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Quest Means Business
Indian Parliament Passes Ban on Vaping; Sources: U.S. to Cut its Financial Contribution to NATO; U.K. Labor Leader Corbyn Fails to Apologize Over Anti-Semitism Claims. Aired 3-4p ET
Aired November 27, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:15]
RICHARD QUEST, CNN INTERNATIONAL HOST, QUEST MEANS BUSINESS: Sixty minutes of trading left, and as you can see, the market is up and therefore, we
started at the record, so we are at a record. A bit of a wobble in the morning, which we will need to discuss and find out why.
Economic news here, the market likes what it is seeing. It is up pretty much across the board. We have records on the Dow, the NASDAQ and the S&P.
Those are the markets and these are the reasons and factors why.
The conversation goes from recession to rebound. Revised growth numbers show the U.S. economy is picking up steam.
Manchester City, one of the world's most valuable sports franchises, after a new investment shows just how valuable.
Now, 40 pizzas in 30 days. Papa John himself says he gorged on his former company's pizza and he found it wanting.
We are live in the world's financial capital, New York City. It is Wednesday, it is November the 27th. I'm Richard Quest and of course, I
mean business.
Good evening. Tonight, a Thanksgiving treat for Donald Trump has revised GDP numbers showed the U.S. economy grew faster than initially expected and
faster than the quarter that came before it. The numbers are encouraging. Q3 up to 2.1 percent from 1.9 showing an economic slowdown may not be as
severe.
Cristina Alesci is here. Look at those graphs. Look at the numbers. We were 1.9 and 2.1 now. This shows the economy is growing.
CRISTINA ALESCI, CNN BUSINESS POLITICS AND BUSINESS CORRESPONDENT: Yes, normally, we wouldn't be talking about revised GDP numbers, but we're
talking about it because everyone, a couple of months ago was worried about a potential recession, a downturn.
This obviously very good news politically for Donald Trump and his reelection bid. This is what he is hanging his hat on and telling the
American people, you know, as of September that the market will crash, and the economy will hit a downturn if he is not reelected. So he is
definitely playing on those concerns.
QUEST: But if we look at the other numbers. The only one I can see that's a bit worrying is consumer confidence, which is a sort of a strange number
because that continues to trend downwards. But it's not empirical in the sense of a GDP number.
ALESCI: You're absolutely right. Consumers have been the backbone of this economy, and the reason that we're growing the way we are, it's offsetting
some of the decline in business investment.
To your point, if we start to see weakness and that is a leading indicator as opposed to this GDP number that looks backwards. So if we start to see
some of the leading indicators getting softer, that's when you know, people will start to worry -- analysts and investors will start to worry again.
But I think it's important to note, although this number is very good for Donald Trump, this is not that much different in terms of growth than the
kind of growth that Obama generated.
So in terms of making a comparison, you know, we have to look at this as he inherited a pretty resilient economy to begin with.
QUEST: But six months ago, we were talking I'm worried about recession.
ALESCI: Yes.
QUEST: That's now -- I was going to say gone, but certainly not around.
ALESCI: I think it's not around because the global economy seems to be holding up a little bit better than people expected. And also, the trade
war hasn't hit the U.S. consumer, which again, is the backbone. That's why we saw you know, this sort of thawing of tensions between the U.S. and
China because Donald Trump knows that if he hits, you know, consumer goods with tariffs, that that could impact the very good narrative that he has
out there right now.
QUEST: Oh, no good narrative, the market up 47 at the moment, but we're at a record, successive records over multiple days. And, you know --
ALESCI: And new highs.
QUEST: Donald Trump is very good at sort of ignoring it when the market goes down. Extremely trumpeting it once it's at record, but there is valid
reason for that. The markets are at records.
ALESCI: Are there valid reasons? I don't know that there are valid reasons. I think there's just a lot of optimism about future growth, but
I'm not sure what it's rooted in.
I mean, it seems to be rooted in the potential for corporate profits to grow. But where is the growth going to come from? Where is this
exponential growth going to come from?
Look, a lot of this sort of is trading feeding on itself. If you feel good, other people feel good, and there's a sense of optimism about the
future. But at any given moment, and you know this, the sentiment can change on Wall Street.
You know, if we don't get some kind of resolution, if we don't get to a Phase 1 trade deal, then that can turn really quickly.
[15:05:09]
QUEST: Have a good Thanksgiving. You doing duty?
ALESCI: Just for you.
QUEST: Thank you. Excellent.
ALESCI: Just for you.
QUEST: Thanks very much, Cristina Alesci. The new GDP numbers weren't the only good news on Wednesday. Other economic data showed that U.S. economy
is still solid. There you have the Dow, but look at the triple stack.
Of all the countries, the U.S. is one of the few that been able to withstand the pressures from the trade war. So all three indices are at
record highs.
Now the poorer one of course, remember, it was just a few weeks ago that we were having the S&P through 3,000 and now, we are off over 3,100. Twenty
eight thousand is a solid level for the Dow at the moment. And the NASDAQ, the best of the session.
Rana is with us. Rana Foroohar is the Associate Editor at "The Financial Times," and good to see you Rana, and also the author of the new book,
"Don't Be Evil." She is with me. This is impressive in the sense that the economic -- I was talking to Cristina, you heard the conversation, the
doomsayers said it was all going to be over, turn off the lights and put out the milk bottles.
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Absolutely. But you know, I'm going to go back to what I've been saying for years. It's the Fed keeping
the markets up. I mean, I think that when you start to see the turn, it was when the Fed said we're going to expand our balance sheet again, we all
know -- we've had this conversation before. This is financialized growth. This is about asset prices staying up.
There's not really an underlying growth story. So I'm interested in that consumer confidence number because I think if that starts to weaken further
--
QUEST: Right. If it is trending down, it is of all the numbers, I was reading, consumer confidence is the weakest one. But if the Fed is -- not
the only, but the primary thing propping this up, then when they sought to hold and indicate tightening, you'd expect the same thing we saw last year,
not maybe not as fast or furious.
FOROOHAR: Yes, I think though -- I mean, it's amazing to me, I thought that the Fed was at some point going to capitulate and say, look, monetary
policy is done. We've got to have a real growth story. They haven't.
You know, I think the Fed is in this really interesting -- interesting and worrisome position, frankly, where they know they are the only thing
standing between the U.S. and recession and you know, major trouble in the rest of the world because of that.
I really believe that and I think that they feel like they can't let the economy fall apart.
QUEST: But what they want from the government in this -- from the administration because deficit -- you can't have more spending because --
FOROOHAR: Right.
QUEST: All right, you can have better spending, more scarce --
FOROOHAR: Better spending. Yes.
QUEST: You can have that. Yes. But the deficit is already at unseasonably uncomfortable levels.
FOROOHAR: Right.
QUEST: You had tax cuts. They've been gone and there's not much room for more, so when you say the Fed is the only game in town, what else could
there be?
FOROOHAR: Well, I think it's all about politics now. It's about what happens in 2020. If we get another Donald Trump presidency, I think we've
got to have a big market correction.
On the other hand, if you get -- if you get -- seriously, and if you get -- because there's no growth story there. I mean, we have -- we're not going
to get a real trade deal with China. We're not getting -- there's talk of some industrial policy, you know, good luck. There's no 360 view in how to
connect the dots between job creators and educators.
On the other hand, who is the Democratic candidate going to be?
QUEST: Let's talk about technology.
FOROOHAR: Yes.
QUEST: Your new book, "Don't Be Evil."
FOROOHAR: Yes. Good title, right?
QUEST: Well, you do good, don't be evil, no evil, do no evil. Are you lumping them all together?
FOROOHAR: No, actually, there's different stories here. But the primary story is the Google/Facebook targeted advertising story. And actually, the
reason I chose "Don't Be Evil," of course, is that's the old Google model that they've sort of quietly let go a couple of years ago.
And Facebook gets a lot of hate, rightfully so. But if you go back and look at why we're at the point we're at today where huge monopoly power in
corporations in tech and particular, political polarization, kids getting addicted to technologies. It's because of Google. It is because of the
fact that they started this highly targeted advertising model in the 19 -- mid-1990s. And that's the arc that we've been following.
Now, they're trying to make some changes. But this is the core business model. It's all about surveillance capitalism. It's about following you
around online and increasingly offline and monetizing.
QUEST: But why is this an evil?
FOROOHAR: Oh, my gosh, where to where to begin, Richard?
QUEST: No, but come on. I use Google all the time for my search. But I don't suddenly find myself frothing at the mouth to buy things because I
see 15 adverts. I get a bit maybe frustrated and annoyed.
FOROOHAR: Think about though, all right, Google is going into healthcare. It's going into finance. Think about the insurance model and you know, you
might be able to get great deals because you're an affluent person.
Predatory lending at the bottom. It's split -- you know, this model of surveillance, capitalism splits everybody into individuals. There's no
shared risk pool anymore.
QUEST: Don't go anywhere, ma'am.
FOROOHAR: I won't.
QUEST: If you will be as kind. Because you'll be aware, of course in the United Kingdom, the Labour Party has a very different view on what it
believes democratic capitalism should look like in a modern social democratic --
[15:10:30]
QUEST: We will get into that in just a moment.
FOROOHAR: Big changes afoot.
QUEST: Well, it depends on the electorate. But yes. Yes, indeed. Don't go too far.
FOROOHAR: I won't do.
QUEST: We are hearing that the Trump administration has moved to substantially cut its contributions to NATO. Now, don't get excited. It's
a largely symbolic move. It's not the national defense budget. It's actually the money they give to NATO to help pay for the keeping the lights
on.
The President is preparing to attend the NATO Summit next week to mark the organization's 70th anniversary and officials tell CNN that other NATO
members are expected to make up the shortfall.
Pentagon reporter Ryan Browne is with us. Ryan, as I said, this isn't a national defense budget. This is sort of the money that goes to NATO to
pay to keep on the lights. Why are they doing it?
RYAN BROWNE, CNN PENTAGON REPORTER: Well, it's part of the Trump administration's broader effort to get European allies to do more. You
know, ever since he was a candidate, President Trump had long slammed European members of NATO for not contributing enough to their defense.
Their defense budgets being too low, falling below the two percent of GDP target that the Alliance recommends.
So they haven't -- they've had some success getting some of the allies to boost their defense spending. But, you know, as part of that broader
effort, they're kind of touting this effort to get them to pay more for the running of the headquarters. It's about $2 billion or so for that kind of
central pot of money.
And so they have been pushing these allies to do more and they've actually been able to successfully this week, we're being told, right on the eve of
this Summit, get the allies to agree to contribute -- nearly all the allies -- to agree to contribute more to offset the U.S. reduction.
Now, again, it's not a huge amount of money, but it does kind of set the tone for this Summit in London that's coming up, you know, previous Summits
where President Trump has attended and NATO have been a bit combative when it's come to resources, particularly clashes with Germany in particular.
QUEST: Yes.
BROWNE: So again, it's a bit of a victory for the Trump administration going into this Summit, whether they'll be able to get any other increased
contributions while the Summit is taking place remains to be seen.
QUEST: Come back to us with more on this one. We will watch closely. Thank you, sir.
Now after the break, more than 160 economists and academics have come out in support of Britain's Labour Party and its economic policies.
How many pizzas did you eat this month? Ten? Fifteen? How about 40? Forty in 30 days. The former CEO of Papa John's Pizza says he has done it
and he is not impressed with the product of the company his name is on. In a moment.
(COMMERCIAL BREAK)
[15:15:39]
QUEST: A new sporting record has been set by one of the world's biggest tech investment funds. Silver Lake is buying a 10 percent stake that is
worth $500 million in the City Football Group which is the owner of several football clubs around the world including Manchester City. The deal values
the group at $4.8 billion.
Matt Egan is here. So who are these -- who is these group City Football Group that's selling?
MATT EGAN, CNN BUSINESS SENIOR WRITER: Well, they own Man City. They own soccer clubs, football clubs, excuse me, throughout Europe, the United
States, Australia, China, Japan and what they're doing is they're getting this $500 million cash injection from Silver Lake Partners, and they can
use that money to further expand by buying more football clubs around the world.
I think what's really interesting is that this investment is coming from a California-based private equity firm that we know for investing in tech
companies.
I mean, they are known for having stakes in Dell and Alibaba. They once owned Skype. And what they've actually done those they've diversified.
They've gone into entertainment and sports. They own shares in mixed martial arts, UFC and also in MSG, which owns the Knicks and the Rangers
here in New York.
QUEST: So why have they done it?
EGAN: I think they're simply following the money. I can't blame them.
QUEST: Well, what money? Because the company -- Man City itself has not done spectacularly well financially on the fields with their results.
EGAN: But what we're seeing is that sports franchise valuations have gone through the roof. This deal done at $4.8 billion. Just two months ago,
the Brooklyn Nets of the NBA, they did a deal at $2.4 billion. "Forbes" pegs the Dallas Cowboys at $5 billion. And that's because TV contracts
have just been lavished on these sports teams.
It's really the Holy Grail right now, live sports, because people are obviously cutting that cords. They're going to Netflix, but you can't do
that when it comes to live sports.
QUEST: What do you do though about in Manchester City's case? Where does it go? I mean, what would Silver Lake do with its stake? Just sit and
watch it grow?
EGAN: Well, they've said that -- at least, according to "The Financial Times," they've indicated that they want to hold this for about a decade,
although they also said they could potentially sell some shares.
But listen, sitting on a sports franchise investment has been great one. I think it's time, Richard that we stop calling them trophy assets. They've
been truly spectacular investments if you can get a piece of them.
QUEST: Good way for us to move on. Thank you, Matt. Trophy assets is what Matt Egan described them. Well, the days when the sports teams were
trophy assets may be coming to an end.
According to "Forbes," the Dallas Cowboys of the NFL are the most valuable franchise, some $5 billion boosted by TV rights, merchandise and deals and
sponsorships.
The New York Yankees come next and you can see as it goes down the fort, the football rivals Real Madrid and Barcelona, they are both at $4 billion.
Not far behind.
Manchester -- by the way, Manchester United comes into number six at $3.8 billion. But way down the list. It's not even on the list, it's way down,
27th is Manchester City. Twenty-fifth on the list.
Don Riddell is with us to talk about this. Don, you know, the days when the Mansours bought their stakes and cashed in or bought into what they
perceived was just a vanity Matt Egan says it is gone.
DON RIDDELL, CNN WORLD SPORT: Yes, I think it would be hard to argue with that. I mean, just look at the valuation. It is just extraordinary. As
you were saying, earlier this year, "Forbes" had Man City $2.69 billion and now we're close to five. Admittedly, that is the valuation of CFG, the
City Football Group, which owns a number of clubs, but there is no doubt that Manchester City is the jewel in the crown here, and this valuation is
absolutely extraordinary.
QUEST: And all that of -- I mean, looking at our top 10 list. Of the top 10 from the Dallas Cowboys to the Los Angeles Dodgers, which ones deserve
to be there, so to speak?
RIDDELL: Well, it's interesting because if you look at that list, it means you don't have to be successful on the field to be valued at $5 billion. I
mean, the Dallas Cowboys, famously were great once upon a time.
They haven't won the Super Bowl in decades, but yet they seem to be a sporting franchise with this phenomenal wealth and investors willing to put
money into them.
[15:20:12]
RIDDELL: So that is interesting. Manchester City, there is no doubt about it, one of the top teams in Europe. They've won the Premier League four
times in the last seven years. They've won the last two. They won an unprecedented domestic trove of trophies in England this year.
They're not doing quite so well in the Premier League at the moment, but they are into the knockout stages of the Champions League, which is the one
tournament that they absolutely crave. That's the one that's eluded them.
But to Matt's point earlier about live television and live sport. There was an argument made recently that the NFL in the United States is
basically the one thing that is keeping the television model, the business model as we know it in place. Without football, television would look so
very different. And I think you can apply that same argument to other top sports, like soccer, like football all around the world.
QUEST: Don Riddell. Thank you, sir. Always excellent to have you with the business of sports. I appreciate it.
We are two weeks until the U.K. general election. A group of economists and academics have thrown their weight behind the opposition Labour Party.
A hundred sixty three of them have signed a letter saying that Labour deserves to form the next government for its spending plans. Now, the
spending plans involved include 275 billion pounds in public investments to kick start growth and raise productivity.
A million new jobs through Green Industrial Revolution, and perhaps most controversially, nationalizing certain industries like the railways and
Royal Mail.
Now, Stephany Griffith-Jones is an economist and the Financial Markets Program Director at Columbia University. She joins me from Brighton in the
U.K. She joins me via Skype. What is it? I mean, I've read the letter, and I've read a large part of the manifesto on economic policy, but it
seems to me, it is turning the clock back to many of the policies that the Wilsonian, that the Callaghan years did that the Duchy has just simply
reversed.
STEPHANY GRIFFITH-JONES, ECONOMIST AND FINANCIAL MARKETS PROGRAM DIRECTOR, COLUMBIA UNIVERSITY (via Skype): I'm delighted to be on your show which I'm
a big fan, Richard.
QUEST: Thank you.
GRIFFITH-JONES: I think it's actually turning the clock forward, if I may disagree with you, because one of the big challenges for the future that
the United Kingdom faces, as does the rest of the world is combating climate change.
And for that, to put it in American -- using an American expression, we need a Green New Deal. And this is one of the areas which Labour would
really be able to fulfill, both by increasing public investment as you mentioned, and also by creating a National Investment Bank, like the ones
that Germany and France have to encourage private investment.
So the public spending would lead to public investment, to levels that are not much higher, or in fact, even similar, very similar to those of France
and Germany and other European countries.
QUEST: The plans for taxation, for example, don't seem to I mean, I mean, I've read both the funding side of it as well, or the funding document, and
it's costed out, but there's two new tax brackets that are introduced, including a super tax bracket, but no details on how much or how it will
operate.
GRIFFITH-JONES: I think there is a focus, as you say, on taxing the very rich, the sort of so-called richest five percent and they would be taxed at
a higher rate, five percent more in marginal terms.
There's also an emphasis on taxing multinational corporations in proportion and I think this is very fair and interesting system in proportion to the
sales and the number of employees and profits they have in the country.
QUEST: Is there not a risk though? Because, obviously the corporate tax rates as well. But under Labour, will they be competitive at a time
particularly as the U.K. comes out of the E.U. assuming Brexit goes ahead, which for the purpose of this question, assume that happens. I mean, there
is a race to the bottom largely started by the United States on corporate tax rates. The U.K. will fare badly if Labour hikes rates.
GRIFFITH-JONES: Can I just answer one of your sub questions? If Labour is elected, we would have a referendum where there would either be the
possibility of remaining, which I think would be the best for the U.K. and including for business.
I mean, they have been really crying out for that. Or it will be a very, very soft Brexit.
QUEST: Right.
GRIFFITH-JONES: Which I think is certainly best. So that in itself would make Britain again an attractive country for investment, which has now
completely slowed down. So I think that that that would be a big advantage for business as well, and for ordinary people.
[15:25:24]
GRIFFITH-JONES: But the other point is, you're right, that there is a race to the bottom. But for example, in other E.U. countries, corporation tax
is much higher than it is in the U.K. at the moment and it would be even higher than it would be under Labour.
QUEST: Right.
GRIFFITH-JONES: So if we are competing for attracting investments, say with mainly E.U. countries which we do, then we will not be in a bad
position.
QUEST: Good to have you, Stephany. Thank you very much indeed. Rana is with me again. This is a very unusual manifesto in the sense that it does
seem to turn back the clock on the prevailing wisdom.
FOROOHAR: Well, it would be the biggest change in the U.K. economy since - - really since the big bang in the 1980s. Right? That's your Reagan Revolution.
Now, you know, there are those who feel that the pendulum shifts between public and private power about once every 40 or 50 years. And so we're
probably due for this kind of shift.
I think the success of this manifesto, assuming that we had a Corbyn government would really be about execution. So you take something like the
idea of nationalizing the broadband service in the U.K., I'm actually pro government involvement in certain things like broadband, because it's tough
to get private investment to roll it out as quickly as needed, but are you going to make it free? I don't think that's a great idea. So the devil is
really in the details, I think.
QUEST: Also the National Investment Bank that Stephany was talking about that other countries have, these are nice ideas, but as you said, the way
it is executed and Britain has had a spectacularly bad history of public ownership?
FOROOHAR: Well, that's actually very true, and it's going to be interesting to see how that plays at, you know, in the ballot box whether
people remember that.
I mean, the city is already spooked, you know, this. I mean, the hedge funds are fleeing. Folks are setting up contingency plans. There's a
sense that this is going to be a massive change for the entire financial sector.
QUEST: Is it the government's business to be owning the broadband network?
FOROOHAR: I actually think it is, and I'll tell you why. I think that there are certain areas of infrastructure where it's really hard to get
enough investment quickly enough, it's just not as profitable.
I mean, think about, you know, the infrastructure conversation we're having in the U.S. as well. You know, real estate agents would -- or sorry, real
estate companies would rather build condos than bridges. I mean, there are certain areas that you need nationalized support and security as well an
issue here. But it's tough. It's really tough to execute this stuff, and I think it's going to be so interesting --
QUEST: A spoof advert going around at the moment in Britain with an actress called Maureen Lipman, who supposedly on the phone, she says get
your hands off my broadband.
FOROOHAR: Well, I don't know. You know, I mean if BT was rolling it out faster, people wouldn't be complaining, but it's tough. Big tech maybe
should be part of this, to go back to my book.
QUEST: "Don't Be Evil."
FOROOHAR: "Don't Be Evil." Google pay up, help build rural broadband.
QUEST: Oh, no. But hang on, arguably, Google would be delighted to help pay for it.
FOROOHAR: Oh, I don't know.
QUEST: But what would it gain in return?
FOROOHAR: Well, exactly. Exactly. Devil in the details.
QUEST: Where I come from in Northern Yorkshire -- in West Yorkshire, we have a saying, you get owt for nowt.
FOROOHAR: I'm going to steal that.
QUEST: Owt for nowt. There we go. Thank you. Good to see you.
FOROOHAR: Good to see you.
QUEST: Happy Thanksgiving.
FOROOHAR: You too.
QUEST: Now, the global backlash against vaping continues in other major markets. It is first banning e-cigarettes.
(COMMERCIAL BREAK)
[15:30:00]
QUEST: Hello, I'm Richard Quest, there's more QUEST MEANS BUSINESS in just a moment. We're going to look at how tobacco companies are reacting to a
likely ban on e-cigarettes in India. And travel chaos just one way if you look, flights grounded, roads are blocked, and it couldn't happen at a
worse time in the United States as more than 30 million Americans travel home for Thanksgiving. This is CNN and here, the facts always come first.
"The New York Times" is reporting Donald Trump knew about the whistleblower complaint when he finally released military aid to Ukraine in September.
We're learning that a White House budget official who initially signed off on the aid freeze feared it could violate federal law, it's all according
to transcripts of depositions in the house impeachment probe.
The Trump administration is to reduce its contribution to NATO's budget, according to several sources, it's a symbolic move largely to pay for
things like NATO itself, rather than actually national defense. Other members are expected to make up the shortfall.
The U.K. Labor leader Jeremy Corbyn is under fresh pressure of allegations of anti-Semitism within his party after he failed to apologize over the
issue. Four times he was asked to do so in a "BBC" interview that came on the same day as the U.K. chief rabbi launched a scathing attack on the
Labor Party's handling of the anti-Semitism issue.
A day of mourning in Albania after the country's most powerful earthquake in decades on Tuesday. Rescue crews are still sifting through the rubble,
using drones and search dogs to reach survivors. At least, 30 people are confirmed to have died and hundreds of people are known to be injured.
If you're traveling in part of the USA within the next day or so, there will be delays, there's no getting away from it. Early Winter storms are
disrupting travel at the Thanksgiving, in the west, heavy snow is been driven by hurricane-force winds, and the storm is so powerful it's being
called a bomb cyclone.
India's parliament has passed a bill making it illegal to manufacture import or sell e-cigarettes. It's a country of more than a 100 million
smokers. People who violate the ban could face a year in prison for a first offense. Dorian Fuhrman is the co-founder of the PAVe, grassroots
organization against vaping.
Let's get to the bigger issue, it's -- I mean I've been to India a gazillion times and smoking is just everywhere. Is it reasonable to assume
that this law will be obeyed?
DORIAN FUHRMAN, CO-FOUNDER, PAVE: Well, that's hard to say. I mean, what we do know is that vaping is not proving to help adult smokers stop
smoking.
[15:35:00]
So, if that's the reason that people hope that it gets into India, then, you know, there's no proof. There's no proof. So, kids in America have
been smoking in record numbers, and they were sucked in by the fun fruity designs and high tech stealth devices. They came into our schools, the
predatory practices of these companies.
They targeted kids where they live on social media and they came into our school and they have created this youth vaping epidemic. So, it's a very
serious concern, there's no proof that it helps adult smokers quit.
QUEST: Well, we had the head of -- we had from British-American tobacco. You know, the problem for your organization to some and others similar is
that, the tobacco industry sits here and says clearly, we do not want people to smoke.
FUHRMAN: Right --
QUEST: We think vaping is an alternative for those who are existing smokers. And we don't think you should start vaping if you're not already
smoking.
FUHRMAN: Right.
QUEST: So, you're at a bit of a loss. You're always like you're pushing against a stream here because they've given you all the answers you want.
FUHRMAN: Right, well, they say what they want -- what they think they want us to hear, and it's not -- it's not true. I mean, basically kids who have
-- who would have never picked up a cigarette in America are now vaping in record numbers. And it's actually proven that kids who vape are now four
times more likely to start smoking whereas they would have never smoked before.
QUEST: Some of the reports that I remember reading a few months ago in "The Times" of the effects of vaping, of addictive vaping --
FUHRMAN: Yes --
QUEST: And the personality changes that take place.
FUHRMAN: Yes -- no, they're very true. The nicotine affects the developing adolescent brain, it causes change in personality, in memory, in
mood control. It opens up pathways for further addiction, so kids are more likely to start using other substances. But it's really -- it's the anger,
the extreme anger that these kids get when they can't get their devices or even just the effect on their emotions of the nicotine because they've
never had such high levels of nicotine.
The cigarettes of today do not have these high levels of patented nicotine salt which goes directly to the adolescent brain.
QUEST: So -- I hesitate to put it in such vulgar terms, which is that between vaping and smoking, you're basically saying smoking is safer?
FUHRMAN: I'm not saying smoking is safer.
QUEST: No, but you know something --
FUHRMAN: Right --
QUEST: The alternative is clearly so awful, so tell me --
FUHRMAN: Well, kids would have never -- in America kids would have never picked up a cigarette. I mean, the public health groups in America have
done such an amazing job, you know, getting kids off cigarettes, and now they're vaping in record numbers and they're going to start smoking again.
And so that's a huge problem.
QUEST: Here's my problem. At the moment, vaping, JUUL and the companies that are involved and all of them, they are perfectly legal business
activities. You may not like them.
FUHRMAN: Right --
QUEST: But they're not against the law.
FUHRMAN: Well, some of them are, actually. So, the FDA has not yet regulated all of these devices. They keep pushing them off. They keep
pushing the regulation off to 2020.
QUEST: But my point is that until they are banned --
FUHRMAN: Right --
QUEST: Surely these companies should be entitled to go about their business.
FUHRMAN: Well --
QUEST: By all means prosecute a ban.
FUHRMAN: Right --
QUEST: But until they do, oh, it's like cigarettes. Until they ban, people can smoke.
FUHRMAN: Well, but that's happening in America now, they're being banned in state-after-state because the FDA is not doing their job to regulate
these devices the way they need to be regulated. And you know, there's no proof again that these devices are safer than cigarettes. What's proven is
that there have been no long term longitudinal studies to show that they definitely help adult smokers quit smoking.
QUEST: Good to see you --
FUHRMAN: Thank you so much --
QUEST: Thank you very much, indeed, thank you --
FUHRMAN: Thank you.
QUEST: Now, bad news for Boeing or at least more bad news. The aircraft manufacturer is having trouble getting its planes to customers, and the
problem is not just the 737 Max. We'll look at the various planes that Boeing makes in just a moment.
(COMMERCIAL BREAK)
[15:40:00]
QUEST: Bank shares are down on Wednesday after the "Seattle Times" published a photograph that showed the fuselage crack in the 777 X. Now,
there you have it. This was the crack, it occurred -- we've known about this. It occurred during an extreme test of the 777 X's plane strength.
Now, this was the last test that was meant to take place, they're all watching it.
They pressurized the aircraft, they bent -- so, the idea was they bent the wings up and then they bent the nose down, and the fuselage down, and they
pressurized it to an absolute 99 percent of limit. It was supposed to have of course stayed in one peace, but then at the moment, the fuselage just at
the back cracked.
We thought it was the rear door blowing off, but that's the first picture. For Boeing, it's an addition to a load of other issues facing it. So,
you've got the 737 Max where the FAA is still reviewing, we know the problems of that. You've got the 737 NG, now that, it needs a redesign of
its nacelles and cowls for the engine. It's also of course got problems with the pickle fork which is between the fuselage and the wings.
Then you've got the 777 X. This is the big hope for the future, unfortunately, deliveries are now pushed back into early 2021. Again, it
was a challenging schedule that they'd set themselves. But it's -- the issue there, of course, and I think where the thing fell off or blew up was
just about there. And then you've got Boeing cutting production of the Dreamliner because of demand concerns.
You've also got problems with the Dreamliner and the Rolls-Royce engines. The Trent 2000 engines, enormous problems. In fact, Norwegian today
announced that it was cutting certain routes because it's having so many problems with its 787 Trent engines. So, you get an idea. All of this at
a time of great travel, CNN's Rene Marsh has more.
(BEGIN VIDEOTAPE)
RENE MARSH, CNN AVIATION CORRESPONDENT: Well, the FAA in a letter to Boeing said that the agency will inspect and sign off on all 737 Max planes
before they're delivered to the airlines. Now, this was an authority that Boeing once had. It's the controversial practice that essentially allowed
the manufacturer to self-police by performing its own safety checks on planes before they delivered it.
This move by the FAA though can only be read in one way. It is a public push-back on the pressure that the agency says that it's been feeling from
the manufacturer to accelerate the process of getting this plane back in the air. Now, the FAA is making very clear in this latest move that it's
not working on Boeing's timeline.
As Boeing is itching to start delivering the backlog of jets to airline customers. So, it's very important to realize that Boeing has been in a
crunch. Its financials have suffered during the months-long grounding and its 737 Max production line which has slowed, but not completely stopped.
Is turning out some 42 jets every month. And so, it is running out of space to store these finished planes. Rene Marsh, CNN, Washington.
(END VIDEOTAPE)
[15:45:00]
QUEST: Well, it doesn't really matter what your plane is if you're in these conditions, you ain't going anywhere. If you're traveling to or from
the United States, be prepared for major disruptions. There was snowstorms and systems that could impact millions of travelers, 30 million are going
to take to the roads and the air over the next few days as with Thanksgiving and the holiday season.
They were blizzard warnings in effect, and the west, and powerful winds and snow is hitting the Midwest and moving east where I am. It's so powerful
it's called a bomb cyclone. And the chaos is already grounded hundreds upon hundreds of flights. CNN's Ryan Young joins us from Minneapolis,
Minnesota where dozens of flights have been canceled.
Is it actually cold where you are?
RYAN YOUNG, CNN U.S. CORRESPONDENT: Absolutely, Richard. Look, the last time we talked to you, we were covered by some buildings. We decided to
move to give you an idea of the full force of this. First of all, more than nine inches of snow has fallen. You could see some of the remnants
here.
It has stopped snowing in the last few hours, but as you look in this direction, you can sort of see the Winter wonderland has been left behind,
Richard, as we talked about this before though. It does have an impact on travel because the slick roads is what everybody is concerned about.
We're on a bridge, and here on this bridge, you can see they've been doing a good job of salting and sort of moving and plowing the snow. But we have
seen several accidents. In fact, almost 200 accidents have happened in Minnesota where people really know how to drive in the snow, 300 spinouts.
And here's the part that you know about, Richard because you've worked outside before. That cold hits you in the lungs and that steady breeze
makes the feel-like temperature a lot lower. Of course, with some 50 million Americans expected to be driving around for turkey day, they're
hoping that people will get home --
QUEST: Right --
YOUNG: And out of the way before it gets cold --
QUEST: But --
YOUNG: And some of the roads sort of re-ice over.
QUEST: The real problem of course, is that people will be starting their journeys, and you know -- and the traffic, the awfulness of the weather,
they may not complete them or they may get where they're going and not be able to get back.
YOUNG: You know what? That's always a concern. But I think what's happened is, with the storm, somehow the timing has sort of worked out in
everyone's favor so far. The nine inches, the ten inches of snow that we may have received here happened before the airport really got rolling. So,
we only had 35 delays here in Minneapolis, about a 100 -- actually a 100 delays and then about 35 cancellations --
QUEST: Right --
YOUNG: And that's good news as you know as someone who flies all the time. We were just talking to a pilot at a hotel, he was saying because all the
snow fell early, they were able to --
QUEST: Right --
YOUNG: Get out of here, and this is of course a big international hub. So, that's one of the good news so far.
QUEST: You know, I always remember that saying, there's no such thing as bad weather, only inappropriate clothing. So, I trust that you are --
well, we dealt with thermals earlier. Good to see you, thank you, sir. Thank you, oh, go ahead, go ahead, you were going to say --
YOUNG: Yes --
QUEST: You were going to say?
YOUNG: No, I was going to say, Richard, as a guy who grew up in Florida, you know, the idea of seeing all this snow just fall like this and just be
parked on the side, especially during the holidays, it's something that we used to joke with our relatives about.
QUEST: Right --
YOUNG: We would send them e-mails and say, hey, it's 75 here. Guess what? My family did the same thing to me, they're like, hey, it's 79 here in
Miami, enjoy that weather up there in Minneapolis. The good news so far is at least no major accidents, that's the good news that we can report, even
though it's a little chilly up here, and I'm sure my face is completely frozen just yet.
QUEST: It will be and if we keep you there for longer, it certainly will be. Sheer sadism. Good to see you, sir, thank you very much indeed. All
right, let me bring you some details. New explosions have hit a chemicals factory plant in Texas. The first explosion was at 1 O'clock this morning,
the blast -- there it -- let's just watch those pictures.
Apparently, it was so strong it sucked the doors out of the frames. The fire continues to burn, it's very powerful. It's obviously fuel-fed, and
local authorities say they're still trying to work out what actually happened. Now, we'll be back in a moment.
(COMMERCIAL BREAK)
[15:50:00]
QUEST: The founder and former CEO of Papa John's Pizza has gone cold on the project that he used to sell. John Schnatter who started the firm in
'84 is now becoming embroiled in a very nasty row by NFL player protests. He eventually resigned. In an interview with a Kentucky TV station, he
said he believes the company is being mismanaged.
He told "WDLB", "I've had over 40 pizzas in the last 30 days, and it's not the same pizza. It doesn't taste as good. This is all a farce." All
right, so I worked it out, that's 10 pizzas in a week which is what we've got here, 10 pizzas. Now, John claims he ate each week for a month, ten of
them.
Paul La Monica is here. Paul?
PAUL LA MONICA, CNN BUSINESS REPORTER: Oh, gosh --
QUEST: Don't let me stop you.
LA MONICA: I think I may stop myself. What do you want to talk about? Do you really want me to take a slice of pizza?
QUEST: No, I don't, no, I don't. The -- what's gone wrong here? I mean, is the pizza -- is the fact that Papa John's is saying the pizza is not any
good any more, is that going to be taken seriously?
LA MONICA: I don't think it is because John Schnatter is a very tarnished figure right now. Obviously, he was forced to step down, and he is still
the largest shareholder in the company. But he's been continuously selling his stake -- you know, and it's down from about, you know, 9.5 percent a
few months ago, to you know, about 4 percent or so now. So, you can't help --
QUEST: But why would he be -- why would he be rude about a company or is he, he might be right, we don't know until we try the pizza. Or you know,
he's trying to kick-start them to get their quality back up again.
LA MONICA: Well, he's claiming that the quality is not there. I think that the numbers may tell a different story because even though Papa John's
continues to struggle, and their sales have been declining in the U.S., they're not declining as rapidly as they were at the height of the whole
NFL scandal and other issues that he has become -- you know, a problem child for that company.
And I think now, you have a new CEO -- I'm waiting for to you take a bite here and tell me what you think. It's got a new CEO, formerly of Arby's
who's come in, and the stock is up pretty dramatically this year without the Papa John of Papa John's being in charge. You've got to put some of
this garlic special sauce on there, although --
QUEST: Are you serious?
LA MONICA: They gave it to you for a reason, hey? Better you than me.
QUEST: Is it really active -- I mean, you wouldn't eat any of this. I mean, you turned your head up, didn't you?
LA MONICA: I'm a pizza snob, like I said, I live in Brooklyn, I can get good pizza at any local establishment -- and oh, my gosh --
QUEST: Stop it --
LA MONICA: I don't even want to know what chemicals are in that.
QUEST: It's Thanksgiving tomorrow.
LA MONICA: Yes. I am thankful that you are taking one for the team and eating it instead of me.
QUEST: Thank you, sir, that's a problem --
LA MONICA: Oh, yes --
[15:55:00]
QUEST: Right now, forgive me, because we're not supposed to talk with our mouth full. As we head to the break, Paul La Monica, who will be -- by the
way, don't worry about those pizzas, none will go to waste, I assure you. We have a television studio, television crew, pizza? It's a match made in
heaven. There you go, market is down -- comes up, though, so we are at a record, up over 40 points, not much, nothing to really write home about.
But it is a record, and we have records for the Dow, the S&P 500, the Nasdaq, all of them at records as we go into Thanksgiving. There will be
no trading tomorrow of course, and a shorter day on Friday. All right, we will take a short break, there will be a profitable moment while I remove
pizza from the back molars.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. There's been so much talked about with Boeing and the 787 -- 737 Max. But it's not just our plane as I had
talked about tonight that has a range of issues affecting the plane maker. The 777 X and the blowing out of the fuselage on its last test. The 787
and problems with the engines, the Rolls-Royce engines.
To be sure that's not just Boeing, that's not Boeing's problem per se, but it is the airline's issues, the 737 engine. Any one of these problems
could be expected. All aircraft have them, the 380 has problems, the 320 nearers have issues. But for them all to arrive on Boeing's doorstep at
the same time, when seemingly there's a lack of direction, that's the serious point.
Now, I don't doubt for one moment that Boeing will sort all these things out, but it's taken a terrible toll on the company and its reputation. And
that's not going to change. The airlines are going to have to stick with Boeing, they've got planes in their fleet and billions of dollars
committed.
But Boeing needs to prove that in each of the programs that are currently in problems, that they can sort them out and do it quickly. 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 is profitable.
(BELL RINGING)
There we go, father Christmas at the Stock Exchange, Macy's of course, the day is over, the bell is ringing, records!
END
END
