assurances from NATO a little out of step not completely, but a little out of step with the
Americans, certainly with the Ukrainians. Might you see Macron and other NATO leaders start to say, oh, well, this is an opportunity.
We need to talk to Putin right now that truce is something we should accept Ukrainians would not. And it was very important on the back of Macron's
state visit that Biden and Macron, specifically publicly aligned on if there are to be negotiations and of course, that would include a truce. The
Ukrainians have to be the ones to make that decision.
It's very important in the face of what you just asked Julia, that NATO stands very, very solidly together with the Ukrainians on that decision,
because of course, one of the reasons this war has gone as well as it has for Ukraine since the invasion is because NATO has been so solidly united
with Kyiv and with the President Zelenskyy in their willingness to face down the Russian threat.
CHATTERLEY: But interesting to your point that Emmanuel Macron feels confident enough now to openly push China to intervene and help find some
kind of resolution to this too.
Well, we could talk for hours, I want to talk about China and what you make of the state level relaxation of restrictions clearly politically easier
for Xi Jinping to do so today post the Party Congress than before, but of course, it is midwinter. They have a lack of healthcare infrastructure,
which clearly they need to be ramping up and have said they will do at this stage, but it does feel like a further giant experiment, quite frankly.
BREMMER: It's an experiment that comes as the Chinese are now taking vaccines much more seriously, for those citizens over 80, for those
citizens with pre-existing conditions. On the one hand, there's been a lot of vaccine hesitancy. The Chinese from the early days were saying these
western vaccines aren't very good.
They were promoting a lot of disinformation around them. And of course, the Chinese also believe more in Eastern medicine and vaccines themselves,
that's Western medicine. That's, you know, you give a drug and you fix everything right? Even that's not the way vaccine actually works.
There is a lot of skepticism there. So this is China now basically saying, we're going to roll that back. We're not going to put in a formal mandate,
but essentially, we're going to do everything we can to make sure all of these elderly get vaccinated in very short order and roll back, relax. Some
of the lockdown standards say that you can quarantine in home for much of the population that's much, much more convenient.
Stop the blocking of emergency exits during quarantines, for example, which is why they couldn't fight that fire that ended up with a lot of civilian's
dead up in Urumqi. But of course, if what we see his massive uncontained spread of COVID as a consequence, and Chinese hospitals starting to get
overwhelmed. Yes, they've built out a lot more ICU beds that built out a lot more hospitals, and they're vaccinating a lot more people.
But they will have to roll back that experimental loosening, if they start feeling like this is going to lead to the one, one and a half million or
more Chinese debt, which is what their official studies have been saying for the last few months. So we're going to watch this space very carefully.
This is not even the beginning of the end of this story.
CHATTERLEY: I can't help but make a compare and contrast too. The situation in Iran in the face of similar public protests too, and the ability of
China to be able to perhaps relax some of these restrictions but maintain control and the emphasis on power here relative to some hopes.
And I know you're a deep skeptic over what's going on in Iran and they have about 90 seconds Ian, but talk to me about what you think in terms of some
of the headlines, and perhaps the misinterpretation of what happened in Iran at the weekend?
[09:30:00]
CHATTERLEY: But talk to me about what you think in terms of some of the headlines. And perhaps the misinterpretation of what happened in Iran at
the weekend?
BREMMER: You know, when you're confident in your message, in your strength, you can respond more strategically. And we see this and how the Chinese
government hasn't arrested all the people in the demonstrations, just found them face surveillance go and said, look, if you do this, again, take a
pledge, you're in trouble. But for now, we're going to slap you on the wrist.
And we're going to respond effectively to some of the demands that you made. That is, frankly, a confident dictator in China that feels like
there's no threat to his power. In Iran it's a very different story, the Supreme Leader using repression and refusing to budge even one iota over
Iranian demands, with two months of major demonstrations far bigger than anything you've seen in China so far.
One other thing I'd mentioned Julia, all of these stories by the New York Times, the BBC and others this weekend that the Iranian morality police
were banned, that's fake news. It's not the case it was misreported. I'm deeply disturbed, that that's the reporting that Americans and others got
those headlines should have been taken down.
CHATTERLEY: Yes and important message as always, great to chat to you. Thank you so much. Ian Bremmer, President and Founder of GZEREO Media
there, thank you. We're back after this.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". Shares of GSK and Sanofi are surging after a major legal victory. A U.S. judge has dismissed thousands
of lawsuits claiming that the heartburn drug Zantac caused cancer. Anna Stewart joins us now. Anna, what do we know about these drugs and the
claims against the company's clearly huge relief today from investors?
ANNA STEWART, CNN REPORTER: This goes back to 2019 when a small laboratory in Connecticut essentially said that it's called - claimed that the
heartburn medication Zantac and generic versions of it could cause some forms of cancer and this is a drug that was widely sold by some of the
biggest names in pharma.
So we have GSK, Sanofi, Pfizer, Boehringer Ingelheim in total since 2019 and now almost two and a half 1000 lawsuits have been filed and tens of
thousands of claims have also been registered.
[09:35:00]
STEWART: And at one stage it was considered that this could cost somebody's companies tens of billions of dollars in total, one of the highest
estimates I saw from Morgan Stanley said as much as $45 billion. So as of the last 24 hours, a U.S. district judge in Florida has simply dismissed
the case.
They say that experts couldn't show a legitimate link between the drug and the cancers that have been caused according to the claimants, so you can
understand why we are seeing share prices rocketing frankly, we saw GSK up 8 percent earlier today, Sanofi 6 percent, Pfizer, I believe is just open
for business and is rising a little bit higher than, Julia.
CHATTERLEY: Yes, I saw the comments from GSK saying that the ruling slapped down, "unreliable and litigation driven science", which is an interesting
quote, but it's not over yet. There were what another 50,000 potential claims out there in other states.
STEWART: So as you say, the pharma companies are certainly seeing this as a big victory. We've had statements from the likes of GSK saying just that,
however, there's of course, always the possibility of an appeal. And I think that's probably quite likely in this situation.
Also, these pharma companies are expecting lawsuits in state courts. Quite a few the first will be in February next year in California. So the Zantac
issue has been, I think, substantially de-risked. And I think we can see that and the share price, but it's certainly not off the table.
I also think you've got to remember all those claimants thousands of claimants who believe that their cancers have been caused by a heartburn
drug the last few months and years must have been horribly frustrating. And for many of them, it's not over yet. It's not over now and some of these
cases will be going forward into next year.
CHATTERLEY: Yes, watch to watch. Anna Stewart, thank you for that. OK, coming up after the break here on "First Move", why Brightdrop is a bright
spot in the EV delivery market, the GM offshoot has hit the accelerator on growth, and the CEO is up next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". And a reprieve the major averages turning higher the S&P 500 now up for the first time in five sessions
though, it is just the opening few moments of the sessions trade concerns on the health of the market, though clearly remain investors pricing in the
possibility of a 2023 recession.
As U.S. banking heads sound the alarm on the New Year's economic outlook investors also worrying how even a shallow recession might impact earnings.
Caution too. We were ahead of some critical inflation numbers out later this week and next. And Apple share is trying to bounce after a two and a
half percent loss in Tuesday session due to sales concerns.
[09:40:00]
CHATTERLEY: Reports also say Apple will delay the rollout of its Apple car until 2026. That would be a year later than currently expected. And the car
also may not be fully autonomous, as was first rumored. Apple is having a pretty torrid time in 2022, currently down some 20 percent year-to-date.
Now its companies committed to striving for a zero carbon future General Motors is using its muscle to supply firms in need of greener vehicles.
It's fast growing subsidiary BrightDrop doesn't just make them, it also offers smart container solutions and AI back software to help de-carbonize
last mile delivery.
It set a target of producing 50,000 trucks a year by 2025 with the likes of FedEx, Walmart Hertz and Verizon among its customers. And you can add to
that expansion into Canada to retooled GM plant that's Prime Minister Justin Trudeau behind the wheel, as you can see in that tweet. And
BrightDrop says it's on track to reach $1 billion worth of revenue in 2023 just its third year of existence.
Travis Katz is BrightDrop's President and CEO, and he joins us now. Wow, that's a lot of good news. It looks like a jewel tailwind. If I look at
what you've been saying in recent weeks, it's the climate commitments from companies that are driving the demand for your product. But also, I think,
to some degree, at least, finally, the economics of EV2.
TRAVIS KATZ, PRESIDENT AND CEO, BRIGHTDROP: Yes, that's right. Thanks for having me, Julia. So this is a really exciting moment that we're living
through right now where we're seeing this incredible momentum in this sector to de-carbonize last mile delivery. But last mile delivery, I really
mean how all those packages that may be arriving on your doorstep this holiday season, get there.
And what we're seeing is that companies are not only all the big companies that we're working with, so companies like FedEx and like Walmart, and DHL
have all made commitments to get to zero emissions by 2035 or 2040. But they're not just doing it for to make us all feel good, or to really
address the environmental challenges, although those challenges are very serious.
They're also doing it because it makes economic sense. So we estimate that on average, customers are going to save about $10,000 per vehicle per year
when they switch from a traditional diesel van to an electric BrightDrop band. So it's one of these moves that is both great for the environment and
it's great for the customers bottom line.
CHATTERLEY: So what's the approximate breakeven point if they're saving $10,000 per year per vehicle net, I'm assuming? But the upfront cost of the
EV truck clearly is going to be higher. I would assume that a diesel or a combustion engine alternative, how quickly can they break even based on
that approximately?
KATZ: Yes, pretty quickly, actually. So we're estimating companies are going to break even between 18 and 24 months, versus buying a traditional
step van and when you think about $10,000 a year, over the 10 year life of vehicle or 15 year life of a vehicle, the vehicle more than pays for itself
in those savings.
So it's really pretty incredible that we are at this moment where the technology is finally mature enough that not only can we do the right thing
for the planet, but we can also do the right thing from an economic perspective. So it makes it really an easy decision for customers to make
the switch.
And I think when you add on top of that, in the U.S., the new incentives that are coming out that potential for clean energy tax incentives, it
creates a little more momentum there for customers as they look to make this switch.
CHATTERLEY: Yes, I was just doing some fast mathematics there. And I don't want to do the sales pitch for you. But there's a $30,000 tax credit isn't
there in the Inflation Reduction Act from my memory for commercial electric vehicles. So if we're talking about an 18 to 24 month breakeven without
that, then I mean it's almost instant with that.
KATZ: Yes, so we're still waiting for all the details on the IRA to be finished the Treasury Department of - writing those now. For there's up to
$40,000, I believe, for larger vehicles, the size vehicles that BrightDrop is building, which are sort of vehicles you see driving up and down your
street delivering packages today are eligible for up to a $7,500 credit per vehicle, so a little bit less than 30, $40,000, but still quite
significant.
CHATTERLEY: Let's talk about what else you offer, because it's not just about the vehicles. And we have been showing the vehicles that for this
last mile delivery, but I also mentioned their provision of software as well. And I know that you're also road testing eCarts as well. Just explain
the importance, both of perhaps a subscription software service to the business but also the eCarts.
KATZ: Yes, to put it in context, so we've been all of us have been buying more and more things online. I think and the pandemic really accelerated
this trend. And well we all love the convenience of online shopping the reality is that to get all those packages to all those front doors, you
need a lot of vehicles.
[09:45:00]
KATZ: And what we've been doing is just packing more and more vehicles into our city streets. And what that's doing is two things. First of all, those
traditionally been diesel vehicles, they're emitting a lot of carbon, but in addition is creating a lot of traffic congestion in our city.
So all of us have seen, you know, sometimes these trucks have to double park and block a lane of traffic or block a bike lane in order to get to
the front door. And that's creating sort of snarls of traffic in our cities. We've developed a whole suite of products we have our electric
delivery vans called the Zevo, but we also have our trace eCarts and we have a software suite.
And all of these together are really designed to help both eliminate carbon but also reduce urban congestion and make our streets safer. So the eCarts
we've tested with FedEx and to imagine these eCarts, they're essentially a giant locker on wheels with electric propulsion, they can carry up to 250
pounds of packages in a single go.
So they're really replacing the dolly that you see these delivery folks struggling with, you know, to get upstairs, they can carry 250 pounds of
packages, effortlessly. So it allows rather than a truck sort of stopping and a driver making three or four trips back and forth to the van to make a
single delivery, they can just drop an e-card and the truck can keep moving and the delivery driver can go and do those.
And it lets you separate the delivery runner from the driver and lets traffic keep flowing. We tested these with FedEx in New York; they were
able to reduce their curbside dwell time. So how long a truck is sitting there by about 50 percent. So that's real savings. And that's going to help
our cities really flow.
CHATTERLEY: Yes. And wherever data is concerned, just the ability to quantify what your footprint isn't or is and reduce some of that work for
individual companies to allow them to focus on their core business, I think is vital if we want to tackle addressing carbon footprints wherever you
are, on a consistent basis. You said 50 trucks production by 2025. Can I ask what the order book looks like? Is 2025 covered?
KATZ: So we are seeing as we've gotten more than 25,000 reservations from big customers like FedEx, like Walmart, like Verizon has one of the biggest
service fleets out there. And we just announced this week that we were adding shipping giant DHL to our roster.
So what you're seeing is some of the biggest names in the industry are coming to BrightDrop, because they really trust what we're doing. They know
we can deliver for them. And we already are delivering for customers today we've got vehicles on the road with FedEx in Los Angeles already.
With our announcement this week that we've opened our factory, what that really means is that we're going from sort of the early stages to this
becoming real today and going to scale today. And I think the power that General Motors our parent company brings is that we know how to scale these
kinds of businesses.
So we're going to see this business scale up very, very rapidly starting this year, and you're going to start seeing these trucks on your streets
delivering packages. And you'll know that those packages that have arrived at your front door have arrived without any tailpipe emissions, which is
really a revolution when you think about it. So we're really excited about this, you know, this momentum and how quickly this is going to scale up.
CHATTERLEY: Yes and I'm glad you pointed out the sort of benefits of being under that that GM umbrella for many reasons, particularly resiliency in
what is a cash burn business, potentially into a slowdown to.
KATZ: Correct.
CHATTERLEY: I want to ask you something that's sort of sideline to this, but I think it's very important. I read your whole CV when you were an
entrepreneur, you found a tech startup. You worked in media; you did a stint at McKinsey, the business consultancy.
I also had a look at your Twitter and you're not afraid to question Elon Musk's $8 subscription price for the use of Twitter? Can I just ask you,
your hand put on that is a sort of a big advertising platform, why you are willing to perhaps criticize that?
And just to throw in there as well, I guess to the point, the bigger point about what's going on Twitter now you know what free speech actually means
to you, as an individual and as a leader?
KATZ: Yes, so as a little bit of context. I was one of the early executives at MySpace who really was there at the birth of this industry. And so it is
an industry that I care about a lot. I think the reality is in this industry and this has always been the case for social media.
If you want to build an advertising based business, you need to build a platform where people can trust that their advertisements are not appearing
next to content that might be offensive to some of their customers. And so that's kind of just the basics of how ad businesses have always worked. And
I think that's something that Twitter is re-learning today.
[09:50:00]
CHATTERLEY: Diplomatic. So just to be clear, you're not going to be advertising BrightDrop products on Twitter anytime soon.
KATZ: Well, our business because we're a b2b business and so, most of our work is done really directly with clients. We do a lot of in person stuff
where they can test drive vehicles. So advertising is not a huge driver of the brake drop business today.
CHATTERLEY: You could have push that back up to GM and said, ask them. Travis, great to chat, you can use that next time.
KATZ: Yes, I believe General Motors has paused its advertising or had paused its advertising. But I don't know what the current status is.
CHATTERLEY: Thanks, Travis, we'll chat again soon, great to have you on. And good luck next year, fun times.
KATZ: Yes. Thanks, Julia, it's great to see you.
CHATTERLEY: Thank you, President and CEO of BrightDrop there. We're back after this.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". Morocco becoming the first ever Arab nation to reach the World Cup quarterfinals, watch this. The major
upset the Moroccans beat Spain in a penalty shootout, meanwhile, no Ronaldo, no problem. Portugal's 21-year-old Goncalo Ramos scored a trick
against Switzerland.
Well, Cristiano Ronaldo was benched. Darren Lewis joins us now from Doha. Darren, my pronunciation is all messed up though in my sheer excitement for
Morocco. I'm so sorry to our Spanish viewers. But wow. Wow, I'm so proud.
DARREN LEWIS, CNN SENIOR SPORTS ANALYST: Absolutely. And so there are few million Moroccan fans as well. There are Arab nation there are Muslim
nation. They're an African nation, the fourth African nation to get to the quarterfinals of the World Cup, the first Arab nation to reach the last
state and they played with so much style and verb.
I know the Portuguese were impressive as well, but it's such a big achievement for the Moroccans. Their coach Walid Regragui only took charge
in August. And yet he has only conceded just one goal, Julia, it is six games in charge so far, they're doing a superb job. And they are making a
lot of people around Western Europe as well as here in Qatar very happy indeed.
CHATTERLEY: Yes. I mean, I was on air yesterday when this result finally came in. And I was watching some of the penalties that were taken in you
know, I was having a conversation with one of my friends - afterwards and he never blame the goal if he let goals in.
But the performance from him was absolutely phenomenal. And I'm speaking as soon as nothing about football, but even I can appreciate that. Talk to me
about Cristiano Ronaldo though. I mean there were a lot of people that were arguing that if he were left on the bench this would be punishment. But his
replacement kind of proved that wrong. What a performance.
[09:55:00]
LEWIS: Yes, absolutely. It's happened for club and country as well. He was left on the bench for Manchester United. Lots of people said that would be
a problem. They're doing OK at the moment and now he has left. And now that's happened for his country as well.
And the problem for him now is he's got - as you suggest, his replacement a young man called Gonzalo Ramos, he's 21 years of age when he was in the
academy and coming through the ranks at his club in - and Portugal. They called him the wizard.
Now, the Portuguese papers are calling him the destroyer because that's exactly what he did last night to Switzerland. Three goals the first player
to score a hat-trick at the World Cup since 1990 and his performance was simply stunning.
And Ronaldo came on late didn't score doesn't score goals in the knockout stages only scored goals in the group stages at the World Cup. That's
another thing that counts against him. 70 percent Julia of the Portuguese public is telling the press yesterday that they would prefer him to be on
the bench and the younger players going to --.
CHATTERLEY: And we've got five seconds left. We've got to go. Well, there on Portugal Morocco, Darren, thank you. You'll be back. Absolutely, I might
not be. That's it for the show. "Connect the World" is up next. See you tomorrow, maybe.
(COMMERCIAL BREAK)
[10:00:00]
END
