Return to Transcripts main page
First Move with Julia Chatterley
Employment Continues To Fall, But Slightly Less Than Expected; Facebook Pressured To Abandon Encrypted Messages Across Its Platforms; BP Prepares For New Boss As Bob Dudley Steps Down. Aired 9-10a ET
Aired October 04, 2019 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:10]
ZAIN ASHER, CNN INTERNATIONAL ANCHOR: Live from New York, I am Zain Asher sitting in for my colleague, Julia Chatterley and here is what you need to
know.
It is Jobs Day. Employment continues to fall, but slightly less than expected.
And coded warning. Facebook pressured to abandon encrypted messages across its platforms.
And bye-bye Bob. BP prepares for new boss as Bob Dudley steps down. It is Friday, and this is FIRST MOVE.
All right, welcome to FIRST MOVE, everyone. I'm Zain Asher, glad to have you with us. The latest U.S. jobs report is out and it shows weaker than
expected employment growth for the month of September - 136,000 nonfarm jobs were created in the U.S. last month. Analysts were looking for a rise
of about 145,000, so coming in slightly less than expected.
The unemployment rate ticked downwards to 3.5 percent. That's another half century low, a 50-year low, but wage growth came in week and also missed
estimates as well.
Stock futures had been lower before the release of the report but have since -- take a look here -- turned mostly flat and this comes after an
extremely volatile day of stocks on Thursday.
Stock swung wildly after report showing weaker than expected growth in the U.S. services sector, which is the largest sector of the American economy
by far.
All the major averages were able to claw their way back from steep losses to finish in the green, with tech stocks as the big gainers. That said,
stocks are still down sharply for the week after back-to-back selloffs on both Tuesday and Wednesday. It is the worst start to a quarter for the
major averages in years.
Let's get right to the drivers. And let's take a closer look at the jobs report we got today. Paul La Monica is standing by for us. So Paul, let's
just start with manufacturing because that is probably the sector that stood out to a lot of us.
When you see manufacturing decline by 2,000 jobs, how much concern is there about the effects of the trade war on the U.S. economy?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think it's a very legitimate concerns, Zain. Obviously, the trade war has only really intensified in
recent months, despite, you know, some hopes for a trade truce with China. We obviously have an escalation of some of the tariffs now imposed on goods
from the E.U.
So geopolitical concerns, I think are definitely going to continue to weigh on big businesses and the job market. So those manufacturing numbers that
we saw slide last month, it's going to be very noteworthy to watch what happens in the next few months if you start continued weakness in the
manufacturing sector, because this has been a pretty solid jobs report, but that did strike out as one weakness.
ASHER: So manufacturing makes up about 10 percent of the U.S. economy, how real is the fear that this is going to take the service sector with it,
just in terms of manufacturing slowing down and seeping into the service sector eventually?
LA MONICA: Yes, I mean, I think there had been hopes that the manufacturing weakness would not impact services. But then we got that ISM
services number yesterday, which really showed that we are starting to see a slowdown, even in nonmanufacturing sectors as well.
So I think there is a bit of a bleed over and that is a concern. It does heighten the possibility that the U.S. economy will start to slow a little
bit more dramatically in 2020, even if it's not necessarily a recession, per se.
So I think clearly the weakness in manufacturing is spilling over to other parts the economy, and that's something that a lot of people are going to
keep an eye on. I mean, keep in mind, these jobs numbers, while good, the gains that we've seen in jobs average monthly for 2019 are considerably
lower than what we had in 2018.
So we are losing momentum, even though we're still gaining jobs.
ASHER: And another area where we're losing momentum is in wage growth as well. So what can you tell us about that?
LA MONICA: Yes, wage growth year-over-year dipped to 2.9 percent in the most recent report, that's obviously not great news for people looking at
their paychecks. But there are two positive signs here. One, the wage gains are still higher than the rate of inflation. So many consumers still
are able to at least keep up with what the price increases are with their wage increases.
And also you hate to make it about the markets and the Fed, but that is obviously a big part of the equation. This is a number - that wage growth
below three percent, the Fed probably can take a deep sigh of relief that inflation pressures may be coming off the table a little bit despite that
spike in oil we had a couple of weeks ago, and that probably gives the Fed more reason to cut rates, if not at the end of this month then most likely
in December.
[09:05:12]
ASHER: All right, Paul La Monica live for us there. Thank you so much. All right, I want to turn now to the U.S. where Donald Trump is widening
his calls on foreign leaders to investigate the Biden family. It comes as new text messages emerge of Mr. Trump pressuring Ukraine to launch an
inquiry.
Suzanne Malveaux is joining us live now. So on top of all of that, Suzanne, you had Donald Trump speaking out on national television in front
of the cameras, also asking China to investigate the Biden's as well. You know, it's just so interesting that despite the cloud that is hanging over
him, he is doubling down.
SUZANNE MALVEAUX, CNN U.S. CORRESPONDENT: Zain, he is doubling down and we saw his text this morning really kind of reiterating what he said on the
South Lawn of the White House yesterday that he was not only involved in asking Ukraine to investigate Joe Biden and his son, Hunter Biden, his
political rival, but also now suggesting that China get involved in unsubstantiated claims of corruption.
Now, in his tweet this morning, he said that it is his obligation and his duty to fight corruption, even if it comes from foreign entities or foreign
countries. It's not political.
Well, in a letter from the three Chairmen of those House committees investigating the President, they say that this is simply a campaign not
only from the President but also from his allies, a campaign of misinformation to try to normalize, trying to seek help from foreign
governments, foreign entities to interfere with U.S. elections.
(BEGIN VIDEO CLIP)
MALVEAUX (voice over): Overnight, the three House committees releasing an avalanche of new evidence after former U.S. Special Envoy to Ukraine, Kurt
Volker met behind closed doors with investigators for more than nine hours.
House Democrats releasing text messages provided by Volker showing President Trump wanting Ukrainian President Volodymyr Zelensky to agree to
launch investigations into former Vice President Joe Biden before meeting with the newly elected leader.
Volker texting Ukraine's top diplomat Andriy Yermak less than an hour before Trump's call with Zelensky writing, "Heard from White House,
assuming President Z convinces Trump he will investigate/get to the bottom of what happened in 2016. We will nail down date for visit to Washington."
According to President Trump last month --
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: There was never any quid pro quo.
(END VIDEO CLIP)
MALVEAUX (voice over): But senior U.S. diplomat in Ukraine, Bill Taylor questioning if that's the case, texting on September 9th, "I think it's
crazy to withhold security assistance for help with a political campaign."
More than four hours later, Ambassador Gordon Sondland responding, "I believe you are incorrect about President Trump's intentions. The
President has been crystal clear, no quid pro quo's of any kind."
The text messages also revealing just how involved Trump's personal attorney, Rudy Giuliani was in setting up the call between Trump and
Zelensky.
The whistleblower complaint alleging Volker held meetings with Giuliani where in one, according to "The Washington Post," he warned Giuliani
against trusting information he was receiving from Ukrainian political figures about Biden and his son.
(BEGIN VIDEO CLIP)
RUDY GIULIANI, PERSONAL ATTORNEY TO DONALD TRUMP: If Volker had said to me that my sources were incredible or wrong, any of them, I would have
immediately said, did you do an investigation? Because I really wanted them to.
(END VIDEO CLIP)
MALVEAUX (voice over): Republicans insisting Volker's deposition showed no wrongdoing by the White House.
(BEGIN VIDEO CLIP)
REP. JIM JORDAN (R-OH):Not one thing he has said comports with any of the Democrats impeachment narrative. Not one thing.
REP. LEE ZELDIN (R-NY): The administration is in an even stronger place today than they were this morning.
(END VIDEOTAPE)
MALVEAUX: Zain, you can imagine the type of activity that's going on here on the Hill even during this two-week recess. We are hearing from
Republican lawmakers this morning who are alleging that the whole process is not fair, sending out letters, trying to slow down the subpoena process
and the inquiry as well.
Today, is also deadline date for the White House to produce some documents related to Trump's phone call with the Ukrainian President. If they do not
do that, which is anticipated unexpected, the House Democrats have already issued -- well, they had not yet issued, but drafted a subpoena that they
would be issuing later this morning.
And then finally, we are also going to see the Intelligence Community Inspector, General Michael Atkinson go before closed doors, behind closed
doors to the House committees again in the Impeachment Inquiry to talk about why it is that he felt that the whistleblower complaint was not only
urgent, but credible -- Zain.
ASHER: And Suzanne, for the Democrats just looking on all of this, all of this new evidence further justifies the whole Impeachment Inquiry process,
but it's important to remind our international viewers that in the United States, impeachment is highly political, and certainly questionable, given
that the fact that the Republicans control the Senate.
MALVEAUX: Well, it is a political process and of course, they don't have to show anything criminal necessarily, an abuse of power is really what's
required by the Constitution.
[09:10:07]
MALVEAUX: So you're absolutely right. What is going to happen? What likely what people are looking at is the House would vote on Articles of
Impeachment. If they were to go ahead and do that, it would go to the Senate, which was Republican controlled.
At this point, there doesn't seem to be any major break within the Republican Party on the Senate side to remove him from office. It would
take two thirds of the Senate to do that, and certainly at least 20 Republicans.
So far, we're not seeing a sign that that loyalty to the President has yet cracked -- Zain.
ASHER: All right, Suzanne Malveaux, thank you so much. Appreciate you joining us.
All right, U.S. Attorney General William Barr is urging Facebook to give up on plans to encrypt messages across its platform. He's signed an open
letter along with senior figures from the Australian and the British government as well, which argues that people's safety -- people's safety
could be at risk if the company employs end-to-end encryption in all of its messaging services.
Hadas Gold joins us live now from London. So Hadas, does Facebook have a moral obligation, a moral responsibility to assist lawmakers with
investigations through back doors say, with its apps, despite them being encrypted?
HADAS GOLD, CNN BUSINESS REPORTER: Well, that is what the U.S. Attorney General and the other figures from Australia and the U.K. who signed this
open letter are arguing.
They're saying that by causing this end-to-end encryption, which is right now only really on WhatsApp, the Facebook-owned messaging services, but
Facebook has announced plans to launch end-to-end encryption, where they won't even be able to see what's in your messages, only the devices
themselves, will be able to see it across all of their messaging services that's across Facebook. That's across Instagram.
Now, the Attorney General William Barr wrote on the letter that lives and the safety of our children are at risk as a result of this because they're
saying it'll make it harder for law enforcement to look at messages that might show evidence, for example of child abuse, potentially of terrorism.
This open letter comes up right on the back actually of a data access group to the U.S. and the U.K. that they say will help in sort of cross border
information sharing where British law enforcement will be able to demand data from U.S. tech firms if they are going after, for example, a terrorist
or child abusers or something like that.
The previous process, they said could take them months. Now obviously, if you're trying to intervene in a critical situation, time is of the essence.
So they're arguing now that by Facebook doing this end-to-end encryption, it's going to hamper these efforts.
Now, Facebook, in response to this, actually Mark Zuckerberg held a live stream Town Hall with employees yesterday where an employee brought this to
him. He said, these are horrible instances potentially of child abuse, and his end-to-end encryption can prevent people from being able to get help as
soon as possible.
And he pretty much cited the fact that end-to-end encryption is incredibly important for political dissidents, he brought up the idea of the Hong Kong
protesters and how important the end-to-end encryption is to them, and that the balance of trying to make sure that law enforcement has access to these
messages versus protecting the freedom of speech weighed heavily on him.
And he was talking about how they plan to work on prevention up front that they can potentially use patterns and other methods beyond just what's in
the messages to help law enforcement.
And he also said, that's partly why Facebook actually announced these plans for end-to-end encryption more than a year before they wanted them to roll
out because they wanted to work with law enforcement on it.
And he said that Facebook pretty much plans to work with governments in the future, in a way to keep this safe. But this is going to be a long going
conversation because you have advocates and you have law enforcement asking Facebook to please do not end-to-end encrypt.
On the other side, you have political dissidents, you have journalists who Facebook says they are also trying to protect. The question, of course, is
what the public will think of all of this because on one hand, they do want -- people want privacy, they want end-to-end encryption. On the other
hand, they also want to keep people safe.
ASHER: And Facebook has come under so much fire for privacy issues, said no doubt that's at the forefront of their calculations. Hadas Gold live
for us there. Thank you so much for joining us.
All right. These are the stories making headlines around the world. In Iraq, the death toll has risen to 38 in mass protests across the country.
More than 1,600 people have been injured among the members of the Security Forces.
Demonstrators I've been protesting about growing unemployment, government corruption and lack of access to basic services.
Arwa Damon is on the ground in Baghdad for us. So Arwa, two years after the fall of ISIS, the economy is of course reeling. Just describe to us
what people there on the ground, what the average Iraqi on the ground in Baghdad is going through.
ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Zain, to do that, one would have to take you to the era well before the rise of ISIS.
Look, the sanctions back in 1991 dealt a devastating blow to the Iraqi economy and to the way of life of many of its residents.
On top of that, you then had the U.S.-led invasion in 2003. And then, of course, you had what then evolved into the Civil War that took place here,
the sectarian bloodletting, and when that calmed down to a certain degree, you then had the rise of ISIS.
[09:15:17]
DAMON: And throughout all of this, the Iraqis have suffered tremendously, not just because of the violence that was taking place, but because of all
of those factors that they are still demonstrating about today. The widespread rampant corruption.
They all know very, very well that this country has phenomenal oil wealth, and yet they have yet to see any significant trickle down when it comes to
the country's revenues from that. And that is mostly because of paralyzing bureaucracy and extraordinarily widespread corruption.
Basic services -- look, for years now, Iraqis have been living without regular access to electricity, to clean water, to proper sewage system,
maintenance -- these things have begun to really grate on the population to a point where it's reaching a breaking point, a boiling point at this
stage.
And then of course, you have the issue of unemployment. You have people with university degrees who are unable to find work. That is what they are
taking to the streets and demanding that the government address.
They have done this before. They have demonstrated for this before. These demonstrations that we're seeing taking place across the country are by and
large leaderless, which in and of itself poses its own unique challenges. But it also shows how organic it is at this stage.
None of the main political parties that have sort of in the past, thrown their lot in with the demonstrators are doing so in a significant manner at
this stage. A lot of the political speech that we're hearing is talking about urging both sides for calm, for strength.
We heard from the Prime Minister himself who said that he believed that the protesters' demands were righteous and that the government would be doing
what they could to address them.
But at this point, this is not a country or a population that is willing to listen to rhetoric. They are fed up and they want real concrete action.
There is a curfew in Baghdad as well as in a number of other provinces. But despite that, we are seeing small groups of people -- hearing about
small groups of people attempting to go out and demonstrate. Security Forces are firing at them to try to break them up even when they are in
these smaller groups.
We heard from Dr. Ali Al Bayati who is with the Independent Iraqi High Commission for Human Rights just a short while ago in Central Baghdad, two
more demonstrators were wounded.
And as we have seen in other countries in this region, Zain, the more governments use violence, the angrier and more demanding populations become
and when it comes specifically to Iraq, instability in this country does not remain confined to its borders.
ASHER: All right, Arwa Damon live for us there. Thank you so much for painting that very detailed picture for our audience.
Protesters are taking to the streets of Hong Kong for the 18th straight week. This time, there is a twist, you're looking at live pictures here by
the way of Hong Kong where it has just 9:18 in the evening.
Hong Kong Chief Executive Carrie Lam today issued a ban on wearing any form of face covering or mask. She invoked a colonial era law that was actually
last used in 1967.
And demonstrators have been marching through Central Hong Kong. We've seen a good number of them wearing masks anyway.
The U.K. Prime Minister accepts he must request a Brexit extension on October 19th if no deal is reached before then. That's according to
government documents submitted as part of a Scottish Court case. The British government is under pressure from the European Union to publish a
legal text on its Brexit proposals.
Ireland says they stopped short of solving the Irish backstop issue. The Prime Minister meets with the head of the European Parliament on Tuesday as
both sides are pushing for a workable deal.
All right, coming up here on FIRST MOVE. The scent of victory for the vaping industry in New York as a ban on flavored e-cigarette is delayed.
And ride hailing just took off in an entirely new way. We ride the new Uber-copter, an Uber helicopter in the skies. Stay with us after break.
(COMMERCIAL BREAK) [09:22:44]
ASHER: All right, welcome back to FIRST MOVE. It is now looking like a solidly higher open for U.S. stocks after today's somewhat, somewhat
disappointing jobs report. Weaker than expected 136,000 jobs were created in the last month. Wage growth also came in below forecast while the
unemployment rate fell further. It's roughly around 3.5 percent right now. That is a 50-year low.
Stocks are still on track for their worst week and about two months. At the start of the fourth quarter on Tuesday, the Dow has actually fallen
just over two and a half percent; the S&P 500 and the NASDAQ are also down sharply. It has been a very volatile week. The numbers have been a lot
worse, were it not for Thursday's come from behind rally as well.
Next week will be another crucial one for investors, U.S.-China trade talks start up again in D.C. Third quarter earnings season begins less than two
weeks from now. So there's so much to digest.
As you can see, it does look like a relatively higher open ever so slightly for the Dow. We will have the opening bell, of course, in about seven
minutes.
But joining me now is Darius Dale, Managing Director and Partner at the Hedgeye Risk Management. Darius, thank you so much for joining us.
DARIUS DALE, MANAGING DIRECTOR AND PARTNER, HEDGEYE RISK MANAGEMENT: Good morning.
ASHER: So let's just start with the jobs report. Slightly weaker than expected. Manufacturing lost 2,000 jobs last month. What are your
thoughts?
DALE: Yes, so that was well telegraph. And I think the reason the market is opening certainly high here is because you are saving for risk of
recession materializing in the near term. And what I mean by that is that the yearly rate of change in nonfarm total, nonfarm payrolls growth
actually accelerated five basis points to 1.44 percent.
But I do want to call out the fact that private sector wage growth is actually hanging out at the cycle highs of 3.5 percent. And so what that
tells us, it continues to signal us is that we're very rich -- the risk of the business cycle is starting to roll over on the lack of a corporate
profit recovery in this quarter and into next year is actually still quite high.
ASHER: So there is so much overall for the Fed to sort of digest just in terms of A, the jobs report and this week overall, obviously, volatility in
the stock market this week, despite yesterday's rally.
Today, jobs report, manufacturing slightly problematic. As you say, we sort of knew that because of issues when it comes to the trade war. The
Fed looks at this week overall, especially with the ISM numbers. Service sector issues. What is the Fed thinking?
DALE: Well, the Fed has got to be concerned here. I mean, the most important number that you sort of didn't highlight is the fact that credit
spreads are actually widening still.
[09:25:10]
DALE: So you call -- yesterday, we got that ISM services number. The market tanked on that number appropriately so because it's signaled risk
that the business cycle is starting to end, but ultimately, the market rallied a full two percent off those lows to close up 0.8 percent because
of expectations that the Fed would ease policy.
If you look at it, the futures on October rate cut effectively doubled in that move. But the most important thing that happened yesterday is the
fact that credit spreads continued to widen.
So that to me is the number one signal. Don't forget that Jay Powell is speaking at 2:00 p.m. today. He is a private equity guy. He has got to
keep the credit markets open because if those credit market slams shut like they did in December, it could be look up below for the market and the
economy.
ASHER: Yes, but that's an important point. So when you look at other areas for investors to take shield, you know, beyond stocks, bonds, gold,
what do you see?
DALE: Yes, so we've been saying the same thing for many months now. The U.S. economy is in what we call quad for. That's a situation growth and
inflation are slowing at the same time, that historically has been associated with a material performance in defensive sectors and style
factors, a material outperformance in bonds, particularly long term U.S. Treasuries, and also there have been material outperformance in the dollar
and gold, which is obviously oxymoronic. But historically, that has been the case.
So we've been making that call for four months now, and that's obviously been the appropriate call, especially if you look at what's happened this
week, with respect to cyclicals and some of the more sort of tech-oriented sectors and style factors.
So we continue to believe that until we see that the Fed finally capitulate and what I mean by capitulate is that this Fed has been dragging its foot.
We are in a very precarious place in the business cycle for the Fed to sort of be, you know, talking about 25 basis points here, 25 basis points there.
They've got to drop that dot plot, get the dollar off its highs, and it will be all systems go for cyclicals and the economy potentially.
ASHER: And speaking of all systems go, I have to go to have a break. Darius, thank you so much.
DALE: Thank you.
ASHER: All right. We've got the opening bell coming up in just a couple of moments.
(COMMERCIAL BREAK)
[09:30:00]
ASHER: All right. That was of course the opening bell. Coming to you live from the New York Stock Exchange. Welcome back to FIRST MOVE. I'm
Zain Asher. Let's take a look and see how the Dow is doing right out of the gate.
Let's see. So as expected, we do have a higher open for U.S. stocks despite today's somewhat weaker than expected jobs report, jobs numbers
coming in at 136,000. Slightly less than expected.
Also following disappointing readings this week on U.S. factories and the U.S. services sector. Manufacturing certainly very weak right now.
Fed Chair Jerome Powell is delivering a speech later today in which he likely will discuss the state of the U.S. economy and as you can see the
Dow, they are up almost 90 points or so.
U.S. Treasury yields have fallen sharply this week on concerns that the U.S. economy is weakening further, but they are ticking higher today.
Checking the oil markets now, crude is on track to finish Friday higher for the first time in nine sessions. But oil remains on track for its second
straight weekly drop on concerns for the slowing global economy will hurt demand.
All right, time now for a quick check of the global movers. Shares of Apple are trading higher. A report says the company is asking suppliers to
increase production of its latest iPhone 11 models from it's stronger than expected demand.
Shares of U.S. grocery chain Costco are lower as well. The company is reporting stronger than expected quarterly earnings but revenues and same
store sales came in weaker than expected amid increased competition in the grocery space.
And shares of Disney are under a bit of pressure in early trading as well. They are up right now though. The countdown to the company's two big
holiday movies continues today in what is being called Triple Force Friday -- "Star Wars," "Frozen," as well. Their action figures are going on sale
today ahead of their big movie premieres in December.
Okay, so more than a thousand cases of vaping-related lung injuries have been reported across the United States, and as those numbers balloon, more
and more states are cracking down on flavored vaping.
But the industry did actually receive a small victory here in New York, where a ban on all flavored vaping products has actually been delayed.
Clare Sebastian is outside a vaping shop in New York.
So Clare, why is the ban on hold in New York?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: All right, so today was the day, Zain, when the New York authorities were going to start visiting vape
stores like the one behind me and slapping $2,000.00 fines on any retailer found to be selling flavored vaping products.
But a court has now put a restraining order on that. It was sued by the Vapor Technology Association which is a trade group in Washington accusing
New York State of government overreach. That is now on hold until October 18th, when there will be a court hearing on the matter.
But of course, the ban itself on flavored products has put businesses like the vape store behind me, there are dozens of those, hundreds across the
state has put them in a state of crisis, essentially.
They say that they make 90 percent of their sales on these flavors, and I've been speaking to some them who say that frankly, even with this day,
the damage has already been done. Take a look.
(BEGIN VIDEOTAPE)
SPIKE BABAIAN, NEW YORK STATE VAPOR ASSOCIATION: Protect yourself and don't use illegal products.
SEBASTIAN (voice over): Spike Babaian is in crisis mode. The owner of three New York vape stores, she is facing a statewide ban on all flavored
vaping products.
(BEGIN VIDEO CLIP)
BABAIAN: You have apple pie and blueberry pomegranate. These are some of our more popular flavors.
(END VIDEO CLIP)
SEBASTIAN: The ban she says affects about 90 percent of her sales.
(BEGIN VIDEO CLIP)
SEBASTIAN (on camera): What is life like right now?
BABAIAN: Well, we made $86.00 yesterday. So the employees get paid more than that per day, which means that we will be bankrupt probably in a
couple of weeks.
(END VIDEO CLIP)
SEBASTIAN: Amid a sudden rise in vaping-related illnesses and deaths and widespread teen usage, New York along with a growing number of other U.S.
states are taking emergency measures trying to ban some or all vaping products.
(BEGIN VIDEO CLIP)`
ANDREW CUOMO (D-NY), GOVERNOR: This is a frightening public health phenomenon.
(END VIDEO CLIP)
SEBASTIAN (voice over): The U.S. Centers for Disease Control says their latest findings show e-liquid cartridges containing cannabis, some of which
came from informal sources played a role in the outbreak of lung illnesses.
Still, the U.S. Food and Drug Administration is considering pulling all flavored products off the market nationwide. While manufacturers have
until May next year to apply to get each individual product approved for the market.
(BEGIN VIDEO CLIP)
MICHAEL LAVERY, TOBACCO INDUSTRY ANALYST, PIPER JAFFRAY: It isn't certain what the regulations are going to be. It is uncertain if the flavored
products come off the market, if they'll be permitted back once the application process is completed in a year or mores' time. That's at the
moment, roughly two thirds of what Juul is selling and they're the market leader.
(END VIDEO CLIP)
SEBASTIAN (voice over): Juul has installed a new CEO, a tobacco industry veteran to navigate the new regulation.
Tobacco giant, Altria which owns a 35 percent stake in Juul has lost about a third of its value in the past year. Though there is a potential upside
for big tobacco. And that is Spike Babaian's biggest fear.
(BEGIN VIDEO CLIP)
BABAIAN: The customers come in and they hug you and they cry. And they say, what am I going to do? What will I do? I don't want to go back
smoking.
(END VIDEO CLIP)
SEBASTIAN (voice over): She's not going down without a fight, refusing to liquidate have banned inventory, even urging customers to lobby New York's
Governor.
(BEGIN VIDEO CLIP)
BABAIAN: We have hundred years of experience to know that prohibition does not work. What it does is it takes a product that was legal and regulated,
and it makes it illegal and unregulated, which means people die.
(END VIDEOTAPE)
SEBASTIAN: So Zain, we have a situation now where of course, researchers at the CDC are racing to find the cause of the illnesses that are now, you
know, topping 1,019 deaths, but at the same time, we have what's becoming a pitched battle between the vaping industry and the states who are trying to
enforce these emergency bans.
There's another lawsuit brought by the Vapor Technology Association in Massachusetts. We know that there's a hearing on that this morning. It
remains to be seen how many more of these bans they will be able to stop and where this goes from here. There's a great deal of uncertainty for
this entire industry.
ASHER: So Clare, the last woman that you spoke to in the piece, does she have a point when she says that bans and prohibition certainly doesn't
work? If you take a product that is legal, and you make it illegal, people will still continue to use it anyway. And that, of course, causes way more
problems in terms of health.
SEBASTIAN: Right, so the argument they're making, Zain, is that, what they want is more regulation of these products so that the retailers can
continue to exist. They say that if you ban these products, people will still try to get them any way they can. And that will lead to a rise in
the black market.
They also point to the fact that the CDC has actually said that they are looking in some of these states at a link between those who've been
sickened by these mysterious lung illnesses and the fact that they seem to have got some of their vaping products from what they call informal
sources.
So they say there is evidence already that the black market is behind some of these illnesses. They say they've been using e-cigarettes, many of them
for about a decade, and this is the first time they've really seen people get sick.
So it seems according to the business owners that we've been speaking to that the black market could be behind this and they say that they are
unfairly penalizing at the legal retailers as a result of that.
But of course, this is a balancing act between of course the rise in teen use and allowing adult smokers to get the access to the vaping products
that keep them off cigarettes.
ASHER: All right, Clare Sebastian live for us there. Thank you so much. All right, still to come here on FIRST MOVE. BP's CEO is stepping down.
We'll have the latest and what prompted the move and who exactly is going to be replacing him. That's next.
(COMMERCIAL BREAK)
[09:40:56]
ASHER: All right, let's get back to our top stories at this hour. The U.S. economy adding 136,000 jobs in September. The new hiring leaves the
unemployment rate at about three and a half percent, lowest in almost 50 years.
In such a tight labor market, some companies are tapping into new pools of talent and using nontraditional hiring programs to open up their offices
like my next guest, Brian Reaves, the Chief Diversity and Inclusion officer at Dell Technologies.
Brian, thank you so much for being with us. So let's start with this. Just explain to us why diversity isn't just the right thing to do, but it's
actually good business practice from a financial perspective as well?
BRIAN REAVES, CHIEF DIVERSITY AND INCLUSION OFFICER, DELL TECHNOLOGIES: Yes, Zain. It absolutely is a business imperative to the degree that
there's a lot of research on the correlation and causation of how diversity inclusion drives greater innovation, drives greater employee engagement, as
well as employee retention. All of those in your benefit to the top and bottom lines.
Certainly also, as we see said, as you just articulated in this particular tight labor market for tech, we must expand our aperture with regards to
where we find that exceptional talent. Because if we don't have the talent, we obviously can't grow as a company. So on all fronts, it is
definitely a business imperative.
ASHER: And Dell Technologies has actually started an autism hiring program where you hire people who have autism. Just walk us through that. Where
the idea came from and how the company has benefited, and also how you select these candidates that you end up hiring as well?
REAVES: Yes, it's a phenomenal program. Because if you really think about it, you know, again, going back to the tech labor shortage, there's 330
million people in the U.S. and I can guarantee you and our belief is many of them have the will to be part of our Fourth Industrial Revolution. But
we just have to empower them with the skills and we have to look beyond the traditional methods.
So with our autism hiring program, as you all know, you know, one in 59 people are somewhere on the spectrum. So there's this exceptional talent,
I think of it as differently abled talent, and genius of another kind.
So we have partners, a company called HMEA as well as the ARC of Austin and Philadelphia, and they help us select and engage these individuals. We
bring these individuals into training programs around topics like artificial intelligence, cybersecurity, data analytics, and we take them
through that.
And as they actually excel, we hire them. So we hire approximately about 50 percent of the people out of the program.
So the second thing I would say is, it's not about us -- a nice thing to do for them, they are actually exceptional in what they do, and they change us
and bring out our empathetic view. And by bringing them in our workforce, we get that opportunity to have that inclusive mindset that then drives
that said innovation engagement and retention, which would then would benefit to the top and bottom line.
ASHER: The traditional way that people apply for a job these days is -- I haven't done it in a long time -- but I guess you submit your resume, and
you go in for an interview, and there are several rounds of interviews, et cetera.
And while that method might work, in some cases, or in many cases, rather, it is still lacking, somewhat. I mean, we still need nontraditional
methods of hiring, and that's what you guys are doing with this program.
REAVES: That's absolutely true. And even the interviewing process with these individuals, obviously, these individuals, they think differently, I
call them differently abled, so we have tuned our processes to engage them where they are to ensure that they are comfortable and we are comfortable.
That mindset change that we have made at Dell is helpful to us, you know, not only across people across the spectrum, but when we look at bringing in
women in one of our other programs, our Dell Career Restart, where we bring exceptional women who may have taken time out of the workforce, and then
bringing them back into the workforce.
So things like talking to them about their confidence levels, obviously giving them the necessary knowledge they need to be exceptional, again, but
it is all about meeting people where they are as opposed to being traditional as we engage these exceptional folks.
ASHER: All right, Brian Reaves, live for us there. Thank you so much. Appreciate it.
REAVES: Thank you, Zain.
[09:45:12]
ASHER: Okay, so here's today's -- you're very welcome. Here is today's "Boardroom Brief." Video app Tik Tok has banned paid local ads on its
platform. The Chinese company says endorsements to not fit the user experience it wants to provide. The platform is particularly prominent in
Southeast Asia and among the teenagers.
The shares in HP are down off of the PC maker announced it is slashing up to 9,000 jobs, the equivalent of about 16 percent of its workforce. The PC
maker is on a restructuring drive aimed at cutting cost.
And BP says its longtime CEO, Bob Dudley will step down next year and he will be succeeded at the helm of the British oil giant by current Head of
Oil and Gas Production, Bernard Looney.
The changeover takes place after the release of full year earnings in February.
Anna Stewart joins us live now from London. So let's talk about Bob Dudley's legacy. I mean, he took reign of the BP during one of the most
turbulent periods in the company's history, particularly after the Deepwater Horizon crisis. Just walk us through that.
ANNA STEWART, CNN REPORTER: Yes, he has been there for 40 years, but he really became synonymous with the BP brand in 2010 when he took over, as
you said, during BP's biggest ever crisis, the Deep Water Horizon disaster and the oil spill that followed in the Gulf of Mexico. It cost 11 rig
workers their lives. It polluted 1,300 miles of shoreline, it killed wildlife. There was a huge human cost and tons of health as well.
He took over then and take a listen to what he said in his very first press conference outside the BP headquarters having just taken over.
(BEGIN VIDEO CLIP)
BOB DUDLEY, CEO, BP: There's no question we're going to learn a lot from this accident in the Gulf Coast. It is going to be about equipment,
people, different companies, and as a result of that, we're going to learn a lot, both BP and the industry. And I'm sure there will be changes.
QUESTION: How will you straighten this --
DUDLEY: I've spent the last three months every day on the Gulf Coast and I'm going to focus for the next month and a half on what we're doing in the
Gulf Coast, our relationships in the Gulf Coast and there in Washington. Tony and I are going to work through a transition between now and the first
of October.
(END VIDEO CLIP)
STEWART: He mentions Tony there, Tony Hayward, the former CEO, and he was just out of shot. But he stood right next to Bob Dudley during that first
press conference. And I think there's no better example of how important a CEO is at a time of crisis like this one.
Investors lost confidence in the former CEO, Tony Hayward. There was huge criticism about things that he said, various gaffes, possibly the most
infamous saying that he apologized at the time for all the disruption that the oil spill caused.
He went on to say, there's no one who wants this over more than I do. I would like my life back.
Now, Zain, that oil spill cost billions of dollars within weeks in terms of cleanup costs. It ended up costing $62 billion. The final bill came in
2016, and that is still being paid out today.
Look at the share price of BP compared to where it was in 2010. Because it has made quite a recovery. But it never really got back to where it was
early 2010. Obviously, it had the same issues as many other oil majors, the oil price crashed in 2014. You can see that in the share price there
as well.
And actually you're looking at the share price as it is right now, up around two percent, and that is because investors seemed cheered by the new
CEO who will take over in February, Bernard Looney. He is the Head of Upstream, and he will take BP forward into this new challenging era, I
guess of a low carbon future -- Zain.
ASHER: All right, Anna Stewart live for us. Thank you. The alternative meat craze is growing quickly. And one of the industry leaders is Beyond
Meat.
McDonald's is testing a Beyond Meat patty in Canada. Grocery stores are adding it to the shelves and Disney announced that plant based options will
be added to every dining location in their U.S. theme parks. Advocate say that it's better for the environment and it doesn't involve animals dying.
But critics say that fake meat is too processed. Even Chipotle's CEO said it's too processed for his restaurants right now.
Beyond Meat's CEO, Ethan Brown told Christine Romans that that is one of the biggest misunderstandings about the industry.
(BEGIN VIDEO CLIP)
ETHAN BROWN, CEO, BEYOND MEAT: We are not trying to hide anything from you. What we do is we take protein directly from the plant. We run it
through heating, cooling and pressure. That's our process.
It's not a question of processed or not processed. It's a tale of two processes and which one you want.
(END VIDEO CLIP)
ASHER: Ethan Brown you just heard there. He was also pretty optimistic about the future as well.
(BEGIN VIDEO CLIP)
BROWN: We're going to be a $35 million company. That's absolutely clear in my mind, and what we're doing is building a platform that allow us to
not only provide all the taste, all the nutrition, but if we get that third pillar, which is price, we should be cheaper than animal protein. It's a
$1.4 trillion industry we can get a significant amount of this.
(END VIDEO CLIP)
ASHER: All right, coming up here on FIRST MOVE --
(BEGIN VIDEO CLIP)
AUTOMATED VOICE: Welcome to Uber-copter, operated by a Heliflite Shares.
(END VIDEO CLIP)
ASHER: Getting around and a New York minute. Uber's new helicopter service hit the Big Apple. Stay with CNN and we'll explain.
(COMMERCIAL BREAK)
ASHER: All right, welcome back, everybody. I'm Zain Asher. Uber is taking ride hailing to new heights right here in New York City. You can
get it from Manhattan to JFK in a matter of minutes. But there are strings attached. And let's not talk about the cost. Samantha Kelly tried it out.
She joins us live now.
So Samantha just walk us through the experience because you actually took one of Uber's helicopters from Manhattan to JFK. You would think that
people would want a helicopter service because it would take less time, but it actually took you more time.
SAMANTHA KELLY, CNN BUSINESS EDITOR: Right, exactly. So I got -- I opened up my app in downtown Manhattan and I had a few different options. I could
take an UberX to the airport, it would have taken me about 40 minutes. It was earlier in the morning. So not a ton of traffic for about $60.00.
But it also saw the Uber-copter option, which is only eight minutes in the flight. But I had to get down to the helipad and then take the flight and
then get to my final destination. And it took me actually 15 minutes longer, about 55 minutes.
But I was able to speak to sort of the Director of UberElevate which oversees the entire program and he had a few things to say about that.
(BEGIN VIDEO CLIP)
ERIC ALLISON, HEAD OF AVIATION PROGRAMS, UBERELEVATE: We actually are only going to be offering or operating the copper service in the afternoon
during congested times.
And so the operating window will be from two to five or two to six on certain days. We only show copter as an option to our riders when it's
going to save you time.
Our technology behind the scenes can weave together our network of cars on the ground with the air vehicles, in this case, the helicopter so that you
can seamlessly transition from a car, to the helicopter to another car to get you to the final destination, completely sequenced and figured out by
our technology behind the scenes.
(END VIDEO CLIP)
KELLY: So it was totally a seamless experience once I got there. It was very easy, pretty quick, and certainly a beautiful view.
But from a practical perspective, unless I worked really close to the helipad, and not to mention the really high cost, it was almost triple the
cost of just taking a traditional UberX, it really depends sort of, you know, what the clientele and who this is for.
One thing that they want to do for the future is potentially make this a part of like a daily commute if you live in the suburbs. So it'll be
interesting to see kind of how this shakes out in the next few years.
ASHER: Right, right. Yes, certainly. So just quickly, you know, Uber has expanded into scooters, bikes, cars, what does it want to be? I mean, is
it trying to eventually want to break into the airline industry? What is it's end goal?
KELLY: Yes, so the CEO recently said that it wants to basically be the Amazon of transportation. Amazon started as a bookstore now you can get
almost anything on the site. And this is sort of it's a long-term vision if you want to take a scooter or bike or helicopter or they are talking
about flying cars. This is sort of their vision for the future.
[09:55:11]
KELLY: But if you look at how the company is performing now, it's certainly not in great shape especially if you look at the stock price.
So you know, whether or not it's moving too far from the core, you know, up for debate.
ASHER: All right. Samantha Kelly live for us there. Thank you so much.
And there's bad news if you're planning to catch an Uber from LAX. Los Angeles International Airport will soon ban rideshare and taxi drivers from
curbside pickups at its terminals.
Instead, travelers at LAX will have to take a shuttle bus to the designated parking lot and then catch a ride from there. Drop offs will not be
affected. The changes are due to take effect at the end of this month. Congestion is really getting worse at LAX. The airport is undergoing a
massive overhaul of its road networks and terminals.
All right, that does it for the show. I'm Zain Asher. "Connect the World" with Becky Anderson starts after this quick break.
(COMMERCIAL BREAK)
(COMMERCIAL BREAK)
[10:00:00]
END
