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Quest Means Business
European Commission Threatens Lawsuit Over Hungarian Policies; Italy Makes Progress on Austerity Measures; European Markets Down; Obama Urges CEOs to Bring Jobs Back to US; Obama`s Jobs Target; CEO Explains Why Jobs Must Come Back; Political Perspective on Jobs Plan; Gadgets Galore in Las Vegas; Buzz About Possible Apple TV
Aired January 11, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: It is a shot across the bow as the EU threatens Hungary over its new Cardinal Laws.
President Obama says we want more jobs at home than abroad. We`ll talk to a chief exec meeting the president.
And they`re getting thinner and faster. The latest gadgets are in Las Vegas.
I`m Richard Quest. I mean business.
Good evening. Europe`s patience with Hungary is wearing thin. The European Commission today said Hungary`s new Cardinal Laws could violate EU rules.
And the Commission said in a swinging attack, "We reserve the right to take any steps that deems appropriate." That`s political speak for taking legal action in the European courts.
The Commission`s concerned that the new measures compromise the independence of Hungary`s judiciary, its Central Bank, and its data protection authority.
Hungary`s budget arrangements also drew fire. The Commission`s ruled Hungary has not done enough to correct its excessive deficit. It says Hungary`s relying on unsustainable one-off measures to mask it. The budget sustainability progress is in sufficient.
Meanwhile, the other side of the view, Hungary`s economy ministry says the deficit will be under the EU`s three percent threshold this year.
Two sides of the argument, both political and economic. Let`s talk more about this. Viktor Szabo is an investment manager for Aberdeen Asset Management, formerly head of Market Analysis for the National Bank of Hungary. Viktor, we need you --
VIKTOR SZABO, INVESTMENT MANAGER, ABERDEEN ASSET MANAGEMENT: Good evening.
QUEST: -- to analyze this for us. Let`s start with the economic situation, then we`ll come to the -- what`s happened today. How bad, actually, is the economic situation in Hungary?
SZABO: The economic situation is pretty bad. Actually, the government had two big objectives. One of them is to reduce the overall debt, and the second one to boost growth. We can see, now, that none of them worked.
QUEST: But you say that, but as I just outlined there, they say that the deficit will be under three percent soon. That`s mastered debt.
SZABO: Formally, it is. But the committee looks behind the numbers, and the underlying deficit is much higher. So, Hungary is under excessive deficit procedures since 2004, and in last region, the Commission asked Hungary to reduce their structural deficit by half a percentage point. And, in fact, the last two years, the underlying deficit increased by three percentage points.
QUEST: Right. But then you take the debt to GDP, it`s only 80 percent. Britain`s got a higher debt to GDP than that. So has Italy, and we`re not suing them.
SZABO: Yes, definitely, but those countries are big, they have huge savings, strong economy. Hungary`s a small, open economy, no savings, relying on foreign investment. They cannot do that.
QUEST: So, when the government says it`s all just a big bunch of criticism from external markets -- you`ve head the arguments, it`s all a plot, basically -- what do you say to the government or to the officials?
SZABO: The hard data tells a different story, because the deficit is larger than it should be. Well, formally, it is in line, but basically, all the underlying indicators are showing that there is no improvement on the fiscal side.
The debt level is higher than it used to be before this government, so basically -- and in the meantime, they spent almost 10 percent of the GDP on nationalized the private pension funds to 10 percent of the GDP, and it`s gone.
QUEST: OK, now let`s talk about the political side, as much as you`re able to in your --
SZABO: I`ll try to.
QUEST: -- in your role. So, it does look as if we`re heading to a situation where the Commission is basically, from what you read on this paper, it`s telegraphing it`s going to sue them eventually. It`ll take legal action.
SZABO: Actually, I think that`s not exactly what the Commission would like to achieve. They would like Hungary to make the changes before the whole legal procedure starts, because it is a long and nasty legal procedure. So, it will give Hungary some time, not much, a little time to modify the laws on the question.
QUEST: Right. And the -- and what we`re talking about, here, is the Central Bank rule, the fiscal rule, the appointment of judges and prosecutors, and a media law, aren`t we?
SZABO: So far, yes, these are the issues. There are other issues, but legally, it`s quite difficult to attack them. These are the points where the Commission is sure that they have -- legally, they can sue Hungary and have a positive outcome.
QUEST: Let`s go back to the financial side, finally, Viktor. A very senior banker said to me last week that basically no one in the city -- in the financial world has much confidence in Hungary at the moment. Was he being -- exaggerating and just being too much, too much fume?
SZABO: No, just look what the price is. The high-risk premium that the markets are now pricing, they clearly show there is a lack of confidence on the market, and that more problem is that confidence is waning in Hungary, as well.
So, people now are starting to take money out of the bank and converting it to foreign currency. And so many people open accounts abroad.
QUEST: Is it beyond the possibility that Hungary goes bankrupt?
SZABO: It`s not beyond possibility, but it`s not our baseline scenario. At the end of the day, they will have to surrender and accept the -- all the conditions of the IMF and the European Union. No other way.
QUEST: We`ll talk more about. Many thanks, indeed, for coming in --
SZABO: Thank you.
QUEST: -- and talking about this. Staying in Europe, Mario Monti says Europe no longer has to worry about contagion from Italy. The Italian prime minister met with Angela Merkel in Berlin. The German chancellor praised Italy`s austerity measures, which she says will help stabilize Europe.
(BEGIN VIDEO CLIP)
ANGELA MERKEL, CHANCELLOR OF GERMANY (through translator): Both in terms of the speed and the substance of these measures, I believe they will strengthen Italy and will improve its economic perspective. We have followed with great respect how quickly the measures are being implemented.
(END VIDEO CLIP)
QUEST: Now, Prime Minister Monit`s imposing $40 billion of austerity. He said the cutbacks aren`t just to please Europe, they`re in his country`s best interests, too.
(BEGIN VIDEO CLIP)
MARIO MONTI, PRIME MINISTER OF ITALY (through translator): This was a very mature attitude by Italians, and it merits not a reward from Europe, because the measures we adopted were adopted in the interest of the Italian people. But it merits a recognition by Europe that it doesn`t have to fear anymore that Italy is a possible source of contagion for Europe.
(END VIDEO CLIP)
QUEST: It`s amazing what a bit of austerity does to your stock market. The main index was one of the few gainers in Europe. If you take a look at Italy`s numbers, banks led the gains. Banca Popolare di Milano at more than nine percent.
The markets in a falling market of the FTSE, DAX, and CAC. The actual MIB in Milan rose a quarter of one percent. Total was down one percent, Shell down three.
Germany`s economy is slowing, and that took its toll on that economy. GDP for Q4 down one quart -- fourth one quarter of one percent. That will teach me to translate that fast. You get the idea, Germany`s slowing down.
Out with outsourcing. Let`s have those jobs back in. Barack Obama wants businesses to come home and relive the American dream.
(RINGS BELL)
QUEST: QUEST MEANS BUSINESS will tell you how he`s doing it after the break.
(COMMERCIAL BREAK)
QUEST: President Barack Obama is asking American companies to come home and turn outsourcing into insourcing. He`s meeting a group of chief execs at the White House to talk about bringing their offices back to the US.
The president said it was time to get some momentum going in the US jobs market.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I don`t want America to be a nation that`s primarily known for financial speculation and racking up debt buying stuff from other nations. I want us to be known for making and selling products all over the world stamped with three proud words, "Made in America."
(APPLAUSE)
OBAMA: And we can make that happen.
(END VIDEO CLIP)
QUEST: Now, if there`s one graph that tells you how much of a chance and change the employment issue is and how important it is to the president`s reelection, if you join me at the super screen, you will see exactly what I`m talking about.
Now, this is a rather interesting chart. It shows the number of jobs in the US economy which, as you can see, peaked back in 2008 at somewhere around nearly 138 million jobs.
When Mr. Obama took office a year later, those jobs, 4.4 million jobs, had already gone. So, tot that up in your mind, 4.4 million.
Fast forward just a couple of years, and the bottom -- the height of the recession, if you like, another 4.3 million jobs have gone.
Now, all of those jobs will not come back, and we -- we are, as you know, seeing some jobs growth in the United States. You`re seeing roughly 2.7 million jobs have returned.
So, to save you the soreness of having to do it, so he still -- there is still negative 6 million jobs in the United States. That`s an estimate. Other people would say that that number is higher if you take into account the unwalked -- unworked, those who are not working part time and the like. So, you see the sort of predicament it is.
Now, one of the chief execs meeting with the president is Timothy Bryan. He`s from the software company GalaxE.Solutions. Just before we came on air and just after he`d spoken to President Obama, Tim told me why jobs had to go back from outsourcing to insourcing in the US.
(BEGIN VIDEOTAPE)
TIM BRYAN, CEO, GALAXE.SOLUTIONS (via telephone): The complexity of software technology development requires significantly more resources be inside the United States in order to achieve the quality standards that are required.
QUEST: That --
BRYAN: So, it is not a matter of convincing, it`s a matter of economic reality or quality statement that says that based on quality, the work needs to be accomplished here, and it`s much more challenging to do it offshore.
QUEST: All right. But there`s a difference, isn`t there, between skilled quality work that you can bring back onshore and, if you like, the grunt labor, the often call center work, that is still -- there`s a cost imperative to keeping offshore?
BRYAN: Well, I am in the software development business, but I heard a lot of commentary about some of the leveling of costs in other professions. But in software development, the argument is absolutely based on quality, and the quality and value that can be achieved inside the United States is making it very competitive even though the unit cost is higher.
QUEST: OK. So, what needs to happen if you`ve got the arguments in your favor, the president on your side, who do you actually need to convince to start shifting the jobs?
BRYAN: I think, like any trend in business, there`s awareness that this is going on. The fact that the president has highlighted it means that international corporations will be looking at their operations, they`ll be asking themselves the tough questions about whether they`re receiving enough value from their relationships with offshore service providers.
And they`re going to be taking a look at companies with a greater displacement inside the United States to achieve the value that can be accomplished here.
QUEST: Finally, Tim, to some of our viewers watching overseas who simply said, "Hey, come on, we`ve got the jobs. Don`t take them away, we have unemployment, we have problems as much as you do."
BRYAN: The business equation is that any -- anyone or any entity that -- that wants to survive has to be competitive. So, it`s not a matter of taking jobs from one entity and giving them to another. It means that value has to be achieved.
And the challenges in software development leave me and, I think, the president believing that a greater footprint inside the United States is necessary, required, and desirable.
(END VIDEOTAPE)
QUEST: Now, our Chief White House Correspondent Jessica Yellin joins me from Washington. Jessica, when we look at it -- I`m always a bit suspicious with these outsourcing, insourcing stories because there`s always such a healthy dose, or unhealthy dose, of politics involved it as well, isn`t there?
JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: This is heavily about politics right now, Richard, because this is fundamentally about the coming fight between Barack Obama, President Obama, and the person he expects to face in the general election, Mitt Romney.
It`s not decided, but the Obama campaign expects that Mitt Romney will be the nominee, and the fundamental case they want to make against Mitt Romney is that as a business man, he -- his business product fundamentally focused on merging companies and downsizing, putting people out of work, making people lose jobs.
And so, the case they want to make is that while President Obama is focused on creating jobs, Mitt Romney focused on killing jobs. And so that`s part of what you`re seeing begin to play out right now, Richard.
QUEST: Yes, well, let`s just talk about that, because that`s a fascinating prospect. I just thought -- you were saying, you alluded to the fact that Mitt Romney, the front-runner, has repeatedly points to his success of job creation.
YELLIN: Yes.
QUEST: His campaign claims Romney`s efforts while at Bain Capital created more than 100,000 jobs, specifically three companies, 89,000 at Staples, 15,000 at Sport Authority, 7900 at Domino`s. The critics claim with their ads that it`s all taken out of context and even the -- and dubious numbers.
So, Jessica, when we look at this issue, does it leave the American people feeling on the one hand, on the other hand, on the third hand, on the fourth hand -- who on Earth is telling the truth?
YELLIN: First of all, I`m so impressed. We didn`t plan this, and you had those graphics ready to go?
(LAUGHTER)
YELLIN: I`m really impressed with your show, Richard. You guys are on it.
Yes. The American people -- first of all, I`ll tell you this. Not that many people are paying attention to this fight right now. Mostly it`s Republican primary voters who are paying attention. The rest -- and very die-hard political watchers.
The rest of the people, I think, think this is a lot of noise. And then, people will start to focus in and get annoyed that there`s all this back and forth and it`s not really clear what the truth is.
The bottom line is, Mitt Romney did help create some jobs. Many of them were low-paying jobs, but they were jobs in the end, and he did downsize some companies.
Barack Obama has been president during a time when the economy has been through an awful, wrenching period. But it`s not entirely his fault. He inherited a bad deal.
And so, they`re going to have to weigh all this. And it`s just going to be this process of a lot of dirt being flung by both sides. We`ll do our best to vet it. But it sort of is what it is. It`s an ugly -- it`s going to be an ugly campaign.
QUEST: In a word -- in a word -- are you enjoying the election yet?
(LAUGHTER)
YELLIN: I`ll get there.
QUEST: All right. We`ll talk to you when you`re there. We`ll follow you closely on the way. Jessica, good to see you, tonight. Many thanks, indeed, for making sense of it. We all enjoy elections in one shape or form, but I guess if you don`t have to put up with sleeping in the motels night after night and traveling, it`s a lot more different.
OK. The world`s biggest electronic show underway in Las Vegas. We`re going to see the latest and greatest technology, and we will have a serious addition to the world of the gadget --
(RINGS BELL)
QUEST: -- after the break.
(COMMERCIAL BREAK)
QUEST: Tech geeks of the world, unite. So far, ultra-thin laptops, robotic iPod docks, tablet power gets theirs, and that was just day one. CES used to be the Consumer Electronics Show, now they just abbreviate it in some sort of prose-ish way, is continuing in Las Vegas. Dan Simon is there, and Dan has the gadget of the night.
DAN SIMON, CNN SILICON VALLEY CORRESPONDENT: Hi there, Richard. You know, first thing I want to show is, you talked about this video mic flag that we unveiled yesterday. If I go like this, look what we`ve got here, Richard.
QUEST: Yes.
SIMON: You`ve got your -- your logo on there for you. We talked a little bit about how the fact that there`s really no breakout product this year. This is one of these evolutionary years here at CES. But we found something that was really interesting, and it was over at Microsoft.
And they took Xbox technology, the popular video game console, which has the Connect, which you can use voice recognition and do all kinds of gestures, and they married it to the idea of going to a clothing shop.
Now, I hate browsing for clothes, I hate trying on clothes. And this technology solves that problem. I want you to take a look at this.
(BEGIN VIDEOTAPE)
SIMON: So, the virtual dressing room, we want to try and some clothes. Let`s go to what`s hot. We want to try on a tie. We go over here and we hit that. And then boom, I can see what it looks like to wear this tie.
Or I want this briefcase. And reach over -- or say I want to try on this blue jacket. Reach over here. So, it begs the old-fashioned question, do you really need to try something on to know if you want to buy it?
STEVE CLAYTON, CHIEF STORYTELLER, MICROSOFT: Well, I think we`re getting closer to really having that dilemma. I`m quite happy to -- I guess there`s going to be some stuff you`re going to always want to try, so my wedding suit, my wife is probably going to want me to go down to the store and get that fully made up for me.
If I`m buying a sweater for the weekend, I`ll probably have to go try it on virtually and buy it right there on the screen.
(END VIDEOTAPE)
SIMON: Now, this technology is still in its infancy, but I think Microsoft has got a huge winner on its hands with that one, especially men, Richard. If you don`t have to go try on a bunch of clothes, I think that`s pretty good.
And they can also apply that to other things. They think that it`ll be unveiled I think February 1st, and then they`re going to allow developers to see what they can do with it.
QUEST: Right. I just love the thought that somebody has a title of a job called "Chief Storyteller, Microsoft." I think that`s just a -- the name of the person.
Anyway, look, more seriously, Apple isn`t there, but there is a lot of fuss and furor about their forthcoming TV, Dan.
SIMON: If you`re a TV manufacturer -- say you work for Samsung -- how aggravating do you think it must be to have people come up to your booth and have you ask about Apple and not about Samsung?
That is what is happening here at CES. There is so much talk, so much buzz that Apple is going to come out with a television. And so we put together a little piece. Take a look.
(BEGIN VIDEOTAPE)
SIMON (voice-over): A television you can talk to. Samsung`s new TVs are controlled by voice --
UNIDENTIFIED MALE: Web browser.
SIMON: -- physical gestures, and facial recognition.
ETHAN RASIEL, SAMSUNG: And what we`ve done is, we`ve built a camera right into the TV. You can surf the web by moving your hand around. You can point to click.
SIMON: TVs always seemed to hold the most interest at CES. The last few shows have focused on 3D technology, but consumers haven`t been swayed because of the need for glasses and the relatively little 3D content for television.
SIMON (on camera): Most consumers have already upgraded to flat screens, but for many, there hasn`t been a compelling enough reason to spend the money to do it again. But there`s one company that might jump start the industry, and they`re not even at the show.
SIMON (voice-over): The tech industry is buzzing that Apple will finally release a television. Shortly before he died, Steve Jobs told his biographer, Walter Isaacson, quote, "I`d like to create an integrated television set that is completely easy to use. It will have the simplest user interface you can imagine. I finally cracked it."
BRIAN COOLEY, CNET: But when Apple gets in the game, you know they are going to be the most serious competitor in terms of making stuff that consumers get attached to and spend top dollar for. That`s a competitor you don`t welcome.
SIMON: With Apple`s possible entry, TV makers are trying to stay ahead of the game, packing plenty of new features into the sets.
LG, for instance, has an internet-connected app that features high- quality video games without the need for a game console. TV makers don`t want to be caught flat-footed, like RIM, Nokia, and Motorola, which dominated the cell phone industry before Apple got involved.
Samsung says Apple`s possible entry hasn`t affected their strategy.
RASIEL: We do what we think is best for our customers. But we`ve got a product here right now, once Apple comes out with something, we`ll take a look at it and decide what we think of it, but right now, our focus is on doing what we think is best for delivering value to our customers.
SIMON: No doubt the TVs at CES are impressive, incredibly thin with amazing pictures and require less power than previous models. The question is whether consumers will finally be ready to upgrade or wait to see what comes from the giant in Cupertino.
(END VIDEOTAPE)
SIMON: So, Richard, the conventional wisdom is that Apple will release a television set sometime in 2012, and I think that is a big problem for TV makers here. Are people going to wait on the sidelines and see what Apple does before they invest the $1,000 or so to go invest in a new TV. Richard?
QUEST: Interesting -- fascinating stuff. Of course, you do now need to put something on the television worth watching.
But Dan, finally, Samsung must clearly be at least happy that they`ve broken the phone market with their Galaxy and with their tablet and with their S2 phone, and they`ve made a serious inroad into cool, uber Apple.
SIMON: That`s true. Samsung, I would say, is probably the closest competitor to Apple when it comes to mobile and tablets. They put out some great products. I think when it comes to televisions, they`ve done very, very well over the past few years with some innovations.
But what we saw a few years ago, Richard, is Samsung had a number of mobile phones, and so did Nokia and all the rest. And then Apple came out with the iPhone and leapfrogged over the industry. And so, there is some concern, if you`re a TV maker, that they`re going to do the same thing.
So, I think what you`re seeing this year is TV makers are looking over their shoulder. They are packing so many new features into these TV sets. They`re great television sets. But you just have to wonder what Cupertino has up its sleeve, Richard.
QUEST: Dan Simon with the QMB, QUEST MEANS BUSINESS mic flag. We thank you for that. Many thanks, indeed.
Now, when we come back in a moment, freeing up the market bit by bit. India inches open to the door of foreign retailers in just a moment, QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: Hello, I`m Richard Quest.
More QUEST MEANS BUSINESS in a moment.
This is CNN. And on this network, the news always comes first.
The French journalist, Gilles Jacquier, was among two people killed several hours ago in Homs in Syria. The reporter for the France 2 network was covering a pro-government rally when it came under fire under fire. A civilian was also killed.
An Iranian nuclear scientist died when a motorcyclist put a magnetic bomb under his car. The blast in Tehran is the latest in a series of deadly attacks on Iranian nuclear experts. Iran is blaming Israel and the United States. Israel isn`t commenting. The U.S. says it wasn`t involved.
The German chancellor, Angela Merkel, has praised Italy`s quick efforts to cut government spending and enact reform. Mrs. Merkel met the Italian prime minister, Mario Monti, in Berlin. He says Europe doesn`t have to worry about contagion from Italy. The two leaders urged the European Union to do more to promote growth.
Pakistan`s prime minister has fired the country`s defense secretary. The state media says he was dismissed for, in their words, "gross misconduct and illegal action." His exit has further widened a growing rift because the civilian government and the military in a country with a history of military coups.
Reveling in a clear-cut double-digit win. That`s Mitt Romney, who took the Republican race for the White House one step closer, with 40 percent of the vote in the key U.S. state of New Hampshire`s primary. His closest competitor was the Texas congressman, Ron Paul, with 23 percent.
A prosecutor in Germany has reportedly been shot to death in a courtroom in Dachau. A man on trial fired at the victim. The 54 -year-old suspect was overpowered and taken into custody. The man was being tried for embezzlement.
Indians could soon be introduced to the likes of Starbucks, Nike and IKEA. The government says single brand companies like those can now operate within the country with complete, 100 percent control of their local operations, no longer requiring joint ventures and complicated corporate structures.
Not so fast. There are a few conditions, as Sumnima Udas explains.
(BEGIN VIDEOTAPE)
SUMNIMA UDAS, CNN PRODUCER: India has just passed a new legislation that will allow for foreign single brand companies to own 100 percent of their operations in India. To single brand companies like Louis Vuitton and Adidas, which formerly needed partnerships with local investors, can now own 100 percent of their brand.
This is not allowed for multi-brand retailers like a Tesco or a Walmart to come into India, but this is still being seen as a major announcement, a huge step for the government. Remember, in November, 2011, Prime Minister Manmohan Singh`s government had proposed this idea of allowing for 100 percent FDI in both multi brand and single brand companies. But this was received with a lot of criticism in parliament. There were even protests on the streets. So the government had to backtrack a little bit.
The opposition was particularly worried about the effects that companies like Walmart or Tesco could have on mom and pop shops.
There is one caveat, though, in the legislation when it comes to procurement. There is one guideline that says that every foreign company that wants to be 100 percent investor here needs to procure 30 percent of their goods from small and medium sized Indian businesses.
MAHESH NAITHANI, SENIOR ADVISER, ASSOCHAM: Any FDI which is more than 51 percent will have to source its material from the domestic industry. That is, from the villagers, the small scale industries, the artisans, farmers. It will eliminate the middleman.
UDAS: Obviously, such a move will hugely benefit small businesses, farmers and artisans here in India. So some analysts are saying that this could deter luxury companies like, let`s say, Louis Vuitton, from scaling up their operations in India, because it will be difficult for them to justify sourcing 30 percent of their goods from small Indian firms.
Sumnima Udas, CNN, New Delhi.
(END VIDEO TAPE)
QUEST: Coming up next, he might not take you by the hand, but he will lead you through the streets of London. It`s a tour guide
(COMMERCIAL BREAK)
QUEST: When a man is tired of London, he is tired of life, for there is, in London, all that life can afford.
All right, it`s a cliche and Samuel Johnson said it, but that`s what he said about the city that I call home, whether it`s St. Paul`s or Gherkin or the bridges and the river.
With almost 2,000 years of history, you need someone to take you through the streets of London.
And that`s Jez York`s guide, a tour guide on one of London`s famous open top buses.
And this is his World At Work.
(BEGIN VIDEOTAPE)
JEZ YORK, TOUR GUIDE, THE ORIGINAL LONDON SIGHTSEEING TOUR: OK, ladies and gentlemen, welcome aboard.
I`ve been a London tour guide now for nearly coming on for seven years. I`ve been working for the Original tour for that whole time. And, yes, I very much enjoy my job. It`s a lot of fun and it`s a great thing to be able to show people around London.
And for now, we`re going to drive up to Piccadilly.
London is such a great place. There`s just so much history, 2,000 years of history. It`s a great way to see London. It`s a -- I mean it`s a massive city. And you sit on the bus and we do all the work for you.
Now, the royal factor is massive. The royal family is one of the biggest draws for this city. And, obviously, the royal family is living history. And people love it.
They want to see the main sites, Buckingham Palace, obviously, a massive pull, St. Paul`s Cathedral, Westminster Abbey, and especially Westminster Abbey because we had the royal wedding.
For ladies -- just for ladies now -- we`ve only got one prince left and he is, by far, the hardest one to catch. So get your skates on.
Probably my favorite building in London is St. Paul`s Cathedral. I think it`s one of the iconic buildings. You know, it`s 300 years old. And it played such a massive role during the time of the Second World War. I mean it was an iconic building and a building of hope. Winston Churchill personally gave orders that, you know, this was the building that most have to be saved through the time of the Blitz.
It`s not about being a showman and being a comedian. People haven`t come on these tours for this. What they`ve come on the tour for is for you to show them London.
If you look over to your left, you can see this archway. This archway is called the Admiralty Arch. It was built by the...
The one thing that you have to know is you have to know the history of London. And you have to know it in some detail, because you get asked all sorts of questions. And it takes a while to learn that. But like, you know, once you`ve learned the history, then, of course, it comes down to people skills.
And it`s all about finding that balance between being entertaining and informative. And that is the key to the job.
I`ve got plenty of seats for you upstairs.
UNIDENTIFIED FEMALE: perfect.
YORK: You`ve got to be a people person. You`ve got to like people, you know. And I do.
One of my little tricks for getting through the day is I -- you know, I like to introduce myself and I like to find out a little bit about the people that are traveling on my bus. And there`s a different story every day. Every day is different and every tour is different.
So it`s been a perfect job for me and long may it last.
(END VIDEO TAPE)
QUEST: Ah, the top of a double decker bus heading down the streets of London.
Now, like any financial capital, London`s skyline is dominated by skyscrapers. They are the venerable monuments to capitalism.
Although now Barclay`s Capital says that today`s skyscrapers could be harbingers of financial doom. There`s an eerie link between the big skyscraper projects and economic troubles, apparently, according to Barclay`s Capital. So we put this to the test.
Let`s start with the Empire State Building, still, at least, for the time being, the tallest building in New York City. It opened in 1930, interestingly. And what was fascinating about that is it opened and it coincided with the middle of the Great Depression.
So you have the Empire State and the Chrysler Building roughly at the same time, of course, and you have the Great Depression, one and the same, hitting at the same time.
Go to the Willis Tower in Chicago, better known, perhaps, as the old Sears Tower, now that wonderful building with its steps up and the way it`s been constructed, that was completed in 1973. That was the same year as the oil crisis hit. Remember, there was the embargo, there was the price rises and oil prices shot through the roof.
The Petronas Tower in Kuala Lumpur, once the world`s tallest building, completed 1996, ding dong, Asian financial crisis hits the entire continent the year later.
And if you think this is all just coincidence and nonsense, the Burj Khalifa. It was going to be called the Burj Dubai but we know the story. It`s the tallest building in the world, completed in 2009, the same year that Dubai has the crisis.
So if you want to know where the next might be, Barclay`s Capital points out that it could be in China and India, which are apparently building the most skyscrapers in the world.
(RINGS BELL)
Jenny Harrison is at the World Weather Center for you this evening.
Not so much skyscrapers, more snow falling from the sky.
JENNY HARRISON, ATS METEOROLOGIST: hello.
Yes.
What -- what did you just say?
Start again.
QUEST: Oh, do pay attention, Miss. Harrison.
HARRISON: Well, I really should.
QUEST: Pay attention.
HARRISON: What -- skyscrapers, snow coming from the sky.
QUEST: Let -- don`t worry about it there. You -- gosh, it must awful at that age.
(LAUGHTER)
QUEST: You just carry on, dear. Just carry on.
HARRISON: Yes. I will.
Snow -- yes, it comes from the sky.
QUEST: Yes. Yes, it does.
HARRISON: And there`s been a lot of it. Look, just leave me alone. Let me get on with what I need to talk about.
We have had a lot of snow, in particular through Turkey, but in particular the southeast, the Balkans, in the last few hours. Another big system coming through Norway.
Let`s have a look at the amount of snow that`s been really impacting Serbia. As much as 72 centimeters in the last 24 hours.
This is what it looks like. We`ve got some pictures to show you. It has caused some major problems, and perhaps not that unbelievable. And I`ll tell you, this is actually the heaviest snowfall in over two decades to the region.
Now, there`s been no reports of any injuries, but all sorts of problems on the road. You can see there people skating. Obviously, a very high electricity pole. They`re trying to obviously get power back. Roads are closed. There really has been an awful lot of snow.
Not just here, Poland, as well. The central and southern areas of Poland have seen some very heavy amounts of snow.
It`s all coming, really, with the same system. There`s an area of low pressure across the far south. The front also is bringing through very cold air and a lot of moisture. And, of course, once you have a lot of moisture and it hits, this cold blast of air, that`s what you get.
It looks pretty nice, that snow. Hopefully, that`s the light and fluffy stuff. But again, it`s caused problems for travelers.
Come back to the weather map and I can show you the low pressure, which is going to work its way further eastward. But that means it will still pick up the moisture from the Mediterranean and then the cold air to the north of that low is going to -- next, as we go through the next couple of days, into Friday, produce some very heavy snow widespread across areas of Turkey.
Already here, as much as 30 centimeters in some areas. And, as I say, there is more to come, certainly by the time we head through Thursday and Friday.
Meanwhile, across the west of Europe, it`s still fairly mild, high pressure in control. And then we`ve got this next system coming through. That is going to really bring the snow across Scandinavia and also western areas of Russia. The winds also on the increase, fairly strong right now across the northwest of the UK. Not as strong as we have seen these winds. But mixed in with the snow, making for some, again, very unpleasant travel conditions.
And then actually the central regions, you see that rain that comes down and the milder air. Then it hits the colder air. And that`s when it turns over to snow. So finally, some more snow across for London out.
Travel-wise, on Thursday, a variety of delays, different reasons. You can see the snow across into Munich, a bit of a mix, really, of sleet and snow.
We still have a bit of a problem when we haven`t got the strong winds, then when we`ve got the strong winds, we could see long delays, particularly look there, Copenhagen, 60 to 90 minutes or so; maybe in Stockholm, but because of the snow. And then, also, some strong winds through the eastern end of the Med as that low comes through in Athens.
Ten degrees behind Athens on Thursday and 12 Celsius across in London.
As for the U.S., there`s a real distinct cool down on the way. This system moves through, a front comes swinging through. All that mild air gets funneled up toward the east and then it turns colder in the wake of that system. So feeling a bit more like winter.
It hasn`t felt like winter here for a good week now -- Richard.
QUEST: Winter is coming. The goose is getting fat, or whatever that phrase is.
HARRISON: That`s the one.
QUEST: Excellent.
Yes, that`s the one, right?
I think it was a Christmas carol, but never mind.
HARRISON: And then you`ve got a lot of it. You`re going to (INAUDIBLE).
QUEST: No, no.
HARRISON: You know, it`s January now.
QUEST: You see -- no, I`m being -- I`m being ahead for later in the year.
HARRISON: Oh.
QUEST: Miss. Harrison, stay with us.
We thank you.
All right, when we come back, Mayor Bloomberg is on a mission to get New Yorkers to give up their Long Island ice tea and declare that a Manhattan is old hat. I`ll explain, after the break.
(COMMERCIAL BREAK)
QUEST: As we reported to you earlier in our program, President Obama`s trying to offer incentives for companies to create jobs in the United States rather than outsource them abroad.
One classic American company that have a very large complement of overseas staff, not surprisingly, is the earth machine moving company, Caterpillar -- 8,500 people in China.
Now, Caterpillar is making no apologizes for its large outside workforce.
Recently, Poppy Harlow met the chief exec and asked him why he`d made that decision.
(BEGIN VIDEOTAPE)
DOUG
OBERHELMAN, CEO, CATERPILLAR, INC: Seventy percent, or so, of our sales are non-US.
POPPY
HARLOW, CNNMONEY.COM CORRESPONDENT: Seventy percent?
OBERHELMAN: Seventy percent.
HARLOW: How much has that changed since you came to this company?
OBERHELMAN: When I got here, it was 50-50 and it was 50-50 for years and years and years and years.
HARLOW: Until when?
OBERHELMAN: Until the big U.S. Slowdown in 2001 and the explosion in emerging markets.
HARLOW: If 70 percent of your revenue, then, is coming from overseas, is this the trajectory that -- that the world is on for -- for the near term, at least?
OBERHELMAN: Yes. And probably the -- the mid-term, as well.
HARLOW: Really?
OBERHELMAN: We need China as much as they need us, if not more so. Think about it this way. We`re a country of 300 million people, a relatively slow growth economy, relatively slow growth in population, a mature economy, a wonderful society.
China, 1.2, 1.3 billion people, high growth, lots of people going into middle class, lots of people progressing and developing.
And guess what they want to do?
They want to turn the lights on. They want to drive on roads. They want all the modern conveniences that we have. They want to live like us.
And we, at Caterpillar, supply a lot of the infrastructure that makes that happen.
Why wouldn`t we want that marketplace open to us and do all we can to -- to really lead and be a winner in China, also?
HARLOW: Why -- why not more jobs here in America?
Why not put all the Cat jobs in this country?
OBERHELMAN: Well, in our business, we just can`t do that. These machines are huge. We ship them all over the world. And what we try to do is assemble -- manufacture and assemble the majority of products where they`re sold to avoid shipping, develop local suppliers and, most importantly, really recognize the local market.
And if we`re shipping those from the U.S. to the middle of Russia or to South America, sometimes we do that, certainly. But for the volume -- the high volume machines, we`ve got to be there. And -- and that`s just the way we do it. And that`s important for us. And it`s good for America. It`s good for Caterpillar.
HARLOW: Why?
Why is it good for America...
OBERHELMAN: A lot...
HARLOW: -- to be creating things over there?
OBERHELMAN: A lot of that engineering, a lot of those components, most of the intellectual property all come from the United States, because this is where we were born and raised. This company has been here 85 years. So every time we export one of these motor graders in the background here to anywhere it goes, there`s a lot of roots right here in the United States.
And I think that`s good for all of us. (END VIDEOTAPE)
(END VIDEO TAPE)
QUEST: the chief exec of Caterpillar justifying the outsourcing of jobs, so to speak.
Now, tonight`s Tweets from the Top.
Twitter`s lawyer, Alex Macgillivray, has Tweeted this about Google`s change in their algorithm. You know, Google has changed it so now the shares include social media.
He says: "Bad day for the Internet. Having been there, I can imagine the dissension at Google to search being warped in this way."
Ouch, that hurt.
Herman Van Rompuy, president of the European Council, has been Tweeting. He says: "Fiscal consolidation will not tell us to say no to everything or to cut everywhere. We must prioritize."
A justification, perhaps, to those who say that all it is is cutting and slowdown.
And, finally, Mike Bloomberg, the mayor of New York, is Tweeting: "New York City is offering entrepreneurs affordable environments to spur innovation and jobs creation."
He wanted to go to the Bronx for jobs."
Hash tag Bronx, hash tag jobs.
That`s Mike Bloomberg doing his bit for the city.
You can find my Tweets from the Top, as always. They are @richardquest, where you and I can have that sort of debate and discussion and you can give me a thick ear and I can answer back, the sort of thing we really can`t get to do when it`s television. But we can online.
Speaking of Mike Bloomberg ratcheting up his crusade against all things unhealthy, with a possible new proposal to limit alcohol sales and advertising, according to "The New York Post." Mayor Bloomberg`s office supports multiple campaigns, against salt, sugar, artificial fats and smoking in public places.
Maggie Lake has been gauging the reaction.
Maggie is in New York.
You must have had a conniption fit when you thought about not being able to have that -- that -- that little snifter of -- after the day`s work.
MAGGIE LAKE, CNN CORRESPONDENT: oh, a shot -- a shout of horror went across the newsroom, I`ll tell you, Richard.
This is what you`re talking about, the front cover of "The Post," definitely a talking point here in New York today, how Nanny Mike is out to slash booze, it says.
But, you know, we did expect to hear a lot of outrage when we hit the streets of New York to gauge opinion. But we were surprised about how practical some people were and how much the economy came up in their answers.
Have a listen.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: I don`t think limiting the number of bars and restaurants is actually going to affect excessive drinking one way or the other. So it doesn`t make much sense to me. I mean Prohibition didn`t work, so this probably wouldn`t work, either.
UNIDENTIFIED MALE: it`s never going to happen. I mean the bars and restaurants are what funds the city and tourism. It`s never going to happen.
UNIDENTIFIED MALE: you -- you`ve got to get the money somewhere. And so it doesn`t make sense to eliminate the tax base, tax sources.
UNIDENTIFIED MALE: not really, because everybody is going to drink. It doesn`t matter. I mean, regardless. I mean they -- to me, they should put more liquor stores, because I like drinking on the weekend.
(END VIDEO TAPE)
LAKE: I like that man`s spirit, Richard.
Listen, this is early stages, we really want to point out.
We contacted the mayor`s office. They declined to comment on the specifics. The Department of Health did say nothing is decided or determined, but idea creation is an important part of our work.
You know, the -- we speak -- spoke to the New York State Restaurant Association and they, once again, also said, listen, this isn`t going to happen. This is just way too important to the economy of New York.
(BEGIN VIDEO CLIP)
ANDREW RIGIE, NEW YORK STATE RESTAURANT ASSOCIATION: The restaurant, bar and nightlife industry are really critical to the local economy. We talk about local economic growth. We talk about jobs. People are working in restaurants and bars.
And then you talk about the billions of dollars of revenue and the millions upon millions of dollars in tax revenue generated to the city and state from this industry.
So this proposal really kind of takes us by surprise and it doesn`t make a lot of sense.
(END VIDEO CLIP)
LAKE: Now, Richard, we can all joke about Nanny Mike, but remember, people said the same thing about the smoking bans when they were first mentioned. And need I remind you about what started in New York City ended up circling right around the globe.
So watch out.
QUEST: OK. Maggie Lake, who is showing that she`s a modern -- just show us the fingers of your gloves, Maggie Lake. Just show us those fingers of yours.
LAKE: You know what that is, right?
QUEST: Yes. There she are. Oh, she`s got her fingers so she can carry on whatever she does on -- on her technology.
LAKE: That`s right.
QUEST: Maggie Lake...
LAKE: On the iPhone, on the tablet.
QUEST: She never flies on up.
(LAUGHTER)
Many thanks.
Maggie Lake, who is in New York for us tonight.
When we come back after this break, it`s a Profitable Moment.
QUEST MEANS BUSINESS.
Good evening.
(COMMERCIAL BREAK)
QUEST: Tonight`s Profitable Moment.
Barack Obama has today been trying to woo business leaders, hoping that they`ll bring their offices and jobs back to the United States, an end to outsourcing and perhaps a chance for companies to relive the American dream, create jobs at home.
Now, if it works, it`s another perfectly timed boost for the president in an election year.
As we heard from Caterpillar`s chief exec, though, jobs move for a reason and it`s not always about the bottom line. This is a global economy.
Where are your customers?
They demand the jobs as much as where your home is. And the U.S. was built on the spirit of free market.
It`s that spirit that`s been adopted and adapted by countries across the world that spirit that`s made moving into the world`s emerging markets so attractive for companies.
The U.S. will bounce back, but it will do it because it runs a better economy, not just because of patriotic sensibilities.
And that`s
QUEST MEANS BUSINESS for tonight. I`m Richard Quest in London.
Whatever you`re up to in the hours ahead, I hope it`s profitable.
The news is next.
END
