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First Move with Julia Chatterley
Flights were Grounded Earlier Following an FAA System Outage; World Bank lowers 2023 Growth Forecast; Countries Prepare for Chinese Travelers Amid COVID Risk; U.S. FAA Lifts Nationwide Ground Stop, Delays Continue; John Deere Showcases the Latest in Farming, Construction; U.S.: FAA lifts Ground Stop Order, allowing Flights to Resume. Aired 9-10a ET
Aired January 11, 2023 - 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: I'm Julie Chatterley in New York its 9 o'clock Eastern Standard Time. And we've just learned the Federal
Aviation Administration or the FAA has lifted the ground stop that has crippled air travel for the last few hours. What does this mean?
Well, it now means flights across the United States are slowly resuming following a major failure of a system at the FAA or the Federal Aviation
Administration. All domestic departures were halted after the system called the new term failed. It provides pilots with safety information they need
before takeoff.
Just over half an hour ago, some flights left Atlanta and Newark airports to mitigate traffic congestion. Other airports across the country are
expected to now follow. But a backlog of departing flights of course has left passengers stranded on planes and inside terminals.
There have been more than 4000 delays and nearly 700 cancellations. We're also hearing that flights are still leaving Europe's main airports bound
for the United States. President Biden has also been briefed at the White House Press Secretary saying there is no evidence of a cyber-attack, at
least at this point.
Richard Quest joins me now I think for some vital context, which had a huge relief that the FAA still now have this system up and running and the
information is beginning to flow. It clearly could have been worse, but I think the fragility of the system and the ensuing impact on very evident
too.
RICHARD QUEST, CNN EDITOR-AT-LARGE: Yes, and that's going to be the bit that needs to be looked at why did this NOTAM, system failed? NOTAM stands
for Notice to Airmen, and it is basically every single pilot, before they get on the plane and head off, will receive the NOTAMs for that particular
route. It can be anything from runway closures work being done on taxiways, issues with air traffic control on Route.
They are constantly updated, not to read the NOTAMs or not to pay attention to them for your route is negligent indeed. So for a U.S. system where
aviation is so vast, if the NOTAM system goes wrong, then Julia, the issue becomes ensuring you don't fall through the cracks. Is there something
about the flight that you're about to take as a pilot that you need to know, a runway closure, Instrument Landing System not working this or that
or the other change of frequencies, all of that sort of stuff is in the NOTAMs.
CHATTERLEY: It's interesting, though President Biden very quickly out saying aircraft that are in the air currently are safe to land. Of course,
they cleared the airspace as best they could, by grounding all flights to your point that simply weren't considered at this stage, safe to take off.
What do you do in that situation then for pilots that are in the air? You go back to manual and you just feed them information that they're cleared
to land.
QUEST: Yes, I mean, essentially, yes. So first of all, any plane that's in the air will have received the relevant NOTAMs for that flight before they
departed. Now, if there was to be something on Route, that I'll be notified by that. So if a runway was suddenly out of action, or there was an air
traffic control problem, they would have been notified on route that this was the situation.
Yes, I think there's always an element of you know, would they have been following up NOTAMs on the way possibly, but not likely? I think the
reality is if you're in the air, you're going to be told what the situation is, where you are, and where you need to be? And by the way, the NOTAM
system, which of course, other countries have their own versions of.
So in Britain, it'll be the CAA in France, it'll be the regulatory authority there. They will have been issuing NOTAMs for their airports, and
their airspace. And the whole lot comes together, when a pilot is, when an airlines flight planning, puts the route together and gives all the
documentation now, of course, in the digital handbook or the digital briefcase to the pilot.
CHATTERLEY: You said the magic word here, which is digital and I was going to ask you it needs to be a sophisticated system. It clearly is but how
recent and how recently has it been upgraded? I think you know far better than I that the FAA has long said it needs more money for system upgrades
and to make greater progress in this kind of system. At least the questions that are now going to be asked and I think the obvious adjoined to that is
the risk of cyber threats.
[09:05:00]
CHATTERLEY: And of course the White House has come out at least at this stage and said there's no evidence of that but I think the vulnerability
here has been unfortunately deeply underscored.
QUEST: This is a valid point, because the FAA has received quite a lot of extra cash for its updating of the air traffic control system across the
United States. Here, it's going to be a question of, was there something wrong that like the Southwest situation where they hadn't updated? Or is
this just the natural vicissitudes of life where somebody unplugged something they shouldn't have done?
And then all the systems are in place, but you couldn't have foreseen that this was going to happen? You know, the oldest system of all stuff happens.
And what they will be looking at is why this happened? Could it have been avoided? Or is it just one of those things?
CHATTERLEY: Yes, as we all know, that more digitally savvy and the more digital pieces of equipment that you get, and the more controlled it is, by
computers, the risk of a switch being pulled, or a plug working loose?
QUEST: You know I remember, British Airways, which had a massive failure of its systems? Why because of contract a switched off the power supply? I
mean, these are the things you try to avoid with big signs saying don't do this, but if somebody does it, you need to look again.
We don't know with this one, I have to say, in the grand scheme of air traffic, things that can go wrong. The failure of the NOTAM system, what
the FAA did was an abundance of caution, choose a wonderful phrase, they stopped with a ground. But you know, was there a massive risk? Was it
likely to be catastrophic? It was this is way down on that list, in a sense.
CHATTERLEY: Yes, and that's really important too. And if it is a sign saying don't touch this button, they need a bigger watch, I think.
QUEST: Don't touch it.
CHATTERLEY: Yes, hands off. Thank you.
QUEST: Thank you.
CHATTERLEY: Richard Quest there. And yes, the major U.S. airlines have come under a bit of pressure to pre-market to meet today's travel uncertainties
already challenged, of course southwest, taking the biggest hit as you might imagine that set to fall just over 2 percent.
Some other U.S. carriers as you can see on track for some minor losses here if we stay at this stage and it's up and running and stable once again.
You'd expect some of that to filter out I think as the session progresses.
In the meantime, here's a look at U.S. stocks poised for a smooth takeoff overall, with futures pointing to a fourth straight day of gains for tech,
the European major solidly hired to and continuing. Their strong January runs the German DAX and the French CAC are up more than 7 percent so far,
in 2023, easily outperforming that Wall Street rivals the U.K. Footsie in fact less than 2 percent away now from record highs.
That said of course global markets caution; still a bounce JPMorgan CEO Jamie Dimon saying the odds of the Federal Reserve hiking rates to higher
than expected 6 percent this year and now 50-50. So even odds they're concerned too, that earnings estimates have not yet come down fast enough
to reflect the economic reality. We'll get profits from the U.S. financial giants out on Friday and of course, their views on the outlook too.
In the meantime, the World Bank also warning this week that the global economy will see growth of fewer than 2 percent this year that's well below
previous forecasts as we were discussing on the show yesterday. World Bank President David Malpass will join us later in the show to discuss the
details of that report.
In the meantime, let's move on and get it to Ukraine. An intense battle continues for the Eastern town of Soledar. The Russian Defense Ministry
claiming its military has now blockaded the town from the north and the south. Scott McLean joins us now from Kyiv. Scott, a whole host of use here
Ukraine saying they haven't taken controls the military group, the Wagner group saying that they had taken control. What do we know, at least at this
stage?
SCOTT MCLEAN, CNN CORRESPONDENT: Yes, Julia. Look, it is extremely difficult to get an accurate picture of what is happening? But I think it
is safe to say that there is still intense fighting happening there at this moment. As you mentioned, the Wagner Chief insists that the entire
territory of the town of Soledar this strategic town in Eastern Ukraine is under their control.
But not even the Kremlin is agreeing with that assessment just yet. They've said that things are trending in a positive direction, but they've not said
that they have captured this town yet. This would be really their first big win on the battlefield in months and months.
So for the Russian side, it cannot come soon enough to try to get a little bit of the momentum back from the Ukrainians who seemed to have had it all
over the last few months. We have got word from the Russian Military recently, as you said they are claiming that paratroopers have blocked off
the north and the south part of the city.
They also say that they have jets striking Ukrainian strongholds and they have their troops fighting, building to building on the streets of that
town as well.
[09:10:00]
MCLEAN: Ukrainians as you said, they may be regrouping but they insist that look the Russians have not taken this territory just yet. We also heard
yesterday Julia from a soldier who is on the front line in solidarity spoke to us late yesterday. And he said that look; it is difficult to know two
things in particular.
First, how many people have died because so many troops on both sides have been killed? And second where precisely the front lines are at any given
point, because there is such a large gray area in the town where fighting is taking place and where both sides are claiming that they're taking
control. The Ukrainian says that the Russians have been able to replace their troops very quickly.
This soldier says that the Ukrainians are also doing the same. In fact, the soldiers are coming in so quickly, that he hasn't even had time to memorize
their call signs just yet. What I think is especially interesting is yesterday, we heard from the Ukrainian defense ministry saying, Look, we're
not ruling out the possibility that we may have to withdraw or pull our troops back in the name of preserving life and limb.
This soldier seems to think that, that will happen at some point. He's just wondering why the order to do that hasn't happened already, in order to
make sure that these troops can live to fight another day and potentially retake. So that is if, in fact the Russians do manage to capture it today
or in the coming days, Julia.
CHATTERLEY: Scott, thank you for that report there, Scott Mclean. All right still ahead a sobering report from the World Bank on the state of the
global economy. The group's President joins us after this and we'll have the latest of course, as planes begin taking off across the United States
following that massive system outage. Stay with us that are all coming up.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back and to a global economy perilously close to recession. That's according to the latest assessment from the World Bank.
The group now estimates global growth of just 1.7 percent this year. That's a substantial drop from its previous targets and it's his particular
challenges for emerging and developing nations that have already been hit hard by the pandemic and rising interest rates among many other challenges.
Elevated inflation aggressive Central Bank policy to fight those rising prices, deteriorating financial conditions and of course Russia's war in
Ukraine is all weighing on growth. The group also warned that any new adverse development could push the global economy into recession that would
be the second within a decade and that hasn't happened in more than 80 years.
[09:15:00]
CHATTERLEY: Joining us now David Malpass, President of the World Bank Group. Oh David I wish you was coming on to talk to us about happier things
but the truth is this report is incredibly concerning. And it's just one more event or NOC to push the global economy into recession, welcome, and
tell us more.
DAVID MALPASS, PRESIDENT OF WORLD BANK GROUP: Thank you, hi, Julia. I wish it were happier things, you know, the world's facing these big challenges
they're coming one after another and it hits people in the weaker countries the most. They're not getting the capital flow that's needed in flow to
create new jobs. And in fact, that there's, there's really a capital drain going on from the developing countries and it comes at a time when the
advanced economies are not really robustly growing.
CHATTERLEY: And that's the challenge as the developed economies continue to raise interest rates that sucks money out of those developing and emerging
countries, because on a risk reward basis. Investors think they're better off putting their money perhaps in developed markets. Instead, this also
caught my attention.
You said, look, what we're looking at here for the emerging and developing nations is a multi-year period of slower growth that compounds the
reversals that we've already seen in things like education, health and essential infrastructure. David, this is incredibly worrying, how should
the global economy the global nations around the world, the richer nations, and institutions like the World Bank respond?
MALPASS: They should think about putting more resources into the developing world, you know, that's always a challenge for taxpayers, why do I do that?
But there are benefits to them from doing that. But then I think even big, much bigger than that is their own growth, their own production, being more
robust.
And then very importantly, is this capital allocation that's been going on now, for many years, where the advanced economies are borrowing so much
their governments are borrowing so much. That it leaves not much in terms of capital available for the rest of the world for the private sectors, and
for the poor countries so one of the big things would be making good utilization of the government spending in the advanced economies in order
to free up resources.
CHATTERLEY: You raise such an important point, though, and that is for leaders in the rich nations to have to explain to their citizens,
particularly at a moment like this, where everybody's facing price pressures, everybody's struggling with inflation, paying energy bills. How
do you make the point that actually if we provide money to some of the poor nations, it benefits everyone?
MALPASS: I think people understand that intellectually, but then from a political standpoint, it's hard to make that allocation of money outside
your own borders. So it's a leap, it says somewhat a leap of faith or a recognition that if countries get poor, if there's more poverty, that's
going to cause refugees, which has a direct impact. It also takes away markets that wouldn't be available for the advanced economies.
So understanding that, and then I think also finding practical ways out of the excess spending. One way that's talked about it at the highest levels
in the multi-national meetings that I go to what people talk about the importance of. If you have subsidies for certain parts of your population,
have them be targeted to the people that really need it, and have them be time bound don't have them go on year after year, but let them wind down
when they're not needed anymore and that frees up resources for everybody else.
CHATTERLEY: Yes, it's such a vital point targeted policies towards the most vulnerable. And you do illustrate it in this report, too. There is a
perhaps a counter to this, and that came from Goldman Sachs this week that was suggesting that, in their view, at least they believe the Eurozone can
avoid a recession.
They'd already said over the holiday period that they believed the United States actually can avoid recession. David, what do you make of that and is
that sort of already factored in here?
MALPASS: You know forecasts are hard to do and maybe right.
CHATTERLEY: Tough.
MALPASS: I would say let's focus on what are the key variables, one is energy prices. If you thought today that oil prices were going to go
higher, again, that would mean that the Central Banks will be trying to lean against it with rate hikes.
And you probably won't get those recoveries that you were just mentioning, and vice versa if energy prices come down, that frees up space for growth
elsewhere. Another key variable is how quickly can China push through the COVID infections and go back to its massive production capabilities that
help the world's supply chain.
[09:20:00]
MALPASS: So and of course, the Russia's invasion of Ukraine is still ongoing a year in I met with President Zelenskyy in Munich, just prior to
the invasion a year ago. No one dreaded, the idea that a year later there would still be a war going on. So that's a key variable itself.
CHATTERLEY: I mean, you've mentioned so many wildcards, the risk of perhaps higher rates than expected. Jamie Dimon and JP Morgan CEO mentioned that
potentially U.S. rates rising more than 6 percent. But actually, the one that I want to honing on is China, David, just from what you're hearing,
whether anecdotally, or that the data that you're collecting?
How much risk concern is there around the economic outlook for China at this moment? And I appreciate it's incredibly difficult to get a sense of
this moment, and obviously very much relates to the extent of the spread of the virus. How much uncertainty around the economic outlook there?
MALPASS: We're forecasting into a dynamic environment.
CHATTERLEY: Right.
MALPASS: You know they had those rippling shutdowns and really locked down to that occurred during the middle of 2022. And even into September, the
end, so that really was slowing their economy. You know, we saw their second quarter growth in 2022 at a minus 2 percent.
So it was a severe shrinkage of the economy, then they came back some and then it fell again into lockdown. So what I hear and I talked with someone
just night before last there, which is physically there, and said, it looks as if people are responding well enough. You know, many, many people being
infected with COVID, but then finding their way through it, and the health system so far, holding up, at least in most parts of the country.
So if that's the case, and then the factories begin to re increase their output, there is the upside possibilities on their growth rate and China,
you know, is the world's second biggest economy, not nearly as big as the U.S. but bigger than really any of the rest of the world and so their
impact matters, both on the supply side, and on the demand side. So both of those might outperform, you know, in a positive way from the forecast, and
that would lift our global growth.
CHATTERLEY: Yes, not the biggest yet, but they're certainly working on it. David, we've managed to find, I think a bright spot to wrap up the
conversation on and fingers crossed the bias is to the upside with their recovery and economic growth as well. Sir great to have you on the show as
always, thank you, the President of World Bank Group!
MALPASS: Thanks Julia.
CHATTERLEY: Thank you. We'll speak again soon. Alright, in the meantime, Japan and South Korea criticizing China's move to stop issuing visas to
their citizens. Beijing made the decision in retaliation for COVID travel restrictions imposed by the two neighbors. It's not clear whether China
will place visa suspensions on other nations too.
It comes as Chinese tourists starts to travel again after the country reopened its borders following three years of tight restrictions. Mark
Stewart is in Hong Kong and he has been exploring the impact.
(BEGIN VIDEOTAPE)
MARC STEWART, CNN CORRESPONDENT (on camera): China is open and that means tourists can travel the world and come to cities including Hong Kong, and
once they are here spend money a potential jolt at a time when many economies around the world are struggling.
UNIDENTIFIED FEMALE: This is cookies very famous cookie Hong Kong.
STEWART (voice over): Kiki Yang is packing for herself and others.
She's heading home to China with a specially purchased suitcase just to carry her gifts from her base in Hong Kong. She's been away for a year
after stringent COVID restrictions prevented her from seeing family and friends in China.
UNIDENTIFIED FEMALE: They will list for me, list of what to buy and what they want?
STEWART (voice over): Yang represents an economic jolt that will be felt around the globe. Now that travel restrictions to and from China had been
lifted.
IRIS PANG, CHIEF ECONOMIST, GREATER CHINA: So there will be extra demand in this world that hasn't been seen for three years within China and also for
the rest of the world.
STEWART (voice over): China is the world's second largest economy with a population of more than 1 billion people. Asia beauty store giant Sasa is
hoping to benefit.
DANNY HO, EXEC. DIR. AND CFO OF SASA INTERNATIONAL HOLDINGS: Just think about the number of consumers I mean the number of consumers and increasing
spending power that they have. The propensity to spend is quite massive.
STEWART (voice over): And then there's the travel component in Thailand a welcome banner at the airport, as Chinese tourists begin to visit once
again, promoting a lasting friendship between the two nations.
[09:25:00]
STEWART (voice over): The government even held a special ceremony for Chinese visitors as the first quite arrived. Popular attractions like the
Erawan shrine and the Golden Cabaret are preparing for crowds after the COVID route. A Thai official hopes the new arrivals will revive the
economy.
Yet in some parts of the world, the welcome is far from warm. More than a dozen countries including Japan are now testing travelers from China, which
China is protesting. In Milan, Italy, airport workers sanitize luggage. And in Brussels, Belgium, wastewater from a jet is removed for analysis.
All of this as China's COVID restrictions disappears while the case count is exploding, and hospitals are overflowing. As for Kiki, there's something
that won't fit in her suitcases precious time with her loved ones.
STEWART (on camera): This is not just about spending money. The opening of travel to and from China means face to face meetings instead of video calls
a chance for business leaders to rebuild business relationships that may have been tarnished during the pandemic. Mark Stewart CNN, Hong Kong.
(END VIDEOTAPE)
CHATTERLEY: OK, coming up here on "First Move" the aftermath of the major FAA systems outage. We'll live from one of the world's busiest airports,
next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move"! With the latest on today's flight chaos across the United States earlier all departures across the country
were grounded following a major computer outage. The White House though says there is no evidence it was a cyber-attack. But of course the travel
disruptions continue so far more than 4300 flight delays have been reported according to the flight tracking site Flight Aware.
[09:30:00]
CHATTERLEY: Amara Walker joins us now from Hartsfield Jackson Atlanta International Airport. Great to have you on the show with us! The good news
is that flights are going to be back up and running and reestablish, but I have to say it looks pretty quiet behind you. What are people there saying?
AMARA WALKER, CNN ANCHOR AND CORRESPONDENT: Yes. Yes, you're right Julia. It's been quite pretty much of the morning we're looking at the slower
travel day. But the good news is, according to the FAA here at Atlanta International Airport, the flights began resuming about an hour ago.
I do want to make clear too compare to the chaos and the messiness we saw over the holiday season this is not what we're seeing here. As you say,
there are really no lines, but there are delays, people are being inconvenienced.
If you look at the departure board behind me, there are a handful of delays up there. There are also some cancellations very few, I must add. A lot of
these cancellations happening at Southwest Airlines I think I saw one at United at around 9 am.
But look, I spoke with several passengers, people are pretty calm. And that's because they're dealing with at least the folks that I spoke with
two to three hour delays. I did speak with one young gentleman who is supposed to get to New York today, in time for a funeral, it doesn't look
like he's going to make it, listen what he had to say.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I was supposed to be like 11, or 12, when we land, and that's going to be two and we're missing the first week for a funeral.
WALKER (on camera): You're missing a funeral?
UNIDENTIFIED MALE: Yes mam, right now.
WALKER (on camera): What do you do when you get on the ground?
UNIDENTIFIED MALE: I mean, there's hope today, there's two luckily. So that's where we're going to go to the second one.
(END VIDEO CLIP)
WALKER: I spoke with another woman earlier this morning, which had a flight at nine o'clock and then she - her flight was delayed until about noon,
that she decided to get onto a different flight to take a different route. That flight was at 2 pm.
And then of course, that got delayed until six. So she said, look, I'm not going to wait here and you know be ping pong back and forth as according to
her schedule. So she just said I'm going to just go home and wait it out and hopefully things will get back online soon.
So again, the FAA saying flights have begun resuming about an hour ago here. Of course, the backlogs, how long that will take to things get back
completely normal? Unclear, hopefully, let's hope by this afternoon, Julia.
CHATTERELY: Yes. When we hope that gentleman gets to where he needs to go to and everybody else as soon as possible. Amara Walker there thank you so
much! Now for more on this CNN Safety Analyst, David Soucie, joins us now.
David, how many decades do you have in aviation? And if you've ever known this no tam system to fail in this manner or to suffer some kind of system
outage like this? What was - you heard it?
DAVID SOUCIE, CNN SAFETY ANALYST: First thing that came to my mind was cyberattacks, because I was very intimately familiar with this system and
the all of the FAA systems and how they're protected. So the first thing that came to my mind was possibility of some kind of cyberattacks, because
not only have we had this situation, but also the Southwest Airlines situation, most recently that had a very similar shutdown.
So what we're trying to find out now, I'm trying to get more information about that, to see if that's a possibility. But I don't think that's what
it was, at this point. I think it was just a system capacity issue and the communication side of the system.
CHATTERLEY: Yes. I mean, the Press Secretary for the White House, who illustrates said, at least at this stage, no evidence of it of a
cyberattacks. But I think a lot of people will concur with where your thoughts were headed at that stage. How confident are you now the FAA has
said, OK, flights can start taking off I know you have some concerns?
SOUCIE: Yes, I definitely have some concerns about how they did that? I go to my website now and look for the NOTAMs and what it's saying on their on
the site is that they may not have the most current information on there.
And then they asked you to click on a disclaimer that said, I have read this information. So what concerns me about that is now what they've done
is they've put the responsibility back directly on the pilot and the dispatchers to find out if there are any abnormalities in the systems.
And there are ways for them to find that out. The challenge is that it really delays that system. And they have to check on every flight 25 miles
north and south on each side of their flight path to see if there's any abnormalities along that flight path and with the airports as well on
either in. So there's a lot of information that they have to check and that's going to continue to cause delays.
CHATTERELY: Yes. And just to be clear, no pilots taking off unless they're confident that they have all the information that they need. The problem to
your point is that just getting access to that information without this NOTAM system just means far more delays perhaps than we've been looking at?
SOUCIE: Exactly. I'm glad you pointed that out.
CHATTERLEY: Yes. OK. How in your experience and your understanding of the need for upgrades the need for greater perhaps systems support? How
outdated is this system that it seems everybody needs everybody uses?
SOUCIE: Well, this system is tied to many other systems. So the challenge is trying to keep the day technology up to date. You have plateaus of
technology where the demand increases but the technology lags behind.
[09:35:00]
SOUCIE: And you always have that, however, with this FAA system, because it taps into so many different systems for information that any one of those
links could cause the whole system to go down. And I think that's what's happened here.
And that's why it's going to be so difficult to troubleshoot it to try to figure out which of the input systems the external systems that the NOTAM
system relies on failed? And that's where the, it's just - it's incredibly complex. This system is immeasurably complex and very difficult to
maintain, let alone to improve as things go forward. So the budget constraints, a lot of other issues come into play. But it is a challenge
for certain.
CHATTERLEY: David, you mentioned the Southwest Airlines debacle at the same time, and we've had two in the space of what just a few weeks now? The U.S.
transport Secretary Pete Buttigieg was instantly out there saying look, they're in communication with the FAA.
We know the White House was updated as well. Just the need to be a perhaps a step back here and a refocus on what kind of funding is required and
conversations about system updates, quite frankly, with something so pivotal?
SOUCIE: Yes, without telling you how to build a watch and getting into the details of it. I was actually a technical officer for contracting for the
internet, for the I.T systems at the FAA while I was an inspector there. And so try to get Congress to approve that it has to come out of two
different kinds of budgets.
So you have facilities and equipment budgets, you have routine maintenance budgets, or ops budgets, and those two things have to work together. And so
right now they have an interim FAA administrator. And that I think, is where the biggest problem is, is their leadership has changed so many times
and has been so different.
And they're interim, they're not actually appointed and stay for a long period of time, then these systems take three, four or five years to
maintain, to develop and maintain. So without constant leadership across the board, that's where these systems falter, because they each one of
these administrators has to have their kind of own way of getting it done.
And then once they start doing that, and then they're replaced with someone else whenever there's an administration change or something like that. So I
think there needs to be some drastic improvement in how the leadership is maintained in the FAA. And that will start to smooth out this budgeting
debacle of how much money do we have to respond to these new technological advances?
CHATTERLEY: Yes, two very important warning shots, I think, in as many as two months. David, thank you for your wisdom! David Soucie there, CNN
Safety Analyst thank you!
SOUCIE: Thank you so much.
CHATTERLEY: All right, coming up after the break, oh, dear oh, dear it's the rise of the Machines or is it John Deere is here talking autonomous
tractors, smart spraying, and much more stay with us that's next?
(COMMERCIAL BREAK)
[09:40:00]
CHATTERLEY: Welcome back to "First Move"! And an unexpected and unfortunate so let's call it that Wednesday wake up call for U.S. travelers flights
across the United States now slowly getting back to normal after a massive systems outage that grounded virtually all U.S. flights.
Earlier this morning as we've been discussing, stay tuned to CNN for updates throughout the day today. But first no turbulence in sight on Wall
Street with stocks on the rise across the board in early trade. As you can see investors hoping to see a market friendly consumer inflation read on
Thursday starts tomorrow that could ultimately help the Federal Reserve ease up on the pace of rate hikes.
Gains too across the Asia session the HANG SENG driven by China's reopening now more than 8 percent this year Morgan Stanley's saying investors still
under appreciate the economic ramifications of China's massive pivot away from that zero COVID policy. And optimism over Chinese reopening helping
boost the price of economically sensitive copper too it's up more than 1 percent today and currently trading at seven month highs.
John Deere has been showcasing the latest machinery and technology and farming and construction for today and for the future. It says more than
half a million of its connected machines are helping users gather and share critical data that allow them to work smarter.
Just as an example a fertilizer system called "Exact Shot" it can cut the amount of chemicals used by more than 60 percent the companies say saving
farmers millions and helping the environment too. The company, which is cutting costs by using 3D printed parts, displayed its wares at the
consumer electronics show including an autonomous tractor.
Much to discuss Jahmy J. Hindman is the Company's Chief Technology Officer and he joins us now. Jamie, fantastic to have you with us! I think you're
proving that it's a myth actually, that Agriculture remains in the relative dark ages, at least relative perhaps to other industries. And that's
essential because we have to feed more people and we have to be kinder to the planet?
JAHMY J. HINDMAN, CHIEF TECHNOLOGY OFFICER DEERE AND COMPANY: Absolutely Julia, it's great to be with you this morning. You're exactly right. We
have a billion people on the planet today we're heading towards 10 billion and we have to feed all those people and do it with less an input, less
land, less chemical, less fertilizer, and technology is really a key ingredient to the answer to that problem.
CHATTERLEY: OK, I feel like we've teasers. So you have to explain it now "Exact Shot" reducing fertilizer use by more than 60 percent? I mean, with
experts, we're talking about better for the environment, but also huge cost saving potentially too. Talk me through this technology and who's utilizing
it today?
HINDMAN: Yes, absolutely. So this is a technology that will make available to farmers that plant corn in particular, it's not uncommon to put starter
fertilizer down with the corn seed. But it's often state of the art today is to put that fertilizer, not just where the corn seeds are, but in
between the seeds as well, where it really does very little use.
Or has very little effect on the overall health of the plant and the starting of the plant. So exact shot really gives us the ability to time
the fertilizer dosage to exactly where the seed is planted and only where the seed is planted. That's how we reduce the amount of fertilizer without
impacting the vitality of the plant.
CHATTERLEY: Yes, and vitally important I think over the last 12 months when we've seen fertilizer prices soar so aggressively. It can be far more
efficient with what you're using, and then it makes sense to me. The other thing that caught my attention see in sprayer technology, and I read that
over the same error if you try to match the level of sensing and processing that this system can do then it would take 6000 people to do the
equivalent. Just explain this too?
HINDMAN: Yes, sure. So the sprayer technology see and spray technology is really this ability to put computer vision on 120 foot long boom of a self-
propelled sprayer that travels at 12 miles an hour in the field. So it covers roughly two soccer pitches per minute give or take.
And it does that while inspecting the ground with these camera rays that are across the room and using computer vision and machine learning to
separate the weeds from the healthy plants. And then we only spray the weeds because that's the only place in the field that the chemical the
herbicide is actually useful. So we avoid spraying roughly two thirds depending upon the field roughly two thirds of the herbicide on the field.
CHATTERLEY: Yes, it's interesting. I'm heading to Davos next weekend. In the summer I was very much focused on food security issues and I had a
number of conversations with farmers and they were farmers of various different sizes.
[09:45:00]
CHATTERLEY: But in certain cases, they were saying to me, look, we're just one bad harvest away from being unable to pay loans to continue to pay our
workers. I look at this and the benefits that this would bring particularly for perhaps the larger landowning farmers or rent tenant farmers.
But it's that decision to invest in the technology in the first place. What kind of costs are we talking about here, Jahmy because we also have to make
this accessible to as many people as possible?
HINDMAN: Yes, no doubt, Julia, that's true. I think if you look at the farmers' balance sheet, if you look at their P&L statements, you know,
their top costs on the farm are their inputs, it's their seed costs, their fertilizer costs and their chemical costs. So this technology that we're
talking about is really focused on reducing what is the overall largest portion of their costs and their business.
And we do that intentionally, right? That's where it can make the most impact for them from a business perspective. But it's also to the point
that you've already made really good for the environment, this is a win-win it's a win for the grower. It's certainly a win for the environment as
well.
CHATTERELY: Yes, it's funny. One of the other things that also caught my attention was some of the comments that you'd made on electrification. And
you look at this size of this machinery in the amount of time that it needs to be running for and in all the discussions that we have on the show with
this technology and not only is the weight of the batteries that required in this case, but the charging requirements.
And I know you've said in the past, look, and electrification in this regard it doesn't really work. And we and we have to be having perhaps a
far more intense conversation about the use of bio-fuels going forward. It also obviously plays to your market and to your business, too but just talk
to me about those two things and what we need to understand particularly for the agriculture sector?
HINDMAN: Yes sure, Julia. We were pro electrification; it's a good technology also. It just isn't a one size fits all technology I think. So
in many of our applications, especially the higher power applications, we just don't have the power, density and electrification to meet the needs of
the growers of the customers in those applications.
And so it doesn't necessarily work in all applications. We did at CES unveiled an electric full battery electric excavator is an example of a
place where it does certainly make good sense from an application perspective. But in some of those large agricultural machines that we've
talked about, we do look at bio-fuels as a bridge strategy to maybe an electric future, perhaps as technology changes.
But as it means to reduce carbon intensity of farming today and not just for new machines importantly, it's probably worthwhile to note that our
current machines are capable of consuming fully renewable diesel. So we could have impact not just on new equipment that John Deere might sell, but
on the complete install base as well. And if you look at that aggregated impact, it's really significant. That's why we're excited about bio-fuels.
CHATTERELY: Yes, there's not one solution. I think that's the message here as well, there's many ways that we can approach this. One of the most
important, I think, announcements that I've seen from the company was an agreement with farm representatives here in the United States to give them
the right to repair their own tractors the other agricultural machinery with their own parts, and not necessarily uses yours as well.
And I was just looking as we were looking at some of those videos there and some digitization in the computer screens that are on display as well. How
does that work in practice as things get more digitized? Does that apply to software too and sort of who then has the risk if things go wrong? Do they
have back - they fixed it themselves?
HINDMAN: It's a great question, Julia. So you're referencing that an agreement we signed with the American Farm Bureau Association just a few
days ago. And it's really I think, reaffirms our long standing commitment to the industry to make available, the tools, the information necessary for
farmers to repair their own equipment.
And we've had that commitment in the past, this sort of solidifies that and I think, importantly, opens up the dialogue and the conversation with
farmers through the American Farm Bureau Association that allows us to start to answer some of those questions that you just asked.
Where should this go? Where it doesn't need to go? What are the true needs of the farmers with respect to repair? And how can Deere assist in that
journey moving forward?
CHATTERLEY: Yes. Just feel like it's the beginning of a conversation, not the end of it. Jahmy great to have you on the show! I know we'll talk again
soon. It's a fascinating business you've got going on.
HINDMAN: Thank you Julia. I appreciate it.
CHATTERLEY: Thank you the Chief Tech Officer there at Deere Company. OK, coming up, one Japanese retailer is giving its employees a boost in the
face of rising inflation. We'll explain next.
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[09:50:00]
CHATTERLEY: Welcome back to "First Move"! People in Japan are suffering their biggest drop in living standards in nearly a decade. Now one retail
giant is doing something about it. Fast Retailing the owner of the fashion chain Uniqlo is raising wages to help staff cope with the rising cost of
living.
It says store based staff along with workers at headquarters and in corporate functions will get pay rises of up to 40 percent. Japan's Prime
Minister recently urged businesses to pay their staff more saying the economy could fall into stagflation if wages continue to lag behind those
price increases. Paula R. LA Monica joins me now.
Wow! I'm stumbling over my words because when you talk about a 40 percent wage increase, you're talking about adding some stickiness to inflation.
But I think what we have to bear in mind here is the fact that wages have what stagnated in Japan for the last three decades more?
PAULA R. LA MONICA, CNN REPORTER: Exactly. I mean, we've talked incessantly in economic and market circles about Japan's lost decade, which you could
accurately describe Julia as plural last decades. And now Japan, like the rest of the world is facing major inflationary pressures.
And as a result, you're Uniqlo's parent company, realizing that they need to boost wages to make their pay for store workers as well as managers more
competitive with what other retailers around the globe are paying right now, because everyone is facing those same inflation pressures. It's not
just Japan, of course.
CHATTERLEY: Yes. But this is a huge jolt, I think, for Japan and can obviously what the Prime Minister had been saying that we actually need to
respond to this. It comes, of course, just a couple of months before those annual spring labor negotiations that we know take place in Japan as well.
But I can't imagine other big companies in Japan can respond to this extent, surely?
MONICA: I doubt that they would boost pay up as much as 40 percent. That is a staggering, phenomenal amount, Julia. But you're correct, you would
likely see other Japanese companies, particularly ones that are consumer facing and have retail stores with workers that are on the front lines.
They probably will be forced to boost their pay any you know, lower paying business like retail, there's going to be more pressure there than maybe
with some of the tech giants in Japan that might already be paying a little bit higher wages for those white collar jobs.
CHATTERLEY: Yes, makes perfect sense to me. Paula R. LA Monica, thank you so much for that. Now, before we go, just to update you on the airport
situation across the United States, the FAA has lifted its ground stop order that now allows flights to depart following an outage of one of its
key safety systems.
As we've been discussing throughout the show it's not known what caused the problem, which has led to more than 4000 flight delays and nearly 700
cancellations that's according to flight tracker Flight Aware. Stay with CNN throughout the day for the absolute latest on what's going on with
flights across the nation?
[09:55:00]
CHATTERLEY: And finally it's been a busy week already here on "First Move". The market bulls beating back the stock market bear. Thursday's big U.S.
inflation numbers the hope is they won't scare. A princely memoir flying off the shelves not a copy it seems to spare plus no Mega Millions winner
me and my team are here to stay sorry producer Bob Cookson but happy birthday for tomorrow anyway.
The Mega Millions jackpot now reaching a head spinning $1.3 billion, the second largest prize ever, the next draw will be held on Friday night. Bob
will surely be playing and we wish you good luck, Bob. That said I certainly expect you back on the job on Monday.
He'd missed the madness, but Happy Birthday! That's it for the show. If you've missed any of our interviews today, they will be on my Twitter and
Instagram pages. You can search for @jchatterleycnn. And "Connect the World" with Becky Anderson is up next.
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