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First Move with Julia Chatterley
The White House Considering A Further $1 Trillion Of Aid And It's Not Enough, The U.K. Joins Germany Promising To Do Whatever It Takes Even As Factories Close And Jobs Are Lost; Experts Demand We Stay At Home. Aired 9-10a ET
Aired March 18, 2020 - 09:00 ET
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[09:00:13]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here's your need to know.
At War. The White House considering a further $1 trillion of aid. It's not enough.
Unprecedented in peacetime. The U.K. joins Germany promising to do whatever it takes even as factories close and jobs are lost.
And experts demand we stay at home. But is it happening?
It's only Wednesday. Let's make a move.
Welcome once again to our FIRST MOVErs all around the globe as we go once more into the breach together.
As I mentioned, President Trump joining other global leaders saying we are at war, and like all wars, there will be days of hope and days of despair
and not just because you may be working from home or you're away from school, I feel your pain, but that's reflected in the tug of war we're
witnessing in stock markets.
We've got on the one hand, rapidly declining fundamentals versus the other side, the power of government support, it's building like I said, it's not
enough.
U.S. stocks have fallen five percent pre market once again, so they've not been able to trade any lower. This is for the fourth time in eight days.
Exchange Traded Funds -- ETFs that track the S&P 500 are pointing to early session losses of as you can see there some 7 percent. The Dow is simply
yo-yoing up and down in a 1,000 point plus daily range.
What's not helping us today in terms of sentiment, but it is a sign of the times -- energy -- lower, as you can see tumbling to 17-year lows. We've
got us crude now below $25.00 a barrel. It's a sign of recession concerns.
It's also not helping the financials either who have big loans to this industry in particular. The good news though, support is building. We're
seeing more measures coming in now, emergency measures from the Federal Reserve even last night to help shore up the system. Plus stimulus.
The U.K. now has a $400 billion plus package on the table, they say most coming. Japan considering cash handouts, too. Fiscal hardliner, Germany,
even to the point perhaps of considering joint E.U. bonds to raise money. I lose words for how incredible that is.
Facebook, writing $1,000.00 checks to all its permanent employees.
The Trump administration now talking about a $1 trillion plus stimulus plan. It's good. I'll repeat it. It's not enough.
U.K. Prime Minister Boris Johnson said yesterday in a wartime government, you do everything it takes to win. I agree.
The risks here are asymmetric, the risks of doing too little short term, unimaginable. The risk of doing too much at this moment, irrelevant. It's
down to governments now.
Let's get to the drivers. Christine Romans joins me now. Christine, I can't say enough. I'm sure I'll continue to say it, it's not enough. Treasury
Secretary Steve Mnuchin reportedly suggested yesterday, we could see a 20 percent unemployment rate in the United States. In terms of numbers, we're
talking more than 30 million people.
I know they've walked it back.
ROMANS: Yes.
CHATTERLEY: For me, this makes sense. It's frightening and it's real. This is why action is needed.
ROMANS: These are the kind of conversations that happen behind closed doors when you're trying to convince senators that this might not be
palatable, to spend borrowed money in the tune of a trillion to $2 trillion to get what was a healthy economy three weeks ago, back on its feet.
So I could see -- I could see that conversation happening. I could also see the Treasury Department trying to walk it back because they don't want to
frighten people. A depression era unemployment.
What we know is in very short time, we're going to start seeing these numbers in the weekly jobless claims figures in the U.S. and in data coming
in.
We know that there are more than four million bar and restaurant workers just in the five states that have closed their bars since Saturday. That's
four million people who are not working right now.
So I'm sure you're going to see a spike in unemployment claims and you're going to start to see layoffs and people not working to the tune of
millions very fairly quickly -- Julia.
CHATTERLEY: Greg Fleming, former President of Merrill Lynch was on a different channel this morning. He talked about 30 million SMEs in the
United States employing 60 million people. I'm quoting him, I think the numbers are probably bigger.
I'm hearing stories all the time of people who are saying, look, I'll try and hold on to my workers, but my company is closing. There's nothing I can
do here.
[09:05:10]
CHATTERLEY: More and more stories. These are the numbers that we're talking about, and it's not just, to your point, about the restaurant
industry, it's every sector that we're talking about here.
ROMANS: We are pressing the pause button on the global economy. We've never done that before. I mean, one after another, the people who study
this for a living say, we are engineering the world into a global recession, and it could be here right now.
Now, you heard Deutsche Bank today say that we will likely see a quarterly collapse in economic activity, unlike anything we've seen on record going
back to World War II, but they're still forecasting that that economy will rev up again maybe later this year or early next year.
Others are -- Capital Economics also this morning saying second quarter GDP in the U.S. will be down 10 percent. But again, if the measures are
appropriate and fast and big, you will see this bounce back later this year.
There's just no playbook for this, Julia. We've never on purpose stopped economies to stop the spread of a virus. It's just -- there's no parallel
in economic history or human history, which makes this such a dangerous moment.
CHATTERLEY: We've been saying on this show now for some three weeks, we don't have a model. There is no model for this. And we have to understand
the gravity of the situation here.
You know, I've been getting pushback on social media and watching people saying recessions are healthy, you stop throwing money at this system. We
have to let some go.
We're talking about everybody being let go all at once, and the point that you made is such a critical one, too, the recovery here depends on the
response now and how speedy it comes and my math here is really simple, $20 trillion U.S. economy. We're taking it out for two to three months, we're
saying potentially here.
So you're talking $5 trillion -- is half of that jobs, personnel? That's where I'm getting really basic numbers, two and a half trillion dollars
from, and that's the kind of response I'm talking about.
Christine, the other thing that's driving me crazy, the idea of talking about shutting the markets. We need the markets open here.
ROMANS: I think that the conversation is irresponsible, and I think that asking the question over and over is also irresponsible. The markets are
open so that people can have access to their money, they can price risk, and they don't feel as though they have been shut out of the system.
I mean, it is just as simple as the sun rising and setting. That's what those markets do. That's how they price risk. They have been closed before.
They were closed after September 11th because the actual location of the world's largest market had been bombed two blocks away.
You know, that was a logical reason where you had to close the markets and when they reopened, they could process what had happened, but it is
incredibly rare to close market and would send even close -- even shortening the hours would send a real -- I think it would send a
frightening message to investors and regular bank account holders all over the world.
CHATTERLEY: I couldn't agree more. It's a way to measure risk. It's a message, too, to congressmen, to the White House to say, this is how dire
the situation is not only for small people that want the ability to get their money out and get their money in and out.
Thank you, Christine. Great to have you with us. Christine Romans there.
All right, speaking of fiscal responses, the U.K. has fired its own bazooka of economic stimulus worth some $400 billion plus. It's joining a growing
list of European governments forced to unleash costly rescue packages.
Anna Stewart is in London. Anna Stewart, in the space of a week, we've gone from talking about what -- a $12 billion targeted stimulus in the U.K. to
$400 billion worth potentially, if not more, and all the while businesses are shutting their doors. This is why it's needed.
ANNA STEWART, CNN REPORTER: It's incredible. Six days ago that budget was announced. It was the Coronavirus Budget, as you said 12 billion pounds,
$14 billion to help the economy through it. It seemed great at the time, woefully inadequate now.
So the U.K. latest measures which I'll get into, but total $400 billion in terms of the overall fiscal package. Let's put that into context against
the other big European economies.
We have Spain, $220 billion. We have Germany 550. In general, the big European economies are spending here around 15 to 20 percent of their GDP
apart from -- you can see there -- Italy, currently their package is $28 billion, of course we expect more from them.
Now the U.K. was the latest. Let's take a deep dive into what they have announced, an additional $23 billion for businesses that will be in tax
holidays, cash grants, interest free loans, that sort of thing, plus $390 billion in government loan guarantees. That's why we're seeing those big,
big figures.
The thing we're expecting more from, I have to say the Chancellor has said this is not the final word, it is what do you do with the people being laid
off and how can you stop companies from laying people off?
[09:10:10]
STEWART: So we expect a lot more on that. Currently, it is just a three- month holiday for mortgage repayments, trying to boost our benefits system. But we do expect a lot more on that.
As you were saying to Christine, this is going to be the big real time problem for real people, the real economy, real businesses -- Julia.
CHATTERLEY: And we're seeing that. We're seeing businesses shut. Volkswagen, one of those things, we are literally down tools. In Europe.
That's it. Think of the jobs here and there's many more, Anna. We're already seeing it. And that's why the response has to be fast.
STEWART: Yes, and we've just heard news from Lego. They're closing all of their stores apart from those in China. They are going to pay all their
staff.
You mentioned Volkswagen, they are shutting their plants across Europe and there are ads from Fiat-Chrysler, the owner of Peugeot. Renault -- they are
closing in total 35 plants already across Europe.
The auto sector directly or indirectly employs 14 million people in Europe. Now, we don't know what this means for each and every job. But just -- that
is such a huge number.
Governments need to do much, much more to help individual people and the businesses that support them, and possibly a more coordinated effort from
Europe.
One interesting example, I will mention before I go, Sweden and Denmark, now, they've actually offered to reimburse companies for a very high
proportion of wages of those people that would be laid off from some big companies.
And maybe we'd see something like that, but different countries are taking different measures. I think we'll see a more coordinated response in the
coming weeks -- Julia.
CHATTERLEY: Yes. The more support from governments, the more companies are able to go, we just hold. We don't fire people. We just hold for two to
three months. Anna Stewart, thank you for that.
Okay. We keep looking to Asia, particularly East Asia for signs of hope, I think of a stabilization in the outbreak.
They are maintaining a downward trend in daily coronavirus infections. In South Korea, reporting just 93 new cases today. It is the fourth day in a
row the country has fewer than 100 cases. Japan, 47 fresh cases, and China reporting just 13 new cases today.
Ivan Watson is live in Hong Kong with the latest. Ivan, I don't want to give people too much hope, but we are seeing stringent measures taken all
over the place and it looks like stabilization.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: It is pretty remarkable, Julia, if you consider that a few weeks ago, China was counting
thousands of new cases of coronavirus a day. It was logging hundreds of deaths due to the disease daily. And now those numbers have plummeted.
As you just mentioned, they counted, according to the official figures, 13 new cases on Tuesday and 11 deaths.
So something that they have done has managed to slow the spread of this illness. Part of that is due to these reasons draconian measures,
particularly targeting the city of Wuhan, a population of around 11 million people where coronavirus was first discovered.
To this day, the residents of that city are not allowed to cross the thresholds of their homes. They are still in complete lockdown. However, as
the infection rate has decreased, some other cities in the Province of Hubei where Wuhan is found, some of them have seen some of their
restrictions lifted, some of the police checkpoints lifted for example.
Some residents in some other cities are allowed to move around in their neighborhoods, and the provincial government has announced that it is going
to create systems of identifying different regions as areas of high, medium and low risk.
Other news that three out of China's 26 provinces on Monday may see their schools reopen. So we are seeing incrementally some signs of progress.
Here in Hong Kong, a city that everybody expected was going to be absolutely clobbered by this pandemic due to its close proximity to
mainland China, it has managed to keep the number of infections confirmed below 200.
But there's been a jump in the last 24 hours of 14 new cases and this is the concern among some Asian societies that have seen some success with
social distancing, with shutting down many sectors of their economy and society to try to deal seriously with the epidemic is that now the
perceived threat is not from inside, it's from "imported cases."
So of the new 14 new cases discovered in the last 24 hours here in Hong Kong, 13 of them are from people who recently traveled internationally or
who were in close proximity with people who traveled internationally.
[09:15:00]
WATSON: So the city government here is imposing a new system. As of midnight on Thursday, any person traveling from outside of Mainland China
or Macau, anybody flying here will go under mandatory 14-day quarantine. That is where the perceived threat is, and that's where the city officials
say they need to -- what they need to confront to prevent losing the ground that they've gained through their hard work over the last month and a half
-- Julia.
CHATTERLEY: Yes. Extreme measures, but extremely necessary. Ivan Watson, great to have you with us. Thank you so much for that.
And again, this is why the message here is so brutal -- stay at home. That's the message from governments worldwide as they advise self-
isolation, social distancing, and shutdowns as Ivan was describing, but it's not happening enough and that warns CNN's chief medical correspondent
Dr. Sanjay Gupta, means we are "woefully unprepared" for what's ahead.
CNN senior medical correspondent, Elizabeth Cohen joins me now. Elizabeth, it is hard -- it's hard for us to understand that our daily lives have to
change so dramatically. How do we make it clear to people that when they're told to stay at home, that has to be it, we have to do this?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Well, first of all, I think we can be super specific. And I think specificity really helps about
what exactly can you do or can't you do? I'll give you an example.
In California, the state in the United States, they told folks there -- the Governor told folks, you know, what, if you're elderly, if you have
underlying medical problems, we don't want you to go out. We want other people to do your grocery shopping for you. We want other people to bring
you food from, you know, take away food from restaurants. We do not want you going out.
I think that's very, very specific. And then to set up those services to make that happen. This is serious. This is real. We are being asked to make
sacrifices.
I think, you know, one thing that I know has helped a lot of people is to think about the sacrifices that say our grandparents or great grandparents
or great, great, great grandparents made in times of war. They were sent off to war. We're not being asked to go to war, we're being asked to sit on
our couches.
It is difficult. It is certainly not easy. It is hard to be isolated from the people that we love and who we want to be with. That's what FaceTime
and Skype are for, but we are being asked to do this and we need to do this because that is what's going to help in this outbreak.
It's not going to be quick, but it's also in some ways a minor sacrifice compared to what our forefathers and foremothers had to do.
CHATTERLEY: Yes, it's a war of boredom and restriction, but, wow, for the greater good. Elizabeth Cohen, thank you so much. Great advice there.
COHEN: Thanks.
CHATTERLEY: Thank you. All right, we're going to take a break here on first move, but coming up, as we head towards another punishing market
open. Will cash handouts help? And what more is required?
And later, the CEO of Slack on the benefits of home working and beating social isolation. Useful advice for us all. That's after this. Stay with
us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. Bazookas one day, bedlam the next. That's the reality that we're dealing with.
U.S. futures have hit their limit down once again. We're anticipating early losses of some seven percent. If that happens, we'll be in that process
once again of a 15-minute trading halt. We'll be here to walk you through it.
Europe meanwhile posting major losses. Asia also had a weak session. What we're going to watch today, too, Boeing, the aerospace giant down 19
percent in premarket trading. Reports say it is asking the United States for $60 billion in emergency assistance.
Just to give you a sense, this company employs 140,000 people, never mind the industries attached to it. Joining us now Jason Furman, former Chairman
of the Council of Economic Advisers under President Obama.
Jason, fantastic to have you with us. Thank you so much for joining us. You were the first person and I read your views in "The Wall Street Journal"
that were saying send cash to people $1,000.00 to adults, $500.00 to children. How did you envisage this working, and is what we're seeing
building support in Congress at this moment what you planned?
JASON FURMAN, FORMER CHAIRMAN OF THE COUNCIL OF ECONOMIC ADVISERS UNDER PRESIDENT OBAMA: Yes, I think we are seeing growing support for it. We
don't know the details of what President Trump. He said he was in favor of it yesterday, but I think it's an idea like this.
You've seen democrats like Senator Sherrod Brown, Congressman Joe Kennedy, and many others come out in favor of this idea. It is important to
understand and I hope we'll get to this, it's only part of the answer. But I do think it's an important part.
CHATTERLEY: We heard Treasury Secretary Mnuchin yesterday saying, look, I'm not giving $1,000.00 check to millionaires. There are suggestions that
there might be limits. My view is, I'm not sure we have time for that.
Yes, there are challenges. We saw it in Australia when they tried it during the financial crisis. Dead people were being sent checks. Jason, is there
time in your view to limit this? Or does it have to be blanket purely for speed?
FURMAN: Yes, so I think speed matters a lot. I don't think you want to be too fancy about over targeting, you know, would rather someone gets it who
doesn't need it than the opposite? The government is operating, you know, on telework, people -- children or home, people will start to get sick. So
I think we really can't assume a great capacity for the government.
I do think the conversations I've had over the last few days with technical administrative people that we can effectively not send it to millionaires
and that won't delay it.
So I think that is a form of targeting that they probably can do and if they can do it, they certainly should.
CHATTERLEY: What else is required, Jason to point, this is just one tool. We need way more. What else can be used here? Are you in favor of payroll,
zero payroll taxes, allowing people perhaps to delay paying tax? It's a bridge that we need a gap -- a financial gap that needs filling.
FURMAN: Yes. I think, a payroll tax cut, I'm not such a fan of because it only goes to the people who are working and they're the ones who probably
need it least. Delaying taxes, certainly something that we should consider. Some of the most vulnerable, those getting nutritional assistance, many of
them got it through schools maybe to make sure that we're increasing it outside of schools.
The states are going to be slammed by this. Their revenue is going to go down. Their spending is going to go up. They're our first line of defense.
They need more funds.
And finally, on the business side, you know, getting businesses through this huge cash crunch because you can go bankrupt, but you can't go un-
bankrupt and we want -- we tide them through now, so we're in a position to recover when the pandemic has passed.
[09:25:05]
CHATTERLEY: You can't all go bankrupt at once as well, which is the potential of the risk that we're facing here. To your point about targeting
people that are working. What about freezing? What about saying to people do not fire people because while they're hired or furloughed, they still
have their benefits. They're still hired.
To your point, yes, people that perhaps are working don't need this, but a lot of people are going to be fired, a lot of temporary workers, a lot of
salaried wage workers are going to be fired. And we need to stop that. Is that feasible, too, in your mind?
FURMAN: I think that would be the single best thing if we were able to figure it out. Denmark, the government is paying 75 percent of the pay of
people. Employers have to pay 25 percent. Workers I think, have to give up some of their vacation days when all of this ends.
You know, I don't know if that type of idea is feasible in the United States, but I certainly are among many others who are scrambling to see.
Because at a time like this, you want to use tried and true methods like mailing checks, we know that will work.
But we're also going to want to try, you know, some big large experiments and bridging workers through this time in their jobs is far and away the
Holy Grail of those efforts.
CHATTERLEY: Yes, I'm not really seeing anyone talking about this either, but for me, just a pause here, do not fire people, just bridge that gap.
Because if we do get through this, and we kick start in three months, you're going to get those workers back. So don't get rid of them now. But
we'll see.
Jason, come back and talk to us soon. Thank you so much. And we hope we'll keep our fingers crossed that your idea works in some part.
Jason Furman. Thank you again.
All right. The market open is next. We are limit down at this stage. So again, we could see a volatile start to this session. We'll bring it to
you. The market open in the United States is next. You're with FIRST MOVE.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to FIRST MOVE once again. That was the opening bell at the New York Stock Exchange and some fists raised there in
solidarity.
We were expecting losses of around seven percent right out of the gate. So again, we're in this process where trading just finds its feet. We work out
precisely where the markets are trading at the start of the session.
Just remember, if we fall some seven percent, we halt trade for 15 minutes. We then resume.
The next circuit breaker kicks in at a loss of 13 percent, and then we have another 15-minute halt. As you can see, we're under pressure. We are more
than taking back the gains that we saw in yesterday's trading session. We're just oscillating up and down session by session.
At this stage and I'm reticent to say it, but it does look like we're holding above that seven percent, so no circuit breakers at this stage, but
I'll continue to watch it.
Let me give you a look at what we're seeing in the bond markets as well. You're looking at the U.S. 10-year yield there. What you're seeing is bond
prices falling. Yields are currently back up to around 1.1 percent in the United States.
For context, yields hit a record low of 0.31 percent last week. So what we've got here going on is equities falling and bond prices falling.
Normally, you would see that flight to safety in to bonds and particularly given all the moves that the Treasury is making to try and support bond
prices and to push yields down that will be a worry. So that's something to watch.
Let me give you a look at what's going on for European markets as well. No, I'm going to show you oil first. That's fine. Okay. What we're looking at
right now is the pressure in the energy markets, not helping sentiment in the equity session.
You've got crude there trading at its lowest point in 17 years. It's a sign of recession concerns. It's also a sign of the broader issues that we were
discussing three weeks ago, and it feels like three years ago, the fact that there's no agreement to shore up supply going forward.
We can take a look at Europe bonds as well now because we do have that and I'll give you a look. Actually, that's the stock session. Okay. We're under
pressure, as you can see, I mean, it's a global story. We've talked about this session after session.
Paul La Monica joins me now. Paul, we're oscillating between frantic gains and frantic losses. I was saying yesterday, this is just a message from the
markets again that more support is needed and we're hearing more and more companies simply downing tools closing, closing stores, more support is
required. And that's being reflected, I think in the anxiety that we see in stock markets and beyond.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, without question, Julia. We had hoped that maybe we could get another rebound today and we haven't had
two up days since mid-February.
We've had these sharp drops and then a tiny, relatively speaking, rebound, and then stocks fall again. And as you point out, right now, I think the
focus is on Boeing and the aviation industry. What kind of bailout package will struggling airlines and aircraft manufacturers need?
Boeing saying last night, it could be $60 billion for the aerospace manufacturing industry that will be needed to help support these companies.
CHATTERLEY: And I think what we have to understand, Paul, and it is such an important point. This is a huge employer. It's a huge contributor to
U.S. GDP. It's also had issues of its own, of course, with the MAX jets grounded.
They've also bought billions and billions of dollars of stock buybacks. And I was looking on social media last night, and there were a lot of people
pushing back and saying, hey, hang on a second. This is a company that's bought back its own stock that's now asking for a bailout.
What I think people have to understand here is, it's bigger than one company. This is also about viable companies also going under as a result
of what's happening here.
LA MONICA: Exactly. This is the big problem as I see it right now. It is bringing back those memories of 2008. 2008 initially, and to this day,
still there are a lot of people who aren't happy that the banks got a bailout and I do understand the populist rap that is there that companies
that made bad decisions, and you could argue that Boeing buying back its own stock was not the wisest use of capital.
They shouldn't be bailed out by the government because we're supposedly a capitalist society, and you just let them fail. But to your point, you
can't let companies fail when they employ tens of thousands of people, and then there are the ripple effects for all the other industries that depend
on Boeing in the aviation industry. You wind up having layoffs and job cuts there.
We can't satisfy our zeal to punish corporate malfeasance by letting our economy go to tatters, it just doesn't make sense even if people are angry.
They'll be angrier if the market plunges even further, and there are bigger job losses.
[09:35:38]
CHATTERLEY: And we are already looking at that, Paul. You phrase that perfectly. Boeing at this moment is too big to fail, but it is part of a
system right now that is too big to fail and too many companies, very viable companies are also shuddering as a result of what we're seeing, and
we have to keep that in mind.
Bigger questions about behavior come after this when we survive this.
LA MONICA: Yes, I mean, I think that what we may wind up having happen after we eventually get through this is that there will be much tougher
regulations put into place for the aerospace industry and other industries in the same way that the financial sector became much safer after 2008.
I mean, one thing that, you know, it's hard to find anything to be encouraged by in this market environment, but we're not really talking
about legitimate fears of runs on the banks, the banks are capitalized.
And I think you can argue that that is in large part due to new rules that forced banks to take on less risk and have more capital, you're now going
to need to see that with a company like Boeing and others in the aerospace food chain. Stricter regulations need to be in place so that they can
absorb a financial hit of this magnitude if heaven forbid, there is one in the future.
CHATTERLEY: So much to discuss there, Paul and, not enough time. The banks are far better capitalized now than the financial crisis provided support
comes for all the businesses and all the workers that are struggling as a result of this global pause button on industry, on business, on daily life.
Great to have you with us. Thank you for making -- working from home looks so easy. Paul La Monica there.
All right, the growing number of people living under some form of restriction, working from home as you saw there or isolation is ramping up
demand for online deliveries.
Amazon says it is hiring an extra 100,000 fulltime and part-time workers here in the United States. Joining us from Washington is Senior Vice
President of Amazon, Jay Carney. He was also the White House Press Secretary under President Obama.
Jay, fantastic to have you with us. Unprecedented times. Talk to me about the hiring that you're doing and what you're seeing right now as a business
and the scale up in demand from people at home and ordering online.
JAY CARNEY, VICE PRESIDENT, AMAZON: Well, thank you for having me, Julia. The situation we're facing is a spike in demand from our customers across
all of our businesses and geographies, the United States, the U.K. and the E.U. countries where we have major marketplaces and stores.
What that means is, this period is very similar for us, like the periods we see during Holiday Season or around Black Friday where we see a spike in
demand and we need to hire additional seasonal workers.
So we put out a notice yesterday that we -- or the day before rather -- that we're hiring 100,000 new people in new positions. In addition to that,
we're raising wages by $2.00 per hour in the United States, two pounds per hour in the U.K. and approximately two euros in the E.U. in order to
compensate workers for the -- you know, the added load that this is causing and to create an incentive for them to come in and join us.
We have customers who are, like everyone desperate for essential goods, household goods, medical supplies, and they also are -- if they're
sheltering in place or just social distancing, they don't want to go out into stores to buy other goods that they might find otherwise in brick and
mortar stores. So they're ordering more online and we need to meet that demand.
CHATTERLEY: There's a number of things here. A lot of people will be asking whether you can make that pay rise permanent, you can answer that.
But I know you've also expanded sick leave policy to include part time warehouse workers. You've also set up a relief fund of $25 million for
delivery partners.
Jay, forgive me for asking this because I know this is unprecedented times, do you think you're going far enough as a company? Everyone looks at Amazon
as this bellwether for support here for what corporates could be doing, big employers could be doing. Are you going far enough?
[09:40:04]
CARNEY: I think that's a perfectly acceptable question and the answer is we meet every day as a leadership and that includes the CEO, Jeff Bezos and
the leaders of all of our businesses and have this very conversation.
What should we be doing? What can we do for our employees? What can we do for our customers? The Relief Fund you mentioned, we have one, specifically
for the businesses where we're subsidizing rents, the small businesses in our corporate buildings in Seattle.
We have another one where we're helping out with grants, the small businesses that depend on all the employees in our home city, our
headquarter City of Seattle, who are now shuttered and don't have customers because our employees in Seattle are working from home.
And we're doing the things that you mentioned adding additional sick leave, adding paid leave for employees who are diagnosed or quarantined, but we're
examining everyday what more we can do.
Hiring I think, is it is important, as -- well, one of the things that we're noting in the announcement is, we recognize that a lot of people,
especially in service jobs are being furloughed or laid off, they may need temporary work and this is now available to them and we hope that they
apply. They're welcome to join us.
You don't need a lot of experience to come work in one of our fulfillment centers. You come and you get trained on the job, and you can really help
make ends meet while you wait for your old job to get back.
To answer your question about whether these jobs will become permanent, much like during our seasonal spikes in hiring, a lot of those seasonal
workers then convert into full time employees because we have that demand and if they like the job and they want to stay, there's often availability
for them.
CHATTERLEY: Jay?
CARNEY: Yes.
CHATTERLEY: Facebook is giving employees -- permanent employees, $1,000.00 checks. It's the topic of the moment. They have 45,000 employees. I know
you have a lot more. Is this something that you're discussing? Can you do this?
CARNEY: Well, like I said, Julia, we're talking about all different ways that we can help our employees and help our customers who number in the
millions and hundreds of millions, in addition to our employees, and help the communities where we do business and the countries where we do
business.
Well, we're looking at every companies actions and searching for best practices to see what we can do. You know, our corporate employee base, you
know, we're a tech company, and we're -- you know, those folks are well- compensated in a very competitive labor market.
We're primarily concerned right now about our fulfillment center workers who are hourly workers in the United States, and in the U.K., we announced
the minimum wage hike last year that got a lot of attention to $15.00 an hour and I think over 10 pounds in the U.K.
We've now raised that minimum for this period to $17.00 an hour and buy another two pounds in the U.K., and I think the -- you know, the message
that sends is that these employees, these Amazonians really matter to us.
CHATTERLEY: I'm pushing you, I appreciate that. Final question, Jay.
CARNEY: No problem.
CHATTERLEY: I floated the idea of somehow having the government say, particularly big employers, you can't fire anybody. You can further them,
perhaps you can pay them a bit less, but you can't fire them. We will provide support in whatever size to help facilitate that.
But we are hopefully talking about a two to three-month period, you'll need those workers back after that. If we simply don't let people go, they keep
their benefits. Do you think that is a strategy that could work?
CARNEY: As a government policy, that's a good question. Obviously, I've served in the White House in this country, and these are incredibly trying
times. I applaud lawmakers whether they're here in the United States, policymakers or in the U.K. or the E.U. for examining all sorts of
possibilities.
Opening the box and saying what kind of creative things can we do to try to help people get through this period?
We're fortunate at Amazon that we're not furloughing and we're not laying off. We're actually hiring. But the system and the problem is much bigger
than one company.
So we are cooperating in every way we can with the governments in every country where we do business and I welcome personally as a former
administration official, experimentation and creative ideas.
CHATTERLEY: Yes, and fast. Jay, great to have you with us.
CARNEY: And fast, exactly. Bias for action. We have to move quickly. Thank you so much.
CHATTERLEY: Yes. No, thank you. Senior Vice President there at Amazon, Jay Carney and of course, former White House Press Secretary.
All right, we're back after this. Stay with us. More to come.
(COMMERCIAL BREAK)
[09:47:54]
CHATTERLEY: Welcome back to the show. Now the joy of having your own show is you can make split second decisions.
So I want to welcome back Senior Vice President of Amazon, Jay Carney. Jay, thank you for staying in the chair because it just occurred to me I've got
more questions for you and I could keep you here for an hour.
But I just wanted just in terms of what you're seeing from people buying products where potential bottlenecks are and what people at home that are
perhaps watching and ordering from you need to bear in mind just in terms of extra time for delivery.
Can you talk us through just some of the practical things that you're seeing and doing right now?
CARNEY: Certainly, Julia. The principal thing that we're seeing and I think retailers around the world are seeing is high demand for specific
household goods, paper products like toilet paper, paper towels, wipes, sanitary wipes, antiseptic products, disinfectant, antibacterial wipes,
that kind of thing, as well as medical supplies.
And what we're doing because of that high demand is working with our suppliers to prioritize the intake of those products into our fulfillment
centers, which are the hubs of our distribution network, and we're prioritizing them temporarily over other products to ensure they turn
around quickly so that we can get them out to customers, and we're doing that everywhere.
What I want to make clear to your viewers is that all other items that you see for sale on amazon.uk or dot com are available, but they're not being
prioritized in terms of the quick turn of a turnaround in the way that those essential items are.
So business as usual to an extent with this prioritization on those goods that people need right away.
CHATTERLEY: And on those really high priority, healthcare related, sanitizing hand gels, for example, are you limiting the numbers that people
can buy because I know all around the world, to some degree we're seeing panic buying and authorities saying, please don't hoard because there's
enough to go around if you don't hoard.
It's hard for people. But is that also the message and are you putting restrictions on for customers as well?
[09:50:10]
CARNEY: That's a very good question, and I need to find out because these things are moving so quickly whether we have new information on that.
Right now, where we're dedicating a lot of energy is to combating price gougers. As you know, our Amazon stores aren't just Amazon inventory. In
fact, they're well over 50 percent third-party seller inventory.
So we work closely with our sellers. Our sellers are overwhelmingly, you know, good partners, and they treat their customers appropriately. But we
do have some sellers out there who have tried to gouge our customers by spiking prices for products like you mentioned, sanitizing gel and the like
and we have aggressively taken them down.
We have algorithms that identify gouging and we have human review 24/7 to find gougers and to pull them down and yes, we are referring the most
egregious offenders to local law enforcement or state law enforcement here in the United States and elsewhere for prosecution if what they're doing is
so bad that it deserves it.
CHATTERLEY: So you're doing your best to protect customers, which makes sense and for the workers that you are employing, a lot of people working
from home, taking measures to try and protect themselves and each other, what measures are you putting in place simply to protect workers that are
coming in that are kind of serving those that are needing these products around the world?
CARNEY: That's a great question. We are and already have instituted and are instituting additional cleaning regimes in all of our fulfillment
centers, where equipment is routinely sanitized and cleaned periodically throughout the day.
We have social distancing regulations now in place in our fulfillment centers to prevent congregations of people in close proximity.
One of the things that's perhaps surprising to viewers about our warehouses, our fulfillment centers is they are quite vast because they
house a lot of products.
And while they employ, in many cases, thousands of people, certainly hundreds, the distances between them when they're doing their jobs can be
quite great already. We're ensuring that that's the case whenever possible.
We're taking every precaution we can to protect our workers, providing them with the necessary gear to increase their protection, and then when we're
engaging with them, like we do with our corporate employees and like employers are doing around the country, which is if we have an employee who
is feeling sick, he or she goes home, takes care of himself, and doesn't come back unless they feel better.
CHATTERLEY: Jay, great to have you with us. Thank you. Big Picture and small picture is all vital at this moment and thank you to your workers.
I'm sure they are working on a lot of overtime.
CARNEY: Thank you. Thanks for what you're doing.
CHATTERLEY: Jay Carney -- no, thank you -- Senior Vice President there at Amazon, former White House Press Secretary.
All right well back after this and we'll take a look at what's going on in the markets. You're with FIRST MOVE. We will be back.
(COMMERCIAL BREAK)
[09:55:08]
CHATTERLEY: Welcome back to FIRST MOVE with a final look at what's going on more broadly across markets at this moment.
Stocks sharply lower, but not as low as we were anticipating premarket. Remember that seven percent threshold, a decline of seven percent is what
triggers circuit breakers and that 15-minute trading halt.
At this stage, we are a few percentage points as you can see away from that, but still again, under severe pressure and taking back much of the
gains that we saw yesterday.
What's weighing here? Well, Boeing as we mentioned earlier on in the show the biggest drag on the Dow tumbling 18 percent on cash crunch concerns.
Also the energy sector, we mentioned that, too. Chevron down some nine percent plunging oil prices. Pressure there.
We've also got sterling under severe pressure in this session, too. There's just a lot of nervousness. We're trying to make it work, guys.
That's it for the show. Take care of yourselves. We'll be back tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
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