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First Move with Julia Chatterley
Ukraine Lashes Out after Video for POW Being Executed; Battle for K- Pop Agency SM Entertainment Heating Up; Lego CEO: We have to Renew Ourselves Constantly; Powell to Discuss Fed's Fight to Tame Inflation; ZOOX CEO: We know we are Changing the Landscape; Twitter Employee Tweets Musk to Ask: Am I Fired. Aired 9-10a ET
Aired March 07, 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]
JULIA CHATTERLEY, CNNI HOST: A warm welcome to "First Move", great to have you with us for a - Tuesday edition of the program just ahead this hour.
China sabre-rattling, the nation's new Foreign Minister warning conflict and confrontation looks inevitable without a U.S. course correction.
President Xi issuing a rare pointed attack on Washington too saying the West is looking to "Contain China". Plus, Bakhmut battling Ukrainian
President Volodymyr Zelenskyy, vowing to never back down as far as fighting for the symbolically important town intensifies.
Russia meanwhile claiming its liberation quote of Bakhmut continues and inflation tackling Fed Chair Jay Powell testifying before Congress in the
next hour, investors watching for signs of higher rates for longer. And as we await Powell's pronouncements U.S. futures, as you can see mostly higher
after a little change on Monday.
Europe also seeing some green too resilience, I think we should call it that in the face of bond market pressure investors now anticipating the
highest levels of Federal Reserve and European Central Bank interest rates this tightening cycle Ouch.
And mix session meanwhile, for Asia with the SHANGHAI COMPOSITE falling more than 1 percent mainly economic rhetoric from the ongoing National
People's Congress so far, no mention of stimulus to help hit those growth targets and the frosty U.S.-China relationship weighing on investors
sentiment too.
JP Morgan CEO, Jamie Dimon, saying worsening ties between the two superpowers is a top concern this year along of course, with the ongoing
war in Ukraine, both of those subjects our top stories today and we do begin in China. The new Chinese Foreign Minister laying out a stark warning
to the United States in his first Press Conference, saying - should not repeat the war in Ukraine in Asia with Taiwan and criticizing America's
perceived Indo-Pacific strategy. Just take a listen to some of what he said.
(BEGIN VIDEO CLIP)
QIN GANG, CHINESE FOREIGN MINISTER: No cold war should be allowed to be repeated in Asia. The Ukraine crisis should not be repeated in Asia. It
claims to maintain regional security, but in fact provokes confrontation and plans in Asia-Pacific version of NATO.
(END VIDEO CLIP)
CHATTERLEY: Marc Stewart joins us now. Marc, we have to be very conscious, I think of a few things the audience the context here the fact that this is
a highly scripted event, but if he wants to make a splash, he certainly did it.
MARC STEWART, CNN CORRESPONDENT: Julia that really is the key. Qin Gang is taken over as China's new Foreign Minister at a time when Xi Jinping is
almost trying to put the reset button on his administration, setting the tone for the years ahead. Qin Gang was known as a very careful and
accomplished diplomat when he served in that role.
Now as Foreign Minister, he is now embracing the strong, pointed very direct, very stern language that we have been hearing from Beijing for
months. Most notable is a statement that he made referring to the U.S.- China relationship and what that future may hold, take a listen.
(BEGIN VIDEO CLIP)
GANG: If the United States does not hit the brake, but continue to speed down the wrong path, no amount guardrails can prevent the railing and there
will surely be conflict and confrontation.
(END VIDEO CLIP)
STEWART: Also of note is the fact that he made reference to the U.S. response reaction to the suspected spy balloon all of these weeks later,
again, suggesting it was an overreaction. Finally, Julia, I want to point out some comments that we heard also from Xi Jinping, Chinese leader Xi
Jinping, he was speaking to a group of business folks.
He made comments to the effect that the U.S. which is rare for him to point out to the U.S. directly, but the U.S. along with the West has done things
that have gotten in the way of China moving forward. Remarkable that he made such a direct reference point to the U.S. But again, we are in the
beginning of a new session, a new regime in a way with new leadership. And that's how Beijing is making its point through very strong brigade.
CHATTERLEY: Yes, OK. American officials that are hearing this understand the context too, Marc, but to fiery rhetoric nonetheless. Marc Stewart
there, thank you for joining us! To Ukraine now and Ukraine's President promising to find the people responsible for killing an unarmed Ukrainian
soldier. It follows the release of video showing the apparent execution of a prisoner of war allegedly in Russian captivity. Here's part of that video
and a warning though it contains graphic content.
[09:05:00]
Alex Marquardt joins us now from Eastern Ukraine. Alex, what more do we know about the source of that video and I believe that soldier involved has
now been named.
ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: Yes Julia that horrific video really fueling outrage, fury sadness all across this
country. We are learning a little bit more. The brigade that this man belongs to are believed to belong to has identified him as Tymofiy Shadura
they published his name earlier today. They said that he has been missing since February 3.
A final confirmation the Ministry of Defense has said when it will come if and when the soldier's body has been returned to Ukrainian held territory
for now it is in Russian held territory. President Zelenskyy as you noted, has said that the murders will be found.
It is believed of course that Russian soldiers were the ones who carried out this execution. Ukrainian Officials say that is more evidence of
Russian war crimes. We've also heard President Zelenskyy speaking about the battle for Bakhmut saying that more units are being sent towards Bakhmut to
reinforce it.
That battle is getting much fiercer, it is getting much more difficult for people to be evacuated from there and Julia we spent time with the Deputy
Mayor of Bakhmut who said that everything is being tried to get civilians out of the city. Take a look.
(BEGIN VIDEOTAPE)
MARQUARDT (voice over): Racing into the war zone, a white knuckle drive towards the middle of Bakhmut. This is the last successful emergency
evacuation mission by the Bakhmut police. We need to go faster an officer says the Russians can clearly see us.
This team called the white angels grabbed civilians who have been trapped. Throwing belongings in the back there's a cat someone else with a guitar.
The fighting raging nearby the residents told to hurry up and get in and sit anywhere they can. As they hold on tight, the rescue mission speeds
away from the smoldering city.
Ahead, there's smoke from a Russian strike. Getting dropped off safely; Leonie tells the officer that everything is blown up in Bakhmut, even
inside his apartment. They've survived months of brutally intense assaults. Russia has made gains trying to encircle Bakhmut and surrounding it on
three sides as Ukraine desperately tries defending them off.
Today we met Bakhmut Deputy Mayor, the city nearby at a makeshift aid center for Bakhmut evacuees. He tells us it's very hard to persuade the
more than 4000 civilians left there to leave. They say they have nowhere to go and have no money. It's very hard to survive there; he says it's not
life, its survival.
Drinking water is a big problem. Walking to the well is dangerous he says. Shells landing on your head all the time all he now feels he tells us is
fear and sadness. Everyone here knows how hard it will be for Ukraine to hold on to Bakhmut. Sweta's elderly mother with disabilities didn't want to
leave. But Sweta managed to convince her.
I don't know if my house is still standing, she tells us. It's very painful thinking about those still in Bakhmut, her eyes well up. I just want them
all to survive; she says that's my only wish.
(END VIDEOTAPE)
MARQUARDT: And Julia Russian forces led by the Wagner mercenary group have managed to encircle the city on three sides to the north, to the east and
to the south. And they are pressing forward, they are managing to encircle it from the north and the south is pressing into the city from the eastern
side.
We saw a video posted by Wagner forces just yesterday, on the eastern side of the city, they removed the Ukrainian flag from Ukrainian monument. They
replaced it with their own flag; they raised their guns in the air. They are trying to make it very hard for Ukrainian forces to resupply from the
western side of the city, which is the only one that is still open to Ukraine.
There are two main roads going into that city. We spent a lot of time in the past few days on that main supply route. That's where just a couple of
days ago Russian forces blew up a crucial bridge. It has been replaced with a temporary bridge, but it is getting a lot harder for those civilians to
be evacuated for those Ukrainian forces to be resupplied.
At the same time, we are hearing directly from the Head of the Wagner PMC as it's called, Yevgeny Prigozhin who has been complaining that he is not
getting the ammunition that his forces need from the Ministry of Defense now that just speaks to this a gulf that we have seen developing between
Russia's Military and this private military.
[09:10:00]
Yevgeny Prigozhin has also said that they are seeing more Ukrainian units move towards Bakhmut and that is what President Zelenskyy says that they
are going to do. They're going to reinforce their positions he says that the recommendations from his generals are not to withdraw it is to stand
their ground to reinforce.
So he says that they're looking for units to send in that direction. So no talk of withdrawal right now certainly no announcement but Julia, we are
starting to see perhaps the groundwork in terms of statements that might be made. If there were to be withdrawal top U.S. and Ukrainian officials,
saying that if Russia were to take over the city.
It would merely be a symbolic victory that Ukraine has managed to degrade Russian forces kill a lot of Russian forces and leave them in a weakened
state. So even if they weren't to take over Bakhmut that they will be far weaker and unable to go much farther after that.
But no doubt, if Ukraine were forced to withdraw from Bakhmut, it would be a significant victory. They have lost thousands of men there and Russia
would be able to claim a symbolic victory the first city that they would have taken from the Ukrainians for months, but that is certainly not a
foregone conclusion Ukraine for now holding their ground, Julia.
CHATTERLEY: Yes for now the message is reinforced rather than anything else. Alex, good to have you thank you. Alex Marquardt there, joining us
from Eastern Ukraine. Now, for the sixth time this year schools, airports and railroads across France are bracing for disruption amid calls by unions
for a nationwide strike.
They're fighting legislation to raise the retirement age, which would mean an extra two years of work for most people. Jim Bittermann is in Paris.
Jim, great to have you with us! And I believe Paris expected to bear the brunt of these strikes. Just give us a sense of scale and how many people
are involved with this?
JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's it Julia I can barely hear your question because of what's going on here the
background. In any case, yes, this is probably going to be the biggest one of any of the district's demonstrations and demonstrations across France,
as you mentioned, to 6, demonstration, 6 day of demonstration.
It kind of a crunch time for the unions here because coming up in just about 7 days or 8 days, time the enabling legislation which will move the
retirement age from 62 to 64, will be before the National Assembly. So if the unions want to convince people, you can say legislators that they are
right in this proposing, and they have got a few days, just a few days left.
And one of the things that's going to be interesting at the end of the day today is to see whether or not there have been a number of strikers out. We
see demonstrations, but does this represent what's the people that are really on strike, for example, there are about 30 percent of the teachers
are on strike.
So not a great turnout there as far as the unions are concerned but 4 out of 5 of the TGV trains have been canceled because of the strike so it's a
real question of how big the union turnout is going to be. And then the second question is, how long this goes on, because for the first time in
this series of strikes, the unions are calling for what they call ongoing strike normally strike, say, here are just for a day or so.
And now they wanted to have ongoing stress, meaning that it could continue right up until the vote in the parliament. So we'll see how it looks at the
end of the day, whether or not this is the kind of thing that's going to move the government at the moment, it hasn't none of the other previous
demonstrations have been very effective in that regard, Julia.
CHATTERLEY: Yes, Jim, I'll refrain from asking you another question, because I know you can barely hear me, but I did hear you say raising the
retirement age from 62 to 64. Maybe it comes from a privilege of loving one's job, but that does feel very young to collect a pension. Anyway,
thank you for your report. And we'll speak to you soon, Jim Bittermann there in Paris.
Now to the world of K-Pop and it's a battle of the bands but with a difference. The influential pop music agency FM entertainment at the center
of a billion-dollar takeover battle in one corner the Internet giant Kakao in the other HYBE the agency behind boy band BTS stick with me. I know it's
complicated. Richard Crespo recently with HYBE's Chairman and asked why he wants a bigger stake in SM.
(BEGIN VIDEO CLIP)
BANG SI-HYUK, CHAIR OF HYBE ENTERTAINMENT: I have long been sad that a good company like SM does not have a good governance structure. And HYBE is
well-known to help artists become successful only in the management process without touching their autonomy of their artistic originality. You can say
that many people are looking forward to the effects of HYBE's acquisition of SM and from the perspective of corporate sentiment.
(END VIDEO CLIP)
CHATTERLEY: And Paula Hancocks joins us now. Paula, never mind K-Pop my brain went pop when I was trying to understand exactly what's going on here
and what it's going to mean for fans and some of these K-Pop stars. Just explain to us what's going on and what we need to understand?
[09:15:00]
PAULA HANCOCKS, CNN CORRESPONDENT: So Julia basically there is a tug of war at the moment to try and gain control of the iconic agency SM
Entertainment. So what has happened today this Tuesday there's a new development Kakao, which is the Internet giant here has launched a $962
million bid offer for the SM Entertainment.
It's done this through a tender offer and that's just after it had a previous attempt blocked by a local court. So it's really a counter attack
to another company you just heard from the CEO there HYBE, who had also been trying to gain the controlling share in SM Entertainment.
Now HYBE is the agency that manages BTS, a very influential agency here and it had been trying to launch a tender offer if you don't own, but that was
rejected by investors which really laid things open for Kakao to come in and make this offer. Now we don't know if this offer is going to be
accepted.
We know that they have until about March 26 for shareholders to decide if they want Kakao to work to have control of their shares and see if they can
get up to that magic majority figure. And we also don't know if HYBE is going to up its offer as well.
What we do know though and this is quite interesting is beyond the entire complex and the difficulties of the business. There is a very public and
growing complex spat in the shareholders. We know that the founder for example of SM and man called Lee Soo-man, he's known here as the godfather
of K-Pop, a very well-known man.
He actually has sold his shares his controlling stake to hide but those that he wants managed on the management team now favor Kakao and they are
having a very public spat. So it is an increasingly complex story. But of course, the stakes are very high who is going to control SM Entertainment
too. Managers, the likes of Girls Generation I don't know if there will be more twists and turns but Julia it has certainly been quite a saga already.
CHATTERLEY: Yes, the money wins, wealthy, who's got the deepest pockets? Paula Hancocks, thank you so much for that. All right, straight ahead.
Everything's still lively at LEGO. The Danish toy giant is 90 years young. With all the pieces still falling into place it seems.
We'll discuss LEGO's future with its CEO Niels Christiansen that's coming up. Plus, zooming ahead with Zoox, Amazon's autonomous vehicle firm is road
testing its Robo taxi. Could the vehicle be headed down your highway soon? We'll discuss with the CEO stay with CNN.
(COMMERCIAL BREAK)
[09:20:00]
CHATTERLEY: Welcome back to "First Move", building a business for 90 years LEGO is marking its anniversary it seems by outpacing its rivals and
gaining market share. The Danish toy giant reported a jump in revenue of nearly 17 percent last year, and a modest net profit rise of 4 percent.
It seems new products are strong digital presence and resilient supply chains all played a part in growing the business. And I'm pleased to say
Niels Christiansen is CEO and President of the LEGO Group and he joins us now. Wow, that's a pretty cool backdrop, I have to say.
We'll talk about some of the toys in a second. But congrats, I think is the word on another solid year, though, I did see your forecasting
normalization of top line growth this year. So just talk us through what you're seeing and put that in context.
NIELS B. CHRISTIANSEN, CEO & PRESIDENT OF LEGO GROUP: Yes, we were very happy with the year we've just disclosed, because it's not been a year
without challenges between inflationary cost or stepping out of operating the Russian market and the beginning of the year, also having seen some
COVID restrictions in China.
So we overcame all that by growing and we grew by taking market share basically throughout the world and growing way ahead of the market. So that
was exciting. Looking ahead, we will continue a lot of these investments allowing us I believe, to take market share. So we anticipate continuing
that and depending on how the market is and then also grows into 23. So that's all expectation.
CHATTERLEY: You know, the last time you and I were speaking, we were talking about some of those input price pressures, in particular in the
tough decision that you had to make on select products to raise some prices. Where do you stand today? And is there any hope as the energy price
costs have come down between now and the last time we spoke. Perhaps reducing or is there just not enough clarity to be able to take that kind
of decision.
CHRISTIANSEN: Things probably too early to reduce, but the pressure set up is exactly like in the autumn, we did raise prices on a select part of the
portfolio because of those input prices going up. We have seen to your point and coming down a little bit from the peak hope to see that continue
throughout the year.
Hopefully then we can avoid actually having to increase prices more. And as always, we would like to make the product as attractive and as good price
value as we came across. And I think we've been pretty OK with that during the COVID pandemic not raising prices until a little bit in the autumn of
last year.
CHATTERLEY: We can talk about two things in terms of investment in both digitization but also in new products as well. And I think one of the other
things that stood out from these results, almost half the products you sold last year. So 48 percent were new, in 2022. Just that up-cycle of
continuing to innovate and provide new products is also surely key to the kind of growth that you're managing to sustain.
CHRISTIANSEN: Yes, it's quite special actually. And I typically say we are no better than what we've just invented. So we have to renew ourselves all
the time, it's just over half of the product line being new every year. So we are as good as the creativity and the innovation we can bring about all
the time.
But it on so allows us to be super relevant and cool to the kids and adults with the diet right now. And in that sense, I think it's also a huge
strength that we put it off with the right type of innovation with the right relevance.
And it also really puts us I think, in front of what the consumers want right now. And that was very successful throughout 2022. And that, of
course, is the biggest challenge of all that we have constantly sitting with us but it's working well right now.
CHATTERLEY: And that applies wherever you're operating in the world. I remember being astonished at the quantity of stores, and the footprint that
you were opening in China specifically last year in hindsight, perfect sight, but with the end of zero COVID policies that surely seems like great
timing.
What are you seeing there because the mood music, certainly on the manufacturing side and the services side is we're seeing a roaring back to
life in China's economy? What are you seeing in terms of product demand?
CHRISTIANSEN: We actually see that. I mean, it is true. You say we had we saw a bit of it and it was actually very hard to keep stores open or even
getting people into stores. What we've seen the first couple of months of this year is really the traffic has come back basically across the world.
We now see traffic at or even above the pre-COVID 2019.
[09:25:00]
So it's really exciting to see how in a business like ours, the fact that you can get in - you can be around the - you can get your hands on LEGO
play or LEGO bricks that just is so important for the brand and people and consumers like it so much.
That they walk out of the stores with a big smile and a high NPS, when we measure that coming out. So that's something that's very important for us
in building the brand. And in China, as your example is, we have a lot of kids in China that are interested in the LEGO brand.
But whose parents did not play with LEGO bricks when they were kids and not into the brand aware of the brand enough yet, that's when it's super
important for us to put in place stores not only in the biggest cities, but also in more rural areas or smaller cities, or tier three or four cities
and that works really well. Either way, we also open stores in a lot of other countries outside China. So this brand building element and
experience building element of a store is Super Bowl.
CHATTERLEY: And that takes me to my next question, because I know one of the key proponents of how you run this business is to match where the
demand is to the manufacturing base?
And having it localized, which obviously helps you navigate what we saw during the COVID pandemic and the efficiency of supply chains. Talk to me
about the decision to break ground because I know that took place late last year on a $1 billion carbon neutral factory in Vietnam.
And just to give my viewers a sense, the size of this is 60 football fields, I believe. So we're talking about a whopping facility, why Vietnam
and perhaps not choosing a location in China?
CHRISTIANSEN: There are some things; we have one location in China. So in that sense, we've actually been expanding that facility over the last
couple of years, but with the potential for growth in Asia, the amount of kids that are there and the potential we see for growth, we actually would
like always to effectively close to consumers.
So we can kind of avoid the long supply chains and the delays. So we can produce the right product very close to the time, the continuous moment and
by the way, serve transportation and sustainability. CO2 emissions are kept to a minimum. So they're getting around is a very good location for us to
serve kind of Japan, Australia, part of Asia Pacific.
And yes, it's a huge spectrum when you stand there you oversee it. It's like 66 football fields next to it. There's another 70 football fields
worth of land for the solar panel. - power that factory right in it. So it's is quite a big piece of land. And by the way, the same is happening in
Virginia, Richmond, Virginia in the U.S., you're building a similar --.
CHATTERLEY: Yes, you have a lot going on. I want to talk about the metaverse and the tie up that we were discussing last time with epic, which
is of course the maker of fortnight, which I know a lot of young people particularly and parents watching this will know very well. When can we
expect the fruits of this collaboration to be released? How long do we have to wait?
CHRISTIANSEN: You have to wait a little bit longer. Yes, it is exciting. We have to wait a little bit longer and each of us I think the second half of
the later part of this year we'll be able to reveal more about that. But I am super excited about how that's coming along and what we can offer up
experience in digital experiences when we get there but it takes a little bit longer unfortunately.
CHATTERLEY: That's OK. We're building up the anticipation. You can come on the show and talk to me about it when you're ready for release.
CHRISTIANSEN: No.
CHATTERLEY: There you go, that's a date now you've promised. Niels Christiansen CEO and President of the LEGO Group there, thank you so much
for joining us today. OK, stay with CNN. Coming up Jay on the way the U.S. Fed Chair could deliver a sobering message on inflation and interest rates
when he testified before Congress next hour. What this all means, next?
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to "First Move". And U.S. stocks are up and running on Wall Street this Tuesday. The Fed Chair Jay Powell set to
deliver his economic views what he sees before Congress will surely make news and it might not be good news cautious trading there for ahead
Powell's pronouncements next hour his first appearance on Capitol Hill in fact, in nine months.
Powell said to face tough questions from lawmakers fearful of the impact of higher interest rates on their voters. He could also take the heat for not
getting inflation more firmly under control. So, he's bashed either way unfortunately, in other headlines shares of Facebook's parent company Meta
hire.
In early trade amid rumors the firm could announce more job cuts, just for context over 10 percent of Meta's workforce will let go late last year.
Also snap shares rallying almost 10 percent during Monday's session. You can see their investors monitoring the increasingly hard-line stance in
Congress against its competitor TikTok, two centers set to introduce a bell today that would make it easier to ban TikTok in the United States.
And as you can see there snap seemingly would be a beneficiary and from snap and TikTok to the Jay Powell countdown clock, the Fed Chair about to
speak as we speak and Christine Romans is here. Christine, you said it yesterday and I'm reiterating it, the problem he's got he said he's going
to be criticized on both sides. Inflation is painful, higher prices is painful. But the treatment is we've now been saying for more than a year to
try and fix that. It's also painful, particularly if you have debt or credit cards.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: You know, absolutely. And he's going to want to deliver a simple message about you know, what the
Feds playbook is and how they're sticking to that playbook. But there's nothing simple about what's happening in the economy right now. I mean, you
have a very strong labor market; you have consumers that continue to spend.
The underlying strength in the U.S. economy is still strong, almost impervious to those eight interest rate hikes. And so, the question is, are
we headed for a recession? Do we dodge a recession and the front page of the Wall Street Journal this morning, they called it the good Dow
recession. Waiting for good Dow, remember, I don't think good Dow in that play ever actually came.
But we're sitting here worried about something we don't know what the shape of it is, and what it's going to look like. I also think that you're going
to hear from Democrats and progressives in particular, who are going to say, hey, wait a minute, all of these interest rate hikes are just a very
cruel, cruel tool that hits people who don't have any money, who don't have any resources who have to rely on debt to grow and survive. So, I think
there's a lot of different ways this hearing today could play out.
CHATTERLEY: Yes, cool and crude. Unfortunately, it's a relatively blunt instrument. The question is, how high do they go? I made the comment
earlier on the show that we're in a situation now where if you look at what bond markets or investors in bond markets bonds are telling you.
They see the rates the highest they've been for both the European Central Bank and for the Federal Reserve since their rate hike process began.
There's real palpable fear out there. I think that the rates have to go significantly higher than they are even today.
ROMANS: Yes, and how much higher I wonder, if we've had eight rate hikes it's such a trajectory. And the economy is still chugging along like this.
[09:35:00]
I mean, outside of housing and I think credit card interest rates, you haven't had a meaningful impact yet, of those higher rates, unless there's
a place in the economy that I can't see that I'm missing, right. But in terms of slowing things down, I think that is just a really fascinating
place to be. And again, what is going to be the Feds simple message today, because there's no simple explanation for what's happening in the economy
and no simple way to solve it.
CHATTERLEY: Yes. And we always want answers immediately, recession or not no landing or a hard landing. To get back to what we were talking about
yesterday, with Mr. Zandi over at Moody's this idea of a slow session, if you can do this gradually. If you can raise rates gradually and wait to see
what the impact is, in a map, perhaps you can avoid the ongoing boom bust cycle that we've you know, the habit that we've got into.
ROMANS: And the job market is so strong, the unemployment rate still so low. You could have a meaningful worsening of the labor market and still
have an unemployment rate that only gets to maybe just south of 5 percent. Would we accept that? Would that be an OK way to kill inflation, maybe?
CHATTERLEY: Yes certainly, better than higher.
ROMANS: Yes.
CHATTERLEY: Christine, thank you.
ROMANS: Nice to speak to you.
CHATTERLEY: OK, coming up on "First Move" the taxi of the future, the CEO of Zoox on a major milestone, and challenges in the journey next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". No driver, no problem. This Robo taxi built by Zoox successfully driving on public roads for the first time,
Zoox an autonomous vehicle company owned by Amazon is running a shuttle service for its employees between the company's two main buildings in
California.
It can travel at up to 35 miles an hour with up to four passengers on board. Now your safety regulators have been reviewing Zoox's operations
since last year. And just this week, announced a probe into Zoox's is self- certification that allows these journeys to be made.
Joining us now is Zoox's CEO Aicha Evans. Aicha, fantastic to have you on the show once again! We clearly have a lot to discuss. But I want to start
with these trips because this is clearly a huge moment. What is the feedback from employees been liking and how do they work?
AICHA EVANS, CEO, ZOOX: The feedback has been first of all, hi Julia. Thank you for having me again. The feedback has been wonderful.
[09:40:00]
One of our engineers whose sort of, you know, you want a mix of people who are sort of believers, people who are skeptics. And one of our tough
critics, internally, got off the robot taxi on his first ride and his eyes were, he said, this is unbelievable. It's even better than I thought. And
so that tells you a little bit of the feeling of the in terms of the reaction.
CHATTERLEY: Has any of the staff gone, you know what, this is really great. But I'd rather take my own car, or I'd rather walk and I just want to give
it a bit longer because I would understand people saying that too.
EVANS: So internally, Julia, we run a culture that's very transparent. We kind of don't sell miracles to our employees. That's just not how we roll
here. So, they understand this is a first step, nobody's giving up their car or walking or doing any of that any anytime soon.
And even in the future, when we start launching with sort of a broader scale, it's really about addressing the current demand that is already
using mobility on demand. And then yes, eventually making a dent into personal car ownership walking bicycles are good. We just want to be an
additional mode of transportation, and serve a segment that currently we feel is poorly served.
CHATTERLEY: Yes. And just to be clear and you can correct me if I'm wrong. But there are, I believe, limitations to this. I mentioned the speed limit,
it tops out at 40 miles an hour, even though the vehicle can go quicker. You're only using it Saturdays and Sundays during daylight hours and not
during bad weather. Is that right? So, there are limits even to the program that you're currently running?
EVANS: Absolutely. So, we've been very clear and very consistent at Zoox since inception, that safety is foundational and critical. And by safety,
we don't just mean qualitative safety, we mean, a quantitative safety case. And so there is the notion of what's called an ODD or Operational Design
Domain. And what you can expect is that, that's the first step, we call it a tiny step, then comes small comes medium comes large.
And so, by the time we launch our employee shuttle in, in the spring, you will see more expansion of the ODD and then every few months, a lot more
expansion. But the goal makes no mistake about it is basically, you know, rain, night time daytime, snow is going to take a while that's, that's way
more complicated proposition and dense urban environment, because that's where the demand is.
CHATTERLEY: Yes, I mean, we're now watching videos as you're speaking as well of, of the vehicle moving. And I think what's probably very clear to
my audience now is, there is no driver, there's no steering wheel, there's no brake.
So, this is very different from a sort of Tesla example, just to use one of a vehicle that can be driven, but also has an autopilot feature. What
you're creating here and have created is a car that will never have a driver will never have a brake and is fundamentally an auto autonomous
vehicle. Correct.
EVANS: That it is a transportation robot. It's not a car, I've said this many different times, it uses a lot of things that are similar to cars. But
it's a transportation robot, and really the future of transportation, especially in major, major cities. And yes, we do not want you to think
about driving, when you're in that vehicle. If you do, we want you to think about being transported. And if you think about driving, we actually
failed.
CHATTERLEY: Yes. So, this is a very important distinction, I think, which brings me to the regulators, and how the regulator's view this, regulate
this, understand the data that you're collecting and understand the safety of the vehicle, I think as well, Aicha.
So, explain to me the decision by auto regulators this week to launch a probe. Because I know you've been going through a review process now and
answering questions for many months. What does the announcement to this week on Monday this week mean?
EVANS: We welcome it. We've been working with the regulatory agencies at the federal, state and local level for multiple years. We knew that we Zoox
chose to go for the ultimate solution, which is essentially a robot taxi purpose built for just doing exactly this. And so, we know that we are
basically innovating changing the landscape with no manual controls whatsoever.
And we would expect them to issue an audit query, which is essentially a request for more information on all of the testing we've been doing. And to
make it public and official so that they are sending also the signal that they are doing the right thing in terms of this first Robo taxi on public
roads. And so, we're very proud of our engagement with them. And we're grateful also for the intensity of the engagement. But this is something
that we welcome and as a citizen we expect.
CHATTERLEY: Yes, it's fascinating I think, because most people reading this will be like hang on a second. But you're already operating on roads. So,
you've sort of self-certified that you're ready to go and now the U.S. regulators are like hang on a second, we just need to work out that you are
ready.
[09:45:00]
Do you think this is working in the right order? And does this slow you down in terms of, and you can tell me how long we have to wait until this
is operating on a road with other drivers on any weather, any environment, any road basis?
EVANS: So first of all, on the any, it's going to be a while this robot taxi is going to be geo fenced meaning in a specific area that's mapped and
understood for the foreseeable future; I want to be very clear. The any of all the conditions, roads, whether that's going to be a while in terms of
the order, I think it makes sense.
I mean, this is the first Robo taxi purpose built and on public roads. We are already amongst road agents we don't control, we are down here in
Foster City, it's a vibrant community. There are people who live here who work here. And so, we're already operating within that environment.
Now on weekends, the - shows that, though our employee shadows would be weekdays and sunset, or sunrise to sunset I think the audio is great,
because Zoox has been very consistent; we were going to use the current regulatory framework. We're not asking for changes or discounts or
exemptions or anything like that.
And so given that we've now gone through this process, in consultation with the agencies, it's now public, most of the public and the press and the
enthusiasts don't really understand the details under the hood, in terms of what happens to have an audit query where it's on the record, it's
official, and they can get all of the information and even more, I think it makes a lot of sense.
If we weren't first, then I would be worried. But given that we're first, I think it makes perfect, perfect sense. And we'll trailblazing and that's
what happens when you trail-blaze.
CHATTERLEY: Yes, it makes perfect sense to me. Everybody's learning here, including the regulators. So as long as you're working hand-in-hand with
them and providing all the information that they require, then there's not much more we can ask. While it's going to - go on. Yes, I know.
EVANS: --so.
CHATTERLEY: Your excitement getting in and out of that vehicle was palpable it was quite exciting. I think you were basically skipping. Define a while
you said it's going to take a while you said it, the demand is there. Every time I use a ride hailing app like Uber, I'm so grateful, quite frankly,
for the convenience.
And the fact that this has been invented the demand is clearly there. How long do you think it takes on a practical safety, regulatory, of course
bases to have these up and running because I do feel like I've been being promised by tech CEOs for years now that it's, it's coming.
EVANS: So, first thing is, you know, I used to resent a little bit the over promising. But the reality is that the level of change we're bringing to
this industry and how it's going to impact society, you have to have irrational belief and exuberance at the beginning, or you don't start the
journey. So, what I will tell you is this, again, Zoox doesn't really consider this day to that day.
What I will tell you is that, we would not have gotten on public roads with this first step in California, unless we were getting really close to being
out in the public carrying paying passengers. And we've already said, we're going to start in Las Vegas, and then sort of in parallel or close to in
parallel San Francisco.
And from there, you can expect many more cities and will sort of follow the good weather. Rain is not a problem. And snow is going to be a while. So,
Manhattan and Chicago and Denver probably on the tail end of things, but the journey have started and you can expect points on the board on a fairly
regular basis.
CHATTERLEY: And any naming of names on the over promising, anyone in particular that you--
EVANS: No, we don't do that. We don't do that.
CHATTERLEY: Just checking.
EVANS: What, you do Julia, - high roads.
CHATTERLEY: Exactly. There we go, a road pond to finish. Aicha, great to chat to you, thank you! We'll speak again soon.
EVANS: Thank you, Julia, thanks.
CHATTERLEY: Thank you. All right, coming up after the break a social stalking turbulence on Twitter once again, it's the story we can't get her
eyes off, details after the break.
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[09:50:00]
Welcome back to "First Move". Twitter's staff count has apparently dropped from around 7500 to less than 2000 people since Elon Musk took over. The
process has been challenging, as we've discussed many times on this show and one employee who wasn't sure if he still had a job use Twitter to
confirm with Musk in person.
Product Designer, Halli Thorleifsson said he'd been locked out of his Twitter accounts for nine days. But no one had told him he'd been let go.
So, he posted this tweet, asking the chief executive to spell it out for him. And after a public back and forth with Elon Musk himself, an answer
emerged. Anna Stewart picks up the story.
Wow, I'm really struggling with my own words on this story. It's a tough one, Anna. I have to say we used to these Twitter back and forth with Elon
Musk and individuals. And there have been all sorts of spoofs with Twitter, people being let go, but this one's quite painful. Just walk us through it
because the back and forth established that it seems he had been fired. But it was classic Elon Musk handling.
ANNA STEWART, CNN REPORTER: And classic Twitter 2.0 frankly. I mean, there were a few things you have to get past before you hit perhaps the worst
part of the story. First of all, this guy doesn't know whether or not he works at his company, he is locked out. That is how people have been losing
their jobs at Twitter, just finding that access is blocked.
The second bit is when he says he spoke to the Head of HR and they didn't know days in having been locked out of his accounts. Whether or not he was
being employed by the company, the Head of HR doesn't know, that is the concern if that is true.
And then of course there are Elon Musk's tweets, and we've come to expect all sorts of bombastic explosive tweets here. And some of it frankly was as
you would expect, and there was some quite good jesting, I would say between the two at one stage.
And then it gets actually to a point where you think hang on a minute, did he just tweet that Elon Musk's tweets, this guy who was independently
wealthy did no actual work claimed as his excuse that he had a disability that prevented him from typing, yet was simultaneously tweeting up a storm.
Right, so, this employee does have a disability. He has muscular dystrophy. He has been wheelchair bound for 20 years. And he goes into great detail in
response to that tweet this morning, the fact that he now increasingly struggles with his fingers and he struggles to type for prolonged periods
of time.
He finds tweeting he says slightly easier because it involves just one finger from his hand. Should he need to excuse his disability? He even says
that clearly what was confidential in terms of the conversations he has with HR has been made public by Elon Musk.
At this point it is worth noting, I think that there are several lawsuits pending, one, we believe violates the Americans with Disabilities Act.
According to another former employee, he's hoping to bring that lawsuit. There is a lot going on here. And you just wonder where it ends, Julia.
CHATTERLEY: Yes. And you did a great job of weaving everything in. There was the sort of back and forth that established that he had been fired and
then the individual then got a notification we believe from HR at least, he said that. But then the response where he told the story of selling his
business to twitter then being in some way employed by Twitter afterwards was written out in a very long Twitter thread that's been done in the last
hour or so.
[09:55:00]
Anna, to your point about potential impending lawsuits confusion over whether you're working there, in some respects, it's much of the same of
what we've heard from people have been let go. But this is painful, I think for any CEO, whether you like to laugh things off or joke around or not.
This is an eye opener one. What petrol where we take that.
STEWART: It isn't that Elon Musk has been quite in terms of this thread. So far this morning, at least in the few hours, he's probably been awake,
we'll see whether that remains the case. But I think what happens next will be very interesting for Halli. Now given you know, it is U.S. employment
law, they can let you go. But they need to give you 60 days' notice or 60 days, severance, maybe more, depending on what this contract is.
CHATTERLEY: Yes. And one of the things that Halli points out is that he's owed money. And he wants Elon Musk to pay him. Quite what money, we don't
know. The plot thickens. He has an open invite to come on our show and talk about it too as does Elon Musk, of course do. Anna Stewart, we leave it
there. Thank you so much for that. And that's it for the show. "Connect the World" with Becky Anderson is up next. I'll see you tomorrow.
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[10:00:00]
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