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Quest Means Business
Alibaba Sued Over Sale of Fakes; Icahn Calls Apple Undervalued; Dow, S&P Close at Record Highs; EU Mission Targets People Smugglers; EU Migrant Crisis; Greek Talks More Constructive; European Markets Up; New UK Parliament; UK and the EU; Hacker Claims Took Control of Plane
Aired May 18, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:59:55] (NEW YORK STOCK EXCHANGE CLOSING BELL)
ISA SOARES, HOST: A small gain to start the week after recent record highs as the closing bell rings on Wall Street. It is Monday the 18th of
May.
Accused of profiting from fakes. The world's biggest e-commerce site, Alibaba, is sued for encouraging counterfeiters.
Hacking into a jet's controls at 30,000 feet. One man claims he's done just that.
And sponsors responsibilities. FIFA's corporate backers are urged to debit for workers' rights in Qatar.
I'm Isa Soares in for Richard Quest, and like him, I, too, mean business.
A very good night to you. Some of the world's best-known luxury brands take one of the world's biggest online commerce companies to court.
Kering, the French company that owns Gucci, Yves Saint Laurent, Puma, and other famous names is suing Alibaba for the second time over fake goods.
This says counterfeits are something Alibaba -- and I'm quoting here - - "knowingly encourage, assist, and profit from." Alibaba admits some people sell counterfeits of popular brands on its sites Taobao and Tmall.
But it's promising to fight Kering's allegations. It says the lawsuit is wasteful. Shares of Alibaba fell over 1.5 percent on the New York Stock
Exchange.
The problem with fakes isn't exactly news to Wall Street. Before going public last year, Alibaba warned potential investors about the issue.
And the founder, Jack Ma, has said the sale of counterfeits is, quote, "a cancer" to the company.
Our business correspondent Samuel Burke has been following this story for us from New York, and he joins us now. So, Samuel, this is not the
first time that Kering has criticized Alibaba over illegal sales made using its platforms. But it seems talks haven't really gotten anywhere. Show
us, if you can, how big of a problem this really is.
SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: According to many companies I spoke with today, Isa, and the investigators they pay to try and get this
material off these websites, this is a rampant problem.
I want to just walk you through one by one. Right there you're seeing a Gucci bag, and if you look closely, it says 390 yuan. Well, that's $62.
That second Gucci bag that you see right there, that one says 335 dollars - - yuan. That's $53.
And then you see other brands, like Yves Saint Laurent. There's a bag on there that we found on our CNN search of these, 280 yuan, that's just
$45.
So, Isa, what we're hearing from these companies is that they've been able to settle these problems with other companies, companies like eBay or
MercadoLibre, their Latin American equivalent. These companies have worked alongside these vendors and been able to hammer out these issues.
In this case, the Kering Group filed the lawsuit. They backed off and said they were going to work with Alibaba, but clearly, something hasn't
happened, and now they're heading back to the litigating table.
SOARES: And why hasn't Alibaba been able to contain this? Are they doing anything, introducing any measures to try to contain this, Samuel?
BURKE: Well, according to Alibaba, they absolutely are. They're talking about the money they're spending, the amount of people that they're
hiring to deal with this issue. And in all fairness, a lot of these groups told me that one of the big problems is that there is a language barrier,
and there's also a geographic barrier.
So, what happens is usually if you were searching for fake goods, if you're a company like Gucci, it's kind of easy to spot because even if you
don't speak the language, you might see the same letters in Spanish, Italian, or French.
But there, they don't have people that even speak Chinese or can read Chinese much of the time, so there's this big language barrier.
But they also talked about tools that companies like eBay have given them. Automated tools to take down fake goods. So, if I were to try and
sell a fake Gucci bag on eBay.com, it might automatically come down if I used the word "fake" or "impostor."
And they also talk about the fact that these brands, again, like Gucci, like Yves Saint Laurent, they have the ability on some of these
websites to take down the goods themselves, and they say these are the type of tools that have fostered a good relationships with other vendors, but
tools that Alibaba just hasn't provided.
SOARES: Samuel Burke, there, for us, showing us, really, how much of a problem it really is for Alibaba. Thanks, Samuel. Good to see you.
Now, the American Apparel and Footwear Association is among those who've accused Alibaba of turning a blind eye to fake goods. Last month,
it filed a complaint with the US trade representative saying the problem is getting worse. The association's president, Juanita Duggan, is with us
from Washington. Juanita, thank you very much for taking the time to speak to us.
So, your association has filed two complaints against Alibaba. First tell us why, and have the changed anything, those complaints?
JUANITA DUGGAN, CEO, AMERICAN APPAREL AND FOOTWEAR ASSOCIATION: Thank you, Isa, for having me on today, and we applaud you for paying attention
to this really important issue of counterfeits on the Alibaba websites. We've been in discussions with Alibaba for nine months trying to resolve
the issue of counterfeits being sold on their sites.
[16:05:02] We are looking for a process that would make take-down requests easier. And we found that we were making no progress. So we took
the extraordinary measure of writing to the US trade representative and other regulators in the United States to bring the issue to their attention
and to ask them to take some action.
SOARES: And Juanita, may I ask you this? Is Alibaba, do you think, incapable or just not interested in addressing this problem?
DUGGAN: Our discussions with them have been disappointing. In the beginning, we thought we had the basis for some progress, but after nine
months, we decided that we had not made any progress, and that the discussions --
SOARES: Now --
DUGGAN: -- that they were unresponsive. So, we felt we needed to take some action to make sure that US regulators hold their feet to the
fire.
SOARES: How big of a problem, if you can put it into context for our viewers, how big of a problem is it? Just break it down for us. In the
last year, how much has it cost business?
DUGGAN: Well, we know that the Chinese government itself did a test purchase on Alibaba, and they said themselves that the majority -- the vast
majority of the products on Alibaba were counterfeits and were not authentic.
We also know that the vast majority of seizures by the US Customs Agency is -- the vast majority of them are fashion-related, and we know
that it's costing the American Apparel and Footwear Association industry $68 billion in 2013 alone. And I think that's the tip of the iceberg.
SOARES: Juanita Duggan, there, the association's president and CEO. Thank you very much, Juanita, for taking the time to speak to us.
And just to point out, Ni Liang, who is Alibaba's head of internet security reportedly told Reuters today that the company has spent 100
million yuan to covertly buy products and check the authenticity. They're expecting that number to rise. They say they are fighting fakes
vigorously.
Now, the well-known activist investor Carl Icahn, who is a shareholder in Apple, said it might be the world's valuable company, but still
seriously undervalued, he says, and is worth almost double its current share price.
Apple stocks have closed up a little over -- let's have a look -- 1 percent, 1.2 percent. Icahn's reasoning is all about where he thinks Apple
will go in the future.
He says, "The company's aggressive increases in R&D spending have bolstered our confidence that Apple, as you can see, will enter two new
product categories: television and cars. Combined," he says, "these two new markets represent $2.2 trillion," three times the size of Apple's
existing markets, if we exclude, of course, Apple Watch.
Well, Paul La Monica joins me now from our New York bureau. And Paul, I feel like I'm getting a bit of deja-vu here. We have heard something
like this from him before. So, what's his argument this time? What's different?
LA MONICA: Not much is different. Icahn still wants Apple to buy back more stock. He's been pressuring the company to do that since he
first disclosed his stake in the summer of 2013. Apple recently expanded its stock buyback program by $50 billion, and apparently that's not enough
for Icahn.
So, it's really not that much that has changed. He just thinks that because the company has so much cash, they can afford to invest in research
and development and also buy back stock.
SOARES: And obviously, he's talking a lot about here TV and a car, this might be in the works, he said, in R&D. But has Apple given any sort
of indication that it plans to even start making cars?
LA MONICA: Nothing official. There is a lot of speculation that Apple is looking very aggressively at the car market. There was talk even
earlier today, a brief rumor, that maybe Apple was going to invest in Fiat Chrysler. There's been a lot of fantasizing about why Apple should buy
Tesla, even though I don't think that's ever really going to happen.
And there's also been a lot of chatter about how Apple has been hiring people to work on driverless car technology. So, I don't think it would be
a huge shock if Apple eventually had a product -- if not necessarily a car, maybe more technology that works closely with the big automotive companies
around the world.
But Icahn is being very aggressive by saying that they'll have something by 2020 and that this could lead the company to be worth almost
$1.5 trillion.
SOARES: And I suppose the obvious question, one that probably our viewers will want to know is, have Apple replied to this letter?
LA MONICA: Apple had no comment. The company really is taking the line of just letting Icahn speak for himself and letting their numbers
speak for themselves. Clearly, this is a company that has done extremely well. So, even though Icahn may not be thrilled with the performance, I
think most investors are. This stock's near an all-time high, after all.
SOARES: Paul La Monica, there, for us. Thanks very much, Paul.
LA MONICA: Thank you.
[16:09:59] SOARES: I want to show you the markets and how US markets closed. The Dow and the S&P both closed at new record highs after modest
gains, some investors speculating the Federal Reserve will hold off on raising interest rates for a little bit longer. We shall see.
Still to come right here on QUEST MEANS BUSINESS, desperate to escape wars and poverty, thousands of people are putting their lives on the line
to get to Europe, but the EU says it's taking on the traffickers who get them there. The latest from Brussels and Italy just ahead.
(COMMERCIAL BREAK)
SOARES: Welcome back to QUEST MEANS BUSINESS. "We will disrupt the business models of smugglers in the Mediterranean." That quote coming from
the European Union. Ministers there say they're setting up a military mission to stop the gangs that are smuggling vulnerable migrants into
Europe. The EU's foreign affairs chief says approval for the operation came in Brussels today.
(BEGIN VIDEO CLIP)
FREDERICA MOGHERINI, EU FOREIGN POLICY CHIEF: This is just the beginning of it. The decision to establish an operation means that now the
planning, the operational planning starts, the fourth generation starts. And again, the operation hopefully will be ready to be launched, that will
depend mainly by the member states, already in June.
(END VIDEO CLIP)
SOARES: Frederica Mogherini there. Well, the International Organization for Migration, the IOM, estimates that more than 1800 people
died trying to reach Europe in the first few months of this year alone. That's a huge increase from the same time a year ago.
It says the country where the highest number of people arrive is Italy, and hundreds more reached Italy over the weekend after they were
picked up off the Libyan coast. Our senior international correspondent Ben Wedeman shows us why they're the lucky ones
(BEGIN VIDEOTAPE)
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): They arrive on the shores of Italy, huddled masses of Eritreans,
Ethiopians, Sudanese, Syrians, and others, yearning to be free of war, of oppression, of poverty, and hopelessness.
The latest to arrive, 407 men, women, children, and babies, picked up off the Libyan coast by a ship run by a search and rescue charity, the so-
called Migrant Offshore Aid Station, or simply MOAS.
Imad (ph), an Arabic teacher from Syria, came with his family of seven. His odyssey began four years ago and isn't over yet. "I went to
Libya to get away from the war in Syria," he tells me, "and then war broke in Libya. My brother had a car workshop in Benghazi, but it was robbed.
He lost everything." He hopes to join relatives in Germany.
From the ship, Mohammad, also from Syria, says he paid $1,200 for the journey from Libya. Twenty-eight-year-old Fatoum (ph) from Eritrea fled
his country to avoid open-ended military service, mandatory for every Eritrean man and unmarried woman between the ages of 18 and 50. He hopes
to find work in Italy as a blacksmith.
WEDEMAN (on camera): The number of migrants expected to arrive in Italy will probably increase every month until late autumn, and as those
numbers go up, it's expected that among ordinary Italians, the milk of human kindness could go sour.
[16:14:59] WEDEMAN (voice-over): From behind the fence, Messina residents watch as the latest migrants disembark. Some political parties
in Italy are calling for a crackdown on immigration.
Marica (ph), a teacher, isn't opposed to immigration, but acknowledges it's a sensitive issue. "At this moment of crisis in Italy, it's easy to
say we don't want them," she tells me. "It's a way to get support from the part of the population that's against immigration."
For now, though, the milk of human kindness is plain to see.
Ben Wedeman, CNN, Messina, Italy.
(END VIDEOTAPE)
SOARES: Now, elsewhere in Europe, Greece's cash crunch is back in the spotlight. A spokesman for the Greek government says Athens needs a deal,
but didn't say how that would be achieved. Take a listen.
(BEGIN VIDEO CLIP)
GABRIEL SAKELLARIDIS, GREEK GOVERNMENT SPOKESMAN (through translator): There will not be a Cyprus-like solution. There isn't, and there won't be
a bailing alternative of the posing. And what I want to repeat, as I have said in the past, is that Greece won't sign a fresh bailout.
(END VIDEO CLIP)
SOARES: So, there won't be a Cyprus-like solution. The Cyprus bailout has barely been mentioned since early 2013 when the island's
second-biggest bank was closed down. Today, as you can see, European markets steadied. Even the Athens market some sort of rebound, 1.6
percent.
The Greek government spokesman said Greece hopes to reach a technical agreement with creditors in Brussels tomorrow. We shall see if they
actually reach that deal.
A possible Greek exit from the euro is in many people's attention. It's also back on the potential of a UK exit from the EU. The British
parliament met for the first time since the election on Monday. At the ceremonial signal the opening of the session, the Conservative Party, which
won the election, has promised to hold, if you remember, a referendum on whether to leave the EU.
Well, earlier, I spoke to John Cridland. He's the director general of the Confederation of British Industry, a business lobbying organization. I
asked him if business leaders have changed their thoughts on a Brexit since that election. Take a listen.
(BEGIN VIDEOTAPE)
JOHN CRIDLAND, DIRECTOR GENERAL, CONFEDERATION OF BRITISH INDUSTRY: I think most business want to remain in a reformed European Union. So, can
the prime minister get a better deal for British business and a better deal for the British citizen? If he can, that's a good reason to stay in a
reformed EU.
I've never claimed that every business has the same view. Entrepreneurs will look at this differently. There are some who think
we're better off out, but I think 80 percent about sums it up. About 80 percent of businesses want to stay in a reformed European Union.
SOARES: What kind of voices -- what are they saying regarding those reforms? What changes would they like to see? You represent how many
businesses? About --
(CROSSTALK)
CRIDLAND: One hundred and ninety thousand British businesses.
SOARES: A hundred and ninety thousands. From the business people, leaders you've been speaking to, what are they telling you? What changes
would they like to see within Europe?
CRIDLAND: So, they want to see the European Union do more of what it's good at and less of what it's bad at.
SOARES: And that is?
CRIDLAND: What it's good at is negotiating market access. Free trade deals all around the world so Britain's entrepreneurs can get out there and
sell. And that can be creating an 800 million consumer market between Britain and the United States with the rest of Europe, or it could be
completing a digital single market in Europe of 500 million people.
What they're bad at, they tend to get involved in lifestyle regulation. They tend to get involved in employment regulation. And the
businesses that are frustrated by Europe are the ones that don't see the opportunities in export markets, but see the regulatory burden that results
from European regulation. Let's have more free trade and less burden of regulation.
SOARES: I was reading a German think tank saying the uncertainty over referendum could cost the economy something between 30 to 45 billion
pounds, in fact. Does this uncertainty, does this worry British businesses?
CRIDLAND: I think business lives with uncertainty. There's been uncertainty about our place in Europe for as long as I can possibly
remember. What business wants is that uncertainty resolved. It wants to the uncertainty removed. And the best way to do that is to make a case for
us being in a reformed European Union. Let's get the reform, and then we remove the uncertainty.
SOARES: Moving the referendum date, bringing that earlier, bringing that forward, will that make matters better? Less uncertainty, better for
business leaders?
CRIDLAND: The reform is the important thing. Making Europe better for everyone is the important thing. The date of a referendum is
consequential to achieving a reform agenda.
SOARES: And finally, what would an out look like?
CRIDLAND: So, I think the United Kingdom could survive outside Europe. The question is, could it prosper? When business looks at whether
we're better in or out, it tends to the view that we have more influence by being around the table than outside the room.
(END VIDEOTAPE)
[16:19:59] SOARES: You are watching QUEST MEANS BUSINESS. Still to come, a security expert says hackers could take control of an airliner
while sitting in the passenger cabin. And it seems he's even experimented with doing just that. We have the details in just a minute.
(COMMERCIAL BREAK)
SOARES: Welcome back to QUEST MEANS BUSINESS. Now, a hacker took control of an airline's engines in midair while he was sitting in the
passenger cabin. That's what the FBI's security researcher Chris Roberts told them.
Now, Roberts allegedly hacked into the computer systems of commercial jets between 15 and 20 times over a three-year period. In an interview
with the FBI, he said he once issued an instruction that changed the thrust from one engine, causing the plane to really veer sideways.
He told the feds his access point was the airplane's inflight entertainment system. Of course, we all know what this looks like, and
that's it.
In April, Roberts was detained after he sent this tweet about the possibility of activating a plane's oxygen masks. Roberts has spent years
researching vulnerabilities in airplane systems, and he says the tweet was a joke after he tried for years to get aircraft manufacturers to heed his
warnings.
Well, according to Roberts, at least three Boeing aircraft and one Airbus model are at risk. Boeing insists entertainment systems are
isolated from flight and navigation systems.
Gerald Dillingham is the director civil aviation issues for the US Government Accountability Office. He says computers on new airplanes are
particularly vulnerable to hackers gaining access for their wifi networks, possibly even a hacker on the ground. Mr. Dillingham joins me now.
Gerald, thank you very much for taking the time to speak to us. Let me ask you this first. We'll get to your research in just a moment. Do
you think it's possible that Roberts could hack an engine control from the aircraft, from where he was sitting on a plane?
GERALD DILLINGHAM, DIRECTOR OF CIVIL AVIATION, US GOVERNMENT ACCOUNTABILITY OFFICE: Well, I guess you can say anything is possible. I
think the FBI will track this down and to see what extent this really did occur. I think we've heard a lot of anecdotal kind of reports about this
possibility after our report was issued, but we haven't seen any real proof that this has happened yet.
SOARES: Let me ask you, because you've been warning about new computer systems on planes and how they could be vulnerable to hackers.
Talk us through what you have found. How are they vulnerable to hackers?
DILLINGHAM: Well, the -- our study actually concluded that it was possible that hackers could enter the flight control system through the
inflight entertainment system. We didn't present any actual occurrences, but we talked about the possibility.
Since aircraft are so inter-connected with the internet and will be more so in the future, that we wanted to raise that early warning that that
was a possibility. We also are aware that currently, FAA and aircraft manufacturers are taking all kinds of precautions to prevent that kind of
occurrence.
SOARES: So, let me -- you said you've already told them that this was a possibility. Can I ask you whether any mock-ups have been done to see if
it's, indeed, possible to hack a plane like this?
DILLINGHAM: Well, not to our knowledge. We don't really know if, in fact, there have been any kind of mock-ups to see if this can happen.
[16:24:58] But what we do know is that FAA and Boeing and Airbus have put in special controls until they're able to develop regulations that will
prevent this sort of hacking taking place. And also, there's also still the human in the loop for aircraft.
Meaning that a pilot would be made aware of any kind of change with regard to the aircraft operation before that change could actually take
place. So, there are vulnerabilities, but there are also safeguards and backup systems.
SOARES: And that's a very good point to make. But let me ask you this. Have you -- I'm guessing you've already given all your information,
your research, to the Department of Transportation. What are you hearing? What do you think -- kind of recommendations do you think need to take
place next?
DILLINGHAM: Well, yes, we did give our recommendations, both -- we had a public version of the results of our study, as well as a version that
was for the FAA only.
And FAA has taken up on our recommendations to move forward with the - - having a total threat model associated with the new next-generation air transportation system, as well as for the cyber concerns onboard aircrafts
and avionics. And the manufacturers have also enhanced their research and development to make the situation less probable or possible to happen.
SOARES: Mr. Dillingham, always great to get your insight. Thank you very much for returning to QUEST MEANS BUSINESS. Thank you, sir.
DILLINGHAM: Thank you.
SOARES: Now, still to come, FIFA sponsors feel the heat. Campaigners want the big names bankrolling the football World Cup to stand up for
downtrodden workers. We'll have that story for you just after this short break.
(COMMERCIAL BREAK)
SOARES: Hello, I'm Isa Soares, and there's more QUEST MEANS BUSINESS in a moment, when a new campaign calls on FIFA sponsors to stick up for
migrant workers in Qatar.
And it's solar-powered, the size of a loaf of bread, and completely crowd-funded. The people's spacecraft is ready for liftoff.
Before that, this is CNN, and on this network, the news always comes first.
Iraq's government is turning to Iranian-backed Shia militia to help take back Rimadi. The city is now under the control of ISIS after fierce
battles in the past week. US Secretary of State John Kerry said he hopes the gains made by ISIS can be reversed.
(BEGIN VIDEO CLIP)
JOHN KERRY, US SECRETARY OF STATE: It is possible to have the kind of attack we've seen in Ramadi, but I am absolutely confident in the days head
that will be reversed. Large numbers of Daesh were killed in the last few days and will be in the next days, because that seems to be the only thing
they understand.
(END VIDEO CLIP)
ISA SOARES, CNN ANCHOR AND CORRESPONDENT: Here in Europe neither say they'll use military force to combat people smugglers. Ministers agree to
establish a Naval operation to target the people who have packed tiny boats like the one you're looking at with hundreds of migrants. And E.U.
officials say the plan could go into action as early as June.
In Macedonia, 30,000 supporters of conservative Prime Minister Nikola Gruevski have gathered outside the parliament building in Skopje -- he
response from an earlier demonstration on Sunday by critics calling for the P.M.'s resignation.
Forty-eight people have died following a landslide in the northwest of Colombia. Bodies are still being recovered and authorities expect the
number of fatalities to rise. The area has been badly affected by several days of heavy rain.
Police say they have jailed around 170 bikers after a deadly gang fight in Texas. They face charges of organized crime in connection with a
shootout that erupted in a parking lot. Nine people were killed.
An extreme sports legend has died after a BASE jump went wrong in California's Yosemite National Park. Dean Potter shown here and fellow
jumper Brian Hunt were reported missing after attempting a 2,300-meter jump in wind suits on Saturday. The parachutes never opened. BASE jumping is
illegal in Yosemite and other U.S. national parks.
Now a new campaign that accuses Qatar of being a slave state. With the FIFA presidency to be decided next week, international trade unions
have joined forces to pull on the companies that sponsor the Football World Cup to take action.
They want sponsors to protest about working conditions at construction sites in Qatar. Letters have been sent to Adidas, Gazprom, Hyundai, Kia,
McDonald's, Budweiser, Coca-Cola and Visa - some of the brands you're looking at on your screen.
Journalist Andrew Jennings says based on statistics from recent years, the number of workers who will die delivering the 2022 World Cup will
exceed the number of players who will take the field. He was joined - he has joined with specialist sportswear maker SKINS to make campaigning film.
Here's a short clip.
(BEGIN VIDEOCLIP)
ANDREW JENNINGS, SCOTTISH INVESTIGATIVE REPORTER: It's forecasted that between now and the World Cup a dozen workers will die every week.
That has to be the saddest sports statistic of all time.
(END VIDEOCLIP)
SOARES: It is indeed a very sad statistic. Well the chairman and owner of SKINS, Jamie Fuller, is also a sports ethics campaigner. He joins
me here in London. Jamie, you went to Qatar - I think it was in April, correct?
JAMIE FULLER, CHAIRMAN AND OWNERS, SKINS: Yes.
SOARES: To see what kind of conditions were workers were living in. Give us a bit of a taste what exactly you saw.
FULLER: Frankly it was really horrendous. Of course I went to the places that aren't on the map as far as the authorities are concerned. I
was more interested in going to the places that we're not allowed to see.
SOARES: Yes.
FULLER: And as we've seen recently in the last couple of weeks with journalists being arrested and having their equipment confiscated, what I
saw was terrible. I saw the most appalling bathroom and sanitary conditions, dreadful kitchen and cooking facilities and these poor guys -
when you look at them in the eyes, they've got this dead look to them because they feel like they're trapped.
They feel like they've got no hope to get away from where they are.
SOARES: But you're not angry - not just angry - at the appalling conditions, but also the kafala system they have there. Talk us through
what that is for our viewers.
FULLER: Yes, will the kafala system is not just in Qatar, it's actually across the Middle East and it's what most of us call indentured
slavery. And basically it ties workers to employers for two years so they can't (inaudible), they're on contracts.
In a lot of cases, they're promised to be paid X -
SOARES: Yes.
FULLER: And when they get there, it's a hell of lot less than X. And I liken it a little bit to - you know - some cases we're talking about
people-smuggling and they are cases - instances - of prostitutes being smuggled from Eastern Europe into the United Kingdom. And they have their
passports taken away from them, they're put in horrendous living conditions and they start with a debt because a lot of these girls - particularly the
Napolis - they have to take a debt out in order to get to the -
SOARES: They own them practically.
FULLER: That's exactly it. So they get there and they have their passports taken away. And even if they don't have their passports taken
away, they can't leave without and exit visa -
SOARES: Yes.
FULLER: -- and the exit visa has to be approved by their employer. So without their employer's permission they're trapped.
SOARES: So you've got all these letters that have been sent to a lot of the companies. Tell us why now and - I mean - what are you hoping to
get out of this?
FULLER: Well we've been agitating for a while for reform within FIFA. And we're not the only ones. There are a lot of people who have been
agitating for reform within FIFA. And we came to the conclusion that FIFA won't listen to anybody they don't need to.
[16:35:06] But we think that perhaps - you've got to go where the money is. And in this instance, it's the sponsors.
Now this isn't that new. Twenty - or in the early - in the early 2000s, there was a lot of - a lot of noise around the Salt Lake City
scandal and it was the sponsors of the IOC that demanded reform from the IOC which happened. And so we think that now is the time for the current
FIFA sponsors to be calling for the same thing.
Because when you look at it and you consider what these sponsors say they stand for, their values, their principles and you contrast that with
what FIFA is doing in the name of football and what's happening in Qatar. They just don't correlate.
SOARES: So are you asking these companies to withdraw money from the World Cup? What would you like to see and ideally have you heard - first
of all - have you heard from any of these companies?
FULLER: No, and I've engaged them privately on multiple occasions and I've never had one response, so that's why we're doing this publicly,
number one.
Number two, we're not asking them to withdraw their money. We don't want them to withdraw their money unless they have to. We want them to use
their power to make real reform happen. And what we're hearing that keeps coming out of FIFA - it's not real reform. It's propaganda rubbish.
SOARES: Jamie Fuller, as soon as you have any sort of feedback from them or you get a response, do let us know. We'll have to have you back.
FULLER: Naturally. Thanks.
SOARES: Thank you very much. Well the campaign we were just talking about was launched just as another news story blew up over Qatar.
Football's governing body says it will investigate why a BBC news crew in Qatar was arrested. It made an eloquent what Jamie was making for the fact
that a lot of medias have been arrested over what they were filming in Qatar.
They were reporting on the treatment of migrant workers building the stadiums for the 2022 World Cup. Patrick Snell joins me now live from CNN.
And Patrick, what were they doing? I mean they were doing a filming there - but what were they doing? Is this part of a P.R. stunt? Or what they
doing there in the first place?
PATRICK SNELL, WORLD SPORT ANCHOR: Well actually, yes, according to the BBC the team was there - one reporter plus three. They were there in
the first place and they government sponsored a P.R. official tour, if you like. Basically to see the official representation of accommodation that
is handed out - handed down - to migrant workers. But depending on which version of events you choose to follow, is a question of which way this
actually pans out.
I think a lot can be read into the statements. I want to get to those statements. First of all, the official response from the Qatari government
- now their statement, reading in part, "The journalists who took part in the press tour were given an opportunity for a comprehensive look at the
problems Qatar is facing and the progress the government and the private sector are making to address those problems. They saw some of the worst
labor villages and some of the best. The BBC was meant to be part of that tour and would have been if they had not chosen to break Qatari laws."
Now, let's get the official response from the BBC - the British Broadcasting Corporation. In response to that, the BBC network adding, "We
are pleased that the BBC team has been released and we deplore the fact they were detained in the first place. Their presence in Qatar was no
secret and they were engaged in a perfectly proper piece of journalism."
"The Qatari authorities have made a series of conflicting allegations to justify the detention, all of which the team rejects. We are pressing
the Qatari authorities for a full explanation and for the return of the confiscated equipment" as well.
So you got two contrasting statements there, Isa, both telling their own story. If you go with whichever one you're following of course.
SOARES: Yes. And Patrick, what has been the reaction to today's developments? What have people been saying?
SNELL: Well obviously this has adopted a higher profile right through the day - there's no question about that. And of course in the past, there
has been huge pressure, if you like, on football's world governing body, FIFA, whose critics have in the past accused them of turning a blind eye to
the conditions of migrant workers in Qatar.
But what I can tell you this - I've recently just been doing an interview with Andrew Warshaw as well of "Inside World Football" - and he's
been telling me that, yes, at least for now, the World Football's governing body is playing part in at least trying to force change.
(BEGIN VIDEOCLIP)
ANDREW WARSHAW, CHIEF CORRESPONDENT, "INSIDE WORLD FOOTBALL": They do recognize that changes have to be made and they are already implementing
some changes. You know, we know that in the future kafala is going to be replaced by proper employment contracts.
We know that in the future passports are not going to be taken away by employers and the employees not allowed to leave the country.
We know that down the road that salaries are going to be paid on time and in a better way than they have been hitherto. So whilst we may not
actually see these developments at the moment, I think you'll find that by the time the "World Cup" comes along and considerably before that, some of
these - some of these reforms, some of these improvements are going to be made. They have to be made.
(END VIDEOCLIP)
[16:40:11] SNELL: And of course inevitably a lot of pressure on the current FIFA president Sepp Blatter. And of course the eyes of the
footballer world and beyond, Isa, will be on the FIFA presidential elections which take place on May the 29th in Switzerland. Sepp Blatter
trying to run for an unprecedented fifth term. Back to you there in London.
SOARES: Yes, the question is whether the reforms are taken quickly enough. Thank you very much, Patrick Snell there for us - CNN Center.
Thanks, Patrick.
There's a global shortage of skilled people and it seems it's getting worse. Stay with us to find out why employers say it's tougher than it
used to be to find the perfect recruit.
(COMMERCIAL BREAK)
SOARES: Welcome back to "Quest Means Business." Good talent is hard to find it seems. According to a new survey, the number of employers who
say it's hard to fill a job vacancy has risen to a seven-year high. Thirty-eight percent say they've been hit by talent shortages - 2 percent
more than last year.
The problem seems to be worse in Japan - a massive 83 percent say they're struggling to hire the people they need. Well field trades are the
hardest positions to fill for a fourth year in a row. That is followed by sales representatives. Next are engineering jobs - you can see there -
especially civil, electrical and mechanical engineers. Completing the top five, add technicians and drivers.
Well Jeff Joerres is the executive director of Manpower Group, the company that conducted that survey. He joins me now from Milwaukee to talk
about those results. So, Jeff, good to have you back on QMB. On the whole, it seems, looking at the numbers, unemployment's going down but it
seems it doesn't seem to make it easy for people getting the right - finding the right people. Why are we seeing such a shortage in talent?
JEFFREY JOERRES, EXECUTIVE CHAIRMAN, MANPOWERGROUP: Yes we still are really caught here and we've been in a talent shortage and we talked about
it - the survey's now ten years old so we have a lot of data on it.
Clearly when you look at 2007 that made perfect sense. We were just across the world for the most part doing extremely well, very tight talent.
Here were are, you know, now in 2015 and we're not quite feeling that the economy is that great and that there's that much demand. Yet we are seeing
the rise in the inability to find the right kind of candidate.
So there's a couple things in there - one is companies are absolutely being more choosy, picky. They know what they want and at the same time
we've seen some degradation of skills because the market has been so protracted, so difficult that the skills have become a bit antiquated in
some cases.
SOARES: Well let me ask you this. Is this also do you think - I'm not sure -- you've mentioned a couple - the employers being choosy and
picky and the degradation of skills - do you think this is because of a lack of applicants or this because of the lack of technical competence/of
experience as well?
[16:45:03] JOERRES: Well number one is the lack of applicants which is maybe some of that participation rate. But that would not necessarily
be the case of Japan which is more of a demographic issue. Then you have the lack of competency, lack of technical skills and very last in the list
of five is that the pay isn't enough.
So I don't think you're going to see companies, you know, really coming back with a pay proposition which means we're probably going to see
some wages being held down for a while.
So it's lack of competency, lack of skills, lack of applicants which is a little demographic but also disconcerting because we need these people
to kind of take off in this next phase of recovery.
SOARES: And, Jeff, you've mentioned Japan very briefly but it really stood out for me - 83 percent saying they were finding it challenging
filling vacancies. Why is there such a high level of talent shortage there?
JOERRES: Yes, it's actually stunning when you look at the next one down is at 68 with Peru and the average as you said was 38. So it is
pretty dramatic.
There's a couple things - one, they're changing their economy dramatically. They're moving from - moving out of that manufacturing into
more of a knowledge economy. They do have a very difficult immigration environment and their birth rates are - they have the highest, you know,
age of the work force. So you combine all of those things and now with the economy getting a little bit better with the, you know, the Abe economics,
you're going to find a real tension in the marketplace.
SOARES: So when you look at those numbers, Jeff, how much of it - how big of an impact let's say - do you think this is having on productivity as
well as on competitiveness.
JOERRES: Well I think that from a productivity perspective it may not be as difficult of a number as it is on growth and on GDP growth, and
driving some of that growth. You may squeeze out a little bit more productivity, but you can only do so much of that. So when you look at
Japan, they're a bit trapped. They can stimulate the economy as can other places but if you don't have enough people to produce - you don't have
enough of the right kind of talent - you're not going to get the growth that's required based on the stimulus.
SOARES: Jeff Joerres, executive director of Manpower Group. Thank you very much for coming on. Great to get your insight there.
JOERRES: Great to be here.
SOARES: Now some of the new talent companies are looking for - it seems to be leaving college this month. The graduating class of George
Washington University got some inspiring words from Apple CEO Tim Cook. He offered them a challenge for the future but first he had some instructions
for his audience.
(BEGIN VIDEOCLIP)
TIM COOK, CEO, APPLE: Hello G.W.! They asked me to make a standard announcement about silencing your phones.
(AUDIENCE LAUGHTER)
COOK: So those of you with an iPhone, just place it in silent mode. If you don't have an iPhone, please pass it to the center aisle.
(AUDIENCE LAUGHTER)
COOK: Apple has a world-class recycling program. For you graduates, you have to find your north star and that means choices. Some are easy,
some are hard, and some will make you question everything. I met someone who made me question everything. That was Steve Jobs. I always figured
that work was work, values had their place and, yes, there were things that I wanted to change about the world but I thought I'd have to do that on my
own time - not in the office.
Steve didn't see it that way. In that first meeting he convinced me that if we worked hard and made great products, we too could help change
the world. Your challenge is to find work that pays the rent, puts food on the table and lets you do what is right and good and just. Thank you very
much.
(AUDIENCE APPLAUSE)
SOARES: Well I was very inspired by it. He went on to say, "No matter what you do next, the world needs your energy, your passion, your
impatience with progress - don't shrink from risk." Very good advice to everyone out there including those millennials.
Now the countdown has started for experimental spacecrafts. Solar sail with (inaudible) space exploration can run on sunlight and indeed
crowd funding. We'll have that story just ahead.
(COMMERCIAL BREAK)
[16:50:57] SOARES: The countdown to launch a revolutionary new solar- powered spacecraft has begun. Called LightSail, it is the size of a breadbox and the aim is to send it into space fueled only by light. It is
the brainchild of the U.S. Planetary Society headed by Bill Nye - also known to viewers of children's television as the Science Guy. He's billing
as a people's spacecraft because they're hoping to raise much of the funding via crowd-funding site Kickstarter.
(BEGIN VIDEOCLIP)
BILL NYE, EDUCATOR: We are advancing space exploration by lowering the cost of sending spacecraft way out into space. Now, to get this thing
going, we need backers like you. We're going to give it a kick start -
(END VIDEOCLIP)
SOARES: Now the Kickstarter campaign has already far exceeded its goal. Maggie Lake spoke to Bill Nye on how the project works.
(BEGIN VIDEOCLIP)
NYE: This idea goes way back to my old professor Carl Sagan (ph). They were going to have a solar sail mission to catch up with Comet Holly -
Halley's Comet - and that mission got cancelled in favor of the Space Shuttle and this and that.
So this idea's languished, at least in the U.S. for a long time. But we've been able to rekindle it and we hired really expert people to build
this very small spacecraft which is built in accordance with a NASA standard called a CubeSat - cubical satellite - so it's a very small
satellite is a secondary payload on an Atlas V rocket which launches on Wednesday.
And when we get out in space -- this is a one-tenth scale model. When we get out in space, the sails will deploy and it will - we will make sure
that this works. But because we've got to play the hand we're dealt, this will be a test flight. This will just make sure the sails deploy and make
sure we can get proper telecommunications with the earth, get some pictures coming down we hope. And then next year will be the real flight where this
very - the identical spacecraft, its sister, will get a solar sail push. It's a strange thing. Light has no mass but it has momentum. So even when
you're sitting there in the studio when the light's beamed on you, you're getting a tiny, tiny, tiny push. So when you're in outer space, the sun
shines on the sail day and night - but wait, there's no night. So it gets a continuous push.
MAGGIE LAKE, BUSINESS ANCHOR AND CORRESPONDENT FOR CNN INTERNATIONAL: Bill, I'm interested. You know, up to this point funding space has been
the hobby of billionaires. How does crowd funding change the conversation?
NYE: Well there's a couple of things. That's a great question. I did not cue her everyone.
(LAUGHTER)
NYE: Ask you a quick question. First of all, bear in mind this is part of a NASA program called - ElaNa - Educational Launch of
Nanosatellites. So we're getting a very low-cost ride to low earth orbit. But the other thing is, because of this CubeSat idea, it's a very small
spacecraft. And with the miniaturization of electronics and with all the research that's been done in solar panels, we can power a very small
spacecraft for a very low cost.
And so universities launch these things from time to time and the other organization that's very interested in CubeSats is the Air Force.
The Air Force has taken a great interest in CubeSats because you could fly many of them in formation and act as though - and have an antenna that
behaves as though a very large - you got a very large antenna.
So these ideas are democratizing space -
LAKE: Now -
NYE: -- because you're establishing standards and everybody uses the same package and then the price of each one goes down.
LAKE: Now, do -- for the people who have participated in this, it's sort of opening up this great avenue I think of getting people not only
interested again but, you know, having this additional funding coming though by choice. What happens if you're on your test flight, something
goes wrong and it doesn't work. Are you afraid people are going to be turned off or do you think the people who are participating are sort of
`understand' the way these things work?
[16:55:04] NYE: Well I have to say the latter. This is to say our experience when stuff goes wrong in space, people say, `Hey, try again.'
`Come on, you guys are getting close, go again.' And that's been the reaction for - well, for decades. And I remind everybody the reason for
this is that space brings out the best in us. Space exploration's inherently optimistic.
It's about looking up and out into the cosmos. And so we have 40,000 plus members around the world - feel free to join - planetary.org.
(LAUGHTER)
NYE: We have 40,000 members around the world who just see space as part of the human experience - as part of what we do as people.
LAKE: What would it say about us if we did not explore space, if we did not look up and out? Whatever that would say it would not be good.
So, this is part of the future.
(END VIDEOCLIP)
SOARES: Truly inspirational there. Well this is a picture of the U.S. President doing something he usually doesn't do himself. We'll tell
you what that was in just a moment.
(COMMERCIAL BREAK)
SOARES: U.S. President Barack Obama has joined Twitter. President Obama sent out his first tweet under the official presidential twitter
account. The user name - our original POTUS. This is what he said an hour after its first tween POTUS. He already had more than 300,000 followers.
Here we go - "Hello, Twitter, it's Barack. Really! Six years and they're finally giving me my own account.
At last count he had just broken through one million. Let's compare that to other leaders. The President has some catching up to do really.
British Prime Minister David Cameron's built up just over a million followers. He joined Twitter back in 2010. India's Prime Minister
Narendra Modi has more than 12 million as you can see and Pope Francis over 20 million followers - and to get his account in nine languages. And of
course if you want tweeters - this is - Hal, help us bring those numbers up. You can tweet us @questcnn or me at @isacnn - my measly 5,000
followers.
And that is "Quest Means Business." I'm Isa Soares in London. Thank you very much for watching. Please stay right here with CNN - the world's
news leader.
END
