Return to Transcripts main page

Quest Means Business

Cuomo Calls For Calm Heads As U.S. Looks To Reopen; U.S. Senate Votes To Replenish Small Business Loan Program; Netflix Adds 16 Million Subscribes In Q1. Aired 3-4p ET

Aired April 22, 2020 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:10]

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: Heading into the final hour of trading on Wall Street, and stocks are rising for the

first time this week. They were open at the start and it's been a strong resilient performance right the way through the day.

Now, up 2.25 points, a gain of 523 points on the Dow. Those are the markets and these are the reason why.

The New York State Governor is calling for caution amid fears of a second wave, while the President is going full speed ahead to open the economy.

Netflix has posted some staggering new subscriber numbers. We're all staying in and chilling.

And we'll go inside a VW factory where some workers are back on the job.

We are live from New York. It is April the 22nd. I'm Richard Quest, and once again, of course, I mean business.

Good evening. It would seem the battle lines are drawn between the President and the Governor of the State of New York, and it's all dependent

upon when to reopen the economy and get things moving again.

Now, Donald Trump, of course, controls the White House, and by that the national economy. But under the Constitution, there are some things he does

not control.

For example, Andrew Cuomo controls the world's financial capital, New York State and New York City, with the exception of course of the mayor as well.

And the two men are at loggerheads about when this reopen.

Donald Trump says, "States are safely coming back. Our country is starting to open for business again."

The New York Governor says, "Opening up now would be stupid and cost lives."

(BEGIN VIDEO CLIP)

GOV. ANDREW CUOMO (D-NY): I get the pressure, but we can't make a bad decision. Frankly, this is no time to act stupidly, period.

I don't know how else to say it. And I've said it innumerable times to local officials on the phone. I get the pressure, I get the politics. We

can't make a bad decision and we can't be stupid about it.

(END VIDEO CLIP)

QUEST: Now, the CEOs are siding with the governor's assessment, at least for the time being. If you look at the numbers, a survey of 61 percent of

executives -- 61 percent of executives are preparing for a U-shape recession. That is lower growth for longer before recovery.

Twenty two percent predict a W-shaped or a double dip recession. Only 12 percent now believe there will be a V-shaped recovery, a quick recovery.

Mohamed El-Erian is with me, Chief Economic Adviser at Allianz and we can do the alphabet of recoveries, but as I look at your forecasts, Mohamed,

you are suggesting, I mean, GDP down this year between up to 10 percent to 14 percent.

MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ: Yes, that's for the United States. And I do that for two reasons, Richard. One is the restart

is going to be very tricky and we may well have a stop, go, stop, and that second stop will be very painful for the U.S. economy if it materializes.

Second, things aren't going to come back that quickly. There are important structural breaks going on. So, I don't see, unfortunately, the economy

bouncing back when it is reopened as fast as we all would like it to bounce back.

QUEST: How dangerous do you think it is at the moment between this battle where you have the President wanting one thing, the Governor of New

York wanting another, the Governor of Georgia actually starting to open the economy?

EL-ERIAN: Look, it's a very tricky judgment. Incredibly tricky, lives versus livelihood, okay, and depending on where you are, you may take a

different view on this.

I can tell you that most of the health experts say it's too early, it's premature and the Singapore experience is really a cautionary tale.

Some business leaders say let's try it, what's the worst that can happen? We'll shut down again. So, it's very tricky. I honestly think it's

premature, but I am not making that decision. I don't have the information that others have.

And it's a very, very tricky decision. This is a generation-defining moment where these decisions are going to be looked back and analyzed over and

over again.

QUEST: Now, let's ask, though, about this issue of structural damage. You know, when we went into this, everybody said, well, look, there was

nothing wrong with the economy. It's not like there had been a structural or systemic recession which required the economy to repair itself.

But the longer this has gone on, there is structural damage now. So, do you foresee that being a problem?

[15:05:25]

EL-ERIAN: I do, and for three reasons. Supply, demand and balance sheet. On the supply side, companies are going to be rewiring their supply chains.

There's going to be a change in mindset from efficiency to resilience. When you rewire something, it doesn't come back strongly. On the demand side,

people may be cautious. They may not spend as much. They may not go out as much.

So, you have lower supply, lower demand, and guess what? On the balance sheet side, we're coming out with a lot more debt. That combination

typically results in much slower actual and potential growth.

QUEST: Right. The problem, of course, was in the U.S., growth, whilst not anemic, it hadn't been robust. It was the best of everybody, but that

wasn't saying much. It certainly wasn't par.

And if you look at the E.U. and the Eurozone, there you did have some par growth that was slowing as well. So, it's not as if the developed economy

started from a racing beginning, is it?

EL-ERIAN: It's not as you know, I've been quite worried about Europe and I'm more worried. But Richard, the real risk out there is in developing

countries.

In Africa in particular, because if there was a bad outbreak, the human toll will be massive. And as one African person put it to me, in the west,

it's about policy, health policy, and it's about lives.

With us, it's about the ways between either dying from infection or dying from hunger. It's a different equation in the emerging economies, and in

particular in Africa.

So, let's hope that there's no massive outbreak there, because it will make what Europe and the U.S. are going through look a lot less severe with what

they are going through.

My main concern is Africa right now.

QUEST: So, all right, so if that's the concern, and we know the G-20 has been talking about some element of concessionary loans and all of those

things, but you're just heaping debts onto debts, frankly.

Are we going to be looking, whether in Paris Club or London Club or any other club, are we going to be looking for wholesale debt relief for Africa

or developing economies, because otherwise all you're doing is just making a bad debt situation worse?

EL-ERIAN: Yes, and especially if the outbreak is severe. Africa absolutely needs it, already the debt service is consuming a lot of the money that can

go towards health.

Already, they cannot afford the mitigating efforts that we have taken in terms of protecting the people, and they are simply protecting their people

right now from the spillover that has come from the rest of the world.

Lower tourism, lower export earnings, imports are harder to secure. So already they're having issues. So, if they're hit, yes, absolutely, I think

debt reduction is going to be front and center.

QUEST: Good to talk to you on such serious matters. We do appreciate you taking the time. Thank you.

Mohamed El-Erian joining us from the West Coast.

Now, the U.S. Government is again trying to keep small businesses afloat. Look at the numbers. The Senate has now passed a $310 billion bill for the

Small Business Administration. The House is expected to do likewise and the President said he'll sign it. But there's a backlog of applications and the

new money could be exhausted in only days.

According to the Treasury Secretary, Steve Mnuchin, larger businesses that took money should give it back.

(BEGIN VIDEO CLIP)

STEVEN MNUCHIN, U.S. TREASURY SECRETARY: Certain people on the PPP may have not been clear in understanding the certification.

So, we will give people the benefit of the doubt. We're going to put an FAQ out, explain the certification. If you pay back the loan right away, you

won't have liability to the SBA and to Treasury.

But there are severe consequences for people who don't attest properly to the certification. And again, we want to make sure this money is available

to small businesses that need it, people who have invested their entire life savings. We appreciate what's going on and their hiring people back.

(END VIDEO CLIP)

QUEST: Because the problem is that the first round of doing this, the money went elsewhere. The PPP had $349 billion at its disposal. But many

larger companies saw through loopholes and seized opportunities to get their hands on the money.

[15:10:06]

QUEST: Nearly half the money went in loans of more than $1 million. More than a quarter went to loans of over $2 million. You can start to see this

was money that was supposedly meant to go to small businesses.

And some big recipients included publicly traded companies, energy companies, Hallador and Broadwind got $10 million each. That was the

maximum amount.

Restaurant chains also prominent on the list, including Ruth's Chris steakhouse, Shake Shack. Shake shack has returned the money.

CNN's economics commentator Catherine Rampell is with me. Catherine, now, come on, we are men and women of the world here. If they write the rules so

that these companies are entitled to and indeed in the case of restaurants and hotels, the rules were even amended so that affiliates could take them.

Why is everybody getting so angry now?

CATHERINE RAMPELL, CNN POLITICAL COMMENTATOR: Well, I think there are a couple of differences here between the intent of the law, right, and how it

was actually written and executed.

So, a lot of the rhetoric we heard when this phase of stimulus was first being built, concocted, negotiated, this was about -- this is going to help

small businesses. We're going to make sure that the mom-and-pop shops are still able to keep operating and are still able to keep people on the

payrolls.

But they didn't necessarily write the law so that those were the only beneficiaries of this particular program. And understandably, I think,

larger companies that found that they legally qualified decided to take advantage.

There are larger companies, to be fair, who are struggling as well, even if the intention behind this particular program was not to help them. But they

have their own employees, they have their own bills to pay.

I think in a sense, it's understandable that they would say, hey, there is money out there to aid us, why don't we take advantage?

Now, it's really the responsibility, I would argue, of lawmakers and regulatory rule writers to make sure that the program does what it is

advertised to do.

So right now, they're kind of trying to claw back those loans that are made, but the horse is out of the barn to some extent.

QUEST: Right. And arguably companies, Board of Directors, have a fiduciary responsibility that if the government has provided a program that

could assist them, then they are, I would say, bound to apply for it. All this talk of immorality doesn't sit well.

RAMPELL: Well, I think on the other hand, one way to think about this is that it's extraordinarily bad PR for them, right, so even if they think

that it's going to help their bottom line in the near term pay bills, pay rent, pay mortgages, pay workers that they're still trying to keep on

board, if they get a lot of bad publicity out of it, as Shake Shack did, for example, they still might decide that it's not in their longer-term

financial interest to take advantage of this program.

Now, there may be an argument here for lawmakers to come up with a different way of helping businesses that they still want to keep people on

their payrolls, that don't qualify as small mom-and-pops. Maybe they need some other kind of financial support. They need some sort of forbearance,

for example, from their lenders.

There might be other kinds of tools available to help companies that are in need that don't necessarily require the same level of taxpayer bailout that

the smaller mom-and-pop type shops need in order to stay afloat.

QUEST: Catherine good to talk to you. Thank you, Catherine Rampell joining us from Washington.

When you look at these particular plans and how they were put in place, small businesses feel they didn't need what they needed. Franchises are

worried and entrepreneurs are still left wanting and needing more. Vanessa Yurkevich now explains.

(BEGIN VIDEOTAPE)

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS REPORTER (voice over): When the Paycheck Protection Program was announced, Stephanie Caudle knew needed

to be first in line.

(BEGIN VIDEO CLIP)

STEPHANIE CAUDLE, CEO, BLACK GIRL GROUP: I set my alarm that night for 11:55 so at 12:00, it went live, and I applied. The site didn't crash for

me, so I thought that the odds were in my favor.

YURKEVICH (on camera): And did you get the PPP loan.

CAUDLE: No. I didn't get approved.

(END VIDEO CLIP)

YURKEVICH (voice over): Codell runs Black Girl Group out of her home in Atlanta, connecting women of color freelancers with other businesses. She's

one of the thousands of small business owners around the country who were left empty-handed when the first $350 billion Paycheck Protection Program

ran dry.

(BEGIN VIDEO CLIP)

CAUDLE: I was going to use the Paycheck Protection loan money to be able to provide somewhat of a freelance stimulus fund for my freelancers.

(END VIDEO CLIP)

YURKEVICH (voice over): Congress says more money is on the way. But the first round sent tens of millions of dollars to bigger, publicly traded

companies, like Potbelly, Ruth's Chris and Shake Shack. These companies say this money will support their employees. Still, Shake Shack returned its

loan.

(BEGIN VIDEO CLIP)

CAUDLE: I've heard about big restaurant chains being able to get money. And it sucks, because it's just like they already have access to so much

capital, but people like me, who -- I am a small business owner, we don't have that same access to funding.

(END VIDEO CLIP)

[15:15:27]

YURKEVICH (voice over): In New York, the epicenter of COVID-19, there are more small businesses than anywhere else in the country. Helana Natt runs

the Greater New York Chamber of Commerce.

(BEGIN VIDEO CLIP)

HELANA NATT, EXECUTIVE DIRECTOR, GREATER NEW YORK CHAMBER OF COMMERCE: The frustration that was out there was that the big clients of the big banks got the money. I have 3,300 members and I have a database that I

speak to regularly and only one person has.

(END VIDEO CLIP)

YURKEVICH (voice over): Julia Testa owns one of those New York Small business that didn't get funded. Four of the seven employees at her flower

shop are out of a job.

(BEGIN VIDEO CLIP)

JULIA TESTA, OWNER, JULIA TESTA DESIGN: You just feel like, as a small business owner, we run the economy. We employ people, we make things move,

and to be hung out to dry like this and totally forgotten about is just -- it makes us feel -- it makes me feel unappreciated.

(END VIDEO CLIP)

YURKEVICH (voice over): Women in the U.S. have been hit hard by the pandemic, making up nearly 60 percent of job losses in March, and women own

42 percent of all small businesses. But these female business owners say they're not discouraged.

In fact, they say they will apply to any future rounds of PPP, but offer this advice --

(BEGIN VIDEO CLIP)

TESTA: When you see an application for Ruth's Chris, maybe you rationally think like, you know do they need it or does Julia Testa Flowers

with seven employees need the money?

CAUDLE: I just ask them to please, please, please, do everything they possibly can to help us, because we're in need not in the next year. We are

in need now and we're counting on them to be able to survive.

(END VIDEO CLIP)

YURKEVICH (voice over): Vanessa Yurkevich, CNN, New York.

(END VIDEOTAPE)

QUEST: Now, in a moment, Chipotle shares -- the restaurant chain, their shares are soaring after impressive earnings numbers even in difficult

times. The Chief Executive will be out with me after the break.

And Netflix numbers are also out. We have got them overnight. Impressive, indeed, in terms of new subscribers. Clare Sebastian will understand

exactly how that works out in a moment.

(COMMERCIAL BREAK)

[15:20:06]

QUEST: Welcome back. QUEST MEANS BUSINESS from New York.

Netflix saw its earnings soar as the online subscription service added 16 million new members that was twice as many as people had thought in Q1.

That was thanks to hits like "Tiger King" and "Love is Blind."

Netflix continues to warn of uncertain times ahead, not least of which because of problems relating to new entrants into the market.

Clare Sebastian is with me in New York. Clare, look at the price though, $423.00 on Netflix shares. The streaming service -- the online service has

just gone gangbusters.

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Richard, it is still despite actually losing ground today. It's still up 30 percent on the year,

which puts it ahead of really the other big major tech players.

It is in a good position for those people that are subscribing to Netflix to try to create an escape from the rather depressing reality that we live

in. But Netflix is not really celebrating.

Yes, this was a huge subscriber number, but there were other caveats that the company was pointing out. One that most of it came from outside the

U.S. That depressed revenue because the dollar is so strong at the moment that all of that revenue coming in other currencies was actually less than

it could have been.

The second thing is that looking at the future, the issue of content production is paused pretty much everywhere around the world, apart from

Korea and Iceland. Now, this doesn't affect 2020, according to the company. All of the releases are going to happen as scheduled. It says it doesn't

affect a lot of 2021. They've already got a lot of their slate there.

But going forward, there's a lot of uncertainty. This is a company that thrives on its own content that spends big on its own content. And how it

will keep doing that when production is just not happening is still unclear.

So, they said, there was a lot of guesswork in their assumptions going forward.

QUEST: And what -- I mean, we've got our own HBO Max, which is coming along and we've got -- and there is Disney and we were just talking about

all of the other players. It begs the question where the jury is still out, whether the cake does actually get bigger or is essentially there is quite

a lot of eating Netflix lunch?

SEBASTIAN: I mean, that is a big question. Certainly, their subscriber number in this quarter. It probably won't continue that way, Richard, and

the company did say that they expect the next quarter to be about 7.5 million, so about half what we saw in this current quarter.

And then after that, at the end of the year, they think it might lag behind what was originally expected because a lot of what we saw in the first

quarter was sort of pull-forward from later in the year, an acceleration of that existing demand.

And if you haven't already subscribed during the pandemic, the chances are you won't after this. But yes, like they said, they were impressed by

Disney, its subscribers passed 50 million already. It's very new to the market. HBO Max of course, comes next month. But Netflix was at pains to

point out, Richard, that they are in a better place than a lot of competitors in this environment where the future content is so uncertain

because they already have this huge library. So, that's how they're positioning themselves at the moment.

QUEST: Good to see you. Clare Sebastian, thank you.

Now, the earnings that have come out, obviously, some are extremely bad in that sense, Delta reported first quarter loss. The first quarterly loss in

some five years. Revenue is down 18 percent compared to last year, and that really doesn't take account of the full shut down.

AT&T, our parent company has suspended guidance for the rest of 2020. And Chipotle revenue was up nearly eight percent. Digital sales jumped in March

as well. It comes as the restaurant chain agrees to pay a $25 million fine to settle charges involving food safety violations back in 2015.

The CEO, Brian Niccol is with me. He joins me from Newport Beach in California.

Brian, thank you, sir. It is appreciated that you take time. Look, I need to understand, we'll deal with the previous incident. Your numbers so far,

bearing in mind everything is shut down and only take away or delivery in some cases. These accounts don't really -- these numbers don't really take

full effect of COVID. What can you tell us about what you expect later numbers to look like?

BRIAN NICCOL, CEO, CHIPOTLE: Yes. Sure. Thanks for having me. So yes, as we shared in our release just yesterday, in January and February before the

COVID crisis, our business was running up 14 percent same-store sales growth.

And then in march obviously, as we had to close our dining rooms and consumers were basically staying at home, you know, we saw our business

take a step back and really, the low point was down 35 percent and then what we've most recently seen as we've gotten into April, frankly the most

recent couple of weeks in April, it has improved kind of week to week and most recently, we were down 18 percent, adjusting for the Easter Holiday.

[15:25:27]

NICCOL: So, it really hit bottom around negative 35. It's hard for me to say that I'm excited about the fact that we're at negative 18 percent, but

it's definitely an improvement and I think as the economies start to open and communities start to open and people get back to work, I'm optimistic

that we'll get to the other side of this and our performance will look more like what it did before we had the incident.

But it's going to be a process and it's going to take some time for us to get there.

QUEST: What will be your guiding light? Obviously safety of your staff, safety of your customers so you can take that as given. But where you have

those states like Georgia looking to open up sooner, and arguably not even meeting the President's own guidelines, what will you do in those

situations?

NICCOL: Look, I think this is really a combination of making sure that you have the best available information, so that, to your point, we're able

to open in a way where it's clearly safe and healthy for our employees and our customers.

And you know, it's a combination, frankly. We're very fortunate that we have a lot of wellness practices in place. We have benefits around our

employees so that there's no incentive for work not feeling a hundred percent.

And then obviously, we can do a lot of things to ensure that the experience is one that provides customers confidence that it's a healthy environment

to have our delicious food.

It's going to require, though -- you know, we have a person, she leads our food safety and wellness program. She's in close contact with the C.D.C.

We'll be in close contact with obviously the state officials all the way down to the local officials.

So, I do think this is going to be a store by store process for us so that each of our restaurants are taking into account what's happening in that

local community.

QUEST: Right. I don't want to unduly flatter you. We don't necessarily do that on this program. But the one thing I've been impressed about is, if

I look at your share price -- now, you had the most dreadful, dreadful health scandal four years ago, five years ago, which you've bounced back

from with new policies and provisions and all of that.

Your share price rocketed up. It then went down, along with everybody else. But as the graph on the screen shows, you're virtually back to where you

were when your restaurants pretty much are still closed. I don't understand, Brian. What are you doing?

NICCOL: Well, you know, look, what I can tell you is we are very much focused on a couple of things. We want to make sure that the restaurants

that are open are running in a safe environment, a healthy environment, and then we've been very fortunate that over the last couple of years we've

invested tremendous in food safety, wellness programs and a digital platform.

And you know, I think both of those things are proving to really help us navigate this crisis at hand, and our digital business is way up and, you

know, both order ahead, as well as our delivery business, and we've seen that turn into a lot more customers joining our rewards program, which is

really an engine behind our digital business.

And you know, I believe when we get to the other side of this, that digital business is going to be sticky and it will be a place that we can build

from as we bring back our dine-in business.

And I think people share that sentiment, that our digital business is really a strong asset for us right now, and then also in the future. And

then obviously our employees are arguably the most important piece of this company. They live our culture. They bring our values to life.

They're the ones that provide the food with integrity for everybody every day. So, if we continue to invest in them through this whole process, which

fortunately, we've been able to, because of the health of the company, I think we're going to get to a better place on the other side of this.

But it's going to be a bumpy ride while we get there, but you know, I'm very confident in our people, our brand, and ultimately our financial

position to get through this.

QUEST: Brian, please come back and talk more about this. Come and join me again on the program where we can discuss this, and hopefully in better

times, we'll even do the interview in a Chipotle where we can be face-to- face, and I'll pick up the bill. Good. Thank you, Brian.

Brian Niccol joining me there.

When we come back, we'll be in Germany -- we will be in Germany for Volkswagen as the company starts to reopen factories.

It's QUEST MEANS BUSINESS live from New York. The market is up. It's a strong day for the Dow.

(COMMERCIAL BREAK)

[15:30:10]

QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. We'll be inside a V.W. plant as it reopens in Germany, that's

coming up. And also, online education. We'll be talking to the CEO of Khan Academy, who joins me with so many students. Now, pretty much for the rest

of the school year and perhaps even beyond, having to learn online. The strengths and weaknesses of that. This is CNN. And on this network, the

news always comes first.

President Trump's instructing the U.S. Navy to attack Iranian boats harassing U.S. ships. Last week, the Navy released a footage, supposedly

showing Iranian vessels making their dangerously close approaches towards American warships. But the Pentagon officials say the President's tweet

doesn't change the rules of engagement. Meanwhile, the President says his executive order, banning immigration to the U.S. only covers people

applying for a green card to be a permanent U.S. resident. The 60-day halt to green cards will not affect people entering the U.S. on other temporary

work Visas. Mr. Trump could sign the order as early as today.

The U.K.'s Chief Medical Adviser says the chance of having a highly- effective Coronavirus vaccine or drug treatment within the next year is incredibly small. Tempered expectations, the social distancing measures

could be totally lifted before that long-term solution is found.

The billionaire Michael Bloomberg is helping out his home state. New York says Bloomberg will spear the creation of a Coronavirus testing and contact

tracing plan. Former presidential candidates is donating at least $10 million to the effort.

[15:35:16]

QUEST: The car industry in Germany is slowly but surely reopening. It is far from business as usual, as our correspondent, Fred Pleitgen now

explains, every move is carefully tested to make sure it's not going to go wrong.

(BEGIN VIDEOTAPE)

FRED PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: The machines are humming again at the Volkswagen plant in Kassel in central Germany, making

transmissions under strict hygiene rules, trying to avoid Coronavirus infections.

We put up signs and barriers, one of the heads of this production line says, and we check the workplaces to see if we needed to install any

protection. All this to ensure that the safety of every employee is guaranteed. Volkswagen says it has 100-point program to ensure strict

hygiene. Workers are constantly reminded to physically distance from others. Where that's not possible, they wear masks or the company has

altered the production line.

White management says it's extremely important for the workers here to maintain physical distance. Now, of course, on a production line like this,

that's not possible everywhere. So for instance, here you have this plexiglass window to make sure that the workers keep enough distance.

Volkswagen is opening two European plants this week alone, but it has dozens around Europe with complicated supply chains and cross border

logistics, getting Europe's largest automaker producing at full capacity will take time, the head of production tells me.

ANDREAS TOSTMANN, HEAD OF PRODUCTION & LOGISTICS, VOLKSWAGEN: It's takes a couple of days to prepare everything and to go through the whole logistics

chain. But we do this plant by plant, and that's when altogether created this step-by-step approach, where we started already in our Slovakian

factory in Bratislava this week, and it will take us probably two, three weeks before we are back to normality.

PLEITGEN: V.W. is not alone. Toyota is reopening some European plants this week, and Mercedes Benz says it will start a phased return next week. But

the carmakers will return to a drastically different market with a global economy in recession that could force them to downsize and possibly even

lay off workers, one of Germany's top automotive experts tells me.

FERDINAND DUDENHOEFFER, EXPERT, CENTER FOR AUTOMOTIVE RESEARCH: Then we came up with a problem of the demand. So, of course, they could produce

cars. But if there are no customers for that cause, that's a pity, so they have to adapt its capacity.

PLEITGEN: While hard times may be looming, for now, the staff at V.W.'s plant IN Kassel are happy to simply have their production line running

again, churning out transmissions for cars, they hope there will be demand for. Fred Pleitgen, CNN, Kassel, Germany.

(END VIDEOTAPE)

QUEST: CNN Breaking News. Harvard has just announced that it will not take money from the U.S. government. Under the CARES plan, the corona relief

plan, that money was allocated for educational establishments. Harvard had been granted money under that plan. And now, it says it's decided not to

seek or accept the funds allocated to it. The President had said that the money -- Harvard took money meant for workers which wasn't the case. And

Harvard would have been allocated funds from a separate program for higher education. However, reading the statement, they say we are concerned that

the intense focus by politicians and others on Harvard in connection with this program, may undermine participation in the -- in the relief effort.

The Harvard has decided not to seek or accept funds allocated to it by statute.

Now, more than 90 percent of students are shut out of classrooms at the moment. So, online learning is the way that they are having to go. 1-1/2

billion students, it's estimated on our receiving lessons in this way at all levels. Joining me is Salman Khan, the CEO of the Khan Academy, a free

online education platform. And before we get to online platform, do you think Harvard made the right decision, bearing in mind that the money was

granted to them and it was allocated? And you know, they did follow the rules, but they've obviously decided it was -- it was -- it was wrong. Did

they make the right decision?

SALMAN KHAN, FOUNDER & CEO, KHAN ACADEMY: I'm not an expert on Harvard and how it was structured. I mean, the optics of it definitely looked bad, that

they have a many billion-dollar endowment. Although, I can imagine they have parts of Harvard that will suffer because of these closures. So, I'm

not in a position to comment. I get a sense that probably politics are trumping the actual logic of whether to take the money or not.

[15:40:14]

QUEST: That's online learning. I've got teacher friends out in Morocco, who are having to do distance learning with their students. Here in New York

City, of course, all the schools are closed. And it's all -- and what's the biggest challenge, ramping up online learning in such a short period of

time?

KHAN: Well, the number one challenge is students just need to be online. And schools, at least in the U.S., have done a good job of getting online

access. And we've seen that happen around the world in better ways. But still, at-home access is very scattershot. Even in richer countries, you

still have 20, 30 percent of families that don't have suitable access online. And you could imagine if you go to poor parts of the world that's

even worse. So, I think that's the base necessity. We are seeing corporations, philanthropists, school districts, ministries of education,

trying to do what's right. It's only been a few weeks, but we're seeing a lot of great movement there.

And then, once you have that layer, I guess you could say your hierarchy of needs, the next thing is what do you do with that online access? And that's

where we're trying to play a role as a not for profit with a mission, a free world class education for anyone anywhere. We've been -- we've always

had content in math, English, and language, arts, social studies, sciences, from pre-K all the way through early college. And we've been trying to

structure that in ways that it's easier for teachers and parents to use in this time of crisis. We've been running webinars for them, to support them,

and we've been trying to accelerate more courses.

Then, the next layer on top of that is, as many human supports as you can have. Well, video conferencing on Skype, on Zoom, or whatever teachers use.

And that's been really difficult. I've been advising a lot of teachers on how to run Zoom sessions. And you can imagine, it's a lot harder than when

all the kids are in the same room.

QUEST: So, the -- do you fear that a digital divide that we've all known about, there'd be many great efforts to try and overcome it, but it still

exists. I mean, that digital divide gets much, much deeper. And because of the -- of that, there'll be an entire -- I mean, I hesitate to use the

phrase, "lost generation." But in terms of those with socially disadvantaged, that's exactly what we're looking at.

KHAN: Yeah, I think it's a very, very legitimate fear. It was a legitimate fear even before the COVID crisis. And I think like many other things, the

crisis is just putting it into sharper relief. We have partners, the NWEA, which is a not for profit that does assessment. They just released data

that you always have the summer learning loss. And frankly, summer is always the time with school closures where that drives inequity because the

middle class, upper middle class can send their kids to enriching camps, while the less affluent, the kids aren't able to learn, and they also

forget.

And so, this year, not only do you have that three months of summer learning loss, you're going to have five or six months. And their data

suggests that this could result in a year of loss learning for the average student. And so, you can imagine what could happen for kids who are even

higher need, more vulnerable populations. So, our hope is that we can partner with telecom companies, philanthropists, I know there's a lot of

movement here to get -- give these students that access, because it's a dire need. The silver lining is that by putting it in sharp relief, people

will realize that this is a human right going forward, even once we get out of the crisis.

QUEST: Salman, good to talk to you. Thank you. Khan Academy joining me.

KHAN: Thank you.

QUEST: When we come back after the break, the "VOICE OF THE CRISIS," and we've heard from so many restaurants and cafes, that we'll be in Nigeria

now to hear from a juicing cafe. The employees have all had to be -- although, they're being paid at the moment, but the owner faces the

daunting task of taking on debt to keep everybody in work. After the break.

(COMMERCIAL BREAK)

[15:46:36]

QUEST, CNN: Our voice of the crisis today is a health food restaurant and cafeteria in Nigeria, that's seen its business disappear. Now if you take a

look, Nuli is a restaurant with healthy alternatives to fast food. It was started with that concept. It has 10 stores. Now the lockdown has lessened

it sales down by 95 percent. There's only one open for delivery business. There's no government help. And April salaries need to be paid. Ada Osakwe

is the founder. She joins me now.

Well, what to say? Where to begin? I know that you've gone -- you've taken strenuous efforts to pay the workforce for March, April is much more

difficult. What are you going to do?

ADA OSAKWE, FOUNDER, NULI: Oh Richard, it's a tough one because we never saw this coming. We were really trying to be on a growth path. Six of those

10 stores that we have were opened only last year. So, now I'm just really with spreadsheets and putting percentages next to everyone's name to see

how we're going to pay and it's everything from 20 percent to maybe a full salary. So I want everyone to at least have something. But after April, I

don't know how we're going to survive.

QUEST: Where are you getting the money to pay the expenses at the moment? Are you borrowing it? Is it coming from your savings?

OSAKWE: So not savings, we're very cash heavy. Working capital is king, cash is king for a business like ours that deals with perishable products.

So we're buying stuff every single day. Like I was just the cash that's coming in from the few -- the few sales that we get every day now. We've

been open for about a week and a half because we're considered an essential business, food service. And that's really what we're trying to use to

survive.

But Richard, honestly, I'm down. You mentioned it's about five percent of our weekly sales is what we're getting now.

QUEST: Right. But what I'm interested in also is the help that's being offered or available from government. $135 million in total is available in

a small business loans, but that would mean taking on more debt. I'm guessing that is the last thing you want to do.

OSAKWE: Precisely. You know, we didn't cause the situation, so if I don't want to put that on my books, I shouldn't have to. So we're hoping the

government can do a lot more and actually put some fiscal stimulus into the system and just give out checks to small businesses so we can meet our

payroll, nothing's going on right now. No help.

QUEST: In terms, you started this business with such hope, it's not your fault, it's nobody's fault this has happened. But what keeps you going? I

mean, when you see your business being destroyed in such a passion, I can tell looking -- you're an -- you're an optimist, you keep going somehow.

Give us some hope as to how you keep going.

OSAKWE: You know, we have -- we're in this together, Richard, it's a global thing. I'm watching folks on your show speaking about the same issues. It's

just hope I haven't been able to get through this. We've been through a lot in the past and as long as we stay together as small businesses as

humanity, we should be able to pull through this. So that's really what keeps me going.

[15:50:05]

QUEST: Well, here comes -- here comes today's daily promise. One of the advantages, of course, once we start traveling again, I'm pretty certain I

will be back in Nigeria, that's almost a given. I'll be ready to come and pay you a visit. And I'll pay the bill. So I'm looking forward. I'm looking

forward to that when we can all travel again. Somebody somewhere in the world is keeping me a track of all these promises I'm making, which I shall

keep posted them. Well, all of them if I can. Good to see you. Thank you, Ma'am. I appreciate it.

OSAKWE: Thank you.

QUEST: As we continue with Earth Day, we'll find out well, what position and shape the earth is in. And there are those who say well look, the

coronavirus is a crisis, but the -- but climate change is the true calamity, after the break.

(COMMERCIAL BREAK)

QUEST: It's 30 years since the first Earth Day and if there's one thing that has happened as a result of the current pandemic, clear skies from

satellites, from the Earth station, Space Station. We can tell. Just look at the difference. That was then, this is now. Many places particularly

those place like Delhi and Beijing, seeing what it's really like for the first time.

Bill Weir is with me, carbon emissions are expected to full six percent this year. They will go back -- I mean, they'll go up slowly because

they'll be reopening slowly, but the Earth Day message is it can be done. But when we see what it takes, Bill, I mean, I wonder what learn -- what we

learn from this?

BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT: Well, Richard, it's deceiving. Yes, we're seeing some of the air pollution around cities, the nitrogen

dioxide is down by 30 percent. And it's allowing city dwellers to see stars they didn't know we're in the sky before but the heat trapping gases that

blanket that surrounds our planet that's warming everything up, it's melting the ice sheets, that's as thick as ever. And that is 100-year

problem. It would take this level of industrial revolution pause for 30 years plus to bend the curve there, but I think it's a lesson that

everything is connected here.

Scientists have been warning as, virus hunters, that if we take down every rainforest, an invisible enemy is going to come out and get into our lungs

and we didn't want to hear that story. And other scientists have been saying there's an invisible enemy coming out of our factories and farms and

homes and cars and that's going to change life.

So yes, it's hard to say happy Earth Day without irony, I'm afraid.

[15:55:12]

QUEST: And of course, there are those who are making quite clear like Bill Gates, that the real catastrophe is climate change. We will deal with

COVID, but climate change could wipe us all out.

WEIR: Absolutely. I mean, if you think a pandemic lockdown is bad now, imagine doing it during a hurricane, or a massive wildfire or the flooding

events that are getting more and more frequent. This whole thing is connected right now.

And while it feels like Mother Nature has sent us all to our rooms to think about what we've done, you got to wonder if the lesson will take hold.

There's so much pent up demand as you mentioned there, and there's such a thing as revenge pollution when Chinese factories get to crack and they'll

go 24 hours a day, but it's bad for business. We're seeing that ignoring that science ultimately is bad for business.

QUEST: Bill, thank you. Bill Weir, I appreciate it. Thank you. And to you - - look, we're all working from home, Bill is at home, I'm at home, you're at home. Let's have your stories of working from home if you would be as

kind. You can -- you can post them on your own social networks of Instagram, Facebook or Twitter, wherever it is. We will find it and use the

#QuestWFH, working from home, QuestWFH.

What's your favorite little tip when it comes to working from home? And we can if we will, we'll use them in the program this weekend, #QuestWFH.

And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable and

safe.

(COMMERCIAL BREAK)

END