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Quest Means Business
Scandal Weighs on FIFA Sponsorships; Amazon World's Most Valuable Retailer; Nikkei CEO Says FT Will Remain Independent; Inside Japan's Corporate Culture; First Malaria Vaccine Gets Green Light
Aired July 24, 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)
POPPY HARLOW, HOST: There is no Friday feeling on Wall Street as the Dow wraps up a miserable week. It is Friday, the 24th of July.
Tonight, for a substitution. FIFA's sponsors make their loudest call yet for change at the top.
Amazon amazes investors and becomes the world's most valuable retailer.
And a trillion-dollar tech deal a long time in the making. I will ask the head of the WTO if your tech goods are about to get a whole lot
cheaper.
I'm Poppy Harlow and this is QUEST MEANS BUSINESS.
Good evening, welcome to the program. Tonight, FIFA admits that it's having trouble getting new sponsors, and the ones it already has, well,
they want a meeting. The current situation doesn't help, said the FIFA secretary general, referring to the massive corruption and bribery scandal
that has rocked the football world since May.
The organization has not signed a single new sponsor since the last World Cup, and the secretary general of FIFA is not expecting any new
partnership until FIFA president Sepp Blatter is finally out of office. He says that the current sponsors are not happy either, and he called for a
summit for next month to help try to quell the concerns.
(BEGIN VIDEO CLIP)
JEROME VALCKE, SECRETARY GENERAL, FIFA: Clearly, yes, there were a number of sponsors, mainly three, I would say, and it's three, in fact.
It's Coca-Cola, McDonald's, and Visa, who have expressed and sent letter to FIFA.
(END VIDEO CLIP)
HARLOW: And also you will remember this scene from Monday during FIFA president Sepp Blatter's press conference. The British comedian on the
stage, jumping on stage, showering him cash. The comedian trying to make a point about alleged rampant bribery within FIFA, and now sponsors are
piling on the pressure for the football's governing body to, frankly, shape up.
In his earnings call, the CEO of Visa called FIFA's response to the scandal, quote, "wholly inadequate," and demanded a fully-independent
commission to oversee reforms there. He said officials don't seem to be aware of how serious this problem is. And meaningful changes cannot be
made until, he says, new leadership takes over.
A few hours ago, Budweiser's parent company, InBev, joined that call, saying that FIFA should empower an independent commission, quote, "without
delay." And earlier this week, Coca-Cola said an independent commission would help FIFA, quote, "build back the trust that it has lost."
Also, McDonald's, another huge sponsor, said it is not satisfied, and will not be without the transparency of an independent commission. And
that leaves Adidas, Hyundai, and Gazprom as key sponsors of FIFA who are, frankly, yet to speak up. All of this pressure from sponsors seems to be
ruffling FIFA secretary general's feathers.
(BEGIN VIDEO CLIP)
VALCKE: I love your questions. They are so friendly, so positive, so nice. You want me to resign, you want me to think about my future, you
want to know if I'm traveling. What else? What I had for lunch or breakfast this morning?
(END VIDEO CLIP)
HARLOW: So, joining me in the C Suite is Sir Martin Sorrell, the CEO --
MARTIN SORRELL, CEO, WPP: -- Poppy Quest.
(LAUGHTER)
HARLOW: -- of WPP. It is QUEST MEANS BUSINESS, it's Poppy in the hot seat trying to fill Richard's large shoes, which is --
SORRELL: Big shoes to fill.
HARLOW: -- pretty impossible, but I am happy to be here. So happy to have you.
SORRELL: Good.
HARLOW: Who better to talk about this. When you look at FIFA, targeting $6 billion in revenue --
SORRELL: Yes.
HARLOW: -- from the 2018 tournament.
SORRELL: Yes. From that core, from that four-year period, yes.
HARLOW: Right. And you looked at --
SORRELL: Actually, less than -- less on an average basis than Formula 1. Formula 1 is about $1.7 billion a year. Interestingly, World Cup is
about $1.5 billion. So, interesting.
HARLOW: Still quite a lot, right?
SORRELL: Yes, quite a lot, but it could be more, actually, if properly run, I think.
HARLOW: So, it has a lot of upside potential --
SORRELL: Yes.
HARLOW: -- but we just went through the list. Visa chastising FIFA for a lack of awareness.
SORRELL: Coca-Cola --
HARLOW: McDonald's, Coca-Cola. You work with all of these firms.
SORRELL: Yes. InBev as well, now.
HARLOW: What do you think the long-term fallout is going to be?
SORRELL: I think long term, as long as there's reform, and this is -- you could look at this as an opportunity, it's not dissimilar -- it's not
as bad, obviously -- with the IOC a few years ago after Salt Lake City and Atlanta and everything. There was change.
Juan Samaranch was the first IOC president to change the institution. That was followed by Jacques Rogge, and now by Thomas Bach, who's taken a
very strong position on a number of major issues. There's going to be the IOC congress in Kuala Lumpur on August the 1st.
And what's interesting is it's so -- it was a similar situation, but of smaller scale and smaller magnitude. But same thing: reform, reform is
necessary. And it has to be neutral reform. There's no -- maybe this is a little bit aggressive to say -- but lunatics can't be judge of the asylum.
They've got to change. And what's interesting about what Visa and Coca-Cola and McDonald's, and now InBev as well, are saying is that they
have to change, and there has to be a neutral, independent commission --
[16:05:01] HARLOW: But --
SORRELL: -- that initiates. It's no good the same group of people --
HARLOW: Right.
SORRELL: -- reelecting somebody --
(CROSSTALK)
HARLOW: And they -- they're all --
SORRELL: -- from that same group.
HARLOW: It's one thing to have a new leader in place and figurehead.
SORRELL: Yes.
HARLOW: It's another thing to change culture and practice. And it's not just one person. So, you have this meeting next month with FIFA, with
McDonald's, with Coca-Cola.
SORRELL: With all due respect, it is about leadership. Sepp Blatter said he can't be held responsible for all this. Well, whether he likes it
or not --
HARLOW: You are.
SORRELL: -- he has -- you are responsible.
HARLOW: But how do they prove it? How do they prove to the sponsors things are different?
SORRELL: Well, it's a question about the quality of the people that - - if it's an independent commission or whoever the next leader is going to be. Electing another leader from the same group who would be tarred or
tainted with a similar approach -- maybe of a different scale, but a similar approach -- is not going to solve the problem.
The World Cup is the premier global sporting event. It is the premier live sporting event. After that, you have the Olympics close to it. And
then you have Formula 1, which I'm a non-executive director of. So, those are the three events that are global sporting events that appeal to global
audiences.
HARLOW: Let me ask you this. I believe -- I'm of the millennial generation. I'm in the old end, but I am.
SORRELL: I am not, unfortunately.
(LAUGHTER)
HARLOW: That's OK. We'll forgive you. But --
SORRELL: I'm an aging Millennial.
(LAUGHTER)
HARLOW: But what we know, what the studies bear out, is that Millennials care deeply about the companies that they buy products from --
SORRELL: Absolutely.
HARLOW: -- and what those companies stand for.
SORRELL: And the employees, moreover.
HARLOW: And employees want to work for a company that live by those creeds.
SORRELL: And that's why the sponsors are taking such a strong position.
HARLOW: That's why I'm wondering is why we're seeing all of these storied companies coming out and being so vocal. Is it because the young
buyers --
SORRELL: Well, there's --
HARLOW: -- expect it?
SORRELL: It's a very difficult position, because you have a legal contract. Nothing is proven as yet. There are a lot of suggestions. A
lot of arrests have been made, but there is a series of cases that are in the process of development. So, you have to be very careful what you say.
But what is now happening -- and I think, remember that Blatter was reelected in Zurich and with a lower majority than he thought and other
people thought he was going to get, but he was reelected. Within 24, 48 hours, he was gone. He resigned.
Where did that pressure come from? My guess is, it came from the sponsors. They were restricted from what they could do by virtue of their
legal contracts, but you're now seeing the pressure that they can exert.
What they're saying is, having a meeting in a few-months time to elect another leader from the same group of people may not be sufficient in their
view. And you're absolutely right. Sustainability, purpose, is at the center of all the clients we do, and you're absolutely right that consumers
buy products and services from companies that they admire.
HARLOW: Yes.
SORRELL: And people go to work and stay at work and are motivated to work at companies they admire. So, this issue is extremely important.
Having said that, do I think that this is a disaster from which FIFA or World Cup football will never recover? No. The sport is so powerful,
it's so important, you see the impact that it's had in American when the women's team won the Women's World Cup and the positive impact that will
have. And I think that will build further grass roots for soccer or football here in this country.
HARLOW: It really is a changing business environment, and the business of business is no longer just business.
SORRELL: Doing good is good business.
HARLOW: Yes.
SORRELL: John Brown, who was the CEO of BP many years ago said at Stanford Business School in 1997, doing good is good business. We over
intellectualize all this stuff. It's very simple. If you're in business for the long term -- that's the critical determinant -- you will -- doing
good is good business. It's good for your consumers, it's good for your customers, it's good for your people.
HARLOW: It's interesting. In the earnings call from Starbucks yesterday, the chief executive, Howard Schultz, said part of the reason for
the record earnings, he thought, was the investment in their employees.
SORRELL: Absolutely.
HARLOW: And in their partners.
SORRELL: Well --
HARLOW: And spending more money on them resulted in --
SORRELL: We have the tenth anniversary of our brand valuation actually. One of the clear, clear lessons is that companies that have
purpose at the center of their strategy --
HARLOW: Yes.
SORRELL: -- have sustainability as part of that purpose.
HARLOW: Yes.
SORRELL: Doing good is good business. It does, ironically, it does pay off. And it doesn't pay off in the context of a FIFA.
HARLOW: Yes. And it's no longer --
SORRELL: Well, certainly not in the long term. It might have paid off in the short term.
HARLOW: -- you're no longer just sort of corporate speak. It's actually --
SORRELL: That's right.
HARLOW: -- needing to be played out.
SORRELL: That's right.
HARLOW: Sir Martin Sorrell, thank you very much.
(CROSSTALK)
SORRELL: Thank you very much, indeed.
HARLOW: Have a lovely weekend. We appreciate it.
SORRELL: And you filled Richard boots --
HARLOW: I try, I try.
SORRELL: -- more than amply.
HARLOW: I try.
(LAUGHTER)
HARLOW: Thank you, my friend.
Amazon. Amazon is really having quite a run. At the top of the heap, the online shopping giant replacing Walmart as the world's most valuable
retailer. How did this happen? Overnight? We'll show you.
[16:09:51] (COMMERCIAL BREAK)
HARLOW: The day has come, and Amazon is now worth more than Walmart. We told you yesterday on the program how Amazon's stellar results could be
enough to make it the most valuable retailer in the world. Well now, that is indeed official.
Amazon shares up about 10 percent in Friday's closing, closing over $530 a share. That pushes the online retailers market value past brick-
and-mortar giant Walmart by about, eh, just $20 billion. The closing share price puts Amazon's worth at around $250 billion. Walmart is valued at
$230 billion.
Let's talk about it with Samuel Burke, CNN business correspondent. You know, last time you were here talking about Amazon --
SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: Uh-oh.
HARLOW: -- you were talking about Prime Day --
BURKE: Oh.
HARLOW: -- and how it was such a flop. And? Amazon sort of had the last laugh on that one. They said those sales topped Black Friday.
BURKE: I'm still a bit dubious of those.
(LAUGHTER)
BURKE: I think I might have the last laugh, because Amazon is growing constantly, so I'm not -- I wouldn't be surprised if every day is better
than Black Friday. I still had a very hard time finding anybody on Twitter saying, ooh, I just found a great deal.
But you're right. In the call last night, the CFO of Amazon says we were thrilled with Amazon Prime Day, and that they had huge sales,
especially in terms of the number of people who signed up for Prime. So, they're touting it. And clearly the stock market likes it, up 10 percent.
But I still have to point out one more thing.
HARLOW: Yes.
BURKE: Here we are, we are all gushing, analysts and whatnot, about Apple -- about Amazon.
HARLOW: And Apple.
BURKE: And Apple. But Amazon barely had any profit, just barely, and their stock is way up. Apple had this amazing profit and their stock is
down 8 percent over -- in this past week. So, it is quite incredible.
HARLOW: It's a good point, because we were talking about surprise profit, surprise profit. But we're not talking about that much here. The
strength in the Cloud business and third-party marketplaces.
BURKE: Absolutely incredible. Amazon web services is the part of Amazon that you rarely ever see. It's kind of the invisible thing that
runs websites and applications where people store their documents, up 81 percent in terms of sales, up more than 400 percent --
HARLOW: Wow.
BURKE: -- in terms of pure profit. And for a long time, they didn't break out those numbers, so a lot of us were very suspicious, thinking,
well, they must have something to hide. And clearly, they have nothing to hide.
HARLOW: When you look at all of that, and you look at Jeff Bezos, a man, by the way, according to Bloomberg now, worth $43 billion as of
yesterday, making him the seventh richest man in the world. But this is someone who is really, it just seems, at the beginning of the evolution of
Amazon. Thrones -- where do we go from here?
BURKE: But I think the thing that you have to really credit him with is Amazon Prime, that $99 a year subscription. He got the idea from
Costco, and in case you're overseas and you don't shop at Costco as much as we do here in the United States, think about the pure profit behind that,
$99 a year just, like at Costco. That's -- it's just a membership, that's it.
So, that type of genius in terms of saying how can I replicate what Costco did in stores and bring that to my website? The truth is, Amazon
products get to you almost as fast whether you have prime or not. So that is just profit, profit.
(CROSSTALK)
HARLOW: But I love seeing that I don't have to pay for the shipping.
BURKE: Yes, well, OK.
HARLOW: You know, we kind of love that.
BURKE: He loves that, too. It's making him rich and it's really business genius.
HARLOW: Because we're paying for it in many other ways. Samuel Burke, thank you so much, have a great weekend.
Well, turning to another very serious story, the CEO of Nikkei Group is promising to respect the editorial independence of the "Financial
Times." The declaration coming just a day after the Japanese media giant announced it was snapping up the business broad sheet for $1.3. Top Nikkei
executives telling reporters their group can learn a lot from the FT.
[16:15:06] (BEGIN VIDEO CLIP)
NAOTOSHI OKADA, PRESIDENT AND CEO, NIKKEI (through translator): The digital strategy, whether it is the system or whether it is the service
development or the customer management, I would say that FT is a step ahead of us.
(END VIDEO CLIP)
HARLOW: However, some have concerns, and they've raised them, about the FT's new ownership and just how independent the paper can be in Japan.
QUEST MEANS BUSINESS has been reaching out to the FT today for comment. We have not heard back yet.
We do want to bring in one man who knows a lot about the country's corporate culture. That is Michael Woodford. He is the former chief
executive of Japanese tech giant Olympus.
He was ousted from the company after he blew the whistle on a cover-up of $1.7 billion in losses at the firm. He took that story directly to the
"Financial Times," which helped expose the fraud. He joins me live from London. Thank you for being here, sir.
MICHAEL WOODFORD, FORMER CEO, OLYMPUS: Hello, Poppy, nice to see you.
HARLOW: You are being very vocal about this sale. You don't like it.
WOODFORD: It's -- "don't like it" seems very simplistic. I care passionately for Japan, and journalism is important. And in my case, I
experienced firsthand what the Japanese media is like.
And frankly, it's self-censoring and very deferential, if not reverential, to the powerful forces, including much of corporate Japan.
And that troubles me that the "Financial Times" is going to be owned by that type of organization.
HARLOW: To be fair and balanced here, I do want to play you some sound from the CEO of Nikkei and what they said addressing some of the
concerns earlier today. Let's roll it.
(BEGIN VIDEO CLIP)
OKADA (through translator): Nikkei has no intention whatsoever to force "Financial Times" to do the editing and reporting as exactly as
Nikkei is doing. Nikkei and "Financial Times" are totally separate in terms of following their respective editorial procedure and policy, and how
the articles are to be formulated are independently to be figured out.
(END VIDEO CLIP)
HARLOW: So, let's assume the best here.
WOODFORD: That --
HARLOW: Let's assume the best here. They're keeping the FT where it is, same location, everything. Is there any sort of independent body,
commission, anything that can come in that you think can help maintain that integrity, since there are some concerns?
WOODFORD: I think the Nikkei has a notorious reputation in Japan, and investors know this, that they have what's called "quarterly reviews,"
which companies use to leak price-sensitive information. It's a cozy, comfortable organization with corporate Japan.
Very different to the "Financial Times." And I think the problem lies that if you can imagine in my case, it's the Enron of Japan, nearly a $2
billion fraud.
I wouldn't now go to the "Financial Times" because while I think their independence will remain, I think to run the story which they did within a
matter of hours of meeting their bureau chief in Tokyo, it was on their website and the front page of their newspaper the following day.
Now, if you are attacking a major Japanese corporation, because of the Nikkei link, I think the journalists would be more cautious, they would go
back to London for approval, they would be more cautious, and it would take more time. And in those type of scenarios, time is everything.
HARLOW: It's interesting, you point out that you brought, as you said, your story there when you were ousted, they put it up on the page.
I'm wondering if you think that some of this concern will hurt the FT's chances at all of getting some of these biggest scoops. Because you wrote
that you would've taken your story to, say, "The New York Times" if the FT at the time were owned by Nikkei.
WOODFORD: Absolutely. I think -- Nikkei itself is an organization which should be under scrutiny, and how does the "Financial Times," which
has done many stories on Nikkei, about its weakness in covering the Olympus and other scandals, about the way this phenomena in Japan of leaking price-
sensitive information.
How does a journalist in the Tokyo bureau in particular start to write critical articles? Now, I'm sure there'll be some, but I think they will
be written in a different way. People are human. Lionel Barber, I have a great respect for his intellect --
HARLOW: Right.
WOODFORD: He's been the editor for ten years. But who appoints the new editor? Who appoints the new editor? That will be the gentlemen, the
German and the CEO we saw at today's news conference. And their journalistic are totally different than western organizations.
And it's not because it's foreign. I don't mind who owns a chocolate company or a car company. And I wouldn't mind if the "Financial Times" had
gone to a German company or a Canadian or an American company or an Australian.
But Japan's media is, and it's known to be, self-censoring. And that sort of mixing into the DNA, you said there was going to be layoffs, and
that's true, but the president of the Nikkei said today that they may share the same buildings in some of the bureaus.
[16:20:05] And that type of -- again, you're a journalist, the flavor and the feel and the independence -- and it might not be this month, it
might be not next year.
HARLOW: Right.
WOODFORD: But when there's a big critical story in Japan, I think the way the "Financial Times" covers it will be affected.
HARLOW: So, we will watch, we will see. But I have a potential idea from one journalist. Maybe you pen an op-ed about this in the "Financial
Times"?
(LAUGHTER)
WOODFORD: I'm sure they'd be happy to do that. Today they were quoting me. But the trouble for the world is Japan is the third-largest
economy. It's -- so much is going on, we have Abenomics, we've got quantitative easing, and you want accurate, probing questions, journalists
turning the stones.
That's not the way the media works in Japan, and that will some -- over time, I'm sure, influence the way the FT works in Japan.
HARLOW: I hope it is not the case. Michael Woodford, thank you very much for being with me, sir.
WOODFORD: Thank you.
HARLOW: All right. Well, it kills hundreds of thousands every year. And now, scientists could be on the verge of killing malaria for good. And
extraordinary update for you, next.
(COMMERCIAL BREAK)
HARLOW: Well, scientists have come one step closer to wiping out one of the world's deadliest viruses. The first ever malaria vaccine has just
cleared a major hurdle in the approval process.
Keep in mind, the virus killed more than half a million people in 2013 alone. Almost all of the deaths in sub-Saharan Africa. And most of the
victims were children under the age of five. Isa Soares has more on the potential breakthrough in this fight against this deadly disease.
(BEGIN VIDEOTAPE)
ISA SOARES, CNN INTERNATIONAL CORRESPONDENT (voice-over): After almost 30 years of research and millions of dollars, malaria may soon get a
final shot in the arm. European regulators have now given the green light to the vaccine known as Mosquirix, or RTS,S. A drug developed by
GlaxoSmithKline, partly funded by the Bill and Melinda Gates Foundation.
RAMIL BURDEN, VP OF DEVELOPING COUNTRIES ASIA AND EXTERNAL AFFAIRS AFRICA, GLAXOSMITHKLINE: The trials are being conducted in seven different
countries in sub-Saharan Africa and involve 13,000 children. The children in the trial would have, for example, they would sleep under bed nets and
they would have access to the best health care if they got sick. So, the vaccine is really an additional tool on the gold standard of care.
SOARES: The vaccine works by stopping the malaria parasite maturing and multiplying in the liver, after which it would normally enter the
patient's bloodstream and trigger the disease's symptoms.
But the trials are already raising questions over the drug's effectiveness. Results show the vaccine was most effective in children
between 5 and 17 months, cutting the number of malaria cases by nearly half.
In babies up to 3 months, though, that drops by 27 percent, with the protection wearing off over time, and with the need for booster shots.
DAVID CONWAY, PROFESSOR, LONDON SCHOOL OF HYGIENE AND TROPICAL MEDICINE: It is only a quarter of the people or a third of the people will
be protected. So, that -- will that benefit be enough, is the question. And the booster doses could be done, but will they be cost-effective in
particular different situations in order to reduce malaria? Or will other tools against malaria be more cost-effective?
[16:24:49] SOARES: This is, nevertheless, a first big step towards a vaccine, and this could be a game changer in Africa, where there have been
198 million cases of malaria, and an estimated 584,000 deaths in 2013, mostly among children. Now, it's up to the World Health Organization to
give its stamp of approval.
BURDEN: We believe that this is an additional tool. It's not the only answer, but it's an additional tool to help tackle one of the world's
biggest killers and infectious diseases.
SOARES: Isa Soares, CNN, London.
(END VIDEOTAPE)
HARLOW: My next guest leads a global advocacy group to stop the spread of preventable diseases, like malaria. Michael Elliott is the
president and CEO of ONE. He joins me live this evening from Washington.
Michael, when you look at the numbers, it is stunning, 584,000 people dying in 2013, 90 percent of them in sub-Saharan Africa, 1,197 children
dying every -- day from malaria, 30 years of research, how big is this?
MICHAEL ELLIOTT, PRESIDENT AND CEO, ONE: I think it's very big, Poppy, and I thought your report just now was absolutely terrific. It kind
of set out why this could possibly put us over the edge in really looking for something that does whip malaria. And some of the pitfalls and some of
the challenges still to go.
The numbers that you've just given, we can kind of boil those down for the viewers. Pretty much one child dies a minute of malaria, one a minute.
HARLOW: Wow.
ELLIOTT: Six hundred thousand or so --
(COUGHS)
ELLIOTT: Excuse me. Six hundred thousand or so, as you said, die every year, one child every minute. So, as we know, as your report just
said, the World Health Organization still has to give the final approval of this.
But when you put this together with bed nets and with other forms of treatment, it's a big deal. And the people at GSK who developed it through
our friends at the Gates Foundation --
HARLOW: Right.
ELLIOTT: -- who put this program together, it's a very significant step.
HARLOW: Now, at the same time, individual countries have to give the vaccine final approval before it can be administered to children. And we
know in some communities, there is a resistance to Western medicine, there is a resistance to, perhaps, giving something to a very young child. Are
you concerned about that?
ELLIOTT: Well, I think one of the things that we've discovered over the last 10 or 15 years is that there is no more effective health
intervention in the world in terms of saving lives, in terms of saving children's lives and making sure that people have a healthy and productive
life, than vaccinations.
Vaccinations are as close to a silver bullet for many of our -- of the world's health issues as you can ever possibly get. So of course, there
have been kind of cultural issues over vaccinations around the world. But I think we now have a really solid record that vaccinations change lives,
change communities, change countries for the better.
And today's news, tackling really one of the kind of main killers out there, 600,000 a year, is just another indication of what vaccines can do.
HARLOW: Michael, at the same time, we saw what happened with Ebola and the limited availability of Z-map. But I know this isn't that same
situation, but I just wonder how you make sure that it can be monitored, that it isn't controlled solely by one entity, that it can get widely
distributed at an affordable price.
ELLIOTT: Great questions, Poppy. And all of those are kind of really good public policy questions that we and many other groups address and
should address, because all these are questions that need to be asked, need to be answered.
Who's profiting? Is the distribution done well? Is the good data -- absolutely key point, kind of sounds really dull -- but is there really
good data on who's taking the drugs so that one can measure the effectiveness and ensure that the benefits that we claim for them are
actually being delivered? Or do you somehow need to re-calibrate the program so that you -- get bigger and better gain?
So, all of these are questions of public policy, which absolutely need to be addressed and taken seriously. The important thing that's happened
today, I think, is a recognition that the science is moving in really productive and exciting ways such that we can kind of see that, as I say,
we can kind of push malaria over the edge.
We can push the fight against malaria over the edge and really move into a situation where this extraordinary killer disease, is genuinely,
genuinely, in retreat.
HARLOW: Yes.
ELLIOTT: I mean, it's already in retreat.
HARLOW: Right.
ELLIOTT: We've reduced malaria deaths by half in 15 years. But we can do even more.
HARLOW: Michael Elliott with ONE. Thank you very much. An exciting day for the world, frankly. Thank you, sir.
ELLIOTT: Thanks, Poppy.
HARLOW: Chrysler recalls nearly 1.5 million cars after startling video. You know what this video shows? It shows hackers taking control of
a Jeep via the internet. We will show you how this happened next.
[16:30:02] (COMMERCIAL BREAK)
[16:00:00] (COMMERCIALS)
HARLOW: Hello, I'm Poppy Harlow. Coming up on the next hour of "Quest Means Business," the WTO director-general tells me about a trillion-
dollar deal that took more than a decade to pull off.
Also the CEO of Pernod Ricard teams up with "Vinnie Chase" from, you know, that great show "Entourage," to find the next start-up sensation.
First though, these are the top headlines we are following this hour.
Police in Louisiana say the gunman who opened fire in a crowded theater Thursday appears to have acted alone. They say 59-year-old John
Russel Houser killed two people and wounded nine before turning the gun on himself. He had been treated in the past for mental health issues,
institutionalized and police say they're still trying to figure out what his motive was.
(BEGIN VIDEOCLIP)
COLONEL MICHAEL EDMONSON, LOUISIANA STATE POLICE: The thing (ph) that I seek from the men and women that make up the Lafayette Police Department
is trying to find a motive, trying to find a motive, trying to find a goal, trying to find something that says why did he walk in that theater.
Why'd he fire at least 13 times? Why did he turn around and go back in there? Why'd he leave his car outside the keys on top of the tire? Why
was he living in a Motel 8? Why did he have wigs in there and little glasses and all those types of things? Any little thing - that's what
those DNA scientists are doing inside that theater right now.
(END VIDEOCLIP)
HARLOW: U.S. President Barack Obama has arrived in his father's homeland of Kenya. His half-sister greeted him at the Nairobi Airport
along with Kenyan - Kenya's president. Also Kenyans lined the streets of the capital to catch a glimpse of President Obama's motorcade. It is the
first time that a sitting U.S. president has made a visit to Kenya.
And the president of Burundi has won a highly-contested third term as leader. The election commission announcing a decision on Friday after a
vote marred by violent protests in opposition, boycotts also coup attempt. Officials say Pierre Nkurunziza got nearly 70 percent of the vote in the
African nation. The opposition maintains that term limits made his candidacy unconstitutional.
And Turkey says it is opening up some of its airbases in order to crack down on terrorism in the region. The country has announced that U.S.
and coalition forces can use some of those bases to launch airstrikes against ISIS. This comes after Turkish jets carried out their own strikes
against ISIS positions in Syria earlier in the day on Friday.
And FIFA has admitted its massive corruption scandal is indeed hurting its business, specifically its sponsorship deals. Visa has called FIFA's
response wholly inadequate and joined key other sponsors in saying it wants an independent commission to oversee reforms.
The FIFA secretary-general explained why FIFA has not signed any new sponsors since the last World Cup.
(BEGIN VIDEOCLIP)
[16:35:01] JEROME VALCKE, FIFA SECRETARY GENERAL: Definitely the current situation does not help to finalize any new agreement. That is a
fact and I'm sure that until the next election - until the 26th of February - there will be not be major announcements.
(END VIDEOCLIP)
HARLOW: Chrysler is recalling 1.4 million vehicles that are vulnerable to hackers. The recall comes after a really shocking video was
released this week. Look.
(BEGIN VIDEOCLIP)
ANDY GREENBERG, REPORTER, "WIRED" MAGAZINE: All right, all the - something just turned on all the fans and a/c and stuff - I didn't do that.
The trip started --
(END VIDEOCLIP)
HARLOW: That is hackers demonstrating how with the laptop from far away they can remotely control the Jeep that is driving. Laurie Segall, of
course she spoke with the hackers. She always gets the scoop on this. And they showed her how they did this. This is the new reality - cars are
computers.
LAURIE SEGALL, TECHNOLOGY CORRESPONDENT FOR CNNMONEY: Yes. Absolutely. I mean, cars are computers and because of that, they have
never been more vulnerable. Companies seemed to start taking that seriously. That's why they're doing this research, Poppy.
I want to first of all pull up a list -
HARLOW: Right, so we can see which ones.
SEGALL: -- out of all the makes and models Chryslers' recalling because it's quite a few. Take a look - see if you're on there. And I
will say this now -- Chrysler's upgraded its network. They said they can no longer prevent remote hacking, but I spoke to one of the hackers just a
couple of minutes ago before I came up here, and he said you're absolutely right, you can't remotely hack anymore. But he did say if I am near your
car, I can still exploit a Wi-Fi hotspot, potentially to get in.
So he says if those - if your car was on that list, go to your dealership. They're going to give a USB stick and they will help update
that - they will help patch it. So very, very important to do, Poppy.
You've got to remember that these cars are connected to the internet.
HARLOW: Right.
SEGALL: You've got to remember that they're scanning the internet looking for vulnerabilities.
HARLOW: Right. Maybe this is a reason to bike, I don't know.
SEGALL: (LAUGHTER).
HARLOW: Look, let's talk more about the hacker that you spoke with. I think you have some sound, right? From what he said.
SEGALL: Yes. I absolutely didn't remember I spoke to these guys years ago and they were demonstrating their first very high-profile hack
for me. So I was able to catch up with one of them again and I said what's different? And before they'd been able to hack but only from inside the
car.
So I asked what is different. Listen to what he said.
(BEGIN VIDEOCLIP)
CHRIS VALASEK, DIRECTOR OF VEHICLE SECURITY RESEARCH IOACTIVE: Now we don't have to be in the car, we don't have to be connected. We don't even
have to be in the same state. So we can reach any car in the United States and potentially North America.
SEGALL: What were you able to do?
VALASEK: We were able to do almost everything we were the last time we did this - steering, braking, lock and unlock the doors, turn on the
high-beams, basically anything that car was controllable over the in-car network, we were able to do.
SEGALL: What do you want people to kind of take away from this?
VALASEK: The statement I reiterate is we're the good guys. Bad guys don't you about what's wrong. They keep to themselves and use it for
whatever they want to use it for. You know, we're out there to let people know the risk exposure and help manufacturers get things fixed.
(END VIDEOCLIP)
SEGALL: Now if only the companies would hire these guys so they don't have to go -
HARLOW: Some of them do.
(CROSS TALK)
HARLOW: Ford told me that they employ hackers.
SEGALL: They need - I think this kind of research shows that they need to be doing what Ford is doing - they need to hire more security and
researchers. And when I spoke to Charlie, one of the other hackers involved, what he said was these companies need to treat security like
companies that house secured data. They need to be constantly testing themselves, constantly to break in to their own networks which are more
connected than ever.
And @Charlie Miller - he said this on Twitter - he's one of the hackers and I think he said it best. He said, "I wonder what's cheaper -
designing secured cars or doing recalls."
HARLOW: Yes.
SEGALL: These guys are going to have more companies investing now -- slowly.
HARLOW: Right. Laurie Segall, fascinating stuff. I'm going to keep biking, all right, thank you.
SEGALL: (LAUGHTER).
HARLOW: Have a great weekend. More than a trillion dollars' worth of tech products - everything from video games to semiconductors could be a
whole lot cheaper for you. That is because of a $1 trillion deal - yes, trillion with a 't."
After more than a decade of talks and back and forth and negotiations, the World Trade Organization has reached a deal to get rid of tariffs on
tech products traded around the world on more than 200 products.
I asked the director general Roberto Azevedo if this move could really help boost GDP.
(BEGIN VIDEOCLIP)
ROBERTO AZEVEDO, DIRECTOR GENERAL, WTO: We have many statistics I think at this point in time. Some are pointing to something close to $200
billion per year. It's a big deal.
HARLOW: What do you expect that this will do for jobs? Because that is such a focus herein the United States, across Europe, etc. What does
this do for jobs?
AZEVEDO: We're expecting a big bump in terms of economic output. So we - because this is not a deal that affects only the products like that
201 products that is on the list - that are on the list.
This is going to affect other sectors as well. So we should expect increased demand for example because the prices for consumers are going
down.
[16:40:01] This is going to help other areas of the industry that use these products as components to lower their costs as well.
Services which use these products for example in hospitals or in telecom - all these things are going to be cheaper to the consumer and to
the producers. So the overall effect should be one of a positive stimulus, therefore job creation.
HARLOW: Are you confident that some of these savings will be passed on to consumers?
AZEVEDO: Absolutely. You're talking about a deal which is about 7 - more than 7 percent of total global trade. For something like this to
happen that you're suggesting where producers pocket all the benefits, you would require an extremely coordinated effort on the part of all producers
to do that.
Because all it takes is that a few of them decide to share the benefits with the consumer to get more market share, to be more competitive
and the deal is over. Everybody's competing. This is a very, very competitive market. I can't see how the producers are going to pocket this
and not share the benefits with the consumers.
HARLOW: This deal has been more than decade in the making. Now you've got it inked - freshly inked. Do you think that deals like this -
our - the best way to stimulate trade in this global economy right now when there is such an urgent need for more investment. Is this the best way?
AZEVEDO: This is one of the good ways to do it. I hope that we can use this to inspire negotiations even here in the WTO. In less than two
years we had two major agreements - we had the Trade Facilitation Agreement in Bali which is worth about $1 trillion a year and this one which is going
to inject an additional stimulus of an order of magnitude of about $200 billion a year.
These are very big agreements and they're different in nature. While in Bali the Trade Facilitation Agreement the commitments were flexible but
the membership was everybody. This one is different. This one is the commitment to very strict, very uniform. But the signatories vary. It's
more - it's more flexible in terms of accessions.
So these are different agreements. We can play with those things and make sure that we keep delivering.
(END VIDEOCLIP)
HARLOW: Well the secretary general of the WTO there. Well the chief executive of drinks company, Pernod Ricard, is hoping to spot the next big
tech sensation.
Alexandre Ricard is one of four judges who will give $1 million to a startup entrepreneur who wins this. It's called "The Venture," and it pits
16 social entrepreneurs and their ideas against one another. Those startups are trying to make a positive impact while also of course turning
a profit.
Also on the panel, Adrian Grenier known for portraying the character Vinnie Chase from "Entourage." A little star power there. Alexandre
Ricard joins me now from San Francisco.
Thank you for being with me, sir. I appreciate it very much. Let's talk about -
ALEXANDRE RICARD, CEO, PERNOD RICARD: A pleasure.
HARLOW: Thank you. OK, let's talk about why you're doing this. Is it because you want to get these smart folks into your fold at the company
or is this a pure advertising, marketing play?
RICARD: You know, at the end of the day, the challenge I've put in front of the Chivas Regal brand team was how can you bring to life the
Chivas brand values in a pioneering and in an innovative way. And they went and did a lot of digging into the Chivas history going back to the two
brothers, the Chivas brothers - James and John in 1801, and they were social entrepreneurs.
So basically they came up with that idea to do what would have these two brothers done in today's world given the global nature of the world and
given the technology. That's point one.
And point two I believe both from a talent attraction retention point of view and a consumer point of view, the new generations are extremely
sensitive to a better world.
HARLOW: Yes.
RICARD: So I think it's the best of two worlds.
HARLOW: It's a great point. I was just talking to Sir Martin Sorrell of WPP at the beginning of the show about exactly that - I mean,
millennials are demanding that companies stand for something good. You know, alcohol companies - any kind of company - they want it to stand for
some social good.
Outside of your sector, I'm interested in where you think the most innovation is needed. Pharma? Tech? What do you look at?
RICARD: Well listen, I'll tell you -- based on the 16 finalists which means they come from 16 different countries and they made the cut from over
1,000 entries which is to tell you how many people around the world are so eager to make a change.
[16:45:06] And we see willingness to change climate. Environment is something which is big. And we have seen a few projects, one of them being
how to save water, how to make agricultural more efficient from a water usage point of view. Recycling as well is big.
So that's from a climate point of view, but you also have disease and health - how to track animals around the world and identify anomalies
through small chips and satellites tracking. That's another domain again. Disabled as well - that's something which is important or the elderly. And
finally, poverty - how to give access to poor households to affordable homes, how to prevent - you know - shack fires in emerging markets. So
quite a few domains.
And people - these young generations - are extremely passionate about it, they have a lot of drive and commitment and I have to say it's - for
people like - it is inspiring.
HARLOW: Yes, they certainly are demanding a new way to have business operate. So I thank you so much for joining me on what looks like an
absolutely beautiful day there in San Francisco, sir. Appreciate it.
RICARD: Thank you very much.
HARLOW: Coming up, it is the moment many Kenyans had been waiting for. President Obama makes a historic visit to his ancestral homeland. We
are live in Nairobi next.
(COMMERCIAL BREAK)
HARLOW: U.S. President Barack Obama has touched down in his ancestral homeland for the first time ever since entering the Oval Office. The U.S.
president is in Kenya as part of a tour aimed at strengthening diplomatic relations in the region.
A huge security operation is underway amid concern about terror from al Shahab militants. The President due to meet with the Kenyan president
on Saturday before becoming the first sitting U.S. president in history to visit neighboring Ethiopia.
Barack Obama's trip is also designed to bolster economic ties between the U.S. and Kenya. He is due to attend a U.S.-sponsored entrepreneurship
summit there in Nairobi.
That is where we find our Jim Acosta - in the Kenyan capital joining me. So obviously he was in East Africa and he was talking about - talking
about - the economy, etc. and business. But he's also spending some really quality, frankly, family time.
JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Poppy. President Obama has arrived in Africa. He's here in Kenya, he's on
the ground in Nairobi landing in his father's homeland earlier this evening. The president was greeted at the airport by Kenya's president
Uhuru Kenyatta and Mr. Obama's half-sister, Auma.
And shortly after that greeting at the airport, the President along with some of his relatives went out to dinner here in the Kenyan capital.
So he is getting in touch with his family once again.
[16:45:03] The President will spend the next few days focusing on efforts to boost Africa's economy and security with a speech at that
entrepreneurial summit that you mentioned, Poppy.
And then there's going to be a major address to the African people on Sunday here in Kenya. He's going to be talking about his Kenyan roots at
that point.
But we should point out - and this is a - I think that it's a little bit disappointing to the White House -- for logistical and security
reasons, he's not going to be going to his ancestral village of Kogelo where his father is from. Instead those relatives will be coming in and
out of Nairobi.
But also a big topic of discussion here for this president will be the fight against terrorist groups in this part of the world, namely al
Shabaab, which as you know has carried out terrorist attacks here in Kenya. That has resulted in a massive security presence here, and I can just tell
you, Poppy, from being out on the streets earlier today here in Nairobi, it was eerily quiet.
I mean, these - I was told by people on the streets that these avenues and boulevards should be jam-packed with people, especially when somebody
like Barack Obama is coming back to this country of his father.
But because of the security precautions that have been taken here, a lot of people have just decided to stay home and watch this on television
although we should point out when he was making his way through the streets of Nairobi, they were pretty full at that point -- a lot of people waving
and cheering - a lot of pride in this African-American president --
HARLOW: Yes.
ACOSTA: -- and somebody that they consider to be person who is very much a part of Africa. Poppy.
HARLOW: Absolutely. Really nice to see that embrace with his half- sister there right when he got off the plane. Jim Acosta, enjoy the trip.
ACOSTA: Thank you.
HARLOW: I'm sure it's fascinating to be on the ground there. Thank you very much.
Next - switching gears in a major way - Taylor Swift heading to China later this year. It is great news for her fans there. However, Chinese
censors may take issue with her merchandise. We'll tell you why next.
(COMMERCIAL BREAK)
HARLOW: Taylor Swift may find herself the object of a little bit of unwanted scrutiny. The pop star's world tour is due to visit Shanghai in
November. There's just one problem. Unfortunately for Taylor, it is the name of her tour - 1989.
Now that is just the name of her album and the year she was born. She is quite young. Combine that with her initial T.S., and it could look like
a reference to Tiananmen Square and the bloody crackdown there on pro- democracy protests. Will Ripley looks at the brewing controversy from Beijing.
(BEGIN VIDEOCLIP)
(MUSIC CLIP FROM TAYLOR SWIFT'S SONG, "SHAKE IT OFF")
--Gonna shake, shake, shake, shake, shake
I shake it off, I shake it off.
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: One of the biggest hits from Taylor Swift's album "1989" is all about shaking it off, a skill
that'll come in handy in China where the superstar's exploding popularity brings potential pitfalls.
Taylor Swift's initials, T.S., could be mistaken as a reference for Tiananmen Square where I'm standing right now. And her album "1989," the
year she was born, is also the year when hundreds of pro-democracy protestors died in a government crackdown here.
This issue is so sensitive here in China, we could actually be detained just for reporting in this location.
Taken out of context, the pop star's clothing line could be politically combustible says University of Denver professor and China
expert Jing Sun.
PROFESSOR JING SUN, UNIVERSITY OF DENVER: If it turns out you have a group of people that will be wearing such problematic (tashas) and they
gather together -- if that is the scenario the government encounters -- I'm sure the government will do something about it.
So far, state-authorized search engines are not censoring T.S.1989 merchandise.
SUN: If the government tries to take a heavy-hand approach on that, it could backfire. And I think (inaudible).
[16:55:04] RIPLEY: Sun says the bigger obstacle facing Swift is places like this. This is Beijing's famous silk market. You can see
busloads of people come here, a lot of them Western tourists. They come by the millions each year for counterfeit versions of the world's biggest
brands - openly sold for a fraction of the price.
There are so many people here, it's incredible and even though most of what's being sold is fake, this place brings in so much money - the
authorities, the market supervisors - they just look the other way.
Taylor Swift's clothing line hasn't even launched yet in China, but knockoffs are already big sellers online.
SUN: That is one thing Taylor Swift can be sure about.
RIPLEY: Sun says it's a part of doing business in the world's counterfeiting super power. How big of a threat is the counterfeit issue
to artists like Taylor Swift?
SUN: In fact it will be far more of fabricated items than authentic ones that will be circulating in the Chinese market.
RIPLEY: He says Swift still stands to make massive profits, teaming up with Chinese e-commerce giants JD and Alibaba, China's insatiable
appetite for American pop culture is a gold mine for the highest-paid woman in music, meaning Swift will likely be 'shaking it off' all the way to the
bank. Will Ripley, CNN Beijing.
HARLOW: We will be right back with more "Quest Means Business" in just a moment.
(COMMERCIAL BREAK)
HARLOW: The heavy selling continues for U.S. stock. For the second day in a row we saw triple-digit loss on the Dow. We actually started the
week well above 18,000, now that index has lost around 500 points in the space of just a few days. Falling commodity prices are partly to blame.
Also in corporate news, the biggest media merger of the year just getting a green light from U.S. regulators. AT&T is going buy DirecTV in a
deal worth $49 billion.
And that is "Quest Means Business." I'm Poppy Harlow. Thanks so much for being with us. Have a great weekend.
END
