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First Move with Julia Chatterley
Microsoft Buying Activision Blizzard for Almost $70B; Oil Prices Hit Multi-Year Highs as Gulf Tensions Rise; Saudi-Led Coalition Launches Strikes on Yemeni Capital; Major U.S. Airlines Call for Immediate Halt to 5G Rollout; German Foreign Minister Meets with Russian Counterpart; Tonga Communities Covered in Ash After Volcanic Eruptions; Beijing Reports Three New COVID-19 Cases; Hong Kong to Cull Hamsters After COVID Cases in Pet Shop; John Deere Presents Fully Autonomous Tractor; Ducati Motorcycle Deliveries Hit Record in 2021; Huge Asteroid to Soar Past Earth in Coming Hours. Aired 9-10a ET
Aired January 18, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:05]
ALISON KOSIK, CNN ANCHOR: Live from New York, I'm Alison Kosik in for Julia Chatterley. This is FIRST MOVE. And here's your need to know.
Microsoft merger. It makes a move to buy gaming giant Activision in a $68 billion deal.
Diplomatic drive. High-level efforts to resolve tension between Russia and Ukraine.
5G fallout. U.S. airlines say new cell service could cause them major problems.
It's Tuesday. Let's make a move.
(MUSIC PLAYING)
A warm welcome to FIRST MOVE. Great to have you with us on a busy day on the global markets.
Stocks are under pressure as U.S. bond yields rise to multiyear highs. Oil is rallying as well.
On Wall Street, stocks are set to begin the holiday shortened trading week with sizable losses. A continuation of the volatile action we've already
been seeing in January.
Tech looks like it's set to begin the session down about 1.5 percent. Stocks are pulling back across Europe as well.
Higher bond yields, a big contributor to today's weakness. The yield on the benchmark 10-year U.S. Treasury has jumped to a two-year high of over 1.8
percent as markets continue to price in a less accommodative Fed.
Rising yields can lead to higher borrowing costs and make riskier parts of the market like growth stocks and crypto less attractive.
Meantime, higher oil prices are playing into fears of rising inflation. Brent Crude hitting seven-year highs amid rising Mideast tensions and
uncertainties over Russia's military intentions toward Ukraine.
All this amid a major breaking merger story in the U.S. Microsoft buying video game maker Activision Blizzard in a deal worth almost $70 billion.
This is Microsoft's biggest takeover deal ever.
Spiced up to say, it's a busy day as always on FIRST MOVE. Let's get right to the drivers and the latest on today's big corporate deal.
And bring in Paul La Monica. Joins us now.
Paul, I'll tell you what, this is one of - one of the biggest plays we have seen Microsoft make.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, this is a stunning deal by Satya Nadella's Microsoft, and you know there has been so much talk about
Microsoft building its cloud business. And I think there hadn't been this much attention paid to the Xbox and gaming side.
Clearly, Nadella feels that the metaverse is going to be an increasingly important part of the Microsoft growth strategy as well. And this deal, $70
bill nearly rings Activision Blizzard which had a lot of problems because of this harassment scandal that is going on at the company.
It's interesting Bobby Kotick the CEO who has been maligned by a lot of people at Activision Blizzard is apparently staying on to run Activision
Blizzard as a separate unit of Microsoft. So, I think there's still could be a lot of controversy involved you know about this deal. But you know I
think it is a clear indication that Microsoft is going toe-to-toe with the likes of Sony, with Roadblocks and you know with a lot of other companies
that have metaverse gaming aspirations.
KOSIK: The deal though is still - is not a done deal. This deal still has to go through regulatory review.
LA MONICA: Yes. I mean, like any major acquisition, this will be looked at by antitrust officials in the United States and around the world. It's I
think still a little too early to say whether or not there is going to be any potential antitrust concerns. Microsoft has done large deals in the
past, LinkedIn for example, then they've been able to get those passed antitrust officials. So, it's altogether possible that you could have
agencies in the U.S. and other parts of the world take a close eye at this deal. But I am not hearing any indications as of yet, granted the, you
know, the news of this is just a, you know, an hour or so out. But no indications as of yet that this is a deal that won't pass regulatory
muster.
KOSIK: Yes. It's going to be interesting to see what this deal winds up doing for gaming as we progress into the metaverse. We will see about that.
Paul La Monica, thanks so much for breaking all those details down for us.
A Saudi-led coalition has launched retaliatory strikes on the capital of Yemen. They are in response to drone attacks on Abu Dhabi by Iranian-backed
Houthi rebels from Yemen which killed three employees at the Abu Dhabi National Oil Company.
[09:05:01]
The rising tensions in the Gulf have sent oil prices to multiyear highs.
Let's bring in Sam Kylie. He joins us now with the latest from the UAE capital.
Sam, what's the latest?
SAM KYLIE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Alison, the latest is really coming from Sana'a, the capital of Yemen, the headquarters of the
Houthi rebels where the government there is saying that 12 people at least have been killed in this retaliatory attack that came hours after the
foreign ministry here in Abu Dhabi said that the -- what they called a terrorist escalation would not go unpunished. Among the dead are reportedly
-- and we have no independent confirmation of either the number of dead or the type of people who were killed. But according to Houthi officials,
these -- the dead include women and children.
Now, there was an attack on a civilian area in Sana'a. There's also have been a large number of attacks on very much military sites. We've had local
reporters on the ground working for us who have been unable to get to and film any of the aftermath of the attacks.
So, in the military side, they have been encouraged by local officials to visit these civilian areas. But this, whichever way you look at it, it is
the heaviest level of airstrikes that has been conducted against Sana'a, really probably the heaviest sort of air attacks that have been seen in
Northern Yemen in some time. Certainly, many months in such a high-level of attack has been visited upon the Yemeni capital. Particularly with this
very high alleged civilian death toll.
And it does come following the murder of three people here that the Houthis claimed responsibility for and said it was because the Emirates have
stepped back into the Civil War in the Yemen. And there is independent confirmation that the Emiratis have been supporting at least one major
militia group there in their fight against the Houthis, not with boots on the ground. We don't think possibly with money or weapons. It's not clear.
The Emiratis have not commented on that, but this is a blow for the Emirates who has been trying to extricate itself from the Yemeni Civil War.
And, indeed, warm relations with Iran just across the Gulf.
The Iranians have been quietly engaging with the Emiratis at the instigation of the Emiratis. And the Emiratis will now want to know how
much, if anything, the Iranians were involved in this attack. It might have involved Iranian-made missiles, for example or Iranian technology. And that
is something the Emiratis will be quietly furious about. Alison.
KOSIK: Yeah. The violence that's happening there in the region, it's bringing those tensions to a new level. And you mentioned the Iranians. I
am curious how you know these regional tensions are going to you know make it more difficult for Washington and Tehran to work, to rescue a nuclear
deal.
KYLIE: Well, the efforts of the Biden administration to rescue that nuclear deal is getting a degree of support. Quite a lot of support here in the
Emirates who have had their own bilateral - have had their own bilateral. They've had a trade mission. They've got bilateral communications with
Iran. They have rejected outright any further attempts, for example, to impose sanctions on Iran.
So, they are, actually, potentially a conduit for communications between the West and Iran. But this setback of this Houthi attack is very
significant and will be very difficult for the Emiratis to overcome in the short term. But in the long term, their future foreign policy is very much
premised on getting out of this sort of violent engagements that they've had in Yemen, in Libya and other parts of the world through proxies
occasionally and back on to a track of very serious and warm diplomacy with as many people as they possibly can. The idea that they were once described
as little Sparta is not something that they want to continue to be seen as. Alison.
KOSIK: OK. Sam Kylie, live for us from Abu Dhabi. Thanks so much for all that greater perspective.
Top U.S. airlines are calling for an immediate halt to the rollout of 5G services due in less than 24 hours. They warn of - and I'm quoting here.
A catastrophic aviation prices if it goes ahead on Wednesday. The carriers are concerned 5G signals will interfere with aviation technology. They warn
quote, "to be blunt, the nation's commerce will grind to a halt."
Pete Muntean joins us now.
Pete, you know this dispute, it's been going on for a while now. And you know the rollout, expected to happen tomorrow, that means will probably
need to know today whether or not it's actually going to happen. But at the same time, we see 5G working in several other countries. What seems to be
the issue here in the U.S.? The airlines have known about this. Why have they not prepared for it?
PETE MUNTEAN, CNN AVIATION CORRESPONDENT: You make a really interesting point here, Alison. And the telecom industry says, yes, the airlines have
known about this for a while and they should have upgraded their equipment to deal with this.
[09:10:04]
But the airlines say there is a real threat to your safety here. And that could lead to more delayed flights, more cancelled flights, to the tune of
about 1,000 a day, they say, on a normal day.
Now, the issue here is all about the 5G radio spectrum and airlines say that will interfere with something called radar altimeters. That is a
critical piece of equipment on board. Everything from commercial airliners to cargo planes to helicopters. You really need it as a pilot. Because that
shows your exact height above the ground, especially in those critical moments right before landing, also in low visibility. Without that, that's
what the airlines say could lead to delays and compromise your safety.
So, the airline CEOs have written the Department of Transportation and the White House to say, either put this off for a little while longer or come
up with a different solution, maybe a buffer zone around airports. We'll get to that in a second.
In this letter, they say, quote, "The ripple effects across both passenger and cargo operations, our workforce and the broader economy are simply
incalculable."
Now the FAA says there has already been a warning at about 80 airports across the country. It says it's working on this to try and make sure that
this deployment is safe also working with the FCC, it says.
United Airlines proposes a solution, a two-mile buffer zone, turning off these 5G radio transmitters around runways, a critically safe area they say
there needs to be. They say this has also worked in places like France and other places across the world.
"They say we won't compromise on safety -- full stop. But, governments in other countries have successfully designed policies to ensure the safe
deployment of 5G technology and we're simply asking the U.S. government to do the same."
But this is at the 11th hour, Alison. We will see if the White House intercedes here, comes up with another delay. Remember this was already
delayed two weeks. Putting this off a little bit longer, or if they do this buffer zone.
The telecom industry says this has worked in plenty of other countries. There's really not an issue here, they say. AT&T and Verizon are really
behind this big push. And in this case, they're not commenting on this new letter from the airline's CEOs to the Biden administration. We also know
members of Congress are lobbing on to this as well. We will see if that push lends anything to this change here. We'll see what happens.
KOSIK: When that decision coming down this afternoon, right?
MUNTEAN: Yeah. I mean, the moments are fading away quickly here. We're right at the 11th hour, 5G is set to turn on tomorrow, on Wednesday. So,
the clock is ticking here. And now the airline industry is really wanting an 11th-hour change from the White House. We will see if they actually do
that here in this case.
KOSIK: OK. Pete Muntean, thanks so much.
U.S. Secretary of State Antony Blinken will travel to Ukraine this week as speculation grows that Russian forces are poised to invade.
Meantime, a group of U.S. senators are now in key deciding tougher sanctions on Russia and more military aid for Ukraine.
Fred Pleitgen is live in Moscow with the latest.
OK. So, Fred, we are learning that the German chancellor says he is expecting Russia to deescalate. And over the past many weeks, there have
been lots of diplomatic meetings, but the reality is Russia has not committed to deescalating.
So, now there is talk of sanctions. So, I have a couple questions here. Would sanctions even make a difference at this point or is the Russian
invasion of Ukraine inevitable?
FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: Well, I think one of the things, Alison, that the Russian have certainly done over the past
couple of years is they've really tried to insulate themselves from the effects of sanctions. This is a by all accounts still a fairly strong and
robust economy. And one of the things that the Russians certainly have built up is a lot of reserves.
And so, they could potentially if there were massive sanctions certainly hold out against those. And quite frankly, also, over the past couple
years, the sanctions that have been levied against Russia really haven't caused Russia to change the course that it's taken. Nevertheless, of course
sanctions are still potentially a powerful tool. And there are off course projects that the Russians are very interesting to get in where they
certainly would not want to see those sanctioned at all.
One of those projects is of course the Nord Stream 2 pipeline between Germany and Russia. We do have the German foreign minister who is here in
Moscow today.
I was actually just at her press conference with the Russian foreign minister, with Sergei Lavrov. And one of the things the German foreign
minister said -- these are tough some words that we haven't heard in this form from a German foreign minister in a very long time. She said that, of
course, if there were for the military moves by the Russians to invade further into Ukraine, a military escalation, that would also most likely
affect that pipeline as well. The Germans saying, the foreign minister saying that Germany will also defend what she calls the European value
system even if it means grave economic consequences for Germany as well.
Obviously, the Germans trying to align themselves very closely with the U.S. We've already said that says the Nord Stream pipeline at least needs
to be in place somehow but that is certainly something that the U.S. sees as potential leverage.
[09:15:06]
And that the Germans apparently are starting to see as that as well. So, sanctions potentially could make a difference. Would they deter Russia?
Very difficult to say, but in the future, they certainly haven't. Alison?
KOSIK: OK. Fred Pleitgen, thanks so much.
And these are the stories making headlines around the world. We are starting to get a better sense of the destruction from the volcanic
disaster and tsunami in Tonga. New images show the coastline nearly wiped out and trees, homes and fields covered in a thick layer of ash.
CNN has more.
(BEGIN VIDEOTAPE)
BLAKE ESSIG, CNN CORRESPONDENT: While we haven't received reports of mass casualties. The reality is we still don't know the extent of the damage,
especially for those outlining islands close to the eruption site. Now it's because communication with anyone in Tonga remains extremely limited. And
ash fall has left runways unusable preventing outside aid from arriving.
And New Zealand has sent two Royal Navy ships, but they went on a ride for about three days. For now, aid organizations on the ground say the biggest
issue is food and water security as a result of ash contamination.
(END VIDEOTAPE)
KOSIK: North Korea says it fired tactical guided missiles on Monday to test the accuracy of its weapons. State media say the projectiles were launched
from the west of the country and hit an island target off the east coast with precision. It was the fourth missile test Pyongyang has conducted this
year.
The British Prime Minister Boris Johnson is insisting he believed the party held at Downing Street over lockdown was a work meeting. He's facing claims
from a former aid that he lied to parliament about the purpose of the event. The prime minister's just spoken to reporters about it.
(BEGIN VIDEO CLIP)
BORIS JOHNSON, BRITISH PRIME MINISTER: It was categorically - categorically that nobody told me, and nobody said that this was something that was
against the rules. It was a breach of the COVID rules that we were doing something that wasn't a work event. Because, frankly, I don't think, I
can't imagine why on earth it would have gone ahead or why it would have been allowed.
(END VIDEO CLIP)
KOSIK: Still to come on FIRST MOVE.
Old brands break new ground. John Deere aims to lead the field with a revolutionary self-driving tractor controlled from a mobile phone.
And Ducati races into 2022 on a historic high. At the age of 96, delivering more bikes than ever before.
(COMMERCIAL BREAK)
[09:20:18]
KOSIK: Welcome back to FIRST MOVE. I'm Alison Kosik.
U.S. stocks remain on target for a week open as investors monitor rising U.S. bond yields as well as higher oil prices.
U.S. 10-year yields are spiking to levels we haven't seen since the 2020 lockdowns as investors brace for aggressive Fed monetary tightening.
Chinese Leader Xi Jinping telling the World Economic Forum today that Central Banks risk harming economic recoveries if they raise rates too far,
too fast.
Markets now see some four Fed rate hikes this year as officials battle the hottest consumer inflation in 40 years. That said, the U.S. economy is
beginning 2022 on a solid footing. The labor market remains strong. Robust profits are expected to lend support to markets as well.
And corporate deal making not hurting either. News today of Microsoft's almost $70 billion deal for video game maker Activision Blizzard.
Activision shares are up about 35 percent in pre-market trading.
Let's bring in Jeremy Siegel, he is a professor of finance at the Wharton School. And he joins us live.
Great to see you, Jeremy.
JEREMY SIEGEL, PROFESSOR OF FINANCE, WHARTON SCHOOL: Hello, Alison.
KOSIK: Let's start with the Federal Reserve. Because that seems to be what's getting the market all riled up in the pre-market, the rising rates
and the expectation that a March rate hike is all but a certainty. And the expectation for the full year is now for four hikes. Do you think, though,
if the Fed does stick to four hikes or even three, that that's enough to get a handle on inflation, can the Fed catch up?
SIEGEL: No, I think the Fed is way behind the curve and I think they're going to have to do much more than four hikes. You know raising the Fed
funds rate, which is a short-term interest rate to 1 percent when you have 7 percent inflation, doesn't really slow down borrowing and spending. I
think the Fed may have to go to 2 percent or even higher to slow down the inflation that we have.
KOSIK: OK. So, we're looking at more hikes or bigger hikes. But then we run the risk of the market reacting with the correction and that is something
that the Fed is not supposed to look at but often does and could that push the Fed's due less and act less aggressively?
SIEGEL: Well, you know, the Fed can't always be a baby-sitter for the stock market. It has to do what's best for the economy. And I think certain parts
of the stock market are going to take some lumps, especially those very high-priced tech stocks that are based on revenue streams that are years
and years in the future. I think we're going to see a rotation of investor interest to the more valued stock from those growth stocks. But I think
that the Fed has to take the economy into priority and not just say I'm going to stop any decline in the stock market. There are going to be some
lumps this year. Although I still think the market could hand end higher in 2022.
KOSIK: Should the Fed be taking a global view as well - I mean, thinking about what China's input was? Xi Jinping at the World Economic Forum, he
gave a speech online warning against the effects of raising interest rates too much too quickly. Now, him saying this as he went ahead and cut his
rate. But the concern from Xi is that the measures, meaning tightening too fast could threaten global financial stability. Is there any truth to that?
SIEGEL: Well, I think everyone is worried that if the Fed is very much behind the curve and then they panic and start raising rates too much, way
too fast, that will dip into a recession, which is really bad for China.
Now, China has its own challenges as you know right now with supply chains and trying to keep a COVID zero policy. So, clearly, Chairman Xi is worried
about a global recession and it may be that the Fed has to raise rates enough to cause a slowdown.
I'm not calling a recession yet and I don't think one will happen in 2022. But 2023 is still up for consideration and I think that the rest of the
developing world, including China is worried about that.
KOSIK: You seem pretty confident that the Fed could wind up tightening us into a recession?
SIEGEL: I think they may have to tighten us into a slowdown that approaches a recession to get a handle on as you mentioned right at the onset 40-year
high inflation. We don't stop inflation this high without some sort of economic slowdown.
[09:25:03]
KOSIK: OK. Despite all the Fed tightening that is expected, you still see stocks rising this year. Why? And what kind of returns can investors
expect?
SIEGEL: Well, I still believe in the - what's called the TINA thesis, where else are you going to put your money? I mean, you know cash, bonds, and in
an inflationary environment like this are going to give you negative returns. Stocks are based on real assets, real capital, real land. I think
most fronts are going to be able to pass those price increases on to keep their profits up. So, although stock returns will not match what we had in
2021, I still think we could have 5-to-10 percent positive returns in 2022.
KOSIK: OK. We are seeing high flying tech stocks get killed as bond prices rise. Should investors be rotating out of tech? And if so, into what
sectors?
SIEGEL: Well, I think those sectors that are going to - that have good cash flow, that have dividends. Because our research -- economic research shows
that dividends are basically inflation protected from getting cash flows that are better than the inflation rate. And I think that though dividend
paying stocks, those value stocks, which have done, yes, absolutely so poorly over the last five, six years, I think are going to have their time
here in 2022.
KOSIK: What about bitcoin and other crypto? We're seeing crypto fall from - - sharply from their highs. And if so, bitcoin is an inflation hedge, why aren't we seeing it do better?
SIEGEL: Well, don't forget, bitcoin has appreciated so very, very much and it's getting a lot of competition. As you know, there is this whole
movement of you know proof of stake versus proof of work, moving to alternative coins. And I think a big factor is regulation, which it is
facing in 2022, part of it was the Build Back Better program. But if it's chopped into parts, there's bipartisan support for more regulation on
bitcoin and I think that that's one of the worries that a lot of the holders of the crypto currencies do have.
KOSIK: Great talking with you, Jeremy Siegel, professor of finance at the Wharton School. I always love getting your analysis.
SIEGEL: Thanks very much, Alison.
KOSIK: And we'll be right back. The market opens next.
(COMMERCIAL BREAK)
[09:30:38]
KOSIK: Welcome back to FIRST MOVE. I'm Alison Kosik.
U.S. stocks are up and running after the long holiday weekend. And as expected, we got a lower start to the trading week with tech seeing the
biggest losses. Stocks are falling as traders are rising bond yields and higher oil prices.
Goldman Sachs now sees $100 a barrel oil by the second half of this year. And Speaking of Goldman, shares of the banking giant, they are falling in
early trading after the release of their fourth quarter results. Earnings missing estimates as higher labor costs weighing on profits. Trading
revenues also disappointing Wall Street.
Also today, shares of Activision Blizzard are soaring in early trading on news of Microsoft's mammoth $68 billion bid for the company. Microsoft is
set to pay $95 a share for the video game maker.
Beijing remains on high alert ahead of next month's Winter Olympics. Three new COVID cases were found in the Chinese capital.
Selina Wang joins us now with details.
So, Selina, it looks like all of these extreme measures to keep COVID out of the country, they clearly are not working?
SELINA WANG, CNN CORRESPONDENT: Yeah, Alison. And the timing could not be worse with the Beijing Winter Olympics just 17 days away. So, Beijing, the
host city had reported its first Omicron case over the weekend. They have now just detected two more cases linked to that Omicron case, including the
woman's mother and a colleague. A third case was also detected, a Delta variant case that was not linked to the original Omicron case.
Now, despite having some of the strictest COVID policies in the world, Omicron has breached China's major financial, technology and political hub.
It is in Beijing. It is in Shanghai and Tianjin. But China is still trying to stamp out every last one.
Across China are some 20 million people are sealed inside their homes for the four cases detected in Beijing. The residential compounds are in
lockdown. And the woman who first tested positive for Omicron, authorities have tested thousands of people who have been to places that that woman had
recently been to in Beijing.
And authorities now saying that it is possible that woman got Omicron from a package that had been shipped from overseas that she'd ordered Canada.
Important to note here, that several times throughout the pandemic, China has pushed this idea that the virus could have come from overseas through
these packages, that is despite health experts saying the risk of transmission from surfaces is low. Alison.
KOSIK: Selina, tell us what is happening in Hong Kong where authorities are worried about COVID transmission from pets?
WANG: A very extreme measure here. We are seeing echoes of China's zero- COVID tolerance in Hong Kong as well. Authorities in Hong Kong are ordering that 2,000 -- around 2,000 small pets are going to be euthanized, including
all pet shop hamsters. They're also banning the imports of small animals. They're asking all pet shops to handover their hamsters to be killed and to
suspend operations immediately.
All of this, Alison, in response to one shop worker testing positive for Delta and around a dozen hamsters testing positive as well. And all of
this, despite health authorities saying that the risk of transmission from animals to humans is low. But this all emphasizes, Alison, these extreme
measures that as much of the world is learning to live with COVID and trying to move on. In China and Hong Kong, they are still sticking with
these zero-COVID strategies, which are sometimes extreme and sometimes there are casualties for pets, Alison.
KOSIK: All right. Selina Wang, thanks very much.
Now it's time to change gears and look at where agriculture meets Silicon Valley. Farm equipment maker, John Deere, presented a fully autonomous
tractor earlier this month, which it says is ready for full scale production later this year. All the farmer needs to do is put it in a field
and configure it for autonomous operation.
Using a mobile app, they start the tractor with a swipe and just walk away or sit back and watch it get to work. Sounds easy.
[09:35:00]
Jahmy Hindman is the chief technology officer at Deere & Company which owns John Deere. He joins us from the headquarters in Moline, Illinois.
Great to have you on the show today.
JAHMY HINDMAN, CHIEF TECHNOLOGY OFFICER, DEERE & COMPANY: Great to be here.
KOSIK: So, you unveiled this fully autonomous tractor at the Consumer Electronic Show this month. It sounds like it can do everything but make
dinner. What can't it do?
HINDMAN: It is pretty cool. It is. And I would argue that technology sort of always been on the farm, Alison. But this is just the culmination of a
long road that we've traveled, increasing automation on the farm to really help solve the labor problem and make farming more efficient.
KOSIK: When is this tractor going to be available to farmers? And how much does it cost? And is it so brand-new that it's really out of reach for most
farmers?
HINDMAN: Yeah, this is really technology that gets added on to our current tractors. So, pricing wise, it's the way the current tractors are sold.
We're still working through what the right business model is for the technology and trying to understand from farmers how they want to adjust
that technology on the farm.
KOSIK: Talk more about how this kind of tractor, an autonomous tractor can help make a difference in the lives of farmers? And those who have you know
-- not just in their lives, but their businesses as well?
HINDMAN: Yeah. It's a great question. You know, I think it gives really the best gift that can be given to a farmer, that gift of time. And they can
choose to use that time however they want, right? Farmers, before autonomy would spend you know up to 16 hours a day in the cab of a tractor. And so,
if you had 16 hours a day to do something else, what would you do with it?
Many farmers will use their time to make their businesses better. They'll make better business decisions. They will be more into the data that comes
off the farms to make those decisions better. And they'll also use it to improve their quality of life, like going through a football game you know
with their children or being more participative in their community. So, I think it's that gift of time we're really giving them.
KOSIK: What about food supply and keeping crops in better shape because they're being monitored by technology?
HINDMAN: Yeah, there is no doubt that's a big part of this, right? The current world population of 8 billion headed towards 10 billion by 2050.
Farmers simply have to do more with less. And one of those things that they have to do less with, or more with less is labor. And that labor shortage
that already exists on the farm, this will give them the ability to take that time and use it to do other things on the farm like Deere because at
the end of the day, they're coming off their farm, their crop health as an example and make better decisions for their farm to produce more food with
less.
KOSIK: So, as your company prepares to roll out these tractors. I'm curious of supply chain issues are impacting that goal. You know how the chip
shortage may be impacting this effort?
HINDMAN: Yeah, we're pretty confident, actually, with this autonomy introduction. They will be able to support that with the existing supply
constraints. That said, we've got a great team that battles with supply constraints every day, that works really hard to provide the equipment that
farmers need.
KOSIK: And this kind of rolls into the idea of you know sort of technology taking over what many farmers can do you know with the labor shortage. You
know, I'm talking about the strike by UAW members late last year -- in December of last year. It was the first strike against your company in 35
years. And you came to a new six-year contract with workers. But Deere also said -- in November said that you are going to have to increase prices on
large farm equipment by about 8 percent. Analysts agree saying to pay for the contract that you all signed, Deere will continue to have to raise
prices. So, I am curious, are higher wages expected to impact your profits unless you raise equipment prices?
HINDMAN: That's a good question. We're really happy that the folks are all back to work and the contract is. I think the reality is we are all
operating in an inflationary environment today. We see that everywhere. That impacts - it impacts everything that we do. It impacts the raw
material and certainly impacts our labor as well.
KOSIK: You recently penned an op-ed saying that the farm is poised to be the place where fully autonomous vehicles first break through to profoundly
impact every one of the 7.7 billion people on the planet. Talk to me about what the future of farming looks like. What agriculture looks like? Are we
going to see you know fewer farmers, more automation?
HINDMAN: I don't know, they will see fewer farmers. But I do think we'll see continuing automation. What we call this precision agriculture. It's
this idea of being able to precisely treat every plant at scale. And so, I think, you will see technology being used to do that to give every plant.
It's the best chance of producing its optimal amount of food for the plant.
KOSIK: OK. Now that you've got an autonomous tractor ready to go, I want to hear what's next.
HINDMAN: Yeah. I mean autonomy is going to continue to be on the farm. So, you can envision other things that become autonomous on the farm over time.
And this I would argue is just a small down payment on that future.
[09:40:06]
KOSIK: OK. Jahmy Hindman, chief technology officer of Deere & Company. Thanks so much for your time today.
HINDMAN: Thanks for letting me be here.
KOSIK: And after the break, let's pick up the pace. We're going to go from tractors to motorcycles and why Ducati is roaring into 2022.
(COMMERCIAL BREAK)
KOSIK: Welcome back. Italy's Ducati is firing on all cylinders as it races into the new year. The motorcycle brand hit a record 59,000 deliveries in
2021. This despite chip shortages and other supply chain challenges. And Ducati has no plans to slow down. This year, it will launch nine new
models. Among them, a long-awaited off-road bike that marks foray into new territory.
Joining me now is Jason Chinnock. He is the CEO of Ducati North America.
Great to have you on the show today.
JASON CHINNOCK, CEO, DUCATI NORTH AMERICA: It's my pleasure, Alison.
KOSIK: Let's start off with these record sales numbers for 2021. Talk us through what kind of year 2021 was for Ducati considering there was this
push and pull, you know, the push of strong demand around the globe for your motorcycles and the pull of supply chains being stretched?
CHINNOCK: Well, it has been an incredible year for us. And a big part of it has a lot to do with the fact that we've had a strong performance in the
new product that we've brought out. And also, how the market backed it. A lot of our customers actually learned that in the past it was a concept of
let's say one we make yesterday. And now they're in a position where they're willing to wait a little bit for the bike product because it's high
in demand.
KOSIK: And you know what, during the pandemic, there was a huge just a burst of popularity around owning a motorcycle. You know, and not just
yours but a lot of them especially during pandemic times. It was interesting. Industry figures show, you know, in London, during the height
of the pandemic, new motorcycle registrations were up there by the double digits. Same with Europe, Asia and China. Why do you think there such
interest in owning a motorcycle especially during the height of the pandemic and now continuing?
CHINNOCK: A lot of people have made their decision that if they're going to live life, regardless of what's happening out there in the world.
[09:45:04]
And so, as a result, people have made their decision to capitalize on this opportunity of owning a motorcycle. They decided that they're going to have
the best. And this is where we come in a play at the top of the motorcycle part.
KOSIK: All right. Let's talk about some of your new products. You have also announced a wide range of products to be released this year. Go through
with me what are the standouts and how do some of the bikes on your list you know expand your portfolio?
CHINNOCK: A lot of the motorcycles that we released in the last year and actually what we have coming up are really an evolution of what we have
learned from racing motor. A lot of that technology (AUDIO GAP) has breakdown to (AUDIO GAP) customs love that but what we've seen for 2022 is
a real departure from that and actually moving into the world of off-road motorcycling. And this is through let's say an adventure tooling style
motorcycle called the DesertX. This is the first motor motorcycle built in almost 30 years that is going to have a real off-road capability.
KOSIK: Ducati I have learned will also become the specs supplier for the all-electric MotoE championship, this is beginning in 2023, which is going
to be Ducati's first foray into electric motorcycles. First of all, why enter into this venture that you know the event itself?
CHINNOCK: Well, this is an excellent opportunity for us to prove technology of electric motorcycle to the world. And at the highest level. This is
something that we generally have been known for like convention but us racing in MotoGP. And the intent here is that we will develop technology
that will eventually make its way to a street motorcycle. But come 2023, we expect that we're going to have a very competitive field while the last few
years they do MotoE project hasn't been performing at the same level that people would expect. But with our product, with our brand, we expect to
kind of resurgence in this concept between the electric motorcycle.
KOSIK: A lot of diehard motorcyclists will say, oh my gosh, Ducati is going electric. That takes away the everything about riding motorcycles, the
sound, the feeling. What do you say to motorcyclists who say that?
CHINNOCK: There is a little bit of that. And quite honestly the way that I have been riding motorcycles from my entire life, you do get that visceral
experience from a motorcycle. It is a combination of let's say awakening all the senses, but I am confident in some of the electric product that I
have ridden and driven, that there is a way for us to be able to capture that. And we learned from our customers as we've actually evolved a lot of
the technologies that were previously sacred cows that we could never touch.
That as long as we're able to deliver what people experience from the brand and that is that emotional connection through an inanimate object. Then we
will be able to deliver on their expectations.
So, I'm confident that our designers and our engineers will be able to do that. And to be able to evoke that emotionally comes from riding the
motorcycle. And it's one of the things that we've already seen the public response from the pictures that we released in the course of the last
couple months that has teased a little bit about what we're going to be doing. So, I am confident that our team is going to be able to deliver on
those expectations.
KOSIK: And just to be clear the MotoE championship where you're going to be providing the electric bikes, at what point will you produce an electric
motorcycle that's actually available for consumers?
CHINNOCK: Well, it's a bit premature for me to be able to comment on that just because there is a lot of things that need to be put into place in
advance. And one of the things that's learned in the world of electric motorcycling is that the ultimate challenge that we have is the battery
technology and the weight associated to it. Because one thing that Ducati is known for, is style, sophistication, performance and trust. And that
performance is a big attribute of our brand. It's a requirement.
With the weight that most cases have to end up going higher, it really changes the handling of a motorcycle. And as a result, it sometimes
compromises what people are expecting to be able to get from an electric motorcycle.
So that's in development right now. Like I said, it's some years down the road. But hopefully, everything that we learn in the MotoE project will end
up giving us the tools that we need to bring something to market that people would expect that worthy of wearing the Ducati badge.
KOSIK: Overall, do you think the surge in motorcycle buying that we've seen lately, does that challenge some city's long-term goals for air and noise
pollution and even safety? I realize that motorcycles do emit less carbon than cars mile-to-mile. But they do give off a disproportionate amount of
traffic related pollutants and they obviously make their presence known with a big howl?
CHINNOCK: Yes, no doubt. I mean, that is a concern. It's actually one of the reasons why we are looking into these different areas of trying to find
solutions that will address that.
[09:50:04]
But one of the things when we talk about safety, you know Ducati, we released last year the very first motorcycle with radar. And what that's
allowed us to do is to be able to put some technology into the motorcycle that gives features of safety for the rider, including blind spot
indicators, that's been used on cars for years, but for the first time, that's a technology that's been introduced in a motorcycle.
So, we're not only dedicated to that performance, but also to try and improve our environmental impact and also the safety for the riders,
themselves. And these technologies are something that are continuously evolving. And we are always at the forefront of them.
KOSIK: OK. Jason Chinnock, CEO of Ducati North America. I really enjoyed our conversation on a fun topic.
CHINNOCK: Thank you very much, I appreciate it. You have a great day.
KOSIK: You too.
Coming up after the break.
Armageddon averted. A giant asteroid about to squeeze its way past the earth. No need dock in cover but all the details are next.
(COMMERCIAL BREAK)
KOSIK: In a few hours, a giant asteroid twice the size of the Empire State Building, that is going to fly by our planet. Though labeled potentially
hazardous, astronomers say will not strike earth.
CNN's Jennifer Gray is here to prove to us that it will not hit earth.
I am curious if we're all going to be able to see this too if the skies are clear?
JENNIFER GRAY, CNN METEOROLOGIST: Well, I think you'll probably need a telescope to see it. And you'll also have to know where in the sky to look.
So, I personally won't be seeing it. I'm going to leave it up to NASA to hopefully send out some video of this passing by. But if you are super
savvy, and you know what you're doing, you definitely have a shot.
This is going to happen in just under seven hours. We have our asteroid watch up now about six hours, 57 minutes. And just to put it to scale. You
can see earth's trajectory right there and then the asteroid that's going to be coming in very close to earth.
Now, if you put it to scale with the solar system, it looks incredibly close. But if you put it to scale say with our human standards, it's
actually not going to be close at all. It's going to be rather far away. It is traveling quickly. Just about 20 kilometers per second. That's how fast
it's going to be traveling.
The last time it was this close to earth was back in `30s. And its next pass with earth this close is going to be in the next 200 years. So, this
is a once in a lifetime opportunity for us.
Its closest path is going to be five times the moon's distance. So, that gives you a little bit of perspective of how close or far it's going to be
1.9 million kilometers away. So, it is going to be quite far.
We are looking at this asteroid has been widely researched. So, this was first discovered in 1990 -- it has been officially discovered in 1994. It
been observed since 1974.
[09:55:03]
So, this has been widely researched. We have been watching this for a very, very long time. And so, that's why scientists are very confident that it's
not going to make an impact with earth, Alison. But it's definitely exciting for folks that are into this sort of thing and love space.
KOSIK: And I know you are into this sort of thing. So, I am curious, you sit back on a weekend and watch you know your favorite "Armageddon" movie
or favorite asteroid movie like "Armageddon" or "Deep Impact." What is your favorite?
GRAY: Oh, man. I think I'm going to have to go with "Armageddon."
KOSIK: Me too. Bruce Willis all the way.
GRAY: My producer and I were just talking about this actually. Oh my gosh, I think I've watched it 100 times. I cried with the baby and that Aerosmith
song I think is still stuck in my head from when the movie came out.
KOSIK: We all remember. I'm an "Armageddon" fan, too.
OK. Well, I can't wait to hear what NASA has to say about this thing after it passes by.
GRAY: Yeah.
KOSIK: You know what its makeup is and all the details.
OK. Jennifer Gray, thanks so much for going through all that for us.
And finally, on FIRST MOVE.
While planet earth breathes a sigh of relief, a Canadian driver also had a lucky escape. She was speeding across a frozen river. And guess what
happened. Well, people nearby rushed to help, including someone with a kayak. And while waiting, of course, the drive had to take a few selfies on
top of the car while it was sinking. Not sure that that's the brightest idea. Good for her, she was rescued though. And she is OK. But police have
charged her and warned her that no ice is safe ice.
That's it for the show. Go ahead and follow me on Instagram and Twitter @alisonkosik.
"CONNECT THE WORLD" is next. I'll see you soon.
(COMMERCIAL BREAK)
[10:00:00]
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