Return to Transcripts main page
Quest Means Business
Oil Execs Grilled; World Cup Security Guards Strike
Aired June 15, 2010 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Don't tar us all with the same brush. Big oil says we're not all to blame-BP is.
A World Cup walk out. Security guards go on strike over pay.
An ambush advertising or orange pride, why FIFA is seeing red over those ladies' dresses.
I'm Richard Quest. We have an hour together, because I mean business.
Good evening.
Investors tonight have one more reason to steer clear of BP. A credit rating down grade that signals it is financially under threat. BP is presiding over the worst environmental disaster in U.S. history and the company's facing the wrath of Americans from Washington to Louisiana, Alabama, Florida, along the Gulf Coast.
The company's reputation in the marketplace is now being firmly trampled upon and the latest developments this Tuesday show that things could be about to get worse.
Come and join me over in the library as I bring the latest development to you. Downgraded: Now you are familiar of course with bonds and the need of the rating agencies, well, Fitch has cut BP's credit rating to BBB down from AA. The significance of course, is it is just two notches above junk status. I have to say that is a long way, those two notches. So we're a considerable way off that. But the fact it is less the A grade status, and gone to B, is significant. And it is the second downgrade in a month.
The reasons are many, but what Fitch is saying is, it is all to do with the higher flow rate. Because the more the flow rate, then of course the more oil is escaping and it is upon that basis that the fines will be levied, the civil fines, by the U.S. government.
Ultimately, Fitch is now saying it will be "surprised", their words not ours, if a dividend is paid, or as if some sort of square count is not used. So the pressure is very much on, as you are aware, for BP to put that dividend money into an escrow account.
There has been an adverse reaction to the downgrade, down to BBB. If you look over here, you'll see that the borrowing costs of BP-now this is per 1 billion of debt, have gone up by $14 million. According to Bloomberg they-BP's bonds have gone up by 1. 4 percentage borrowing costs. Now, what this mean is for a company like BP which has more than $20 billion worth of borrowings, if and when they refinance at this lower rate , it is going to cost them more money, around $14 million for every $1 billion of borrowing. So that is what's been happening with BP. If you look at the effect of the share price, interestingly, maybe it was down 4 percent, best part of 4 percent. Of course, that has to be seen in perspective 9 percent down yesterday. So, all in all, we are now looking at a loss of some 48 percent from its recent high for the shares of BP.
Serious stuff, you might worry, the consequences of this disaster are already reaching far beyond BP. And they could eventually hit the entire oil industry one way or another. Because the moratorium on deep sea drilling is affecting companies from Shell to ExxonMobil, to Conoco Phillips, the whole industry.
Executives from the world's largest companies are talking on giving evidence on Capitol Hill, and among them, BP's president of North America. Brianna Keilar joins me now from Capitol Hill.
Good afternoon to you, Brianna. This is fascinating isn't it? Talk about divide and rule. It's not our fault. They've shoved the blame firmly to BP.
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, certainly they have. What you really saw, for lack of a better term, was these other executives from these four other oil companies, ExxonMobil, Chevron, Shell and Conoco Phillips, basically throwing BP under the bus. Saying, you know what, we would not have drilled this way, we would not have made this mistake.
But I have to tell you, Richard, there are a lot of Democratic lawmakers who aren't so sure. And they say, they believe that BP is actually the rule and not the exception when it comes to taking risks, and safety standards. And also, in a very colorful example that they make, when it comes to the oil spill response plans, as it turns out, most of these oil companies have their oil spill response plans prepared by the same company. Listen to this exchange between he Democratic chairman of one sub-committee-not the one that had this hearing today-but talking to Rex Tillerson, the head of ExxonMobil.
REP. BART STUPAK, (R-MI) CHAIRMAN, SUBCMTE. OVERSIGHT & INVESTIGATIONS: You plan is written by the same contractor that BP is. BP is relied on Marine Spill Response Corporation to provide response equipment. And so does your plan. So, if you can't handle 40,000 how are you going to handle 166,000 per day, as you indicated?
REX TILLERSON, CEO, EXXONMOBIL: The answer to that is when these things happen we are not well equipped to deal with them.
STUPAK: So when these things happen, these worst-case scenarios, we can't handle them, correct?
TILLERSON: We are not well equipped to handle them. There will be impacts as we are seeing. And we have never represented anything different than that.
STUPAK: And you have all said that-
TILLERSON: That is why the emphasis is always on preventing these things from occurring.
STUPAK: Sure.
TILLERSON: Because when they happen, we are not very well-equipped to deal with them. And that is just a fact of the enormity of what we're dealing with.
KIELAR: Very plain spoken right there, you can see, Richard. But, you know, Republicans on this committee have been saying even though there has been this oil spill we cannot give up on drilling for domestic oil, otherwise the U.S. will just be relying even more on foreign sources of oil. And I have to tell you, that if you think that today is and interesting hearing, which certainly it is, and it really puts new meaning into that word we say, when someone is on the hot seat. Wait for Thursday. We are going to see Tony Hayward, the head of BP, on Capitol Hill, testifying before Congress for the very first time.
QUEST: Brianna, let's just look ahead to Tony Hayward. Is there any chance that members of Congress will decide, you know, there is only so much you can beat up Tony Hayward, and actually that could backfire on them. Or is it just open season on Hayward.
KEILAR: I think that especially for Democrats it is going to be open season. Because what we have seen-so many hearings now. It is hard to even count how many there have been. And you've seen that BP has been hammered on, again, and again. And here, in the U.S., a lot of Americans have-they have taken on a sort of demonic view of BP. And certainly Democrats have honed in on this. And some Republicans aren't really defending BP, although they are certainly still defending domestic oil production. And so I think that really that's not the end of it. I think we'll continue to see that, certainly, on Thursday when Hayward is here.
QUEST: And you and I will talk, hopefully, more about that as this week moves on, because we will obviously have full coverage of Hayward on Capitol Hill. Now President Obama has been visiting Florida. It is his latest tour of the Gulf region and, again, perhaps nothing new but he did say it. He's promising to hold BP to account for what has taken place.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: But let me say to the people of Pensacola and the Gulf Coast, I am with you, my administration is with you for the long haul, to make sure that BP pays for the damage it has done and to make sure that you are getting the help you need to protect this beautiful coast and to rehabilitate the damaged areas, to revitalize this region and to make sure that nothing like this ever happens again. That is a commitment I am making to the people of Florida, and to the people all across this Gulf.
(END VIDEO CLIP)
QUEST: In around six hours from now, Mr. Obama will use his first Oval Office speech, where he will address the American people on the question of the oil spill. Needless to say, CNN will bring you live coverage. The times, if you wish to stay up, it will be 2:00 a.m. in Central Europe, 1:00 a.m. in London. And there will be a special edition of "LARRY KING LIVE", which will follow immediately there after.
When you and I come back, in just a moment, South Africa is supposed to be a beacon for the rest of the continent during this World Cup. The tournament is a shining light on labor unrest. We'll be live in Jo'burg, on that.
(COMMERCIAL BREAK)
QUEST: Some of the world's top strikers are on show at the World Cup in South Africa, many of them on the pitch, even more of them, those strikers, at least, outside the stadium. More than 100 Match Day security guards have been protesting at Johannesburg's Ellis Park, that they have been ripped off. They say their employers paid them--promised to pay them far less than they were originally promised. Now they want FIFA to intervene and to confirm the correct rate for the job. Their earlier protests over pay by stewards in Cape Town and Durbin; thousands have already quit, handing in their uniforms at Durbin's Moses Mabeda (ph) Stadium. The police have taken over security at the venues. The striking workers say they will not put anybody at risk. Isha Sesay is following the story for us in Johannesburg. Isha joins me now.
Is this a storm in a football cup? Or are there really serious issues underpinning that could actually have an affect on the World Cup?
ISHA SESAY, CNN INT'L. CORRESPONDENT: Well, look, Richard, what the South Africa police services say that they have the situation completely under control. The match tonight, which is going to kick off in about 20 minutes from now, between Brazil and North Korea, will have 1,000 members of South African police services, conducting inner perimeter security duties. That is the situation at present.
We also know, as you pointed out, South African police forces will take over security at four stadia here in South Africa. Durbin, Port Elizabeth, Cape Town, and Johannesburg. The police are saying they have the situation under control, but undoubtedly it is somewhat of a blemish on the preparations. Nobody wanted to see this. You know, the authorities were completely convinced ahead of this walk out that they had the situation under control and this World Cup would proceed hitch free. That is not the situation now.
But South African police saying this, I want to read you a statement from the national commissioner, General Becki Selle (ph). He has expressed his satisfaction that the matches to be played in the stadia, in those host cities, that I mentioned, will be secure and that the fans can enjoy the games in safety. He says, we've activated necessary and adequate contingency plans to different stadia in the country. A priority call of action, according to the mandate is to ensure the safety of the tournament.
So there you have it. That is the word from the police here in South Africa. But it is just an unpleasant situation that detracts from all the activity on the pitch, Richard.
QUEST: When we look at this, I mean, if you are going to go on strike, you have your moment of opportunity, Isha. And it is when you can get maximum impact, so to that extent it is not surprising, is it? That they are doing this?
SESAY: No, absolutely. You hit the nail right on the head and as we speak to people here in South Africa, you know, that is the feeling. That they are taking advantage of the moment when the whole world is watching, when the spotlight is on South Africa. They are looking to exploit the situation and that, you know, in some quarters certainly not providing or presenting any sympathy for the security guards, because the feeling among some people is that it is purely opportunistic, Richard.
QUEST: Let us just consider for one second, the football luck we have seen. We are going to have a World Cup economic competition in a moment. Are you impressed with the games of the day?
SESAY: The games of the day, the matches between New Zealand and Slovakia, ended in a one all draw. It was fairly uninspiring. But I have to say it was quite a treat to watch the match between Ivory Coast and Portugal. You know was some big stars on the pitch, Richard. The likes of Didier Drogba, of Ivory Coast, and of course the captain of Portugal, Cristiano Rinaldo, so that in itself was impressive. But you know that match ended in a goalless draw. So what can you say? You can't get too excited, Richard.
QUEST: Would you bet your hat on the results of tonight's game.
(LAUGHTER)
SESAY: I like this hat very much, Richard. But I will, indeed, put it in for a wager and I will put the result, the victory, for Brazil.
QUEST: Ah!
(DESK BELL CHIMES)
SESAY: For a victory. They are the highest ranked team versus the lowest ranked team.
(DESK BELL CHIMES)
QUEST: Ah, that is not a bet. That is-all right. Many thanks, Isha Sesay, I should say joining us from Johannesburg. I'm not sure that bit of head gear would go terribly well.
Now, join me again, over in the library, these charming lasses may look like happy football fans, giving the Dutch team some colorful support. But they have all got FIFA in a bit of a tizzy. Now they are all wearing identical dresses. So, you might think, well, a nice bit of coordination. It doesn't have a logo or any corporate markings. But they are being accused of ambush marketing by FIFA. The Bavaria beer gave out the dresses, Bavaria Beer Company, and FIFA now says it is considering legal action against the brewer. The official sponsor of the World Cup are allowed to use the World Cup for advertising, and among them the U.S. beer brand, Budweiser which has paid millions of dollars for the right, for the privilege. Bavaria Beer denies planning any market or ambush advertising. They say in the course of the 2006 World Cup in Germany supporters wearing orange lederhosen bearing the logo, were asked to take them off at the matches. Alex Thomas is there.
Thank goodness, for one moment I thought we were either going to get Alex in orange lederhosen or an orange dress. But no, we have got the CNN issued regulatory jacket.
Is FIFA just being spoil sports about this?
ALEX THOMAS, CNN INT'L. CORRESPONDENT: Lederhosen? In your dream, Richard!
(LAUGHTER)
Yes, of course FIFA are being spoil sports about it, to a degree. When you have a Holland game, everyone dresses in bright orange and the ladies are not different. So, we filmed these people unknowingly, thinking they were just colorful Holland fans. And FIFA clearly were one up on us. And I think if Bavarian brewery is trying to deny it is an ambush marketing campaign, well, it is going to be a tough one for them to deny, because I spoke to two of the girls involved, Barbara and Merta, and they admitted the company did pay for their flights over, and their tickets to the game. Although they didn't realize ambush marketing was against the law.
Here's how they described how they were treated. They went into the game in Danish outfits, changed into Dutch outfits while they were in the stadium, much to the delight of the people around them, and that is when it caught the attention of FIFA.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: You have different kinds of ways of letting people out.
THOMAS: Did they go over the top?
UNIDENTIFIED FEMALE: I think, yes.
UNIDENTIFIED FEMALE: Girls were falling down and-
UNIDENTIFIED FEMALE: Yes, I bruised my legs and they're pushing.
UNIDENTIFIED FEMALE: And I told the girls they put them in jail for half a year because of the crime, the ambush marketing law. And the girls were crying and they were really upset, calling their parents. Yeah, they were really, really upset.
(END VIDEO CLIP)
THOMAS: So, the girls detained? Thirty-five of them got released quite quickly, within minutes of a lawyer being contacted. But Barbara, herself, was held for a further two hours. She claimed to me, Richard. Nonetheless, FIFA have responded to us and said this company has a history of flaunting the rules, as you said, going back to the last World Cup. The women were not hurt at all, they weren't officially arrested at any state, and they go on to make a further point it is this: "The orange dress is part of a marketing and PR campaign already running in commercials at the brewery extensively in Dutch media, and as such a recognizable item associated directly with the brewery in question. FIFA is only targeting the real authors of this campaign and all available legal remedies are being considered."
So, in other words, they're letting the girls go off and they are going to go after the brewery company, if they can do it.
QUEST: Alex, before you dash off. Look, I've seen ambush marketing before, this has to be at the lowest level of ambush marketing.
THOMAS: Very subtle label on a girls' dresses, it was about that large. But you know, the bottom line is Budweiser, the official beer of the World Cup, they paid millions of dollars and they are very keen to stop any rival brewery getting in on that action, Richard.
QUEST: And we don't have any pictures of you, Alex, actually inspecting just how large that label was, on those young ladies' dresses. Alex-
THOMAS: They're around, I'm just not going to show them to you right now.
QUEST: Well, don't worry. I'm sure some of your colleagues will happily for a free keg of beer when they get back. Alex Thomas, who is in Johannesburg for us tonight.
Let's turn to other matters of major business. When we think about computers Microsoft software, Microsoft has been looking a bit like a dinosaur by companies backed by Google and others. Well, it still does rule the roost in software, when we talk about Office, Office 2010 has been launched. We'll be in San Francisco in just a moment. Take a look.
(COMMERCIAL BREAK)
QUEST: Microsoft is fighting to win back its old image of being the top dog when it comes to software technology. It has brought out a new version of its ubiquitous Office software suite. It is supposed to be much more Web friendly. Now, Jon Fortt is here to explain exactly what Office 2010 means. And actually whether it is a major development.
Jon, hang fire for one second, in San Francisco. We know, of course, that Jon recently got a tour of one of Microsoft development labs. Exactly where they make this sort of thing. We need to see that first.
(BEGIN VIDEOTAPE)
JON FORTT, SENIOR WRITER, "FORTUNE": I'm here at Microsoft's Envisioning Lab, were researchers are dreaming about the future of productivity. And this, is a giant touch wall, where we have different ways to interact with data. This is pretty cool. Open this up, we've got information about mobile phone adoption. This raw data that is constantly flowing, Microsoft can show this to customers and really get their feedback on how they might use something like this.
Lots more cool stuff in the lab. Let's go take a look.
Well, now we are inside the belly of the Envisioning Lab, at an idea for sort of a workstation, a desk. Tell me what's going on here.
DAVID JONES, MICROSOFT ENGINEER: As you have more screen real estate, does it make sense to keep having larger and larger application windows? Or at some point do application windows go away and you do your work in something like a virtual information space?
FORTT: So, here I've got my whole project space spread out across these three screens. You know, I've got little documents on sheets of paper that I move around down here. And here, I've got different windows, into different aspects of my life. Maybe I don't want to just look at my project. Maybe my wife calls during that and I can take a look at what is happening at home.
JONES: Exactly. We think people have, the play multiple roles during the day. They work on different projects and there is a huge cost to switching between these, on a work station today. So, we're experimenting with concepts that allow you to create different work context, and switch rapidly between them.
FORTT: OK. Let's take a look at what else you have, over here.
JONES: Here we have a concept that is going to be familiar to gaming fans everywhere. Project Natal, which is coming to the Xbox 360 later this year, rather than using a traditional game controller, you can use your body to move information around. Now, there is some chance that technology like this might find its way to the office.
FORTT: It may not sound realistic for a traditional office environment, but for example, in an operating room, where a doctor can't touch of anything, because he's in the middle of a surgical procedure. The ability to navigate through imagery data can make the difference between life and death. So, there are some legitimate applications.
(END VIDEOTAPE)
QUEST: Fascinating stuff, Jon. I wonder, do you get a feeling for how many ideas in the lab never get any further than the lab, but are part of just the creative process, to get the juices flowing?
FORTT: You know, I think, Richard, most of them don't get out of the lab. And one of the things they were really careful to emphasize is that the point of the lab isn't to try to have a crystal ball and predict what the future is going to be. But it is really to get clients juices flowing when the come in. The want to show folks this stuff, the CEOs and CIO, who are their clients. And get them talking about how they might use something like this, in the future. So, in a way they are helping Microsoft to kind of steer their research and development, to come up with maybe the best ideas, for what could go into future versions of office.
QUEST: Whether or not we-I mean, most of us, at some point, touches a windows contraption, or piece of Window software, certainly, in the major corporate environment. But even with their last advertising campaign, about "I'm a PC," they still lack the sexy coolness-perhaps-or am I just being out of date?
FORTT: Well, you know there is nothing particularly sexy about Office. You have to admit that. And when we think about Microsoft, we to tend to think about windows, after all, it is on 90 percent of the PCs out there. But Office for the business audience, and for the investors, particularly important, because a third of Microsoft's revenue, and more than half of its operating profit actually, comes from the business division that is anchored by Office.
So that is why this consumer launch today is particularly important. And it is more than just Word, Excel, PowerPoint, Outlook, for e-mail, those core programs that most of consumers know. There are also things like Access, Database Management. They are also products for sharing. And in this particular product the online component is the most interesting.
QUEST: Right.
FORTT: Microsoft has actually come out with a free online suite, to try to take some of the mindshare away from Google and some others, who are trying to encroach on its territory.
QUEST: But anyone who has followed Microsoft knows that the company has had to admit, firstly it was slow on the Internet. Secondly, recently it has admitted, yet again, that it has been slow to build up its Windows mobile and a satisfactory mobile suite. Thirdly, that it has not necessarily got ahead of the cube on cloud computing.
Do you get the feeling that it is now ahead of this curve?
FORTT: I think it is too soon to say they are ahead of the curve, Richard, But I think it is also important to point out Microsoft is the one company that has a really huge business here in Office. It is not to their advantage to be the first mover and cannibalize that with free web apps. They want to take stock of the field and see what others are doing and what they really need to do to respond.
And interesting, Forester pointed out that more than two-thirds of people on the Internet use Microsoft Office frequently. About 4 percent use Google Docs. So this isn't a case where Microsoft is really having their lunch eaten by Google, but this online version that they have come out with now is really pretty good. And there is a business model behind it. They are using what we like to call the "freemium" model. They tempt people with the free version, you can very easily throw your credit card number to Microsoft to upgrade to a paid version. They think that this will actually drive more sales, get more people on the current version and be good for the bottom line.
QUEST: And, Jon, as always, we're delighted to have you on the program. Making sense and-next time I want to go see that lab. That looked a cool desk to play with, at least.
FORTT: Very cool.
QUEST: I have to say, I was interested in that.
All right. Jon, many thanks. Jon Fortt, joining us from San Francisco.
In Germany, it turns out quite a lot of investors are having a bad month at the office. Why is everyone feeling so clever about the future? It has nothing to do with the football, in a moment.
(COMMERCIAL BREAK)
QUEST: Hello.
I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN, where the news always comes first.
Uzbekistan has reopened three small border crossings with Kyrgyzstan to allow in sick and wounded refugees. Most of the border remains shut after 100,000 people who fled ethnic clashes, overwhelmed makeshift camps in Uzbekistan. Days of rioting targeted ethnic Uzbeks in Kyrgyzstan, which has killed 171 people, according to an official count. The country's interim leader says that number may be far too low.
Britain's prime minister, David Cameron, says the Bloody Sunday massacre of 13 civilians in 1972 was unjustifiable and wrong. Prime Minister Cameron today announced the findings of the 12 year inquiry into the shootings in Northern Ireland. The report found that British soldiers fired without provocation at Catholic demonstrators in Londonderry. It contradicts a hasty 1972 investigation that suggested that some victims had been firing weapons themselves.
Ahead of his first Oval Office speech to the nation on Tuesday evening, President Barack Obama has promised to face the oil spill disaster in the Gulf with what he calls an unprecedented response. Mr. Obama spoke in Florida. It's his fourth visit to the Gulf Region since the April the 20th oil rig spill.
The commander of U.S. forces in Iraq and Afghanistan had to be escorted from a Congressional hearing after fainting. General David Petraeus told CNN he got dehydrated and he hadn't eaten breakfast. In his prepared remarking, the general said progress is being made in Afghanistan, even though security violence has intensified. His statement said the situation on the ground will become more difficult before it gets better.
And the stock markets now. There are five in a row. And that means European indices closed higher on Tuesday. It was the fifth day in succession. That's why the bell.
(RINGS BELL)
QUEST: For the first time it's happened since the beginning of March. A rather modest gain in London masked a big jump in the shares of the TV company, BSkyB. BSkyB was up 16.5 percent on a take over bid by Newscorp, Rupert Murdoch's media company. Newscorp already owns nearly 40 percent of BSkyB. It wants to take the company wholly owned. The company rejected the bid, but it's generally believed in the markets they're not averse to a deal at a higher price.
BP down almost 4 percent. BP now off 48 percent since its high.
Banks were well. In Paris, SocGen rose, up 4 percent. It's going to aim to double net profits in two years.
Infineon one of the day's big winners, up more than 3 percent on that.
Now, the gains in Germany come in spite of a survey, the ZEW survey, that showed a dramatic drop in investor confidence. The institute, which measures how investors are feeling about the coming six months, says the mood is sharply down. So the confidence plunge is serious because it's now just under 29 points, all the way down from nearly 46 points that it was back in May and far, far worse than economists have expected. And that's the core point here.
The ZEW says it's a sign of how worried investors are about the sovereign debt crisis in Europe and the effect of government budget cuts on European economies, especially, of course, with Angela Merkel's $80 billion budget cuts herself.
Not everyone is bearing on what's happening in the economy. The executive recruitment firm, Korn/Ferry, says employers are now hiring again and, in some sectors, things are back to pre-recession levels.
Gary Burnison, chief executive of Korn/Ferry International -- Gary is with me now.
Good evening to you.
GARY BURNISON, CEO, KORN/FERRY INTERNATIONAL: Good evening.
QUEST: We mustn't make too much of this, but at the same time, we can't ignore it, can we?
But at the -- but unemployment is still conditionally high.
BURNISON: It is. It is. And there's really, you know, there's a two tier labor pool. There are those in the C suite that have skills and the like. And many, many people are unemployed right now. I mean, in the United States, the unofficial rate is, you know, 17 percent.
QUEST: So who is getting these -- well, first of all, just where are these jobs?
In what sectors are they?
BURNISON: Well, for us, it's been fairly broad-based. But particularly we've seen, you know, activity in financial services and technology, particularly over the last few months.
QUEST: At what level?
BURNISON: In the C suite.
QUEST: So there's a premium on executives who know what they're doing and can help any company in these difficult times, is that fair?
BURNISON: That's fair.
QUEST: And...
BURNISON: That's very fair.
QUEST: And are they -- are -- are companies prepared to pay for that?
So are you seeing not only a job, but a bill -- but a, you know...
BURNISON: A paycheck.
QUEST: A pay -- well, right.
(CROSSTALK)
BURNISON: -- work in the United States, compensation is down considerably...
QUEST: Yes.
BURNISON: -- say, 15 percent. In Asia, it's up. The -- in Europe, it's neutral.
QUEST: So join those strands together.
What have we -- what can -- what generalities can we say?
BURNISON: Well, the generalities, U.S. companies are looking east of New York, south to Texas and west to California. You know, as the...
QUEST: Anywhere except?
BURNISON: Anywhere except.
QUEST: Anywhere except?
BURNISON: Well, because, look, consumers have driven the economy in the United States for the last 30 years. I mean, you know, they've been consumed with consuming. And as you -- if you look out over the next few years, it's hard to see what's going to replace that. So I think it's -- it's more like a Nike swoosh in terms of the economy than anything.
QUEST: But certainly Europe, at the moment, could not be regarded as a bonanza for job creation?
BURNISON: No. But we believe you invest in a crisis. So I'm -- I'm here for the next three months for that particular reason, because we see opportunity in the Western economies around the world, despite the heavy debt levels.
QUEST: Well, I'm -- I'm in difficulty, you know, accepting this, that there's an opportunity at a time when U.S. unemployment is nearly 10 percent...
BURNISON: Sure. Sure.
QUEST: -- and European unemployment is nearly 10 percent.
BURNISON: Sure.
QUEST: And by the best guesses, it's not coming down soon.
BURNISON: It's going to be -- it's going to be slow.
QUEST: Yes.
BURNISON: But if you look at the demographic trends, Germany, France, the U.K., the United States, it bodes well for younger people entering the workforce over time here.
QUEST: Richard Burnison...
BURNISON: Believe it or not.
QUEST: Well, I'll take you -- I'll take you up on that, which means for those of us who are over 40...
BURNISON: Yes.
QUEST: -- heading toward...
BURNISON: Oh, boy. Yes.
QUEST: Is it that bad?
BURNISON: It's that bad.
QUEST: So it -- I mean, you know, look, I'm 48.
BURNISON: I'm 49.
QUEST: So I'm not -- I'm marginally better than you are if we both lose our jobs tomorrow, except you're the chief executive and I'm sort of...
BURNISON: Yes.
QUEST: If there's one piece of advice that you would give to any exclusive, a C suite executive at the moment, what would it be?
BURNISON: Focus on the long-term. I mean this is the time to plant the seeds for spring. Don't hunker down. Focus on the long-term strategy and growth and invest.
QUEST: Many thanks, indeed for coming in.
We much appreciate it.
Now, we need to talk about the market and what's happening in the Atlantic crossing over there to Wall Street, where major indices are continuing to make strong headway.
Alison Kosik is at the New York Stock Exchange -- Alison, good evening to you.
So there we are. We all -- I don't know if you could hear that last interview, but those of us who have a -- who sort of might need a job, it's looking better for us.
How are the markets today?
ALISON KOSIK, CNN CORRESPONDENT: The markets are looking terrific today. Right now, the Dow right now at a triple digit rally, up 182 points. This has been going on most of the day, Richard. You know, investors are really pretty much following the rally that we saw in the global markets. We're seeing worries about European debt ease, at least for today. The euro is up. The dollar has dropped. These kinds of things are giving momentum to the markets.
But the real test is going to be in the final hour of trading, Richard. That's when we've seen things reverse course completely. I mean in the final hour, over the course of a few days, we've seen things drop.
So we'll keep an eye on it for you -- Richard.
QUEST: The truth is, is it not, Alison, there is no strong -- we had -- I mean there was a bit of minor economic news today, nothing terribly exciting, some manufacturing data and factory data. But there's no real reason for a market to be up the best part of 2 percent in a day.
KOSIK: I mean, listen, it could be bargain shopping. And also, you know, we did get some good news out of Boeing. Boeing said that they're boosting production of its 737. They said existing customers are putting in even more orders. Also, there's a research firm, a tech research firm that said that this year it expects the personal computer -- that personal computer sales are going to grow about 20 percent this year.
So these kinds of things are giving the market that staying power, at least a little over an hour before we see the closing bell. But it's this kind of positive news that gives investors hope that the economy is showing signs ever so slowly of turning around.
But you were talking about employment. That, of course, is a lagging indicator. And we are still stuck in a rut as far as employment goes -- Richard.
QUEST: Many thanks, indeed, Alison.
We will talk in the days ahead...
KOSIK: Sure.
QUEST: -- because, of course, we've got the second...
KOSIK: Thank you.
QUEST: -- quarter reporting season and the results of that to report on.
Alison, many thanks, indeed for that.
When we return in a moment, forget the footing on the bench, the Economic World Cup is where the action really is. The team sheets -- read balance sheets.
How does North Korea measure up against Brazil, in a moment?
(COMMERCIAL BREAK)
QUEST: Exciting stuff as the World Cup moves inextricably on. And the gathering momentum on QUEST MEANS BUSINESS -- forget the footing. We're talking no ambush marketing or droning horns on this part. We're looking at gains in Group G. The football pundits have labeled it the group of death. At least it's looking that way for North Korea.
The lowest ranked team in the World Cup are playing the highest ranked, Brazil. The game kicked off about 10 minutes ago. The score is still 0-0.
The test, of course, is how they compare in economic terms. North Korea's economy is one of the world's most centrally directed and least open. Essentially, we can't find out any facts that we could say verifiably on the economy.
Brazil, on the other hand, is showing strong growth. Its economy grew 9 percent in the first quarter, not behind -- far behind China, which grew 12 percent in the same period.
If Brazil does not economically trounce North Korea, I'll eat me bell.
Let's go and join Jim Boulden over in the library.
JIM BOULDEN, CNN CORRESPONDENT: I watched the first 10 minutes of the match so far and North Korea hasn't done so bad, really, actually.
QUEST: That bell could be very (INAUDIBLE).
BOULDEN: Yes.
(LAUGHTER)
BOULDEN: That would be a tough one, wouldn't it?
QUEST: All right, so, we've got this group.
BOULDEN: Yes.
QUEST: We've got Group G. So we've got these two playing at the moment. But earlier in the day, we had these two playing, Ivory Coast and Portugal.
BOULDEN: Yes, Portugal. 0-0.
QUEST: 0-0, right?
BOULDEN: 0-0.
QUEST: Was the score?
BOULDEN: Yes.
QUEST: It -- that was the football score.
Should that have been the economic score?
BOULDEN: If you look at who's doing better at the moment, I would actually say the Ivory Coast would have had to win. If you think of all the problems in Portugal, you think of the loss in GDP, you think of the problems with the euro and, in fact, I -- it was interesting, GDP growth last year, of course, Portugal was minus 2.7, 159th in the world. We actually saw growth in the Ivory Coast...
QUEST: But...
BOULDEN: -- 42nd in the world.
QUEST: Here you have the rear -- this makes it quite clear. So remember, it's the Economic World Cup. Portugal, 37 versus '96. But as you head toward a penalty, Portugal had the austerity plan which came in on June the 9th, whereas the Ivory Coast had its own penalty in the form of asking for further assistance from the IMF's HIPC Fund.
BOULDEN: But it has actually gotten some of the approvals from the IMF. And IMF says that it's meeting some of the targets. And, to be fair, OECD is very happy with the austerity plan coming out of Portugal. They put out a very nice press release for Portugal last week.
QUEST: Ivory Coast, as a team, as an economic team, great infrastructure, paved roads, telcos, in -- Internet activity.
Portugal?
BOULDEN: Well, one Web site called the main city in Ivory Coast, the main coast, the New York City of West Africa. It's got the best port between the North African countries and Capetown. So it has a lot going for it. It even has oil now. And, of course, we know it's got the cocoa, it's got the coffee.
QUEST: All right. So, if we were to put that into perspective on this day, we know the result was 0-0, but you say...
BOULDEN: Yes, I think...
QUEST: -- economically...
BOULDEN: Sure. I mean let's figure, obviously, a much bigger economy, a much richer country. So it's impossible to compare the two that way. But if you're talking about somebody who's got -- who's got growth going on, a country who's got things going for it right now, you've got Ivory Coast. So in that way I'd say they were equal.
QUEST: All right. Jim, move over to one side. Here we go. Now, we promised to show you some of your World At Work pictures.
This picture was sent in from Daniel Scott (ph). I'm not sure which is Daniel Scott. Well, he says he works in a small audit firm in Bloemfontein in South Africa. That is his World At Work picture. It doesn't look like too much -- I think we can probably see it just in the corner there. There's a bit of football maybe taking place. But that is our World At Work picture.
Many thanks, Jim.
We'll have more -- another one tomorrow.
You can e-mail your pictures of the World At Work to quest@cnn.com. You Twitter us at atrichardquest.
We will show you the best ones on this program. But the core of it, remember, is you, your colleagues, your family at work and the World Cup -- quest@cnn.com.
The weather forecast now. It has been -- Guillermo, I think when you're watching the World Cup, we need a picture of you at some point.
GUILLERMO ARDUINO, CNN METEOROLOGIST: OK.
QUEST: And the weather is glorious.
The weather is glorious.
ARDUINO: Yes, I'll send it. I'll send a picture and I'm happy to report the weather will continue to be nice. You see here, the only thing is that we have some winds in the English Channel and into the northern parts of France, but it's getting better. It's all because of this low pressure center here.
We're going to forget about the one in the eastern parts of equipment, because this is the main system that will continue to bring some bad weather.
I'm going to be specific now for a little bit. This is also affecting the northern sections of Spain, Oviedo, Santander, Bilbao and San Sebastian. They are next to the border with France, the Basque Country.
And also here in France, we're talking about especially here around Cannes and San Tropez, all the way to Arilar (ph), those sections, Monaco and Nice included, are going to see bad weather and Piedmont, as well. The Amanti Region here, Liguria of Italy, those Northern sections.
You see, there's the satellite. The weather came from the south. It was quite detrimental in the northern parts of Algeria and Tunisia. And now, it is actually changing. So you see the strong winds will continue, especially into tomorrow morning.
Now, when we put all that together and we translate it into airport activity, we will see rain in Milano, the winds in Paris, in Amsterdam. But we do not see something that bad. Perhaps in the northern sections of Germany, Schleswig-Holstein and into the south is where -- the south of Germany, too, is where we may see some winds up to 55 kilometers per hour here near Denmark. So there, at some airports, we may see problems.
Temperature wise, it's pretty nice. The east continues to be quite hot, I must say. London, as Richard was saying, glorious, 21 degrees, sunny skies. That's it.
But look at Glasgow now, even higher than that.
Now, as we go to the East Med, because the problems are in the West Med right now, things are fine. For the next two days, even getting better in Turkey, in Cyprus, Crete, the Aegean Sea, the Mediterranean Sea, of course, the Bosporus, the Black Sea. Things are fine.
We are looking at South Africa, too, more rain in coastal parts. The cold air is here to stay. It is very cold to many people. It looks like three degrees, but it feels like minus two, Richard. So it's quite chilly and it's also 8:49 p.m. -- back to you.
QUEST: Guillermo at the World Weather Center, we thank you for that.
Information I need to give to you from BP on the efforts to clean up the spill in Mexico. There's been a small fire on a ship that was helping to capture the leaking oil. The fire was quickly extinguished. It's believed that it was caused by lightning. There were no injuries, thankfully. But it has caused a shutdown of the containment operation. The effort is expected to start up again in a couple of hours, but obviously, as the containment effort has shut down, well, there has been more oil leaking into the water.
Live pictures right there. You can see those on your screen as I'm looking at them myself.
In a moment, investors say it's a safe haven. Vietnam has a fondness for gold, in a moment.
(COMMERCIAL BREAK)
QUEST: Welcome back.
The price of gold has risen. At the moment, investors are casting around for somewhere safe to put their money. A weakening dollar is also an encouragement for that as an investment.
Look at the price of gold now, at about up $12 on the opening price. One analyst currently quoted it at $1,233. It's about $2 below the high of the day. It is not a record today, although in the last two weeks, we have seen an overall record. And certainly when you allowed for the weakening euro in euro terms, the dollar has been -- the gold has been trading at record highs.
It's the spirit and part of the reason is that Vietnam has clung to the metal as a currency.
Andrew Stevens takes us to the markets in Ho Chi Minh City.
(BEGIN VIDEOTAPE)
ANDREW STEVENS, CNN CORRESPONDENT: I'm Andrew Stevens at a gold and jewelry market in Ho Chi Minh City in Southern Vietnam. Now, it used to be said that there were three currencies in this country -- the Vietnamese dong, the U.S. dollar and gold. This is the basic measurement of gold here in Vietnam. It's called a luang (ph). It's about 1.3 ounces, worth roughly about $1,500 at the exchange rates of today.
You can still actually buy a house using gold, such is the love affair of the metal in this country. It's seen very much as a safe haven. And if you consider the recent past, the Vietnam War, 400 percent inflation in the 1980s, it's easy to see why the Vietnamese put a lot of trust in gold as a currency. You can still deposit it in the bank and get interest rates paid on gold.
This woman tells me she spends hundreds of thousands of dollars a year buying gold, which she then uses to speculate in the property market.
"It's not easy for gold to lose value," she tells me, "while the U.S. dollar is losing value."
To give you an idea of gold's reputation as a safe haven here, in 2008, when the global economy first started to wobble and inflation here went to over 20 percent, Vietnam became the biggest importer of gold in the world. More than 70 tons of the precious metal came into the country. There were also gold trading houses, more than 20 of them dotted around this city, where people went to buy and sell gold. It's a sort of gold exchange.
So is gold trading floors, though, are now closed by edict of the Vietnamese government. They were worried, they said, about the fragile conditions in those gold trading floors, meaning they're worried about too much speculation.
So, buying gold has come back to the streets, if you like, come back to shops like this. This is a gold and jewelry store. And you can see the daily price for gold advertised very prominently on the front of this store. All along this street, you'll see prices for gold being quoted.
There's also an interesting generational change occurring. The younger Vietnamese are now using paper currency more so than gold. They trust the financial system more than their parents did. So as time goes, we're likely to see more and more people using the banking system as it should be used.
But, with gold prices still way over $1,000 an ounce and likely to stay that way for some time to come, it's difficult to see the lure of gold diminishing too much in a country which has had such a long love affair with this metal.
(END VIDEO TAPE)
QUEST: Andrew Stevens reporting there, Ho Chi Minh City.
The government -- the Vietnam government has other reasons to worry about gold buying. Imports last year actually led to a shortage of dollars in Vietnam.
Now, if you are concerned and watching or need to know about Brazil versus North Korea, they're 20 minutes into the game and the score at the moment, well, it's jolly exciting that, isn't it?
0-0 at the moment. There's still a long way to go. Brazil, North Korea, 0-0 and let's all remember -- let's not forget, of course, the economic World Cup says Brazil should win this one handily.
We could be wrong. We have been wrong before. We will be wrong again. There will be a Profitable Moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment.
Earlier, we told you about the lovely ladies in their orange and the Bavaria Beer Company that decided to do a bit of ambushing of its marketing. There is something delicious about the battle between FIFA and those companies engaged in ambush marketing.
It's not the first time there have been problems with this World Cup. Some months ago, a South African airline, Galula.com (ph), tried to tie itself unofficially to the event. FIFA called time on that particular escapade.
And you'll be well aware that the Olympic Committee, the International Olympic Committee, is fierce in protecting its rights. Sponsors go berserk when someone tries to muscle in.
I suppose it's reasonable if you pay a lot of money for rights, you said get what you pay for. But I have a sneaking admiration for the plucky underdogs with few resources and a lot of chutzpah. It would be a very dull world without them.
And that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I hope it's profitable.
"WORLD ONE" starts right now.
END
