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Quest Means Business
Several States Pull Plug On Reopening Plans As The U.S. Records Biggest Daily Jump In New COVID Cases; U.K. Travel Operator TUI Halts Florida Trips Through November; F1 Star Hamilton Launches Commission On Motorsport Inequality; Pence Leads First Coronavirus Briefing In Nearly Two Months; E.U. Investigating German Watchdog Over Wirecard Scandal; Three Meat Packing Plants In Wales Are COVID-19 Hotspots. Aired 3-4p ET
Aired June 26, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ZAIN ASHER, CNN HOST: The Dow is down roughly around 700 points, though the number is accelerating in the past hour or so as a result of surges in
cases in places like Texas, Florida and California.
Those are the markets and these are the reasons why.
Several states pulled the plug on reopening plans as the U.S. records its biggest daily jump in new COVID cases.
Facebook tries to stem an advertiser exodus as Unilever becomes the latest to pull ads from the site over hate speech concerns.
And Formula 1 condemns its former chief executives after controversial comments they made on race to CNN.
Coming to you live from world's financial capital here in New York City, it is Friday, June 26th. I am Zain Asher in for my colleague, Richard Quest,
and this is QUEST MEANS BUSINESS.
I want to begin with the rising tide of coronavirus cases in the United States. The outbreak is now growing in 32 states. Texas and Florida have
both reported daily records of new cases. At least 11 states are now pausing their reopening.
In the last few hours, the White House Coronavirus Taskforce held its first briefing since April. Vice President Mike Pence pushed a positive message.
He says states are reopening slowly and safely, but Dr. Anthony Fauci seemed to contradict him saying that some may have opened too soon. I want
you to listen to this.
(BEGIN VIDEO CLIP)
DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: So people are infecting other people, and then ultimately, you
will infect someone who is vulnerable. That may be somebody's grandmother, grandfather, uncle who is on chemotherapy, and who is on radiation or
chemotherapy or a child who has leukemia.
So, there is what I call -- and again, I just want to bring this out without making it seem that anybody is at fault. You have an individual
responsibility to yourself. But you have a societal responsibility.
Because if we want to end this outbreak, really end it and then hopefully when a vaccine comes and puts a nail in the coffin, we have got to realize
that we are part of the process.
(END VIDEO CLIP)
ASHER: A stark warning there from Dr. Anthony Fauci. Let's take a look at U.S. markets again. The Dow is down about 660 points or so. There are fears
of a delayed recovery and a lot of worries here about the possibility of yet another shutdown.
The Texas Governor is not only pausing the state's reopening, he is adding restrictions as well.
Let's go now to Lucy Kafanov who is in Houston, Texas for us. So, Lucy, just walk us through what exactly does the soaring infection rate in Texas
actually mean for the local healthcare system, particularly hospitals in Houston?
LUCY KAFANOV, CNN CORRESPONDENT: It is a huge concern for hospitals in Houston, which are overwhelmed. We are in front of the Texas Medical Center
and that facility ran out of ICU beds yesterday. That shows you just how much of a threat this is.
Now, we have to keep in mind, Texas was one of the first states to push for an aggressive economic reopening. We are now seeing the fallout from that.
Three consecutive days of record breaking numbers in terms of new cases. We are still waiting for the new numbers to come back today.
The Governor forced to back pedal on that reopening, announcing new measures for example, shutting bars as of a few hours ago. Reducing the
capacity for restaurants. They are still open, but only 50 percent capacity.
He is also restricting gatherings of over a hundred people or more. But local officials in places like Harris County, which by the way is the third
largest county in all of America, they say it doesn't go far enough. Take a listen.
(BEGIN VIDEO CLIP)
LINA HIDALGO, HARRIS COUNTY, TEXAS JUDGE: Today we find ourselves careening toward a catastrophic and unsustainable situation. Since when did we decide
as a society that instead of saving a life and preventing the spread of the virus, we would treat human lives, the lives of our neighbors, as
collateral damage?
(END VIDEO CLIP)
KAVANOF: So, that was Harris County Judge, Lina Hidalgo, she says that her hospitals in this county could run out of space in as soon as a week when
hospitals start running out of those critical ICU beds and acute care beds that is when mortality rates go up. That is a very worrying concern.
She actually went further than the Governor raising the threat level here to red, the highest level possible urging citizens to not to go out, to
avoid any kind of non-essential travel, to work from home if possible, but she is not able to actually enforce a stay-at-home mandate. That is
something that the Governor has the power to do. No indication at this point, Zain, that is willing to go there -- Zain.
ASHER: You mentioned an important point which is that Texas was actually one of the first states to push for an aggressive reopen. What is going to
be the economic impact of Texas closing, then reopening, then closing again, if that is the case?
[15:05:01]
KAVANOF: I mean, the number -- I don't have specific numbers for you. Of course, this is going to hurt Texas economy, but when you talk to
healthcare officials and local officials who see the devastating impact on their communities, the record breaking number of people getting sick, the
hospitals at capacity in so many parts of Texas, the economic impact is going to be a lot worse if people keep dying from this disease, and that is
the trend we are on right now.
ASHER: All right, Lucy Kavanof live for us there. Thank you so much. Appreciate it.
Sobering news out of Florida as coronavirus cases there surge to new levels as well. Nearly 9,000 new cases reported on Friday, that is nearly twice
Thursday's total, which was already causing significant concern as Florida develops into the next U.S. epicenter. The state's economy is also at risk
as well. Here is CNN's Vanessa Yurkevich.
(BEGIN VIDEOTAPE)
VANESSA YURKEVICH, CNN BUSINESS AND POLITICS REPORTER (voice over): It's a cruise ship parking lot at the Port of Miami, ships idling, waiting to take
the seas, which leaves Ana Castillo waiting for customers.
(BEGIN VIDEO CLIP)
ANA CASTILLO, OWNER, SAFE CRUISE PARKING: It's very, very weird to see how empty it is.
(END VIDEO CLIP)
YURKEVICH (voice-over): COVID-19 has wreaked havoc on Florida's biggest money-maker, tourism. It's crushed businesses like Castillo's. She shut
down Safe Cruise Parking in March, and plans to reopen in September when cruises start again.
But a surge in coronavirus cases in the state has her worried.
(BEGIN VIDEO CLIP)
CASTILLO: I do think that people are going to look at Florida as like, the new epicenter and probably even be more scared to travel here. So it is --
yes, it is concerning.
(END VIDEO CLIP)
YURKEVICH (voice-over): It's a concern for agriculture here to, the state's second-largest industry. In just two months, farmers lost nearly $900
million in revenue during peak harvest season. And as they're planning for the next season's crop, another shutdown would be devastating.
(BEGIN VIDEO CLIP)
GENE MCAVOY, VEGETABLE SPECIALIST, UNIVERSITY OF FLORIDA: So if we see a spike that, you know, starts closing things down in October and November,
it's going to be bad.
(END VIDEO CLIP)
YURKEVICH (voice-over): Florida's construction industry, which took a hit, is also on edge.
(BEGIN VIDEO CLIP)
FRANK D'ANGELO, COUNCIL REPRESENTATIVE, FLORIDA CARPENTERS REGIONAL COUNCIL: The spike is here. How bad that spike's going to be, we don't
know. The best we can do is try to keep our members working.
(END VIDEO CLIP)
YURKEVICH (voice-over): Construction jobs were hardest hit in Fort Lauderdale, dropping 10 percent in April from the year before.
(BEGIN VIDEO CLIP)
D'ANGELO: They definitely want to get back to work. Unemployment in Florida, it's relatively low compared to the rest of the country. Even with
the federal stimulus and $600.00 a week, it still doesn't make up the delta they need to provide for their families.
(END VIDEO CLIP)
YURKEVICH (voice-over): Two-point-five million Floridians applied for unemployment since March, many still waiting for checks, including one of
Castillo's employees. She had to lay off all 15.
(BEGIN VIDEO CLIP)
CASTILLO: I can't give these people jobs. You know, these people have been unemployed since March, and I don't know how much longer it'll be.
(END VIDEO CLIP)
YURKEVICH (voice over): Vanessa Yurkevich, CNN, Miami, Florida.
(END VIDEOTAPE)
ASHER: All right, the British travel operator, TUI says it is cancelling all trips to Florida through November. TUI says new health and safety
measures at Walt Disneyworld would impact its customers' holidays experience. The E.U. is soon expected to decide whether it is safe to admit
travelers from the U.S.
All right, we are going to go for a quick break now here on QUEST MEANS BUSINESS. We'll be right back in just a couple of minutes.
(COMMERCIAL BREAK)
[15:11:01]
ASHER: All right, as we mentioned before the break, the British travel operator, TUI says it is cancelling all trips to Florida through November
as COVID cases rise sharply there.
Roger Dow is the President and CEO of the U.S. Travel Association. He joins us live now from Washington.
So Roger, thank you so much for being with us. When you think about the surge in cases and not just places like Florida, but also Texas, Arizona,
California as well, how much does this throw a wrench in the travel industry's plans to really get back to normal?
ROGER DOW, PRESIDENT AND CEO, U.S. TRAVEL ASSOCIATION: Well, it is important that we get back to normal because there has been such harm done
to the economy, and the travel economy. This has set us back a little bit. We have watched the numbers every single week and the numbers this week
have decreased because of this spike, and we are hoping we can put it behind us very quickly.
ASHER: Do you see travel normalizing in this country? Are you expecting things to get back to normal next year or later on this year do you think?
DOW: Zain, I really expect to see things come back towards late summer. It is going to be domestic travel. It is going to be a drive market with short
flights, then meetings, and international probably not coming back until late fall and beginning of next year, and I think 2020 is going to be an
awful year. 2021, a good year, and 2022, back to normal.
ASHER: Okay, let's hope. So according to the U.S. Travel Association --
DOW: Let's hope.
ASHER: Yes, according to the U.S. Travel Association, 2019 travel spending this the U.S. directly supported nine million jobs. So what does this
setback, just with this news out of certain states in this country, what does this setback mean for employment in the travel sector?
DOW: Well, the good news is, many areas of the country are beginning to open and travel workers were getting back to work. The unemployment in
travel, it was 51 percent of all workers. That's twice the highest number during the Great Depression.
So this means it is going to slow down bringing those people back to work, and they can't last. These are people who live paycheck to paycheck. This
is America's work force and we have got to get them back to work. We have got to do so hopefully, and we've got to get people wearing masks and
following the guidelines.
ASHER: So the E.U. has debated, talked about, thought about a potential sort of ban on travel emanating from the United States. What will that mean
for the travel sector in this country?
DOW: Well, right now, it is not going to mean much because travel between different countries internationally is totally shut off. So, it is not much
of a difference right now. It will be a problem if it is four or five months from now.
I don't expect that to happen, but we need international to come back because it is $280 billion to our economy, and one of the most important
things we have is international travel.
ASHER: Should airlines have a much more unified response in terms of health and safety measures? So some airlines decide to block using the middle
seat, for example. Other airlines don't. I don't believe there are any airlines that are necessarily checking temperatures. I think there is only
one. Should there be a more unified response from airlines about how they work to protect travelers at this time?
DOW: I think it is very important that the traveling public knows what unified things are being done because they look at airlines as airlines,
not as American, Delta, United, it is airlines. So, the more they do things together, the better.
It is impossible to have distancing of six feet on a plane. American today announced full capacity on the planes they are flying. I think that's okay,
because everyone is wearing masks. Everyone is being careful, they are being smart in their spacing. They are being smart on sanitation, but they
all should be following the same guidelines so the consumer is not confused and gets back to travel as soon as they can.
ASHER: So, we are seeing airlines like TUI, for example, cancelling all flights to Florida through November. Is there a concern that other airlines
are going to follow suit just because of the surge in cases and the rules and restrictions in Florida? What sort of an impact would that have, do you
think?
DOW: We are watching it very carefully. We certainly hope not. Florida has had a spike. The Governor is reacting very quickly. He has basically closed
down the bars where they believe a lot of the young people are getting this. The young people aren't being hospitalized but they are getting these
cases.
And it is important to get the air traffic to Florida, but Florida is also a drive market. Disney is opening up in about two weeks and when
Disneyworld opens up, that will be the signal that Florida is open.
[15:15:25]
ASHER: All right, Roger Dow, live for us there. Appreciate it. Thank you.
DOW: Thank you, always a pleasure.
ASHER: Indeed. The world of motor sport is reckoning with systemic racism like never before. We have seen NASCAR making changes here this America led
by its only black driver, Bubba Wallace.
Meantime, Formula 1 is wrestling with its own historic inequality. Amanda Davies reports.
(BEGIN VIDEOTAPE)
AMANDA DAVIES, CNN SPORT: Six-time Formula 1 World Champion, Lewis Hamilton is the sport's only black driver in its 70-year history. He has often
talked about the challenges he has faced in his career because of the color of his skin, and in the wake of the death of George Floyd, he called out
other members of the motorsport community for not speaking up against racial injustice.
He has decided to take matters into his own hands launching the Hamilton Commission, a research partnership aimed at making motorsport more diverse
and multicultural.
And this week, when I spoke to the man in charge of Formula 1 until 2017, the man dubbed as Mr. F1 because of his 40-year relationship with the
sport, Bernie Ecclestone, he did praise Hamilton for his actions, and talked of its importance for the sport.
But he made what I think is fair to say was some pretty controversial comments. I began by asking him why he thinks F1 hasn't done more to tackle
the issue of diverse in the past.
(BEGIN VIDEO CLIP)
BERNIE ECCLESTONE, FORMER CHIEF EXECUTIVE OF THE FORMULA ONE GROUP: I don't think anyone has bothered about it before. They are too busy trying to win
races or find sponsors or something, really, other things, little, if any interest.
DAVIES: So what impact do you think what Lewis has launched, the Hamilton Commission -- what impact do you think that's going to have in real terms
for Formula 1?
ECCLESTONE: I don't think it is going to do anything bad or good for Formula 1. It will just make people think, which is more important. I think
that's the same for everybody. People ought to think a little bit and say what the hell. Somebody is not the same -- not the same as white people,
they are black, and black people should think the same thing about white people. Because in lots of cases, black people are more racist than white
people are.
DAVIES: What makes you say that?
ECCLESTONE: Well, things over the years, I have noticed, and there is no need for it.
DAVIES: Is that not a case of fighting for equality and fighting against injustice for such a long time?
ECCLESTONE: Well, against injustice for anyone, whatever color they are, is important to do something about that for a start. But as -- I mean, I don't
think you are going to easily change people's attitude.
I think they need to start being taught at school, so when they grow up, not to even think about these things. And I think it is completely stupid
taking all of these statues down.
They should have left them there. Take the kids from school to look and say why they are there and what those people did, and how wrongly it was what
they did.
DAVIES: As somebody who was so integral to making Formula 1 what it is today, do you not want to see it as a sport leading the way and changing
attitudes and portraying society as it is?
ECCLESTONE: I suppose the people that need to do that are the viewers. For the number of people that are directly involved in sport, it is such a
small number of people -- they can do very little.
I am surprised if anyone in Formula 1, certainly the teams and the people who are the promoters have any concern about this. I think it is the public
at large that have to start thinking.
(END VIDEO CLIP)
DAVIES: You wonder what the sport's current owners will make of those comments. Ecclestone of course while still an influential figure in the F1
paddock is no longer in charge. That's the Liberty Media Group run by Chase Carey. They in recent days have launched a new initiative to tackle
diversity and inclusion. The We Race As One Campaign including a Taskforce to address the issues both on and off the track.
But set against the backdrop of the issues that Bubba Wallace has faced in NASCAR in recent weeks, now Bernie's comments, there is no doubt the
scrutiny will be greater than ever on Formula 1 when the delayed season hits the track in Austria next weekend.
Amanda Davies, CNN, London.
(END VIDEOTAPE)
[15:20:24]
ASHER: All right, in the last few hours, Formula 1 has actually issued an official response to the interview you've just heard. It states, "At a time
when unity is needed to tackle racism and inequality, we completely disagree with Bernie Ecclestone's comments that have no place in Formula 1
or society."
"Mr. Ecclestone has played no role in Formula 1 since he left the organization in 2017. His title, Chairman Emeritus being honorific expired
in January 2020."
All right, Facebook is trying to contain the growing ad boycott over alleged misinformation on its platform. Verizon joined the stop hate for
profit boycott on Thursday, followed by union lever on Friday. They are the largest companies to join the campaign so far.
Facebook's CEO, Mark Zuckerberg responded on a live stream earlier.
(BEGIN VIDEO CLIP)
MARK ZUCKERBERG, CEO, FACEBOOK: Facebook stands for giving people a voice, and that especially means people who have previously not had as much voice
or as much power to share their own experiences.
(END VIDEO CLIP)
ASHER: Alongside the NAACP, Color of Change is heading up the stop for hate profit campaign. Its President, Rashad Robinson joins us live now in New
York. Rashad, thank you for being with us.
So just walk us through your thoughts on this. How have social media companies like Facebook played a role in perpetuating hate and
discrimination?
RASHAD ROBINSON, COLOR OF CHANGE: Well, through the algorithms, through the ways this which they let certain content on their platform and all the
incentive structures of how the content gets up getting traveled and shared. The ways in which advertisers' dollars are put next to some of the
most hateful content.
We have watched as white nationalist organizations join Facebook's platform and sow hate and division and are then even given more access to be able to
launch new pages and new campaigns on the platform.
Facebook will give sort of lip service about how they are sort of pulling down this content, but then when we really dig into the policies, they are
unwilling at the root and structural level to address all the ways in which their platform sort of incentivizes misinformation.
They also refuse to put Civil Rights at the core of how they develop and roll out new products. And so, advertisers need to know if their content is
being put next to misinformation and disinformation of hate. Folks who are using the platform should know whether or not they are viewing it and it is
coming across their platform and they are sharing it.
This actually has to be incredibly important because Facebook has 2.6 billion users, that's more followers than Christianity, and a platform this
large has to actually have rules of the road in how it sort of allows for information to flow.
ASHER: So for corporate leaders who may be watching this program right now, what are you asking businesses to do?
ROBINSON: We are asking businesses to pause their advertising on Facebook. For folks that have audiences on Facebook, you can still reach and post
sort of organic posts, but we are recognizing that Facebook has become incredibly dangerous to our society.
They have put their hands on the scales of elections, allowed for sort of the rise of white nationalism and other sort of violent behavior around the
world, and have refused to be accountable for it.
And so, if big corporations like Unilever and Verizon, which have already joined, and corporations like Ben & Jerry's and others standing with us and
saying we will not continue to allow our ads to show up on a platform where Facebook will charge us to have our ads right next to a group like the
Boogaloo Boys who wants a second Civil War.
And having those ads appear right next to that content, and not even tell us that they are charging us for it. Corporations have a responsibility if
they are saying Black Lives Matter right now to do the work to make sure their dollars are not helping to fuel all the type of attacks, all the type
of misinformation, all the type of hate that makes it impossible for Black Lives Matter -- black lives to matter in our country.
ASHER: So, a pause in advertising dollars. If it is only for one month or a couple of months, how much of a difference do you think that will make in
terms of what Facebook's stance is going forward?
ROBINSON: Well, I mean, we haven't even gotten into the actual July pause. Already today, Mark Zuckerberg is making statements about sort of what his
sort of new intentions are and making statements about things that they previously told us were impossible to do.
We are starting this out with an ask of companies to take this first step with us, and also to put their time and energy in the conversation they are
having with folks like Mark Zuckerberg and Sheryl Sandberg and others to push them on exactly what they are going to do to implement it.
We recognize that in order to get change, we may be in a long term sort of battle around this. But already, this effort around pushing for sort of the
pause in advertising, pushing for companies to pull back on advertising has already gotten this company which previously thought they didn't have to
respond to respond.
[15:25:26]
ROBINSON: You know, folks who are watching should make no mistake. Mark Zuckerberg is Chairman and CEO. He controls 60 percent of the shares. No
private person gets to control a public square this big and then to get to set the terms of engagement for so many people and then not have to answer
to the sort of rules of the road, to all the ways in which a platform --
ASHER: Although, Rashad, I am just going to tell what you Facebook has said. Okay, just in terms of playing devil's advocate here. They said -- I
am reading from my phone, they said, "We invest billions each year to keep our communities safe." They have also said that, "We have opened up
ourselves (this is our Facebook) to a Civil Rights order and we have banned 250 white supremacist organizations from Facebook and Instagram."
Why do you think -- just tell our audience, why you think that that is clearly not enough?
ROBINSON: Well, you know, the Civil Rights audit came as a result of demands from my organization after they hired a PR firm to attack us and
launch racist and anti-Semitic attacks against my organization and other organizations that were pushing them.
And so, it is also disingenuous that they are not telling the full story of even how they got to opening themselves up to a Civil Rights audit. But the
fact of the matter is that they are not being transparent about even what they pulled down. Also, the content that they have left up.
The fact of the matter is, they have created a political exemption because they refused to actually deal with the type of content that comes from
political leaders which is damning.
And so, you know, it is one thing to say that you are not going to let misinformation and disinformation about sort of voting rights suppresses
sort of a vote, and then you allow Donald Trump to put ads up there that are clearly sowing misinformation and disinformation and lies about voting.
It's like saying you're not going to do something and then allowing it to actually happen to violating the four corners of your own rule.
ASHER: So Twitter for example, now labels certain tweets by the President as misleading for example, or they their reach. Is that the sort of change
you are looking for from Facebook specifically?
ROBINSON: That is actually definitely in line with the type of changes. I mean, you know, Facebook also needs to let users know when they have
actually clicked on and followed information that's misinformation you've had to pull down.
They should let advertisers know that in a transparent way, they have actually put their ads and their brands next to sort of racist hateful
content that later had to be pulled down.
What ends up happening in terms of Facebook is they have set up an incentive structure where hateful, violent and racist content that sort of
sows the kind of passions of violence actually gets to travel. It actually gets to move much quicker on their platform.
And so, as a result, Facebook has to do the work to be more transparent about this.
I, you know, have been in deep conversations with Facebook for years about all of this. I got a direct note from Sheryl Sandberg with some of those
very same talking points earlier today.
And the fact of the matter is, they still refuse to actually address the core demands of groups like the NAACP, the ADL, Commonsense Media, Sleeping
Giants, Color of Change and others which have been demanding in so many ways that this company actually follow its own policies that they already
have on the books and actually strengthen the policies to make sure that we don't deal with the same type of racist interfering in our elections, that
we don't deal with the same type of sowing of hate that we have seen for all sorts of violent acts.
Facebook actually has to be a responsible player and we have to do all the work to hold them accountable, and corporations have an opportunity to join
us in this effort to ensure that their dollars are not going to sowing hate.
ASHER: I mean, I am really looking forward to seeing what sort of impact Verizon, Unilever pausing ad revenue, pausing ad spending even if it is
just for a few months. We are not sure how long it is going to last, but what sort of long term impact that has. Rashad Robinson, great enter view.
Thank you so much for coming on. We will have to leave it there.
Okay. The Wirecard scandal keeps stacking up. For Germany's financial watchdog and Ernst & Young coming under pressure about how well they held
the company accountable. We are with Fred Pleitgen in berlin, next.
(COMMERCIAL BREAK)
[15:32:42]
ASHER: Hello everyone. I'm Zain Asher. There's more QUEST MEANS BUSINESS in a moment when we'll ask the virologist why meat processing plants in Europe
and the U.S. have become major hotspots for COVID-19 outbreak. Our single tweet from rapper Kanye West sent gap shares soaring more than 40 percent.
Before that though, these are the headlines for you at this hour.
The U.S. set a record of 40,000 new coronavirus cases on Thursday that already eclipses what many officials called the peak of the outbreak in
April. But those numbers seem likely to keep rising as many states go forward with reopening plans. U.S. Vice President Mike Pence, meanwhile,
says the country is opening safely and responsibly. Those comments came at the first coronavirus task force briefing in nearly two months.
Pence added that he'll be visiting some of those states soon starting with Texas on Sunday. The IMF warns the recession in Latin America and the
Caribbean will be even worse than expected this year. But now says the economy will shrink nearly 9-1/2 percent citing for tracted coronavirus
outbreak. That would be the region's worst recession on record.
The European Commission is calling for a probe into Germany's financial watchdog over its supervision of Wirecard. The payments company has been
plagued by a $2 billion accounting scandal and filed for insolvency on Thursday. Meantime, the auditor E.Y. is under fire for failing to request
Wirecard's bank statements in Singapore for three years, that's according to Financial Times.
Fred Pleitgen is in Berlin for us. So, Fred, just explained to us how on earth could this company Wirecard actually get away with leading everyone
to believe they had $1 billion in cash when they clearly didn't? How did so many people not pick up on this?
FRED PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, I mean, that certainly is the big question that a lot of people are asking here in
German, a lot of people are asking around the world and you're absolutely right. I think one of the key things is that Ernst and Young, the company
that audit and has been auditing Wirecard is under a lot of fire. There's a group representing financial investors here in Germany.
They actually filed a lawsuit against Ernst and Young saying that they had been telling the auditor for years that there was something wrong at
Wirecard and simply hadn't gotten any sort of reaction.
[15:35:03]
PLEITGEN: And of course, we do have to recall that there were also two Financial Times investigations that found that there was something wrong
there as well. And up to at least until last year, it doesn't seem as though that rang anything like alarm bells at E.Y. Now (INAUDIBLE) it did
come out with a statement of its own saying essentially that the fraud that was going on at Wirecard was so big that anyone would have fallen for it.
I want to read you one quote that we have from their statement it says, "Collusive frauds designed to deceive investors and the public often
involve extensive efforts to create a false documentary trail that even the most robust and extended audit procedures may not uncover a collusive
fraud." Now, I read that statement in a show a couple of hours ago and I got a lot of angry reactions from people on Twitter say, look, that's just
not good enough for one of the biggest auditing companies in the world.
And certainly, if you look at the German finance minister, he also says he believes that the supervisory board at Wirecard failed and the auditor
failed. But you also said that the German financial regulators failed as well. And that's certainly something that BaFin which is the financial
regulator says as well. And the Germans are saying they're taking this very seriously. They say that they are going to look very hard at some of the
mistakes that were made and possibly the institutional reforms to make sure something like this does not happen again. Of course, a giant embarrassment
for Germany as a financial marketplace, Zain.
ASHER: Yes. I mean, if shareholders can't trust companies, like E.Y. accounting firms to do their jobs properly, then what can they trust and
just walk us through how much damage this done -- this does just in terms E.Y.'s reputation?
PLEITGEN: Well, I think -- I think it certainly has done a lot of reputation, certainly, just from some of the reactions that we've been
getting to our reporting. There certainly are a lot of people who are quite emotional about all this and quite angry about all this. But again, it's a
bigger thing. I mean, obviously for Ernst and Young it is something that a lot of people are saying just simply isn't right and simply shouldn't
happen to a company of that magnitude and of that size.
But if you look at also here in Germany, the financial regulator here is also saying and I think the exact words that this is one of the biggest
catastrophes that they have ever seen also, because of the way that the regulators oversaw a lot of things that were going on as well. And again,
this might cause some serious institutional reforms here in this country as well. That's how seriously they're taking it.
That's how much they believe this could do damage to the image of Germany. Of course, one of the things that we talk about a lot is that the
confidence in Germany as a financial marketplace, but generally also as a country to do business in stems from the fact that they have regulators
that work that they have rules that work. So certainly, the Germans do not want to see that to be dented in any way, shape or form. So they stay,
they're going to look at this very hard and take action very quickly, Zain.
ASHER: Fred Pleitgen live for us there. Thank you. Some German officials say people should pay more for meat to reflect its true cost of production.
The government there is looking at the Meatpacking industry after a major COVID outbreak linked to one plant. These facilities have become
coronavirus hotspots around the world. CNN's Anna Stewart visited a plant in Wales to find out why.
(BEGIN VIDEOTAPE)
ANNA STEWART, CNN REPORTER: It's the third meat factory in a small country of Wales to register a coronavirus outbreak in recent weeks. This one at
the 2 Sisters Poultry factory is the biggest. 200 cases so far. That's dwarfed by an outbreak at the Tonnies meatpacking plant in Germany, where
over 1500 workers have tested positive for COVID-19 leading to a local lockdown more than 360,000 forced to quarantine.
It's a worrying trend in meat processing plants and slaughterhouses across the world. Despite many adopting COVID-19 safe measures, PPE and social
distancing where possible.
JAMES WOOD, INFECTIOUS DISEASE PROFESSOR, UNIVERSITY OF CAMBRIDGE: So, temperature is something that there is a feature particularly cutting
plants. It's harder to have a cold temperature in national slaughter lines. But one of the features of the slaughter lines is the fact that they're
very noisy places. People have to stand close to each other and sometimes shout in order to make themselves heard. And all these things can promote
the risk of spread of infection.
STEWART: In the U.K., more than two-thirds of sectors workers are from other European countries. In the U.S. and Germany, migrant workers make up
around a third of the workforce.
Back in the town of Llangefni, home to the closed poultry plant, the streets
are practically empty.
Many of the workers their families and their contacts are still self- isolating at home. It's a small town and always everyone we spoken to, you know, somebody that is affected. The biggest concern has been that
employees who felt sick early on in the outbreak didn't stay home as they couldn't afford to.
[15:40:03]
PADDY MCNAUGHT, UNITE REGIONAL OFFICER: These people are all paid. They don't have sick pay schemes in place. So when people have a slight
temperature or something that could be related to COVID-19 whether it's a slight cough or slight temperature, people have been less likely to take
time off and isolate.
STEWART: 2 Sisters say unions like unite are leveraging this crisis to improve work as conditions. And added that all their staff are now on full
pay since the factory is shot. There's a confluence of factors at play. As outbreaks continue to crop up at meat plants across the world. There are
concerns about the safety of the workers and their communities. Anna Stewart, CNN Llangefni, Wales.
(END VIDEOTAPE)
ASHER: The world is taking a closer look at conditions in the world slaughterhouses and processing plants. In the U.S. facilities and dozens of
states are under siege by the virus. Since the pandemic began, there have been thousands of confirmed cases tied to plants. China is working to
assure people that their meat products are safe. A major outbreak in Beijing is believed to have again begun at a meat market too.
And in Germany, residents of (INAUDIBLE) are racing to get tested, whether they have symptoms or not after hundreds of workers at a meat plant tested
positive. Dr. Angela is resolution is a biologist at Columbia University in Seattle. She joins us live now from Washington via Skype. So, Angela, just
explained to us really just why these meat processing plants have just become such a hotspot in terms of spreading COVID cases during this
pandemic.
DR. ANGELA RASMUSSEN, VIROLOGIST, COLUMBIA UNIVERSITY: That's an excellent question and it's clearly something that's happening all over the world.
And I think that it's largely because of some of the issues that your correspondence just raised. The conditions in these plants for workers
enable super spreading events to occur. And then they have inspired workers to come to work while they're still sick.
In this case, this virus is also transmitted when workers are pre- symptomatic or asymptomatic, so people can be coming to work potentially contagious and not know that they are, in fact infected. When you combine
that with people working in environments where they are very close together, where they may be yelling or shouting and producing large
quantities of respiratory droplets, which is the primary mode of transmission of this virus.
It's really a recipe for disaster. And when you have these factories or plants and communities where everybody is associated with the plants,
virtually every household has somebody who might be working at the plant or is in contact with people there. It's really a recipe for that virus to
move beyond the plant into the widespread community and have community transmission be established there.
ASHER: And how much of a factor is say cold temperatures and also just the lack of -- in some cases lack of an adequate air filtration system?
RASMUSSEN: So cold temperatures may have an effect. There is -- there is research that indicates the temperature and humidity both play a role in
how long the virus can persist in the environment. But I would think that the air filtration as well as the worker conditions probably play a larger
role. And that is because we do know that this virus is primarily transmitted by respiratory droplets rather than fomites or contaminated
surfaces.
So, the thing to remember here is that viruses are transmitted by people. Viruses don't like to live in the environment, they really can't live in
the environment on their own for a long period of time. So anytime you have a lot of people that are spending a lot of time together in close physical
practice, proximity, producing these respiratory droplets, you have an increased risk of transmission.
ASHER: So, what do you say to people who are now concerned about whether or not their meat is safe?
RASMUSSEN: I think that that largely is a pretty minimal risk for several reasons. One, as I just mentioned, this virus is much more likely to be
transmitted from close physical contact with another person. That's not to say that it's impossible to transmit it from a contaminated surface or
piece of meat, but it's less likely. The other thing is that we know that when virus is on surfaces and presumably on meat or wrapping materials that
the meat would be packaged in it declines and infectiousness over time and fairly rapidly.
Within 72 hours, there were substantial decreases in infectious titers of this virus on plastic surfaces. So by the time that meat makes it -- its
way from the packing plant to your grocery store and is then purchased, there's likely to not be very much virus on there if there was any in the
first place.
[15:45:05]
RASMUSSEN: And any residual virus that might be there that risk can be further minimized by practicing good hand hygiene after handling your
groceries.
ASHER: So, what needs to change some of these meat processing plants just in terms of testing, contact tracing, quarantine rules, you know, staying
six feet apart from the next employee. What needs to change?
RASMUSSEN: All of those things need to change. So, these -- the people running the meat processing plants need to ensure that their workers are
able to physically distance from one another, they need to make sure that they're equipped with a proper personal protective equipment. And in this
environment, that means at minimum, a mask and gloves. Ideally, you would want a more protective mask like an N95 particulate respirator.
In addition to that, the meat plant workers themselves needs to have more protections. They need to have sick leave. They need to be able to stay
home and isolate or quarantine themselves if they suspect that there has been exposure and there needs to be increased testing capacity.
Furthermore, here in the U.S., oftentimes interventions were not undertaken until after there was already widespread transmission within a plant or the
community surrounding it.
And that's really too late. These plants need to be implementing these measures before they start having an uncontrolled outbreak to make sure
that everybody both in the plant and in the community around it is as protected as possible.
ASHER: Dr. Rasmussen, thank you so much. Still ahead. Gap banks big on an upcoming collaboration with Kanye West. We'll have full details ahead on
Yeezy's Friday. That's next.
(COMMERCIAL BREAK)
ASHER: All right. Shareholders at Gap are saying yay for Kanye. That is off the news of a collaboration sent stock soaring. This is how shares of the
clothing giant are doing right now. They actually soared 40 percent earlier after music and fashion icon Kanye West confirmed this upcoming
partnership. The ever fashionable. Paul La Monica is here with me. He joins us live now. So Paul, just explain to us, you know, just what Gap stands to
gain here.
Obviously, they've had shrinking profits over the past few years. I believe their revenue last year was about $4.6 billion. They've had this identity
crisis. What is Kanye West going to for them that they so far haven't managed to do for themselves?
[10:50:06]
PAUL LA MONICA, CNN DIGITAL CORRESPONDENT: Yes, I think that Gap in addition to the other brands does things like Old Navy and Banana Republic,
it's really been struggling to find an identity. I mean, the Old Navy brands still resonates I think with younger consumers looking for cheaper
fashion, but Gap, is it khakis? What exactly is the Gap supposed to be known for? And I think they're trying to inject some much-needed coolness
with this partnership with Kanye and the Yeezy brand.
The problem though, Zain, is that even if the Kanye apparel sells well, they're probably going to have to do it at a lower price point than what a
lot of his items have been typically selling at elsewhere because Gap isn't exactly a high-end luxury brand. And also, I've seen one analyst report
saying that, you know, this is a good deal for Gap and it could generate as much as a billion dollars in sales by 2025.
2025 is a long time from now in this retail world where so many companies are struggling because of COVID-19.
ASHER: Do we know what Kanye stands to gain financially from this just in terms of equity, royalties, that sort of thing?
LA MONICA: Yes, we haven't seen the full details of the agreement whether or not there is equity in Gap or Kanye or not. But it is said to be about a
10-year deal which is clearly a huge bet by gap that this is something that is going to have long legs in retail world where fashion trends are very
fickle. And even though Kanye has obviously been both a musical and now fashion legend, will people in 2025 still want these clothes the way that
they're clamoring for them.
Now, that's, I think a big question and Gap again, still has many other financial problems they have to go through in order for this partnership to
even work. They're being sued by Simon, one of the real estate companies that is not too thrilled by the fact that Gap hasn't been paying rent in
the COVID crisis. So, I just see that so many problems in the near term for Gap hard to get too excited about a 10-year deal, even if it is with
arguably one of the most influential people in fashion right now.
ASHER: All right. Paul La Monica, thank you for that. Appreciate it. Need to work? There's a pod for that one. California gym gets creative when it
comes to meeting CDC guidelines. Its owner as joins me live from Redondo Beach, next.
(COMMERCIAL BREAK)
[15:55:13]
ASHER: One California gym has worked out a creative solution to social distancing, a plastic exercise pods. Inspire South Bay Fitness has built
stations out of shower cutter and pipe. This is really creative actually. So guests can take classes and stretch six feet apart. Each pod comes with
its own equipment and of course disinfectant in case you need it. Peet Sapsin owns South -- Inspire South Bay Fitness with his wife. He joins us
live now from Redondo Beach. This is really creative because it's sort of hard to maintain social distancing in gyms.
And we know that workout classes can be a major source of spread. How did you come up with this idea?
PEET SAPSIN, OWNER, INSPIRE SOUTH BAY FITNESS: So, we started off with Zoom classes during COVID-19. And we were thinking about ways to come back to
our live gym. And we wanted to do mandatory mass when clients come in. And since we do group fitness, there's a lot of exchanging between clients
walking through the class, so there's no way to really social distance. So then my wife drew up the idea of the dividers.
And at first, she told me shower curtains and I was like, OK, I thought that was kind of silly. But I'm a visual guy. So, the more I see it, the
more I can believe that, OK, it's going to work. So, we went to the hardware store and build one with PVC pipes and shower curtains. And then
we send the picture to our clients and everybody was excited. So, after a while of putting a mask on, they cannot breathe.
(CROSSTALK)
ASHER: Did you build it yourself?
SAPSIN: We actually built it ourselves, yes.
ASHER: Wow.
SAPSIN: It's just me and my wife.
ASHER: That is impressive, actually. But how expensive is it for you just in terms of A, limiting number of people in your class and then having to
build these pots on top of that?
SAPSIN: So the pods -- what we were going to go with a Plexiglas solution and that would have cost us over $10,000 for all nine pods. But then when
we build our own with PVC pipes and shower curtains, it cost us about $400 for all nine. And yes, it's a little bit more expensive as in terms of like
coming up with cleaning solutions and things like that. But, you know, our clients are worth it.
ASHER: And beyond just the pods, what else are you doing to sort of sanitize the place just in terms of limiting how many people can actually
enter and exit at the same time? The number of people in the classes and also just making everything clean as well all the time?
SAPSIN: Yes. So, we saw -- we used to have be able to max out a 24 clients per class and now we reduce everything down to nine max. Everybody that
checks in starts with sanitizing their hand, that's number one, and then they sign into waiver, and then we check their temperature, and then we
assign them to their pods. So, we didn't want any cross contamination. So, we made sure that everybody stay in their pods and have everything that
they need so that within the 15 minutes they stay in there the entire time.
When they are done, we provide cleaning solution in there so that they can disinfect out themselves. And our gym is well-ventilated. We have all our
doors open, 16 feet ceiling, you know, fans are pointing down and turn on at all times.
ASHER: Peet Samsin, we have to leave it there. Thank you so much. Really creative idea actually. Thank you for coming on. And that is QUEST MEANS
BUSINESS. I'm Zain Asher in New York. The news continues here on CNN.
(COMMERCIAL BREAK)
END
