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Quest Means Business
Trump Books Trip to Davos for World Economic Forum 2018; Exclusive Interview with Ford CEO Jim Hackett; Bezos Becomes Richest Person in History. Aired 4-5p ET
Aired January 09, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN HOST: Closing bell ringing on Wall Street. Not surprisingly, the Dow actually just giving back a little bit, but not
surprisingly, a rousing session. We have records in all three major indices and records in Europe. Let's see if he does justice. Four, five,
six, seven -- I think that's called over-egging the pudding. But trading is over. Records on the market. We'll put it all in perspective. Today
is Tuesday. It is the 9th of January.
Tonight, President Trump goes to Davos. The president is going to the World Economic Forum to be amongst the elite he supposedly despises. A
television exclusive with the chief executive of Ford. Jim Hackett shares his plans to build smart cities. You'll hear that in half an hour. And
prime mover, Amazon's Jeff Bezos becomes the world's richest man ever. I'm Richard Quest, live in the world's financial capital, New York, where, of
course, I mean business.
Good evening, tonight we've just shown you U.S. markets have closed at all- time records once again. And Donald Trump wants to continue the momentum of his economic America-first message. He's going to the World Economic
Forum in Davos, and when he does so, he will obviously be boasting about the state, the speed and the growth of the U.S. economy.
But it is the event where he's going that is raising eyebrows. The annual meeting of the political elites. The heads of the global corporations and
the uber-super rich. Now, you could argue they helped fuel Donald Trump's populist movement. Tonight, the president has decided to join them. The
decision to attend in Davos took everyone by surprise. The last president to go was Bill Clinton in 2000. The White House confirmed the trip in the
last hour.
(BEGIN VIDEO CLIP)
SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: The president will attend, and he welcomes the opportunity to go there and advance his
America-first agenda with world leader and he is very much looking forward to being part of that process.
(END VIDEO CLIP)
QUEST: David Gergen is with me, CNN senior political analyst. You've been to Davos more than once or twice.
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I think you and I probably have been too many times. About 20 times a piece.
QUEST: Absolutely. OK. Why is he going? Because pre-presidency, I would have said this is the perfect place for a man with golf courses, private
jets, multiple homes. But this idea of draining the swamp, anti- establishment. He's going to the heart of it.
GERGEN: Absolutely. But I think it's a smart move. Listen, he's going to have the world stage for 45 minutes to an hour. Everybody is going to be
tuning in. And he has a chance to make his case for the American economy and take credit for these -- you know, these arousing numbers on the stock
market and unemployment rate going down, all the rest you've been reporting on here. He thinks he's not getting sufficient credit. He's not getting
sufficient attention. He's mired in the Mueller investigation. Questions about his fitness in office and all of the rest of it. This is an
opportunity to try to change the spotlight back to where he wants. Now, I do think there's a question. Is he playing to the home base crowd? In
which case he's going to be the tough on trade, tough on immigration, or is he going to try to play to the international.
QUEST: Now, that's the fascinating part about this. Does he go there to blow up the house and say a plague on all of you, and America's change
we're no longer going to -- if we look at his recent speeches, they've all had this message. Take, for example, we don't care how you vote at the
United Nations. Which do you think we're going to see? A blow them up or we want you with us?
GERGEN: I think he's going to go for pleasing his base. It's been his instinct.
QUEST: A plague on all your houses.
GERGEN: Well, yes. And being tough. He will say -- he will have some grace notes. He'd say we want to get along with everybody, we want to love
you, and America is doing some wonderful things for the world. But I think he still sees the most important challenge of his coming year is keeping
control of the House of Representatives, keeping control of Congress so he can get more of his agenda done.
QUEST: We have seen today an extraordinary meeting. He's --
GERGEN: Yes.
QUEST: -- on immigration. He allowed the cameras to stay in there for 45 minutes while he effectively debated his immigration policy with others who
didn't agree with him.
[16:05:04] What was behind it?
GERGEN: I thought it was a pretty smart move. It was weird, but it was a good weird. In the sense that it allowed the -- it was like 50 minutes.
QUEST: Yes.
GERGEN: It allowed us all to sort of tune in on what, you know, it was a cabinet meeting. Interesting television. Very importantly, Richard, I
thought was the clips that have come out of it so far have shown Trump being pretty articulate. And at a time when people think he may be going
bonkers or he's losing it in there, this helped to put some of that to rest, I think.
QUEST: That's what this was about, wasn't it? There was nothing -- there was nothing accidental about allowing the cameras in. And it probably was
him who decided to do it. Because the man is a media mastermind genius.
GERGEN: Yes. Let's be careful about that word genius.
QUEST: Deliberate.
GERGEN: I know. He does have a sixth sense. He is a very good salesman. That is his strength.
QUEST: So, he shows the world, I'm going to debate, I'm going to engage, any idea that the time -- I'm losing it, people will see I've got all the
arguments.
GERGEN: Right, right. And it was enough. Listen, I am sure there are other days -- if you go back and read the transcript with the "New York
Times" reporter who went in and talked to him, you know, impromptu fashion at Mar-a-Lago, that's basically incoherent. And highly repetitive. The
word collusion comes up, you know, every third word. There's collusion, every phrase. But this Donald Trump was actually, you know, articulate and
he looked like he was in charge. And it was interesting. He is -- let's go back to Davos.
QUEST: Yes, please.
GERGEN: He's taking about half his cabinet with him. They have a very large contingent of the economic side of the house, which I think you can
expect secretary of the treasury. You can expect Gary Cohn, Wilbur Ross out of commerce. Lighthizer out of trade. I think there is going to be a
big delegation. It's very unusual for America to go with this big a delegation. But last year you remember Davos, the big, big speech came
from the leader of China.
QUEST: I was there.
GERGEN: Yes. And it was pick up the flag, America is retweeting. We're going to pick up the flag. We're going to be in charge of trade. We're
going to lead the way on trade. We're going to lead the way on environment. And now this is Trump's moment to go head-to-head with Xi as
world leader. I think he's going to play for his base, as I say, rather than trying to seize the flag back.
QUEST: You're getting this?
GERGEN: Yes.
QUEST: I shall see you.
GERGEN: I look forward to it.
QUEST: We'll swap tips for keeping warm.
GERGEN: Absolutely.
QUEST: Thank you.
GERGEN: OK, thank you.
QUEST: Let's go to the trading post where we need to show exactly what happed in a day, and remarkable day as David Gergen was saying. So, we
have records. First of all, three records. Green is the order of the day. Lots of green. As much green damage you can give me today. We've got the
Dow of a record. We've got the S&P at a record. We've got the Nasdaq at a record. So, my first duty, of course, is to change these numbers for you.
So, the Dow now goes to 4. The S&P and the Nasdaq both go to 6. But there's more, because not only did we have records -- so writings not as
good as it should be -- over in Europe. We have a record on the FTSE, which goes to 3. And in Zurich, we have the SMI, which goes to 2.
Now, this would be remarkable in any scenario. But to have 4, 6 and 6 records on the Dow, the Nasdaq and the S&P when we're only in the second
trading day of the year, this is something that clearly has to be dealt with by Paul La Monica, who understands exactly what we're talking about.
And why we're seeing such remarkable records so quickly.
PAUL LA MONICA, CNNMONEY CORRESPONDENT: Yes. I think one thing to just noted obviously, is that we're still waiting for earnings. That's going to
really kick in later this week, with JPMorgan Chase and some other big banks. There is not a heck of a lot of news out there yet, and volume is
low, which I know trades pointed out to you on the "EXPRESS" show earlier today. So, the reason why I think stocks are still hitting all these
records, though, is that there is legitimate optimism about what profits are going to look like in 2018. And it's a combination of tax reform, but
also real fundamentals. Because this rally is broadening out. It's not just tech any more.
QUEST: Right.
LA MONICA: Boeing is at an all-time high. Union Pacific is at an all-time high.
QUEST: Let's look at Boeing, because we have the Dow higher -- twice as high as the gain on the Dow as the S&P and Nasdaq. And Boeing, of course,
is the largest component. And you see this -- why has Boeing suddenly put on about 6 or 7 percent in a matter of a few days? From 296 to 318, 20
since January the 1st. Why?
LA MONICA: It's a stunning move. Today they announced that they had extremely solid deliveries of commercial aircraft last year. And I think
that's what people were expecting.
[16:10:00] Everyone knows that Boeing is doing really well in the aviation business right now. And that is something that is going to probably keep
this stock going higher. I mean, there is the defense side of the Boeing coin, as well. But it's just commercial jets. That business is booming.
And they're stealing share from Airbus, and that's helping them.
QUEST: And they'll get some 6,000 aircraft. Look at the Dow 30 and give us an interception. As we take a look and see exactly how the 30 stocks
within the Dow Jones Industrials have traded. We see -- oh my goodness, gracious me. Dear old GE, the laggard from last year. It's trying. It's
trying to do something.
LA MONICA: Yes. GE, I think there is a hope that under new management that they will kind of right-size that ship, if you will. But look at the
rest of the Dow here, and this is a broad rally, again. You don't see any big tech leaders there. You've got Boeing, GE, J&J, United Tech,
Travelers, Caterpillar. Takes a while before you see where tech did today, and it's IBM, which is the stodgiest of tech out there in the Dow. But
tech is off to a hot start this year, as well. This is a nice rally across the board.
QUEST: Good to see you.
LA MONICA: Thank you.
QUEST: Thank you very much indeed.
I need to bring you some breaking news. Steve Bannon is stepping down from Breitbart news. It's just been announced. We're not sure the reasons,
whether it was because he was pushed out or decided to step down or the sponsors decided. We'll bring you more on that as the program moves on.
Staying with the main theme of the day, though, markets and economies, the World Bank says the global economy is at a turning point. It just released
its report on global economic prospects. Shows global growth stronger than expected. Franziska Ohnsorge is the banks lead economist on that report.
She joins me from London. We know that we are seeing synchronistic growth between the major economies at the moment, which is the first time in a
decade, at least, that we've enjoyed this sort of thing. But if I understand your report right, it's going to get faster.
FRANZISKA OHNSORGE, WORLD BANK DEVELOPMENT PROSPECTS GROUP: Yes. Global growth has solid momentum now. We expect it to tick up a little bit in
2018 to 3.1 percent. The broader line last year was 3 percent. And it's a broad-based recovery, as investment led by advanced economies. But it's a
cyclical recovery. And cyclical recoveries come, and they do eventually fade. What our main concern is, where growth ends up once this cyclical
recovery fades.
QUEST: But hang on. A cyclical recovery is the norm. You get a cyclical recovery after a period of recession or downturn. We arguably -- I know
what the point you're making is, that we should be seeing more of a structural recovery. But arguably, that already happened in the '09, '10,
'11 post-recession.
OHNSORGE: Yes, this recovery from this post-crisis low in 2016 of 2.4 percent growth has taken longer to materialize than we had expected. For
years we had to revise our forecast downward and we were disappointed. Finally, now, there seems to be a turning point where we have to revise our
forecasts up. But it will fade. And when it fades, and growth returns to its long-term sustainable growth, our concern is that kind of growth would
be about a percentage point less than it was ten years ago.
QUEST: Right. But it's inevitable. The faster rate of growth will dwindle. That is inevitable. I'm not sure what it is that the World Bank
now wants to ensure a higher level of sustainable growth.
OHNSORGE: It is inevitable that it fades. The question is, where does it fade to? Ten years ago, we would have thought that, for example, emerging
market and developing economy growth would have faded to about 4.8 percent. Nowadays, it would be more something like 4.3 percent. So, there's lots of
room for disappointments.
QUEST: Which is the biggest -- what is the biggest concern for you on the economic horizon? Is it firstly, say Brexit and dislocation within the EU?
Is it the U.S. president's trade policies? Is it something that I'm not considering? What is the worry that you have?
OHNSORGE: In the medium to long-term, of course, is potential growth. But in the shorter term, there are any number of risks. And that could be
political risk, that could be -- surprises along the process of Brexit. The main worry is the financial markets seem very vulnerable to a
correction. Asset evaluations around the world are very high and bond yields are at record lows around the world, not just advanced economies.
[16:15:00] QUEST: Yes, but the only problem is, we have been saying that for the last five years, four years. And if we had followed the advice of
economists, many of us would not show the gains in pensions and portfolios.
OHNSORGE: It's true that what would have upset -- upset financial markets five years ago, say geopolitical concerns in Asia, or the talk of
sanctions, now doesn't seem to have any effect on financial markets. But there could be a turning point where suddenly they correct.
QUEST: Excellent to have you on the program. Thank you. Joining us on QUEST MEANS BUSINESS, really appreciate it. Please come back again. We
need to talk more about these issues. Thank you.
Coming up on QUEST MEANS BUSINESS, South Korea's sanctions against the North could be eased. Both sides are making Olympic overtures. We'll have
Will Ripley who is in South Korea after the break. There is green on all the markets.
(COMMERCIAL BREAK)
QUEST: A dramatic breakthrough in talks between North and South Korea, which could lead to sanctions on Pyongyang being relaxed. After the
North's decision to take part in next month's Winter Olympics in Seoul, the -- in South Korea, the South says it will consider lifting sanctions
temporarily. Japan has hailed North Korea's decision on the Olympics as a change in attitude. Now turn back the clock, and you'll see a pattern of
talks since missile tests back in 2006.
Join me at the super screens, and you'll see what I mean. These are the lists of North Korea talks. So, you've got September 2007. You then have
got July and December 2008. And a long gap into February 2014, August 2015, and now January 2018. Will Ripley is near the DMZ, where, I mean, I
sympathize. It looks freezing there tonight. The issue -- why are they talking? What has driven this? Is it what everybody says? Is it the U.S.
hard line?
WILL RIPLEY, CNN CORRESPONDENT: The North Koreans would never admit to that, Richard. But clearly, with sanctions kicking in this year, you can't
deny the fact that when you're cutting a country's oil imports and nearly all of their export revenue. They need something to change before their
economy takes a drastic hit. And so, that could be a motivating factor. Also, the Olympic are maybe perhaps a short window for diplomacy that both
sides recognize. Which is why we saw those talks take place.
QUEST: You are an expert on North Korea, Will. Is it your feeling that they are playing everybody in the sense of let Donald Trump think he is
having a minor victory over this hard line, and then do something with an atomic blast or a nuclear test or whatever?
RIPLEY: I actually don't think that they're trying to make Donald Trump think he has a victory.
[16:20:00] Because the North Koreans said at the end of yesterday's meetings that their nuclear weapons are pointed directly at the United
States and not South Korea or China or Russia. So, if anything, they're trying to drive a wedge between these countries and the United States as
opposed to trying to appease the United States or making them feel like they won a victory.
QUEST: All right, Will, finally, just point out where you are and what might be there. You're near the DMZ. What are we looking at?
RIPLEY: Right. So, the de militarized zone, we're right along the DMZ. North Korea, just a bit over that way. It's still dark out here. We are
just a few minutes away from the Panmunjom truce village, where those talk were taking place. This is the location of other talks previously. The
last time they had talks there, just over two year ago, they lasted 44 hours. This time around, they hammered out a number of deals in one day.
It's really remarkable. And it shows that both sides, the North and the South really came to the table ready to make a deal on the Olympics.
QUEST: It looks very cold there. I'm sure you should have a hat on in those cold weather. All right. Will Ripley, thank you very much. Go and
get yourself warm. At least buy a hat. Thank you.
A new report says North Korea is trying to compensate for the tight sanctions placed upon it by mining cryptocurrencies. It suggests software
was installed to channel coins into a server at this North Korean University. Chris Doman is a threat engineer at the cybersecurity firm
AlienVault, which was behind the report. He's in London. Good to see you, sir. This is fascinating. So, you're saying that the North basically
mined bitcoin or others with a view to what, raising revenue?
CHRIS DOMAN, THREAT ENGINEER, ALIENVAULT: Yes. This is part of a minor set of attacks. We saw this being sent directly to that university in
Pyongyang. It's unusually direct. But this comes on the heels of last week, there was a report that the Korean government. They saw North Korean
hacker hacking into some networks, and in that case also mining the cryptocurrency. And Kaspersky saw some of the things too. This has been
going on for about a year now.
QUEST: Now when you said they've been mining them, have they been mining them legitimately. Is there anything intrinsically wrong with what they
have been doing, other than the fact that it is surprising that North Korea has been doing it?
DOMAN: It's a really good question. So, we weren't sure at first. We saw it being sent to that center in Pyongyang. But maybe this was the
university doing it themselves. It was malicious, they did try to hide. And then later today someone else found some very closely related malware,
same people, same Monero wallet. And that was infecting people in South Korea. Combined with that, there have been other attacks that have hacked
into networks to install similar software.
QUEST: So, I'm not really fully understanding what they are doing. Are they mining legitimately like we visited many bitcoin mines over the years,
or are they going in and stealing other people's bitcoins or some nefarious version of all?
DOMAN: Yes, it's all three. So, what we're looking at being sent to that server at a university that may well be legitimate. But then it's also
quite clear it's stuff not hacking into people's machines to mine that Monero. Then as you said, there has always been hacking into exchanges and
things too to steal the coins once they've already been mined. So, all three.
QUEST: When we look at what's happening to cryptocurrencies and the whole blockchain phenomenon, we are struggling to understand, or at least I am,
struggling to understand what people like yourself believe the true role of cryptocurrencies is in the future.
DOMAN: Well, I have a very biased perspective. My job is to look at malware every day. And every day I see more and bitcoin malware. If you
track a graph of the price of bitcoin along with how much malware we see, targeting bitcoin it's almost a direct correlation. But I think other
people --
QUEST: Explain what you mean by that. In terms of the relationship between the malware and the price, or what you're seeing in the bitcoin
market.
DOMAN: Yes. If you draw that graph, they go together. So, the higher the price of bitcoin, the more people move to targeting bitcoin. So, people
that before when everything was ransomware or trying to steal people's banking credentials. Now there mining bitcoin instead or Monero, another
currency. Because there is more money in doing that than before where they were doing things like stealing banking credentials.
QUEST: Good to see you, sir. Thank you for making it understandable and helping me follow through. I appreciate it.
DOMAN: Thank you.
QUEST: As we continue tonight on QUEST MEANS BUSINESS, from the boardroom to the red carpet. You followed the debate over gender equality. For
women in the developing world, the fight to be treated as equals is every bit as real. And their stories are perps maybe even more inspiring. CNN
is partnering with the European Journalism Center over the coming year. Together we're going to show you the challenges these women face. Whether
it's the classroom or the workplace, think of it in politics or in healthcare. We're going to see what's being done to bring down barriers
wherever they exist. And you can, of course, read more about it and join in. Log on to CNN.com/AsEquals where you'll find out more.
[16:25:00] When we continue after this short break in the news headlines, Ford brought the car to everyday driver. Any color, as long as it's black.
Now city streets are jammed, and the Ford chief executive says he has a solution. His first TV interview as chief executive, next. QUEST MEANS
BUSINESS.
(COMMERCIAL BREAK)
[16:27:39] QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in a moment. When Ford's chief executive, in an exclusive
interview, tells us how the company will build smart cities of the future. And a new name on the top best-sellers list. Jeff Bezos becomes the
richest man in history. As we continue tonight, this is CNN, and on this network, the facts always come first.
Breitbart News has just put up a story confirming that Steve Bannon has left. He has departed from the news site where he served as executive
chairman since 2012. The story says Bannon and Breitbart will work on an orderly transition.
The U.S. State Department says it welcomes the two Koreas talks on ensuring a successful Winter Olympics. A spokeswoman says U.S. and South Korea
won't stop their campaign of maximum pressure on Pyongyang. North Korea says it will send a delegation to the games, and has agreed more talks, and
says it won't discuss the nuclear program.
The head of Tunisia's General Labor Union is demanding an exceptional increase to the minimum wage. Following days of protest that erupted in
several towns in the country against the high cost of living and taxes. State media says at least one person has been killed when clashes broke out
between protesters and security forces.
The relationship between technology, communications and the automobile industry has become ever closer. And you need to see it no further than
the example of this company. Brought us the assembly line, the Ford Motor Company of Dearborn, Michigan.
Ford's chief executive, the new chief exec, says he wants to he wants to change how our cities work. Jim Hackett spoke exclusively to CNN in his
first broadcast interview as chief exec.
[16:30:00] Until now, Ford has focused on getting autonomous cars on the road, and doing so. And it's been creating safe self-driving technology.
To do that, you have to build trust in the technology that is embedded within the automobiles and you have to create a viable business model.
Working with Lyft and delivery services like Postmates. This year, the three parts come together, and Ford wants to end congestion, calling for
shared networks of vehicles for all types of people and their businesses. It will have a dramatic effect on our cities and on Ford's business model.
Ford's chief executive is Jim Hackett. He told Samuel Burke the switchover, it is connected cars, it is coming sooner than we think.
(BEGIN VIDEOTAPE)
JIM HACKETT, CEO, FORD MOTO COMPANY: I want to take you back in history. You know, the computer was never just about the computer. It also was
about the networks and the software. In other words, the whole system that came around it. The vehicles are going to be the same way. So, our
opportunity is making these really smart vehicles, and also the follow-on services that will be counter cyclical. That won't die down in a
recession.
SAMUEL BURKE, CNN MONEY TECH CORRESPONDENT: So, walk me through some of those services. Does that mean you are going to be installing WIFI on
stoplights, so they can talk to your cars? What does it mean exactly?
HACKETT: An early example that we know is super popular, is vehicle can find parking spaces. You know, you lose more fuel efficiency trying to
find a parking place than you do just being stuck on a freeway. So, the potential in the future is the parking spot is letting the vehicles know
it's available. And they're communicating. In fact, there's no meter maid in the future, because technology is taking care of the time that you're in
the spot if you have to pay for it
BURKE: So, are you going to make those sensors and sell them to people, to cities?
HACKETT: The partnership here is that cities need our help in designing the relationship, the vehicle to those environments. The city will own a
big part of the revenue. But they don't have some of the costs they have today. So, they enjoy a partnership with us for that reason. Ford would
profit in a relationship like that.
BURKE: You have just announced a partnership among many partnerships with Qualcomm, for instance. Talking about cell signals with cars. So, what's
going to come out of that type of partnership, and is cell signal really the future for cars?
HACKETT: So, the challenge in the design of the system in the past was your vehicle could only see itself, and it was from the driver's
perspective. So, if you were in a traffic jam, you couldn't ask the cars five vehicles in front of you what was happening. In the future, very
soon, the vehicles are in network, and they're communicating back and forth.
BURKE: How soon?
HACKETT: Well, that's stuff coming, with the announcement with Qualcomm. We're working on ideas as we speak. Things are being tested in markets.
There are some regulatory endorsements we need. But much sooner than you might think.
BURKE: Do you see yourself becoming a company that makes a majority of its money or a plurality of its money from those type services, or do you think
your core revenue will always be self-driving cars, like the ones behind you?
HACKETT: Well, you know, I get up every day as a mustang owner, and get in that car and feel the power of that -- the noise, the thrust. That's a
passion for vehicles that Ford is always going to kind of lean towards. We love the fact that people love our vehicles. This other side, the fact
that we now have this vehicle in a bigger system, promises for us that the vehicle is going to perform better. Because the system is smarter. And
the opportunity for profit is outside now just the vehicle sold.
BURKE: But more money from cars, or more money from the kind of cloud around the cars?
HACKETT: Well, I think it's probably equal.
BURKE: Yes? 50/50.
HACKETT: And all the projections we have done. One thing I have seen is that some people estimate this living street idea that we're announcing
today could be over $10 trillion. And that's because the operating system in the cities for transportation gets so big.
BURKE: It's interesting. Your predecessor was a very successful guy. Many people liked him. They thought he was a good businessman. You were
brought in after a rather short tenure from your predecessor to be the guy who makes Ford into a company? Is that a fair way to describe your
entrance?
HACKETT: Yes. Mark Fields had a lot of impact on me. He was an exceptionally great executive. He could execute really difficult things.
I think what I bring is that in the industry I came from, it found itself where the technology had been feathered but eventually, the technology was
driving the way work was done when I ran Steelcase. In the future, the technology in the transportation systems and the vehicles are going to be
so closely matched, that it becomes a new design problem. And that's where I have expertise, and I think why I was asked to be brought in.
BURKE: So, who becomes your biggest competitor then? Is it the tech companies? Is it a new tech car company like Tesla? Is that who see as
the main competition going forward?
[16:35:00] HACKETT: The way I think about competition, this is a great news moment. We don't have to see this future I'm describing to anybody.
Because everyone has only had a portion of the system's problem, the tech companies have had communication protocols or the software. The car
companies have had the vehicles.
Which, by the way, are really complex machines. A lot of tech companies that announced they were going to make cars have backed out of it. So, the
challenge is, the system's integration. That's something I think we have as big an opportunity as anyone.
BURKE: Look at the ecosystem right now, of all the companies involved in self-driving cars, I see a lot of partnerships. A whole lot. I would even
venture to call you guys promiscuous. Are you just trying to partner with everybody that you can right now? I mean, you're partnering with Dominos,
for instance. Is it just, say, hey, let's try and do as much as we can and see what sticks?
HACKETT: Well, the evolution of the object of the vehicle and the system that it works in means that you need lots of partnerships to buy in the
open nature. This is actually an open system, won't be owned by Ford. We have made early seed investments that are really special in this area to
create the capability. But the partners, they want to profit and benefit from this new technology I mean, this is unlike any time in history,
Samuel, where this technology will change business models.
BURKE: So, you're talking about a business model. I see this car right behind you which is in a partnership with Domino's pizza. Are you
partnering with them because you're worried that people won't be buying cars, individuals so it will be a Domino's Pizza Ford Car that goes around
24 hours a day, so those are the type of partnerships you need to build to replace an average joe like me buying a car?
HACKETT: When we went to Domino's, Patrick Doyle has done a tremendous job with that company. It's a tech company unto itself, not a pizza company.
And we found this interesting fact. In analog world the pizza is in a vehicle being driven by people. And we know how big that number is. They
are able to monitor that. And we said what if we use robotic capability? Could we now bring to customers that we couldn't have before? The
opportunities are really extraordinary. So, Ford and Domino's have gone to the next stage of this, and they'll be making announcements in other
markets of big ideas that we have together. We have some cool insights. We found out that people really rather get their pizza from the car rather
than somebody hand it to them.
BURKE: Even people who live in high-rise buildings?
HACKETT: Yes. They found they would rather come down and not have to put their shoes on, because they you know, they're on, so to speak, with
somebody they don't know. The vehicle they don't care about. They don't have to interact with it, other than to say give me my pizza.
BURKE: And the same type of partnership, in a way, with Postmates is a delivery company. So again, you're trying to see just what's going around
24 hours a day instead of the human driver, the human client of yours, consumer?
HACKETT: Some of the partners might seem oblique is because you've got to think about the nature of the way goods are moved today and how dependent
they are on the capacity of a vehicle to get it where it needs to go. In fact, they sit in piles. If you're an object to be delivered, you sit in a
pile waiting to be moved. That's the bane of their existence. It's called dwell time. In the future, these kinds of systems will move goods
continuously. Really, they don't have to rest. Because the object of the robotic technology is to get the product fulfilled to its customers. Any
kind of transaction that involves logistics is a market opportunity for us. As partners.
(END OF VIDEOTAPE)
QUEST: See more from Jim Hackett on tomorrow night's program. And later tonight I will be speaking to the chief executive of Harmon which unveiled
its own smart cockpit for cars at CES.
More on breaking news. Breitbart's news just put up a story confirming Steve Bannon has left the building, so to speak. Our senior media
correspondent, Brian Stelter is with me. Pushed?
BRAIN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Pushed pretty hard in the last few days as a result of what he said to Michael Wolff in the book
"Fire and Fury." Those quotes came out one week ago. Bannon was quoted saying the president
acts like a child, quoted saying Don Junior behaved in a treasonous way.
He was quoted tearing down Ivanka Trump and Jared Kushner. The quotes were stunning, and they caused the split with the White House that was
unrepairable. 24 hours ago, the White House said there is no way back for Bannon. And behind the scenes, there were conversations with the Breitbart
board with his financial backers, the Mercers. It was made clear Bannon had to go, and now it's being announced as this smooth transition. But
make no mistake, he's been pushed out of Breitbart.
QUEST: But Bannon arguably and correct me and jump in, is the true conservative of the ultra-right.
STELTER: He is the nationalist. He the true believer, yes. He believes that Trump is just an imperfect vessel for his nationalist views. And
frankly he thinks Trump probably isn't going to work out, so I have to go off on my own.
[16:40:00] QUEST: Has he brought the house down around his ears and whilst there may be no way back for him with Donald Trump and this White House, I
mean, what's left for Steve Bannon with the alt-right, far right conservative movement?
STELTER: The spin for Bannon, the positive case for Bannon is he's going to devote himself to the movement, to politics, to recruiting candidates
and helping them win elections. We all remember Alabama, where despite Bannon helping Roy Moore. We can't underestimate what a fall this is for
Steve Bannon. A year ago, he was the incoming chief strategist to the President of the United States as Trump was about to take office.
And over the summer, he has to leave when John Kelly takes over. He goes back to Breitbart. That was a demotion, but at least he was still running
the website. Now here we are in January, only a week into the new year. He's been forced out of the job. At least the proximate cause, because he
was really, really honest with a reporter.
QUEST: Is it Teflon Trump? Whatever he seemingly does, it doesn't stick. In the sense that you know, the book excoriates executive time, makes him
seem to be lazy. He plays golf. Having criticized President Obama, the trouble is therefore more it. He makes more time off than his
predecessors. He has insulted allies. And as I see it, like today, he holds a news conference that we put 50 minutes of him and his cabinet
meeting.
STELTER: Trump has a connection to his audience. That is sometimes underestimated. A connection to his fans to his base of supporters. That
it is so much bigger it supersedes any concern about how much time he's watching cable news or whether his tweets are unhinged.
Steve Bannon thought he was bigger than Trump. The book "Fire and Fury" makes that clear. Bannon thought he was going to real president and Trump
was going to be the figure head. But the reality is, and I think Trump is and I think Breitbart editors know this, Trump is the person that has the
connection to the base. And that so far has been an unshakable connection.
As for Steve Bannon, what's he to do? Launch a new website. Currently the reporting is he's going to focus on politics. But he is in a much, much
weaker position than he was just a week ago.
QUEST: Good to see you, sir. I appreciate it. Thank you, as always. As we come back, nobody has ever been richer, nobody than Jeff Bezos is now.
And in doing so, he changed the world in the process of getting insanely rich, more than $105 billion. Imagine that sort of wealth.
(COMMERCIAL BREAK)
[16:45:00] QUEST: Jeff Bezos is now the richest person of all-time, according to Bloomberg. Amazon's booming share price has propelled Bezos'
wealth to $105 billion. It beats the high point of Bill Gate's gates' fortune in 1999. Jeff Bezos launched Amazon from his garage. The online
bookstore that went on to revolutionize online Shopping and then came to move into cloud computing. This was Amazon web
services, first time somebody had done something like this. It's now market leader.
It is relied upon by all sorts of companies from big retailers to start ups. And more recently, Amazon Studios, a major player in the streaming
market, exclusive, expensive shows like "The Grand Tour." And still Bezos continues to fund Blue Origin, which plans to fly tourists into space by
April of next year. So, Brad Stone is the author of "The Everything Store," he joins me now from San Francisco.
Jeff Bezos, I mean -- I remember years ago interviewing him every quarter when Amazon had results. Every quarter. Without fail. And he would say -
- I would ask about profitability. He would say it will all happen in time. It would all happen in time. Stop being so short-sighted, Richard,
he would say to me. But he has done it. I mean, it's extraordinary.
BRAD STONE, AUTHOR, "THE EVERYTHING STORE": Well, one thing he hasn't done, Richard, is continue to come on TV and talk about his quarterly
earnings. He's almost invisible these days. But, yes, you're right. And that fortune keeps growing. And look, I mean, you know, retail in the U.S.
in particular is, you know, flat, growing single digits at best. People know that every time they go to the local mall. E-commerce, maybe 14, 15
percent annual growth.
Amazon is a company with a 24, 25 percent growth rate. So, it is vacuuming up market share in its core business from other parts of retail. You know,
people are drawn to the selection and ease of use. So, it's still a small minnow in the overall retail pie, but continues to grow. So, what's scary
is that he's probably going to get even wealthier.
QUEST: OK. I don't for a moment think that it is the money that is driving him any more than I suspect you would agree with me. However, when
you look at the range of things that he's done with the money, the space adventures, the movie studios, on his private fortune, "The Washington
Post," give me an understanding of the man of what his goal and ambition is.
STONE: I think he's empire-building. I think he wants Amazon to be a historic company that is seen as changing the rules of business. And so,
he talks in terms of having three pillars for the Amazon business. One is Amazon Prime. One is the marketplace, where small businesses can sell on
Amazon and the third is AWS. He focuses on and what constantly talks about is adding more pillars. And so, you have Amazon Studios as you mentioned.
Now, the Alexa business, which is basically creating voice computing, everywhere is another area focus. And Amazon is also building an
advertising business. So, you look around and you see Jeff investing his time and his resources in building new things. So, he is an inventor. But
I think, you know, he sees Amazon in historic terms. And, you know, not building size for size sake, but I think he's trying to build Amazon into
the kind of company that perhaps we haven't even seen in the history of business.
QUEST: What is this reticence for interviews and for public speaking? Now, again, I remember Bill Gate in the early years. He was pretty
dreadful at doing interviews. He did them when he had to, and he didn't really enjoy them at the time. But the philanthropy element brought him
out when he realized, if he wanted to advance his agenda, he had to speak out. Bezos doesn't see the need.
STONE: Yes, and the difference is, he's quite good at it. He's probably the savviest and persuasive person to speak on Amazon's behalf. You know I
think that he thinks of his own strategies, his plans as the kind of secret sauce. And he's extremely disciplined. And as a result, when he does talk
he tends to be repetitive, because he's so unwilling to reveal what he's really thinking, planning. But the other thing is back in 2001 when he was
appearing all of the time, he had to convince people that Amazon was a company worth from, and a stock worth buying. So, he doesn't have to do
that anymore. Everyone is already on board.
QUEST: Brad, $105 billion. What would be the first thing you would buy?
STONE: I think you have to start giving it away, and that's actually what's really to come for Jeff, he's tweeted about being more an active
philanthropist. We saw a lot of pressure on Bill Gates 15 years ago to up his philanthropy. Jeff does a lot. He funnels a lot of that money into
his private space company, Blue Origin, but he hasn't had the impact of Bill Gates or John Rockefeller really great philanthropists in the past, so
that is his next act.
[16:50:00] QUEST: Thank you, good to see you, sir. I appreciate your time. As we continue to car cockpit from the future was unveiled today,
the chief executive from Harmon on his big announcement at CES. It's "QUEST MEANS BUSINESS," live from New York.
(COMMERCIAL BREAK)
QUEST: Earlier we told you about Ford's plans to expand their self-driving car technology. Now a company owned by Samsung technology unveiled its own
autonomous technology, a smart cockpit with 5-g internet connectivity that you can see here.
The chief executive of Harmon is Harman is Dinesh Paliwal and joins me from Las Vegas. All of this technology requires 5-g. But what are going to
enable me to do?
DINESH PALIWAL, CEO, HARMON: Well, Richard, I am glad you asked that because, look, we are at the forefront of so much explosion in technology.
At the same time, we all suffer, whether at home or in the car, that we are buffering, we are not able to get in a bandwidth. The pipes are not big
enough. So 5g, simply put, is 100 times faster than the current 4g and LTE.
And that's the essential building block for autonomous or highly automated driving. We have a lot of data coming out of the sensors, the cameras
around the car for the surround view or vehicle-to-vehicle. But we did not have the pipes big enough so 5g is a necessity and I'm very happy we just
launched our first 5g telematics and we have been awarded the world's first award on that, so this is a very important part of the industry.
QUEST: The autonomous vehicle. We're seeing more and more. This is clearly the future. I wonder, when do you think, sir, it becomes the norm?
PALIWAL: So, this is a journey, the way I see it, we have technology available today in a controlled environment. We could have cars driven
autonomously. However, for the real-world application we are sometime away. So, the will that be lots of incremental and exponential development
happening like here at Samsung Harmon we just launched driveline which is the first open architecture autonomous platform.
That means is bringing a lot of inputs from front facing and rear cameras and the lidar and other sensors, in analyzing it. And with 5g, with Ota,
over the update from the cloud and cyber security. These are the building blocks coming together to allow automation, eventually leading up to fully
autonomous commercial applications.
QUEST: OK. But this issue of security. Last night we had the chief executive of blackberry on program, this issue of security has not been
solved yet, has it?
[16:25:00] PALIWAL: It has not been solved. I'm glad you are raising that issue.
So publicly we need to talk about. Because we talk about connectivity, but we seldom talk about cybersecurity, in the throat of unintended intruders
coming in. So that is the one area where we have a lot of work to do, and we had Harmon actually for even Samsung acquisitions, invested in Israeli
and American companies for cybersecurity. And right now, we have 30 million cars on the road which are utilizing this technology.
QUEST: Good to see you, Sir. Congratulations. Thank you for joining us from CES.
PALIWAL: Great. Thank you.
QUEST: Let me remind you, before we finish tonight, all three major indices rose to records, the Dow, S&P and Nasdaq. For the S&P and Nasdaq,
it was the sixth consecutive day of records.
We will take a short break. And have a Profitable Moment on the other side.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment. Klaus Schwab and those WEF must be absolutely beside themselves with the announcement tonight that Donald
Trump and half the cabinet are going to the World Economic Forum in two weeks. So, what to make of it? Having called that because those who go
there, or Steve Bannon did, the gutless elite. Now he is joining them. Is that what has happened? Is this the final sand in the eye for Steve
Bannon? I don't think so. Not a bit of it. This is Donald Trump's victory lap. He goes to Davos and it is a version that they did at the
United Nations of America first. We don't care if you don't like it this is what we are going to do. Oh, and by the way, I won. That is what this
is going to be about in Davos. Come with us, follow us, do what you like, but the rules have changed with regard to the United States. That is what
is going to tell them in Davos. Watch my words.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead I hope it's profitable.
END
