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Quest Means Business
Algerian President Ends Bid for Fifth Term in Office; One Hundred and Fifty Seven Killed, Including 21 UN Staffers in a Plane Crash; U.S.- Backed Forces Advance on ISIS Fighters Amid Fierce Fighting in Syria; Venezuela's National Assembly Expected to Declare National Emergency; Theresa May Heads to Strasbourg for Brexit Talks; Zidane Makes a Surprise Return to Real Madrid; FAA to Issue International Notice to 737 Max Operators; Five-G Fast Becoming a Reality; U.S. Stocks Set to Finish Higher; Trump Budget Blueprint Asks for $8.6 Billion in Border Wall Money; Former Chancellor of the Exchequer George Osborne Becomes a Newspaper Editor; Tech Rally Drives Stocks Higher. Aired 3-4p ET
Aired March 11, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Interesting day on the markets. The Dow starts lower -- that is firmly because Boeing, which is such a
component was pushing it down. We'll talk about that during the day. But the market rallied and if you look at the broad base of stocks, they were
sharply higher. Again, Boeing being a bit of weight down on the market. But off just around a bad start of the day of 151 points, a gain of half a
percent, and this is what has moved the markets.
It is the full blown crisis of Boeing. The major international airlines are grounding the 737 MAX 8 and China is also grounding. The U.K. is
almost un-investable. A former chairman of Barclays makes that damning claim that Brexit uncertainty is driving away investment. Theresa May is
flying to Strasbourg tonight for last-minute talks.
And there's a tech rally under way. The former CEO of Verizon tells me what's on the horizon with 5G. Live in London tonight, it's Monday, the
11th of March. I'm Richard Quest. I mean business.
Good evening. Tonight, Boeing says it has no new guidance following the crash of the Ethiopian Airlines Flight 302. Meanwhile, governments,
airlines and passengers are asking a very simple question, is Boeing's bestselling jet, the 737 MAX 8, is it safe to fly? After all, carriers in
China, Indonesia, Ethiopia, South Africa and the Cayman Islands have all grounded their 737 MAX fleets. The United States and Europe have not.
Sunday's crash claimed the lives of 157 people. And the investigation is moving swiftly. Crews on the ground have recovered the flight data
recorder and the cockpit voice recorder. The Chief Executive of Ethiopian Airlines says the pilot reported technical difficulties shortly after
takeoff requesting clearance to return to Addis and of course, it's the second crash of a 737 MAX in five months.
Air safety experts say it's too early to tell if the two incidents are related, but getting to the bottom of what happened is crucial, not just
for the families of the victims, but for the travelers around the world. You and me for instance, the 737 MAX is the latest version of Boeing's most
popular plane.
(BEGIN VIDEO TAPE)
QUEST (voice over): Boeing builds its 737 MAX as the fastest selling airplane in the company's history. A high-tech single aisle jet. There
are more than 5,000 on order for a hundred airlines worldwide. Many of them are in China and India.
The 737 has a long history. Since the first twin jet baby Boeing was introduced in 1967, it's grown into the bestselling line of commercial jets
in history. The MAX 8 variant launched in 2017, seats up to 200 passengers. It was designed to offer airlines greater range and better
fuel efficiency from the models that came before.
Like any new series, Boeing introduced brand-new technology and features into the 737 series, including the automatic safety system.
(BEGIN VIDEO CLIP)
DAVID SOUCIE, SAFETY AND ACCIDENT INVESTIGATOR: This particular aircraft has a new -- something new as far as how the autopilot responds when the
angle of attack, when the aircraft nose goes up too high, it pushes that nose down even when the autopilot is off and a lot of pilots aren't used to
that.
(END VIDEO CLIP)
QUEST (voice over): In the case of Lion Air, Indonesia and investigators say pilots repeatedly fought to override that system before the fatal crash
of the plane back in October. The preliminary crash report said faulty sensors led the automated system to push the nose of the plane down again
and again. It's not clear why the pilots did not follow the recognized procedure and turn the system off.
Now this crash, the second in a brand-new model plane shortly after takeoff. It's provoking more questions about the plane's design and what
Boeing has told the airlines.
(END VIDEO TAPE)
QUEST: Dozens of carriers are still flying the MAX. For instance, all these airlines have ten or more MAX jets in their fleet. The Chinese
carriers are amongst the largest carriers. You have got Southwest, American Airlines, they have the most.
Boeing says the passenger safety is always its first priority. Peter Goelz is the former Managing Director of the NTSB, the National Transportation
Safety Board. He joins me now from Washington.
[15:05:10]
QUEST: Before we get to the detail, just a straightforward blunt question. In your view, should American regulators ground the 737 MAX pending more
information?
PETER GOELZ, FORMER MANAGING DIRECTOR, NATIONAL TRANSPORTATION SAFETY BOARD: I don't think they should do it right now, but they ought to be
prepared to act very quickly if they have no further information in the next 24 to 36 hours. I mean, this is a very troubling event. There is
information out there that they could gather, not just from the radar, and the tower tapes, but also perhaps from ADSB. But if this mystery goes on
much longer than 36 hours, I think they probably should consider that step.
QUEST: What is it about the connection or is it the connection between what happened with this one and the Lion Air, what do you find most
troubling about the two incidents?
GOELZ: Well, the question is, both accidents occurred on takeoff, in a similar phase of flight. There appear to be at least superficial
similarities in how the aircraft performed and there's a question out there, do the pilots who are flying these aircraft truly understand the
nuances of the new flight management system? And has Boeing and the air carriers made the sufficient efforts to train them?
Ethiopian Airways is really one of the premiere carriers, not only in Africa but in the world. They're a great and historic carrier and they
have a great pilot training program. They have a great maintenance program, so it is very troubling.
QUEST: It's confusing for the traveling public when we are obviously reporting that major countries like China and those like Indonesia where
Lion Air has so many have grounded the fleet. And the U.S. and Europe hasn't.
Now, somebody about to board a plane looks outside the window, sees it's a MAX 8 and thinks, "Well, hang on a second, China has grounded it. These
other countries have grounded it. Shouldn't the American --" I mean, they don't know. People don't know, Peter.
GOELZ: I know they don't know. I mean, but the one thing you do know is in the United States, the air regulatory system and the carriers and the
unions that are part of the system, all push for the same goal, which is safety, and believe me, if there was -- I mean, I know I work with some
unions, the Flight Attendant Union of America, and they are deeply concerned about this.
They're in contact with the company. You know, a number of times today, they are continuing to fly. But to say that they're not concerned would be
an understatement.
QUEST: Peter, thank you. We'll talk more about this when the 36 hours or 48 hours has passed, we'll be back to you to get your latest thoughts. We
appreciate it.
GOELZ: Thank you.
QUEST: Now, bereft families and anxious airlines are awaiting answers. CNN's Farai Sevenzo is in Nairobi in Kenya, where the flight had been
heading.
FARAI SEVENZO, CORRESPONDENT, CNN: Richard, the latest we know is that James Macharia, Kenya's Cabinet Secretary for Transport met with the
Country Director of Ethiopian Airlines here at Jomo Kenyatta Airport earlier on today and he assured people that they're doing everything they
possibly can to try and find closure for all the relatives, particularly the 32 Kenyans who lost their lives.
More importantly, Tewolde Gebremariam of Ethiopian Airlines had this to say about the reliance of Ethiopian Airlines as a carrier.
(BEGIN VIDEO CLIP)
TEWOLDE GEBREMARIAM, CEO, ETHIOPIAN AIRLINES: We have more than 300 flights a day and it's a very safe airline. The operation is running very
smoothly. This is a very isolated and unfortunate incident, accident and we are taking care of, as I say, the families and friends and relatives of
the bereaved passengers and crew.
(END VIDEO CLIP)
SEVENZO: Then again, Richard, at the moment the story has moved into the real tragic stories of what happened on Sunday morning out in Addis Ababa.
We know that 22 United Nations staff lost their lives. All through the day, we've been hearing from people like the Catholic Relief Agency, WFP,
and many people who were coming to Nairobi to attend an environmental conference here in what is essentially the headquarters of the U.N.
And of course, they always carry these flights. This shuttle to Addis Ababa because Addis Ababa is the seat of African union power, Richard.
[15:10:10]
QUEST: Farai in Nairobi, thank you. Now, after the break, around the world in 18 days. Theresa May flies off to Strasbourg for late-night talks
as her Brexit deadline is getting ever closer, and a former Barclays Chief Executive says Britain is almost un-investable now. Get your phones out to
decide at cnn.com/join. Is Britain that bad?
Also, 5G on the horizon. It will change the way we do almost everything. Now, get record speeds, the race is on at record speeds. We'll talk about
it with somebody who knows after the break.
(COMMERCIAL BREAK)
QUEST: The British Prime Minister, Theresa May and her Brexit Secretary tonight on their way to Strasbourg. This really is the last attempt to get
concessions from the E.U. on the withdrawal deal before U.K. lawmakers vote on Tuesday. It's a vote the government is expected to lose and the E.U. is
not budging on the important backstop point that we've talked about so often.
So this is the road map for the week. I'm glad that you and I are together tonight so we can actually look at it because it will all be explained to
you -- don't worry, don't get frightened. I won't go into great laborious detail. I will give you the overarching view. Tuesday, the vote on
Theresa May's deal. If it passes, you leave with a deal. If it's no, if her deal is rejected, Wednesday should there be a no-deal Brexit, if
there's yes, no deal. If there's no to that. Thursday, you end up on a vote on the extension. Should it be delayed? That's the way it looks. If
it is a yes, delayed; no probably. It's complicated.
But it's a sort of route map that flows through and gives you an idea of exactly where this thing could end up. For instance, really the options
are three-fold. One, leave with a deal. Two, no-deal Brexit. Three, delayed.
Bianca is with me from Parliament. At the beginning of last week, or midweek, I was pretty sure Theresa May was going to get this thing through
because she's basically blackmailing Brexiteers that a delay means no Brexit.
BIANCA NOBILO, CORRESPONDENT, CNN: Yes, that's what she's trying to do. And actually, Richard, in the last two hours -- because I know you like a
poll on "Quest Means Business," I conducted my own poll of back benchers in Theresa May's own party. And I've got some quite interesting results.
[15:15:09]
NOBILO: One or two MPs really surprised me. Because these have been people that actually wrote letters of confidence against the Prime
Minister, that are Brexiteers, that are fundamentally opposed to the withdrawal agreement, and they told me that they're very close to backing
her deal, just because they fear the alternative.
However, I spoke to one or two, and I can quote one now, and he said to me, "The mood of the Party is now turning against the Prime Minister. I feel
there will be definite moves against her as she's negotiated in a very poor way." So I do see a split. Some are being won over, but many are
hardening in their stance against her.
QUEST: I do love all this criticism about the Prime Minister, as if somehow, you know, she was going for a walk in the park. This poor woman
has had to negotiate an agreement against the European Union, with a Labour opposition wanting something completely different and her own Party
undecided what they wanted.
NOBILO: All those that are less sympathetic towards the Prime Minister, Richard, would say the following. First of all, it was her decision to
call that snap election in 2017. She lost the majority of the Conservative Party hat, so that put her in a weaker negotiating position. She then gave
away Britain's leverage when she decided to trigger the Article 50 negotiations and when she did, she accepted the E.U.'s scheduling. She set
red lines that were not going to be able to give Britain any flexibility.
So many people criticized the way in which she has conducted this. But granted, it is such a difficult task. And I think people do recognize that
and respect the Prime Minister on the whole for her perseverance. But for those people who are less sympathetic towards the Prime Minister, they have
many reasons why they think that these negotiations could have gone much better.
QUEST: Bianca, it's going to be horrible weather tomorrow night, so I suggest you wrap up warm. I am already getting the thermals out for when
we're -- well, you can't be too careful at this time of the year. It could be wet and windy. Thank you. Bianca is at Westminster where we will be
with you from tomorrow night.
Gerry Grimstone served as Chairman of Barclays Bank. He warns the U.K. is almost un-investable now. Grimstone spoke to CNN's John Defterios and Sir
Gerry said, Britain is close to a constitutional crisis if MPs reject Theresa May's deal.
(BEGIN VIDEO CLIP)
GERRY GRIMSTONE, FORMER CHAIRMAN OF BARCLAYS BANK: I think the last two years have shown there is no comfortable halfway house. There is no
comfortable lounge that you could sit in where you have the benefits of being in and the benefits of being out. So Britain has to take a step back
now.
I think we are very close to a constitutional crisis. I think nay need may need a change in personnel. It may need a change in government. I think
it is very likely it is going to need another vote at some point.
JOHN DEFTERIOS, EMERGING MARKETS EDITOR, CNN: Another referendum is --
GRIMSTONE: Either a general election followed by a referendum or a general election itself. Because you cannot have a situation where the government
is bringing forward major legislation in our system which Parliament then turns down. Something has to give. You cannot have these negotiations
conducted by Parliament in the end of the way. I'm afraid if this government can't do it, there will have to be a change of personnel for
another government to do it.
DEFTERIOS: I read Bank of England surveys that show lost income of a $1 billion a week because of the distraction of Brexit. That is the cost of
Brexit on a weekly basis, is that inflating the numbers? Does that seem realistic to you?
GRIMSTONE: Well, I'm as passionately in favor of Britain as anybody can be. But I would say, the United Kingdom is un-investable at the moment.
Until the fog clears and you know whether you're going down this route or that route, I am afraid the country is un-investable.
Once the fog clears, there will be some amazing investment opportunities. But we are already seeing a short-term cost of investment not coming into
the United Kingdom.
DEFTERIOS: And there's no shame of having a second referendum. The Greeks did it when they had the debt crisis. It would serve the country better to
go another round with more clarity knowing where we are today and what we know now.
GRIMSTONE: What I can say if circumstances change, sir, I'd change my mind. What do you do?
(END VIDEO CLIP)
QUEST: Now, we want you to join in on the conversation. Do you agree with the former Barclays Chairman? It's the usual, cnn.com/join. So that is
the fastest one. Would you invest in the U.K. during this Brexit gridlock or is it un-investable? It's really simple, yes or no. We didn't want to
complicate it. There's too many other complicated things going on this week. Let's keep it nice and simple. Vote now, cnn.com/join. Is Britain
un-investable -- no. let's get it right. Would you invest in the U.K. during the Brexit gridlock or as a result of the Brexit gridlock? We'll
follow.
[15:20:09]
QUEST: Oh, dear. It's not looking good. Whilst you consider your verdict, members of the "Quest Means Business," jury, the former British
Finance Minister, George Osborne, has been making his Brexit predictions. He told me how long he thinks Theresa May can hang on at 10 Downing Street
or whether Parliament will start to flex its muscles even further.
(BEGIN VIDEO CLIP)
GEORGE OSBORNE, FORMER BRITISH FINANCE MINISTER: Here are some predictions. The Prime Minister will lose again heavily the vote in
Parliament on her deal. I think Parliament will vote to ask the E.U. to delay Brexit and then crucially, I think Parliament will start to assert
control over the process of finding a Brexit deal that it can support. I think this is our story today in the newspaper from our very good political
team. And what they will do, I think Parliament, is look to find the majority which lies in my view around membership of the Customs Union and
the single market.
That, to me, feels like leaving the E.U. but not tearing up all the economic relations with our neighbors and frankly, a better reflection of a
country that was split down the middle on leaving the E.U.
QUEST: When is she gone?
OSBORNE: I think the kind of general understanding in Westminster is that by the end of the year, she will go. In fact, one of the ironies is, the
more Parliament takes control; the less Parliament will want a powerful new Prime Minister. And so having a powerless Downing Street might suit quite
a lot of people's interests.
QUEST: When you're having your late night hot chocolate or glass of whiskey, whatever it is, and you think back to the Number 10, 11 meetings
to discuss the referendum, did anyone have any inkling what it was going to be like?
OSBORNE: Well, I had a strong sense that leaving the E.U. would be a disaster for the U.K., which is why I didn't want a referendum in the first
place. And then frankly, I threw everything in to trying to win that referendum including bluntly my political career with the Conservative
Party because I thought it was such an important vote for us to win. And you know, sadly we didn't.
QUEST: But did anybody think, I promise you, this is going to go very badly wrong? And not only is it going to go wrong, it is going to divide
the country. And not only is it going to divide the country, it will be an almighty mess.
OSBORNE: Well, I said all of those things and what is the charge against me? That I ran something called Project Fear. I don't think it was
Project Fear, it was Project Reality. I was trying to spell out to people, ultimately unsuccessfully, what the consequence was of tearing up 50 years
of economic partnership and security relationship with our nearest neighbors.
We're sort of living with the consequence of that now that if you go around telling people the system has failed you, globalization has failed you.
We're going to start again. It's going to prove difficult to deliver on that and that's what the Brexiteers are discovering and those who have made
common calls with them since.
QUEST: You're going to go to your grave with people saying you're partly responsible.
OSBORNE: Well, I certainly feel a responsibility because I was part of a government that held that referendum. So absolutely, I kind of share my
responsibility. I accept my responsibility for being party to that decision. But now, of course, I have got a responsibility to try and
deliver what I think is the best possible outcome from a bad situation, which is in my view the country's decision to vote to leave the E.U.
(END VIDEO TAPE)
QUEST: Now later in the program, George Osborne went from being a political leader to leading London's number one evening newspaper, "The
Evening Standard." We'll hear how he does it now. We will see him in the newsroom. That's at the end of tonight's "Quest" program. You'll meet
George Osborne, the editor.
European markets rallied on Monday, the beginning of a crucial week in the Brexit progress. The FTSE finished today higher, but climbed the least of
Europe's major indices. Germany's Dax's supported by big gains for the two biggest banks. It's the rumors of Deutsche Bank and Commerz that they will
come together. France is also -- everybody was in the green somewhat.
But in France, the yellow vest movement may be running out of steam. Fewer than 30,000 demonstrators turned out this past weekend across the country,
according to the government. It's a far cry from the hundreds of thousands who marched in cities and clashed with police back in mid-November.
France's Labor Minister, Muriel Penicaud joins me now from New York. Minister, the first thing I of course must apologize is that I'm not in the
studio with you in New York, where I normally would be. But obviously I'm over here in Brexit, which we can talk about as well in a second.
On the Yellow Jackets protest, do you believe it's just run out of steam and that the worst has been seen?
MURIEL PENICAUD, FRANCE'S LABOR MINISTER: I think that the question raised by the yellow vests is something you can find in many countries. There can
be an election that was outside election. The question for so many people now in countries, developed countries that fuel fear.
[15:25:10]
PENICAUD: Fear because globalization is not only winners, there are also losers. Fear because there is a big change in technology coming. So a lot
of people, a lot of cities in our democracy feel anxious about the future and their future and the future of the children, it's not special to
France.
I mean, yellow vests are not special to France. The way it is expressed is special to France, but not deeply the question behind it.
QUEST: Right, but there is also - but what is special to France, you are right, those issues affect everybody, but what is special to France are the
industrial reforms of President Macron that are going root and branch after many of the sacred cows, if you like, of the labor movement -- pensions,
work guarantees, overtime -- all of those sort of things. I guess, have you learned the lesson that you can't move as fast when making such major
changes?
PENICAUD: So it's interesting to see that the question raised by this social movement is not against reform we have done. I've been lucky enough
and proud with our President, Emmanuel Macron to lead some big reforms. We are reforming the whole labor market, first by the Labor Code to make
flexibility, more agility, more predictability, especially in urgency case, and since that, I see every day, investors, foreign investors or SMEs that
they now, we don't fear anymore too much.
We have done also a second reform which is about up scaling the nation with artificial intelligence, with the digitalization, we know that skills will
be the key. These tool reforms that have been passed need not to be contested in the last month in the social movement. The question was much
more about the social transition on ecologic transition and especially the purchasing power. The main question would have been raised as purchasing
power.
QUEST: Minister, when President Macron came, the saying was, France is back. With Brexit on the horizon how worried are you that there is going
to be a really a nasty Brexit and France is going to feel the pain?
PENICAUD: It's clear Europe did not choose Brexit, but we respect the vote of our British cousins. It's clear that the hard Brexit, as we say, is not
a win-win solution. But in a way it has -- something will happen. In a way, that's a responsibility of U.K. choose the way it is. Europe and U.K.
have negotiated for a long time. Now, the question is are we ready to own the situation? The most important that there are citizens that can be your
German, French, or British citizen, where they live today, where they work, don't feel fear in the coming weeks if there is no particular solution.
So we are ready to make some things work for people, but from a government standpoint, each government takes its responsibilities.
QUEST: Minister, we'll meet again in Paris or New York face-to-face ...
PENICAUD: With pleasure.
QUEST: ... to deal with these matters. Thank you very much. It is appreciated.
PENICAUD: Thank you.
QUEST: As we continue tonight on "Quest Means Business," we return to our top story. Boeing is facing serious safety questions after the second 737
crash in five months. A former Inspector General of the U.S. Transportation joins me just after the break.
[15:30:10]
(COMMERCIAL BREAK)
[15:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I'm Richard Quest, there's more QUEST MEANS BUSINESS in just a moment. After the news,
we'll look at the 737 Max and the renewed safety concerns about the plane. And from finance to fine print, the former U.K. Finance Minister, the
Chancellor George Osborne and his love for his newspaper the "Evening Standard". Before that, this is CNN, and on this network, the facts always
come first.
A huge win for protesters in Algeria as President Abdelaziz Bouteflika has just announced he will not seek another term. He is postponing the
election scheduled for May next month, saying it will now happen after a national conference on political reform. Protesters have been demanding
for weeks that he quits the race.
The United Nations has confirmed 21 of its staff were on board an Ethiopian Airline flight that crashed minutes after takeoff. All 157 people on the
plane were killed, they came from at least 35 countries and were heading from Addis Ababa to Nairobi. There's more of this story of course in a
moment.
The battle to take the last piece of Syrian territory from ISIS is raging tonight. A CNN crew has been watching the fight for the past couple of
days. They say it's impossible to tell how many civilians or fighters are left in the tiny enclave that's all that remains of the ISIS caliphate.
Venezuela's opposition-led National Assembly is expected to approve Juan Guaido's request to declare a state of emergency over widespread power
outages. The self-proclaimed interim president has accused the government of murdering 17 people who died in the black-out. President Maduro
blames the outrage on U.S. sabotage.
The British Prime Minister Theresa May is headed to Strasburg tonight for last-minute talks with senior European officials. She is hoping to
negotiate a change in her Brexit deal that would help her sell it to the U.K. parliament. British lawmakers are scheduled to vote on Mrs. May's
deal on Tuesday.
Less than a year after leaving football, the legend Zinedine Zidane is going back to Real Madrid. He's the third manager this season. He left
Real Madrid last May after leading the Spanish club to three straight Champion Leagues trophies.
News just in to CNN, breaking news. The FAA is to issue an international notice to 737 Max operators. Now, the agency says it will take immediate
and appropriate action if it identifies a safety issue. It's unclear whether the statement will actually make any recommendations or simply
repeat or reaffirm the previous basis and confidence in the aircraft.
Let's go to Mary Schiavo who is with me to just talk about this. The nature of this, what would you expect the FAA to say?
[15:35:00] MARY SCHIAVO, FORMER INSPECTOR GENERAL, U.S. TRANSPORTATION DEPARTMENT: Pretty much what they've said. The FAA is a very reactive
organization and frankly, they look to Boeing often to tell them the problems or the difficulties, what should be done, et cetera.
Back when I was Inspector General, I was actually tasked to review the certification process of the 777, and Boeing is self-certified, and that's
probably a good thing because they have the technicians and then the expertise to do it. But they self-certified 90 percent, 95 percent of that
plane.
The FAA will look to Boeing to take its cues, and I wouldn't necessarily assume that it is going to be the same guidance as with Lion Air. And I
think there are some significant differences here, and that's what the wait is about.
QUEST: All right, Mary, I want you to stay with me as -- because I want your input on -- to what we're just going to talk about because Boeing is
facing a crisis of confidence in its 737 --
SCHIAVO: Yes --
QUEST: Max. Now, I must stress, it's not known if there's a link between this crash and the Lion Air crash. And whiles it's rare for particular
planes to have problems, there have been aircrafts plagued by major design flaws. So you've got the Comet, which was actually the world's first --
SCHIAVO: Right --
QUEST: Commercial jetliner. Now, the Comet was launched in 1952 and gave Britain a lead in the race to make high-powered planes. But the hype
didn't last long. Three planes crashed --
SCHIAVO: Right --
QUEST: Over the next two years, engineers found the fuselage didn't hold up under pressure. Then there was the DC-10, an American made, three-
engine plane as well and from Laker Airways. It was first introduced in '69. It ultimately was a success, but had a relatively poor safety record
early on.
The DC-10 suffered four fatal crashes in '74 and three times in '79. The fleet was grounded for a while. The cause was metal fatigue and the plane
ceased production in '83. The manufacturer said there weren't enough orders. Now, Mary Schiavo, so, the Comet, the DC-10, you know, there have
been examples before. I'm not suggesting --
SCHIAVO: Right --
QUEST: Necessarily there is these two connections, but you know, the weight of history has to be on the regulators.
SCHIAVO: That's right, the weight of history, and then we look at this other 787, the Dreamliner with the battery fires too. Eventually, that had
to have an order as well. And so, you know, what happens is regulators seem -- at least the United States regulators seem loathe to do it, but in
the long run, it is the thing that can install the corrective measures and it can reinstall confidence in the plane.
So the reluctance to do it sometimes baffles me, but the FAA is often slow to react, and sometimes they react to public pressure and that's what
finally tips the scale.
QUEST: What's your view on this one? The lightning doesn't tend to strike -- you know, it doesn't tend to strike directly twice. So the chance of it
being the same idea --
SCHIAVO: Exactly --
QUEST: Of the MCASS, but at the same time one can't ignore the similarities and the profiles of phase of flight, new plane, and the
profile of what happened during the flight. So I'm just going to open- ended say to you, what do you make of it?
SCHIAVO: Well, you know, you're absolutely right, they can't ignore the prior crash, that's what investigators do. They draw on their experience
in prior crashes to see if, you know, did they not get it right? Did they not have enough remedial measures?
I think it's far worse for Boeing if this is something else. You know, it is the same as Lion Air, they can say, look, you did not follow our
guidance, you didn't have the training, you know, but it can't be. I don't think it's the angle of attack indicator, so if it's an air speed
indicator.
But if it is something entirely different, yet another problem plaguing this plane, and what they're going to have to go back and see is did they
hang too many ornaments on a 1967 tree because this is a 1967 737 design and frame, and they put on heavy engines and the nose tipped up.
And so they tried to tweak it with a computer program. If this is yet something else plaguing the plane, I think it's even far worse for Boeing.
And everybody has reason to be concerned because it's -- you know, it does look like a Comet or a DC-10 at this point until the black box readouts,
which I think will give us the answers probably later this week.
QUEST: Mary, finally, I just want to touch on this. You would agree with me that Boeing has as much interest in understanding what happens, and sort
of the idea that Boeing --
SCHIAVO: Always --
QUEST: Would somehow not wish to get to the bottom of this is simply not the case. They are as concerned if not --
SCHIAVO: They have to --
QUEST: More so to -- and it's not going to be hidden away in a cupboard.
[15:40:00] SCHIAVO: No, they have to get to the bottom of this. And I think that's why they haven't said anything. I think that it may not be
the same and they're waiting to see because they wouldn't want to issue --
QUEST: Right --
SCHIAVO: Guidance to say now get out there and get these pilots trained. I think maybe from ACARS Date, maybe from something, I think they already
know there's more there and they have to get to the bottom of it. They must and they will, but I think there's more there.
QUEST: Mary, thank you, we'll be in touch with more when we hear more --
SCHIAVO: Thank you --
QUEST: From the FAA, thank you ma'am. As we continue after the break, 5G, now I'm told it's going to change my life and online. Now, the race to
roll out this 5G is on, and it's not the smartphone, and we need to understand it. In the moment, our next guest is very much on top of it --
after the break.
(COMMERCIAL BREAK)
QUEST: To have something that's truly life-changing. Five-G is becoming a reality with major networks ramping up efforts to bring us faster speeds,
connections and access to the cloud. To give you some idea, 5g connections were a 100 times faster than the 4G you're currently using.
It's much more than that. Five-G connectivity will impact everything from household centers to thermostats, autonomous vehicles, robots and the race
is on to bring it to you and me. Sprints commercial launch is slated for May, Verizon has been trailing its service in some U.S. homes.
Ivan Seidenberg is a former Chairman and CEO of Verizon. Good to see you again sir, and the author of "Verizon Untethered", detailing his time with
the firm and the evolution. He joins me now from New York. I'll apologize to you, too, sir, that I'm not with you in New York. Look, 5G, is it going
to be everything that people say it should be or will be?
IVAN SEIDENBERG, FORMER CHAIRMAN & CHIEF EXECUTIVE OFFICER, VERIZON: Well, good to be here, Richard, and thank you very much for inviting me. I think
5G is going to be transformative. When you think about the wireless business going from -- as we talk about in our book, deploying technology
from 1G to 2G all the way up to 5G.
Every time we deploy a new technology platform, we enable more things to occur than anybody ever could imagine. So quickly what 5G does is as
you've already mentioned, is 5G --
QUEST: Right --
SEIDENBERG: Will create more capacity, will connect more devices to the network, it uses less power, and it is faster on a latency basis, meaning,
the speed of connection is quicker. So all sorts of new things can occur.
[15:45:00] QUEST: When you were at Verizon, did you realize how quickly this would come along, this 5G? And also, the astronomical sums of money
that it would take to invest in it?
SEIDENBERG: That's a very good question. So when our team at Verizon always believed that if we invested in our technology platforms, we would
be deploying capital that would create growth opportunities. And that was the case when we went from 3G to 4G, and now from 4G to 5G.
So we were a very willing investor in the capital required to put out 5G. And the important thing about 5G though, is that we already have an
infrastructure that has been built out --
QUEST: Right --
SEIDENBERG: Over the last 30 years. So the incremental cost of putting on 5G is much less than the cost of putting in prior technology platforms.
QUEST: Huawei, the question of Huawei, do you trust Huawei and would you - - I don't think you did, did you, put it into your systems?
SEIDENBERG: Well, all I can do is report on what we did years ago which is I think a little different now. We did not have a lot of Huawei equipment
in our network, we had the same concerns that people have expressed now about security and relationships with Chinese industrial policy.
But I do think that what the government is doing now, which is to vet it out and to look at the standards and the protocols and to do a proper
investigation. I trust that the government understands what it needs to do here, and I'm sure the current company under Heinz(ph), they'll take a
careful look at it and they'll act accordingly.
QUEST: Right, but on the bigger issue of Huawei, do you think there're the concerns -- I mean, look at what the U.S. government has said, it basically
threatened the Germans today in the last two weeks that they'll stop sharing intelligence if Germany introduces Huawei.
The Australians and the New Zealand don't, the Brits are saying they can manage it. Do you think that Huawei is a danger to western infrastructure?
SEIDENBERG: Now, well, that's an overstatement, I think. But what I would say is there's enough anecdotal evidence that would suggest that the
various western governments should take a careful look at their practices and their protocols, and to make sure that they're doing a fair job at
representing, providing neutral and important equipment for 5G.
There is no mistake that over time, Huawei will become or is an important supplier for 5G equipment. But I think all of these short-term issues,
they need to be resolved, and I would not hesitate. So as an old guy, looking at the industry in retrospect, I think where we are today is a fair
place to make sure that Huawei is doing all the things that they should be doing.
QUEST: Blessed are the old, Ivan, you are not -- you and I are not that far apart. All right, good to see you, sir, thank you very much indeed --
SEIDENBERG: Thank you --
QUEST: For joining us tonight.
SEIDENBERG: Thank you.
QUEST: As we continue, forget Monday, blue Monday, U.S. stocks are sweeping to a gain -- a good gain, and oh, wow, look at that. We'll talk -
- we'll obviously be talking about other things the best of the day so far, snapping a five-day losing streak and Verizon climbing almost 2 percent as
it spends big, and of course it's seen as a safe stock in times of trouble.
Technology stocks leading the way across the board, even Boeing is paring some steep earlier losses. The U.S. President has delivered his budget
request to Congress, Washington agrees that the document amass to a very large paper weight. The Republican Congress largely ignored the
president's last two budgets.
Democrats who control the House will ignore the budget, that much we know. They'll read it, but lays out the president's 2020 message, and that's big
border wall money. Bigger money for the military. Big cuts to welfare programs and for agencies like the EPA. And the budget's tag line,
promises kept, taxpayers first.
But read the list and each promise pairs with a big demographic that the president won in 2016 and needs to win again next year. Coming up after
the break, from Donald Trump's budget to a man who used to draw up the British version, George Osborne still brings politics to work is the editor
of the "Evening Standard". "Standard", read all about it in the "Standard" with George Osborne.
[15:50:00] (COMMERCIAL BREAK)
QUEST: The "Evening Standard", tonight's headline outnumbered, out-flying to -- this is the backbone of what people read on the way home on the tube
in London. It's jelly good read. Now, George Osborne is the editor and he's keeping Brexit on the front page, it's quite literally.
In 2016, he was the U.K.'s Finance Minister. And it might have been his face on the front. Now, he's the editor of the paper and he gets to
decide what goes on. You heard him earlier, talking about Brexit. Well, what sort of an editor is George Osborne?
(BEGIN VIDEOTAPE)
QUEST (voice-over): It's 10:00 a.m. in London and there's barely an hour before the early edition of the "Evening Standard" goes to press. The
newspaper was founded nearly 200 years ago. And now there's a fresh face in charge.
(on camera): Where's your domain?
GEORGE OSBORNE, EDITOR, EVENING STANDARD: I sit here on the back bench.
QUEST: That will be a first.
(voice-over): George Osborne, once Britain's chancellor of a Exchequer, a rising star of the Conservative Party. He was last seen in politics, part
of a cabinet that called the Brexit referendum. George Osborne is now a paper boy.
OSBORNE: So we've got our good piece about him --
UNIDENTIFIED MALE: Yes --
OSBORNE: Of course, seemingly on the immigration --
UNIDENTIFIED MALE: Yes --
OSBORNE: Policies.
UNIDENTIFIED MALE: It's got to feel like this is the "Evening Standard", and I think that's the job of the editor is to be a bit -- a conductor of a
very --
OSBORNE: Yes --
UNIDENTIFIED MALE: Good orchestra.
QUEST: Today's front page in the business it's called a Wipeout. A photo splash of the Prime Minister Theresa May. The text, outnumbered,
outflanked, and out of time, suitably brutal.
(on camera): Who came up with that?
OSBORNE: So I was saying let's do something big, and Richard came up with the words. Here's your "Standard".
QUEST (voice-over): The paper is a free-be, and has a circulation of nearly 1 million Londoners.
(on camera): People like myself who have spent a lifetime doing journalism and doing news sit around and say, well, you know, what the hell makes him
think he's qualified to do this?
OSBORNE: One of the very early decisions I took was not to bring in a bunch of cronies and friends of mine, but what I want the paper to be is
urgent with the information, telling people what's going on, particularly in this country at a very troubled political time, and I think we've done
that as a team.
You know, this is, in my view, the most influential best paper important newspaper in Britain.
QUEST (voice-over): His critic say Osborne is one of the people who got us into this Brexit mess in the first place, and he shouldn't be directing the
paper's coverage.
OSBORNE: I've been to Downing Street, I don't need to go again. I edit the paper in a way I see and you know, if politicians want to call me out,
fine. But that doesn't mean they're going to change my opinion.
QUEST: Politics isn't the only potential conflict he faces. The paper has Russian and Saudi investors, and Osborne is an adviser to both the
investment firm BlackRock and his brother in Silicon Valley VC Fund.
[15:55:00] OSBORNE: Some of these conflicts are perceived, but the reality is I'm pretty confident in my news judgment that I will follow a
story where it takes us. And people question whether I would do that and I have done that.
QUEST: Once the night's "Standard" is put to bed, it's sent to the presses on the outskirts of London. The gears grinding much faster here than in
Westminster and Brexit.
OSBORNE: When you leave politics, it's quite hard to find something that fills the hole. And what I've tried to do is get a new job and a new set
of responsibilities and a new career.
QUEST: That new career gives George Osborne huge influence in London.
UNIDENTIFIED MALE: Free "Standard", great "Standard", great.
(END VIDEOTAPE)
QUEST: Last few minutes on Wall Street, the trading, the Dow breaking a five-day losing streak and it's impressive that the Dow is actually up this
amount because Boeing is weighing down very heavily on the stock. The S&P and the Nasdaq having the best day in some six weeks, 2 percent on the
Nasdaq, the S&P up 1.5 percent, all sectors are doing well.
The tech is the best so far. Have a look at the Dow 30 and how that -- the Dow 30 and only one stock and absolutely individual reasons why Boeing is
the only one that is down, Apple, the best of the day in there. Now, it is very often, you really don't see, Apple the best, Boeing obviously for sad
reason, the lowest.
We will take a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. I interviewed George Osborne many times when he was a chancellor of the Exchequer. It was weird experience
interviewing him, now he is the editor of the London or the "Evening Standard" as it is.
Former top line politician, front bench politician now editing a newspaper. It's sort of like game keeper turned poacher or maybe poacher turned game
keeper. Not sure which way round it is, but he seems to be making a good job at it. He's turned the -- he dropped the London title from the paper,
he's redesigned it and he seems to be fully engaged in the issues of the day.
Perhaps he's realizing that there is a new life, another life after politics, and because he's the editor of such an influential paper like the
"Evening Standard", it's not as if he's disappeared off into the yonder only to talk about the heady days when he was the chancellor.
No, he's still a power player in London and in Britain tonight. George Osborne, interesting to see what he does next. And that's QUEST MEANS
BUSINESS for tonight, I am Richard Quest in London, whatever you're up to in the hours ahead, I hope it is profitable.
(BELL RINGING)
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