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Quest Means Business

Auto Execs Warn Chip Shortage To Drag On; Pandemic Reveals U.S. Dependence On Imports From China; Companies Delay Reopenings Projected For Labor Day; Norse Atlantic Will Launch New Airlines During Pandemic; Maersk CEO: Trade Pipeline Is Bursting At The Seams; U.S. Markets Closed For Labor Day. Aired 3-4p ET

Aired September 06, 2021 - 15:00:00   ET

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

[15:00:05]

RICHARD QUEST, CNN BUSINESS ANCHOR: Normally, I'll be telling you that there is 60 minutes left of trading in New York, but not today.

United States is marking Labor Day. So instead, let me tell you what European stocks are doing, they're all higher with the DAX nearly at a

record. The markets and how they were looking and the main events of the new week.

It'll get worse before it gets better. Europe's car makers sound the alarm on the global chip shortage.

Hopes for a grand return to work on Labor Day, it fizzles out on Wall Street.

And Norse Atlantic tries to succeed where so many other low cost carriers have failed. The Norse Chief Executive will be on this program tonight.

I'm live in London. A very good day to you. It's Monday, it's the 6th of September -- September. How did that happen so quickly?

I'm Richard Quest, and I mean business.

Good evening. Tonight, the global chip shortage is going to get worse before it gets better. That's the message from top auto executives who have

gathered in Munich for much of the International Motor Show. You're going to hear from two chief executives who say the problem isn't going to go

away anytime soon.

Ford and GM are already pausing production at some North American plants, and in doing so, they're having to cut shifts at others. Subaru is halting

production at all its factories in Japan for four days, and that starts -- and that begins tomorrow.

The CEO of BMW tell Max Foster, he was speaking from the motor show that the shortage could last another year.

(BEGIN VIDEO CLIP)

OLIVER ZIPSE, CEO, BMW: What we saw for the first six months of this year that we could counterbalance the effects on our customer is quite good.

Then the second half of this year, we will see more effects. Also BMW will lose some vehicles, but we are working very hard to reduce the effects on

our growing market segments.

But we foresee that the second half of the year will be more difficult. If you ask me how long this chip shorted period will stay on, I consider it

will be the next six to 12 months. And after that, we should be over

(END VIDEO CLIP)

QUEST: Six to 12 months. That's a fairly daunting prospect, because the continuing shortage is being made worse by COVID waves, particularly in

Southeast Asia, where of course the semiconductor manufacturing happens to be based.

And it's not only car makers, semiconductor chips are in everything -- mobile devices, household appliances, IoT - Internet of Things. The

government says, 169 U.S. industries embed semiconductors and forecasts they could face a 20 percent shortfall.

As for Intel, well Intel says it could be until next year, but one, 2023 for the shortage to get sorted.

Anna Stewart has spoken to VW CEO, Herbert Diess and Anna is with me. Now, look, the reality is we've known about this chip shortage. Why haven't we

been able to sort something out by now?

ANNA STEWART, CNN REPORTER: Well, frankly, the big problem is a simple supply and demand issue, Richard, there just aren't enough chip makers in

the world, there aren't resilient enough supply chains to supply an ever growing demand.

And as you mentioned there, it's not just the automakers who really, in some senses, are just the canary in the coal mine. They were the hardest

hit for a number of reasons. They operate in a very traditional manufacturing just in time sort of process. They don't have big inventories

when COVID hit. Many car makers actually canceled their orders.

And I can tell you, lots of companies and other sectors gobbled up capacity at factories. That is why there was such a big problem for the autos, and

it is continuing and it will, I think until at least 2022, possibly until 2023, and they are just having these car makers having to focus more on

high end production.

You can have thousands of chips in one car, but if one chip isn't there, that car simply cannot be finished. It's been very disappointing,

particularly for the CEO of Volkswagen, as he told me earlier.

(BEGIN VIDEO CLIP)

HERBERT DIESS, CEO, VOLKSWAGEN GROUP: We expected that we would have a relief after the summer break, which didn't happen because in Malaysia, we

had really quite significant problems with COVID. Some of our suppliers, the backend of our suppliers are mostly based in Malaysia, three plants

were hit hard.

We think that we will overcome this situation towards the end of the month and then we should see a relief. Semiconductors will be on short supply

probably for several months.

STEWART: You want to be at least 50 percent all electric or that's what you're expecting from your car sales by 2030. It's an ambitious target.

Although, actually some of your competitors -- Volvo, Ford, Renault, Stellantis -- have more ambitious targets as to when they will be all

electric. Why are you a bit further back?

[15:05:14]

DIESS: Maybe not further back, I think we are selling many more cars than most of our competitors. Now in Europe, we are already leading, and even in

the U.S., we have been in second place for the last months, and in China, we are growing fast.

We are not slower. We are, you know, we don't want to pull back, for instance, from Latin America where electric cars will probably not be the

solution for climate change. No. in Latin America, the natural way forward is use biofuels, which are CO2 neutral, which is still combustion engine.

That is why we don't say we will finish production of ICE cars so soon.

STEWART: How will the adoption of autonomous technology go? When we look at the issues we've got with electric technology, infrastructure, charging

points, supply chain problems with semiconductors, how quickly is the world going to go autonomous?

DIESS: Yes, I think you overestimate the problems with electrification. It is going actually quite well. In some of the markets, we already sell 70 to

80 percent electric cars for instance, Norway, Sweden, and Germany. It will take time because your entire supply chains are changing from combustion

engine into EV, so battery cell production has to ramp up and it's going actually quite smoothly.

But we see a much bigger transition for the industry when cars are becoming autonomous because cars will be used differently, more -- it will be used

by more people. You can send your children or your grandparents in a car somewhere now imagine.

STEWART: Volkswagen is of course very competitive for Tesla, you really give them a run for their money, particularly I think in Europe. There have

been many parallels drawn as well between yourself and Elon Musk, not least given you a very active social media presence selfies with Mr. Musk, lots

of stunts. Have you taken a leaf out of his playbook?

DIESS: No, I think you know that -- I don't see any parallels. I highly regard what he is doing. Now, I think he is a pretty brilliant guy and he

is really -- he makes a difference. He is changing the world with his ventures.

I think I really like that he is thinking very long into the future. Now, he is thinking far. And he's a brilliant, but we are quite different. He is

very focused on Tesla, on his story. I'm running a big traditional company, which we try to prepare for the future, and I think we also require

different characters.

I like him a lot, but I think we are quite different.

(END VIDEO CLIP)

QUEST: Gosh, Gosh, Anna. That was fascinating because he is right, but isn't it gratifying and rather lovely that he can appreciate Elon Musk. But

of course as he points out, he is running Volkswagen, which is the VW -- it is just a considerably larger enterprise, which has many more vehicles.

STEWART: Exactly. It was really charming actually. And what's so funny, Richard, is he has actually teased Elan Musk on Twitter on fairly constant

basis since he joined in January and Elon Musk has also said lovely things about him. So bit of a bromance there really.

QUEST: Do you have a car?

STEWART: I don't have a car. You know, I am a millennial of the future because I need car sharing, Richard. I don't have a car. I'm not a very

good driver. I need autonomous car sharing. Someone needs to definitely parallel park it for me, I think.

QUEST: Well, I'm sort of an old, old fogy, and haven't had one for years. I just want to make sure --

STEWART: You have driven me before, Richard. I remember us driving through Liechtenstein once.

QUEST: We both survived the experience. Lovely to see you, thank you.

The delta variant is surging in the United States. Masks and personal protective gear are back in urgent demand. It's not surprising perhaps

China is taking full advantage as CNN's Claire Sebastian explains.

(BEGIN VIDEOTAPE)

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT (voice over): These N95 respirators are designed for pandemic survival, filtering 95 percent of

airborne particles, whether the business that makes them can survive the pandemic is not guaranteed.

BRIAN WOLIN, CEO, PROTECTIVE HEALTH GEAR: The labor costs are associated with making an N95 respirator is so different from China to the United

States. We have hourly wages, we pay overtime, we pay double time on weekends.

SEBASTIAN (voice over): Right now, with the delta variant fueling sales, this New Jersey factory is investing to try to bring down those costs.

SEBASTIAN (on camera): This is a brand new piece of machinery worth over a million dollars. It's not yet operational, but in a couple of weeks, it

should be able to churn out up to 50,000 N95 masks every day.

[15:10:10]

SEBASTIAN (voice over): The last 18 months since Brian Wolin and his brother-in-law decided to turn this luxury retail display business into a

medical grade mask factory have been a crash course in market uncertainty.

WOLIN: It's been a tremendous roller coaster. So, when we first started, we didn't know how we'd be able to handle the demand. And then once the

unmasking policy came out back in May, the -- really, the demand dropped off significantly.

SEBASTIAN (voice over): Pre-pandemic, the U.S. imported most of its supply of personal protective equipment. China accounting for almost half of those

imports close to three quarters when it comes to masks and respirators.

CHAD P. BOWN, PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS: China is for most parts of PPE, the largest export. And what that meant in early 2020 is

when they were hit with the pandemic first, they stopped exporting. And not only did they stop exporting, they actually started importing from the rest

of the world.

SEBASTIAN (voice over): That sparked critical shortages, leaving healthcare workers exposed.

JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: We shouldn't have to rely on a foreign country, especially one that doesn't share our interest or

values in order to protect to provide our people during a national emergency.

SEBASTIAN (voice over): Data shows in 2020, the U.S. continued to rely on China for PPE. Imports more than tripled compared to 2019.

Tim Manning, the White House's National COVID-19 Supply Coordinator told us PPE imports are down quite a bit this year, and there is now enough

manufacturing capacity in the U.S. to meet domestic demand. And yet, cheaper imports are still coming.

A box of 20 of Protective Health Gears U.S. made N95 masks will cost you $74.00 on Amazon. The same quantity from China's BYD costs less than half

that.

Some smaller mask manufacturers tell us they also believe some Chinese manufacturers are selling certain products below cost in the U.S. to

undercut U.S. producers. CNN has not independently verified this claim.

WOLIN: How are you? Very nice.

SEBASTIAN (voice over): Brian Wolin is clear, he doesn't want handouts. He just wants the government to buy his product.

WOLIN: We spoke to the government time in and time out and tried everything that we could to get a contract, and it just hasn't happened as

of this moment.

BOWN: How big should this industry be in normal times in order to be able to be easily scaled up during a pandemic? That's -- you know, that's the

kind of questions that the Federal government now has to grapple with.

SEBASTIAN (voice over): At a time of deteriorating relations with China and still critical need for these products, questions that are both urgent

and fraught with risk.

Clare Sebastian, CNN, in Paterson, New Jersey.

(END VIDEOTAPE)

QUEST: It is Labor Day in the United States. A lot of bosses wanted their offices back to normal, either by today or from next week. That may not

happen for a long time.

Employees are demanding more from their companies and bosses are finding that employees are not afraid to leave.

In a moment.

(COMMERCIAL BREAK)

[15:15:49]

QUEST: In the United States, it is Labor Day. Now this year, the date was meant to remark the return to normal life. Now, we are seeing COVID cases

surging and most return to work plans have been either postponed or abandoned or simply pushed off into the future.

Many companies say they will -- it will be next year before they'll have employees put back in or they've put the plans on hold definitely. For

instance, Google's parent, Alphabet earmarked September the first for its return to work. That is now at least January,

Amazon hoped for a return by Labor Day. Now, it is eyeing 2022 for its reopening.

And the asset manager BlackRock says its staff won't be back until at least October. Let's see if that holds.

What a far cry from the CEOs who were saying just a few months ago, we want you back in the office. This is a Morgan Stanley's CEO back in June.

(BEGIN VIDEO CLIP)

JAMES GORMAN, CEO, MORGAN STANLEY: If you only get paid New York rates, you work in New York. You know, none of this -- I'm in Colorado with work

in New York and getting paid like I'm sitting in New York City. Sorry, that doesn't work.

So, I would call it directionally very strong without dictating yet, that Labor Day, I'll be very disappointed if people haven't found their way into

the office and then we'll have a different kind of conversation.

(END VIDEO CLIP)

QUEST: Remember. Now here in London, employees are returning perhaps in larger numbers. Tens of thousands of commuters have poured back into

Central London today, and the London Transport Network says it was the busiest morning rush hour since the pandemic hit.

The pandemic though has shifted priorities for many workers. A special report from Edelman shows that higher wages are no longer enough to make

people happy at work. They are guided by beliefs when picking a job, their own wellbeing, looking for flexible hours, and remote working.

The company behind the study delayed its own reopening because of the delta variant. Chief Executive, our good friend, Richard Edelman is with me live

from New York.

Richard, just be -- just to be clear. When are you now saying to the staff come back?

RICHARD EDELMAN, CEO, EDELMAN: It could be October, it could be December. Richard, it has to be dependent on whether public health officials say it

is all clear.

QUEST: This new study, the sort of trust barometer in a post pandemic world, you say that salary is not the -- is no longer the big thing that it

was. There are other factors. Do you think that will last?

EDELMAN: So it's really a trifecta now. Of course, it's salary and compensation. But that's just table stakes. It's now also my workplace

conditions, and does the company listen to me as to my views. I'm a belief driven employee now, and I actually want to work for a company that's doing

good.

You know, we have a time right now where businesses actually stepping into the void left by government, whether it's about vaccination, or even about

local policing. So, it's a very important moment to understand that business is the most trusted institution and my employer is the best place

for me to get quality information.

QUEST: And yet bosses can squander that trust very easily making promises during the pandemic of hybrid working, only to demand people back through

one way or another, promising one thing, delivering something different.

EDELMAN: So something like as many as 40 percent of Americans are thinking of changing jobs and the number one reason is that, I don't agree with the

values of my company. It's not about the wages, it's actually, you know, do they look at my personal health as their priority or not?

And so smart companies are going to have to be flexible here and recognize that in fact, a belief driven buyer and a belief driven employee are

actually identical, and we have a change in value since the pandemic.

We actually have a moment in time here where I'm leading with my heart and I really want to --

QUEST: All right, come on. Richard, how long does this last? It lasts until the first recession when jobs are hard to come by, and the whip hand

is with employers, not like at the moment.

[15:20:17]

EDELMAN: So at the moment, you see rising wages, you see more demands by employees, but it's actually a deal, which is, I will stand up for my

company, I will be more loyal to the company if in fact, I'm given that level of flexibility. And that's a thing that we have not done since the

Industrial Age.

We have to really think even about the assembly line. We can't have an eight-hour shift that starts at 7:00 a.m., and finishes at three, and that

you have to be there at the exact moment because actually, moms or dads want to drop their kids at school and we're going to have to figure out a

level of flexibility not hereto foreseen in business.

QUEST: So employees looking for their value based, value laden if you will work environment. So what does an employer do? Let's go -- let's grasp this

nettle heart if we may, Richard. Let's take, for example, freedom of choice, right to life, abortion, the issue, which in the United States is

about to become exceptionally controversial.

What does an employer do about taking a value position on that?

EDELMAN: So there are specific issues on which business has to lead. So sustainability and on diversity inclusion, also now on vaccination. There

is a general consensus that employees should be vaccinated.

I think that abortion gets into the religious area. Myself, I'm pro-choice, but I'm not going to impose that on my employees. And so smart CEOs will

recognize that there are specific issues on which they have to weigh in, for example, the ability of their employees to vote freely in states.

But there are other issues, guns, for instance, or abortion where you've moved into an area that is very hard, because the country is deeply split.

QUEST: And finally, briefly, back to the office, October, December, January, where are you?

EDELMAN: Well, I'm working at my office, but it's a very lonely place and I'm not expecting my colleagues to come back. They don't have to follow my

example because I've specifically told them not to.

I can walk to the office, and so they need to come back when they feel safe and when their kids are vaccinated and when this country has beaten the

delta variant.

QUEST: And you and I will meet when it's safe when we can get together and enjoy and talk more. Thank you, Richard Edelman. Always good to talk to

you.

Cuba is getting ready to welcome visitors back in hopes of restarting its idle tourism industry. The state run media has announced that Cuba will

start to reopen its borders in mid-November, and won't even make visitors get tested for COVID upon arrival.

The announcement comes as hospitals in the Caribbean nation are filled with COVID patients. The Health Ministry says more than four million people

there are fully vaccinated with Cuba's own vaccine.

CNN's Patrick Oppmann is live in Havana.

They made such a big deal, and rightly so, of their own vaccine. From your knowledge and experience, the efficacy of it is high, and has that allowed

them to vaccinate and open?

PATRICK OPPMANN, CNN CORRESPONDENT: They are vaccinating like crazy, but still have a long way to go, Richard, because we are still in the depths of

this pandemic seeing the highest number of cases -- new daily cases and deaths in recent weeks of at any point during the pandemic, which would

seem like a strange time to announce that you're going to do in the next two months, begin lifting restrictions. But that really speaks to how

devastated Cuba's economy has been by the virtual lack of tourism.

You can walk around where I am now in Old Havana and you will not find a tourist here. You go to the beaches, they are virtually empty.

There are so few tourists coming in here and Cuba is running on fumes at this point. The government thought they would have been able to open by

now, they have not been able to and they say that they will make up the difference. They will vaccinate what they have to do the rest of this

island. Go ahead, Richard.

QUEST: Yes, I just wanted to say -- let's take that though. Most of the visitors, I mean, the tourist industry was difficult to begin with

originally because of the embargo. The U.S. decides to start coming in and it increases. So, where do they expect tourists to come from?

OPPMANN: Right now, you have a lot of tourists coming from Russia, and right now, when they land as you said, they have to have a PCR test, they

have to stay in the hotel until they get a negative PCR test result back.

It's not a very pleasant vacation experience. So, they are hoping by waiving the PCR test requirement, by showing that people are vaccinated,

they will be able to begin to attract tourists from places like Canada, the traditional tourist market, and that that will come back.

[15:25:24]

OPPMANN: It's not going to come back very quickly, though, Richard. And the big problem they have to do is they still have over half this island to

vaccinate. They think they can get it done in two months that seems overly optimistic based on how it's going. And yet, there are really no good

choices here, Richard, as with so many other places in the Caribbean that depend on tourism. It's either open or die. And when they've opened in the

past, we've seen an explosion in new cases. That's not very good for business either.

QUEST: You've summed it up perfectly. Patrick Oppmann, who is in Havana, thank you, sir.

Stay with travel. If you want to hop on a flight from London to New York, well, there could be a cheaper option coming, if it gets into the sky. A

new airline is getting ready to launch in the midst of the pandemic. It's got quite a lot of experienced people behind it, but will the model fly?

And I don't mean the plane model -- will their economic model fly? After the break.

(COMMERCIAL BREAK)

QUEST: There is a new airline on the block, Norse Atlantic. It is trying to achieve what many others, including Norwegian could not -- low cost,

long haul air travel across the Atlantic and they are launching at a time when the industry is struggling to recover from a pandemic.

I would say its predecessor, but they will take strong objection to that, a similar named airline Norwegian had a similar strategy, ended up filing for

bankruptcy and then reinvent itself back to its roots as a regional carrier.

The company's Chief Executive beyond Bjorn Tore Larsen joins me now from Washington.

I'm not going to ask you why you are better or different from Norwegian because you've been sick and tired of asking that. I'm going to ask you why

you're not going to make the same mistakes. Why will you succeed where they failed?

BJORN TORE LARSEN, CEO, NORSE ATLANTIC AIRWAYS: Well, we are a very different airline. We're a very brand new airline with a new concept. We

only fly long haul. We have none of the complexity of a hub and spoke carrier. We are very focused on maintaining our cost down. We do have very

modern, but yet very cost competitive aircraft. More importantly, we have an abundance of people that want to join us.

And, and a lot of them have joined already. And we will have the greatest people in the air, which will work both with the heart and with all their

competence. So we are very sure that our model will work.

QUEST: OK. So you've got cheap planes, your 787 some aircraft, so you've -- I'm guessing you -- they're virtually handing you them, or lease, you've

got a very good deal on your 787s which are cost effective. But you know the economics of this backwards, the nature of fuel costs, the staff costs,

the overnighting, all of these sorts of things, boosted. Now, if all the legacy and existing carriers merely increased the number of seats that they

offer at the back of the plane, they eat into your margins. That's what happened to Norwegian.

LARSEN: Well, I don't think you can compare us, we are not going to challenge the big companies who mainly focus on their business travelers,

we are there for the leisure travelers, we are there for the big number of people who would like to fly affordable, but yet the most environmentally

friendly aircraft. And we have lower costs than the competition and low cost is never a disadvantage.

QUEST: So when -- I mean, assuming U.S. regulators give you the launch, and you get the IOC out of the Norwegian authorities and after the U.K.

authorities. When do you expect the first bump on seat for flight?

LARSEN: We plan to be in the air with the first aircraft. The springtime. It's all depending on when the pandemic is behind us. And then regulators

are open to airspace between Europe and America. But in our estimates, we will have the entire fleet flying by next summer.

QUEST: And how quickly will you grow? I mean, you've obviously got to do the main routes London, Boston, New York, Miami, and then you'll probably

look to go further to the west coast. How much do you want to blanket Europe with these point to points? And related to that, are you going to

get feed from other carriers?

LARSEN: We do not plan to grow beyond the 15 aircraft that we have secured now. We think it's a good size for a long haul carrier like ours. But we

will use the opportunistic approach growing in the future. In other words, when we have proven the profitability of our airline and also then when the

opportunity Arise for us to get more aircraft at a reasonable cost we'll take advantage of those opportunities. But our present plan is to only have

15 aircraft in our business model.

QUEST: So, last question, I want you to look at this quote, this quote from Ben Schlapping of One More at a Time. I'll read it to you, since you can't

see it. Ben Schlapping, One Mile at a Time. History has shown that low cost long haul airlines generally don't work. And I'm not just talking

about Norwegian, the sky is replete. I'm old enough to remember Freddie Laker. I flew on people's express. I remember them all you know them all.

Why do you think you'll be different?

LARSEN: Well, Richard, the times are changing. So these days, there is a different sort of audience that we are inviting on board. And we think that

we won't only have our share of the market but we will actually stimulate growth so that more people can afford to fly on our aircraft. So whilst the

people may not have been able to get it work in the past, we simply don't think they have done the same level as we are doing.

QUEST: We're going to look forward to being on an inaugural flight. I don't do many (INAUDIBLE) but I was on JetBlue which is of course a slightly a

very different product to the one that you're you will be offering. But I look forward to assuming you invite me to being on your first flight, sir.

LARSEN: Absolutely. Richard, welcome aboard. Looking forward to see you.

QUEST: Probably middle seat somewhere near the toilets at the back. Thank you, sir. I look forward to. Thank you.

LARSEN: Thank you.

QUEST: As the airline industry waits for demand to return, the shipping industry is trying to work through extreme demand. Remember I was talking

to at the beginning of this program about semiconductor shortages. It's all those goods crossing and now port closures in China. One of the challenges

facing the shipping industry. Maersk's chief executive has told me the trade pipeline is bursting at the seams from extreme demand. I spoke to the

CEO last month during my trip to Denmark.

(BEGIN VIDEOTAPE)

SOREN SKOU, CHIEF EXECUTIVE OFFICER, MAERSK: Right now in global trade, there's a massive demand.

[15:35:05]

SKOU: A massive demand in factories, in land side logistics, on the ships. Everywhere the pipeline sort of to speak, is bursting at the seams. Because

of two things. First of all, there's very, very strong demand led by the U.S. and all of the stimulus money that has gone into products to the U.S.

consumer. On top of that, there's a huge inventory rebuilding cycle going on.

QUEST: Because we've depleted -- demand has depleted that which was in stock.

SKOU: Yes. And also, because at -- year ago, in the second quarter of 2020, a lot of companies stopped buying in Asia or really scaled down their

purchases because nobody knew what the world was going. We thought that we would have a major global crisis. But then the stimulus came and demand

came roaring back.

QUEST: So where exactly is the supply chain issue? Is it at the manufacturers? Or is it at the commodities and raw materials? Is it in the

shipping, the distribution? I keep hearing about it. But where is it?

SKOU: I'd say pretty much everywhere. You've seen it, starting with commodity prices going up, lots of shortages for instance of computer

chips, and so on. And then all the way through the supply chain and logistics change is lacking rail capacity in the U.S. trucking power and so

on. So it's all over the place.

QUEST: We're seeing inflation. Now the argument of inflation is it's a commodity level, it's at manufacturing level, but it's also at shipping

level, rates have gone through the roof. And that is contributing to global inflation at the moment. Particularly in countries like the U.S. and in

Europe.

SKOU: No. There's no doubt that we see inflationary -- inflation creeping up for the reasons that you just -- you just stated. I do expect, however,

that things will normalize as we work out through this period of extraordinary demand. And as inventories fill up again.

QUEST: You're turning the ship around literally, the ship of Maersk towards logistics. How easy is it turning to be?

SKOU: Well, we are -- we are we are growing our land side logistics business a lot. Simply by selling land side logistics products to our

customers on the ocean. And in many cases, creating a more integrated solution and more end to end solution. That's going quite well.

QUEST: The problem is everybody's doing it. Everybody wants to manage another company's logistics. And I'll grant you you've got great

experience, you've got ships, you know how to move things. But you know, what -- is it worth it?

SKOU: I think in today's market is quite powerful to be able to offer an integrated solution where we take responsibility for the whole move from

the door -- from door to door. And that's why we have been growing so strongly during the pandemic. Last quarter, we grew 36 percent organically

in our logistics business.

QUEST: If you take, for example, the Delta variant, which is now starting to hit Asia, and you see the measures that China's taking at the moment, is

this -- how's this going to affect you and your ability to export out of China?

SKOU: Well, China has, you know, is combating COVID with very drastic measures, basically closing down ports if they have a handful of cases. And

then of course, it's adding to the disruptions that we all already have, and will make it more difficult for us.

QUEST: What did you make of that? The closing down of the port last week because of one case? What did you make of it?

SKOU: Well, we have a different strategy -- a different strategy in the West, but we have also had many more cases. So it's hard for me to judge

what is the right way, but obviously for global logistics change, you know, when you close a port, it has consequences.

QUEST: So have you gotten vaccine mandates?

SKOU: No, not yet. But we will, I think I'm pretty sure we will at some point.

SKOU: OK. So forgive me, I'm going to push you ahead. You say not yet but we will. What are you waiting for?

SKOU: Enough vaccines. So, our seafarers of course, they come from Western Europe, some from the U.S. but majority are Indians, Filipinos, Myanmar and

so on. And they are -- we cannot rely on governments to actually provide the vaccines, we have to, as a company provide the whole set up and that's

what we are. We are establishing and it's only very recently that we as a private company was even able to buy the vaccine.

So, once we have control over that logistics set up so to speak for vaccines. We will -- we will mandate it.

(END VIDEOTAPE)

QUEST: CEO of Maersk. That's QUEST MEANS BUSINESS for the moment. It will be attached to the bell normally for the top of the hour, no bell of

course, because no trading on Wall Street, but I'll update you with the business news of the day. And then between now and then Connecting Africa.

(COMMERCIAL BREAK)

[15:58:06]

QUEST: Hello, I'm Richard Quest. No closing bell on Wall Street, it's Labor Day holiday. So the U.S. markets are closed. But we've got your dash to the

bell in any event. In Europe, the major averages all in the green, the DAX in Germany is up almost one percent. It's now in a few dozen points away

from a record high that it set earlier this year. It was banks and tech stocks that leading the market higher.

The week jobs number in the U.S. as investors wondering if more central bank support will be on the way perhaps in a way that they won't withdraw

or taper quite as quickly. All eyes on the ECB ahead of its meeting on Thursday. And there too, there will be questioning of tapering and the

future of European stimulus measures on the agenda. Markets in Asia were up, the Nikkei in Japan continues its rally. It was up almost two percent

and closer to five-month high.

Investors they're expecting new stimulus after the Prime Minister announced he was stepped down last week. In Hong Kong Hang Seng was up as well. No

trading in the USA, it is Labor Day. A day once meant to either return to normal life which now seeing COVID cases surging and returned to work push

back.

Richard Edelman is the CEO of Edelman told me how people return to the office will have more to do with company values than wages.

(BEGIN VIDEO CLIP)

RICHARD EDELMAN, CHIEF EXECUTIVE OFFICER, EDELMAN: So something like as many as 40 percent of Americans are thinking of changing jobs. And the

number one reason is that I don't agree with the values of my company. It's not about the wages, it's actually, you know, do they look at my personal

health as their priority or not? And so, smart companies are going to have to be flexible here.

And recognize that in fact, a belief driven buyer and a belief driven employee are actually identical, that we have a change in value since the

pandemic. We actually have a moment in time here where I'm leading with my heart.

(END VIDEO CLIP)

QUEST: That's the dash of the bell. I'm Richard quest, no New York Stock Exchange bell instead. whatever you're up to I hope it's profitable. Here's

"THE LEAD" with Erica Hill.

END