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Quest Means Business
Buyout deals between Saab, General Motors, and Koenigsegg have run right off the road, but why?
Aired November 24, 2009 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INT'L. ANCHOR, QUEST MEANS BUSINESS: The wheels come off as Saab sales plans fall apart. The boss tells me he's considering all options.
A secret lifesaver, the $100 billion bank bailout, that we didn't know about.
And Extra! Extra! Read all about it! Microsoft and NewsCorp gang up on Google.
I'm Richard Quest. You can clearly tell it is a busy hour, as I mean business.
Good evening, a short, Saab shock. First, Opel's deal with Magna collapsed, now GM's Swedish brand will no longer go to Koenigsegg. Only this time it is not GM that is pulling the plug. The question is, did the tiny sports car company lack the financial muscle? Why did they pull out after so many months of negotiations.
In just a moment we are going to be speaking to the managing director of Saab for his view for what went wrong. First, though, the background and the details.
The Swedish sports car maker Koenigsegg is calling off the deal. The Swedish automaker is currently owned by General Motors. Now, as the Saab managing director will tell me, they are just, as you will hear in a moment, all option are now on the table. But this is how we arrived to where we are now.
Early in January GM revealed it was in talks to sell its struggling Saab unit. By the end of May, Germany had agreed a deal with Magna, and General Motors, and the U.S. government, to buy GM's European Division. That, of course, is Opel. Saab was left out in the cold. Saab wasn't part of that.
Then, in the middle of August, this small company that makes a handful of cars, the Swedish luxury maker, Koenigsegg, announced that they were going to buy the Saab brand. This was revolutionary, because they only made half a dozen cars, or whatever. And now they were going to take a volume carmaker. Well, earlier this month General Motors announced the deal with Magna was being called off. It wanted to keep the European arm. And at the same time, now the Saab deal with Koenigsegg was not affected. That is until now.
So that's the scenario. GM's boss says he's going to wait until next week before he decides what to do.
Fritz Henderson, in a statement said, "We are obviously very disappointed with the decision to pull out of the Saab purchase. Many have worked tirelessly to create a sustainable plan for the future of Saab."
Now he says, "Given the sudden change in direction . we will take the next several days to assess the situation.
That's the situation that we have so far. Koenigsegg says that the delays in negotiations created risks and uncertainties that the company could not bear. And we hope to talk to Mr. Koenigsegg, who will now join me on the line.
, Mr. Koenigsegg, can you hear me, sir?
CHRISTIAN VON KOENIGSEGG, CEO, KOENIGSEGG GROUP: Yes, thank you. I hear you very well.
QUEST: Let's just talk about what happened. Why did you decide it was best to pull out? Was it because of the timing? Was it the lack of financing? What was the reason.
KOENIGSEGG: Yes, OK. I think I will just backtrack very quickly. We were selected this summer by GM as the final bitter for Saab. And something we were very please about. And shortly after that we worked out the business plan, together, with GM and Saab, for the future.
QUEST: Right.
KOENIGSEGG: In this plan there were several elements of financing from ourselves, also seller financing, and the EIP, European Investment Bank, was a part of that. So, also we have a partner from China, BAIC, which would take are of the Chinese distribution, but also as a financial partner.
QUEST: Right.
KOENIGSEGG: We had, actually, all the funding needed to fulfill the plan. But given the amount of parties involved, the negotiation had become very complex, and it is kind of a situation where agreements are waiting for -
QUEST: I suppose what I'm trying to really understand is, did you just get cold feet on the deal and decide it was a deal you didn't wish to do?
KOENIGSEGG: No, that's not true, actually. We have a great belief in Saab, and the management of Saab, and their product range, and what the plan promised. And that had been reinforced over the autumn. The problem is that we can still not see a date when the deal can be finalized. And we had set out for the plan to start working during the autumn. And now we come, end of November, and this might be prolonged December, January, and who knows February. And Saab is, at the meantime, not being able to even start. And that of course creates great uncertainty to the plan. And we are responsible to ourselves and our co-investors, and today basically we pulled the handbrake and said, we cannot overlook the implications of not knowing when to start. And what that will affect Saab. Therefore we have to pull the plug.
QUEST: Finally, and briefly, in all of this I realize the blame game is a futile game, but where does the blame lie. Because General Motors' international strategy is falling apart. First with Opel and Magna, now with Saab and yourselves. Who is to blame?
KOENIGSEGG: We really don't want to point fingers. It is a very complex process with large organizations that are involved, that are shrinking, with governments, with central bank agencies and so on. And it is not possible to point fingers and that is what you want to do.
Everyone actually wanted to make this deal, but the implications, and the time aspect was difficult to control.
QUEST: Thank you, Christian Von Koenigsegg. Many thanks, indeed, chief executive of Koenigsegg, joining me live. And of course, you are most welcome, at any stage, to come back and talk more on this subject.
As our coverage continues, you have heard from the buyer that never was, now let's hear the story as seen from the seller that still exists. Saab's managing director Jan-Eke Jonsson, a short time ago, and I asked him how surprised he was when the deal collapsed.
(BEGIN VIDEOTAPE)
JAN-EKE JONSSON, MANAGING DIRECTOR, SAAB AUTOMOTIVE: We have been negotiating this deal with the Koenigsegg Group for you know the last six, seven months. So, of course, it was a big surprise that they would pull out and it was something that was unexpected from our point of view. -
QUEST (On camera): They say in their statement that they simply ran out of time. The financing wasn't -couldn't be done in time from the development bank. So, I mean, is that your understanding, too? Was there a delay in putting together the deal?
JONSSON: I think it is first of all very important to understand that this a very complicated transaction, with many different players involved, including of course, the European Investment bank, the National Debt Office of Sweden, as well as commercial parties. And then Koenigsegg was basically of the opinion at this point that they were not able to pull all the parties together towards a time line that they felt was necessary.
QUEST: You see, that is the key question, isn't it? It is whether or not more time should have been given, or do you feel that Koenigsegg just basically decided they didn't want to buy after all? They didn't like the look of the business?
JONSSON: No, Koenigsegg has spent a significant time and effort, including significant money on advisors of various kinds to actually, together with their own time, to actually pull this transaction together. And I would say their determination was pretty impressive. But they judged that at this time there was too much risk as it relates to the business side, and the timing, and the financing, all that they felt was appropriate to pull out of further negotiations.
QUEST: Now, of course, it leaves you with the problem of what, and General Motors, of what to do next. GM says it is going to take a few days, having expressed its disappointment.
Mr. Jonsson, what is your preferred solution now?
JONSSON: Well, that is -you indicated, it is, of course, a big surprise to us to pull out of the negotiations. And it is only, you know, some hours since we learned about this. So, we now need to take the time, assess the situation, look at our options, and then, during next week, we should be able to come back with the proper direction, going forward.
QUEST: Is it likely one of those options would be to keep Saab within General Motors, GM, in the same way that GM changed its mind in relation to Opel?
JONSSON: Well, I think we need -we need the time now to understand where we are at, what the situation is; what the options are. I think it is too early to evaluate any option going forward. But give us a few days and then we'll be able to come back with a proper answer.
QUEST: And in those few days, when you have that answer, Mr. Jonsson, please come and talk to us again. We are very grateful to have you on the program tonight.
JONSSON: Thank you.
QUEST: Our coverage, of course, we will continue to watch what happens with General Motors and its various international subsidiaries.
You are up to date with the big talking points, Fionnuala Sweeney, now at the CNN News desk for the news update.
FIONNUALA SWEENEY, CNN INT'L. ANCHOR, NEWS DESK: Richard, an inquiry into Britain's role in the war in Iraq has begun in London. A host of British officials, past and present, will appear before the inquiry, over the coming months, to discuss the Blair government's role in the run up to the war, as well as in the fighting and the aftermath of the invasion.
Philippines President Gloria Macapagal Arroyo has declared a state of emergency in two southern provinces after a dramatic rise in the death toll from politically related violence there. Twenty-two more bodies have been found after a convoy carrying a candidates relatives and some journalists was attacked Monday. That is in addition to 24 already confirmed killed.
China has executed a dairy farmer and a milk salesman for their part in the manufacture of contaminated baby formula. Beijing says the two men produced a powder that tested high for protein, but the high reading came from the chemical melamine which is used in the manufacture of plastics. Six infants died after drinking the contaminated formula. More than 300,000 were sickened.
U.S. President Barack Obama and Indian Manmohan Singh held talks at the White House. Mr. Obama saying that India and the U.S. have one of the defining partnership in the world. The leaders discussed security, law enforcement, climate change and India's civilian nuclear program.
And Mr. Obama says he intends to finish the job U.S. started in Afghanistan. The president accepted the prime minister's invitation to visit India next year.
On the topic of diplomatic relations, Iran's president Mahmoud Ahmadinejad has touched down in Bolivia, and will have details on what he hopes to gain on his trips there. That is on "WORLD ONE" at 8:30 p.m. in London, 9:30 in Central Europe.
In the meantime, gratefully back to you, Richard in the studio.
QUEST: Yes, a lot of it about this time of year. Go get a glass of water. Fionnuala Sweeney, who will be in fine vocals in about an hour and 10.
Coming up next, in just a moment, how do you keep a bailout of a$100 billion secret? The answer is you are the Bank of England and you lending it to British bank who could take the entire system down.
Also, when we come back, what is happing with Lloyd's Bank? They have a lot of money, from the shareholders this time.
(COMMERCIAL BREAK)
QUEST: Has been one great big secret, but it is now out. The Bank of England loaned $10s of billions, up to $100 billion, to two British banks, kept it all under wraps, for fear that if the news had got out last October it could have really shown just how close the British banking system was to collapse. It was emergency aid. It came at the peak of the banking crisis.
And just look. This is where $102 billion went to, it went to RBS and HBOS, the Halifax Bank of Scotland. The money was lent in an emergency to prevent them from going under. It has since been repaid. The Bank of England admitted it kept quiet about if for the simple reason it could have created panic. After Northern Rock (ph), and all these other things that had happened, this one could have taken the whole system.
Also, in the banking sector, Lloyds, $22 billion. Lloyds, of course, bought HBOS in the shotgun marriage. Its balance sheet is in tatters. This is a dramatic and deeply discounted, rights issue, to try to shore up the balance sheet. Heavily discounted. We'll talk more about it in a moment.
Look at the banking stocks, overall. Lloyds, interesting, up 2.5 percent when the others are all down. And I think that is because it is - well, there is obviously technical factors about the ex-rights price and all those sort of things. But by and large, the gist -this is interesting, that's fascinating. That tells me that when RBS went, it just shows the depth and the gravity of what was taking place with RBS and the clearest sign for that is that Barclays barely budged. So all those that were - fascinating we need to talk more about this. And we need to do so with Jim Boulden.
The banking sector has just been agog.
JIM BOULDEN, CNN INT'L. CORRESPONDENT: I was shocked. I really was. I mean, you know, the fact that they not only did this in secret, but we didn't find out about it until today.
QUEST: And the bank has had several opportunities to tell us since the end of last year.
BOULDEN: But they said that until today they were not sure that things were stable enough to have this happen. And Alistair Darling, the finance minister, put out a press release as well, or a statement to the committee, as well; and said we are able to tell about this today because we think the system is now stable.
(LAUGHTER)
QUEST: Extraordinary. And the money has been paid back?
BOULDEN: Within months. The money all got back within - in December, November.
QUEST: So this was classically propping up the bank, at the key moment.
BOULDEN: The day, they talked about the fact that these two Scottish did not have enough money to possibly get through that one day. It was Monday or Tuesday after the collapse.
QUEST: That is the job of the Bank of England, isn't it? To be the lender of last resort?
BOULDEN: Yes, well, he talked a lot about, Mervin King (ph) talked about too big to fail. Well, this is a great example of too big to fail. They decided they had to give them this money. And so interesting that it would have to be done in a way that was secret, because it meant that -we don't know what other bailouts might be out there. We don't know what other loans might have been given. We have no idea. As people have been saying more and more, and some of these European banks might be in trouble and we don't know about it, because there might be other secret loans out there.
QUEST: Now, as we put that - let's talk about Lloyds.
BOULDEN: Yes.
QUEST: And what is happening with Lloyds bank. And this deeply discounted rights issue. What does it tell us, about what are they using the money for? And how far do they hope to go with it.
BOULDEN: Well, they didn't need money from the government. They choose not to take money from the government. They didn't want the government stake to be more than 50 percent. It is somewhere around 40 percent. Royal Bank of Scotland had to take more money from the government. The government has a majority control of the shares of the Royal Bank of Scotland. Lloyds decided in early November, they weren't going to do that.
They just said, we are going to go to the market, because we feel confident now that we are going to be able to do this. And they are going to do it at this discount.
QUEST: Jim, many thanks indeed. Jim Boulden, joining me to discuss what's happening with that.
Now, in just a moment, we will catch up with our job seekers and their quest for work. We will be talking about the introductions, the applications, the interviews, the coffees, whatever it takes to get that job and that footstep on the ladder.
(COMMERCIAL BREAK)
QUEST: Welcome back. "Job Quest", which I know you have been following extremely closely. Week 10, as we follow the people who are seeking employment. Tonight we meet a woman who is trying to get back into work after a long break away.
Lisa Matheson, is who we are meeting tonight. She live in Atlanta. She is brushing up on new technology skills. She has been out of the market for seven years and looking for a communications post, since last August.
Rodrigo Medina, you remember Rodrigo. He is in Barcelona, in Spain, works in sales. Out of work, I would class Rodrigo now, as long-term unemployed, been out of work for more than a year. Interviews galore, no jobs so far.
In this week's "Job Quest" Rodrigo has some luck in meeting with a head hunter. We need to catch up in Spain.
(BEGIN VIDEOTAPE)
ANNOUNCER: Last week on "Job Quest" .
RODRIGO MEDINA, BARCELONA, SPAIN: If things go my way, they will give me a call and then I will be having an interview with their customer. And hopefully they will call me back. So I have to wait a couple more weeks.
UNIDENTIFIED MALE: Mr. Johnson you have your information? Right here talk about the different grants that are available.
UNIDENTIFIED MALE: Well, this is certainly helpful, Mr. Hubbard. And I really appreciate your time and effort with this because I didn't exactly know which way to go.
LISA MATHESON, JOB SEEKER: Hi, Matheson, M-A-T-H-E-S-O-N.
Hi, Jim. I'm Lisa Matheson.
UNIDENTIFIED MALE: Nice to meet you.
MATHESON: Pleasure to meet you.
I'm here today to get some additional skills in social media. Something that I hadn't had on my previous job and so it has been seven years since I did an external communications role, so I thought this would be a great opportunity for me to beef up some skills.
UNIDENTIFIED MALE: We have a very tight agenda this morning.
UNIDENTIFIED MALE: Let's go to this one, because this one is really interesting.
MAHESON: We were doing a brainstorming session where we were talking about what are the obstacles implementing social media? And how can we get senior executives to buy into the practice? And how to better manage social media as part of our communications strategy?
UNIDENTIFIED MALE: Don't talk about the company financials. Don't talk about stock price.
MATHESON: It was really beneficial to me, because I had the opportunity to meet a lot of communications professionals and at the same time, I got to better understand how social media is working today.
MEDINA: Today I have an interview that I found through the headhunter I went to see a month ago. It is for a German company. And it is for a very important sales position. So, hopefully it goes good. I'll tell you when I'm back. Bye.
The interview went quite well. I talked directly to the decision maker, which is good news. And at the end of the interview, ended up being very informal, which is always good when you have an interview. So, I have a good feeling about it.
I'm still doing the tennis lessons. I've just got a new student this week. So that keeps rolling. And keeps bringing money into the family.
I'm waiting on a call back of the interview I had a couple of weeks ago, which I thought was very good. And I thought I fit the profile perfectly. But still they haven't called me back. Other than that, that is all I have for now.
MATHESON: One of the things that I know that is really important to do during a time when I am unemployed, because I place a lot of my self worth and identity in the job that I do, is to take care of mental health. And one of the ways that I am doing that is to invest more time in volunteering with the Red Cross and to work on my hobby, which is painting.
So, it is nice to just free my mind of all the stress that I have on me right now. Before I was so busy working for my previous employer that I wasn't taking the time to invest in my hobby and so this has been, in a way, a nice break for me to be able to get back to dong what I love.
I think my biggest fear, right now, is not getting a job quickly, or soon enough that I have some negative downstream financial implications. It is the combination of getting the job quickly and if I don't get the job quickly, what can I do to make sure that I say current and marketable down the road?
Of course, my preference would be to stay here in the Atlanta market and be close to family and friends. But I'm not - I don't have the luxury of being able to get everything that I want. And so, if it means that I need to take a position in another state, then I'm going to do that.
The condo (ph) market is not so great right now, unfortunately. And while this is a great investment for me, for me to move out of the Atlanta area means that I'm probably have to take a significant hit on selling my place. Or I'm going to have to try and rent it out.
That keeps me up at night, this is my first place. So, this was a huge milestone in my life. And it is something that was a marker for me, of success. And, you know, but I have been broke, nearly homeless before, and I bounced back. And I know that I will do it again.
(END VIDEOTAPE)
QUEST: "Job Quest": If there is one thing that I've heard most from all of you, it is been that you'd all like to, in some way, maybe become entrepreneurs. Start your own businesses and actually make some real money for yourselves, not other people.
Well, these are two web sites from young entrepreneurs about the business climate. First of all, entrepreneur's web site, Entrepreneurship.com. The founder of this one has basically created this for graduates, who will be able to find details, get information, and as it says work experience on full time rolls.
On this one, this was a web site created by another, it is called Automatic. It was dot.com, it was sold by the creator, who was also a graduate, for the sum of $5 million. Now we have been talking to both of those people.
Rajeeb Dey and Harjeet Taggar, they join me here in the studio to talk about how entrepreneurship, really, is perhaps the way of the future.
(BEGIN VIDEOTAPE)
HARJEET TAGGAR, FOUNDER, AUTOMATIC.COM: It was a culmination of all of them, but the truth is, I think, most start ups or enterprises, they are always kind of this inherent disaster and you kind of just about keep things on track. And hope things work our and be prepared for when it is sort of an opportunity or a good event comes along.
QUEST: Now Rajeeb, you talked about this in terms of what your entrepreneurial activity is designed specifically for graduates.
RAJEEB DEY, FOUNDER & CEO, ENTREPRENEURSHIP.COM: Exactly. So, we set up a site called Internships.com, which is to connect graduates to start ups and small business, to kind of expose them to entrepreneurial work placements. We developed this entrepreneurial skill and flair within them.
QUEST: But did you need that sort of thing?
TAGGAR: I think it is useful. It is useful to have a network and connect people. Actually a lot of the help, or a lot of the good things that came for us, came from things not like internships, because they didn't exist at the moment, but the Slade (ph) Business School helped us immensely, connecting us to people, and that -
QUEST: Isn't the whole problem -everyone has a good idea. And everyone thinks it is worth millions, and frankly, most go nowhere.
DEY: It's true. And there is an element of luck, obviously, But you've got to really kind of put your all in it. Because you never would know what would happen if you have a good idea and you got the conviction, then you just have to put your heart and soul into the start up. But you never know what will happen.
QUEST: How important is start ups and entrepreneurial activities and other activities for graduates? Because we tend to think of graduates going straight on to paid employment?
DEY: Sure. I think it is crucial and vital, especially in the current economic crisis, where we are seeing less corporate jobs available. There is a huge graduate unemployment crisis. Entrepreneurship is really going to help us out of this recession in terms of wealth creation and job creation.
QUEST: Is that true? In the sense of the number - I mean, I have always known - I'll be quite honest. I've always known I couldn't sell water in the desert. I mean, if there is a gold bar to be sold I will manage to lose it. But do you believe there is a role for entrepreneurship in graduates.
TAGGAR: I think there is a massive role. I think you have nothing to lose when you are a graduate. I think entrepreneurship puts you up against yourself in many ways. You find out - you are very much exposed to your own limitations and you have to cope with those and accept those, which I don't think you are when you are working in a big organization, where there is more of a safety net and there are more structures in place. I'm all the better for the experience of having run a venture.
QUEST: What did you learn? What did you learn? What challenged you most about what you did?
TAGGAR: I learned that it is almost impossible to predict what the market actually wants. The only way to make decisions is to launch, get a product out as early as you can. Listen to what your customers want. Listen to what they are doing and adapt.
QUEST: What do you think drives most entrepreneurs? Is it the prospect of making millions like Harjeet did? Or is it the prospect of creating something? Or they just want to get their product out?
DEY: I think it is a variety of reasons.
QUEST: But which is the core, would you say?
DEY: It is obviously making money, but there is a definitely a rise of social entrepreneurship, as well.
QUEST: Right. Was that a big concern for you? The making of money? When you started your business, did you go, I could make millions out of this?
TAGGAR: The main answer is yes, for me, my main motivation for doing a start up was I thought it was the quickest way to financial independence. The next one that I'm going to do I need a different motivation because I've seen the chances - the statistics are in my face now. I know how incredibly difficult it is and how lucky we were. And I need something more.
QUEST: How much of your fortune would you now be prepared to risk on the next venture, knowing that the odds are against you?
TAGGAR: I would still be happy to put things in. I guess what's lucky for me is the field I'm in consumer Internet it is incredibly cheap to launch a company. It is almost just the cost of your time to develop the product. So, I'm not a clean tech guy who needs $15 million to have that much in capital to get out there and do something.
QUEST: Just as well, because I haven't got any.
(LAUGHTER)
QUEST: Finally, gentlemen, Rajeeb, the -- we've all had this goal, perhaps, that we'd like to be able to make it -- the Bill Gates in the garage, Nordel (ph) in the garage -- the idea that we can all come up with an idea.
DEY: Yes.
QUEST: It's just not realistic.
DEY: Well, I think it's -- it's -- it's possible. I think everyone should have the opportunity to pursue an entrepreneurial path. I think you need to be open to it and it's not easy. It is challenging. It's not going to be for everyone. But I think what we're trying to do with -- with the site is make sure that people know that it's a viable career path.
QUEST: And are you finding the sort of person that could sell sand in the desert and water in -- in the ocean?
TAGGAR: No. I think sales is my biggest skill. It's something I've worked on and developed. But I think there's a lot of stereotypes of entrepreneurs. And the actual thing is, there's so many different types and so many different ways to do it. Pick your strengths and you -- you optimize around those.
(END VIDEO TAPE)
QUEST: Fascinating stuff if you can make it as an entrepreneur. Whatever the business, the price of oil matters. In a moment, I'll be speaking to a man who used to be at the heart of OPEC, the oil cartel. Now Nigeria's oil minister telling us more about what are OPEC's plans to tide the (INAUDIBLE).
(COMMERCIAL BREAK)
QUEST: Good evening.
I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN.
And this is the price of NYMEX crude tonight -- $76.20, down just $1.36. $80 has been and gone and we're now worried more about the strength of the economic recovery and that is why, of course, we're seeing a small pushback.
But that price alone is more than 74 percent up of the low point of the year. The roller coaster of oil prices has been a phenomenon that is not only bewildering those economics ministers, but also speculators, and, indeed, questions of economic recovery.
The IAEA has issued a blunt warning -- IAEA -- that if oil prices continue to rise, then it poses a real threat to the economic recovery. The reason, of course, it means from top to bottom, producers to distributors to consumers, it's sucking money out of the economy.
OPEC output 20 billion -- 20 million barrels. OPEC basically says that demand is steady at the moment. The fear is it will fall back and then OPEC ends up with the really knotty problem of what to do.
On the one hand, OPEC wants to maintain the price between $70 and $80, but at the same time, it doesn't want to see a glut coming onto the market, which could collapse.
It's not a new position that OPEC finds itself in, but it's certainly an uncomfortable position.
OPEC's former secretary general, Rilwanu Lukman, joins me now from Washington.
Mr. Lukman is also Nigeria's petroleum minister.
Mr. Lukman, you said a couple of hours ago that the oil market was extreme at the moment. You referred to the fact that you don't want a glut and you don't want prices to collapse.
What did you mean?
RILWANU LUKMAN, NIGERIAN PETROLEUM MINISTER: Well, actually, what we are talking about is that we -- we want to make sure that the production that we put in the market is able to balance supply and demand in such a way that the -- the market remains steady and -- and effective, so that consumers are not unduly strained and also producers are able to -- to make reasonable money out of the oil they put in the market.
QUEST: But that delicate balance, do you believe that demand the mom -- demand and supply are just about right, where we're seeing a price of $70 to $80 a barrel?
LUKMAN: We are quite happy with the -- with the price range that we have witnessed over the last couple of months. We believe that if this continues, then it will probably indicate that the world economy is recovering. But higher prices in -- in dollar terms are sometimes, of course, the result of the dollar itself depreciation against the major currencies.
And higher prices may not be all the time due to fundamentals of the supply and demand. Sometimes speculation comes in and influences the price in such a way that we begin to think that really, demand is going up.
Each time the price goes up, we have to check and make sure that it is, in fact, due to fundamentals that the price is moving in that direction.
QUEST: Do you believe that something needs to be done to curb the speculation in the oil market, because you're right, we're seeing a depreciating dollar, which, of course, leads producers so increase supply to maintain revenues, which, of course, is a self-defeating object. But speculation ruins the whole project.
LUKMAN: Well, speculation, in the current situation, is, to some extent, inevitable. What worries us is when it becomes the main motivator of -- of price movements. And people move into oil when they -- they think that it is -- is going to appreciate. They move out of it when they think it's going to fall.
So it depends on what is happening in the other sectors of the...
QUEST: Right.
LUKMAN: ...international economy what they -- what they do (INAUDIBLE).
QUEST: Let's just finally turn to -- to Nigeria's own -- the difficulties you've had in the Niger Delta region, the difficulties you've had not only in -- obviously with -- with violence and terrorist activity, substantially oil remains a crucial part -- oil and guns, natural resources remains a crucial part of your economy.
Can you tell us tonight...
LUKMAN: True.
QUEST: ...that the security of supply from Nigeria is assured?
LUKMAN: Yes, we can confirm that. The Niger Delta situation is -- it's moderating. We have amnesty in place and the militants have laid down their arms, a substantial number of them. And we are engaged in a robust program of rehabilitating them and assuring that they do not go back to the creeks (ph). And to that extent, we are able to repair some of the damaged infrastructure that have been compromised in the period of the insurgency.
We have the capacity to produce up to 3.7 million barrels per day. We are doing a total of condensates and crude oil level 2. -- 2 -- 2.5. So there's still room for us to -- to increase if the market calls for extra - - extra oil.
QUEST: And please, Minister, you have an invitation any time to come on our program and talk about these things.
I'm very grateful for your time tonight.
Minister Lukman joining me from Washington.
We know oil is a crucial part of our coverage.
A busy hour of television. This is an hour you daren't miss.
When we return, Rupert Murdoch's search for a solution -- the media maven wants search providers to pay for the content his outlets produce. It is a fascinating dynamic that we'll talk about after the break.
(COMMERCIAL BREAK)
QUEST: New government figures from the United States show economic growth was weaker in the third quarter than originally reported. And within the last hour, the Federal Reserve says that the unfolding recovery will be gradual. But the U.S. Fed has upped its forecast for growth in 2010, now believing -- look, you're reading it as I'm reading it coming in at the moment. It ranges now from 2 to 4 percent. That's an increase from .8 to 4 percent.
So, Clinton, the Fed saying -- the U.S. Fed saying that the future next year will be better. But the economic data in the rearview mirror says the last quarter was not as good as we thought.
Analysis is required for this. The senior economist, Robert Scott, from the EPI.
Interesting stuff, isn't it?
The revisions on third quarter down when we thought they might be at least equal. But next year, the Fed says things will be better.
ROBERT SCOTT, SENIOR ECONOMIST, ECONOMIC POLICY INSTITUTE: Well, I think the Fed is engaged in some jawboning here. They're trying to convince everybody that the economy is going to get better in the hopes that they'll improve the outlook. But the underlying data are pretty weak, I have to say.
QUEST: Were you as surprised as some that -- that that revision was as far down as we thought on third quarter -- the initial thoughts on the quarter?
SCOTT: No, I wasn't surprised at all. Since the initial data were released, the figures on U.S. trade for September came out and showed a much bigger jump in the trade deficit than was expected. That depresses GDP growth in the third quarter. And I think that was the largest contributor.
And we also had a slower than expected growth in consumer spending.
Both of those things pulled GDP -- GDP growth down.
QUEST: In many ways, that consumer spending reduction is the worrying part of the equation, because it suggests it was stimulus -- it was basically government action that kept the economy moving and it's still keeping the U.S. economy moving.
SCOTT: That's correct. And at this point, the government has not done enough. I think the concern going forward is that that stimulus spending is going to peak in the second quarter of 2010 and then begin to taper off. We already see that state governments around the country have announced that spending plans for next year are going to be slashed. They've lost hundreds of thousands of state jobs already and they're going to be cutting more workers next year.
So that's going to put more downward pressure on growth in 2010. So I'm very concerned that we could slip into a double dip recession going forward unless we take more action now to boost the economy.
QUEST: Robert M. You will be familiar with this. I have a set of traffic lights in my studio here. We find it a very useful barometer for the way economies are moving.
If we look at the U.S. economy at the moment, red, amber or green, do you think?
SCOTT: Oh, I think definitely amber at this point. We are definitely not out of the woods on this recession, by any means. We need to do more to, as I say, increase aid to the states so that they don't lay off more -- more of their workers. We need, also, to implement a jobs program to encourage the private sector to be doing more hiring.
As you mentioned, so far, we're relying on the government. Next, we need to get the private sector going and -- and President Obama is committed to doing that. And I think he'll come up with a plan next month.
QUEST: Robert, many thanks, indeed.
Please come back to help us understand these numbers as and when they come out in the future.
Robert Scott joining me from Washington.
A number of media outlets are reportedly thinking about getting on board Rupert Murdoch's anti-Google bandwagon. The media mogul wants to pull the content of his vast media from the world's largest search engine. It doesn't pay Newscorp for the material. He wants a model that will get some money for that.
Maggie Lake has been following the story from New York.
It's interesting, isn't it, because Google would say well, actually, we're not providing it, we're merely aggregating it. You want to search, we tell you where to find it.
MAGGIE LAKE, CNN CORRESPONDENT: That's right. They say they're driving traffic. Some of the newspapers feel differently, Richard.
And, you know, the -- the core of all of this is how do we value information?
In particular, in this case, it's will people change their search habits in order to get the information they want -- very core to this whole sort of Internet content provider question.
Now, of course, the Murdoch -- Murdoch is sort of shooting that arrow across the -- to bow, if you will. He's got a whole host of publications here in the "New York Post," as you well know, we relish the tabloid headlines. You'll remember the famous, famous classic "Headless Body Found in Topless Bar." But for people who love that, as well as their "Wall Street Journal" -- over in your neck of the woods, "The Sun," "News of the World," "Daily Telegraph," to name a few -- you know, if they want this, are they going to go and use Bing instead of what's become second nature to most of us, Google?
Experts pretty uniformly say they won't -- people won't change their habit.
But we decided to do some unscientific exploring of our own, hit the streets and ask people. And the reaction we got was a bit more mixed.
Have a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: No, I wouldn't. That -- that -- that's it. I mean I, you know, I would search out where I needed to search out the -- the news that I thought was reasonable to listen to and read.
UNIDENTIFIED MALE: Yes, definitely. I think I definitely would maybe look into Bing or maybe other search engines or whatever else is out there.
UNIDENTIFIED MALE: Yes, definitely. You know, this stuff is changing all the time. So, you know, as long as it's a different way of doing things and we've got to relearn it anyway.
UNIDENTIFIED FEMALE: But it's just like -- I mean Google, that's what Google is for. Google has taught us to find out more about the stuff and you can't do that with the news.
What do you use it for?
(END VIDEO CLIP)
LAKE: What do you use news for?
Richard, see, you know, this is the thing, the -- the Internet experts, the industry watchers say people want information free and they'll just go to wherever they can get it for free.
Now, it's important to point out, users wouldn't have to pay like a subscription to get to Newscorp in this case. It's Microsoft's Bing that would be paying for the exclusivity. But it would really change the landscape if they were able to make this work.
But a lot of discussion, a lot of controversy about this whole prospect.
QUEST: Maggie, many thanks, indeed.
This is one that I'm not putting my big toe into. It's going to get far too chaotic. We'll talk about this again in (INAUDIBLE).
Maggie Lake in New York.
All right, the weather forecast. And if you are traveling around, some headwinds. There were some very strong headwinds. A pilot friend of mine was telling me this morning that he -- he was flying across Europe and there were some 110 knot headwinds.
Well, if you wanted to know that, Guillermo is at the World Weather Center.
GUILLERMO ARDUINO, CNN METEOROLOGIST: They will continue. But I think that it's getting much better. And I don't know if you noticed that the rain is mostly here in the areas that were devastated in the Cambria section and also in Southwest Scotland. They will continue to affect the area, but it's not going to be as bad. And also, in the south here, Cornwall and into Land's End is where now we're going to see some more rain moving in.
And again, the rain is not going to be bad in the south -- you know, I want you to remember that -- or in the -- in the southern parts of England. Wales may see some -- Wales will see the winds. We have, still, the chance of some floods. But it is going to remain showery after that. And I think it's the end of this deluge.
So, of course the accumulations are going to be in the area of 30 millimeters or so. That's what we have seen so far. The authorities are saying in areas we may see 100 millimeters again.
But the south is fine. You see Wednesday, Thursday, Friday, London, temperatures no change. But I think that after the end of the week, we are going to get cold air. And then it will be definitely for here to stay.
So we are not going to see a significant change temperature-wise right now, even though, as Richard was talking about, the winds have affected Northern France, Northern Spain and into the northern parts of the European Union.
We'll see you on the other side of the break.
Richard has more for you.
Stay with CNN.
(COMMERCIAL BREAK)
QUEST: A hundred and fifty years since Darwin published his revolutionary book, "On the Origin of the Species." Some of Darwin's first editions are amongst the treasures of the Natural History Museum here in London.
So for today's World At Work, I went to meet a very special lady. She has the lovely task of looking after these rare books and the museum's art collection.
(BEGIN VIDEOTAPE)
JUDITH MAGEE, CURATOR, NATURAL HISTORY MUSEUM: This is a collection for the nation and for the world. And we have to keep it in condition so that future generations can research it and study it.
We -- we call it our rare books room. We have very early works from the late 1400s right through to the present day.
All of the key people who were significant in natural history, from Linnaeus, Cuvier and through to Darwin and Alfred Russel Wallace right through to those that are doing cutting edge science and working in the museum today.
"On the Origin of the Species" was a first edition. There were 1,250 copies in the first print. But now, we have over 470 different editions in 35 different languages. And the most recent one we have is this one, which is from Tibet. So this is the -- the first translation in Tibetan of "On the Origin of the Species." In fact, it's the most published book after the bible.
QUEST: It's fascinating.
MAGEE: Yes. This here is a letter from Darwin to his wife, Emma, in which he states that if he were to die, then for her to make sure that she got it published.
A library like this has monographs and journals, but it has a lot of art works as well -- over half a million pieces of art work on paper.
They come from all over the world. Here, we have some examples from India. What you have is East meets West and science meets art all encapsulated on one single sheet of paper. That's what's so exciting about it all.
Every day is new, basically. I come in here and I discover something about those who have written about natural history, those who have been on adventures, on voyages, expeditions. And it's this thirst and lust for knowledge that these people have had in the past that excites me, in fact. And -- and you see what they've produced from it -- wonderful books and wonderful art work. Nobody could actually be untouched by that when they see it.
QUEST: "On the Origin of the Species," a book written 150 years ago, our understanding of which is still evolving thanks to Judith and her world at work.
(END VIDEO TAPE)
QUEST: Brilliant.
And we'll be back in just a moment when I'll have a Profitable Moment.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment.
Another wheel off the General Motors' wagon, as the sale of Saab fell through. Not enough time for Koenigsegg to do the deal. They pulled out. G.M. says it's disappointed and they'll take a few days to decide what to do next.
There are rumors it might be the end of Saab -- just rumors. In other words, G.M. might do a U-turn and decide to keep Saab, like it did with Opel.
Whatever is decided, the G.M. fiasco just motors on, whether it's changing its mind on Opel, bargaining jobs for government aid or deciding the future of Saab. It is simply not a happy picture tonight.
And that's QUEST MEANS BUSINESS for this midweek edition.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I do hope it's profitable.
Christiane is next with "AMANPOUR" after the headlines from the I Desk.
END
