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Quest Means Business
Kate Spade Is Found Dead; Tim Cook Talks About How Apple Can Navigate The Scandals Plaguing The Tech Industry; Britain's Heathrow Airport Is Being Shown A Brexit Lifeline With A Promise Of Greater Capacity For Exports And Passenger Numbers After Britain Quits The E.U.; Chief Executive Of South African Airways Says He Really Thinks It Will Be Different This Time As He Launches Yet Another Plan To Keep The Carrier Afloat; Fashion Designer Kate Spade Found Dead in Apparent Suicide; Pope Francis Offers Prayers and Condolences to Victims of Guatemala Volcano Eruption; Weinstein Pleads Not Guilty to Rape Charges; Legendary Ad Agency Ogilvy Rebrands and Restructures; Comments By Qatar Airways CEO Spark Aviation Gender Debate; Shareholders Pressure Tesla CEO Elon Musk; Malaysia's Central Bank Governor Offered to Resign; Toshiba to Sell PC Business to Sharp for $36 Million; White House Asks U.S. Airlines to Ignore Beijing's Demands. Aired: 4-5p ET
Aired June 05, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA NEWTON, CNN CORRESPONDENT: You could see the round of applause for the NASDAQ, the Dow is actually off, but that NASDAQ hit another all-time
high. It's Tuesday, the 5th of June.
Tonight, farewell to a fashion icon. Kate Spade is found dead. She was 55. Apple's Tim Cook tells us why his company does think a little
differently, and sorry, Elon, more questions are coming your way because the shareholders are about to grill their CEO. I am Paula Newton and this
is "Quest Means Business."
OK, we have an hour ahead, chockfull of chief executives. I'll speak to the Heathrow CEO after it finally got approval for that new runway. The
South African Airways CEO tells us why can turn his airline around and the CEO of Ogilvy will be with me right here in the C suit live to talk about
his own revamp branding.
We begin tonight though with some sad news from New York. Tonight, the world of fashion is in mourning after the death of superstar designer, Kate
Spade. Spade, a mainstay of the fashion world for absolute decades was found dead today in her New York apartment. She was 55 years old. Police
are calling it an apparent suicide.
Now, the groundbreaking designer opened her first hand bag shop in New York City in 1993. She later branched out into dresses and other accessories.
Katherine, the Duchess of Cambridge wore the latest designs that bore her name, as did countless stars like Taylor Swift, Halle Berry and Sarah
Jessica Parker.
Now, Kate Spade sold her name's sake business in 1999 and is currently owned by the Tapestry Company, that's the same company that owns Coach.
Two years ago, she and her husband help found a new fashion firm though, Francis Valentine. It was named after daughter.
Tyler McCall joins me now. She is the Deputy Editor of "Fashionista." You know, so many things to talk about here in terms of what she represented.
I mean, you guys just a few days ago did a retrospective on how iconic she was and what her designs meant to people.
I know the fashion world is still in shock, but how do you think she will be remembered in terms of her fashion legacy.
TYLER MCCALL, DEPUTY EDITOR, FASHIONISTA: Well, we were talking about it on "Fashionista" today and I think she will be remembered for bringing joy
into the fashion industry. I think that's what her brand was all about really.
NEWTON: And when you say joy, did it have to do with her great designs, her unconventional designs. She was out there. It was in fact
conservative sometimes.
MCCALL: She was out there. Yes, I think it's in her designs. She loved color. She loved print. She didn't shy away from any of that, but also in
her personality. You know, she was kind of an out there person, too, in the best way. And I think that that is what the fashion industry loved
about her.
NEWTON: A lot of changes in the fashion industry since she got into it. I mean, it's interesting Kate Spade, she was still tied so closely to it
because it bore her name, and yet, she didn't really have that much to do with the company. Is that a sign just of these huge conglomerates taking
over the company and the fact that creatively, she just wanted to go another way.
MCCALL: You know, I think that you do have a lot of designers now who sell either part of or whole stakes of their name sake company. I think that
that -- it can just become kind of a big responsibility. Now, you have a designer that is doing at least four collections a year, you know, pre-
collections, in-season collections, and sometimes, I think they are just afraid to pass the torch on and start a new project.
As you said, Francis Valentine, Kate's other brand certainly had the same spirit of Kate Spade that was directed at a different customer. It can
give us a great opportunity for her to kind of reaching new audience.
NEWTON: Yes, and so sad. You know, she was found today. The police department tells us there was a suicide note left. I mean, a lot will be
said in the coming days about how this could happen.
You know, Chelsea Clinton even tweeted that her grandmother gave her, her first Kate Spade bag and that she still has it. In terms of really trying
to capture the essence of a brand, what was it about Kate Spade that people still attach and will continue to attach to her name?
NEWTON: Yes, it's interesting. It's not just Chelsea; I thought so many people in the fashion industry today is saying that the Kate Spade bag was
their first handbag and I think it hits that sweet point of it felt exciting and it felt like you were buying into fashion, but it was
accessible. It wasn't exclusive. It didn't feel snobbish.
And I think that that's really what people loved about the brand.
NEWTON: You know, sadly the fashion industry has had stories like this before whether it has to do with addiction or mental health issues. Is
there something about the fashion industry, or is it just throughout all industry, and it's just something that everyone is coping with in terms of
mental health?
MCCALL: Yes, I think we have a big mental health issue in this country altogether. I think that a lot of industries now are becoming faster
paced. The digital world means that we can be connected all the time, which means, it's hard to feel disconnected even if you go on vacations.
So, I think a lot of people are feeling that kind of pressure right now, and not just within fashion.
NEWTON: Yes, and it's not that anyone can really know at the time, but certainly, she was quite a fashion legacy for everyone around the world.
Thanks so much for coming in. We really appreciate it.
MCCALL: Thank you so much.
NEWTON: Now, Apple's CEO, Tim Cook takes aim at his company's --
[16:05:16]
NEWTON: -- rivals in an exclusive television interview and tells CNN how Apple can navigate the scandals plaguing the tech industry. Now, it comes
as the darling of Silicon Valley pushes closer to $1 trillion -- with a T - - dollar valuation. First, Tim Cook says the company is focused on humanity from LGBT civil rights to "very open immigration policies."
Cook says Apple's DNA is to try and "change the world." Chief among those rights is privacy. Cook tells CNN, "It is a fundamental human right." The
firm just unveiled more privacy options for its web browser, Safari.
Plus the firm is trying to stop smart phone addiction. We were just talking about that, a new feature monitors and limits how much time we
spend on our devices. Cook himself says he was picking up his iPhone way too much. Yes, surprise, surprise.
Now, the Apple Chief Executive spoke to our Laurie Segall from the company's annual conference in San Jose, California.
(START VIDEO TAPE)
TIM COOK, CHIEF EXECUTIVE, APPLE: We have never been focused on usage as a key parameter. We want people to be incredibly satisfied and empowered by
our -- the devices that we ship, but we've never wanted people to spend a lot of time on them or all of their time on them.
And yes, it's a personal thing as to how much is too much. We thought a lot about this and we are rolling out great tools to both make people aware
of how much time they are spending, and the apps that they are spending them in, but also how many times they pick up their phone, how many
notifications they get, who is sending them the notifications -- all of these kind of information.
I think, you know, empowering people with the facts or will allow them to decide themselves how they want to come back or if they want to come back.
LAURIE SEGALL, CNN CORRESPONDENT: So, how about you? Do you use this feature? It's caught how many times you use this feature, so tell me about
your own tech habits? Were you alarmed?
COOK: Yes, I have been using it and I have to tell you, I thought I was fairly disciplined about this and I was wrong. When I began to get the
data, I found I was spending a lot more time than I should.
SEGALL: Like where?
COOK: Well, I don't want to give you all the apps, but just too much, and the number of times I had picked up the phone were too many. I also found
that the number of notifications I was getting just didn't make sense anymore.
You know notifications started out to be something to tell you about something really important happening, and all too often, now it is like
everything is important and so I think these tools, everybody should decide for themselves, you know, we're not forcing our view on anyone. We are
giving people the data and I hope that people really spend time looking at it.
We are building it into the operating system, so it's simple. You don't even need to download an app, you just need to open it and look at it.
SEGALL: I mean, when did you start designing -- when did you realize that the smart phone, that the iPhone had become more addictive than maybe you
guys had planned for? When did you start designing these features?
COOK: Well, we started with parental controls when we launched the App Store, and so this is not a new focus of ours. We have been focused since
2008 and it's not so much the device, I don't think is addictive in and of itself, it's what you do on it. It's the -- these notifications that you
are getting, the number that you are getting, the amount of time you are spending in certain apps.
And whether the word is addiction or not, I don't know. I am not a clinical expert to tell you that, but I do know that a lot of people are
very worried about how much time even they are personally spending or their kids are spending and we wanted to give them the tools to both show them
the facts, and then some tools to limit.
So, you can set a limit. You can set your budget, just like you might set a financial budget, how much time you want to spend in this app. And once
you hit it, you have to decide to give yourself more time and it forces you to make a decision and I think this is a wonderful thing for people.
SEGALL: I know you have always been interested in tech and humanity and ethics, it certainly seems -- I know you guys have always had parental
controls. It certainly seems like there is a very specific moment in time right now where we were all rah-rah tech for so long, and then you see
everything that has happened in the last year whether it is the weaponization of platforms, you know, it is privacy issues and we are all
kind of scratching our heads and then we talk about addiction and you know, what is this doing to mental health.
Do you feel an ethical obligation now?
COOK: Well, yes, and -- but keep in mind of what Apple has always been about.
[16:10:03]
COOK: Apple has always been standing at the intersection of technology and the humanities, so we have always infused humanity into our products. We
think deeply about what they can they be used for, how there might be some unexpected consequences, and try to do things with them, and to both
prevent them but also allow the great things that can occur.
And so, we have never been not focused on that. It's a constant focus and you know, I think we made another contribution today, but it's alongside of
many others that have been made over the years.
SEGALL: You see Apple making these decisions, you know, based on -- that this is impacting us. Do you think that tech companies are in a position
right now where they can self-regulate with some of these more sticky issues?
COOK: Well, that's a big topic. Generally, for me, I am not a big fan of regulation. I think self-regulation is the best, but when it's not
working, and in some cases it is not working, you have to ask yourself so what form of regulation might be good and I think that it's a fair question
that many people are asking at this point.
SEGALL: What kind do you think isn't working?
COOK: Well, I think the privacy thing has gotten totally out of control, and I think most people are not aware of who is tracking them, how much
they are being tracked and sort of the large amounts of detailed data that are out there about them, nor about the companies that possess the data.
(END VIDEO TAPE)
NEWTON: Incredible. Quite a warning there. Our Laurie Segall joins me now from San Jose. Laurie, great interview. I was really intrigued by the
way you questioned him about his own iPhone use because of course, we can all relate to that. How transformative do they really think that is going
to be because I tell you, I don't -- although I am on my phone all the time, I do think about pre and post and to me, post looks a whole lot
better than pre.
SEGALL: Yes, you know, it's funny, there was an app back in the day that let you look at how much time you are spending on your phone. I remember
downloading it seeing that I was spending a horrible amount of time on my phone and then deleting it immediately after because I didn't want to deal
with it.
So, I think it will be interesting to see how this plays out. You know, I think just bringing this kind of dashboard, it also gives you the ability
to set times to have these notifications come up if you have spent too much time or you only have so many minutes left for your daily consumption of
say Instagram.
We will see if that actually hits. I mean, some other interesting things that might work a little bit better, we will see our group notifications,
so think about all the notifications you get on your smart phone. Now, they are going to give you the ability to group them into one and limit
them.
So, I think it's this idea, and this is what I spoke about with Cook. You know, really trying to give users the ability to control their habits. You
know, that's going to be a tough one. I think we are at a certain moment in time where it's really difficult to put down the smart phone. We know
that a lot of these apps have been designed for us who pick them up more.
So, I think this is a really great step in the right direction. It will be interesting though to see how much works, what doesn't work and how much
data are actually collecting even more data on that, but a lot of it. That's something to think about as well, Paula.
NEWTON: Oh, yes absolutely sobering. Great interview, Laurie. We are going to be talking about this for weeks and months to come, really
appreciate you being out there. Thanks, Laurie.
Now, in case you were wondering, Apple shares did go up on Tuesday about three quarters of 1%, no it is in fact close, yet to that trillion dollar
valuation. Now, in the meantime, we told you that the Dow was flat. The Dow was down, sorry, pretty much most of the day. The S&P is flat. Both
had a fairly rocky section. You know who you can't count out, you can't count out the NASDAQ, so believe it or not, a gain of about a third. We
are at 17 -- the producers don't like me doing this, but come on. This is much more effective than rubbing anything out.
We are up -- get this -- 11% on the year. It hasn't suffered that NASDAQ from the trade here, sorry that have plagued both the Dow and the S&P.
Another stock we've been following closely, Starbucks.
Now, it closed more than 2% lower and that's because its outgoing Executive Chairman Howard Schultz now is talking about leaving. He will leave his
position and perhaps, go into public service, maybe even the White House. Take a listen.
(START VIDEO CLIP)
HOWARD SCHULTZ, CEO, STARBUCKS: President Trump has given license to the fact that someone who is not a politician could potentially run for the
Presidency. Whether or not that has anything to do with me remains to be seen.
(END VIDEO CLIP)
NEWTON: Our Rebecca Berg is following the story from Washington. Yes, Rebecca we are already talking about 2020. You know he did quite an
extended interview today on CNBC and in that extended interview, I was surprised kind of how much at times, he almost sounded like a Republican,
various interests and really concerned about entitlements and the debt.
REBECCA BERG, CNN CORRESPONDENT: Absolutely. Howard Schultz sounding a lot like a moderate Democrat, very business oriented, policy platform that
he is starting to test the waters for, and if we --
[16:15:16]
BERG: -- would expect given his business background, that he would want to focus on the policy issues that he is familiar with, that he cares the
most about, but certainly raising the question about how he could potentially fit into a Democratic presidential primary, especially in a
year and elections like when Democrats are so energized by the Trump White House, by running against Trump and also, by progressive candidates. You
see candidates like -- potential candidates like Bernie Sanders, Elizabeth Warren really running to the left on a lot of these issues.
Anti-big business, anti-big banks, and you wonder where would someone like Howard Schultz fit in a Democratic primary in a field like that. Also,
when you look at party primaries typically in the United States, you tend to see some of the more extreme candidates come out on top.
Now, that's not always the case, Donald Trump ran really as a moderate, not even as an ideological Republican at all in his Republican primary and on
the strength of his name ID was able to do very well, nevertheless. But Howard Schultz does not have that same name ID even though he is Chairman
of Starbucks.
People know the name Starbucks, they don't yet know the name Howard Schultz. So, he has a lot of work to do in that respect.
NEWTON: Yes, and that is a really good point, Rebecca in terms of recognition. It is in Donald Trump's name recognition. I mean, you can
kind of see every Presidential election now being a bit of a clean slate with all the parties. How are Democrats do you think are going to react to
this? I mean, you talked about the people that we are expecting to show up for the Democratic Party in 2020 and how they really have pitched
themselves, so will this pull them ever so slightly more at the center?
BERG: Well, we will have to wait and see how much traction does someone like Howard Schultz gain. If he does gain a great deal of traction in the
field, we might see other candidates adjust, but what I have been hearing consistently from Democrats regarding the parties potential 2020
Presidential field is that they feel it is the more the merrier that there should not be a limit to how many people run that the more diversity that
the party can show through its Presidential field, the better.
And then, they can duke it out and may the best man win. Now, it is going to be a challenge for someone like Howard Schultz potentially to compete
with someone, let's say like Joe Biden who is running more as a moderate, someone who could appeal to blue collar Democrats, but who has that name
recognition, who has a political reputation that he has already staked out.
So, it is a challenge for the newcomers if you have someone like that running, but with potentially as many as 20 maybe more candidates. It
could be a free for all as well, and that's why you have people like Howard Schultz taking a serious look at it.
NEWTON: And there it is, folks. Your 2020 primer in the middle of 2018. Thank you to Rebecca Berg. Appreciate.
BERG: It's never too early.
NEWTON: It's going to be a long campaign, Rebecca. Thanks so much. Appreciate it. Britain's Heathrow Airport is being shown a Brexit lifeline
with a promise of greater capacity for you guessed it, exports and passenger numbers after Britain quits the EU. You will hear from the CEO,
up next.
[16:20:00]
NEWTON: You know, one of the biggest delays in aviation has been that extra runway for Heathrow. I know you feel like we have been talking about
it forever, and well, guess what? We have been, clearly. Even way back in the 1940's, the illustrated London news proposed nine runways.
Today, the UK government is finally backing an expansion plan despite those environmental concerns saying it will help Britain remain connected as it
leaves the European Union. Now, Parliament will vote on it in the coming weeks.
Earlier, Heathrow's CEO John Holland-Kaye told me it is crucial for Britain as a whole.
(START VIDEO TAPE)
JOHN HOLLAND-KAYE: This is a great day for the UK, finally by the government making this decision for Heathrow expansion, it means that all
of the communities in the UK can be connected through Heathrow through every growing market in the world, and including in North America. We have
plenty of cities in North America that we need to be connected to in the US that we are not currently connected to.
And by expanding Heathrow, we will have the capacity to be able to do exactly that and that will help to keep Britain as one of the world's great
trading nations by giving us those trading links to get our exports all over the world, but also to help in with investors and tourists and
students to come and study here and boost the UK economy.
NEWTON: Now, to infer what you said implicitly and what Theresa May's office has said exclusively, you got that runway because Britain voted for
Brexit. Is that really the economic underpinnings where you want this runway to go forward given the fact that economically, it could be
unimaginative and you know certainly, the environmentalists, they are saying, it is not the place to put another runway in Britain.
HOLLAND-KAYE: Heathrow was always the right solution even before the Brexit vote. The Independent Airports Commission set up with cross party
support in the UK had already decided that Heathrow's northwest runway was the right solution, not just for the economy, but had the right package of
environmental measures to mean that we didn't have to make a choice between the economy and the environment, we could do both and that's exactly what
the government has backed today, and we are just going to get on and make sure that we deliver that as quickly as possible to keep Britain as one of
the world's great trading nations.
NETWON: And on the back of that, do you believe you will get full approval for this?
HOLLAND-KAYE: Absolutely. We have good cross party support for Heathrow expansion. You will know that the two major parties, the conservatives and
the labor party have both been discussing this for some time. This is a labor policy. It was actually backed by labor 10 years ago. The
conservatives then became the government and overturned that decision, but now, they are backing it also.
We also have support from Scotland and Northern Ireland from their parties. So, we have good cross party support. Of course, there are still some
people who are still determined that it is not the right answer. Many of whom made their minds up even before the Independent Airports Commission
looked at all the facts. We have a good plan here. It's the right thing for the UK, and now, we can get on with confidence and make it happen.
NEWTON: And how integral do you think it will be in a post Brexit Britain to have that runway?
HOLLAND-KAYE: Well, it's vital for the future of the UK economy. It was vital even without the Brexit vote, but of course, once we have decided
that we are going to seek to build our economy by looking beyond the European Union, it becomes even more vital. Heathrow provides those
trading links for Britain with all the growing markets in the world. In North America, in Africa, in Asia, it's only through a hard airport like
Heathrow that you can get your people and your goods to those kinds of markets.
And yet, Heathrow has been at capacity as you may know for the last 10 years, holding back the UK economy. Now, finally, with this decision we
can make Heathrow once more the best connected airport in the world, and Britain, the best connecting country in the world.
(END VIDEO TAPE)
NEWTON: OK, and we will wait to see if that all goes through in July. Now, still in London, the FTSE fell from a two-week high. Shares in the
Royal Bank of Scotland tumbled after the UK government reduced its stake. Downing Street (ph) also go clear 21st Century Fox's bid for Sky.
You think it's be over there, it's not. It could trigger now a bidding war between Fox and Comcast who both want the British broadcaster.
The Chief Executive of South African Airways says he really thinks it will be different this time as he launches yet another plan to keep the carrier
afloat. Now, it's been propped up by the government for years and says it still needs more money. Speaking to Richard at the IATA meetings in
Sydney, the CEO says he is not calling it a crisis.
(START VIDEO TAPE)
VUYANI JARANA, CHIEF EXECUTIVE OF SOUTH AFRICAN AIRWAYS: I wouldn't really accept the crisis part because of things inside got into SAA with the
executives and whatnot I brought --
[16:25:15]
JARANA: -- with. We have really started to stabilize the business, really started to implement some of the key strategies. Obviously, when
you have the lenders not being part of your funding structure, that's a sign of crisis, but when we come in and put a very good strategy in place,
that thing can make a big difference.
If you're starting to see everyone rallying then the plan, we are starting to see that operations of the strategy, so I wouldn't say it is a crisis
per se.
RICHARD QUEST, CNN HOST: But you did have -- I mean, before your time, but you did have to be bailed out? Numerous times.
JARANA: Of course. Of course. There has --
QUEST: And there will have to be more bailouts?
JARANA: There has to be more funding of the new plan.
QUEST: You call it funding of new plan, I call it bailout.
JARANA: Fair, but there has to be funding of the new plan because what we have done, we have put together a very strong plan -- turnaround plan with
a break even in three years, and we have presented this to the shareholder, and we said, here is the plan. If you like it, you are going to have to
fund it with a mixed model of both debt, equity and also bringing in a strategy equity partner through investing.
QUEST: What is fundamentally different about your plan over previous plans? Never mind the funding element. In terms of restructuring the
airline, what is different?
JARANA: The key part that we are bringing in to the table today is the willingness to execute the strategy. That's the single biggest thing,
willingness. In the past, there has been a lot of strategies by the SAA, and there has been less willingness to take the hard decisions.
QUEST: I am not being unfair when I am both cynical and skeptical at your ability to succeed. And I am certainly not being rude when I say that, but
I've covered SAA for many years and there have been many, many restructurings and they all end up in a bailout and no appreciable
difference.
JARANA: Well --
QUEST: Why should we believe that you can do it?
JARANA: The plan that we have put in place, it is very clear it defines the funding requirements for the next three years. We are not saying --
QUEST: But why -- no, I understand that, but why should we believe that this time, it will be real?
JARANA: Very strong commercial forecast, great aviation skills bring in teams a very strong change agenda that has been set up and structured and
is more deliberate, so there is evidence of execution. It is all in the execution more than in how the strategy is defined.
QUEST: Is SAA drinking at the last chance saloon? Is this it? I mean, if you can't -- if you can't do it this time, turn off the lights, close up
and let somebody else fly the routes?
JARANA: I think this is the card we play and it's a very strong capability for us.
QUEST: Is this it?
JARANA: My sense is that, perhaps it is. If there is a sense that the team that can do it and the kind of evidence we have put in place in terms
of execution, we have brought skills from across the world to actually support SAA, I mean, Peter Davies is a known aviation expert is with us and
we are doing the best foot forward to actually execute on the strategy.
(END VIDEO TAPE)
NEWTON: Well, you know that Richard is going to hold him to that. Coming up, a comment by the head of Qatar Airways lands -- you can say with a
thud, and sparks an industry wide debate on gender equality. That story and more just ahead on "Quest Means Business."
(COMMERCIAL BREAK)
[16:30:00] NEWTON: Hello, I'm Paula Newton, coming up on the next half an hour of QUEST MEANS BUSINESS, no woman can do his job, it's just too hard.
That's what the head of Qatar Airways is walking back because he did make those comments within minutes, just minutes of becoming IATA's new
chairman. And speaking of tough jobs, Elon Musk has way too much on his plate, the shareholder vote in about an hour from now aims to change that.
First though, these are the top news headlines we're following this hour. Tributes are pouring in for famed fashion designer Kate Spade. Her body
was found today in her apartment in New York, police are calling it an apparent suicide.
The company she founded back in 1993 said in a statement today, "we honor all the beauty she brought into the world." Kate Spade was just 55 years
old. Pope Francis has offered his prayers and condolences to the victims of volcanic eruption in Guatemala.
Entire towns were blanketed by deadly combination of rocks, ash and gases. The president have started to hold funerals for the dozens of people
killed. Harvey Weinstein entered a not guilty plea Tuesday in a New York Supreme Court. The former film mogul is facing two counts of rape and one
charge of criminal sex act, but dozens of women have accused him of sexual misconduct, he's back here in New York on September 20.
Now the name Ogilvy in PR circles is revered as a respected giant in branding. Now, let's look at branding itself after being in the business
for about 70 years this year. And now, its bold new look marks the end of a two-year restructuring plan, the agency's new purpose is simply -- this
is a tag on, to make brands better.
Now, it owns -- it has made so many brands famous, its own brand is famous and it even got a quick mention in Mad Men. Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Advantage.
UNIDENTIFIED MALE: Only if he wrote a book.
UNIDENTIFIED MALE: I got the galleys(ph).
UNIDENTIFIED MALE: I want a code or something.
UNIDENTIFIED MALE: Advertisers are only up there with lawyers, is the most revile, this is not going to help.
UNIDENTIFIED MALE: No, helping.
(END VIDEO CLIP)
NEWTON: Yes, that money can't buy -- mention, is something that might have made it larger -- its larger rival WPP a little bit jealous. John Seifert
is Ogilvy's worldwide chairman and CEO. And he joins me now here in the C- suite. Thanks so much for coming in, totally appreciate it --
JOHN SEIFERT, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, OGILVY: It's a pleasure, thank you.
NEWTON: Seventy this year, I mean, when you think about the things I've seen, right? It's probably one would say in the advertising and the
branding world, you have your new tag line, it took two years of restructuring. How painful was a two years of restructuring and why do you
think it took that long?
SEIFERT: Well, first of all, everybody in our business is going through pain. We have seen unprecedented changes in the marketing and advertising
world. A lot of that is brought on by new technology, the world of social consumers, now empowered to pretty much define brands on their own terms.
So two years in a way is not that much a time because for us, it's been a lot of rewiring of the company, simplifying the company, we had grown up
with too many sub-brands, too many different pieces of the organization competing with each other.
And the fact is, clients today, they want to sit down with a partner, talk about the complexity of their marketing and branding in a far more holistic
and integrated way, and they expect you to come to the table to connect things, not try and sell them individual pieces for your own good.
NEWTON: And we'll talk about that restructuring, you know, branding, marketing, advertising can either be iconic or at times it can just be
tried and useless.
SEIFERT: Yes --
NEWTON: I think so much in the digital world, so many people find it the ladder. In the new environment, how do you make it relevant?
SEIFERT: Well, I think it starts with -- you have to start to shift your thinking, and one aspect of this is you just can't advertise anything
anymore, you can't just assume that by doing a 30-second commercial and telling somebody what you do or how you do it, that that's good enough.
[16:35:00] Consumers have more information than ever, and they know how to figure out what's fact from fiction. And so at the end of the day, you
have to be relevant, you have to be deeply authentic, and you have to be consistent in creating value.
The consumers really judge as worth the dollar they want to pay for it, and that's a challenge.
NEWTON: A challenge it is. I know that you know, the name sake said that the changes are life blood. But at what point does changes become
superfluous in the sense that -- I think you pretty much have to be changing every month in this environment.
SEIFERT: No, I think that's right, and we certainly know that through the entry in a big data, we now have more and more information than we've ever
had. I mean, brands today are literally changing almost every minute.
They have enough information in real time, understanding consumer behavior -- you're on an airplane, you have a bad experience, you're tweeting about
it, you're putting video online, sharing it with your friends.
There's no brand in the world today that can afford to, you know, wait three months or three weeks or three days to respond to the daily, you
know, interaction between themselves and their customers. And so that's a new part of what brand building is all about.
Which is, you know, how effective are you at managing in the real time of consumer life.
NEWTON: There's been a lot of talk, and this has hurt the company as much as it's hurt the brand makers like you about the digital space, and the
fact that whether it's social, Facebook, Google, that they are pretty much monopolizing that ad space.
Do you see that changing or do you just see overly adapting to that?
SEIFERT: I think everybody is going to adapt. I mean, the fact is that they've come in, they've garnered a huge share of spending in a very fast
period of time, they have their own challenges. Issues of transparencies, issues of trust around protecting people's data, protecting the environment
and which advertisers brands show up.
So I think all of us are trying to figure out how to navigate this new reality. At the end of the day, David Ogilvy wrote the book on brands and
he ultimately argued that if you could not trust a brand in all that it does at every point of interaction, at everything that it means to you in
your life, then chances are you're not going to be successful.
And I think we're all trying to figure out in this new digital landscape, how to be trusted and how to be consistent and relevant in every
interaction.
NEWTON: And speaking about when brands do go poorly, I mean, you guys are getting into a new branch of business, you're taking on the consultants
head on, why?
SEIFERT: Well, because the fact is that brands are at the top of CEOs agendas, consultants have long time -- for a long time been at the center
of the CEO's view of strategy and how they go to markets and how they think about their business strategy.
Our view and our consulting offering is we want to be at the conversation where business intersects brand, intersects technology. We're not going to
go build the digital platforms of our largest clients. We're not going to restructure our clients the way a McKenzie(ph) or a Bayne(ph) or someone
like that might.
But when it comes to thinking about how do brands show up? How do you think about new business models in which the brand has to reinvent itself in
terms of setting new expectations with your audience is, we should be part of that conversation.
We know through all of our history what it means to brand a company in that environment and we think we really have a relevant story to tell.
NEWTON: OK, we'll watch your future substantive interest, thank you so much for coming in --
SEIFERT: Thank you, thank you --
NEWTON: It took 70 years to get here, that should -- money you see is much change in the next seven as you saw --
SEIFERT: Thank you --
NEWTON: In the last 70 --
SEIFERT: I agree.
NEWTON: Thanks so much, I appreciate it. Now, as Ogilvy celebrates its own milestone, all this week, we are looking at companies that have been
around, yes, for more than a century, even longer than Ogilvy, the bourbon maker Jim Beam has spent many years working with Ogilvy is the latest
member of our 100 club.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Across the lush blue grass pastures and limestone- bedded forest of central Kentucky, one name reigns supreme.
UNIDENTIFIED FEMALE: Are you not (INAUDIBLE)?
UNIDENTIFIED MALE: Jim Beam.
(LAUGHTER)
FRED NOE, MASTER DISTILLER, JIM BEAM: It's almost like a pilgrimage for some folks who are very loyal fans, come from all over the world to see
where the Jim Beam bourbon is made.
UNIDENTIFIED MALE: Fred Noe is master distiller, for him, bourbon is a family business, and the blood lines trace all the way back to 1795 when
Jacob Beam sold the first barrel.
NOE: You know, Jacob Beam started off making just a little bit of whiskey, maybe one barrel a day if he was lucky. When people meet me, it kind of
amazes them that, you know, I'm the seventh generation of one family that is stuck with one business over 220 years.
Now, eighth, that my son Freddie has come into the business.
FREDDIE NOE, JIM BEAM: Now, growing up, I've walked around these distillery grounds since I was, you know, almost knee high to a duck. The
biggest thing that I've learnt from my dad is that every consumer matters.
NOE: Hey, how are you all?
UNIDENTIFIED MALE: How are you doing?
NOE: I'm good, how're you?
UNIDENTIFIED MALE: I'm good, how're you doing?
NOE: Doing great.
UNIDENTIFIED MALE: Wow --
UNIDENTIFIED MALE: Oh, wow.
UNIDENTIFIED MALE: That's pretty sweet.
UNIDENTIFIED MALE: I'm not going near that knife.
NOE: I think a lot of them are just taken by what our family has done and the legacy and of the yeast that we use for example was started by Jim Beam
right here on this property right up to prohibition.
[16:40:00] UNIDENTIFIED MALE: Unlike their bourbon, that word "prohibition" still sits bitter on the tongue. The constitutional law
banned the production and sale of alcohol in the United States from 1920 to 1933.
NOE: Jim Beam sold that distillery to get away from it. He didn't want to go to jail. He knew people were not going to quit drinking just because
the laws created said you can't drink. And really, the job that kept him alive during prohibition was a limestone rock quarry right here on this
property where we are today.
Beam marked the end of prohibition by rebuilding the family distillery in 1934 and branding it Jim Beam. But it was Fred's father who helped the
family business become what it is today, remaking an entire industry with the launch of Booker's in 1988.
NOE: Bourbon in the '60s was king, and then it went through a big decline. My father, Booker Noe, you know, saw that if we extra age the bourbon and
boiled it maybe higher strength, it might rekindle the fire, one of the bourbon category.
UNIDENTIFIED MALE: Built as America's only native spirit, bourbon is now an $8.5 billion industry in the U.S. state of Kentucky where 95 percent of
the world's bourbon is made, and Jim Beam is the world's biggest bourbon seller.
In 2018, the company filled its 15 million barrels since prohibition.
UNIDENTIFIED MALE: This is awesome, got more(ph) tattoos of friends lying right there.
UNIDENTIFIED MALE: From Jacob and Jim, to Fred and Freddie, the legacy of Beam family bourbon is secure. With each generation etched on the walls
and now the arms of their faithful fans.
NOE: Thanks for coming, cheers!
UNIDENTIFIED MALE: See you(ph) --
NOE: Thanks. Your work, didn't want to be out again?
(END VIDEOTAPE)
NEWTON: OK, we're not sure why he said it, but he said it. Qatar Airways CEO Akbar Al Baker has stirred up quite a controversy when it comes to
diversity in the aviation industry. You don't want to miss what he said walking back.
(COMMERCIAL BREAK)
NEWTON: Quote, "Qatar Airways has to be led by a man, it is a very challenging position", end quote. I have no idea why he said that, but
apparently, it was an off the cuff comment from Qatar CEO Akbar Al Baker and has sparked as you can imagine quite a debate about gender equality in
the airline industry and beyond.
Now, Al Baker's remarks was met with groans of course and boos by people in the audience.
[16:45:00] At the time, it wasn't clear if he was joking, afterwards, he clarified his words, saying again, quote, "while I am known in the media
for some lightheartedness at press conferences, it is crucial that I emphasize the facts as I did today and the importance of women
representatives in the airline industry, Qatar Airways firmly believes in gender equality in the work place and our airline has been a pioneer in
this region in that regard with a female workforce of more than 44 percent.
As I mentioned today, it would be my pleasure if I could help develop a female candidate to be the next CEO of Qatar Airways." And I bet you any
money, you'll be doing that mentoring. Mr. Al Baker is also chairman of IATA Board of Governors this year, just this year.
On that board, there are 31 members of airlines around the world, there are 26 right there, men, and here is a one woman in the shot, there she is --
actually, the board does have two women, they are the CEOs of Air Europa and Flybe.
According to IATA's own figures, the number of female CEOs in every industry is of course terrible, and aviation industry numbers are even
worse. Sandra Navidi is CEO of Beyond Global and author of "Superhubs: How the Financial Elite and the Networks Rule the World."
Sandra, men are still ruling the world according to you, I mean, were you surprised by those comments?
SANDRA NAVIDI, CHIEF EXECUTIVE OFFICER, BEYOND GLOBAL: I was shocked though, I shouldn't have been surprised because I myself have worked in the
financial industry for two decades. I've experienced this kind of (INAUDIBLE) myself, I have witnessed it with regards to other women and
I've done a lot of research on it for my book where I had to at some point explain why I'm only writing about men and why women are completely missing
in action.
NEWTON: Let's talk about the airline industry first. It is one of the most -- it has been historically, one of the most misogynistic and we just
have to start with what they ask and tell quite the things to do.
You tweeted a picture in fact of the fact that, you know, at one time you referred to you had to be single, you had to be attractive, you had to be
skinny.
NAVIDI: Yes, the airline industry has traditionally been rather male on the management level, and it's just a very conservative industry that has
an engineering background, it's pushing boundaries, it's penetrating new territories, it's you know, taming big, beautiful airplanes as Trump
probably would say.
And those -- this is probably associated with male strength and not with female strength. Females are still more seemed as a nurturing, warm and
when they are more assertive, it's seen as aggressive which plays to their disadvantage.
NEWTON: And now what's going to change it?
NAVIDI: I think we need a quota because at the root of the problem is that these networks, these business networks are primarily male and men like to
work with other men who are like them.
And it's harder for women to network because first of all, women are more reluctant to use relationships in business more opportunistically, there
are less established or fewer established networks for women to network and there are fewer mentors for women.
NEWTON: But do you worry that in establishing something like a quota, that things go far beyond what is merit based.
NAVIDI: You know, I don't because we have seen good example in Scandinavia where they have started with a quota -- starting with a quota doesn't mean
we have to use it ad infinitum, but if we just listen to those PR, you know, things that the CEO say, nothing much changes.
And even if we look to Germany, nothing much has changed with regard to board for instance.
NEWTON: You know, he got off easy because he was able to say, well, it was just lighthearted --
NAVIDI: It's always a joke.
NEWTON: Yes, it is always a joke.
NAVIDI: Yes.
NEWTON: Do you think though it was better to hear it from him, just at least we heard, perhaps or even in the back of his mind.
NAVIDI: I think it's very valuable to hear it from the horse's mouth, and in my book, I give the example of Satya Nadella; the CEO of Microsoft who
just a couple of years ago said that women who don't ask for raises create the karma for themselves.
Those are women he trusts, meaning women who are more sort of -- he won't trust, and I think he just had a weak moment where actually said what he
was thinking. And I think these biases are much more prevalent than we'd like to think.
I don't think this is a fight that can be won, I think that it needs to be fought continuously, and politicians, institutions, policies, all these
come into play to try to change this permanently because diversity creates stability in every system and company.
NEWTON: Gosh, and I not only hope the future women leaders of the world are listening, but the future male leaders of the world are listening.
Thanks so much Sandra --
NAVIDI: You're most welcome --
NEWTON: I appreciate you coming, thanks for coming. Fasten your seatbelt, Elon Musk, it is Musk madness we should say. Tougher shareholders are
meeting today in California and yes, things are going to get tensed, stay tuned.
[16:50:00] (COMMERCIAL BREAK)
NEWTON: OK, Tesla's annual shareholder meeting is about to begin in California. Investor groups are demanding action to limit Musk's power
after a chaotic few months for the company. Clare Sebastian joins me now for more.
Clare, you really had -- well, say, figuratively, a front row seat to all the hysterics at Tesla. What do the shareholders want to do?
CLARE SEBASTIAN, CNN CORRESPONDENT: So there are a couple of keys that are on the table that it potentially disrupted, and certainly been getting a
lot of attention in the lead up to this, one is from an activist investor group which was just urging shareholders to vote against three members of
the board that are for re-election including James Murdoch, the CEO of 21st Century "Fox", and including Kimbal Musk who is Elon Musk's brother.
They're arguing that they're too close to Musk, there's no check on his power, there's going to be rubber stumping everything he says. The other
one is a proposal from individual investor to split the roles of the chairman and CEO.
They want an independent director as chairman, i.e. not Elon Musk, who is certainly the chairman. So this is about, you know, really just more
accountability for this company. It's been public for eight years, people are saying it's bold and it needs to be a little more serious about making
a profit.
But it also yields a level of frustration that we've seen towards Elon Musk himself, and that has certainly come to ahead over the last month.
(BEGIN VIDEOTAPE)
SEBASTIAN (voice-over): Well, Elon Musk may got off to an OK start, the modest piece on earnings and then all he had to do was get through a
routine conference call with Wall Street and left.
UNIDENTIFIED MALE: Where specifically will you be in terms of --
ELON MUSK, CHIEF EXECUTIVE OFFICER, TESLA & SPACE X: Excuse me, next --
UNIDENTIFIED MALE: Capital requirement?
MUSK: Next? More about the questions are not cool, next?
NEWTON: Before left, tonight, Wall Street is questioning Elon Musk's leadership at Tesla --
UNIDENTIFIED FEMALE: Was immediate and expensive.
UNIDENTIFIED MALE: I think there was a mystique about Elon Musk and he was this genius, this leader, this generation's version of Thomas Edison, and I
think he showed a side of himself that was disappointing to others who had held them in this light.
SEBASTIAN: Undeterred Musk stepped out a few days later at the Met Gala in New York. And it seems though a shakeup was brewing in the executive team
with rising concerns about Model 3 production targets.
First, Doug Seal(ph); the senior vice president of engineering took a leave of absence, then Matthew Schwarp(ph); the head of sales performance
engineering quits to join self-driving car company Waymo.
And just two days after that, a memo emerged from Musk announcing a quote "threatening at Tesla's management structure." Some worried this was yet
more evidence of Musk taking on too much.
UNIDENTIFIED MALE: It's not just with Tesla, they tucked Solarcity into Tesla's body and then he has Space X and all the other products that he's
going -- that he's involved in.
SEBASTIAN: Musk multi-tasking continued, days later, he was out testing another venture, the boring company and underground mass transit systems
designed to solve L.A.'s traffic problem.
MUSK: If we can ask for your support, that will be great, I really appreciate it.
(LAUGHTER)
SEBASTIAN: In marking Tesla, he also had public support with his procedural (INAUDIBLE) on his mind.
UNIDENTIFIED FEMALE: Elon Musk is trading this fire on the media after some critical coverage after his car company.
SEBASTIAN: Musk promised to create a site where the public can rate the core truth of any article. The name he chose, that of a Soviet newspaper,
Pravda.
UNIDENTIFIED MALE: I think he's falling into the Trumpian negative news he calls straight newspaper.
[16:55:00] SEBASTIAN: It was a manic month that saw Musk lose a consumer report's recommendation for the Model 3 and win it back nine days later.
It saw the stock price whip-sword by the turmoil. Shareholders braced for the wild ride -- continued.
(END VIDEOTAPE)
SEBASTIAN: So reporter -- Elon Musk do it that well a ride as we've had before, as if you don't mind, well, at Tennessee, don't buy the stock.
Serious questions though he's going to be facing, can, may keep ramping up the Model 3 production, and that is crucial and well, they need to raise
money, they're obviously in a cash --
NEWTON: Yes, sometimes wild rides do end in crashes, don't they Clare? Let's wait and see what happens, Clare, thanks so much, love the piece,
appreciate it. Now, as one trading day comes to an end here on Wall Street, another though is just about to begin in Asia, we'll have
developments and investors will be watching as the sun rises -- a minute.
(COMMERCIAL BREAK)
NEWTON: OK, after lackluster day, markets in the U.S. and Europe are closed, much though in Asia open in 3 hours time and here's what you can
expect to drive those markets. Malaysia could announce a new Central Bank Governor in a matter of hours.
Sources tell "Bloomberg" that the current governor, you see him here, offered to resign less than one month after Prime Minister Mahathir Mohamad
took office. Now, the bank is facing questions about the land that it purchased from the previous administration.
Toshiba is selling its PC business to Sharp for just $36 million. Sharp left the PC business eight years ago, it's now owned by Foxconn which
already manufactures PCs under contract.
And the White House is asking U.S. Airlines to refuse Beijing's demand that they explicitly refer to Taiwan as part of China rather than a separate
country. That's according to sources speaking to the FT. Many airlines have already complied with Beijing's demand.
More on those stories in the hour ahead, that is QUEST MEANS BUSINESS, I'm Paula Newton and I'll be here right back here again tomorrow.
END
