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Donetsk Authorities Say Vehicle Blown Up Close To Headquarters; Wall Street Down Amid Tensions In Eastern Europe; IOC President Criticizes Russian Skater's Entourage; South Korea Tops 100,000 Daily COVID Cases; Hong Kong Postpones Leadership Election Amid Outbreak; Chinese Official Makes Political Comments During Olympics. Aired 3-4p ET
Aired February 18, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HALA GORANI, CNN INTERNATIONAL HOST: An anxious week for stock investors is nearly at an end, you can see the markets are lower as fears persist
that a Russian invasion of Ukraine could be imminent, but nothing too dramatic right now, down 20 points for the Dow. Those are the main markets
and here are the main news headlines.
NATO allies hold an emergency call after signs of violence and evacuations of civilians take place in eastern Ukraine.
Tremendous coldness from her own entourage, the IOC chief calls the treatment of Russia star figure skater very chilling.
And a powerful storm is blowing dangerous winds across northwest Europe.
Live from London today, it is Friday, February 18th. I'm Hala Gorani, Richard Quest is off today. This is QUEST MEANS BUSINESS.
Tonight, a Ukrainian official is calling a vehicle explosion in the eastern city of Donetsk a staging and a provocation. The U.S. says it is the kind
of false flag operation that it has been anticipating from Russia, the latest U.S. Intelligence assessment says Russia is continuing to prepare
for an invasion. One official describes the assessment as bleak.
The leaders of Ukraine's separatist regions have told people there to evacuate to Russia. They've loaded them up on buses. Warning sirens blared
today in the City of Donetsk.
You can see from these images people there appear to stay calm despite the sirens. The Ukrainian military has reported more than 50 violations today
of the Minsk Ceasefire Agreement.
The President of Belarus met with the Russian President Vladimir Putin in Moscow today, the neighboring countries both border Ukraine and have been
holding those joint military drills. They say those drills will continue, and they accused the west of fear mongering over this.
(BEGIN VIDEO CLIP)
VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): We have an active phase of military training going on. Tomorrow, we'll take part in one
important event together as part of this military cooperation.
ALEKSANDER LUKASHENKO, BELARUSIAN PRESIDENT (through translator): I can see today they're gathering for second round, frightening the entire world
by saying we'll attack tomorrow, we will surround and destroy Ukraine and so on. Although, we've never even had any plans to, discussing it many
times, but we'll continue to train people to fight. There's no way around it.
(END VIDEO CLIP)
GORANI: Alex Marquardt joins us from Mariupol, Ukraine, and we've seen the most intense shelling in Eastern Ukraine in the last few days since 2015 --
Alex.
ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: We have. Yesterday, there were some 60 violations of the ceasefire along that line
of contact between Ukrainian forces and Russian-backed forces. That was -- that level, that number, 60, was the highest in four years. And as you
noted, Hala, those violations have continued today. All of that ratcheting up fears of what could come next.
Also, yesterday, we did see that shelling of that school on the Ukrainian held territory, both sides accusing each other of carrying that out, but
Hala, really the most unnerving and unsettling events that we have seen, really this week have happened in the course of the past few hours, the
leaders of those breakaway enclaves that have been backed by Russia for the past eight years, urging their citizens to get on buses and head to Russia
to evacuate.
They say that there is a Ukrainian offensive operation that is in the works, that Ukrainian forces and weapons are on the border. There is
nothing to validate that. There is no sense that that is in any way true.
And so what the fear is now is that what we're starting to see are these kinds of false flag operations, these staged operations that could give
Russia a pretext to justify a military invasion.
We also saw what the leader of Donetsk called an explosion of a car near the government building. That has not been verified. But all of this sort
of raising the temperature, raising the tension at a time when things are already extremely tense.
So we will see where things go from here. This has been combined with harsh rhetoric from the Kremlin. Repeatedly, we've heard President Putin talks
about how what's going on in the Donbas region is a genocide. He's talked about this being a civil war, but what's notable, Hala, is very quickly
U.S. and Ukrainian officials coming out and saying this is exactly what we expected to see. This is a false flag -- these are false operations.
The State Department is saying that this -- you know, the loading of or the ordering of people to evacuate and putting them on buses is cruel and
cynical. So, it is remarkable how quickly the U.S. and Ukrainians are calling out what they did expect to see in pushing back right away -- Hala.
[15:05:24]
GORANI: Right. And you mentioned the -- you just mentioned the evacuation of civilians and the explosion of that vehicle in Donetsk and the U.S. was
quick to say, as you mentioned, that these are false flag attacks.
I wonder, what are the concerns that -- to go from the current situation to a full scale invasion is still a huge leap? What are you hearing on your
end about how worried Ukrainians are that Russia really is planning a full scale incursion into their territory?
MARQUARDT: Well, there is significant worry, Hala. You and I have talked about this for the past two weeks where, you know, you look around and on
the street, there is not, you know, visible concern, there are not visible signs of panic, or, you know, people going to chaos, shopping and loading
up on groceries.
But in talking to people, especially here in eastern Ukraine, especially here in Mariupol, which is so close to the fighting, which has seen
shelling in the past few years, there is real concern.
I went to a church this morning and asked a man what he was there praying for and he very quickly said, "I'm praying for peace." And then in terms of
the false flag operations, what you and I see is, you know, things that are quite obvious, Russia can spin it as, you know, potential attacks on ethnic
Russians in eastern Ukraine or Russian speakers in eastern Ukraine. And really, you know, ramp up this disinformation campaign, which we've already
seen in full effect over the course of the past few weeks to try to convince you know, Eastern Ukrainians and people in Russia that Ukraine
really is trying to do something against these people and that Russian action to push that -- to push back against that would be justified --
Hala.
GORANI: Okay, thanks very much. Alex Marquardt live in Mariupol, and we will stay in close touch with Alex.
So there is a lot going on because on a parallel track, the diplomatic push continues. The American President Biden is holding a virtual conference
with NATO allies earlier today and his Vice President Kamala Harris is attending that Munich Security Conference, and President Biden, by the way
will be speaking about the situation in Ukraine at the top of the next hour. So in about 53 to 54 minutes from now.
Kevin Liptak joins me live. Kamala Harris is at the Munich Security Conference, the U.S. Defense Secretary spoke to his Russian counterpart, we
are expecting potentially a meeting between Sergey Lavrov, the Russian Foreign Minister and his U.S. counterpart, Antony Blinken late next week.
So these diplomatic tracks are still alive, I guess, which is better than the opposite, right, of those discussions having ended. They haven't. What
can we expect from them?
KEVIN LIPTAK, CNN WHITE HOUSE REPORTER: Yes. Yes, American officials do think it's important to make clear that this diplomatic path is still
there. But they're making no bones about it. That path is narrowing.
The State Department said yesterday that Antony Blinken and Sergey Lavrov would meet, but they made clear that that meeting wouldn't happen if an
invasion moved forward.
So today, we will hear from the President. We expect an update from him about the situation on the border between Russia and Ukraine, and one thing
I think that we'll hear from him is sort of the latest information that the U.S. has about where these troop levels stand, where their positioning is.
This is a part of the strategy that the President and his aides have been employing to be kind of proactive about all of this, spell out what they
know about what Russia is planning, what Vladimir Putin is planning in an attempt to sort of get ahead of it.
And you've seen that at the Munich Security Conference with the Secretary of State and the Vice President, you've seen the Defense Secretary in
Poland and Lithuania, all sort of spelling out what they know about what is happening on the ground there.
And in the last couple of minutes or so here at the White House, the U.S., the top U.S. cyber official have formally attributed that cyberattack that
took place in Ukraine at the beginning of this week on the Defense Ministry, and on some banks, she formally attributed that to Russia and
that was something that many people had suspected.
But we were waiting on the U.S. government to formally say that it was Moscow that was behind those attacks. And what was interesting was this
official, Anne Neuberger, she is the President's top cyber security official, she said that the speed with which the U.S. was attributing these
attacks was significant because they wanted to get out ahead of everything that Putin was doing, and they thought it was important to call out this
behavior sort of in real time as it happens.
And now, as you said, the President is speaking right now with a number of transatlantic allies. This is virtually an identical call that he held one
week ago today last Friday. He wants an update from those leaders.
[15:10:11]
LIPTAK: Some of them have spoken to Putin in the last week, so he wants to sort of update them on what they've been doing, on what he's been doing,
but then the other critical thing is to ensure that everyone is sort of on the same page with these package of sanctions that will be sort of the next
step in all of this should Russia invade.
There has been some questions about what European countries are willing to do and what they're not willing to do. This is sort of the President's
latest attempt to ensure that everyone is sort of singing from the same hymn book as this U.S. official sort of predict that an invasion could
occur in the next several days -- Hala.
GORANI: Of course, European countries have closer economic ties with Russia, specifically closer energy ties. So anything that hurts the Russian
energy industry could also impact growth in European countries. It's a little bit trickier for them, but as you mentioned there, it is a united
front.
Kevin Liptak, thanks so much, live from the White House.
Now investors are watching events in Ukraine very closely. The Dow Jones Industrial Average is struggling to recover from its worst one day drop of
the year so far, it turned positive this morning, very briefly, you see it there on the graph, then it dropped nearly 300 points. It's recovered
somewhat in to the final hour of trading.
Paul La Monica joins us from New York with more, specifically, what are the concerns of investors on the stock markets, especially when it comes to
large cap companies?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think that investors, Hala, are obviously very worried about what could happen to oil prices if there
is a full-scale invasion, anything that leads to higher commodity prices could be bad for earnings, it could be bad for consumers who may feel an
even bigger pinch than they already are due to all the inflation that we have in the U.S. economy and global economy for that matter. So I think
that's what investors are really worried about, as well as just the uncertainty that comes with having any potential military conflict, what it
might mean for Western Europe and the U.S.
GORANI: And oil prices. Let's talk about that. Why isn't Saudi Arabia, other big oil producing companies increasing output to try to bring those
prices down?
LA MONICA: Yes, it's a great question. You could make the case that a lot of oil producing countries are content with where prices are right now, and
that the fact that they could go even higher, but I think there could be more pressure on countries like Saudi Arabia to potentially step up
production if need be in order to boost supply, if there is any disruption to the pipelines coming out of Russia.
All right, thank you, Paul La Monica.
Straight ahead on QUEST MEANS BUSINESS, more fallout from the Olympic doping scandal as the Russian skating program comes under fire from the
head of the International Olympic Committee.
We'll be right back.
(COMMERCIAL BREAK)
[15:15:42]
GORANI: A tough week ended in tears for the Russian figure skater at the center of that Olympic doping scandal. Kamila Valieva faltered on the ice
tumbling out of medal contention in the individual event and her entourage's response drew a sharp rebuke from the top Olympic official.
More now from CNN's Selina Wang in Beijing.
(BEGIN VIDEOTAPE)
SELINA WANG, CNN CORRESPONDENT (voice over): With a quick frustrated wave, Kamila Valieva ends her final competition in Beijing with stunning
disappointment.
The 15-year-old Olympian from Russia bearing a tearful face in our hands as she walks off the ice after a performance riddled with stumbles and falls,
one of the world's best figure skaters placing fourth in the women's single skate.
It is a crushing end to a week marred by scandal for Valieva, after it was discovered she tested positive for a banned drug less than two months ago.
Speaking the morning after, even the President of the International Olympic Committee appeared distressed by what happened on the ice.
THOMAS BACH, PRESIDENT, IOC: I was very, very disturbed yesterday when I watched the competition on TV.
This pressure is beyond my imagination.
WANG (voice over): Her two teammates taking the podium for gold and silver instead and Japan winning bronze.
ANNA SHCHERBAKOVA, LADIES SINGLES FIGURE SKATING GOLD MEDALIST (through translator): I saw from her first jump how difficult it was, what a burden
it was for her.
WANG (voice over): Had Valieva been among the top three, medals wouldn't have been awarded until the doping investigation around her concluded. Her
first place win in the team competition, already delaying that event's medals.
MADISON HUBBELL, TEAM EVENT FIGURE SKATING SILVER MEDALIST: I don't think that it's fair to any of the athletes who medaled that we have to, you know
forego that Olympic moment.
WANG (voice over): As a scandal overshadows the Olympics and exposes the alleged dark underworld of Russian figure skating, the World Anti-Doping
Agency is investigating Valieva's entourage, including her coach, Eteri Tutberidze, known as a powerhouse behind Russian figure skating with a
reputation for brutal training regimens.
When Valieva came off the ice crying, Tutberidze asked her quote: "Why did you let it go? Tell me?"
BACH: How she was received by her closest entourage with such -- what appear to be a tremendous coldness. It was chilling.
WANG (voice over): As the probe continues, Valieva's participation stirring outrage worldwide.
The weight of the scandal it seems too much for the 15-year-old skating star to bear.
Selina Wang, CNN, Beijing.
(END VIDEOTAPE)
GORANI: Well, you briefly heard there from Madison Hubbell, the American ice dancer who can't receive her medal until officials sort through the
Valieva case. Now, CNN Sports Coy Wire spoke to her and her skating partner earlier.
(BEGIN VIDEOTAPE)
HUBBELL: I don't think that it's fair to any of the athletes who medaled that we have to, you know, forego that Olympic moment standing -- standing
on the medal stand and it is -- it's hard to go home empty handed. We have our empty metal box waiting in our room and we have no answer as to what
the timeline could be for that issue to be resolved.
COY WIRE, CNN SPORTS ANCHOR AND CORRESPONDENT: Are you being given anything from that team event to walk away with some sort of placeholder
prize? Or is it just an empty box?
ZACHARY DONOHUE, U.S. OLYMPIC ICE DANCER: The IOC was very generous in extending to U.S. Olympic torches, which we definitely consider to be an
honor, but we have a whole team of athletes that have finished competing and are, you know, staring and looking at an empty box and the unknown of
the future and missing out on that Olympic moment even if in the future, we're able to have an amazing experience, it is not at the Olympic Games.
It's not for the whole world to see, it's not, you know, the true culmination of their hard work and effort, blood, sweat, and tears.
(END VIDEOTAPE)
GORANI: Well, Georgia Simmerling competed in four Olympic Games in three different sports for Team Canada. Now, she runs AG Sports, a marketing and
management agency that focuses on female athletes and she joins me now from Calgary from what looks like your car. Welcome.
[15:20:10]
GEORGIA SIMMERLING, FOUR-TIME OLYMPIAN: Thanks for having me.
GORANI: So, sure, talk to me about your reaction to the Kamila Valieva performance when she broke down. Obviously, she fell. The pressure seemed
to get to her. What was your reaction as a female athlete and someone so concerned about the female role -- the role that females and women play in
sports?
SIMMERLING: Yes, I think it was tragic. Truly, I think, you know, she's a minor. I think we all have to recognize that and understand that, and I
really don't -- this is so much bigger than herself. There are so many more people involved.
And, you know, it's saddening, I, as an athlete, myself, for close to two decades competing on the world stage, I prided myself on being a clean
athlete, and you know, following the rules -- following the rules as an athlete and following the rules as a country, and when athletes break the
rules, they eventually are penalized and they are sanctioned, whether it's doping scandals, or, you know, doping violations or whatever it may be.
And I think what's so disheartening and sad and frustrating is the fact that we saw something like this take place in 2014 in the Winter Olympics
in Sochi, Russia and the documentary "Icarus" came out and I was competing in those Games and that was eerily close to home for me to watch that
documentary and say and think to myself, "I was there while this was going on."
This deep rooted corruption really from the Russian Federation, and I guess ignorance really, like, you know, we thought, one could think, you know,
the Western world that that would be taken into hands and be changed, and it clearly has not, and I think it's just so much bigger than we actually
think. And I hope, you know, justice is served.
GORANI: So it sounds to me like you don't believe she should have been allowed to compete in that second event.
SIMMERLING: You know, she was tested positive for an illegal substance. Do I think sh should have been competing? No. But it's so much bigger than
her. I think that's where the frustration for people, for countries, for athletes that have been clean their entire careers.
You know, the Olympic movement, it is based off you know, friendship, respect, equality, and that's just clearly not there right now.
GORANI: So, what about her age? Someone has to give her this banned drug. Her coach was criticized for immediately criticizing her performance.
Obviously, the girl herself knew that she messed up. She didn't need someone to tell her. But does someone who is 15 get a pass?
I mean, you're still a kid. You're not 12, but you know, you're still a child, technically.
SIMMERLING: No, I don't think she gets a pass. You know, you're competing on the world stage. You're an Olympic athlete, you have to be clean. I
think that it is as clear and simple as that.
Again, it's so much bigger than Kamila as an athlete, and I think that's what needs to be investigated.
GORANI: And do you agree with the idea that perhaps the minimum age for competing should be raised, that's been floated to 17, in that way, you
don't ever confront this issue anymore? Seventeen? You're -- I mean, you know, pretty much almost an adult and you know what you're doing, so you
don't have this gray area here?
SIMMERLING: I think that's definitely up for questioning, for sure. I think that at the end of the day, you know, "Icarus," that documentary
stated that this has been going on since the 1980s or probably earlier in Russia.
So, you know, I don't think it's actually going to solve much. It would solve, you know, I think the fact that you know, we are pointing fingers at
a minor and that could be addressed, but I think it's so deeply rooted into, you know, the country of Russia that that's where things need to be -
- that is where it need to be solved.
You know, athletes -- I believe it was athletes that had been tested positive prior to -- it was after the 2014 Games, so the 2016 Olympics that
I competed in as a summer athlete, we were told that they weren't allowed to go, but there were athletes that were competing in 2016 that had tested
positive in years previous. The rules just weren't clear.
GORANI: So you've said several times this is much bigger than this one individual athlete, this one event, and this one sport. What needs to
happen in your opinion now to try to make this a cleaner competition for everyone?
[15:25:08]
SIMMERLING: That's a great question, and I am -- I will be the first to say I'm no expert in this. You know, I think a -- you know, an
investigation outside of the IOC, outside of the Russian Federation needs to take place and it needs to happen now.
I feel so, so sad and frustrated for the athletes that don't get their medal ceremony and don't get to receive their medals because of this. You
know, that takes a lot away from them as athletes that have become Olympic champions and Olympic medalists that there is -- you know, the amount of
athletes that reach the Olympic podium, the percentage is so small around the world and they're not the only ones that step on that podium. There are
hundreds of people that are behind them, their family, their support network, their sponsors, and they are the ones also suffering because it
comes down to marketability.
And if you're not receiving a photo on that Olympic podium, that's saying a lot and that takes a lot out of your performance.
GORANI: Yes, and your future earning potential as well. Endorsements, the rest of it. Georgia Simmerling, thanks so much for joining us from Calgary.
Really appreciate it.
And coming up, we talk Ukraine again. Ukraine is accusing Russia of staging a provocation after authorities say a vehicle was blown up in one of the
breakaway republics, and now Kyiv is appealing for help.
We'll be right.
(COMMERCIAL BREAK)
GORANI: Hello, I'm Hala Gorani. There is more QUEST MEANS BUSINESS in a moment when a deadly storm is sweeping across Europe, grounding flights,
halting trains, and causing massive damage in the European region. And also, a leading Chinese health official suggests that the country may
modify Zero COVID policy due to economic pressures.
Before that, the headlines this hour.
[15:30:10]
South Korea confirmed more than 100,000 new COVID cases on Thursday. That is a new record. Officials say they will extend most social distancing
rules, but have also agreed to ease some measures for restaurants and cafes.
Meantime in Hong Kong officials have postponed the election of the city's leader amid a large outbreak there. The government says it's discussing
plans for city wide COVID tests.
The International Olympic Committee president has rebuked a Chinese official over political comments. On Thursday, a spokeswoman for Beijing's
organizing committee declared that Taiwan is an indivisible part of China, and dismissed allegations of forced labor in Xinjiang. The IOC says it has
spoken with Beijing organizers and both have reaffirmed their commitment to remain politically neutral as required by the Olympic Charter.
The U.S. says it is resuming its avocado inspection program in Mexico after a death threat against an American inspector. That will allow Mexico to
once more ship avocados to the U.S. U.S. Agriculture officials also say they are working closely with Mexican authorities to develop better safety
measures.
Also, among the stories were following. Canadian police have become -- begun a major operation to clear the capital of freedom convoy protesters.
Today they're ramping up arrests, as well as towing trucks from the center of Ottawa. Some of the movement's leaders were arrested yesterday. The
protests over COVID-19 restrictions have clogged up the streets of Ottawa for three weeks now.
In Brazil, at least 120 people have now died from floods and landslides in the city of Metropolis. Officials say two dozen people have been rescued
and more than 800 have lost their houses. President Bolsonaro says the damage resembles images of war, and officials are warning that the city
could still see more landslides.
American President Biden is speaking right now to NATO and other world leaders about Ukraine. He's also set to deliver an address on the crisis in
about 30 minutes. Kiev meanwhile, is sounding the alarm after the authorities in the self-proclaimed Donetsk Republic say a vehicle was blown
up. Now the U.S. called this a false flag operation, a pretext that Moscow could use to invade, raising fears that Russia is creating a pretext for an
attack.
Now it came shortly after sirens blared, in those two breakaway regions in eastern Ukraine, where citizens have been urged to evacuate to Russia.
Ukraine says it will not be provoked into responding. Kaitlan Collins joins me now live from the White House with more. We know the U.S. President is
talking to allies Canada, Germany, France, Poland, Romania, the U.K. representatives from the E.U. and NATO.
What is -- what is the objective of this call because they've been speaking throughout the last few weeks.
KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: They have but I think it's different to have all of them on the phone at the same time talking
about the latest intelligence and of course, the latest developments over the last 48 hours. Given you're kind of seeing play out what officials here
in the United States had predicted would happen before a Russian invasion were to occur.
Talking about these pretext that they believe Russia would start to try to manufacture, to try to justify them going in or starting an invasion,
whatever it is actually going to look like, given there's been a range of possibilities that U.S. officials have laid out. And so, President Biden is
speaking with these world leaders right now on a call that we were told, was scheduled overnight.
And then he's going to give basically what amounts to a status update from the White House momentarily on the latest intelligence there. And it really
comes as they are waiting to see what Vladimir Putin is going to do. And if it gives you an indication of what the White House is expecting, they do
say President Biden will stay at the White House over the next several days over the weekend when he was initially considering traveling.
That as of course going as there are several officials in Munich for the security conference right now. But also notably, the White House says they
are going to host a virtual meeting with the G7 leaders next Thursday at the White House on this ongoing crisis on Ukraine. Now, of course, there
have been warnings from the president himself that a Russian invasion could happen any day now.
So that could potentially speak to what they believe is going to happen or whether there's a likelihood of an invasion going forward. And so, we
should also note one other development that we just got from the White House is those Ukrainian cyberattacks that happened in recent days that the
Ukrainian government said were the largest in their history, it was on Web sites for the defense ministry, the army.
[15:35:01]
COLLINS: Two of the largest banks in Ukraine, they are now formally attributing that to the Russian government. Say that -- saying they've
moved quickly to try to identify who is behind that. Russia, of course is denying it. But the White House did just come out from a few moments ago
from the White House lectern and say, yes, they do believe the Russian government is responsible for those attacks that they said could happen
before the invasion, or potentially in tandem with one.
GORANI: And are the U.S.'s allies on the same page with regards to possible sanctions against Russia? Because we know that in Europe, the economic and
energy relationship between some countries and Russia runs quite deep. Do we know how, you know, if they're on the same page without -- in that
regard?
COLLINS: Look at what the Italian Prime Minister is saying. He is saying that they need to make sure that any sanctions that go forward from the
E.U., if they were to do some in light of an attack should exclude energy, talking about what kind of energy they rely on Italy. And so, of course,
that's somewhere where you've seen some disagreement between the United States and other countries.
And they've tried to talk about being on the same page, you have heard officials say those responses may not look identical across the board when
it -- when and if Russia does invade, but they've said that they will run basically, that they will be forceful and swift from all countries, of
course, that remains to be seen. And given the large scale that they've talked about, it also raises questions about the timing of implementing
those sanctions if they do go forward and what that actually looks like.
And of course, a big question is Putin has heard these warnings they've gone on for weeks, if not months now. And the question is, is he weighing
the calculus of the cost of those sanctions against what he believes is the worthiness of moving forward with. What is clearly, he is preparing to have
these military pursuits.
GORANI: All right. Our Chief White House correspondent Kaitlan Collins, thanks so much. Washington is pointing the finger at the Russian government
for those recent cyberattacks on Ukrainian banks. We just heard Kaitlin mentioned that. Officials say technical information links the event to the
Russian Main Intelligence Directorate, our cybersecurity reporter Sean Lyngaas is in D.C. with more.
It was a pretty quick assessment that they made, right? In a good official announcement, just in a matter of days. That's quite unusual, right?
SEAN LYNGAAS, CNN CYBERSECURITY REPORTER: Absolutely. I've never seen it happen this quickly. In fact, after the 2017 cyberattack in Ukraine that
ended up spreading around the world. It's known as NotPetya. The Justice Department later accused GRU officers of doing that, but it took years to
bring that case and even several months for the White House to formally blame Russia for that.
Here we're talking about a matter of days, and it's part of a broader pattern of the U.S. rapidly declassifying intelligence in an effort to
expose alleged Russian machinations in Ukraine as we wait to see if there'll be any evasion.
GORANI: All right, thanks very much for that. Sean, we'll keep our eye on that story. After the break, more supply chain issues are piling up. Roku
is the latest company to blame disruptions for dragging down their earnings. Other companies are looking for ways to get ahead of them. Stay
with us.
[15:40:49]
GORANI: From T.V.s to farm equipment and airplane. Supply chain problems are weighing companies down. The T.V. maker Roku is down heavily today
after announcing a miss on earnings, which it blames in part on supply chain disruptions. The farm equipment company John Deere has raised prices
by eight percent as a result of -- as a result of higher production costs.
The CEO of Airbus spoke to Anna Stewart about how his company is overcoming this supply chain hurdle.
(BEGIN VIDEO CLIP)
GUILLAUME FAURY, CHIEF EXECUTIVE OFFICER, AIRBUS: We are on the recovery, we're hoping we're going to deliver by far more planes in 2022 than in '21.
But we are not yet with the pandemic behind us.
ANNA STEWART, CNN REPORTER: Picking up on what you just said there. Yes, you're planning to ramp up production, particularly I think of the A320
Family. Your most popular aircraft, the narrow body jets. But like many businesses, you've experienced lots of supply chain disruption over the
last couple of years. Do you see that continuing this year and possibly posing a risk to your plan to ramp up production?
FAURY: Ramping up from 600, 611 as we did in 2021 to 720 is a very steep ramp up. And our supply chain is doing this in a very complex environment.
So, we continue to believe and to observe that the management of the supply chain will be the most important part of our activity in 2022 and probably
as well in 2023. So, we are very much with the eyes on the ball trying to anticipate issues, to gain visibility on the on the future problems to have
enough time.
To resolve a lot of disruptions and for the moment, we have not experienced significant disruptions because of this way of managing and anticipating
the issues we might face later.
(END VIDEO CLIP)
GORANI: Well, getting ahead of supply chain issues is a priority for companies beyond Airbus. The energy and automation companies Schneider
Electric is building a new plant in Texas in an effort to shorten its supply chain. The company announced its 2021 results this week and showed
that record sales have led to a seven percent growth in revenue from 2019. Annette Clayton, the President and CEO of Schneider joins me now from
Austin.
So, talk to us about how so far supply chains have impacted your business.
ANNETTE CLAYTON, PRESIDENT AND CEO, SCHNEIDER ELECTRIC: Yes, thanks, Hala. You mentioned we had a record, year record -- revenues record EBITDA and
record net income. And, you know, we went into the pandemic with good fundamentals in our supply chain. But like many of the companies you've
discussed, we're not immune to the global semiconductor challenges.
And we have made significant investments in our supply chain in order to meet our customer's needs. You mentioned the El Paso factory, we have a big
presence in El Paso. And we're actually expanding that. We've spent over 100 million inside the region. And it makes a lot of sense because we're
experiencing all of the tailwinds from, you know, what's happening in the - - in the market.
The tailwinds from us infrastructures spend the attraction and the growing sustainability business. For example, energize is one of the -- one of the
projects that we have where we're helping 10 pharmaceutical companies actually decarbonize their supply chain. You've got, you know, growing
E.V.s that require infrastructure from grid to plug. So, you know, in our business, you know, we believe in the all-electric world and we digitize
and decarbonize and electrify processes, so, you know, we've been investing in the supply chain.
GORANI: So, what is it -- just to educate me on the idea of shortening a supply chain, and you've announced these new plans to open new
manufacturing facilities in Texas. How does that work? How does the technology -- how do you use technology to design kind of more efficient
supply chain -- a more efficient supply chain?
CLAYTON: Yes. It's a -- it's a really important question. And we've always had the philosophy that we needed a combination of global and local. And
so, a lot of our supply chains were regionalized to begin with because speed is obviously important. And what we've done is shorten the supply
chain in this particular case by expanding our capacity here in North America.
[15:45:07]
CLAYTON: And, you know, we used to see maybe three, four black swan events every three to four years. But now we're seeing that many in a single year.
And, you know, we're facing Hurricane Eunice at the -- at the -- or sorry, the Storm Eunice at the very moment. And so, we see that we have to be more
resilient, we have to have more agility, we have to have more flexibility. And we've been building that into our supply chain. And shortening it is
one of those -- one of those countermeasures.
GORANI: How does that -- and by the way, Storm Eunice is very much right outside my window today. So, we're feeling it too. How does that impact how
you hire, how you staff your company, the -- this notion, this idea of shortening the supply chain?
CLAYTON: Yes. We've remained intentionally flexible with our -- with our workforce, because we realize, you know, ourselves and many of our
suppliers are struggling in the labor market. So, we've remained intentionally flexible as we've ramped these facilities. We've worked and
helped with our suppliers. And there's a couple things that we've also done. We've worked with MIT and Dr. David Simchi-Levi.
And we look at our supply chains time to survive an event and the time it takes to recover an event. And then we mitigate those plans either with
inventory duplication of suppliers, or closer facilities.
GORANI: And part of your business is helping other companies achieve energy efficiency. So, is the current surge in energy pricing that must -- that
must create problems for you, no?
CLAYTON: Well, look, we work with customers on, you know, the vectors of decarbonization. The primary one is actually energy efficiency. I mean,
that's one of the most maybe underappreciated forms of decarbonization because the megawatt is the one you don't use. So we help customers make
the invisible visible with respect to energy and energy consumption. We also help them buy more renewable sources of energy.
Like, for example, micro grids, so we partner with the Carlyle Group, with a joint venture called AlphaStruxure that helps customers do energy as a
service and actually not spend their own capital on renewable energy. And to look at longer term PPA more reliable costing.
GORANI: Right.
CLAYTON: And then the last thing we do is really help customers decarbonize their entire value chain because one of the things we see is that you have
more carbon, maybe 11 times more carbon in your supply base and in your value chain then you have in your own operations. So, decarbonizing it is
really important.
GORANI: Yes, makes sense. Thanks very much. Annette Clayton for joining us. The President and CEO of Schneider. Thank you.
A leading Chinese health officials suggest that the country may modify that zero-COVID policy that it's been sticking to due to economic pressures. In
Hong Kong, case counts are rising despite strict restrictions. The city has now had a total of more than 20,000 cases since the pandemic began. And its
hospitals and testing centers are overwhelmed. Ivan Watson shows us how the zero-COVID policy is playing out right now.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hong Kong's COVID bubble has finally burst. Just look at this line for COVID test. Testing
capacity, clearly overwhelmed. For most of the last two years, the city managed to keep the virus out through some of the world's harshest
quarantines and travel restrictions. But now authorities are counting thousands of preliminary positive infections a day.
And yet the Hong Kong government and the Chinese central government, they're both doubling down on what they call a dynamic-zero strategy. They
want to completely eliminate the virus from this community.
Critics argue that genie is already out of the bottle most of the new infections are identified as the highly contagious Omicron variant. But
more than two years into the pandemic. The Hong Kong government is once again locking down large sectors of society, like public playgrounds, kids
cannot use those swings. And they are also prohibited from in-person learning in all schools, family gatherings of more than two families at a
time, banned.
Restaurants have to close after 6:00 p.m. Gyms, beauty salons, tattoo studios, all of those have been prohibited from working for weeks. The Hong
Kong government says it's paying subsidies to help keep businesses afloat, but anecdotally, I'm talking to some small business owners who say it's not
enough and they're resorting to working underground illegally to help pay Hong Kong's famously high rent and keep food on the table.
[15:50:10]
WATSON: One of the most dramatic transformations Hong Kong is largely cut itself off from the outside world. Only residents are allowed in and they
face long expensive quarantines. The result, in 2019, this airport handled more than 71 million passengers. In 2021, that number plunged to just 1.4
million passengers. The land boundary to mainland China also remains mostly closed.
Surveys show business confidence is down and some people are voting with their feet. According to government statistics, in 2020, in the first half
of 2021, more than 160,000 residents emigrated and with no end to the restrictions in sight, that trend is unlikely to change. Hong Kong once
marketed itself as Asia's world city. Today, it's one of the most isolated places in the world.
Ivan Watson, CNN, Hong Kong,
GORANI: And up next. The Storm Eunice is causing major disruptions in the U.K. and parts of Europe are on high alert. We'll have the very latest for
you if you're in this part of the world. Stay with us.
(COMMERCIAL BREAK)
GORANI: Storm Eunice rip through the U.K. and parts of Europe including France, which is prepared to declare a state of emergency. Record-breaking
hurricane force winds tore the roof off of London's O2 Arena. Take a look at this. And the winds wrought havoc on train and air travel. And there
were some scary landings earlier as high winds rocked flights arriving at Heathrow. More now on this mega storm from Nina dos Santos.
(BEGIN VIDEOTAPE)
NINA DOS SANTOS, CNN EUROPE EDITOR: Dangerous winds battered the U.K. and Northwest Europe on Friday, with gusts in England reaching the highest
speeds on record at up to 122 miles per hour. The intense scales caused huge waves along the coasts, uprooted trees and ripped off rooftops.
Including parts of the London O2 Arena's famous dome. The U.K.'s Met Office expanded its rare red alert for southeast England and parts of Wales on
Friday morning.
Warning of a possible threat to life and telling millions of people to stay indoors. The chief meteorologist said that Eunice could prove to be one of
the most impactful storms to hit parts of the U.K. in years. Along with strong winds, the storm brought heavy snow and ice to the north of England
and Scotland. It also caused chaos as Britain's rail networks told people not to travel and hundreds of flights were canceled across the country.
Some flights still went ahead though, and more than 200,000 people joined a live stream to watch as planes attempted to land at London's Heathrow
Airport. As the storm reached Northwest Europe, France issued orange and yellow wind alerts for large parts of the country. Belgium and the
Netherlands to urge people to stay inside and warned of strong lusts.
[15:55:01]
DOS SANTOS: Eunice is the second storm to hit the U.K. in a week after Storm Dudley left thousands of homes without power. The red alert has
expired, but the strong winds are expected to continue for much of the weekend.
Nina Dos Santos, CNN, London.
(END VIDEOTAPE)
GORANI: You saw in Eunice piece, planes have been struggling to land in these high winds and this has not gone unnoticed by some very enthusiastic
planes spotters at London's largest airport. Jerry Dyer has a YouTube channel. Big Jet T.V. Hundreds of thousands of people tuned into his live
stream with this sort of dramatic commentary though. It's easy to see why.
(BEGIN VIDEO CLIP)
JERRY DYER, BIG JET T.V. PRESENTER: (INAUDIBLE) Yes. Big swing, man. Surely not. Surely not. He's going to do it. Always down. Fair play, mate. Fair
play.
(END VIDEO CLIP)
GORANI: That was one of the most entertaining things I've seen in weeks. There are just moments left to trade on Wall Street. We'll have the final
numbers after this.
(COMMERCIAL BREAK)
GORANI: Moments left to trade on Wall Street. The Dow was down most of the day and took a dive again in the last hour. It follows the worst one-day
drop for the Dow Jones this year. Tensions in Ukraine are weighing on investors' minds with President Biden's set to speak in just the next few
minutes. We'll carry that live. All the major averages are lower to end a quite volatile week.
You see it there. The S&P and the NASDAQ as well. Let's take a look at an individual Dow component about a row of green is on the board but that's
it. Cisco, JPMorgan and Coca Cola are in the lead today. But Intel, Boeing and Salesforce are at the bottom. Intel will reportedly delay its 2023
server chip. The company told investors it would have to spend heavily to catch up with investors and that did not help its stock price one bit.
And that's going to do it for QUEST MEANS BUSINESS. Richard, we'll be back soon. I'm Hala Gorani in London. "THE LEAD" with Pamela Brown begins right
now.
PAMELA BROWN, CNN ANCHOR: President Biden at any moment -- the President is about to give an update on his attempt to convince Russia to stand down and
not invade Ukraine.
[16:00:09]
END
