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Quest Means Business
OPEC Slashes Oil Demand Forecast; Oil Falls on OPEC Forecast; Oil and Economy Boost Airline Fortunes; US Stocks Plunge; Detroit Exits Bankruptcy; Looking Back at Detroit's Housing Blight; Detroit's Improvements; Employment Outlook; Greek Stocks Tumble; "Time" Honors Ebola Fighters; Heineken Reduces Staff in Sierra Leone; Craft Beer Boosts Heineken's Profit
Aired December 10, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
POPPY HARLOW, HOST: A brutal day for the Dow. Stocks plummet on Wall Street at the close of trading. It is Wednesday, December the 10th.
Oil prices plummet as OPEC slashes demand forecasts.
Also, a new chapter for the city of Detroit, officially exiting bankruptcy.
And thinking inside the box. A new cafe that serves only cereal.
I'm Poppy Harlow, and this is QUEST MEANS BUSINESS.
Good evening, everyone, thank you so much for joining me. I'm Poppy Harlow in for Richard Quest. Tonight, oil prices have fallen to their
lowest point in more than five years. Brent Crude prices are down more than 3 percent on the day, under $65 a barrel. It is stunning.
OPEC now forecasts demand for its oil will fall to 29 million barrels a day. That is the lowest level in more than a decade. It is far less
than what OPEC produces today.
The fall in crude prices pushed stocks way down. The Dow ended the day down 266 points, that sell-off really accelerating at the close. Exxon
and Chevron, those oil giants, both fell more than 2.5 percent today.
Luke Rahbari is a managing partner at investment management company Stutland Volatility. He joins me now from the New York Mercantile
Exchange. Luke, thank you for being here. It is a stunning number to see oil at this price per barrel. Today, also, OPEC cut its forecast for 2015.
They say that world demand will fall another 6 percent. Where do we go from here?
LUKE RAHBARI, MANAGING PARTNER, STUTLAND VOLATILITY: Well, unfortunately, I think we're going to have to go a little bit lower. But
these comments out of OPEC were expected. I think they're really trying to push out the marginal players, the secondary players, and they're doing a
pretty job of it right now.
HARLOW: You talk about a quote-unquote "whisper number" for the economics of getting oil from oil stands, for example, much more expensive
to extract oil from. What is that whisper number where it becomes economically just not feasible?
RAHBARI: Yes, this number moves around a little, but the number for shale breaker -- shale oil producer to get around break-even is somewhere
around $43, $45 a barrel, right?
HARLOW: OK.
RAHBARI: And that's aright around break-even. And right now, with oil at around $60, we're already seeing a lot of pressure on secondary
producers. So, I think OPEC is starting to get what it wanted.
HARLOW: So, we can see Saudi Arabia continue with prices like this at this point, they're continuing to sell at this price into the market with
no problem. But then you're hearing from Iran today that prices could fall to $40 a barrel if OPEC does not, according to Iran, act more
"disciplined." Do you agree with that outlook from Iran, or is this just a desperate plea?
RAHBARI: The outlook might be right, but actually, I disagree with the part that OPEC is acting very disciplined right now. And their
discipline is right now to break the back of marginal producers or non-OPEC countries that continue to produce, or smaller OPEC countries that are
breaking their quotas.
And Saudi Arabia, the oil minister said today that he's just another seller in the market, and there's no reason for him to cut back. That just
means that all you marginal players, or guys that were cheating, we're going to continue to produce. And I don't know how much longer these guys
can hold on, but OPEC's going to find out. So, I think they're going to continue to drive it lower.
HARLOW: Some economists say that for every penny that oil prices or gas prices, if you will, in this country decline, that puts about $1
billion into American's pockets.
When you look at Europe, isn't it even more substantial for the European economy that is not nearly as production-based, say, as the United
States and consumer-based in terms of putting more money in consumers' pockets to spend on other things?
RAHBARI: Yes. I hear that a lot, and I -- and whether I believe the number or not, that's fine, but you're talking about a lot of different
costs in someone's living just other than oil prices and gas prices. And in Europe, they don't drive around as much, and they had really high taxes
on gasoline and on oil.
So, I think if you wanted to really give the consumer a break and see this effect really roll into the economy, more jobs, higher-paying jobs,
more people having belief that their jobs are not going to go away in six months. And you can see that in the housing market. Highest amount of
rentals, right? And --
HARLOW: Yes.
RAHBARI: -- when you get big firms that are buying all this rental property, private equity firms, and renting it out, that doesn't mean that
there's been a housing recovery, right? That just means that the big firms are making money off that. So, I don't see this extra money for gas
savings really spurting some kind of growth or making that much of a difference in a consumer's spending.
HARLOW: Important perspective. Thank you so much for joining us from the New York Mercantile Exchange this evening, sir. Good to have you on
the program. We appreciate it.
RAHBARI: Thanks for having me.
HARLOW: All right. We are going to take you live to the New York Stock Exchange in just a moment, but first, I want to talk about more of
this fall in oil prices that we have seen. It is one of two key factors boosting airline fortunes. They are loving this.
That is according to IATA, the airline industry group that represents 250 airlines globally. It's responsible for more than 80 percent of global
commercial air traffic. Those lower oil prices mean cheaper jet fuel for airlines.
That is combined with stronger economic growth around the world that we're seeing. IATA says the flying public will, indeed, benefit. They do
predict that fares will fall around 5 percent next year. This as airline profits are expected to jump around 25 percent.
Earlier today, I spoke with IATA's director general, Tony Tyler. He told me the lower fares will help stimulate even more demand.
(BEGIN VIDEOTAPE)
TONY TYLER, DIRECTOR GENERAL AND CEO, IATA: Well, we're forecasting - - and by the way, I say we're forecasting, we look at the consensus forecast -- and that is for Brent Crude prices at about $85 for next year.
That's the forecast. Of course, airline fuel prices will be more than that, coming in at just under $100 a barrel.
But we're -- what we're forecasting is partly as a result of this, we're seeing -- going to see just over 5 percent reduction in unit
airfares. This, too, will help to stimulate traffic. It will help the industry's bottom line, of course, to see these lower fuel prices in 2015.
HARLOW: You're predicting a 5 percent decline in airfare, but a lot of people would like to know why not more, given the fact that crude prices
-- oil prices are down 40 percent?
TYLER: Well, of course, the airlines have a lot of costs that are not fuel prices. Fuel prices are the -- at the moment running at about a
third, on average, of an airline's costs. So, airlines, of course, have a lot of other costs that are not coming down. They have other costs that
are going up.
Taxation, for one. Taxation around the industry is forecast to rise by 7 percent this coming year. It's gone up by 7 percent this year. And
it seems to run regularly at 7 percent. So, airlines are having a lot of other increases in their costs.
But also, as the benefit of cheaper fuel flows through, it's necessary -- of course, that's going to get passed onto customers -- but it's also
necessary for airlines to build their balance sheets in order to invest in modern aircraft, more efficient aircraft, to drive the industry into the
future.
(END VIDEOTAPE)
HARLOW: And we will hear more from Tony Tyler later this hour on the program. We talked about new guidelines for tracking aircraft in the wake
of the tragic disappearance of Malaysia Airlines Flight 370.
Now, let's go to Alison Kosik. She joins me live from the New York Stock Exchange. What a day!
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: What a day! And oil drove the sell-off, obviously not just with oil, but with stocks, too, as we see
lots of red on the screen. What sparked all this selling? It was the latest weekly oil report from the government showing a surprise jump in US
crude stockpiles.
Also, a second report, OPEC's monthly report. That came out today, forecasting there's going to be less demand for oil next year. So, this is
a situation, Poppy, of Supply 101. If there's more supply and less demand, prices are going to fall.
And what it wound up doing was leaving investors to worry what it really means for the global economy, because the concern is that you're
seeing fall less because of a glut in supply but more so because of weak demand. Poppy?
HARLOW: Yes, and investors seeming to really shrug off the belief that more money in consumers' pockets is going to mean more money spent at
businesses. Clearly, that's not the outlook they're taking right now. Alison Kosik, live for us this evening at the New York Stock Exchange.
Thank you.
This ahead on the program as the largest municipal bankruptcy in US history comes to an end. The governor of Michigan calls it a turning point
in Motown's history.
(BEGIN VIDEO CLIP)
GOV. RICK SNYDER (R), MICHIGAN: After so many years of decline, we've got everyone focusing on growing the city of Detroit. And that's really
exciting.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
SNYDER: I have a check for $1.2 million to give to the mayor to say this is essentially the fact that we worked together in partnership to save
the city Monday, and these are additional resources for the city of Detroit. So, that's the kind of results we're showing in this world,
compared to the old world, where you used to hear about deficits, new problems, and new issues.
Now we're showing how we can work together, be more efficient, show better results. And I'm really excited about partnering again with the
mayor and the City Council on watching that path only get better and better. Thanks for your good work, Mayor.
(END VIDEO CLIP)
HARLOW: That was Michigan governor Rick Snyder handing a check -- a big check -- to the mayor of Detroit, marking the city's emergence from
bankruptcy after just 16 months. I will have an interview one-on-one with the governor in just a moment.
After, as I said, a very short 16 months, Detroit will wake up tomorrow officially out of bankruptcy, the largest municipal bankruptcy in
US history. Detroit was $18 billion in debt and was forced to cut pensions and benefits of tens of thousands of city workers and retirees.
They also, though, freed up $1.5 billion to spend over the next ten years on things like fixing a lot of problems, including $30,000 broken
streetlights, poor response times from emergency responders. I went to Detroit four years ago to see how bad the situation had gotten. I've been
back many times since, but here's a look at that moment.
(BEGIN VIDEOTAPE)
HARLOW: It's not just all of this abandoned land in Detroit, it's also these abandoned houses, some of them burned down, broken into, looted,
just like this one. You walk in, just take a look at what's around.
This isn't a neighborhood. This is nothing useful, but it sits here because it's too expensive for the city to break it down, so there's just
trash, squatters. This is what they want to tear down and turn into urban farms.
Take a look around. It's pretty phenomenal. Filled with hay. There's a lot of arson here, as well. A lot of people take it upon
themselves to burn down their own houses instead of waiting for the city to come do it, but just take a look at this. Obviously, a fire right next-
door.
MIKE SCORE, PRESIDENT, HANTZ FARMS: It was a house burned down, and usually the city will come in behind a fire and clean up. But the city is
short on revenues, and they can't get around to all the structures that have been damaged by fire, so it'll sit here.
(CROSSTALK)
HARLOW: So, you'll clean this up.
SCORE: We'll work with the city to get blighted structures like this removed. And for people who live in the neighborhoods around sites like
this, are excited about the change that that would make in their community.
HARLOW: You just look at something like this and it's literally a burned-down house with the couch thrown in here. You still see someone's
winter jacket. This really is urban blight.
SCORE: Right. And if you're a family and you've got young kids, this isn't the type of structure that you want in your neighborhood.
(END VIDEOTAPE)
HARLOW: That is exactly what Detroit is working to get rid of. One of the big plans there is to build urban farms in the middle of the city on
all of that abandoned land. We will be watching very closely.
Think about this. Today, Detroit has just 40 percent of the population that it had in 1960. That is a huge decline in the tax base.
In the years that residence since have had to deal with a big lack of social services, like long wait times for police and emergency responders,
including firefighters. Earlier today, I spoke with Michigan governor Rick Snyder about the improvements.
(BEGIN VIDEOTAPE)
SNYDER: If you look at it, in terms of police response times, when we started the bankruptcy process, some of the numbers that were being quoted
were over 50 minutes for a response time.
HARLOW: Wow.
SNYDER: Now, that response time is in the teens. And emergency services, it was very long. Now, it's probably in the 10 to 12-minute
range. If you look at it, those are exponentially better results in terms of response times.
Are they where we all want them to be for the long-term future? There's still room for improvement. But the good part is, they're --
again, the results are showing up already, and there's a focus to say even with that, we can do better.
HARLOW: For Detroit, you have to look at the long game here, right? For Detroit to be successful in the long term, you need more businesses to
come call Detroit home, you need more people to move there to shore up tax revenue. Do you need to work to change the perception of Detroit?
SNYDER: Yes, absolutely. Again, I view that not only for Detroit, but for all of Michigan. We had the lost decade in the entire state.
Detroit had decades of decline. So, in many cases, people's perception will lag five to ten years behind reality when they're not active in an
area and seeing it first person.
So, when I go out and give talks, or when I do a trade mission -- I just went to China recently -- a lot of it is making sure people have the
facts about what is Detroit of today, what is Detroit, Michigan of today. And when they do, it dramatically changes their impression.
In fact, as I talk to people, as people see this, I encourage people to come visit Detroit. That's the very best way, is to come see it first
person. So, we're going to continue that effort. And one thing I look forward to after the first of the year is hopefully getting around to more
places to really talk about the real comeback of Detroit, Michigan.
HARLOW: You're right, I've spent a lot of time over the past five, six years in Detroit, and it is a great city, but people need to come see
it, I think, to really experience it. Let me ask you this: Detroit is a city that was so reliant on one industry, the auto industry. And when the
auto industry fell, Detroit fell. So, what do you do now to make sure that this city is not reliant on a cyclical industry?
SNYDER: Yes, well, the good part is, the auto industry is coming back. They're actually doing a lot of great things in Detroit and
Michigan, so we don't want to walk away from that. But we're seeing broad- based growth.
One of the things in the state, over the last four years, we've created nearly 300,000 private sector jobs. And when you look at where
those jobs came from, only about 13 percent or so are in the automotive or the transportation industry. About 30 percent are in manufacturing.
All -- the 70 percent of those other jobs are in a wide variety of other places. And when you look at the results, we're actually one of the
leading states for creating high-paying jobs, medium-paying jobs. So, it's showing up in many great ways.
And I'm still proud to say, even with those kind of results, those smaller percentages, we're number one in creating manufacturing jobs in all
the United States. So, the trend line is very good in Michigan.
(END VIDEOTAPE)
HARLOW: Our thanks to the governor for joining us on the program. As Detroit emerges from bankruptcy, in its latest employment outlook, the
Manpower Group is predicting that, as you just heard the governor say, the state of Michigan will have, actually, some of the strongest hiring figures
in the United States next year.
It is part of the group's global survey hiring, which suggests hiring prospects throughout the US are looking their best in seven years.
Around the world, hiring should see pretty steady growth in all but a few countries here. Take a look. We see countries surveyed with positive
hiring outlooks for 2015. Though highlighted in red are countries with a flat or negative outlook for next year. All of them in Europe.
Jonas Prising is the CEO of Manpower Group. He joins me now from Milwaukee. Thank you for being here, sir. And let me begin with this:
although we have seen quite a sell-off on Wall Street today, we were very close to Dow 18,000 just a few days ago, and I wonder if you believe that
the employment outlook justifies the market at that level?
JONAS PRISING, CEO, MANPOWER GROUP: Well, Poppy, as you could see from the survey results, things are slightly better than they were a year
ago, and stable compared to what employers said they were going to be in the fourth quarter, which I think has been borne out by what we've seen in
a number of big labor markets.
So, I think there is reason for cautious optimism, but of course, the survey results also paint a very clear picture of a slow and uneven labor
market recovery.
HARLOW: What about oil prices, declining oil prices? When economists look at this, they say that for every penny a decline in gas prices, it's a
billion more dollars in Americans' pockets overall. That's even more of an impact, some would say, in Europe, where really it's just consumption
based.
Does that translate into companies getting more money from people spending, and therefore hiring? Or should we not make that correlation?
PRISING: No, I think we should make that correlation. The question is, of course, to what degree it's true. And it's actually going to come
true and filter through. The US gas prices move a lot more with the changes in oil prices, so the differences that US consumers can feel are
very substantial. And of course, they use their cars a lot.
The European markets in particular have very high taxation, so even though there are very, very strong fluctuations in world oil prices, this
may not translate into consumers' pockets in exactly the same extent. And it's also true that Europeans don't travel as much. But overall --
HARLOW: Yes.
PRISING: -- lower oil prices should give consumers more freedom to spend money, and coupled in particular for the European area with a euro
that is slightly weaker compared to the dollar, that should mean better opportunities for export industries. So overall, I think it should be a
positive sign and a good indicator of some more opportunities going forward.
HARLOW: Manpower is predicting a 16 percent growth in jobs in the United States next year, but says look, do not read this as a broad-based
global large upward trend. I wonder what you think the biggest outlying risk is.
PRISING: Well, as with anything, the employers in today's world are very susceptible and very aware of geopolitical events that can change the
situation rapidly. So, I believe that, as you can tell from their responses in particular in Europe, there is still a great deal of caution.
Now, that same caution translates into the US. And although at 16 percent of net employment outlook measure, US employers are at their most
optimistic in seven years, there's still a degree of caution, because that's not the highest measure that we've seen.
So, it is a continued slow improvement in optimism also in the US. And as we know, employers can change their stance very quickly based on
geopolitical events.
HARLOW: Jonas Prising joining us from Manpower Group headquarters. Thank you for being on the program this evening, sir. We appreciate it.
Well, stocks in Europe closed mostly lower. They were pressured by a slide in Greek stocks. The Athens General Index fell by more than one
percent on the day.
Still to come on the program, "Time" magazine names its Person of the Year for 2014. Who made the cut? Find out after the break.
(COMMERCIAL BREAK)
HARLOW: Welcome back to QUEST MEANS BUSINESS. "Not the glittering weapon fights the fight, but rather, the hero's heart." This is the
proverb quoted by "Time" magazine as it names those fighting on the front lines of the Ebola outbreak as its Person of the Year.
According to the latest World Health Organization figures, at least 6,388 people have died from the virus in West Africa. The disease has yet
to be contained. Health workers have been battling more than 11,000 confirmed cases in Guinea, Liberia, and Sierra Leone.
(BEGIN VIDEO CLIP)
BRYAN WALSH, "TIME" FOREIGN EDITOR: If it weren't for small groups like Doctors Without Borders, the Christian relief group Samaritan's Purse,
and of course, the Liberian doctors and nurses and others in West Africa on the ground, they were the only ones really fighting this in those first
months when it really started to get out of control.
(END VIDEO CLIP)
HARLOW: And we commend all of the work that they have done. The current outbreak began in March. Since then, more than 17,000 people have
contracted the virus, placing a huge demand on medical professionals. CNN's Nima Elbagir gives us a unique look at their work from the hard-hit
Liberian capital.
(BEGIN VIDEOTAPE)
NIMA ELBAGIR, CNN INTERNATIONAL CORRESPONDENT (voice-over): Blood- splattered and limp, too weak to hold up his head. A doctor struggles under the weight of a desperately ill patient.
The doctor, agreeing to wear a camera to give us a glimpse of the bleak reality he witnesses daily here at this government-run treatment
center. Today, the doctor managed to get this patient to drink water. It's a small victory.
The last few months, Dr. Soka Moses and his team have worn their protective suits in unbearable heat, walking the high-risk wards to tend to
the patients in their care.
SOKA MOSES, DOCTOR, JFK EBOLA TREATMENT UNIT: Life is rough, and then you die. What else can we do? If we don't do it, who will do it for us?
So, we have to take the risk and cater to the patients, or else our country will be wiped away.
Don't leave some behind. Drain the whole tank, yes?
So, working in a high-risk zone is highly dangerous. I have so many patients in agony. Patients are crying in pain, some patients are drying,
unconscious. Some patients need help. Some patients cannot move any longer.
And you see some patients you cannot do anything for them. They are dying, and all you do is you watch them die. Sometimes you pray for them
and do the little you're doing and just hope that something miraculous happens.
ELBAGIR: Dr. Moses got one day's training before going into these wards and says that's typical here. In a health care system struggling to
cope, you do what you need, here, to survive.
The Doctor forgets the camera for a moment and begins to hum a hymn to himself. A comfort amidst the grimness.
(DOCTOR HUMMING)
ELBAGIR: An ambulance arrives, bringing more patients. It begins again. There's no room, so the stretcher goes on the floor for now, next
to a mattress where another critical patient lies. Here, there are two patients for every bed.
MOSES: Carry, an ambulance!
ELBAGIR: Another ambulance. More patients. It is unimaginably unrelenting. But there are the success stories, and that's what sustains
the staff. Around the back of the Ebola ward, patients spot the camera and begin to wave. They're recovering. Maybe even going home soon. But for
the staff, there is no end in sight.
ELBAGIR (on camera): What happens when you go home at the end of the day?
MOSES: I get prepared for another day.
No, no. Here today?
ELBAGIR (voice-over): And another day. And another day. Until their prayers are finally answered.
Nima Elbagir, CNN, Monrovia.
(END VIDEOTAPE)
HARLOW: Nima, thank you so much for that report. As the Ebola outbreak has spread, companies operating in the affected areas have had to
react. Heineken is one example. The Dutch brewer has sent some of its staff home from Sierra Leone as business slowed down due to the Ebola
crisis.
Joining me now on the program, Alexis Nasard is chief marketing officer and president of Western Europe for Heineken. Thank you for being
with us.
(CROSSTALK)
ALEXIS NASARD, CHIEF MARKETING OFFICER AND PRESIDENT OF WESTERN EUROPE, HEINEKEN: Thanks for having me.
HARLOW: Nice to have you in New York. Let's talk first about that. A stunning number, over 6300 deaths thus far in West Africa. What has the
impact been in terms of your employees, I know particularly in Sierra Leone?
NASARD: We are shocked and saddened, clearly, by the Ebola tragedy, like many people are. And we are committed to play our role in that issue.
We have signed up to the global compact pledge for Ebola, like many other companies have.
And we are availing our facilities and our medical resources in all the companies we operate in in Africa to support our employees, their
families, as well as the farmers that work with us.
HARLOW: And you did have to send some home.
NASARD: We did have to send some home, but thankfully, we didn't have any of our employees who have been personally affected by this tragedy.
HARLOW: I want to talk to you now, switch gears dramatically here to beer sales.
NASARD: OK.
HARLOW: And talk about craft beer sales. We have seen Budweiser, for example, some 44 percent of 21 to 27-year-old drinkers today have never
tried a Budweiser. What we are seeing is craft beer sales that are in line with big brands, like Budweiser and Heineken. How big of a threat is that?
NASARD: Craft is not a threat.
HARLOW: Really?
NASARD: Craft is an opportunity. Because craft is making beer interesting again. Craft is making -- it's putting may of the traditional
players in beer under the right kind of pressure to come, to innovate with new brands, new propositions. It's making the choice of beer less of a
plain vanilla choice and more of a pertinent choice for demanding consumers.
HARLOW: We're even seeing Delta Airlines, they are going to start serving these craft beers --
NASARD: Yes.
HARLOW: -- on their carriers. I know they serve Heineken, for example. So, you say it's an opportunity.
NASARD: Absolutely.
HARLOW: You have to embrace this. So take me into the room strategizing at your company. Are you thinking about buying up craft beer
brands? Are you thinking of partnering with them? Are you just going to be creating your own? What does it take?
NASARD: Craft is something which has been one of the most positive phenomena that's happened in beer. And it's a positive phenomena first of
all for consumers, because it makes the choice more interesting. Also from a business standpoint, and also for our customers.
(CROSSTALK)
HARLOW: So would you buy one -- a craft beer maker?
NASARD: We think of ourselves as a craft company. I hate to shock you with that.
(LAUGHTER)
NASARD: Ultimately, what is craft about? It's providing a different experience, a beer with t different taste profile and a more exclusive
taste, very often at a premium price.
We have today, for example, recently launched one of the best craft beers in the world, which is brand called Affligem, 1,000-year-old Belgium
abbey brand, which we're selling at a super premium in many parts of the world.
HARLOW: So you don't think you have to buy those existing brands?
NASARD: Not necessarily. We have 300 brands.
HARLOW: Tell me about THE SUB.
NASARD: Yes.
HARLOW: What is it?
NASARD: THE SUB is an innovation which we're very excited about, because ultimately, innovation, people think about it in terms of oh, give
me line extensions, new brands, new products.
HARLOW: And we have some video here, I believe, we can roll --
NASARD: Yes.
HARLOW: -- so people can see as you describe it.
NASARD: But what is more exciting about the beer category, and many other categories, is innovating in the experience. When you have a real
draft experience at home, where you can pour next to your friends high- quality beer with a nice social ritual, this is what THE SUB does.
We've done it with state-of-the-art design. We've partnered with Marc Newson, who's currently working, now, at Apple in the area of design, to
come up with a product that not only appeals to beer aficionados, but also appeals to gadget lovers and experience seekers, which is increasingly what
premium consumers are.
HARLOW: They want something different.
NASARD: Yes, absolutely. They want something different, they want something cool. And even in the economies of the world where the economy
is not growing -- take Europe, which I happen to lead as president at Heineken -- despite the worst of the crisis in 2008 and 2009, people were
queuing up all night to buy the next iPhone.
HARLOW: People -- yes -- indeed. I wish we had much more time left Mr. Nasard, wonderful to have you on the program. Thank you for coming on
this evening.
NASARD: My pleasure.
HARLOW: Well, the airline industry has been hit hard with two tragedies this year, the loss of two Malaysia Airlines flights and hundreds
of passengers' lives. Still to come on the program, IATA's director general explains why he says there is no silver bullet to repeat of MH370.
(COMMERCIAL BREAK)
HARLOW: Welcome back, I' m Poppy Harlow. Here are the top stories this hour. Afghanistan's president has condemned the "inhumane" actions
described in the Senate Intelligence Committee's report into the CIA's interrogation tactics. Ashraf Ghani told journalists in Kabul that the
report shows that Afghans, some of whom were innocent, had indeed been tortured. He said that from next year no international forces will be
allowed to put Afghans in jail.
A doctor says the Palestinian official who died during a confrontation with Israeli troops died of asphyxiation. The doctor told CNN that that
Ziyad Abu Ein inhaled teargas, vomited and choked to death. A witness also says that Abu Ein was hit and kicked by an Israeli soldier and then hit
from behind with a rifle butt.
The judge in the Oscar Pistorius case has ruled that prosecutors will be allowed to appeal that verdict. The South African runner is serving a
five-year prison term for culpable homicide for killing his girlfriend Reeva Steencamp. A murder conviction would mean at least 15 years in
prison.
Malala Yousafzai and Kailash Satyarthi have received the Nobel Peace Price at a ceremony in Oslo. The co-winners are both outspoken activists
for children's rights. Several international officials attended the event along with some of Malala Yousafzai's classmates. They came there from
Pakistan.
And after nearly three months of demonstrations, police in Hong Kong say they will clear the main protest site Thursday morning. Demonstrators
in the Admirality district where they were - that main business district - were given notice so that they could pack their belongings. But some say
they will not leave until they are forced out. Their demand for an open nomination for Hong Kong's elections has not yet been met.
Well, IATA's director-general says there is no silver bullet to avoid a repeat of the disappearance of MH370 nine months after that Malaysia
Airlines flight vanished from radar. A taskforce set up by the airline industry's lobbying group is calling for new standards to track commercial
aircraft. Under the new guidelines, aircraft would be tracked any time they are in the air, anywhere. Planes would report their location at least
once every 15 minutes. Airlines would have 12 months to meet the new standards. Our Richard Quest explains how the system works at the moment.
(BEGIN VIDEOCLIP)
RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Planes are currently tracked using two radar
systems. There's primary radar which reflects radio signals and measures the approximate position of the plane. Then there's secondary radar,
relying on an aircraft transponder. It feeds back additional information such as identity and altitude. Once an aircraft is 250 nautical miles from
landfall, radar coverage fades. And crews maintain contact using high- frequency radio.
Under current regulations, planes only have to communicate once an hour or so. The rest of the time, they fly over the earth's vast and
remote oceans alone.
(END VIDEOCLIP)
HARLOW: And earlier today I spoke with IATA's director general Tony Tyler. He explained why the airline industry has not yet solved that
tracking problem.
(BEGIN VIDEOCLIP)
TONY TYLER, DIRECTOR GENERAL AND CEO, IATA: There are many airlines who are already implementing new measures to improve the tracking of their
aircrafts in operation. But it is a fact that it's not as simple a matter as perhaps people think to track aircraft in every area of the world.
Because in most places the aircraft are flying, they're being tracked all the time by conventional or secondary radar, but that's not the case in
some remote parts of the world. And the technology doesn't really exist at the moment to do that in a completely comprehensive way. No one is
resisting the development of that technology however, and we all (key) to see it implemented soon.
HARLOW: Camphor-proof transponders would do that. But you said that there is no silver bullet, and I wonder what your industry's response is to
the Aircraft Task Force Report that called for planes to be tracked every 15 minutes no matter where they are - real-time tracking of commercial
airlines.
TYLER: Yes, this is what - I mean, this is what we all want. We want to have aircraft being tracked all the time so that a mystery like the
disappearance of MH370 can't happen again. But it's not a simple thing to put in transponders and other devices that cannot be turned off. They
don't exist on aircraft at the moment, and it's not a simple matter simply to implement them. But if you think about how long it took the industry to
fit cockpit doors, you know, strong cockpit doors to their fleets after the 911 outrage, you can see these things cannot be achieved overnight. But
new technology is coming which is space-based ADS-B. I mean, satellite- based technology that is going to make all these - the tracking - probably a lot easier to solve, and we're all waiting for that to happen. And in
the meantime, we're doing all we can to improve the track-ability of aircraft given existing technology.
HARLOW: You were asking the United Nations to regulate anti-aircraft weaponry. Given what we saw with MH17, it is believed to have been shot
down over Ukraine. What do you want to see from the United Nations on that front?
TYLER: What we'd like to see is a convention developed or modifications and amendments to existing conventions that would regulate
the design and manufacture and deployment of weapons capable of bringing down aircraft, much the same way that chemical weapons, landmines, nuclear
weapons and so on are regulated by international convention. We would like to see a convention applied to these kinds of weapons as well.
(END VIDEOCLIP)
HARLOW: Our thanks to him for his time. And still to come on the program, it is something you often see in films, but real-life bodyguards
for them, their livelihood is quite a risky business. More on that when we return.
(COMMERCIAL BREAK)
HARLOW: Now for this week's "Business Traveller." In the last month alone, the United States State Department has issued nine separate alerts
warning people about traveling to different regions mostly due to safety and security concerns. But if you do end up in a hostile location,
personal protection - bodyguards - may be the best way to stay safe. And our Richard Quest went to the streets of Kiev to look at the risky business
of personal security in the latest edition of "Business Traveller."
(BEGIN VIDEOCLIP)
QUEST: These men are the frontline in keeping you safe. Executive protection - body guards for you and me - are essential.
ALEX KOPYL, DEPUTY DIRECTOR, TOP GUARD SECURITY: Top executives allow our -- big - really big - companies - they strongly, they badly need this
service to assess first all the threats and the risks and to eliminate it before they arise. It might be both kidnapping their family members, it
might be physical pressure, injury, wounding, sometimes even killing.
QUEST: Have your guards ever actually had to physically intervene?
KOPYL: Of course. Of course. You know, at once -- probably one situation out of - out of - 30. Sometimes it's just physical. Inference
(ph) sometimes it's weapon.
QUEST: You're putting your life in the hands of these guards. So, it's helpful to know how they stay one step ahead. It's compulsory
training. It's twice a week, and it keeps their skills and their knives razor sharp. Now, time to protect me.
(APPLAUSE)
KOPYL: We all need to be a little bit paranoid in our business. You know, the only fact we have - no one of our clients got killed, and that's
you know, that's the best statistics for us.
QUEST: Now it gets serious. Protecting the principal on the streets. Alex, you kept me safe in the hotel, now we're on the street and an
entirely different set of rules apply here.
KOPYL: This part is most complicated for our guys. Those who want to assault you, they will never do it in a fortress. They will always choose
the likeliest and the simplest way to attack you. In the street, it's the simplest and the less predictable way. Prowagots (ph) it's kind of a nice
man(ph) because it's less - it's less predictable in the less defended place or not.
QUEST: I really ought to take a picture of this chap. It's very interesting. Now how are you going to move me along.
KOPYL: Now we're not going to move you along unless we see some kind of danger. Of course the main objective for the personal security, stop is
to evacuate the client as far, as fast as possible.
QUEST: Add in a genuine threat, and all bets are off. You do as you're told. It's not graceful, they're not gentle. Only one thing
matters - keeping you alive.
KOPYL: Right now we are moving with the two cars - a security car and the client's car.
QUEST: Driving in convoy's a delicate dance between lead and backup. The backup blocks other cars from approaching. It allows the lead to pass
by uninterrupted.
KOPYL: They have to bend and all the rules. But you can break little rules - let's say a red light or take the wrong way on the road in order to
save someone's life.
(END VIDEOCLIP)
HARLOW: Richard Quest in this week's "Business Traveller" there. Consider this, the world is going to need 1.8 billion new jobs by 2050
(ph), that is according to the UNI Global Union and New Economics Foundation. You heard the CEO of Manpower earlier on the program telling
us they are optimistic about hiring in the U.S. and globally next year. This is a much longer-term forecast and it is much more bleak. Phillip
Jenning is the UNI Global Union's secretary general. I spoke with him earlier and asked how adding nearly two billion jobs to the global economy
can be achieved.
(BEGIN VIDEOCLIP)
PHILIP JENNINGS, GENERAL SECRETARY, UNI GLOBAL UNION: One of the glaring facts that's been brought to - the research suggests - is that
we're not spending enough in skills development, we're not spending enough in education and that the business community is still cutting too many
corners when it comes to the development of their own workforce. It requires a role for government to put the proper infrastructures in place,
and it also requires much clearer thinking about the quality of life that the people are leading. One of the big things coming out of the conference
was the - was the strategies on social cohesion as a result of the inequality that we have in the world's economy, with the share of wealth
being devoted to wages in a very sharp decline. And therefore what we're trying to do is to wake up the world to the realities that these jobs
figures are real and we have to do more about it. Government has a role, private sector has a role, but above all, we have to keep up much more
resources to education and skills development.
HARLOW: I wonder if you think it is just about putting more money into education and skills development, or if it's about educating and
training in different way for the jobs of today. Because there's got to be a disconnect when even people who have gone through college or professional
schools can't get the jobs that they need.
JENNINGS: We are dealing with the day-to-day issues of inequality in the distribution of wealth. And what we need to address is a technological
revolution that is taking place.
HARLOW: Yes.
JENNINGS: Where it is considered that one in two professionals and services jobs will be eliminated by the technology.
HARLOW: Wow.
JENNINGS: Education and skills is one dimension of this, but it means that we have to adapt to some new parameters and some new benchmarks. We
determine our economic success and failure by GNP and gyrations of the stock markets. In the future we're going to have to benchmark social
progress and this ability to put people into work.
(END VIDEOCLIP)
HARLOW: Our thanks to him for his time from Cape Town this evening. Now, sometimes there is no greater snack than cereal. I mean it - sweet,
light, crunchy, natural, organic. There is a cereal for every pallet. Well, two brothers in the U.K. are hoping they can cash in on the taste for
all-day breakfast in their new cafe. That is next.
(COMMERCIAL BREAK)
HARLOW: Take a look at this. Lucky Charms, Sugar Pops, Reese Puffs, Apple Jacks. Welcome to the "Quest Means Business" breakfast table. Well,
twin brothers have opened the U.K.'s first breakfast cereal cafe. It is in London and they say it is about capitalizing on people's nostalgia for
years gone by, even though cereal sales are falling. Our Jim Boulden met them over breakfast of course.
(BEGIN VIDEOCLIP)
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: It's a cereal killer idea - sell nothing but breakfast cereal. Mix nostalgia with a vast number
of hungry expats who work in London, and you get the Cereal Killer Cafe. These two cereal entrepreneurs, Alan and Gary Kerry, are twins from
Belfast, Northern Ireland. And if you're wondering which one had the idea, --
ALAN AND GARY KEERY, CEREAL KILLER CAFE: We came up with the idea when we were run shortage, we wanted some food and we wanted a bowl of
cereal and we went -
KEERY: I said.
KEERY: -- we wanted a bowl of cereal -
KEERY: I said.
KEERY: -- I/we wanted a bowl of cereal.
KEERY: And wouldn't it be great - all we - all I want -- is a bowl of cereal. And we were just talking about launching it, and the idea came in
to my head.
KEERY: It wasn't, and then like he said wouldn't it be good to become up with cereal. I said, ooh, why don't we start a business?
(LAUGHTER)
BOULDEN: Whoever first thought of Cereal Killer Cafe, it's here now on London's Brick Lane.
2nd KEERY: There's a lot of vintage cereal boxes we've got which obviously we're not selling. Boxes of cereal that we're - some of them are
from America, Australia, South Korea, South Africa. While they are trying to evoke the breakfast tables of the 1980s and '90, I'm more interested in
the more vintage boxes from the 1970s.
(BEGIN CLIP)
Boy: He likes it, hey Mikey!
(END CLIP)
BOULDEN: Sourced from the internet.
2nd KEERY: You can try them, you know, if you're brave enough to, knock yourself out.
1st KEERY: You might not live to tell the tale.
BOULDEN: This really is a walk down memory lane when it comes to breakfast cereals. Some are just for show because they actually are quite
old. But you can sell get some of the ones that you remember from your childhood. From Boo-Berry's to Kix to Lucky Charms to Captain Crunch.
Kellogg's, Post and others still make some of these or produce limited editions. Many here were just for Halloween. The Christmas versions are
on the way. And if you think the twins are crazy, so do a lot of people.
2nd KEERY: Yes, we get (inaudible) think we're crazy quite a lot.
1st KEERY: Yes.
2nd KEERY: I think there were some people are talking about, like people -- we've got our death threats on Twitter -
1st KEERY: We've had marriage proposals.
(CROSS TALK)
1st KEERY: And it's from one extreme to the other really.
2nd KEERY: Yes.
BOULDEN: To go along with the 100 or so varieties of cereal, there is a lot of milk. They planned on 13 varieties, now it's about 30.
1st KEERY: You've got three different types of oat milk. And so, we don't know what's going to sell. Do we sell an organic oat milk or is it
vanilla oat milk going to sell, you know?
2nd KEERY: Yeah. And so the milk is going to be like five or six different varieties.
BOULDEN: Here at the Cereal Cafe, cereal is not just for breakfast. It's open for lunch and dinner as well. Anyone for Froot Loops? Jim
Boulden, CNN London.
(END VIDEOCLIP)
HARLOW: Quite a smart name - the Cereal Killer Cafe. We'll see how the business does. Jim Boulden, thank you for that. And just a reminder
to all of you, you can always tweet the show. That is @questcnn or tweet Richard - bother him a little bit while he's on holiday. You can tweet him
at @richardquest. Well we'll have a final check of the brutal day on the markets. That is next.
(COMMERCIAL BREAK)
HARLOW: Welcome back to "Quest Means Business." The CEO of one of Greece's largest banks says despite the recent turmoil in the global
markets, the majority of Greeks are committed to Europe. Take a listen.
(BEGIN VIDEOCLIP)
ANTHIMOS THOMOPOULOS, CEO, PIRAEUS BANK: The country that has gone through a terrible period. Unemployment has soared up 20 percentage
points, we lost 25 percent of our national product, therefore you can make a safe assumption there's been a lot of social pain which obviously has
spread political tensions. But, bottom line, I believe that we remain anchored in our European path.
(END VIDEOCLIP)
HARLOW: And Greek stocks - they continue to slide on Wednesday ahead of snap elections next week. The Athens General index fell by more than 1
percent on the day. The rest of Europe - FTSE a lower day on the markets as well.
Oil prices plunged Wednesday once again after OPEC slashes the global demand outlook for next year. After a small recovery over the last few
hours, Brent crude prices are down around 3 and 1/2 percent just for the day. OPEC predicts demand for its oil will fall to 29 million barrels a
day next year. That is the lowest level in more than a decade. It is also far less than what OPEC produces today.
Well, the fallen oil prices spooked investors. The Dow Jones Industrial average ended the day down 268 points. That makes this one of
the worst days of trading all year. The NASDAQ and the broader S&P 500 both fell more than 1. 6 percent.
Shares of major oil companies tumbled. Exxon Mobil closed down 3 percent, Chevron stock lost 2 percent. What a day it has been for the
market. We will be monitoring it of course tomorrow evening right here on the program. That was "Quest Means Business." I'm Poppy Harlow, in this
evening for Richard Quest. Thank you so much for joining me, and I will see you again next time.
END
