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Quest Means Business
Facebook Changes Name To Meta In Shift To Metaverse; U.S. Lawmakers Slam Oil Firms Over Climate Misinformation; COVID-19 and Climate Top of G20 Agenda; Biden Tries to Get Framework for Climate Initiatives Passed before Going Overseas; Supply Chain Woes; Call to Earth; Dash to the Bell. Aired 3-4p ET
Aired October 28, 2021 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:16]
PAULA NEWTON, CNN INTERNATIONAL HOST: So, it's an asset starting to get into some of that record breaking action. The Dow is still a ways off, but
tech stocks are up more than one percent and about struggling to get that record itself.
Those are the markets, and these are the main events.
Facebook goes Meta. Yes, I'm not kidding, literally. That is the new name. We'll explain the major corporate overhaul.
Top oil executives get a rough ride on Capitol Hill over climate misinformation.
And Joe Biden tells Congress to pass his historic spending plan as he flies to Europe this hour.
Live from CNN Center, it is Thursday October the 28th. I'm Paula Newton and then this is QUEST MEANS BUSINESS.
And good evening on what is a busy day of news. Tonight, Facebook is getting a new name as CEO Mark Zuckerberg lays out a vision for the future
of his company. But this is key not just his company, the entire Internet.
The social media giant is rebranding under the name "Meta" as it prepares to enter the so-called Metaverse.
Now, moments ago, Mark Zuckerberg unveiled a version and a vision of an immersive internet experience at Facebook's augmented reality/virtual
reality experience. He says it'll replace the mobile internet, and he wants his company to be there from the beginning.
(BEGIN VIDEO CLIP)
MARK ZUCKERBERG, CEO AND CHAIRMAN, META: It is time for us to adopt a new company brand to encompass everything that we do. To reflect who we are,
and what we hope to build, I am proud to announce that starting today, our company is now Meta.
Our mission remains the same, still about bringing people together. Our apps and their brands, they are not changing either. And we are still the
company that designs technology around people. But now we have a new North Star to help bring the Metaverse to life, and we have a new name that
reflects the full breadth of what we do and the future that we want to help build.
From now on, we are going to be Metaverse first, not Facebook first.
(END VIDEO CLIP)
NEWTON: Brian Stelter has been watching it all. You know, it's interesting that in trying to turn the page on epic accusations of both user and market
manipulation that Facebook has the audacity to say, yes, we want to lead the next age of the internet.
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Yes, indeed, and nothing changes about Facebook today as a result of this. Nothing changes about
WhatsApp or Instagram, none of the allegations of abuse on the platform. Although, the proven facts about how Facebook has damaged society in a
myriad ways, none of that goes away.
But the new name does show what Mark Zuckerberg is prioritizing. He wants to move on. He wants to focus on the Metaverse and he is going so far as to
change company name to do that.
So, it is a little bit like Google rebranding as Alphabet creating an umbrella parent company and then having various subsidiaries underneath.
But this is a little different because Zuckerberg is not announcing a total corporate restructuring. He is just saying this is our new brand name, our
new corporate name, and Facebook and WhatsApp and all the rest are inside of it.
But I do think it is striking here. We may look back and say okay, this was the day Zuckerberg previewed the future, that yes, we're all going to walk
around in the future wearing headsets or fancy glasses or wearing other devices that allow us to interact with virtual realities when we are also
out in the real world.
Or maybe not, right? This has been a promise for decades. Virtual reality has been a concept in gaming, going back to the 90s. We've been promised
this before, and it's never really materialized in a way that many people want to do it.
So we will I guess know in 10 or 20 years if this was the moment where the Metaverse started to become reality. But even Zuckerberg admits it's going
to take a long time to build this. He is investing tens of billions of dollars in the years to come to create this and he's trying to get
developers on board. That was really what today was about, trying to get developers on board to help build the Metaverse and to rebrand the company
to show how much he cares about doing this.
NEWTON: Yes, and I think -- fine, jury out, right, we're not going to you know, pronounce on whether or not this is going to be a thing or whether or
not Facebook can lead it but you know, I know how closely you've been following Mark Zuckerberg over the years and name change or not, Zuckerberg
is still a lightning rod for all of this criticism.
Did we see a different Zuckerberg here at all? Name change or not?
STELTER: I think it is the same man, but trying to put on a virtual face or an augmented reality face and show that he believes he knows the future.
He notably has said in an interview just published with the information, he is not looking to leave. He has not thought about leaving.
[15:05:10]
STELTER: There has been a lot of calls for Zuckerberg to step down as CEO, to hand off to someone new so that someone else can manage, you know, the
fallout from the Facebook Papers, can try to improve safety and health in the platform.
He explicitly says in this interview, he has not thought about stepping aside, he has not thought about focusing solely on the Metaverse. He says,
"I am engaged, deeply engaged on a day-to-day basis and that is going to continue."
So to the critics out there saying he needs to step aside, there is no sign that's going to happen. Instead, what he wants to do is he wants to change
the Facebook story. He wants to make the story about wearing a headset and taking a remote meeting and feeling like you're actually there with your
colleagues in real life.
And look, who wouldn't like a better version of Zoom? Who wouldn't like a better version of Skype? I mean, there is a lot of improvement that we
could see in these products. And if Facebook can do it, then that's all the better.
But there also has to be a focus on the current harms the current issues that are happening with the platform. Zuckerberg claims, he is able to do
both. He claims there's plenty of space to do both. But his big priority now is very clear.
And by the way, he's not the only one working on this, you know, other companies are also investing in the Metaverse. There is a race now to
combine virtual reality and real life, and we will see number one who wins. Number two, how big that market really is.
NEWTON: Yes, and in fact, Zuckerberg's plan is to dominate this and that's what this whole presentation was about.
Brian, thanks so much. Always good to have you on the stories appreciate it.
Now, Facebook may be looking to rebuild its profile after a string of scandals and an aging user base. It starts with of course the name change,
"Meta." Facebook will be one part of a broad portfolio. Mark Zuckerberg gets a new title, CEO and Chairman of "Meta."
The company is updating its interests, moving beyond social media apps and into the so called Metaverse. Zuckerberg believes it could reach to a
billion people within a decade.
(BEGIN VIDEO CLIP)
ZUCKERBERG: We expect to invest many billions of dollars for years to come before the Metaverse reaches scale. Our hope, though, is that if we all
work at it, then within the next decade, the Metaverse will reach a billion people, host hundreds of billions of dollars of digital commerce, and
support jobs for millions of creators and developers.
We will try to lay out how some of this commerce model will work, but I also want to be upfront about the fact that there's a ton that we just
don't know yet.
What I can tell you though is that we are fully committed to this. It is the next chapter of our work, and we believe for the Internet overall. And
our strategy and track record show that we will do everything we believe is sustainable to grow the community, the creator economy, and the developer
ecosystem.
(END VIDEO CLIP)
NEWTON: Sheera Frenkel is a technology reporter for "The New York Times." She is also the author of "An Ugly Truth Inside Facebook's Battle for
Domination," and she joins me now. Yes, Domination 2.0. here.
I mean, your book was impeccably sourced, and your book claimed that essentially Facebook's business model has been toxic. So now what of Meta,
right, and Zuckerberg's version that he just laid out?
SHEERA FRENKEL, TECHNOLOGY REPORTER, "THE NEW YORK TIMES": I mean, this is really just an extenuation of everything Mark Zuckerberg has been about.
He, as a teenager even had something of a god complex. He was obsessed with this board game called "Civilization" where you can build worlds.
When he launched Facebook, he told people at the very start, his goal was to be first to market, biggest market. He's just doing the same thing he
has always done. He is trying to stake a claim. He is trying to take control of what he thinks is going to be the big next wave of technology.
And the question is going to be whether the world accepts that, whether people in spite of all of the controversy, in spite of all of the crises
that have hit Facebook in the last month, are going to want to put their trust in Facebook, and especially in something like a Metaverse, which is
incredibly data rich.
If you think you're giving Facebook a lot of your data now, wait until you have to have these sensors and tools in your house, which are feeding it a
constant stream of data for you to be able to play these games and engage in these kinds of workspaces.
NEWTON: Yes, you just painted a very vivid picture there of why everyone should proceed cautiously. You know, Frances Haugen, the Facebook
whistleblower focused the problem for us, you know. She is saying, look, this is a company that views this kind of safety issue or that data issue
as a cost center, not a growth center in terms of where they should be to protect our privacy.
What happens if that persists? Especially you know, you guys laid out so well in your book, the risk not just to the developed world, but the
developing world and you highlighted what happened in Myanmar.
FRENKEL: Thank you so much, Paula, for bringing that up. That Myanmar chapter was startling for us even as we wrote it, because we showed how
again and again Facebook was prioritizing growing in these new markets, rather than the safety and privacy and security concerns of countries all
over the world where different languages are spoken, with there's different systems of governance, and really just different dangers.
[15:10:04]
FRENKEL: I was really struck today by how much -- so much of the language Mark Zuckerberg used in introducing the Metaverse was almost, almost
perfectly in sync with the language that he used when he announced that he wanted to bring the next one billion users online.
Back then he talked about how this was an amazing opportunity for growth to bring the world online, to connect people in what he saw as the next new
wave of Facebook. Now, we know the downwind effects.
Today, we know what happened in countries ranging from Myanmar to India to Sri Lanka. Why would he use that same language again when introducing the
Metaverse is honestly beyond me, but I was very concerned that it took them 55 minutes into this presentation to begin to even raise safety and
security as a priority?
NEWTON: It certainly shows the kind of silos that Facebook is operating in, and they might think that's harsh criticism, but we've seen the effects
day in and day out. So you know, we have this this concept of the Metaverse.
You know, Facebook claims that it invites regulation that it wants regulation from the bottom up starting immediately with the Metaverse. You
know, do you think that that's true? And if it's true, what is your advice to regulators about how to do this?
FRENKEL: You know, they want regulation on their terms, they want regulation that they can craft. That's the reason why they have one of the
largest lobbying operations in Washington, D.C. They've been very clever in how they've -- how they've positioned themselves in Washington on this.
So it's all good and well to say you want regulation if you get to be the ones guiding that regulation. I think regulation that focuses on a specific
list of things that Facebook should and shouldn't allow is the best case scenario for the company because they can just check those things off their
list, and then anything that falls outside of it, they can say, well, that's not our fault. That's the government telling us what we can and
cannot do.
However, I think there's a smarter way to go forward with regulation. I think that's what lawmakers are really looking at right now with a focus on
Facebook's algorithms. What does the company recommend to people? What does it push people towards? And that's applicable on Facebook, Instagram,
WhatsApp, or, you know, in the Metaverse that they hypothetically create. What are they going to be pushing people towards? And that is the thing
that we should be thinking about, and that I think lawmakers are going to be regulating over.
NEWTON: Yes. What are you pushing people towards? And can you mine that data to even do that? We will leave it there, Sheera, but thank you so
much, some great insights for us. Appreciate it.
FRENKEL: Thank you.
NEWTON: Now, Facebook has been said to be going through a big tobacco moment based on the pressure it is under from lawmakers.
Over on Capitol Hill, they were focusing on another industry, Big Oil. We will show you the highlights, next.
(COMMERCIAL BREAK)
[15:15:11]
NEWTON: Leaders of the world's largest private oil companies heard today that it's time to clean up their role in the climate crisis.
Now, in a tense hearing on Capitol Hill, top oil executives were confronted with claims they tried to undercut the science on global warming.
Twenty seven years ago, tobacco executives were summoned to testify before Congress. I remember this moment, I don't know if you do. It was a
notorious time. They testified under oath that cigarettes were not addictive.
Now, lawmakers want to put similar pressure on oil executives. Now, the heads of ExxonMobil, Chevron, BP America, and Shell all appeared remotely
in the House Oversight Committee where lawmakers accused them of spreading misinformation. Listen.
(BEGIN VIDEO CLIP)
REP. RO KHANNA (D-CA): You can either come clean and make your misrepresentations and ongoing inconsistencies and stop supporting climate
disinformation, or you can sit there in front of the American public and lie under oath.
MIKE WIRTH, CEO, CHEVRON: While our views on climate change have developed over time, any suggestion that Chevron is engaged in an effort to spread
disinformation and mislead the public on these complex issues is simply wrong.
(END VIDEO CLIP)
NEWTON: Rene Marsh joins us now from Washington. Rene, really good to see you, especially on such an important story. You know, Exxon's kind of
opening statements said it all, right? They said that their position had evolved with the science.
What are the lawmakers saying about that opinion?
RENE MARSH, AVIATION AND GOVERNMENT REGULATION CORRESPONDENT: You know, there were so many themes, what we saw were the top executives saying that
they believe in climate change. They also said that they support these policies for climate change.
But the lawmakers at one point asked them whether they would commit to an internal audit to determine if they were indeed funding any outside groups
who were contributing to this climate misinformation, and none of them said that they would be open to that. They all declined that commitment.
So that was a very telling point in the hearing, but I will tell you that for every time that they said they were not involved in climate
misinformation, the Democratic lawmakers were able to put forward pieces of evidence and documents that they say proves otherwise.
(BEGIN VIDEOTAPE)
MARSH (voice over): Increased floods and flames scientists link to climate change have caused death and destruction nationwide. But lawmakers say the
fossil fuel industry has misled the public on the energy sector's role for decades.
In one leaked 1998 memo, this one from the oil industry's most powerful lobby, the American Petroleum Institute, it lays out a multimillion dollar
communications plan for the industry. It states quote, "Victory will be achieved when average citizens understand uncertainties in climate
science."
REP. CAROLYN MALONEY (D-NY): They spent billions of dollars lobbying or trying to stop any meaningful change in Congress, which they were
successful at doing, and really putting out false information very similar to the tobacco companies.
MARSH (voice over): In this 1978 internal memo, Exxon scientist, James Black wrote, "Present thinking holds that man has a time window of five to
10 years before the need for hard decisions regarding changes in energy strategies might become critical."
Despite the warning, more than two decades later, Exxon took out this full page "New York Times" ad titled "Unsettled Science," which argued little is
known about the effect of climate change, positive or negative.
Documents also show the energy industry heavily funded contrarian scientists like Willie Soon and junk science theories like this --
WILLIE SOON, AUTHOR: For polar bears. I think essentially, you do want to watch out for ice. Too much ice is really bad for polar bears.
MARSH (voice over): More recently, this July, an Exxon lobbyist was caught on a secret recording, admitting the company had used shadow groups to
fight early climate science efforts.
UNIDENTIFIED MALE: But there's nothing -- there is nothing illegal about that.
MARSH (voice over): Exxon CEO, Darren Woods responded to the footage by saying the comments quote: " ... in no way represent the company's position
on climate policy and its commitment to carbon pricing."
GEOFFREY SUPRAN, RESEARCH FELLOW, HARVARD UNIVERSITY: This is a labyrinth of people and money connecting fossil fuel companies, trade associations,
think tanks, and PR firms, all feeding into an echo chamber of climate denying media, blogs, and politicians.
MARSH (voice over): The fossil fuel industry's messaging has evolved to include social media. The industry is using Facebook to target Americans
with messaging based on their demographics and interest.
UNIDENTIFIED FEMALE: We know there's an urgent need to tackle climate change --
[15:20:00]
MARSH (voice over): Some users could see ads similar to this one from Shell that touts their net zero plan by 2050, and this one from BP
promoting methane regulation.
Meanwhile, the American Petroleum Institute, a trade association, funded in part by Shell and BP uses Facebook's advertising to target conservatives in
key states such as Arizona with anti-climate policy ads. That's according to Influence Map, a nonprofit independent think tank that has analyzed
corporate spending and Facebook ads.
SUPRAN: So this sort of speaking out of both sides of their mouths is a contemporary and ongoing means by which fossil fuel companies divide the
public and politicize the politics of global warming.
(END VIDEOTAPE)
MARSH (on camera): And Paula, you know, that issue that we just talked about there with the ads that differ where you have Shell and BP saying
they embrace green energy, and then the trade association, American Petroleum Institute saying that there are too many regulations that are
getting in the way.
They were asked point blank today, will you tell your trade association to stop putting out those sort of negative ads because they're actually
working in Washington? And again, the oil companies refused to make a commitment to even do that.
So what we saw on display today was, they were saying that they believe that climate change is an issue, but they were not committing to stopping
groups, trade associations like API, from putting out those ads calling for basically undercutting the sort of greener policies -- Paula.
NEWTON: Yes, and you're right to point out that their actions definitely say otherwise. Thanks so much, Rene. I really appreciate that.
Now, with COP 26 just a few days away, it will be hard to reduce carbon emissions without these companies as we've been saying to actually step up.
Now, according to a study from the Climate Accountability Institute, more than a third of the world's emissions can be traced to just 20 oil
companies. Now, the four companies appearing today are all in the top 10. Together, they make up more than 11 percent of all carbon emissions.
Naomi Oreskes has studied how ExxonMobil supposedly misled the public over climate science. She is a Professor of the History of Science at Harvard
University, and she joins me now. You know, perhaps as damaging as the carbon emissions, these companies releases the disinformation, right, that
they've amplified for decades.
How profound has that obfuscation been? And in your research, what effect has it had?
NAOMI ORESKES, PROFESSOR OF THE HISTORY OF SCIENCE, HARVARD UNIVERSITY: Well, I think it's been very profound, and I think we saw it on display
today. For 20 years, the fossil fuel industry, actually, for nearly 30 years, the fossil fuel industry has poisoned the well of public debate, and
they have polarized discussions about science, so something which should be a matter of fact, where we could have honest disagreements about policy,
but agree about the facts. Instead, we find ourselves arguing about the facts.
And we saw that today with the Republicans apologizing to the fossil fuel industry, defending their practices and attacking their fellow Democrats,
while Democrats were trying as best as possible to get at the truth of this question.
NEWTON: And again, that goes to the politicization of an issue, which affects us all profoundly. Now, you know, it was interesting, in your
research, you argue that all of this mimics the strategy of tobacco companies, right, in that they shift, I want to say responsibility away
from corporations you say, which knowingly sold a deadly product, while denying its harms on to consumers.
You know, this historic parallel that you talk about, it is a blame game here. And yet, I am still a little bit confused, because as I put forth,
right, I've never smoked, but I've used fossil fuels all day today. So explain to me that shift of responsibility from the private companies on to
consumers?
ORESKES: Well, obviously it is a complex question which both supply and demand play a role. But the fossil fuel industry wants us to think that
they're just supplying product that we are insisting on having.
And so they always use the word energy, energy, energy, and we heard that many times today, we need energy. Well, that's true, we do need energy, but
we don't need fossil fuels.
We have lots of credible studies now from universities, government laboratories that show that we can meet our energy needs, certainly at
least 80 percent of our energy needs by 2050 through renewable energy. Renewable energy is reliable, and it is now becoming as cheap or in some
cases, cheaper than fossil fuels.
So what they're trying to do is play energy with fossil fuels, and insist that we have to keep on having fossil fuels. But that's just not true. And
moreover, they talk about their energy as safe, but it is the opposite. It is fossil fuels that are driving the floods, and the hurricanes, and the
fires that we saw this year, killing people, displacing people from their homes, destroying communities.
So this field is not safe, and most of us want to be safe and we know that the technologies exist to move to a transition to safer technologies, but
the fossil fuel industry is committed to business as usual and we saw that today.
[15:25:10]
ORESKES: Because even while they were saying that they agree with the Paris Accords, every one of these companies with the exception of Shell
also told us that their plan is to continue not just to produce oil and gas, but to expand oil and gas production.
NEWTON: Yes, and you know, a lot of them have been complaining recently that one of the reasons we're having this very fragile moment in energy
markets is because there has been no new investment in let's say, exploration or drilling or whatever. So in your opinion, what would move
the needle? Is it pure and simple, hard and fast regulation?
ORESKES: It's not my opinion. We have many credible studies from economists, from social scientists, from the National Renewable Energy
Laboratory. There are two things that we know could move the needle quickly and stimulate investment in renewable energy and that would be eliminating
the fuels, the subsidies for fossil fuels.
We heard a lot of tap dancing today and a lot of disinformation, but we also heard a couple of outright lies. And one of them was the claim that
the fossil fuel industry is not subsidized. That is just flat out false.
Direct subsidies to the fossil fuel industry just in the United States alone have been conservatively estimated at about $20 billion; around the
globe, about $650 billion, and that's not my opinion, that comes from the International Monetary Fund.
So eliminating all subsidies would enable a market-based solution. It would enable the renewable energy to compete on a level playing field, and then
the second thing would be to put up price on carbon, so that the consumer would pay the true cost of fossil fuel, and not this artificially low cost
that we have been paying for the last four years.
NEWTON: Yes. I will point out that your research in terms of the disinformation was not just qualitative, it was quantitative research, and
that's why it was so startling to see that and yet, as I said, COP 26 just getting underway.
Let's see. Let's see if they do move the needle. Thanks so much. I really appreciate your research on this.
ORESKES: You're welcome. Thanks for having me on the show.
NEWTON: Now, last month, for the first time ever, Europe's top selling car was yes, electric. Unfortunately, for Volkswagen, it was not theirs. We'll
hear from the company's CEO on how it is working to overcome supply chain issues and capture that all important, EV market.
(COMMERCIAL BREAK)
[15:30:00]
(MUSIC PLAYING)
PAULA NEWTON, CNN ANCHOR AND CORRESPONDENT (voice-over): Hello, I'm Paula Newton. There's more QUEST MEANS BUSINESS in a moment.
Joe Biden is en route to the G20 and COP26 summits and will be doing so apparently empty-handed for now. That's after failing to get his spending
agenda passed.
Also the CEO of Volkswagen tells CNN his company may need to make some big changes to keep up with Tesla.
Before that, the headlines this hour.
(MUSIC PLAYING)
NEWTON (voice-over): China is responding to CNN's interview with the president of Taiwan, Tsai Ing-wen confirming the presence of U.S. troops in
Taiwan. She told us the threat of China is growing every day. In response, the Chinese foreign minister accused the U.S. of destabilizing the region
and called Taiwan independence a dead end.
Russia's capital Moscow has now shut down to all non-essential businesses for 11 days to try to stop the spread of COVID. It comes two days before
the rest of the country is also set to begin a non-working period to try to fight that outbreak. Russia on Thursday reported a record number of new
infections and deaths.
A local sheriff says the investigation into last week's deadly shooting on a movie set is now focusing on the film's assistant director and the
armorer, responsible for weapons on the set. But he also says no one has been cleared of blame and that includes actor Alec Baldwin.
(MUSIC PLAYING)
NEWTON: Joe Biden is en route to Italy and hopes Congress will pass his economic plans while he's gone. Before setting off for the weekend's G20
summit, Biden said he would finalize an historic economic framework worth $1.75 trillion.
It includes billions in new climate spending, free preschool for all 3- and 4-year olds and expanded health care. To pay for it, the government would
put a tax on share buybacks, a minimum tax on corporations and new taxes on high earners.
President Biden said this kind of investment was needed to keep up with the rest of the world.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: These are not about Left versus Right or moderate versus progressive or anything it else that pits
Americans against one another. This is about competitiveness versus complacency, competitiveness versus complacency. It's about expanding
opportunity, not opportunity denied.
It's about leading the world. We're letting the world pass us by.
(END VIDEO CLIP)
NEWTON: He will arrive in Rome in a few hours from now. And Phil Mattingly is already there, trying to follow the bouncing ball.
Help us out. I have been trying to figure this out. Things seem to have changed since Nancy Pelosi just spoke a little while ago.
When he says he has nothing to show on Capitol Hill, is that true?
Has the needle the moved now?
PHIL MATTINGLY, CNN SENIOR WHITE HOUSE CORRESPONDENT: I think the needle is moving. When you talk to White House officials, they have long been
targeting when he arrives in Glasgow for COP26. You mentioned the climate provisions. More than $550 billion of clean energy programs, taxes,
incentives, tax cuts, grants, loans, that's what he wants in hand.
He believes that can create momentum but also show that the U.S. is very clearly a world leader, particularly at a conference where the Chinese
president and Vladimir Putin is not going to be. And I think they find that's important.
When you talk about the back and forth, I covered Capitol Hill for years and I'm still a little bit lost. But when you look at through the prism of
what they are trying to do, the president made clear, they were moving. Whether or not they could get the votes is an open question.
But they admitted they weren't going to give up quickly. I think that's what you have seen today.
What do they have to put on the table to get the progressives who aren't there yet to say yes?
And every step they have taken, the president laid out a framework, Speaker Pelosi laid out the actual legislative text, they will now answer questions
and keep moving forward. It means it might be a late night. But they are trying to move this across the finish line.
NEWTON: That means what?
When we talk about progressives and what they wanted in the bill -- that it is bipartisan support.
Does that it look like this will pass now?
Just because they seem to have brought the progressives forward on the rest of the spending bill.
[15:35:00]
MATTINGLY: It's an open question in terms of the timing. I think the end game and the outcome here, based on the response to the framework, which
the progressives have said they fully endorse the framework, they are not there on the willingness to vote on that infrastructure bill, but if they
endorse the framework, it might take a little bit. But both bills will be passed.
You mentioned that infrastructure proposal, $1.2 trillion; 19 Republicans in the Senate supported that proposal. What that means beyond probably the
largest infrastructure investment since probably the 1950s when it comes to the United States, is what it gets at for why President Biden kind of laid
out his theory of the case to become president.
He's willing to compromise, to work across the aisle but, most importantly, you hear him talk about this when he goes off script, the idea that
government can work is so critical, given what we have seen over the last four or five years. This would help prove that. That's a big part of the
urgency now.
NEWTON: And allies certainly that he will be confronting at the summits believe that as well. Phil, you have laid it out perfectly. I had no doubt,
with young children, the jet lag isn't bothering you at all.
(LAUGHTER)
NEWTON: Appreciate it.
New GDP numbers show the U.S. recovery at risk. The Delta variant, supply chain problems, labor shortages, I know, it's breathless. And all the
higher prices have helped slow economic growth.
Now third quarter GDP was up 2 percent compared to last year. That's below expectations and the weakest growth since the recovery began last fall. It
matches the final quarter of 2019. That was before the pandemic. Rana Foroohar is here for us again.
Rana, I found these numbers confusing, especially since many say this will be revised up anyway.
What did you see in the numbers?
RANA FOROOHAR, CNN CORRESPONDENT: For starters, I think they will be revised up. That's been a pattern. This is about the virus, Delta, and
about supply chains. And the two things are connected. Because the supply chain delays are really about the fact that the virus has been playing out
differently in different parts of the world.
China was first with this. Then it had a recovery. There were different recoveries in different parts of the world at times; that creates the
bottlenecks and supply chain issues.
At the same time, the fact that the U.S. economy is such a boom/bust structure, we're really great when times are good, but when times are bad,
we fire people and then we have to rehire them and that takes time and that causes its own labor bottlenecks. All of this is playing out in these
numbers.
NEWTON: Absolutely. As you said, there isn't anything smooth at times about that labor market or the way industries kind of pick up and muscle
down. This brings us to the interest rates. The Fed has a lot of things on its plate right now.
What to you think they will take from this?
Does that mean, despite inflation, less pressure on the Fed to raise rates?
FOROOHAR: You just nailed the great irony. As always, in some ways, the bad news is good news for the Fed in the sense that it takes the pressure
off of them to make a quick rate hike.
As you know, I have been warning that we should probably have been hiking rates slowly for some time now in order to deal with any kind of subsequent
downturn for Delta and any other reasons -- Trade wars, geopolitics, et cetera.
We haven't done that. I don't think you're going to see a rate hike soon if the numbers continue as they are. I think it's going to be slow and steady.
And the Fed is going to err on the side of caution.
NEWTON: This is the issue of Jay Powell's job.
Do you think there's anything political that people are looking for in terms of a different direction?
All eyes all over the globe really on what they do with those interest rates.
FOROOHAR: Well, 100 percent. Within the Democratic Party, there's already a battle over this. A lot of people are concerned that Powell was about to
turn more hawkish and he was concerned about asset bubbles and was going to raise rates.
It will be interesting. I think, if we don't see the rate hike or see any motion that there's going to continue to be maybe a pullback in
quantitative easing, I think probably some of those progressives will feel better about him.
But it is an incredibly delicate moment. I have to say I have been a financial and economic reporter for 32 years. I don't think I have been in
a period, where there's been more confusing vectors than there are right now.
NEWTON: You're in good company. And Janet Yellen, former Fed chair, kind of said the same thing. It is confusing. Thank you so much. That really did
clear up what's at stake here. Appreciate it.
Now the supply chain crunch took a big toll on carmakers. The Volkswagen CEO says his company has gotten through the worst of a semiconductor
shortage.
[15:40:00]
NEWTON: He told Anna Stewart that it's becoming more resilient and getting ready to catch up to Tesla when it comes to electric cars.
(BEGIN VIDEOTAPE)
HERBERT DIESS, CEO, VOLKSWAGEN: We had really a challenging quarter. Quarter 3 was tough because of semiconductor supply. But I'm sure we have
seen the worst. So we have better supply now.
Hopefully, months after months, we can increase. We have shown some resilience. Now our premium brands have stayed profitable. Volume was
really impacted heavier. So we didn't make positive figures on the volume side.
But all in all, I think we can digest what we have seen in the quarter. And then we should see improvement quarter after quarter next year. I think are
through the worst in semiconductor supply. There will be still constraints but, hopefully, the supply chains will recover over time and then for 2022
we should see some improvement.
ANNA STEWART, CNN CORRESPONDENT: That's good to hear.
How to you plan to build in more resilience when it comes to supply chains for the future?
DIESS: We are working hard with the whole supply chain. So we'll make sure we get more capacities. We are also stockpiling in between the different
steps. We have seen some impact from COVID, from Malaysia, which we now, all people are vaccinated so we should see an improvement.
And we make sure that the supply chains are becoming more robust and more resilient. We have a strong team working there, over 100 people dedicated
now to semiconductor supply. And I think they are doing a great job.
STEWART: And the transition to electric, particularly in Europe, is well underway. For the first time ever, the best-selling car model last month
was a battery-electric vehicle. It was a Tesla, though.
When will it be a Volkswagen?
DIESS: Our sales are doubling compared to last year. Many new products are coming to market now in the next months. Cooleye (ph) is launching EVs;
Audi, additional EVs; Q4 Atro (ph) incoming.
Volkswagen is amplifying. They just introduced the 83 (ph) in China. So you will see a strong growth from us in EV sales. And hopefully we can catch up
with Tesla.
STEWART: You have reportedly said the company could lose 30,000 jobs if the transition to electric is too slow. It raises a lot of concerns for
your employees.
Can you give us any assurances regarding jobs?
DIESS: I think we have to prepare for new competition. No, Tesla is building up the plant, which will be a highly productive plant. And I think
we should better prepare for it.
So we have to do some refurbishment in our workbook (ph) side and prepare for the new challenges, which will be not only about technology but also
about productivity and building cars fast.
So that's why we started a campaign, a program, mostly here in Augsburg, to prepare the plant for the new competition. When it comes to talking about
2030 or so, we will see less manufacturing jobs.
STEWART: COP26 is nearly upon us and it's setting the pace for ambitious emission pledges.
Is there anything you foresee that could come out of COP26 that could force you to accelerate your transition to electric?
Anything you'd like to see come out of this summit?
DIESS: I think it's really a chance to get better alignment between the states. There's a lot at stake. I think we are prepared for building up our
EV fleet but we need charging infrastructure. We need the right taxation system.
So when it comes to CO2 taxation. And it's really I think an international task. But I think industry is preparing well. And politicians, if they get
their act together and come forward with a common plan, I think there's a huge chance now to really make a lot of progress in the next years for CO2
reduction in mobility, in traffic.
(END VIDEOTAPE)
NEWTON: The World Bank has frozen aid to Sudan after this week's military coup. We hear from World Bank president David Malpass about the situation
on the ground and what could happen next.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
[15:45:00]
(MUSIC PLAYING)
NEWTON: Could seaweed provide the future of food packaging? This week we visit London based startup Notpla. The company, which stands for not
plastic, is attempting to reduce our dependence on single-use plastics with a revolutionary new biodegradable material.
(BEGIN VIDEOTAPE)
(MUSIC PLAYING)
PIERRE PASLIER, CO-FOUNDER AND CEO, NOTPLA (voice-over): The problem is plastic is that it's indestructible. It's a material that will stay around
for hundreds of years. So it's really permanent (ph). But we use it for the wrong reasons. We use it in places where we throw away something after just
five minutes of use. And that's really this problem we're trying to solve.
UNIDENTIFIED FEMALE (voice-over): According to the U.N., every year 300 million tons of plastic waste is generated. Half of that plastic is
designed to be used only once. That's why Pierre Paslier set out to find a material that eliminates our reliance on plastic for single-use packaging,
taking his inspiration from nature.
PASLIER (voice-over): We chose seaweed because it has a lot of sustainable credentials. First of all, it grows very fast. Some of the seaweed we have
tried in the lab grows up to one meter per day.
Second of all, it doesn't use fresh water or fertilizer to grow. It just grows on its own in the sea without human intervention.
And on top of that, when it grows, it sequesters carbon. So it really is something that has a lot more potential in helping us getting out of this
problem than a lot of other biomass (ph).
UNIDENTIFIED FEMALE (voice-over): Notpla has used this innovative material to produce its flagship product, Ooho. The packaging made out of seaweed
can hold drinks and sauces and is able to biodegrade in a matter of weeks.
PASLIER (voice-over): It's really in line with fruits and vegetables. So Notpla packaging can break down in a home compost extremely fast, just like
an apple or an orange.
UNIDENTIFIED FEMALE (voice-over): The entire bubble can even be swallowed whole.
(MUSIC PLAYING)
UNIDENTIFIED FEMALE (voice-over): Manufacture begins in Notpla's East London warehouse, where chemists mix different seaweed and plant extracts
to create a solution.
This solution is used to create a thin membrane, which has properties suitable for packaging, ready to be filled with anything, from ketchup to
cocktails. The concept works for any liquid.
PASLIER (voice-over): We partnered for the London marathon with Lucozade. They were using plastic bottles and cups and they were looking to reduce
the amount of waste that is created at these events. And actually, at the end of the event, it was brilliant that the trucks that clean the streets.
[15:50:00]
PASLIER (voice-over): And usually have to stop at each station to pick up all of the plastic, they just drove by our station. There was nothing to
pick up. So it was really incredible, the feeling that we had, delivering hydration without the plastic.
(MUSIC PLAYING)
UNIDENTIFIED FEMALE (voice-over): And beyond liquids, Notpla is looking to revolutionize the takeout food industry with British delivery company Just
Eat Takeaway.com seeking to replace the plastic that typically lines food delivery boxes with seaweed.
UNIDENTIFIED MALE (voice-over): What we wanted to find was not just a card box, because that would leak. So what the guys at Notpla have done so
cleverly is add a lining to that card that gives the heat-proof, waterproof, grease-proof opportunities of plastic but disappears in the
ground in a couple of weeks.
As far as I'm aware, the packaging that we're making here with Notpla is by far the most sustainable, if not the first time globally, that we have seen
packaging like this.
UNIDENTIFIED FEMALE (voice-over): Looking to the future, the team at Notpla is hopeful that we can find more creative solutions to the climate
crisis. For Paslier, the answers are all around us.
PASLIER (voice-over): Nature has all of the solutions. We just have to continue getting our inspiration from it. Different plants, different
trees, different vegetables, this is what the future looks like. We need to use more, other natural materials. And I think through this diversity, we
can really solve this problem. And I'm really hopeful that we will.
(END VIDEOTAPE)
NEWTON: Wasn't that extraordinary, they can just swallow that bubble whole?
Now we'll continue to showcase inspirational environmental stories like this one as part of the initiative here at CNN. Let us know what you're
doing to answer the call. That's #CallToEarth.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
NEWTON: Now the president of the World Bank says he's deeply concerned about Sudan's military coup. David Malpass talked to Julia Chatterley this
morning about the bank's response.
(BEGIN VIDEOTAPE)
DAVID MALPASS, WORLD BANK PRESIDENT: You know, as we think about development in poor countries, it's individual countries going in different
directions. So unfortunately, Sudan has taken a giant step away from the transition that they were doing. They were transitioning from a
dictatorship to a civilian led government.
So I'm deeply concerned about the developments of this week.
[15:55:00]
MALPASS: We suspended our disbursements and the development of new programs. But for the people of Sudan, it is critical to get on track and
to have a restoration of the transition process.
I was there at the end of September. I talked with both the civilian and the military leaders. They stated that they were committed to this
transition. But now, we've got a full break in the progress on transition. So I'm hoping for restoration and that's vital for people.
JULIA CHATTERLEY, CNN ANCHOR: Have you had any outreach?
MALPASS: We've made clear that we can't interact on our current programs. You know, on Monday, they cut off -- they cut off the internet and the cell
phone systems. And so it's been hard to have outreach.
I think they are -- well, I don't know what they're doing. All I can say is, it is gravely concerning and, you know, there has got to be a
restoration of the transition process to the democratic government.
(END VIDEOTAPE)
NEWTON: OK, there are just moments left to trade on Wall Street. We'll have the final numbers and the closing bell, right after this.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
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NEWTON: Just a few moments left to trade on Wall Street. The Dow back in the green after a selloff yesterday -- and how. It's really picked up. The
Nasdaq is set to close at a fresh record high. Investors not bothered in the slightest about the latest U.S. GDP numbers. They came in under
expectations.
Third quarter GDP was up 2 percent compared to last year. The Delta variant, supply chain problems, labor shortages and high prices, everything
we talk about here, helped slow economic growth. That's below expectations, as I was saying, and the weakest growth since the recovery began last fall.
It roughly matches the final quarter of 2019. Remember, that was before the pandemic. We now want to look at the Dow components. Pretty green today
with Merck, Caterpillar and Apple sitting at the top. Apple reports soon enough.
And a sliver of red at the bottom. People still down on Visa and American Express.
That is our show for today. Thank you for joining us for QUEST MEANS BUSINESS. I'm Paula Newton. The closing bell is ringing on Wall Street.
"THE LEAD WITH JAKE TAPPER" starts right now.
END
