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First Move with Julia Chatterley
Kim Jong-Un Continues Tour of Russia; The Race to Arm Ukraine; Maersk Launches First Green Methanol-Powered Container Vessel; Chip Designer Arm Makes Public Debut; Deadline to Avert Major U.S. Automaker Strike Nears; Moderna CEO Responds to Accusations of Price Gouging. Aired 9-10a ET
Aired September 14, 2023 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome to "First Move", this Thursday. Just ahead, this hour Kim Jong Un on the move the North
Korean leader visiting key military sites, the Pacific Fleet and the University in Eastern Russia after meeting with Vladimir Putin.
The Kremlin also confirming Putin has accepted Kim's invitation to visit Pyongyang or the latest from that meeting in just a moment. Plus, the
humanitarian crisis in Libya, the floodwaters may be receding, that the human toll climbs after that catastrophic flooding, live report coming up
next too.
And armed and ready Softbank owned chip designer Arm going public today pricing its IPO at $51 a share that securing a $55 billion dollar valuation
shares that trade on the NASDAQ. Shortly we'll be watching that hopefully that will lend a hand or even an Arm to stocks today Wall Street higher
already pre market as you can see there.
Europeans stocks higher two after the European Central Bank hiked interest rates by a quarter of a percentage 0.24 percent that well expected. That's
the highest level since the Euro was launched back in 1999. And across the Pacific-Asia stocks closed in the green on Thursday, the NIKKEI and the
KOSPI gaining more than 1 percent and the top performance there as you can see.
Lots to get to as always over the next hour we do begin in Russia, where the North Korean leader continues his closely watched trip to Russia. Kim
Jong-Un and Vladimir Putin met for five hours on Wednesday, vowing a closer military relationship raising concerns of course once again from the west.
South Korea's presidential official suggests that North Korean weapons are already being used by Russia in Ukraine. Paula Hancocks joins us now.
Paula, to add to that Japan also warning today that any Arm's deal between the two nations could potentially violate U.N. Security Council
resolutions. I think the message from these two leaders is what and why do we care?
PAULA HANCOCKS, CNN CORRESPONDENT: Well, it's problematic really Julia, isn't it? When you consider one of the U.N. Security Council members,
Russia is one of the potential parties to this deal that could potentially be done. The fact is that there were no press conferences.
There was no documents, no communique. So we don't know exactly what was decided between these two leaders. But all indications are and according to
U.S. officials, they were moving towards a military drill South Korean Unification Minister today as well, saying that he had deep concerns about
pursuing some kind of military deal.
And then we also had the presidential office official, telling journalists that they believe that already certain kinds of weapons from North Korea
have been used by Russia on the Ukraine battlefield. So there is a lot of concern out there. Now we have heard that from both sides of North Korea
and Russia that Kim Jong-Un has extended an invitation to Vladimir Putin to come to Pyongyang which he has accepted, according to those sides.
Now, Sergey Lavrov, the Russian Foreign Minister, apparently will be heading to Pyongyang in October, likely to lay the groundwork for this kind
of meeting. It would be a significant meeting. This meeting just yesterday was significant. But there hasn't been a Russian President who has gone to
Pyongyang in 23 years.
It was back in the year 2000. The last meeting, and it was Russian President Vladimir Putin, who went to meet the then leader of North Korea,
Kim Jong-Un's farther than later Kim Jong-Il. So certainly it would be a significant move. And it's also suggesting to the west, to the U.S. and its
allies here in Seoul and in Tokyo.
That what we saw yesterday was just the beginning of this potential, blossoming friendship and alliance worrying alliance in many ways between
these two leaders. We also heard another detail from the Kremlin from the spokesperson there Dmitry Peskov about the gifts that were exchanged
between Kim Jong-Un and Vladimir Putin.
Apparently they both exchanged firearms as gifts, carbine, which is a type of rifle, which really continues that the military theme that has
surrounded this entire visit and it does continue. Kim Jong-Un is still in Russia at this point. We understand we were told by Vladimir Putin himself
that he would be going to see some kind of military demonstration by the Russian Pacific Fleet.
He was also going to a factory to see production of civilian and military items. So no more details than that, we haven't seen any footage of Kim
Jong-Un today, but certainly it shows that military was the overwhelming theme of this meeting in the past couple of days, Julia.
[09:05:00]
CHATTERLEY: Certainly an exchange of Arms already taken place to your point. In terms of the gifts I believe it was swords back in 2019. Paula
Hancocks thank you for that -- . To desperate scenes now on the streets of the Libyan City of Derna after Sunday's massive flooding when according to
the Red Cross, a seven meter high wave wiped out buildings and washed infrastructure into the sea.
Now local authorities are saying that they are simply unable to bury all the victims. The country's rival governments are also providing deferring
death tolls, ranging from at least 5000 to more than 6000 people with 10,000 still missing. Ben Wedeman joins us now on this.
Ben, unimaginable this the scale of the wave that the people they're faced, I read also that the Mayor of Derna had suggested perhaps up to 20,000
people may have lost their lives. And that would be I believe, just looking at some of the numbers a fifth of the city's population, it's unimaginable.
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, we have to be careful, Julia, with these numbers, because nobody really knows. And we've
seen numbers ranging all over the place. But what's clear is that thousands of people have been killed ended this city and the government in Eastern
Libya based in Benghazi, simply are incapable of dealing with the magnitude of this tragedy.
We know that, for instance, they are struggling with just dealing with the sheer number of dead bodies in the streets of Derna. The temperatures are
high, they're hovering around 30 degrees centigrade at the moment, and doctors are worried that with all of these dead bodies lying around.
There's very much a danger of the spread of disease, and more bodies are constantly being found in buildings and washing up at sea. We've seen some
very disturbing footage of -- large groups of bodies floating out at sea. So they're really just the health challenge of all of these cadavers is
really mind boggling.
Now, for instance, the International Committee of the Red Cross has announced it's sending a variety of relief supplies, medicine and other
things. And among them 6000 body bags, the international community is starting to pick up in terms of its response this morning from the Italian
port of Brindisi.
An Italian navy ship has departed with more supplies, tents and blankets, mobile hospital and other equipment to provide for the situation in Derna.
But given the fact that the country is divided, and that for years, these two governments have been at war with one another.
What is clear, and what we heard from the Head of the World Meteorological Organization today at a press conference in Geneva, is that the
meteorological infrastructure of Libya has basically stopped functioning, and therefore they were incapable of providing warnings to the population
of Derna of the danger that Storm Daniel was bring in.
And they were they simply didn't provide, they didn't put out any evacuation warnings or orders for the population. And in addition to that,
because the government's if you can even call them that have been so busy fighting with one another, they've ignored the infrastructure.
So those two dams, which according to one study put out by a Libyan academic needed to be maintained were not maintained and therefore that may
have contributed to this catastrophe all of this human folly may have had a very large part in creating the situation where we're seeing this mind
boggling death toll, Julia.
CHATTERLEY: Ben Wedeman, thank you for now. And for more information about how you can help Libya's flood relief efforts you can go to CNN.com/impact
for more information. Now Russia says it propelled a Ukrainian attack in the Black Sea. Moscow says it destroyed five underwater drones attempting
to strike one of its patrol ships.
And as both sides burn through weaponry and ammunition at a rapid pace, Ukraine's allies are working against the clock to help provide more Arms.
Clare Sebastian reports.
(BEGIN VIDEOTAPE)
ARMIN PAPPERGER, CEO OF RHEINMETALL: Yes, this is ammunition but without power, you cannot fire this ammunition.
CLARE SEBASTIAN, CNN CORRESPONDENT (voice-over): Amid the high tech displays at this sprawling international defense Expo. The Head of
Germany's top weapons producer has a much less futuristic battle on his hands to keep up supplies of these NATO standard 155 millimeter artillery
rounds. The lifeblood of Ukraine's defense, and now it's counter offensive.
[09:10:00]
PAPPERGER: We doubled or tripled our resources, our capacities. We are able now to produce next year 600,000 artillery rounds.
SEBASTIAN (voice-over): He says that's more than six times that pre-war output. Not yet enough, though to clear a multi-billion dollar order
backlog.
PAPPERGER: Three years ago everything solid we can do everything with Air Force. It's not possible. Yes, we need strong lead forces. And this is
exactly what we produce
SEBASTIAN: Our governments and is the EU doing enough? Do you think they woke up quick enough to this production crisis you could call it?
PAPPERGER: The EU made decisions and they said OK, we want to invest. We are still waiting at the moment for the final decisions.
SEBASTIAN (voice-over): Ukraine can't afford to wait. The government tells us they're firing 5000 to 6000 of these rounds a day. But we'd like to be
firing more than 10,000 much more than is currently being produced by its NATO allies. Russia, meanwhile, is firing 40,000 rounds a day Ukraine says.
Manufacturers in the U.S., Ukraine's biggest backer have also rapidly scaled up not fast enough, though, to avoid having to sub in controversial
cluster munitions this summer.
JAKE SULLIVAN, U.S. NATIONAL SECURITY ADVISER: We would provide cluster munitions, because the alternative to providing cluster munitions was them
not having enough bullets.
BRIGADIER GENERAL JOHN T. REIM, U.S. ARMY: We were at 14,000. You know, we're 24,000 today, next month, we'll be at 28,000. So we've doubled our
monthly output. You know, that's quite significant. Some of these longer terms, you know investments. You know, beginning of next year, we'll start
realizing additional capacity.
MORTEN BRANDTZAEG, CEO OF NAMMO: I think we are in a phase of right now of an industrial war work capacity is the big issue.
SEBASTIAN (voice-over): Norwegian co-owned Nammo another major ammunition producer in Europe says it has gone from making just a few 1000 rounds a
year to a rate of 80,000 a year.
BRANDTZAEG: This is totally changing our company, we are investing at some sites are 15 to 20 times more than we normally do in order to build
capacity.
SEBASTIAN: When you look at what's happening now, with the counter offensive moving relatively slowly. The fact that it had to start later
than plans President Zelenskyy says, he says because weapons deliveries were delayed. Does that concern?
BRANDTZAEG: To me, it's a major concern. Of course, we see the consequence in the -- . So I think we all in the western society have a common
responsibility to step up this capacity.
SEBASTIAN (voice-over): Clare Sebastian, CNN, London.
(END VIDEOTAPE)
CHATTERLEY: And now to the largest public debut so far this year chip designer Arm set to trade on the NASDAQ after pricing its IPO at $51 per
share. An exciting day, of course, but the company's exposure to China remains one of the concerns for investors as the country contributes around
a quarter of its sales.
Anna Stewart joins me now. And the bigger point there is that they don't control the revenues attached to those sales. But we'll come back to that.
And this could be an exciting day because they're putting up less than what 10 percent of the stock in this IPO and they've got some not insignificant
Cornerstone investors, Google, Apple, Nvidia, AMD, Wowzers.
ANNA STEWART, CNN REPORTER: I mean I'm excited I've been excited about this one for weeks now shows what a nerd I am is the biggest IPO that we've had
in a very long time since Rivian. And looking at what it's being valued at here at the top range of $51 per share $54.5 billion if banks also
exercised their rights to buy shares.
Now, that is considerably actually less than we thought even a month ago when people were talking about a 60 to $70 billion range. It's considerably
more though than what Softbank bought Arm for back in 2016. That was $30 billion, or would it try to sell it for to Nvidia only last year that was
valued at $40 billion.
You're right, there's only 10 percent being floated here and about a sixth of the shares, I believe have been set aside for some of those big
investors, Intel, Apple, Nvidia, Samsung, TSMC. It has been so quiet on the IPO front that this has got a lot of attention, not least because there are
a few in the pipeline like Instacart coming up.
This is a different beast. This isn't a new, fast growth startup company. I mean, this company was founded in the late 90s. It's been listed before. We
know all of its glories we also know some of the clouds on the horizon.
CHATTERLEY: Yes, and we've sort of mentioned one of them. Let's go there, because I think the good news is to your point, Arm's technology and chips
have never been in more demand given the technological advancement that we're seeing around the world.
[09:15:00]
The problem is its right in the middle of a geopolitical storm at the same time and what a quarter of their sales come from royalties effectively from
Chinese parts of the business that they don't effectively control. How much of a concern is that do you think for investors because they've certainly
warned about it?
STEWART: There are two big issues. One is that it's so focused on smartphones and yes, nearly every smartphone in the world has a bit of Arm
technology in it. But people aren't upgrading their phones. I mean, the new iPhone launch this week, I realized that I'm still on the 11 -- .
They're seeing revenue slip they want to be an AI. They're not really there yet as a leader, and then there's this China issue. And you're right, this
was really clear in the filing lots of warning a quarter of their sales go to China. They have a really complex relationship with the entity out there
Arm China.
That they say they hold a 4.8 percent follow closely for perhaps an indirect ownership interest in Arm China through a 10 percent non-voting
stake in a Soft bank controlled entity that owns less than half of the Chinese company. Plus, Arm China has a history of late payments.
Plus, as you mentioned, what about the geopolitical risk here between the West and China? You're opening yourself to a lot of risk here. And I think
investors have been warned so we'll see whether they still got appetite today.
CHATTERLEY: Yes, we're going to see how that trades. You're still on the 11. Are you going to upgrade? --
STEWART: -- CNN, this is my CNN phone.
CHATTERLEY: Oh!
STEWART: I think it's time, right?
CHATTERLEY: Good luck with that. Anna Stewart, that's taking us down a path of a lot going on. Thank you very much for that moving on, swiftly.
Straight ahead, steady as she goes. Maersk set sail with its first carbon neutral vessel. The CEO is up next to talk all about it.
Plus, automakers shutdown the clock ticks towards the deadline to avert strikes with America's Big Three car makers, stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move", in setting a course for a greener future you're about to see the pride of Maersk's shipping fleet the world's
first green methanol-powered container vessel. The Laura Maersk pictured here arriving in Copenhagen is a key part of the company's drive to become
fully Net Zero Climate Neutral by 2040.
The company also making waves with its investments into AI driven, automated fulfillment centers for E-commerce. But in its wake of course
slowing demand and falling profits is the pandemic lead supply chain squeeze passes. Much to discuss, Vincent Clerc is the CEO and he joins us
now.
[09:20:00]
Vincent, fantastic to have you on the show, let's talk about that container vessel to begin please because this is a hugely symbolic moment I think on
you your path to net zero. Talk us through the container and how it stacks up to the other -- vessels in your fleet.
VINCENT CLERC, CEO OF MAERSK: Yes, Julia, you're right. It's a really important moment for us. It's a very proud moment where we see our energy
transition take a very concrete face in the face of Laura Maersk. It is a first step, its 2000 containers that she can load.
It's one of 750 ships that we operate today. But it was a step that had a really, really powerful impact already, because what was a first when she
was ordered has become now the dominating trend across the whole industry. She has created a lot of followership. And today there are 125 ships that
will be powered with green methanol that are under construction. So it's a real exciting view on what one decision can do for an entire industry and
an entire sector.
CHATTERLEY: Yes, it's a big statement. And it was a big risk back in the beginning, when this decision was made. I remember it well. I know you've
signed a deal with Equinor, I believe to ensure you have the fuel to keep this going into the first half of next year. And then you hope to fuel this
from any methanol plant in Denmark itself.
And just give us a sense, how does this compare in terms of cost, again to some of the legacy fleets? What's the relative price difference to run
this?
CLERC: So the price difference of the ship is relatively small it comes the ship by itself, the structure is the same as what you would see on a
conventional ship. What really makes the difference is the engine, which is a dual fuel and so is a little bit more expensive.
What we have said is it costs about 7 to 8 percent more to build a ship like this with dual fuel and green methanol capacity. The second problem is
the one that you alluded to is actually to get the fuel. The fuel is more expensive than traditional oil based fuel.
And it adds up to a cost premium of about 10 percent on the cost of shipping, which so far hundreds of our customers have already signed up for
in supporting also not only our decarbonization agenda but their own because our decarbonization of our scope one is really the decarbonization
of the scope three of our customers.
CHATTERLEY: Yes, I was about to say that. So you already answered my question a 10 percent price premium, but can you give us it in percentage
terms in terms of the number of clients that are already saying, look, we want to do this to reduce the carbon footprint of our supply chain, never
mind anything else? Do you think you can get them all on board?
CLERC: Yes, so we have about 70,000 customers and we have a few hundreds of them that have already signed up for it. Some of them have signed up for
parts of their shipments are there for the entire shipments it's a really meaningful step. Already today, more than 2 percent of all shipments have
already transition to green shipping.
But it is a long way to go until we have them all on board. And it will not happen only by taking bold moves such as ordering Laura Maersk. We need to
continue to work on having the proper financial incentives for a lot of these companies to do the right thing. And that what this essentially means
is a carbon tax.
CHATTERLEY: Yes, I was about to say, what does that actually mean in practice, because you obviously, as you mentioned, have 750 vessels? How
long is it going to take to get all of those from dark to green effectively? And to your point, arguably, it puts you at a relative
disadvantage in the short term, at least with these investment competitors that aren't moving.
The hope is that the incentive in structure can change. And that's government led in order to facilitate that move quicker. What do you need?
CLERC: Yes, so for us, it has to take 17 years if we have to make it by 2040, obviously, but we're quite optimistic actually, because the maritime
sector is governed by the International Maritime Organization. It's a U.N. compact where all countries are represented.
And here over the summer, it accepted a resolution that will essentially create a global carbon tax that will come into effect in already in 2027.
That will provide the right framework for not only Maersk, but for the whole industry to continue to lean into the decarbonization and be actually
a good example of how hard to evade sector can take a destiny into its own hands and really find solutions.
CHATTERLEY: Yes, I mean, you're going to be well ahead in four years' time is that kicks in. I want to talk about your results too. Although
congratulations once again on the launch of this vessel. You warned about seeing a deeper pullback in container demand or global container demand and
volumes to fall as much as 4 percent.
And the worst case scenario that you had I remember before that was around 2.5 percent. Some of that tied to the United States, Europe as well. Talk
me through that. But also China is an interesting one for me. There's still debate out over what kind of slowing we see there too.
[09:25:00]
CLERC: So I think essentially what has been happening and has driven the lower demand for shipment is over inventory after years of delays and
congestions. There has been too much investment into inventory and as has to be worked down. And that's what we've seen play out, especially in the
U.S. during this year.
But also, to a certain extent in Europe, what's happening in China is a little bit different, because whereas the consumer demand both in Europe,
and in the U.S. has always so far kept on improving, or at least surprising on the positive side, what we have seen is the opposite happening in China
where consumer demand has surprised on the negative side.
From a shipping perspective, that has a lot less impact, because a lot of what is being consumed in China is actually built in China, for China, and
therefore, the impact that this is having on our businesses a lot less, but through the expansions that we have had across the supply chain in China,
contract logistics, distribution, and so on. We're certainly feeling also this lower demand that we're seeing for a lot of the consumer goods.
CHATTERLEY: It's interesting, that point you made about some degree of insulation given where Chinese products are produced and then consumed.
Vincent, final question, why Laura? Why -- ?
CLERC: So Laura was actually the ship that was the first ship 140 years ago, that actually transitioned from sailing to what was at the time called
steamship engine. So it's a name that is charged with values for our company, our old company that has been through, that is going through right
now is third energy transition.
And it's symbolic of the pioneering spirit that we have had through all of this transition. And this law immerses being the leader and the pathfinder
for the rest of the industry, I think is a very appropriate name for.
CHATTERLEY: Yes, it's a flag bearer, Vincent, always great to chat.
CLERC: Exactly.
CHATTERLEY: Thank you so much for your time.
CLERC: Thank you.
CHATTERLEY: Vincent Clerc there, the CEO of Maersk sir will speak soon. Thank you. OK, still to come here on "First Move", Kim Jong-Un's trip in
Siberia continues. We'll discuss the meeting and what it could mean for the war in Ukraine with Political Scientists, Author and President of the
Eurasia group and GZERO media, Ian Bremmer, when we return.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to "First Move". And Kim Jong-Un's visits to Russia after his rare summit with President Vladimir Putin Wednesday, North
Korean state media and the Kremlin say Putin has accepted Kim's invitation to visit Pyongyang at a "Convenient time".
Separately, Kremlin Spokesperson Dmitry Peskov announced that Russian Foreign Minister Sergey Lavrov will also visit North Korea in October. This
summit between Kim and Putin comes at a critical juncture both South Korea and Ukraine have suggested that North Korea has already supplied Moscow
with weapons to be used in its war with Ukraine.
Now despite warnings from the West, there is still a lot we don't know when it comes to a potential technology exchange between North Korea and Russia.
Joining us now Ian Bremmer, President of Eurasia Group and GZERO Media joins us now.
Ian, good to have you with us as always, the message seems to be on a visual level at least, we're stronger together, especially when we're
deeply isolated as nations for much of the rest of the world.
IAN BREMMER, PRESIDENT, EURASIA GROUP AND GZERO MEDIA: Yes, the message is, we have no friends other than each other. And let's be clear of all of the
advanced industrial democracies. South Korea was one that had been kind of distant on the Russian invasion of Ukraine issue, Putin now doing
everything he can to directly alienate and antagonize the South Koreans as well.
There is no wealthy democracy that is prepared to work with Russia at this point. There are very few leaders anywhere in the world that are willing to
make a pilgrimage at the head of state level to go say that they're aligned with President Putin. Kim Jong-Un is prepared to do that.
But of course, given how poor his country is, how isolated how much of a totalitarian leader he is, it just shows that Putin is scraping the bottom
of the barrel in order to continue to effectively fight this war.
CHATTERLEY: Your South Korean point though, is an interesting one. They've been clearly very reluctant to do anything other than provide humanitarian
assistance, longer term loans. We saw that at the G20 in particular. Does some kind of weapon exchange if indeed we see that between Russia and North
Korea, perhaps change the calculus for South Korea here too, or is that a step too far?
BREMMER: No, absolutely it will. The South Koreans now see Putin as a much bigger direct problem in promoting the interests of Kim Jong-Un, than they
even see that of China and Xi Jinping. That's a big deal. Remember, I mean, China has really been the supporter, the lender, the provider of aid of
last resort for the North Koreans over the past decades that is not true any longer.
Now, Putin is becoming close to an ally of North Korea, you know, a big state visit welcoming to a, you know, a high technology, bringing in all of
the military leaders to talk about how they can coordinate announcing military exercises. This is really because Russia has absolutely nowhere
else to turn.
You may remember Julia, when you and I were talking about the top risks for 2023 back in January, number one, in my view, was what we called rogue
Russia, the idea that Russia was becoming a rogue state, like Iran, like North Korea, not like a normal member of the G20. Well, of course, Putin
can't go to the G20 anymore.
It wasn't even welcomed at the BRICS meeting by South Africa. And so, you know, what's he able to do? And the answer is Belarus, which is not really
independent -- their leaders willing to come to Russia, and now you've got North Korea. This speaks badly for Russia's trajectory, but it also shows
that Putin himself is likely to become more risk acceptance on the global stage.
CHATTERLEY: What does that mean from here because as you correctly pointed out, at the beginning of the year, he's becoming the sort of de facto
leader of these rogue nations? But what we've also seen through the war in Ukraine is a pulling together I think of the G7 nations. We know that China
has been sort of on the shelf with regards the prospect of weapon supplies to Ukraine.
[09:35:00]
But they also and Xi did attend the summit that he did choose to attend with the BRICS summit, of course, and we saw an expansion of the number of
countries involved in there. So when you look at the sort of three aspects of what we're seeing around the world, what are we seeing in your mind?
BREMMER: I think we're seeing the reaction to the G7 and NATO getting stronger, largely on the basis of national security interests aligning.
We're seeing the Chinese not wanting to break the global system, but worrying that the West is trying to contain them. And that's why they want
to grow the BRICS.
They don't like the U.S. led G7 getting tighter, they don't like the quad and U.S. lead architecture in Asia, that is feeling like it is aligned
against China, they didn't show up at the G20 at the president level, in part because their relationship with India, the president of the G20 this
past year has such a negative relationship with them positive with the U.S.
For Russia, it's a very different story. There felt to be war criminals, by the United States and all of the top American allies. And there are a
number of countries that will do business with Russia. But they don't want to be seen as Russia's friends. They don't want to be seen as supporting or
promoting Russia's invasion of Ukraine.
And you know, what that means is that Putin is becoming more like Iran has been in the Middle East. What does it mean to be a rogue state? Well, for
Iran, it's meant supporting proxy war in the region, promotion of radical organizations like Islamic Jihad, and the Muslim Brotherhood.
It's meant drone strikes, cyber-attacks, espionage, that behavior by Iran in the Middle East, is what I increasingly expect from Russia against NATO
frontline states, Europe, and even the United States and Canada. That's what I think it means for Russia to become a rogue state. The Americans
increasingly have no further way to punish the Russians short of direct invasion.
They've maximized sanctions the Europeans have done 11 rounds. They're not they're saying he's a war criminal, they think he should be in jail for --
sake. So there's very little addition that the Americans can actually do. And that that puts the Russians in a position where they are acting like a
pariah.
CHATTERLEY: Yes, except perhaps supply more energy to the Europeans. Admittedly, it's being pushed and cushioned by China and India, but cutting
off that financial flow all the more important in light of what you're saying. And I would never get you on the show and talk about nation states
without talking to you about one of the other predictions you made.
And that's the sort of techno polar world, this shift between power between nation states and some of the Big Tech companies. And you got a perfect
messy illustration, I think, in what we saw over the Walter Isaacson book on Elon Musk. And the questions, the enormous decision that seemingly was
made over switching on Starlink satellites in Crimea.
And at least from the perspective of Elon Musk, a decision of what the result of using that technology and what the attack potentially could mean
for an escalation in the war. Whatever you think, on whatever side you're on, quite frankly, this is not a decision that any CEO of a company should
be making surely.
BREMMER: It's very interesting. We're talking specifically about whether the Ukrainians would be supported in attacking Crimea, which of course, is
recognized by almost every country in the world as still part of Ukraine. So they're just trying to defend their own territory.
Privately, Western governments have been concerned. But just in the last 24 hours, it looks like the Ukrainians used UK Storm Shadow missiles to attack
Sevastopol, the capital of Crimea held right now by Russia. The Ukrainians are of course unique using drone strikes on increasingly on a daily basis
against Crimea.
When they wanted to use Elon Musk's Starlink, Elon personally, not the management of Starlink, not the CEO, Elon said, no. Said, I don't feel
comfortable. This could lead to world war three. Now whatever you think about Elon's personal decision or you know, what you might think about Jack
Dorsey's personal decision to deep platform Trump from Twitter when he was president, the fact is, these decisions are being made by individuals.
They are not signatories to NATO. They are not members of treaties, they're not been elected by anybody. They're making decisions that are literally of
life or death for Ukrainian national security, and increasingly for security around the world.
[09:40:00]
You're right, Julia, I refer to that as a techno polar world. And it's a very, very different geopolitical order than the one that you and I have
grown up with.
CHATTERLEY: I mean I sort of project this onto a Taiwan China situation. And if Elon were in the same situation with support for Taiwan against
China, and not that we want to predict that or in any way, sort of foresee that in the future.
But again, what would the answer be in this situation? What do you do effectively if you need the technology that one of these tech companies
provides? Do you turn around and I don't know nationalized the technology, because it's what you need in the moment to be able to either prevent a
bigger escalation or a win -- it's kind of frightening.
BREMMER: I mean Elon Musk, in an interview, just yesterday was making an analogy of Taiwan with Mainland China, to Hawaii in the United States.
Look, I mean, I don't think Elon has a geopolitical preference on Taiwan. But I know that his business interest align very strongly with Mainland
China, and not with Taiwan.
In that regard, he's kind of more like LeBron James, for the NBA on Hong Kong, than he is a geopolitical actor. So he's going to do much more of
what the Chinese government, Mainland Chinese government, Communist Chinese government wants him to do.
And so, that means if Taiwan were to need a technology like Starlink, and no competitors exist, facing cyber strike, for example, first of all, Elon
would not be in a position to allow them to have it. And secondarily, the Taiwan needs government would not be in a position to trust Elon to give it
to them, and not provide intelligence along to the Chinese.
By the way, a lot of Ukrainian officials were concerned about that. In their conversations with Elon, they were worried that that was going to get
back to the Kremlin. So of course, if you're NATO, if you're the U.S. government, you have to be thinking, do we need to nationalize that
technology? Do we have to invest in competitors domestically to make them national champions?
I mean, we have a lot of American CEOs that are, you know, building very big businesses, they're entrepreneurs. They're very effective. They're
world class. But that doesn't mean they're patriotic in the geopolitical decisions they make. I mean, when Elon Musk says I wanted to Netflix and
chill, I didn't want to be a belligerent in the war.
That's the position that a lot of American capitalists would be sympathetic to historically, except that when the war started, he was the one saying,
I'm going to give this to the Ukrainians. I'm going to help them defend themselves. You can't do both. And that's the problem, of course that he's
finding himself in today.
CHATTERLEY: Yes, maybe governments have to work on quicker procurement and be in there first. And so that the tech companies like the Microsoft's and
like the SpaceX, or Elon Musk, in this case, aren't the first ones in there making some of these decisions. Ian, we'll reconvene because I've run out
of time. It's always a pleasure. Thank you.
BREMMER: See you soon.
CHATTERLEY: The President of Eurasia Group and GZERO Media there, thank you. We're back after this.
(COMMERCIAL BREAK)
[09:45:00]
CHATTERLEY: Welcome back to "First Move" and to this. Smiling cheering and clapping that's chip designer arm ringing the opening bell there at the
NASDAQ. The ticker tape is flying it's making the biggest public debut of the year so far. Its IPO was priced at $51 a share as we discussed earlier,
giving it a $55 billion valuation, we'll let you know when that begins to trade.
Meanwhile, here's a look at how the markets are trading at this stage. We've also had some data out from the United States this morning to the
Producer Price Index, a key measure of price changes at the factory gate levels. This is the wholesale level rising 0.7 percent last month that is a
touch hotter than expected.
Good news, however, U.S. retail sales also coming in above expectations jumping 0.6 percent from July. That's pause for thought though, of course
for the Federal Reserve and the possibility of future rate hikes. Now, if an industrial dispute between America's big three automakers and union
leaders aren't resolved within a matter of hours, production lines across the country could grind to a halt.
Both sides have until 11.59 p.m. tonight to reach an agreement or thousands of workers are set to walk off the job, the talks not necessarily going too
well. And now the president of the United Auto Workers Union is announcing plans for a targeted strike at a limited number of plants.
Vanessa Yurkevich is outside GMs headquarters in Detroit. Vanessa not sounding good, whether you expect the posturing to be at peak, I think at
this moment? What are we expecting in terms of these targeted strikes if they do indeed go ahead?
VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: The stakes could not be higher right now, just hours to go until potentially a
historic strike by the United Auto Workers Union against all three major U.S. automakers. A targeted strike is a unique approach, something that we
haven't seen used by the union since the late 1990s.
But what it essentially means is that the National Union will call on local unions to strike at specific times, specific dates and at specific
locations around the country. That is to keep the companies guessing, it's also a way for the Union to keep some workers on the job so that they don't
deplete their strike fund.
But of course, this is a risky tactic because when you don't have a contract, the company is also not operating under a contract. And it's
important to note that right now the Big Three automakers have, less inventory than they did in 2019. Shawn Fain laid out this policy, the
strike proposal that he's, that's going to go into effect tonight if they don't come to a deal.
Listen first to how he put the state of negotiations. And then listen to CEO for Jim Farley on where he is feeling like things are standing right
now.
(BEGIN VIDEO CLIP)
SHAWN FAIN, PRESIDENT OF UNITED AUTO WORKERS: We're still very far apart on our key priorities. From job security, to ending tears, from cost of living
allowance to wage increases. We do not yet have offers on the table that reflect the sacrifice and contributions our members have made to these
companies to when we're likely going to have to take action.
JIM FARLEY, CEO, FORD MOTOR COMPANY: On August 29 we made our first offer almost two weeks ago to the UAW. We've made three offers since then, and we
had no genuine counteroffer on any of those.
(END VIDEO CLIP)
YURKEVICH: Now, Ford says they're still waiting on a counter offer to the offer that Bill Ford and Jim Farley walked over to the UAW headquarters on
Tuesday that was a historic offer in their words, a 20 percent wage increase over four years.
[09:50:00]
The Union though, as we know, is asking for a 40 percent pay increase over four years. So still a bit of negotiating left to be done. Will it be
enough? And will it be an enough time before this deadline runs out? 11.59 p.m. Thursday, the strike would start at 12 a.m. Friday that's when we will
see workers walk off the job. Julia?
CHATTERLEY: And we'll be watching, Vanessa, thank you for that. Alright, after the break, from tweaking COVID to tackling cancers, CNN sat down with
the Moderna CEO to talk about the future, that's next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". The CEO of Moderna responding to accusations of price gouging with its commercial COVID-19 vaccine just as
the company races Pfizer to bring un-RNA technology to seasonal flu vaccines. And a new study Moderna says its MRNA flu shot generated a better
immune response in a new study than a vaccine that's already on the market.
The findings pave the way for the company to discuss a path to approval with regulators. The hope is that seasonal MRNA flu vaccines can be
designed and manufactured more quickly than shots based on older technology. Our Medical Correspondent Meg Tirrell joins us now. Meg, I've
lost the ability to say MRNA.
It's been such a while and the price gouging. Let's talk about that very quickly first, because it stood out to me is just interesting from a
perspective of what's changed between the delivery of those COVID vaccines and even how they're just being packaged and delivered today. It's
economies of scale lost.
MEG TIRRELL, CNN MEDICAL CORRESPONDENT: It really is and that was Stephane Bancel, the CEO of Moderna's argument about why he says this is not price
gouging. So their price to the government during the pandemic was about $15 a dose. Now the price in the commercial setting then was sort of more
normal way that the healthcare system purchases vaccines.
It's closer to $130 of dose and that's similar to what Pfizer and Novavax are also charging for their vaccines now. He argues that during the
pandemic, these vaccines were provided in 10 dose vials, so healthcare providers had to buy the syringes separately. He also notes now they're
putting them in prefilled syringes, so that's more expensive.
And as you pointed out, the volume is a lot lower fewer people are getting vaccines in less frequently, so they don't have those economies of scale.
That is how he pushes back on the argument about price gouging. Now a big question for Moderna of course, is how it moves to the future beyond COVID.
You talked about their flu results that actually got a pretty good response from folks at least on Wall Street yesterday watching Moderna stock. But
one of the most exciting programs people are watching from Moderna is in its individualized cancer treatment. Stephane Bancel, the CEO of Moderna
explained how that works in our interview, here's what he said.
[09:55:00]
(BEGIN VIDEO CLIP)
STEPHANE BANCEL, CEO, MODERNA: We'll make a product is individualized because you and I even equals both lung cancer, we will end up having a
different chemical product, that product is injected intramuscular. It's the same technology, the same lipid as COVID or flue we just spoke about.
And what those products do what's in your body. And we've now demonstrated that clinically is, if you basically activate your T-cell to help your
immune system fight your cancer directly. So the product we make is not directly with medicine. But it's the tools for your immune system to
recognize the mutation on your cancer cell that you did not recognize before, so they can take care of your cancer.
(END VIDEO CLIP)
TIRRELL: So, Julia, they've already had results in melanoma and lung cancer, combining this treatment with Merck's Keytruda, which is a very
powerful immunotherapy on its own. A lot of folks saying both for Moderna and for BioNTech, which is, of course, another huge MRNA player, this could
be the future of that technology.
CHATTERLEY: Yes, and I know more of this interview is available on the web. And I'll tweet out more details too, because it's so interesting. Fingers
crossed for success on the cancer fronts too. Meg, great interview, as always, Meg Tirrell, thank you and that's it for the show. "Connect the
World" is up next, we'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
