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Quest Means Business
Hurricane Florence Intensifies into a Category 4 as it Heads Towards the Carolinas; Swedish Election Deadlock as Far-Right Party Makes Gains; EU, UN Warn of Catastrophe in Syria's Idlib; Chairman of Economic Council of Advisors Says President Trump is Wrong About Jobless Rate; American Blue-Collar Jobs Grow at Best Rate in 30 Years; Dow Slightly Lower Nearing End of Trading Day; Nike Sales Jump After Colin Kaepernick Campaign; Norwegian Airlines Takes on Argentine Carriers; EU's Barnier Sends the Pound Sterling to a Five-Week High on Brexit Deal Hopes. Aired 3- 4p ET
Aired September 10, 2018 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
UNIDENTIFIED MALE: ... no collusion. Was he talking about the 28 million ballots?
SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: I'd have to go back and check and look at that. I didn't see that. I'm sorry.
UNIDENTIFIED MALE: Sarah?
UNIDENTIFIED MALE: The price tag on the Russia investigation? And if so, that's highly inflated.
SANDERS: Again, I'd have to check, Jeff, I'm not sure of that.
UNIDENTIFIED MALE: ... testify or not. If you could just talk about this ...
SANDERS: That's a question I will refer you to outside counsel. Davis?
UNIDENTIFIED MALE: The President is going to Pennsylvania tomorrow, what does he plan to say and what's the (inaudible) this year's 9/11
(inaudible)?
SANDERS: Certainly, the focus will be ...
HALA GORANI, HOST, HALA GORANI TONIGHT: Sarah Sanders there in the briefing room at the White House, saying that no lie detectors are being
talked about as a possibility now to try find to figure out who wrote that anonymous op-ed in the "New York Times." She also criticized Bob Woodward
who wrote of course that book using sources there that were unnamed to describe the situation in the White House that is being described as
chaotic among other things. That's going to do it for "Hala Gorani Tonight." "Quest Means Business" is coming up next.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: It's an hour until the closing bell on Wall Street. The last chance to make your trade. The Dow, the
good gains of the day have evaporated. The good news is the losses are small. Look at the break apart of the Dow. You have the Nike at the top,
you have Boeing towards the bottom. We'll explain why, because let me show you, the market drivers of the day.
CBS is down, Les Moonves is out, the #MeToo Movement hits the C-suite. Alibaba and Snap lose key executives, all changed, but tech. And Nike, I
showed you the shares near the top of the Dow, it's controversial campaign is getting real market results. Live from the world's financial capital on
a rainy day in New York City. It's Monday, it's the 10th of September. I'm Richard Quest. I mean business.
Good evening at a new earlier time, but the same quality program. It's a pivotal moment for the #MeToo Movement and for CBS. The Chief Executive
Les Moonves is leaving the company immediately, pushed out by fresh accusations of sexual assault. Moonves is the first Fortune 500 CEO to be
ousted through the #MeToo era. The controversy isn't over because the details of Moonves' payout is still to be decided. CBS shares have
regained some of the early losses. They are still down for the day, that's partly because with Moonves gone, the battle for control of CBS has come to
an end. Our media correspondent Brian Stelter is following it all.
BRIAN STELTER, MEDIA CORRESPONDENT, CNN: Hello.
QUEST: You've worked in the media business throughout all your professional career, explain.
STELTER: There's never been an earthquake like this. It is as simple as that. We've talked about a lot of #MeToo figures, a lot of men who have
lost their jobs in the past year, but nothing like this, nothing like the Fortune 500 CEO, who vowed to fight on and stayed in the role for six
weeks, but was eventually forced out this time yesterday.
QUEST: Before we talk about the CBS side of the equation. When Weinstein happened and all the #MeToo happened, did Moonves know that - that did you
think that he had this entire smoldering volcano waiting to erupt within ...
STELTER: You just asked me the most interesting question of this story. I believe he did know. I believe he did know he was vulnerable to this and
that makes me wonder something else, did he go picking a fight inside his company on purpose? Did he go trying to fight with his controlling
shareholder, trying to wrest away control of CBS on purpose, to create another story line? Because, really, we have seen the merger of two story
lines here, this tug of war, which he lost to Shari Redstone over the future of CBS, and this #MeToo case.
I wonder if ever the actor, ever the Hollywood star, Moonves went out and tried to make his own story, but no matter what, it ended badly for him.
QUEST: Okay, let's talk about CBS. They've put $120 million into a guarantor trust, he would have gotten $140 million, $20 million will go to
charities or to organizations. But I mean, how does CBS justify not suspending him and then firing him or reinstating if the allegations are
true? Why allow him to resign?
STELTER: I think the answer is that you're talking about a board of directors that was mostly made of up of Moonves' old friends, his pals. He
was essentially running this board. It was mostly elderly, mostly white- man board. That has changed as of Sunday, now there's been a shakeup of the board, but I think a lot of this had to do with Moonves surrounded by
his friends, believing he could get through this.
Eventually, then the law firms came in. Eventually more women came forward. Eventually these negotiations of Redstone continued to progress
and it became in the words of one source, untenable for Moonves to continue.
[15:05:12]
STELTER: But even now, as you said, $120 million still possibly on the table, incredible development.
QUEST: Okay, on that, let's just look at the national amusements - what's the agreement? What is the - have they agreed to do?
STELTER: Everybody agrees to put down the weapons. Everybody has surrendered.
QUEST: So what happens?
STELTER: So now CBS, Redstone tightens her control on the company. This is the Redstone family. Sumner Redstone of course, the owner for a couple
of a decades, now her daughter - Shari - is in charge. Now, going forward, there's talk about a possible CBS-Viacom recombination.
However, I think what's more likely is we're going to see better merge for CBS and this board has reaffirmed the - the phones are open, the lines are
open, call with your offers. I would be surprise if a year or two from now, CBS is not in the hands of either some big tech company or some other
big buyer.
QUEST: Extraordinary developments. Good to see you. Thank you, sir. Good to see you always.
STELTER: Thanks.
QUEST: We're going to continue talking about it. Les Moonves may be gone, the question shareholders and activists want the answer to is how much he
should take with him? As I was just describing, it depends on the outcome of the investigation into his alleged misconduct. Now, the full payout
would be $140 million, of which $20 million would go to organizations to support the #MeToo Movement and Equality for Women in the Workplace.
But as we just said, $120 million is in trust. It would only return to CBS if the board decides that Moonves could be fired for cause. Ronan Farrow
who led the investigative journalism and wrote the original report and the update just over the weekend tell CNN it was the idea that Moonves would
get anything at all that prompted more women to come forward.
(BEGIN VIDEO CLIP)
RONAN FARROW, CONTRIBUTING WRITER, THE NEW YORK TIMES: One of the most important things about this story is, this is the first Fortune 500 CEO to
step down for these reasons in the #MeToo era. This is someone who was supposed to be immune to criticism, that many of these are women stayed
quiet about for years because they thought he had complete impunity.
So, yes, the reluctance of this Board to act and he has a lot of these women, that's troubling. It shows how far we still have to go. But also,
this is a story of how far we have come because no one thought we would be here.
(END VIDEO CLIP)
QUEST: Joining me in the C-Suite is Davia Temin, media reputation strategist. The C-Suite is appropriate for us to talk about these events.
Your study and your research shows the number of CEOs or the number of people accused on what's happened to them.
DAVIA TEMIN, MEDIA REPUTATION STRATEGIST: As of today, it's 700, so Les Moonves makes 700.
QUEST: Seven hundred people accused?
TEMIN: High profile people accused since Weinstein.
QUEST: Right, and what happened to most of them?
TEMIN: Well, most of them have - there was no most. So, a certain percentage, about half have left. About half still remain or they're
continuing to be under investigation. So it's not clear. I think the amount of time that it takes between investigation and final resolution is
shortening now from what it was a year ago.
QUEST: The idea that Les Moonves could walk out the door with more than $100 million, what would you say?
TEMIN: You know, I don't find that the worst thing in the world. I think that he lived a life - I'm not supporting him by any stretch of the
imagination, don't get me wrong. But he lived according to some rules, those rules changed somewhere about a year ago, about two years ago now.
And I am most concerned that he is caught and that he sets a precedent now that others who do this are caught. It's a game change and it's a culture
change.
QUEST: I agree, and if it was a normal job, and we're talking about $100,000.00 which for a top executive is not a fortune, that would be fine,
but we're talking about $100 million. We're talking about life-changing events. All right, he's earned similar amounts. He's earned $20 million
to $30 million for the last 20 years, he's not short of the price of a cup of tea. But it's symbolic.
TEMIN: It's symbolic and it's probably - if they find that there is an investigation that there's real merit to all of this, then it should be.
QUEST: What does it say then that he's been allowed to resign pending an investigation where the up side is vast and the Board is probably in his
favor?
TEMIN: Well, he's been allowed, he's been made to resign, right? So he hasn't been allowed to resign.
QUEST: I'll resign for $100 million.
TEMIN: I would, too, tomorrow. But I think that ht e point is, he has - he has lost all the reputational equity that he ever had. So whatever he
walks away with, he's lost it all.
QUEST: Let's talk on that front. The #MeToo Movement, at some point, there will be - when I say cut off, I don't mean a cut off in terms -
because bad behavior, appalling activities, must always - should always be held to account. But at some stage, people will say, "Okay, he did this,
but he shouldn't be fired."
[15:10:13]
TEMIN: Yes, you know what ...
QUEST: Are not there yet?
TEMIN: No, we are not there yet.
QUEST: And what about Moonves?
TEMIN: No, no. I know. We're not there yet for anyone. We are way far away from that. We are so much at the tip of this iceberg. There is so
much underneath the surface at this point, that there is a long way to go. And I think Boards know that, I think corporate Boards know that. I think
that's why they're so fixed on looking at culture now and toxic culture and all the other stuff because they know what the viability is.
QUEST: What do you think - and this is a sort of a no win question ...
TEMIN: All right.
QUEST: ... for you. What do you think the right way for a Board - I mean, at what point is dismissal the answer for events happening 30 years
ago in a different culture?
TEMIN: That's a hard one. It really is a hard one, but I think that when they come to light that you have to work on the facts that you get and I
think dismissal is appropriate.
QUEST: Let's talk about Serena, let's listen to what she had to say at the Open, after she was fined. She lost and was fined.
(BEGIN VIDEO CLIP)
SERENA WILLIAMS, PROFESIONAL TENNIS PLAYER: I'm here fighting for women's rights and for women's equality and for all kinds of stuff and for me to
say, thief and for him to take a game, it made me feel like it was a sexist remark. I mean, like, he's never took a game from a man because they said
thief. For me, it blows my mind.
The fact that I have to go through this is just an example for the next person that has emotions and that want to express themselves and they want
to be a strong woman and they're going to be allowed to go that because of today, maybe it didn't work out for me, but it's going to work out for the
next person.
(END VIDEO CLIP)
QUEST: Are you with her on that?
TEMIN: I think that rules have to be equal and I think that responses have to be equal and I think that's more unconscious bias is what I think, but I
think that the rules haven't been and they won't be for a long time, but you have to call out what you think is biased, and she's doing it.
QUEST: And it's really maybe not for us to say whether it was or wasn't. I mean, calling the umpire thief is pretty serious stuff in a competition
of a sport or ...
TEMIN: Well, have others, though, called him thief before? That is the question, right? It's got to be equally applied and it hasn't been for so
long, we don't even know what that looks like anymore.
QUEST: Exactly.
TEMIN: Right? So we're finding out though because we're finding out by testing the limits.
QUEST: Great that you came in to help us test them. Please come back again.
TEMIN: Thank you.
QUEST: Thank you. A look at the markets. The Dow is struggling to go green, the S&P and NASDAQ set to snap a four-day streak and tech shares
bouncing back from a rough week.
Actually, you know, I do need to keep reminding myself, and new perhaps, that we are in - I look at those numbers, and I'm so used to it being after
the closing bell. but it's not. We are in the last hour of trade, where the final decisions are made on how the day should end. And to learn the
Dow may be off just a couple of tootling points today. There will be moments where you will truly see the reason and wisdom of why we have come
to you an hour earlier as we consider - continue tonight, no one can shoulder the responsibilities of chairman and CEO forever, sage words from
Jack Ma. He has built a $400 million business from his apartment, and now he's leaving Alibaba.
And get your phones ready. That's mine over there, where is it? It's over there. I'll be asking you to weigh in on Elon Musk's future at Tesla after
he made strange promises and ideas and then smoked a joint on radio.
[15:15:00]
Something completely different, absolutely new, we have never done anything like this before and few would be quite so brave, some might say foolish,
but here on international television, you are going to have a say on what we are doing and it all requires you to get your phone, your tablet, your
computer and whatever electronic device you've got and go to cnn.com/join. Now, as you'll see here from my phone, this is what you see, well that
might be a little bit tricky for you to see. So let me show you over here.
This is the gist of it. You're going to see the question and today's question is Tesla's CEO, Elon Musk is showing and we'll discuss it. We
will show you the results and the percentages of what people believe. Now, the question, and how we're getting to the question, so far, Les Moonves
has been pushed out - that was on top of our program. Jack Ma is leaving while on top, so you have two CEOs going in dignity, grace and delight or
not in the case of Moonves, Jack Ma absolutely, he's going in his own terms.
So, let's put it to the Board members. And you are the Board in this particular case, what should Elon Musk do? What should Tesla do with Elon
Musk? Firstly, they should stay the course with him, stay with it. He should resign or be forced to resign, a bit like Moonves and go off with
all of your stock options and your money, and he should be fired, out the door, out the window because of course of what he did - smoking a joint on
national radio saying, "I'm going to take the company private," and then not finding he couldn't do it. Thirdly, all the other weird and wonderful
eccentric, bizarre things. What should he did? I'll show you the results. cnn.com/join.
From sporty jock to tech billionaire, Jack Ma's remarkable journey as the leader of Alibaba is coming to an end. Next year, he will hand over the
reins to Daniel Zhang - the company's Chief Executive will take over Ma's position as Chairman. Investors don't want to see him go. News of his
retirement on Wall Street put a minor dent into the shares.
Ma's departure comes in a turbulent time for Alibaba. Its stock has lost around 10% of its value over the year, as China's tech industry grapples
with trade tensions and tighter regulations. In his native China, Ma has become a business icon. Matt Rivers reports on his legacy from Beijing.
(BEGIN VIDEO TAPE)
JACK MA, CHAIRMAN, ALIBABA: No banks would accept it ...
MATT RIVERS, CORRESPONDENT, CNN: Jack Ma, one of China's richest men, a giant in tech, a man who has stood side by side with presidents, loves
kung-fu novels, always has. He has a genre called Wu-xia and he says, they teach valuable lessons.
MA: Whenever you want to be a great people, a great company, you have to work very hard. You have to suffer a lot of terrible things -- wraths and
terrible things -- before you be a hero. It is spiritual. It is spiritual. And think out of box. You have to think out of box to win.
RIVERS: And win he has. It's been 19 years since he co-founded, Alibaba and the company that began in a Hangzou, China apartment has grown into one
of the largest internet companies in the world.
[15:20:01]
RIVERS: In 2014, Alibaba $25 billion IPO was then the largest in US history. Ant Financial, the company's finance subsidiary has invested
billions of dollars in companies around the globe. Alibaba's e-commerce sites have fundamentally changed the way hundreds of millions of people
shop in China and its mobile payment platform revolutionized how people pay for what they buy.
All the while, Ma has arguably become the most public face of China's tech boom, a charismatic, often inspiring figure for ordinary people; nicknamed
Papa Ma on Chinese internet.
Ma has faced his share of criticism of course. Critics say, his company nearly copied e-Bay, and thrived only because the Communist Party wanted
it, too. China's protectionist policies, so the argument goes, ensured that Alibaba had no real competition making its rise not only easier, but
in some ways inevitable.
There is some truth there, but no matter your view, the facts remain. Alibaba is a juggernaut of a company and its leader is routinely mentioned
in the same sentence as other (inaudible) of tech - think Jobs, or Musk, or Gates, and like Gates, Ma says life is about more than a job.
Can you imagine yourself sitting back, relaxing?
MA: No. I have so much education, environment, and going around and meeting the entrepreneurs, I've done a lot of things. Life is so fun and
never ever focus on one thing. We come to this world not to work. We come to this to enjoy life. This is what I believe.
RIVERS: Ma has said he wants to focus more on philanthropy. The former English teacher has always focused on improving education in China, and as
for his company, widely considered to have a deep management pool. He told CNN in 2016 that whenever he does step down, it will be in good hands.
MA: Tomorrow is more difficult. The day after tomorrow is beautiful, but most people die tomorrow evening. So we have to realize that good things
can never be achieved easily. Life is not only about Alibaba. I have run my first 100 meters, I should give the base to the next generation.
RIVERS: Matt Rivers, CNN, Beijing.
(END VIDEO TAPE)
QUEST: So, New York University - NYU's marketing profesor, Scott Galloway is with us.
SCOTT GALLOWAY, PROFESSOR, NEW YORK UNIVERSITY: Good to see you, Richard.
QUEST: At this new earlier hour, Paul La Monica, too.
PAUL LA MONICA, CORRESPONDENT, CNN: Thanks.
QUEST: Thanks, too. Jack Ma is talked of in reverential tones. He's leaving Alibaba, even though he hasn't handed it, isn't it the equivalent
of when Gates left Microsoft?
GALLOWAY: That's actually probably the right analogy. And not only that, he's leaving. I mean, typically, the CEOs of large companies like this
give up power with the same (inaudible) and generosity of an African dictator, so to have a guy say, "I'm going back at the age of 54 to work on
education." He's ringing the bell at the top of the market, taking a victory lap. It's a real credit to the ecosystem and the internet economy
in China because they are now creating enterprise value. The stock hasn't taken a hit.
Now, this was a good day for China and Jack Ma and Alibaba. It shows that this ecosystem is sustainable and for real.
QUEST: And in doing so, Paul La Monica, it shows also that they have put in place a worthy successor.
LA MONICA: Yes, you had a great succession plan here. Daniel Zhang has been the CEO for the past couple of years, so having him take over the
executive chairman role makes sense. Joe Tsai also is a very public face of the Alibaba - the Vice Chairman. When you listen to Alibaba earnings
calls and other announcements over the past couple of years, Ma has already taken a back seat.
He is of course the most well known person at this company, but I think a lot of people on Wall Street already recognize, and around the rest of the
world that there is more to Alibaba than just Jack Ma and as you pointed out with Microsoft and Bill Gates, it's a company that is still doing quite
well now ...
QUEST: Right, but in the departure, it certainly faltered.
LA MONICA: It faltered a little bit.
QUEST: But there doesn't seem to be a suggestion, and you're right. With 2%, 3% or whatever it has fallen that you saw in Alibaba is not indicative
of any great concern that the market has.
GALLOWAY: Well, this is a jargon item. What's unusual is, as Americans, we tend to be - we are narcissists. We think that the epicenter of all
innovation is within the seven-mile bike ride of SFO International, but if you look at the product development roadmap of Alibaba -- payments, hail a
car, buy something, incredible advertising ecosystem -- their product road map, agility, ability to innovate quickly, makes us look tired. It makes
us look like - I don't want to come up with a company, but he has created something incredible.
QUEST: Snap - I'm sorry.
LA MONICA: You first.
QUEST: Did I say something I shouldn't have done?
[15:25:02]
LA MONICA: God bless you. It's been a very, very challenging time for this company. Arguably, it's one that maybe shouldn't have gone public at
least in this format. Now, you have the last of the kind of so-called adult supervision for Evan Spiegel with Imran Khah, a former Wall Street
analyst, now leaving the company. I think there are a lot of legitimate concerns about what the strategy is going to be and the fact that people
who buy Snapchat stock, buy everywhere because you get no voting rights. None.
QUEST: I keep forgetting that.
LA MONICA: So if you think that Evan Spiegel is the next Steve Jobs, he isn't. Then, guess what? By all means, buy that stock, but if you have
any skepticism whatsoever about his ability to lead Snapchat and not just create something that Facebook and Instagram will rip off five years later?
Stay away.
GALLOWAY: That's true of all these guys. They all have dual class shareholder systems.
LA MONICA: Yes, but no votes is really ...
QUEST: Yes, Snap was particularly egregious in giving no votes.
GALLOWAY: There's a bigger issue at play here and that is Snap is a good company, very innovative, great product and it's going out of business.
And the reason why, is that we have in our economy let one company aggregate four the top five apps in the world. Eighty percent of our time
on this is in app, one company controls it all. This isn't your phone, Richard. This is a delivery vehicle for company called Facebook.
It's an invasive species putting all other companies out of business. Snap is a walking dead because we've let monopolies run amuck. Snap is going
away, it's just a matter of time. It will be below five bucks a share within 12 months and it will be picked up by Google or one of the other
guys.
QUEST: And for those viewers who are sort of crying concern, who have followed closely because I know you've watched very closely. My Snap
investment, you'll be pleased to know that in today's fall, my Snap shares are down 66% since I've opened them.
GALLOWAY: See, you've got snapped. You purchased Snap.
(CROSSTALK)
QUEST: I bought - no, but then I don't use Facebook and a variety of other things much either.
GALLOWAY: But do you use Instagram?
QUEST: Should we move on?
GALLOWAY: Twitter?
QUEST: Yes. Well, sometimes.
GALLOWAY: Yes, go on - at our age, go on Snap. You feel like you're going to slip and break a hip. It is so focused and so set up on young people
and that its power, but if you look at the user metrics, like every other app in the world, Facebook is pulling the same move. They have technology
that goes out, registers - any app in the world is getting traction about those features.
LA MONICA: My kid - they're not ready for Snap, but they know what Facebook is. They have no idea what Snapchat is. They already know what
Facebook is at nine and five. They don't know about Snap ...
QUEST: So likely to talk about - don't go too far. Go on and have a cup of tea. Commiserate with me on my Snap stock. Donald Trump is starting
his economic wins on Twitter. Unfortunately, one stat that he mentioned was wrong . It's wrong 62 times, and now, even the White House won't defend
the President on it. We'll have more after this.
[15:30:00]
(COMMERCIAL BREAK)
[15:30:00] QUEST: I'm Richard Quest, there's more QUEST MEANS BUSINESS in just a moment. But I'll ask the chief executive of Norwegian about the
takeover talks surrounding his airline and beyond. He'll be answering that.
And Donald Trump takes his economic posts a step too far on Twitter, we'll share just how wrong he was. Before that, this is Cnn, and on this
network, the facts, they always come first. Hurricane Florence has intensified and it's now category 4 hurricane as it moves toward the United
States.
North Carolina's governor is warning people could lose electricity and utility services for several days once the storm hits. It's expected to be
one of the strongest hurricanes in a landfall there in some two decades. Sweden is headed for political uncertainty after both major centrist
coalitions failed to win a majority in Sunday's vote.
The ruling center-left social democrats and their coalition are leading the center-right bloc by just a half point -- percentage point. As for the
Sweden democrats which is a far right party with roots in the neo-Nazi movement, they are in third place, but did receive nearly a fifth of the
vote.
Trump(ph) and the UN are warning of catastrophic consequences of a military offensive in Syria's Idlib province. The Syrian government says it's
carrying out surgical airstrikes, but has not started a ground assault. The White Helmet volunteer rescue group reported dozens of the estimate
intense escalations over the weekend.
President Trump often criticizes the media for not giving him due credit when it comes to the economy. So today, he made a boast about his
verifiably false -- and the reason we're going into this in some detail is because time and again you hear the talk of "fake news", "fake news".
Well, today, even the top White House economist admitted the president was wrong. Donald Trump -- this is the tweet. Donald Trump tweeted that GDP
rate 4.2 percent is higher than the unemployment rate report, 9 percent for the first time in over a 100 years.
Here's the Fed's data going back to numb too -- I know, 1948, unemployment in red, GDP in blue. GDP is higher than unemployment 62 times most
recently in 2006, so it was left to the Chairman of the White House Council of Economic Advisors to put in perspectives, saying someone must have added
an extra zero by the time the facts got to Trump.
(BEGIN VIDEO CLIP)
KEVIN HASSETT, ECONOMIST & CHAIRMAN, COUNCIL OF ECONOMIC ADVISORS: What is true is that, that it's the highest too in 10 years. And at some point,
somebody probably conveyed it to him adding a zero to that, and they shouldn't have done that.
And I can say that at least numbers -- we speak here at the White House are grateful for -- and when the press finds mistakes that we make, we don't
like making mistakes but we're grateful when they're pointed out because we want to correct them.
(END VIDEO CLIP)
QUEST: Sarah Westwood at the White House -- oh, dear, Sarah, tell me, is there embarrassment or is this sort of just a feeling of well, that's just
Donald, that's just the president.
SARAH WESTWOOD, CNN WHITE HOUSE REPORTER: Well, Richard, what we saw today was a rare acknowledgement of error from an administration official when
Kevin Hassett; the chairman of the Council of Economic Advisors came out and said that President Trump was off by about 90 years when he cited the
time frame in which the GDP has been higher than the unemployment rate.
President Trump spent a lot of time on Twitter this morning touting economic growth as part of his struggle to change the conversation away
from the controversy facing his White House. But as you mentioned, he sort of created a dust-up of his own when he is getting the numbers so wrong
when it comes to economic growth.
[15:35:00] And all of his focus on the economy is coming, we should note just days after former President Obama claimed that it was him who deserved
credit for this boom that we've seen in the GDP for the drop in the unemployment rate.
Kevin Hassett said a large part of his presentation to reporters today just moments ago at the White House was disproving that claim from Obama,
although Kevin Hassett said that he was not dispatched specifically because of Obama's comments.
QUEST: Sarah Westwood at the White House, thank you. And the President Trump's blue-collar workers -- the number of jobs are growing in their best
rate in 130 years according to analysis from the "Washington Post". Now, this is about goods-producing jobs like mining and construction,
apparently, they are up more than 3 percent in the last year.
And employment in rural areas and small towns where the great -- recession from the great recovery has been slow is now getting better. They're
growing at an annual rate of around 5 percent in the Trump era. Each day this week, we'll be taking a look at economic issues facing American voters
as they head to the pivotal midterms, a balance of power in Washington is at stake.
Clare Sebastian asked of a strong economy will be enough to deal Republicans and Donald Trump a victory in November.
(BEGIN VIDEOTAPE)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We've accomplished an economic turnaround of historic proportions.
CLARE SEBASTIAN, CNN (voice-over): If Americans vote with their wallets this election season, the president has some reason to feel confident.
Economic growth is at a four-year high.
TRUMP: These numbers are very sustainable.
SEBASTIAN: Unemployment at half century lows --
TRUMP: We've created 3.7 million jobs since election.
SEBASTIAN: And stock market is hitting record.
UNIDENTIFIED MALE: Donald Trump has created an environment that the markets really like. With regulatory reform, again with the tax cuts, so
he does get some credit.
SEBASTIAN: Tax cuts is this administration's signature policy, refueling strong corporate profits including a record-setting courses for America's
banks. And yet experts question whether the President's campaign promise of a tax cut for all has materialized.
TRUMP: And we will massively cut taxes for the middle class --
UNIDENTIFIED FEMALE: What we saw is we have a non-traditional investment cycle. Companies taking that additional cash and reducing debt, buying
back stock, increasing dividends. The best majority of consumers reported they did not notice a meaningful change in their after-tax take-home pay
post-tax reform.
SEBASTIAN: Despite the low unemployment, those consumers are also facing stagnant wage growth and signs of rising prices due to tariffs. The
president has not only asked voters to trust him on trade.
TRUMP: First, and we're going to have to tariff your cars. They said when can we show up? When can we be there? Oh, would tomorrow be OK? Oh, folks
stick with us, stick with us.
SEBASTIAN: He has also provided pockets of short-term relief aimed at the mostly Republican agricultural states.
UNIDENTIFIED MALE: The president has promised substantial aid, many billions of dollars to farmers who are rightly concerned about the story
being tariffs and other action by the Chinese that could hurt the U.S. middle America. Whether that's enough is unclear.
SEBASTIAN: What is clear for the scandal-plagued administration, the strong U.S. economy sends a powerful political message.
TRUMP: Once again, we are the economic envy of the entire world.
SEBASTIAN: When the president and his party will continue to trumpet. Clare Sebastian, Cnn, New York.
(END VIDEOTAPE)
QUEST: The power of this is quite extraordinary. We're handing some of that power to you with our question and -- Tesla's chief executive, CEO
Elon Musk should stay the course, resign or be fired? Cnn.com-slash-join, and we will get your final results in just a moment all for you.
What should Musk do? What should the board do? When we come back.
[15:40:00] (COMMERCIAL BREAK)
QUEST: We have about 19 minutes left on the trading day, and the Dow -- just now, the Dow has looked, the Dow -- oh, as you can see, the gains,
though really look nice impressive gains, though we're here at the beginning, the gain and portended well for the holiday.
They sort of evaporated and instead we've just bumped along the bottom throughout the session, and it was the uncertainty over global trade, we
have Donald Trump threatening more tariffs.
And so for instance, you heard obviously the comments about Ford and the Ford car that's not going to be built in the U.S. even though the tariffs
have been -- Apple was hurt and Apple is down one and a third percent, one of the biggest losers on the Dow so far.
But Nike is at the top of the Dow, and that's interesting. Online sales jumped 30 percent after the ad campaign with Colin Kaepernick. Scott
Galloway and Paul La Monica are with me. This is fascinating because Nike renews the contract with Kaepernick, he can -- and he continues to be a
spokesman, not only that, they make a great big deal about it.
If you believe what you want, you'll risk everything.
SCOTT GALLOWAY, CLINICAL PROFESSOR OF MARKETING, NEW YORK UNIVERSITY STERN SCHOOL OF BUSINESS: Yes --
QUEST: What does it tell us?
GALLOWAY: Worst business move of 2018, was Google match showing with the Senate Intelligence Committee hearings, the best business move of 2018 was
Nike choosing Colin Kaepernick as their 30th anniversary spokesperson --
QUEST: Why?
GALLOWAY: Because Richard, they just did the math. Let's break it down, Nike does 35 billion revenues, 15 billion domestically, 20 billion
internationally, if you're buying $115 pair of flying Air Blazers in the U.S., I mean through young, an urban dweller, it means you lean
progressive.
They put $1 to $3 billion at risk domestically, of that $20 billion abroad, you're a Brit, how many people abroad feel that the U.S. is doing things
really well? That they've got a handle on race relations here.
They put at risk, $1 to $3 billion of their business to strengthen their relationship with $32 billion of their business, this was the genius move
of 2018.
QUEST: Even though you end up with an edifying sight of people burning sneakers, Nike sneakers.
PAUL LA MONICA, CNNMONEY DIGITAL CORRESPONDENT: Social media is such an enigma right now. How much of that was legitimate with people really
taking their $100-plus sneakers and burning them.
How much of it was fake news if you will? And to your point, China, Chinese consumers are not going to get all up in arms about Colin Kaepernick taking
a knee during the national anthem. And China is now after the U.S., pretty much the most important market for Nike.
I think it made sense when they did the math both demographically and geographically, it wasn't a bad marketing move --
QUEST: Right, so let's do -- I'm not being rude when I open my phone. I assure you, it's the Tesla question --
GALLOWAY: Yes --
QUEST: The Tesla question in which we are asking. Should -- what should the board, what should Elon Musk do? Should he be fired? And he has various
motive, but should they ask him --
LA MONICA: OK --
QUEST: Should they ask him to please go away? Should he resign or should he just carry on? You're already shaking your head --
LA MONICA: Yes, because there's a fourth choice that's not there that I would vote --
QUEST: Hey!
LA MONICA: For, sorry, he shouldn't stay the course, he's got to start acting like an adult, and he's got to hire a COO --
[15:45:00] QUEST: That's a given --
LA MONICA: To help him out, just like he has at SpaceX, that doesn't mean he should be fired or quit, but he shouldn't stay the course either. He
can't keep doing what he's doing.
GALLOWAY: We're the mother of all enablers here, I feel like the tech innovators collectively -- those of us who are fathers, we have a memo to -
- Elon Musk, Jack Dorsey and Larry Page put down the blond, put on a tie, show up. There's --
QUEST: That's not -- that's a recipe for corporate successes.
GALLOWAY: But on a tactical corporate -- on a tactical level of some ministers and corporate boards, there should be a committee of the board
that sits down with them and says if this aberrant reckless behavior continues, we're going to kick you up with chairman and bring in another
CEO.
They have -- boards have a responsibility to be the adults in the room, there's no adult in the room, the board consists of people, he built out a
solar city --
LA MONICA: Right --
GALLOWAY: His brother -- this is really -- this is a failure on corporate governance.
LA MONICA: Is this a problem though that they don't have a CEO? Think of the worst case scenario. Mark Zuckerberg starts putting on a hoodie again
and acts like the jerk that they portray him in the social network as, Sheryl Sandberg could be the new CEO of Facebook, no problem, everything is
fine.
GALLOWAY: Well --
LA MONICA: There's no one at Tesla that can take over on a moment's notice, they have no bench.
GALLOWAY: But that's what the problem is. Everyone is so afraid to lose Elon Musk, if I were a board member, I'd say where does Elon Musk go if he
loses Tesla? Is he going to go and be the CEO of Fiat-Chrysler, they need to have a serious conversation with him.
QUEST: Good night to you two for coming here today, good to see you --
LA MONICA: And you --
GALLOWAY: Thank you sir --
(CROSSTALK)
QUEST: Thank you very much. The final score on what should Tesla's CEO do? Seventy three percent of you --
(BELL RINGING)
Stay the course, sorry, Paul La Monica. After the break, Norwegian takes aim at Argentina and Asia in a full throttle drive for growth. The chief
exec says it's time to harvest the results.
(COMMERCIAL BREAK)
QUEST: Part of being in a recession, the pace starts falling and prices are rising. And you might argue it's the worst time in the world for an
airline to introduce new routes in Argentina. Not so says Norwegian Air shuttle which is selling cheap and cheerful domestic flights in the country
and that it intends to disrupt the local market.
The low cost carrier Norwegian is also venturing into Asia, and the earnings seems to speak for themselves, passenger numbers are growing, the
number of routes and destinations are growing. The fleet is one of the youngest in the business. Now, the company is not making any money, not at
least at the moment.
[15:50:00] And certainly the level of debt that it's taken on board is very high, dangerously so. Norwegians caught the eye of Carsten Spohr of
Lufthansa and Willie Walsh of IAG. The chief executive told me, all this attention is flattering.
(BEGIN VIDEO CLIP)
BJORN KJOS, CHIEF EXECUTIVE OFFICER, NORWEGIAN AIRLINES: Really, he's by the way, he's a very smart guy, and ideally it's a very good airline, so
they do a lot of things there. And I can't -- I can't actually here think about it. I would have done the same if I had these issues of emotions,
I'd be angry at them.
No, he's exactly the guy, and we are on the stock exchange, everybody can buy somebody at the stock exchange. So --
QUEST: Right, but as soon as Willie said he was going to with IAG, Carsten of Lufthansa said I'm in it, I'm in as well. Are you having talks with
anybody?
KJOS: No, we haven't announced anything for sale. They are coming to us, but the thing to think about it is, it's better to be pretty shaky than
most.
QUEST: It is, but just we're clear, Carsten Spohr of Lufthansa group is also interested in you, are you interested in doing something with
Lufthansa?
KJOS: I cannot say anything about that. As you know, it's because it's -- what I have to say maybe recorded on the stock exchange. I can -- my
opinions, about that, both of these airlines are very good airlines.
QUEST: The Asia expansion has gone well, the U.S., you've won all the battles in most of them anyway in terms of recognition. And you've now got
attention. What is it you want to do?
KJOS: I want to -- I want to give the Argentineans the possibility to fly on these and fast, and have a good flight and learn maybe to fly longer
maybe with us to Europe.
QUEST: But what do you want to do with Norwegian? What do you see as its - - because everywhere you look now, you're being nipped after the heels, the legacy, the level has come along, Euro wings is now going long, you're
smiling again. Euro wings is going longer, France is coming along with you and all the others.
KJOS: There will always be others.
QUEST: There will always be others. But they're attacking you on all sides.
KJOS: Not actually, they are -- some routes, but all this have competitors, it's just about two that you have. At the end, we got up to
scale and we certainly served so many citizens in U.S. and we have a huge network in Europe.
So we are at the level now, we should definitely release our harvesting now.
QUEST: And what will it take though to become profitable?
KJOS: Well, we ramped up the long haul this year tremendously, no, they are -- they're all on the peak now, we can -- no, we can start harvesting.
So we should -- our future as I see it will be bright.
QUEST: But it is important for you, I mean you're arguably -- Jeff Bezos of Amazon has spent the entire history of the company until now taking
losses to build for market share and to build the corner stone that we've got. At some point, you're going to have to make money while your
investors and shareholders are going to say, this is not worth -- just in the low.
KJOS: But then again, out of 17 years we have made money for 15 years, and I wouldn't have gone into this I didn't think I would -- it would be
profitable.
QUEST: Brexit, finally on Brexit. Now, you're going to tell me that you'll be fine because of your different subsidiaries. You're going to
tell me that you've got the U.K. subsidiary which will handle all the U.K. stuff, and the Irish subsidiary will handle -- and anyway, Norway is part
of the European common area for aviation.
But you must still be worried.
KJOS: Well, actually, we are fit(ph) to the task(ph), the only thing I don't understand is what are they going to do with all the bilateral
agreements that you used to have, they have to refix(ph) it. So it's a huge amount of work they have to go through, but they can do it, I mean,
it's --
QUEST: No, let's take for example your U.K. routes to the U.S. London Gatwick is crucial to you --
KJOS: Yes, it is --
QUEST: It's your largest base --
KJOS: Yes, that's right --
QUEST: London Gatwick is crucial to you, the U.S., U.K. flights will have to be renegotiated. I'm confident that, yes, that the British and the
Americans will fix it because they need open sky, everybody needs opened sky, everybody needs the passengers and the two-ways(ph) to really take the
world, that is the most -- well, actually, today, 20 percent of all jobs, job creation comes from this industry.
[15:55:00] You would -- nobody would want to stop that.
(END VIDEO CLIP)
QUEST: Five minutes before the close of trade in New York, the -- this is the scenario, this is the way things look. In Europe, the markets were all
higher, even the FTSE managed to eat out a very small gain. The encouragement came from the EU's chief negotiator Michel Barnier who claims
the Brexit deal could happen by November.
The -- no, got 2.3 percent. The reason for that very simply, the government now seemingly will respect the EU budget rules or at least it
seems less, and the scenario being it's less likely that there will be a full blown showdown between the new populist government in Rome and the --
and with Brussels.
But it's still early days, that's just one day, and that is just Monday. As to the New York market, a good start to the morning and then it drifted
off and then it completely evaporated into the afternoon, and this is really -- this is your trade talks, this is your worries, this is your
earnings and all eyes on the things on what is likely to be for the future.
Very small losses though considering the sort of day, trading is just about finished, we'll have a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, "Cbs", the board of directors effectively put their fingers on the thumb on the scale when they decided
to let Les Moonves resign, put the money, 120 million into a guarantor's trust and only after the investigation decide whether he should get that
money or not, will be fired without a penny.
By doing it that way, they have effectively already tilted the decision towards him getting something. Perhaps arguably a far better way would
have been to have suspended him, pending the investigation with no money put in any form of trust, and then decide whether he goes with the full
amount minus whatever or whether he's allowed to resign because the allegations don't stand up or he gets fired without a penny.
At the moment, it would be very difficult for them to do that. But the board needs to remember, the world is watching what happens at "Cbs". And
that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable.
The closing bell on Wall Street --
(BELL RINGING)
Trading is over.
END
