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Quest Means Business
Mladic Extradited to Hague; Nokia Profit Warning; E. Coli Outbreak in Europe
Aired May 31, 2011 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HALA GORANI, CNN ANCHOR: Breaking news. A plane carrying Ratko Mladic has arrived in the Netherlands. The former fugitive and Bosnian- Serb commander was extradited from Serbia today.
He is going to face charges at the War Crimes Tribunal for the former Yugoslavia at the Hague. And you see live images, there, of Rotterdam Airport with a few vehicles just outside of the hangar where the Falcon jet carrying Ratko Mladic was towed into that hangar there on the left-hand side of your screen.
And on the right-hand side of your screen are taped imaged from a little bit earlier. That is the plane carrying Ratko Mladic as it was about to land just about 20 minutes ago.
Ratko Mladic, of course, accused in the Bosnian War. He is accused of having masterminded the Srebrenica massacre in which so many thousands of men and boys in Bosnia were killed.
Nic Robertson is live at the Hague with more on what to expect. I imagine that means we won't see Ratko Mladic because that Falcon jet was towed into the hangar, Nic.
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, and very likely he'll be transferred to the helicopter that's going to take him on a five-minute flight from that airport 25 kilometers away in Rotterdam into the compound here. So we may not even see any images of him here.
I've seen some cameramen trying to get on the roofs of neighboring buildings, but if they do manage to get a picture, it will be our chance to get an image and see the physical condition of Ratko Mladic. We haven't seen him walking around, we haven't seen how -- enough to judge his state of health for ourselves.
So, what we may get as he goes between the hangar and the helicopter, what we may get is that helicopter drops him off in the prison facility behind me, will be, perhaps, our first glimpses of him moving around since his capture. Certainly, we'll be on the Dutch, Hala.
GORANI: You mentioned there he's going to be given a medical check. His lawyers tried to appeal that extradition process by saying that he was too weak to face justice in the Hague. What are his medical complaints? What are his lawyers saying is an issue as far as trying him in the Hague is concerned?
ROBERTSON: Well, they're saying that he's had several strokes, that he has scar tissue on his heart from those strokes, that he is still partially incapacitated from those strokes. He certainly doesn't appear to be as strong and healthy as he was back in the 1990s.
He's -- his lawyer is saying that he needs to see a cardiologist, that he needs to see a neurologist, and he needs to see a psychiatrist, that he needs to see a gastroenterologist. The list actually went on.
He -- the defense lawyer, his defense lawyer, said that he isn't fit to be in the trial and to keep up with the proceedings.
He was asked, well, look -- the prosecutor in Belgrade had ruled that Mladic, Ratko Mladic, is capable of following the proceedings in the courtroom, and he said, look. He's capable of being in the courtroom, but not participating in his own trial. That's what the defense lawyer has said. No doubt the doctors here will make their own assessment.
But when I talked to the chief prosecutor in Belgrade yesterday, he told me absolutely not. Mladic in the courtroom has been lively, has been joking, even said at one point that he was verbose, spending too much time answering questions in a very long fashion and long-winded way, and has said that Ratko Mladic had asked for long Russian novels, something by Tolstoy and by others, as well, an indication, he said, that look, he has his mental facilities. If he's reading that kind of book, he's quite capable of following the legal proceedings against him.
So, there's a strong difference of opinion as occurred from Belgrade. Clearly, the prosecution has won the case, and doctors here will be able to make their own judgments. But they really will want to get -- whatever medication he needs, they will want to get it right so that he can go through that trial, Hala.
GORANI: Nic Robertson, live at the Hague. Ratko Mladic is on the ground in the Netherlands, a swift extradition process. He was in Serbia just a few hours ago. He is now on a jet, or near a jet in a hangar at Rotterdam Airport, about to face charges that he orchestrated a massacre in Srebrenica, charges of war crimes and crimes against humanity.
We will take you live to the Netherlands as soon as more developments emerge on the Ratko Mladic story. For now, QUEST MEANS BUSINESS, live from London, is next.
RICHARD QUEST, HOST: It's a knock for Nokia. It warns sales will be weaker than forecast.
Piling on the pressure, sponsors Emirates and Visa voice their concern over FIFA.
And a cucumber crisis. Sales plummet after a food scare.
I'm Richard Quest, I mean business.
Good evening. Nokia has abandoned its profit goal after an unexpectedly poor second quarter. The success of the iPhone and devices using Android has left Nokia scrambling for market share in high end SmartPhones. And tonight, we're going to examine Nokia's new strategy in the face of strong competition.
The world's top-selling mobile phone maker says things are worse than it thought, and a profit warning for the second quarter and, crucially, scrapping its --
(BELL RINGS)
QUEST: -- full year outlook. Join me in the library and you will see the negative factors for Nokia.
The company says future is to be substantially below $8.8 or $9.5 billion forecast. Not only that, weaker sales, lower prices, lower volumes and, crucially, Nokia says it will no longer do a quarter -- no, annual forecast, only quarterlies from now on as it comes and gets to grip with that.
If you really doubt the significance of all of this, have a look at that. The share price down 17.5 percent because investors were so concerned. Nokia is, after all, still the largest manufacturer of handsets in the world. The price is down 40 percent since the beginning of the year.
And the strategy, the SmartPhone strategy, is clearly under transition for Nokia. Under the new chief executive, Stephen Elop, who came from Microsoft, all Nokia phones, Symbian is gone, Windows Phone will be the new OS operating system for Nokia.
The transition period, the first Windows phone is expected to be coming out later this year, perhaps into next. But the transition is going to take some considerably longer than perhaps we had first thought.
Overall, what's clear from the negative results from Nokia, as David McQueen told me, the principal analyst at Informa Telecoms & Media, the announcement, perhaps, not so much as a surprise as a bit of a shock.
(BEGIN VIDEOTAPE)
DAVID MCQUEEN, ANALYST, INFORMA TELECOMS & MEDIA: We're not so surprised, no. I think the company has been going through transition. It needs to go through transition. It's lost out in certain markets and certain segments.
I think the beginning of the year when it announced a new SmartPhone strategy, it's now gone through with that strategy, and I think it's been a bit of a hardship, I think, for this year and probably into even next.
QUEST: But their decision to say that they were going to, obviously, substantially lower for this quarter and not give guidance for the year, or change guidance for the year. That's quite dramatic, in one respect. For a company as mature as Nokia in a market as important as it is.
MCQUEEN: Oh, absolutely. But the market has moved on three years in the last past three years, and I don't think Nokia really picked up on that. They were slow to innovate in their SmartPhones. Apple came in, and nobody really saw that as a competitive element.
And there's probably a bit of hubris in the company. They had massive volume, they were making good margin, good revenues. They didn't think anybody was going to take any of that away.
QUEST: Right, but is it a crisis? Would you describe what's happening at Nokia as a crisis?
MCQUEEN: Not so much a crisis as a change in strategy. They had to go away from what they did before. They've now got to realize they had to change the whole SmartPhone ethos and what they were going to do in the SmartPhone market.
QUEST: With the win -- going with Windows Phone, now.
MCQUEEN: Going Windows Phone, indeed. Whether that is still the right move is open to debate. I think the mobile operators are all quite keen there was another operating platform out there, because I think Android was also mooted, that they may go with Android.
But that sort of then reduces, us as consumers, our choice of platforms, say, Apple, BlackBerry, Android. So, I think having another one was quite good for the market, but it hasn't done very well so far.
QUEST: We're apt to think that Nokia is sort of down and out and it's all over, just switch the lights off on the way out. But the fact is, it does still sell. It does still manufacture and distribute a very large number of handsets.
MCQUEEN: Absolutely. It's got a fantastic distribution channel. The manufacturing is still -- it's still good. Quality still is. It's still got a pretty good brand.
Its problem has been in some of the more developed markets, the markets where it's always been very successful, like Europe. And it's now looking at emerging markets, India, China, but even suffering a bit there, as well.
QUEST: Right. So, let's boil this down, if we may. They've said substantially lower, and they've -- and they're -- clearly, a turnaround is underway. Do you have confidence that they can turn this around?
MCQUEEN. Yes, yes. They'll be a much leaner company. They'll probably still be number one in terms of volume, because there will be markets, India, as I mentioned, China. They are getting some competition there, though, at the lower end.
And if the end of this year we see the Nokia Moxa phone and into next year and they start growing the ecosystem, that everybody craves, like Apple has done with the iPhone, then they can start being successful --
QUEST: A lot of "ifs" there. "If, if, if, if."
MCQUEEN: Well, indeed. Well, I think they can turn it around. But it will be a much smaller company than they are at the moment. And whether Samsung may came in at number one in terms of volume in the next 18 months, who knows?
QUEST: Thank you.
(END VIDEOTAPE)
QUEST: Nokia was the worst-performing stock on the FTSE Euro top 100 today, but an upward trend otherwise for the market, a 17 percent thrive -- fall on such a major share.
On the London market, energy shares, big gains for BP, up nearly 2 percent. Total, up 1.4 percent. Metal stocks were up as the metal price rose. Tyson Group gained 3 percent, and Johnson Matthey was up 4.6 percent.
Not withstanding the Nokia effect, the major markets, or the two big ones, the CAC 40 and XETRA DAX were up. The market --
(BELL RINGS)
QUEST: -- in New York, the Dow Jones Industrial has started -- everything was off, of course, for Memorial Day on Monday, but today, the first trading day of the week, a shortened week, and it's the fourth session of gains.
At 12,518, the New York market, the Dow Jones is at a five-week high. Now, it's not a particularly big high, bearing in mind that equity markets have traded sideways, but at least they are holding their own.
And of course, many people had suggested, analysts had thought we could be in the market for something of a correction. But that doesn't appear to, certainly, to be happening on this Tuesday in May.
Spain says it's not to blame. Anger escalates as Madrid and Berlin face off over Europe's deadly E. coli outbreak. We're live in Spain and Germany.
(COMMERCIAL BREAK)
QUEST: Anger is intensifying between Germany and Spain over a deadly outbreak of E. coli, which is linked to at least 16 deaths. Hundreds of people are falling ill across the euro zone, although whether that's got anything to do with the euro zone itself, I suspect nothing at all.
Spain's fury is growing after German authorities last week said they detected the potentially dangerous E. coli bacteria on cucumbers from the southern Andalucia region.
Remember, though, Germany never said it was sure Spain's fruit and vegetable exports, and for sure say they impact has been profound, with losses estimated at $219 million a week. Cucumbers are third -- Spain's third-largest vegetable export. In case you want to know what the other two, it's tomatoes and lettuce.
So, let's see over in the cover. I'll show you who takes what and where. So, if you look, who is the largest market of all? Well, the largest market is Germany, with 142,000 tons of cucumbers from Spain. That's a lot of cucumbers, frankly.
Within the Union, as well, you also have the Netherlands and you have the United Kingdom, 53,000. Bit of a big difference, as you can tell, between that and what the Germans -- that's quite, three times the size.
The French is fifth with 34,000 -- no, they weren't, that's the Netherlands. The French is fifth with 34,000, and then everyone follows down, Sweden, Poland, and Denmark.
So, that's the way the position looks across the continent. All the countries are somewhat furious in some ways with what has been taking place.
Let's get the coverage from Spain and from Germany. Our correspondent Fred Pleitgen is in Berlin, Al Goodman is in Madrid. Al, we start with you. If -- if, and it is a big if -- this E. coli outbreak comes from Spanish cucumbers, then why are the Spanish so upset?
AL GOODMAN, CNN MADRID BUREAU CHIEF: Because they say that Germany has been talking, basically, out of turn and has hurt not just cucumbers but all Spanish vegetables, even some fruits.
This is an $11 billion industry in exports of last year, and about nearly a fourth of that revenue, of that $11 billion, comes from Germany. Not just cucumbers, but tomatoes, lettuce, and the whole bit. And the Spanish producers this day are saying that most of Europe is right now shutting out all Spanish produce on fears of these cucumbers.
In fact, I think Fred can tell us that Germany is backtracking a little bit in terms of what they're saying about some of those cucumbers out of Spain, but clearly the Spaniards are quite upset. Not just the industry, but also the government. They're already talking about possibly trying to get some compensation out of Germany if it turns out that the origin of this bacteria is not in Spain. Richard?
QUEST: Fred Pleitgen in Berlin. Well, we know the cucumbers came from somewhere, and we know that there are some people who are ill as a result of it.
FREDERIK PLEITGEN, CNN CORRESPONDENT: Absolutely, we do, Richard. And we also know that so far, 16 people have actually died from contracting these E. coli bacteria. Most of them are actually in northern Germany, in places like Hamburg, where this is really at its worst at this point in time.
There's also some deaths that occurred in the western part of Germany and, as of today, there's also one death in Sweden, but that person had actually been in northern Germany as well.
But Al says very correctly that the German authorities at this point in time say they simply don't know where all of this is coming from. For a while, they thought that these cucumbers from Spain might be the culprit. Right now, they're saying they don't know that that's really the case.
Let's listen in to what one German health official in Hamburg, where this disease is spreading very badly, had to say today.
(BEGIN VIDEO CLIP)
CORNELIA PRUEFER-STORCKS, HAMBURG SENATOR FOR HEALTH AND CONSUMER PROTECTION (through translator): A source was still not identified, and the warning remains not to eat raw cucumbers, leaf lettuce, or tomatoes.
(END VIDEO CLIP)
PLEITGEN: Now, one of the interesting things, Richard, when you speak to people here in Berlin, obviously they say that they're very concerned about all this. And as Al said, that the demand for things like cucumbers, for tomatoes, for lettuce, also, from places like Spain has absolutely flat-lined.
Lots of people that I'm speaking to here say they're not going to wash these things any differently, they're not going to cook their vegetables. A lot of them are simply staying away from tomatoes, lettuce, and cucumber right now, because they are so afraid of this very bad E. coli outbreak, Richard.
QUEST: And Al Goodman in Madrid, in Spain, are people shying away from the cucumbers and the lettuce?
GOODMAN: No, it seems like people are doing quite about the normal. What you are seeing in Spain and what analysts have been urging the government and the producers is to get on the same page.
They say that basically through these past recent days, Spain has really been outpointed, outclassed, out-publicized by the German side, and that Spain now is trying to send out a more constant, firm message that there will have to be some damages paid if it turns out that the source is not here.
Spain is all coming together now and trying to get this word out that they can't afford to suffer if, in fact, they're not at fault. Richard?
QUEST: Al Good man is in Ma -- excuse me, this evening. Al Goodman is in Madrid, Fred Pleitgen is in Berlin. Gentlemen, we thank you both.
Now, doubts, mistakes, regret. Not many chief execs are big enough to admit them. Michael Wu is. The Hong Kong Maxim Group CEO tells us what he wishes he'd done differently. A special interview with The Boss, next.
(COMMERCIAL BREAK)
QUEST: Michael Wu is the chairman of the Hong Kong company Maxim's Group, and when his company faces a problem, it's his responsibility to find a solution.
Over the past few months, we've seen him cope with all the challenges of running an international food company. There are moments when the man at the top has his doubts. I wanted to ask Michael himself if he felt he'd done his company justice.
So, Michael and I had breakfast when I went to meet The Boss.
(BEGIN VIDEOTAPE)
ANNOUNCER: Over the last eight months, Michael Wu has pushed the boundaries of his business. He's launched new products, introduced new brands, taken on mainland China, all while managing his 14,000 employees.
Today, he's in London. Richard Quest sits down with Michael Wu, the chairman and managing director of Hong Kong Maxim's Group for a visit with The Boss.
QUEST: Have you made the transition from entrepreneur to chief executive, and do you battle with that difference?
MICHAEL WU, CHAIRMAN AND CEO, HONG KONG MAXIM'S GROUP: I don't think I've made that well. I'm much more an entrepreneur than I am a CEO. I'm the one who dreams. I'm the one who communicates.
QUEST: When did you first properly realize that you were going to become a chief executive with fairly large, substantial responsibilities?
WU: Well, I joined the company in 1992 and, at that time, when my grandfather hired me, he said "You would have a shot at becoming the chief executive if you performed well. But if you didn't, you would be out of the company."
So, from day one, my aim was to become chief executive.
QUEST: Was there a perception that it's within the family, you're going to get the job anyway? Whether rightly or wrongly, the perception is always the family boy's going to get the job.
WU: In Chinese culture, people want -- outsiders, the staff, they want a family member to succeed. They want to be led by a family member. Because I think the tradition and the heritage of this company being led by a family member, I think it's very important, and I think it carries -- it gives me lots of advantages as well as pressures.
When I tried to execute something, it's just easier for me being a family members and the CE to get something done than if I were an outsider.
If I were an outsider, I would be given lots of doubts. "What's he doing? Would this work? When is he going to fail?"
QUEST: There must have been people who said, "Young kid, new, freshly-minted degree. He's going to ruin the company.
WU: I had doubts even from within -- from my grandfather. When I first brought Starbucks to Hong Kong. Nobody had ever heard of Starbucks in my company, and they -- I took them to a competitor in Hong Kong and I told them to try the coffee.
And we're going to be charging $3 US for this small cup of coffee, which is the same as a whole lunch, a barbecued rice lunch, and we're going to be making money out of this company. And everyone in the company, including my grandfather, said "you're crazy. Nobody's going to pay $3 US for a cup of takeaway coffee."
But, I said, it's the trend. The young people, they're willing to spend this money on the brand. And it's the lifestyle. So, I believe in this concept. Let me try it.
One thing I learned from managing a business in China is that, don't assume anything. When we try -- when we thought that the business model in Guangdong was probably very similar to Hong Kong, we were right and we were wrong.
QUEST: Have you bitten off more than you can chew in China? By your own admission, it's proved to be more challenging then you had thought.
WU: China is a very challenging market. We are primarily focusing only on Guangdong, which is close to Hong Kong. And the thing about China is that it's such -- it's geographically, it's so much difference from Hong Kong.
You take things for granted in Hong Kong. Hong Kong's a very small place. China's a huge place.
QUEST: So, did you misjudge?
WU: There were a lot of misjudgments in the operations. Logistics, for example. We completely misjudged that.
QUEST: So, as a boss, how has the last ten years shaped your concept of what it means to lead a company of 14,000 people?
WU: You have to have faith and confidence in your vision and your dream.
They're in difficult times, which we have seen in the past ten years, we've experienced some very difficult years. There were a lot of -- people would doubt you into what you do, your expansion, you're rolling out new concepts. They'll doubt you, will this work, will that work?
But if you believe in what you do, and you execute that well, then good times will come back.
QUEST: Sarah Curran has told us that she thinks she'll know when it's time to hand over the reins and go. She's an employed CEO. You're a family CEO. Will you know when it's time to say good-bye?
WU: The day I lose passion and interest in my job. The day I stop coming up with new ideas, stop driving our team to think further, to go out and innovate, I think when that day comes, it's a day I will have lost interest. But it won't be soon.
ANNOUNCER: Next week, on "The Boss."
SARAH CURRAN, FOUNDER AND CEO, MY-WARDROBE.COM: I remember what it was like, and it was bloody difficult.
ANNOUNCER: Sarah Curran prepares to take on her next big challenge, inspiring and mentoring.
And in Brooklyn, New York, playing up the underdog status. Steve Hindy tells us how he used is viral and aggressive guerrilla marketing to get ahead.
(END VIDEOTAPE)
QUEST: You've got to admit, it's fascinating stuff. It's "The Boss," and it's only here on QUEST MEANS BUSINESS and on CNN.
And in the next few weeks, we'll be inviting you to maybe nominate a boss that would like to join the ranks of our series. That's coming up.
This is QUEST MEANS BUSINESS. Good evening to you.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN. And on this network, the news always comes first.
Ratko Mladic has arrived in the Netherlands, where he'll face a war crimes tribunal. He arrived from Belgrade less than an hour ago. The former Bosnian Serb general is facing charges of genocide over the 1995 massacre of 8,000 Muslims at Srebrenica. Mladic's lawyers tried to stop the transfer, saying he's too ill to stand trial.
Spanish producers -- exporters say the E. coli scare in Germany is having a domino effect, with nearly every European country refusing to buy vegetables from Spain. German authorities are examining vegetables from Spain in their search for the source of the outbreak. They also say they are looking at a shipment that originated in either Denmark or the Netherlands.
The United Nations is condemning what one official calls reprehensible acts of violence in Yemen. Clashes have been reported in the capital, Saleh, the southern city of Taiz and the coastal town of Zinjibar. The U.N. says government forces have killed at least 50 people in Taiz since Sunday.
Victims' organizations say 127 bodies have now been recovered from the depths of the South Atlantic Ocean -- part of the recovery effort in the crash of Air France Flight 447.
It's been almost exactly two years since the disaster off the coast of Brazil. A total of 288 people perished.
Egypt's economy is boosting hopes of sustaining the country's new regime. The country grew by 5.5 percent in the first half of the fiscal year and maintaining that kind of growth is why G-8 leaders want Egypt and Tunisia to get extra support. At the G8, they suggested the country should get billions of dollars in help and support of reform.
The key question, of course, the question, of course, is what will the money be used for?
And, indeed, ordinary Egyptians feel that they will be the last ones to benefit.
CNN's Diana Magnay in Cairo asks whether, for some people, the costs of the revolution outweighs the gains.
(BEGIN VIDEOTAPE)
DIANA MAGNAY, CNN CORRESPONDENT (voice-over): Since the revolution, customers have been far and few between at Saudi Sayed's (ph) fruit store. He believes people are reluctant to spend their cash because they don't know what's coming. I asked if things were better for him when Hosni Mubarak was in power.
"Then, there were no robberies or chaos," he says. "Now, the revolution has caused a lot of trouble and theft."
Sayed hadn't heard about the Tunisian fruit seller who set himself on fire to protest police interference with his business -- the incident that ignited a wave of protests across the Middle East.
But he listens intently when I tell him the story.
"We have a man who sells fish right behind us," he says. "He killed himself 20 days ago because he couldn't afford life's daily expenses. It happens." (on camera): This is the shop.
(voice-over): We all follow to the fish seller's shop -- locked and derelict. The man in the business upstairs remembered their neighbor well, an entrepreneur who started off importing clothes from Turkey, until high taxes, they say, forced him to shut that business.
ABDELMOMEN ORABY, NEIGHBOR: The government doesn't help you to when the government see you have a bit -- a good business, they want to stop with all the taxes.
MAGNAY: Oraby says revolution and regime change made no difference.
(on camera): Even though the government was changing the rules?
ORABY: Yes, yes, because this -- these changes doesn't have change this time. But unless -- a longer -- a long time, maybe my children...
MAGNAY: Right.
ORABY: -- have -- has this change.
MAGNAY: And in the meantime...
ORABY: But who...
MAGNAY: -- how to survive?
ORABY: No, no, no, no. At this time, life goes back.
MAGNAY: There are a lot of different theories about why things are so tough economically right now. The finance ministry will put it down to a soaring public deficit, to the loss in exports and to the fall in tourism, all because of the increased security concerns in Egypt right now. But there are other people who say that the deficit was just as high under Mubarak and put today's problems down to the unfair taxation system, the wage disparities and the corruption of the past regime.
But this government knows that it's under pressure to turn things around and fast.
(voice-over): Sayed says all he knows for sure is that his debts are bigger than they've ever been. He fears that if he doesn't pay by the end of the month, he'll be arrested.
Diana Magnay, CNN, Cairo.
(END VIDEO TAPE)
QUEST: When we come back in just a moment, getting a job in tough times -- hear why our next guest says it's all in the mind and what that mind means. We'll discuss, after the break.
(COMMERCIAL BREAK)
QUEST: The heckles around FIFA President Sepp Blatter are growing louder and new scandals are emerging on an almost daily basis.
Today, Jack Warner, the head of the North America's football body, CONCACAF, was reported to FIFA for alleged violating his ban. Warner was one of two executives suspended on Sunday after bribery allegations surfaced.
Now, according to FIFA's U.S. representatives, Warner had been violating that ban by meeting with members of CONCACAF. Warner today revealed he has urged members of the Caribbean Football Union to vote for any un -- for the unopposed President Blatter tomorrow. The English and Scottish Football Associations are both calling for that vote to be delayed. The English FA was already planning to abstain on the election before it became a one horse race. They want some independent review of FIFA's practices.
Now, the sponsors of FIFA are also expressing their concern. These companies could have the clout to effect a change in the body. Emirates, the airline, has updated its reaction to the scandals and says: "Emirates, like all football fans around the world, is disappointed with the issues currently surrounding the administration of the sport. We hope these issues will be resolved as soon as possible. The outcome will be in the interests of the game in general."
Another major sponsor, Visa, says the current situation is clearly not good for the game and we ask that FIFA take all necessary steps to resolve the concerns that have been raised.
As for Coca-Cola and Adidas, they have both agreed what's going on at FIFA is not helping the sport. It would be somewhat remarkable if they thought it was.
This presidential election has gone from being an open goal for Blatter to one of the most closely scrutinized races in FIFA's history.
Pedro Pinto, we are lucky -- well, not for him. He's in the rain. But he is outside FIFA's headquarters in Zurich for us tonight.
I'm not going to mince me words here, Pedro, have we descended further into farce?
PEDRO PINTO, CNN CORRESPONDENT: Well, yes and no, Richard. No, because yesterday, the -- the press conference was extremely farcical and to get worse than that would -- would be -- would be quite an achievement. Yes because the allegations are still there. The sponsors, as we've just heard, are -- are calling for reform. The International Olympic Committee, as well, has released a statement. And I can tell you that they're encouraging all federations to adopt and abide by transport ethical standards and they trust FIFA will take necessary steps to protect the reputation of its sport.
So the backdrop of these elections continues to get, how shall I say, darker and darker. And in the midst of all of this, I had a chance to speak with some of the delegates that will vote at the elections tomorrow. They'll vote at the building behind me. And most of them still believe that Seth Blatter is the man to lead the reform.
Earlier I spoke with the head of the Kuwaiti Football Federation.
Football Association. He said that he understands that the media, that the fans have a negative view of FIFA. But that doesn't mean necessarily that the leadership has to change.
(BEGIN VIDEOTAPE)
PINTO: Do you understand why the world has quite a negative view of what has happened around FIFA for the last few days?
SHEIKH TALAL AL-FAHAD AL-SABAH, PRESIDENT, KUWAITI FOOTBALL ASSOCIATION: Of course, this -- this matter can happen in anywhere, huh?
All the organizations maybe can have the same system, maybe. The IOC sometimes has the same. Now it's FIFA. I still -- I trust on FIFA's constitution. I trust that the committees will do their job. It's a matter of time. I -- I believe that everybody have the right to say what he wants. Everybody has the right to listen from the others.
So what I believe is that we have to sit to discuss this matter, then we will solve this problem. And I hope that will be in the benefit of football.
PINTO: But the IOC underwater deep reforms.
Is it time for serious change at FIFA?
AL-SABAH: Well, let me -- I cannot tell you my opinion. You know, I'm one of -- of 200 something countries. I think we have to discuss that inside tomorrow. I think tomorrow will be very -- the most important day in FIFA's history.
(END VIDEO TAPE)
PINTO: So at least the head of the Kuwaiti Football Federation understands the importance of this moment, Richard. I think that if Sepp Blatter is voted into a fourth term tomorrow, which everyone expects to happen, I think in his speech, he needs to come up with a plan, with a road map for reform. And he needs to do it quickly and objectively and in a way that will convince people that he wants this organization to have a makeover in its image.
QUEST: All right. So the Scottish and the English FA are both saying that they think it should be the -- the vote should be put off or suspended for the time being.
Is anybody else that might be regarded as in favor of transparency, the United States, for example, Australia -- are there any other delegates that are -- that are sort of gathering to the cause?
PINTO: Well, Chuck Blazer, who is the American official from the FIFA executive committee, he was the whistleblower. He was the one who initially reported this alleged corruption occurring in the meeting between bin Hammam and the CONCACAF on the 10th and 11th of May. He said that this call from the English Football Association and the Scottish Football Association is too little too late. And he was the only one who kind of had that -- that rhetoric, as well. Everyone else that I spoke with, all the other delegates believe that the election will go ahead. They want the election to go ahead because they -- they still think that Seth Blatter is the right man to change the -- the situation -- Richard.
QUEST: Pedro, keep dry and we'll talk again tomorrow after, no doubt, the congress has met. And who knows what the result is there.
Pedro Pinto doing sterling work in Zurich.
There's no way these scandals will disappear even if Blatter gets reelected tomorrow.
Sylvia Schenk joins us now via Skype from Frankfurt.
And Sylvia is the senior adviser for sports at Transparency International.
Sylvia, I mean, well -- well, what can one say?
The first and core question to you -- does Transparency International think the vote should go ahead tomorrow?
SYLVIA SCHENK, SENIOR ADVISER FOR SPORTS, TRANSPARENCY INTERNATIONAL: I think it would be better for FIFA and, as well, for Blatter not to vote tomorrow but to postpone the election and to have an investigation first. In the moment, we have a lot of allegations against executive committee members. We have two sus -- suspended executive committee members.
They will not be part of the congress tomorrow. But up to now, we really don't know whether they are guilty or not.
And then, I think there are still some delegates, as well...
QUEST: Right.
SCHENK: -- who have -- who have taken bribes, because if bin Hammam has given bribes to delegates in South or Middle America, then there are some delegates tomorrow guilty, as well.
So there are a lot of questions. We need an investigation first and then we can have the election.
QUEST: And yet that doesn't look like that's going to happen.
So if the vote goes ahead tomorrow, is Transparency International prepared to condemn it?
SCHENK: Well, it's not our task to condemn it. Then we will have to look at the reality. We will make more recommendations. I think if there is an election tomorrow, then the new elected president of FIFA has to go into an investigation anyway.
We recommend to the new president...
QUEST: Right.
SCHENK: -- then to have an investigation from the outside, not to do it in staff, within the family, as he always is saying, because I think to regain credibility for Blatter and for FIFA, you really need transparency on the whole and you need independent investigations.
QUEST: Right. Sylvia, we're -- we're being -- or you're being very polite here. Frankly, if this was an election or this was a corporate matter, Transparency International, which, of course, does such sterling work in these areas, would -- Transparency International would be frothing at the mouth at the clear -- at
The apparent breaches of what seems to be good practice.
SCHENK: Well, we said it before, that we propose to postpone the elections. And, of course, we won't say afterward it was wonderful to have the elections. But nevertheless, we have all -- you and -- and other staff to look at the results.
QUEST: You see, the problem is, isn't it, never mind the bribery that may or may not, alleged or not, to have taken place, the very people who are voting tomorrow either may have been the recipients or at least have knowledge of or been in some way involved in all of this. It's -- you know, it smells to high heaven like bad fish.
SCHENK: Yes, that's right. That's the reason why we think the elections should be postponed. But if they are not postponed, nevertheless, life is going on. And then we have to have other recommendations for FIFA to leave -- to do something. We can't just sit down and say, well, it's a pity and do nothing.
QUEST: Is -- is this sport, is this the worst case, perhaps, except maybe Salt Lake City in the 1900 -- in the early part of the century -- is this the worst case that you've come across in sport?
SCHENK: Well, I'm not quite sure. There are other cases that have not yet come to the public sometimes. So it's a rough situation in the moment, but nevertheless, it's very good that it comes to the public. So - - so that's some progress, in the end. And it may help for the future. We have other foundations, international sports, where we have the very best situation and nothing comes to the public yet.
So I think FIFA -- it's good for FIFA and for the future.
QUEST: I think we have a half -- a glass half full and a glass half empty.
Sylvia, lovely to have you on the program tonight.
Many thanks for joining us from Transparency International, joining us via Skype.
We will have more QUEST MEANS BUSINESS after the break.
(COMMERCIAL BREAK)
QUEST: Tonight, why the most important job site is in your head. As investors brace for the U.S. employee report, due out at the end of this week, tonight we're going to show you why 96 percent of employers say they picked the right mind set over the right skill set. That's according to the people who wrote this book, "Put Your Mindset to Work".
Now, if you join me in the library, you'll see the basic premise of this book. It's all about the 3Gs -- grit, good and global.
We'll see what the global mindset.
Apparently, you need to cultivate unprecedented cultural agility -- openness, be a -- be available to new ideas and concepts, connections. In other words, be a -- be a man or a woman of the world.
Well, that will get you so far. But, of course, if you -- if you know your way around the world, you also have to have a good mindset, and that's all about integrity, trustworthiness, or the -- the sort of appreciation of what is right and -- and a moral compass, as we used to say in the old days.
And then you need to have grit, the sheer tenacity and resilience.
Now, it's not just enough, according to the author, James Reed, to have the grit or the good or the global, you've got to have all three. Because if you have all three, well, James Reed is with us.
What does all three enable you to do?
JAMES REED, CO-AUTHOR, "PUT YOUR MINDSET TO WORK": All three gives you the winning mindset, Richard. And -- and that's when we surveyed thousands of employers around the world about what they look for from people. And there were 72 qualities that came to the fore. And we distilled them down to these three, so that it was easy to remember, easy to work on and easy to present yourself.
QUEST: OK, so, can you teach these or -- I mean is -- you know, it's the old nurture/nature argument?
REED: Oh, definitely. What I would say about mindset, it's the lens -- the lens through which you see life and the world. And -- and you can change that, just as you put on a pair of glasses to see better and move around the studio, you can change the lens of -- of your own mindset. And that's what's special about this. This was different about it, because it can work for anyone in any situation...
QUEST: But...
REED: -- to develop their mind set.
QUEST: But whenever I read these sort of books, mindset and things, it's -- it all sounds better on the page until I actually try and put it into practice in my everyday life.
REED: Well, what we did, we've tracked 30,000 applicants for jobs. I mean looked at who was successful and who wasn't. And we saw that the successful CVs, the ones that got to the interview and got the job, demonstrated mindset at work. So it was evident from what those people said that there was something there that someone picked them out and put them on the pile, I want to see these people.
QUEST: Right. Mindset, that's global, grit and good.
REED: That's right, the 3G mindset.
QUEST: And -- and was one more important than the other in terms of getting to the interview, do you think?
REED: Well, interestingly, when we surveyed these employers, integrity and trustworthiness came at the very top, being a good person, being morally grounded, as you said. But the other...
QUEST: I guess you weren't looking at the financial industry too carefully.
(LAUGHTER)
REED: Well, maybe we were.
I mean where was value created and destroyed?
Where is value created and destroy?
QUEST: Right.
REED: Look at the report we just saw. But without the grit to take you forward when things are tough and without the global, the ideas and the curiosity and the creativity that you get from being open and connected to other people, you don't go as far.
So it's putting the three together in the true 3G mindset that makes it a winner.
QUEST: How do I identify what I may have and what I may still need more of, because, you know, to -- to a large extent, the definition of the 3Gs as it relates to me or to you, is an external view of me, isn't it?
REED: Well, it's interesting, we've created an assessment...
QUEST: Ah.
REED: And it's on 3Gmindset.com. And you can do it for free if you go there today. And that will give you your score against HG and overall, as well. And then you can go on and develop your mindset through some of the ideas in the book or on the Web site and improve your score.
And the same thing can apply for employers when they're assessing people.
QUEST: This is really important now, isn't it, because for every -- you -- you know better than anybody the -- the -- the job situation out there, being able to put your best foot forward, the ratio of jobs to applicants.
REED: It's very tough at the moment. On average, 20 applicants per job. I was looking at one this afternoon, a job in East London working for Nike, 700 applicants in seven days. So it's about standing out from the crowd. I mean 700 applicants is a huge number.
QUEST: How do you manage not to get despite -- dispirited and -- and depressed if you think you're one of 700 just going for maybe two or three jobs or one job?
REED: Well, that's where the mindset comes in, because it can be depressing being rebuffed. But if you have that resilience, that's an asset to you. That determination not to give up, that takes you a long way.
And it's also what employers notice, because what they really want is someone who's committed...
QUEST: Right.
REED: -- someone who's going to give real commitments in to their business. And if you keep trying, they notice that.
QUEST: A final question, completely unfair.
Of global, good and grit, as a -- as a chairman yourself, which do you think you have in spades and which would you like to have more of?
REED: Well, I've done the assessment...
QUEST: Yes, go on. Oh, oh.
REED: I'm definitely a work in progress.
QUEST: Yes.
REED: I want to improve my 3G mindset. But I scored highest on grit, which probably helps you quite a lot.
QUEST: Excellent.
Many thanks, indeed.
Global, good and grit. We have a fourth G with us tonight -- Guillermo at the World Weather Center.
Hey, it's raining in Zurich. London -- it's -- we are getting -- it may be May, Guillermo, but we are getting classic April showers all of a sudden, pow.
GUILLERMO ARDUINO, CNN METEOROLOGIST: You're right. But the next four days, you're not going to get that. It is actually very nice, I think, in London. And it's a little bit cool. But I have good news for our viewers who are going very soon to Paris, because -- or France overall, because the weather was pretty nasty yesterday. Now, it's improving. We had some travel delays and Germany now is -- is on our eyes.
And yesterday, we were talking about the difference in temperature between Germany and France and Britain, too. I remember Berlin at 29. So things are changing.
Look at Britain. In the north, we see some rain showers moving in. But England is looking fine. It's clearing now. Of course, we may get a little bit more of the same. But the next three days are going to be much better.
Now, when you turn your eyes to Germany, that's a problem, especially the Berlin area, in the Schleswig-Holstein section, we see also some bad weather. To the south we see, near Munich, also, we see some storms popping up. And needless to say, Switzerland, as well.
We have to report that it's going to be short-lived. So we're not talking about significant delays even in other cities here in Europe. Milano looking OK, even though it's near the alps. Rome looking fine, Barcelona, Madrid, the Iberian Peninsula looking OK.
So it all comes back to Germany, with the chance of large hail, heavy rain and also windy conditions overall, all across the country. And I told you that yesterday at this hour, we had 29 degrees. Look at what's happening in the forecast for tomorrow. We're going to see 20 degrees. So the difference between today and tomorrow is quite significant.
And the Poland area, as we move to the east, stays pretty much in a warm section. That gradually is going to change, as well. So we will gee -- we will see that change over there.
In the States, the weather is quite quiet, too, after a rough weak. Look at Chicago with some delays at the airport, though. That's O'Hare, New York LaGuardia, and on the other coast, we have problems, as well. But look at the rain. We don't see much. Most of it is in Canada, in the Great Lakes region. We may see some delays here associated with the bad weather, typical right now, when it's warming up. And it's warming up very nicely.
I think it's really nice, I must say, for many sections. And I'll tell you about that in a second.
We don't see much rain that is going to have an impact on the Mississippi River, adding more rain to the misery, more water to the already very high levels. The Missouri River is actually very high still.
Delays at airports, maybe New York, we may see some problems, not by much. You see windy conditions on the other side of the country, too, Denver and Vegas. But it's looking OK.
The heat is a problem. And the heat in the south, in a large area, we have also fires in Texas. So that's really, really bad. We are getting closer to the 40 degree mark in many areas in the south of the United States.
I wanted to show you what's going on in the Philippines there. Luzon, south of Taiwan, also, look at the South China Sea. Now, we see quiet conditions. There was a cyclone in the making that had some fair chance of development, but it's not going to be like Songa (ph), that typhoon that became a super typhoon.
But, Richard, we're looking at that area, as well. It seems that it's not as bad.
QUEST: Guillermo at the World Weather Center. We thank you...
ARDUINO: Thank you.
QUEST: -- for that.
Now, the Tweets from the Top. And we have a new candidate in our Tweets from the Top, Christine Lagarde has returned home from her 36 hour IMF campaign trip to Brazil, to Brasilia. It's quite extraordinary.
She says: "Back in Paris after a 36 hour round trip, but very positive meetings made all that time in the air worth it."
Michael Bloomberg is heading to Sao Paulo -- what is it with Brazil this week? -- for the C40's mayors conference. And he says -- Mayor Bloomberg says: "Any meaningful action on climate change must start with cities. And C40 cities is committed to leading the way."
We'll be speaking to Michael Bloomberg about that on tomorrow's program.
We'll have a Profitable Moment in just a moment.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment.
The corporate world is replete with examples of companies that you were convinced would be there forever and then all of a sudden, found themselves in deep trouble. I'm thinking General Motors and then Woolworth's.
Well, is Nokia about to become the next example of this?
If there's anything about the Nokia experience, it seems to be that when the going gets tough, you have to keep a close eye on the competition.
Nokia's problem was that it failed to foresee what was coming, or if it did foresee, it didn't execute very well after. The boom in Smartphones, led by the iPhone; Android's increasing popularity; and now, a shift in demand toward cheaper phones in Europe and China.
Research last month showed Nokia's share of the market has fallen to 25 percent, its lowest level since 1997.
There's a strategy in place, but will it work?
And that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I do hope it's profitable.
"PIERS MORGAN TONIGHT" is after the news headlines.
END
