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Quest Means Business
Football Riot in Egypt; Facebook Getting Ready to Go Public; Amazon Shares Slide; Chrysler Back in Black; EU Blocks Deutsche Boerse, NYSE Euronext Merger
Aired February 01, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, HOST: A flurry of Facebook activity as the social network gets set to connect with investors.
"We will end this journey with fewer people," says the CEO of American Airlines, 10,000 jobs will go just in the US.
And a fight to the finish. An Olympic fencer shows us his world at work.
I'm Max Foster, this is QUEST MEANS BUSINESS.
Well, hello to you. We'll bring you the Facebook story in just a moment. We're also bringing you the latest on what is turning out to be a tragedy in Egypt. Riots after a football match on Wednesday in Port Said have killed at least 25 people, according to Egypt's health minister.
State TV also said roughly 100 people have been injured. More on that as we get it. It's just coming in now.
The company that makes lots of private things public may be about to go public itself. Reports say the world's top social network will file for a share listing in New York as early as today, potentially raising between $5 billion and $10 billion. That would make it one of the biggest IPOs in US history. Reports say Morgan Stanley has been chosen to underwrite the deal.
CNN's Maggie Lake joins us now, live from New York. I'm baffled about the valuation, but I'm sure you're going to explain it, Maggie.
MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: Well, that's the big debate, isn't it, Max? You're right. These are staggering numbers, $5 billion to $10 billion raised would absolutely dwarf Google when it went public. We consider that a real benchmark.
They could be valued at the end of this thing between $75 billion and $100 billion, bigger than Disney, bigger than General Motors, and all for a company that didn't exist just a few years ago.
As you said, this is not -- there's a little confusion about this. They're not going public, they are beginning the official process. So, the clock starts ticking once they make this filing, and then, we would expect them to go to market or debut sometime in the spring.
We've been waiting all day for this. There have been so many rumors, there's so much anticipation. It hasn't actually happened yet. Maybe now that it happens after the close of trade here in the US, we're keeping a close eye on it.
But what's important about this is that we're going to get our first detailed look at the financials of this company. It's a very private, secretive company. How much money do they actually make? Right now, it's only been guesstimates.
And how do they make that money? Is it from advertising? How much of it is from third-party vendors and games that people play on Facebook, the cut they get from that? This is very important information as analysts and investors try to decide, is it a good buy?
(BEGIN VIDEOTAPE)
MARK ZUCKERBERG, CEO, FACEBOOK: All of your stories --
LAKE (voice-over): Call it Mark Zuckerberg's most important status update ever. His eight-year-old company is looking to friend Wall Street with the largest internet IPO on record. But will Wall Street like what it sees?
LAKE (on camera): Facebook claims to have 800 million users. They're on it at home, they're on it at coffee shops like this one in New York City. It's that kind of popularity that has so many people so excited about Facebook's upcoming IPO.
NATE WESTHEIMER, EXECUTIVE DIRECTOR, NEW YORK TECH MEETUP: I think this is a company that is smart enough to figure out in the long run how to really turn their scale into a lot of profit.
LAKE (voice-over): Nate Westheimer is a social networking entrepreneur based in New York. He says the Facebook growth story is still in its early days.
WESTHEIMER: What I think is exciting about Facebook is the fact that they haven't really pushed the gas on driving revenue. They're doing pretty traditional ads right now. They know that they can try new things and they can really try to push it harder, and they're not yet. And they're still making billions of dollars of revenue.
LAKE: Ad revenue growth at Facebook has been impressive. In 2010, the company took in $1.8 billion. That revenue doubled to just under $4 billion last year. And this year, it's expected to hit $6 billion.
Even so, skeptics say Facebook stock is just not worth the risk.
DAVID DIETZE, POINT VIEW WEALTH MANAGEMENT: There's going to be a lot of advertisers that are already there, and more advertising is going to come. But the question is, of course, whether that can grow sufficiently in order to justify paying 50 times next year's earnings.
LAKE (on camera): What do you think, what are you telling clients?
DIETZE: Yes, well, I think it's too much. I mean, here's one of the problems, it's the law of large numbers. The 800 million people on the 7- billion-person globe here that really like Facebook are already there.
Of course, Facebook would come back and tell you, they've got all sorts of potential for data mining, so there's more than advertisement that can be done. You learn about all these users, that could be sold to all sorts of companies. But of course, that's going to raise all sorts of privacy concerns.
LAKE (voice-over): Indeed, privacy remains a huge concern for some on Facebook. They fear the company might try to sell their information to boost profits, despite Facebook's insistence that users have control over how their information is shared.
UNIDENTIFIED MALE: It is always difficult to tell what they're doing with our information. It makes me a bit uneasy. But there's not really an alternative social networking space.
LAKE: It's a critical mass of users that competitors like Google Plus have yet to duplicate. Still, even some die-hard fans say they'll think twice before buying a share of Facebook.
UNIDENTIFIED FEMALE: I'd like to see what happens with it. I'd like to see what the reaction is initially at first.
(END VIDEOTAPE)
LAKE: It's interesting, Max, in this conversation, you have to point out the ghosts in the room. So many people burn, so many people remember the dot-com bust, getting sucked into the euphoria and get left holding the bag.
But there are also all those people who remember missing out on Google when it priced at $85 a share, and it's trading at $580 a share. So, all of that in the room when you talk about whether Facebook's a good buy.
FOSTER: OK, Maggie, thank you very much, indeed, for that. It's going to be a fascinating flotation when it does happen.
Now, shares in Amazon are sliding after it warned it might lose money this quarter. The world's largest internet retailer made a pretty ambivalent forecast, saying it might make $100 million or lose up to $200 million.
For the quarter just gone, Amazon earned $177 million, more than double what analysts had expected. Revenue came in below forecasts at just less than $17.5 billion.
Now, Chrysler is having a much better day today. It's just had its first profitable year since it endured a government bailout and bankruptcy in 2009. The car maker made $183 million in 2011, compared with a $652 million loss the year before, and it says profits could soar to $1.5 billion this year, with revenue up 18 percent.
CNN's Felicia Taylor is at the New York Stock Exchange, and she joins me, now. So, how is it unfolding this earnings season?
FELICIA TAYLOR, CNN CORRESPONDENT: Well, again, it's sort of this kind of mixed bag that we've been seeing pretty much all throughout the earnings season. Amazon stock is down about 8.33 percent right now. It was down as much as 11 percent. This was a big disappointment for the Street. A lot of the previous reports, they've been very good, so this was enormously disappointing.
As you mentioned, the online retailer reporting a 57 percent decline in quarterly earnings, and sales also missed estimates.
Many analysts say that the stock has been overvalued, that it was due for some kind of a steep sell off, but this is more than that. Besides the softness in Europe, though, the company says its Kindle, even at the cut- rate prices that it's got, isn't selling fast enough. And that free- shipping promotion that it tried to launch, that hasn't really been taking off. It's been pretty slow, actually.
The world's largest internet retailer also had less revenue from the video game market and, like I said, pretty disappointing, and one analyst now even gives it a sell recommendation. The concern here is that this could be the start of continued slow growth for the company. Even its forward guidance for the first quarter was 5 percent below estimates.
However, let's go to the upside. Things are looking good at Chrysler. It's making a nice turnaround. The car company reported a fourth quarter and full year profit. Higher sales of Jeep, which is quite well-known, and other new cars pushed Chrysler to its first annual net income since 2005.
Global sales rose 22 percent, and they were even stronger in the United States, they were up about 26 percent. So, it has now reversed its loss that it had in 2010. As you probably know, Max, Chrysler is privately held with Fiat holding the majority stake. The company, as you mentioned, filed for bankruptcy back in 2009.
The company does say that things are going to get even better this year, with revenue increasing by about 18 percent. The CEO says he's got all the elements in place, even with a sluggish economy, which is expected, and the company is running ahead of its recovery plan.
Chrysler has spent the last couple of years basically overhauling its product line, like the Dodge Dart, and developing new cars and trucks, and obviously, that's a strategy that seems to be paying off as people are turning, once again, to buy a Chrysler. Max?
FOSTER: And the big deal, we've been talking about it for a year, haven't we? It was a -- I think it was a year, wasn't it? What happened? Why is it off the books now?
TAYLOR: Yes, basically, this is that deal that possibly could have happened between the NYSE Euronext and Deutsche Boerse. It was worth about $17 billion, and it's just not going to happen.
The European Commission says that the deal would have stifled competition and created a virtual monopoly on derivatives trading, which clearly the marketplace doesn't want to see. The NYSE says it strongly disagrees with the EC's decision, but is now in discussions with Deutsche Boerse to terminate the merger agreement.
Instead, the NYSE Euronext will repurchase shares and try to boost investor value. The shares of the NYSE are little changed on this news, and that's pretty much, Max, because this has already been priced into the marketplace.
We've heard about this for a few days, now, and so it's not really surprising to traders that this has been taken off the table. However, initially, everybody thought it was kind of a done deal. So --
FOSTER: Felicia, thank you very much, indeed, for that. We're going to leave it there, because we want to bring you an update on this tragedy unfolding in Egypt. Riots following a football match there. State TV now reporting 40 people have been killed. The number is rising rapidly minute by minute. Also, state TV saying about 100 people have been injured.
These are the latest pictures we've got from state TV in Egypt, and we now understand, you can't see it in this pictures, but that stadium is actually on fire. Port Said is where we're getting pictures from on this.
It was a football match, 100 people injured, 40 people dead, but that number's escalating as we speak. We're trying to confirm all the details from our own sources, but state TV currently running the story and the pictures, so we're bringing you what we can.
We're going to have more on this in just a moment, and also when we come back, this is the new face of the top of Sony. The troubled company braces for more losses. We'll ask if the new boss can turn things around.
(COMMERCIAL BREAK)
FOSTER: State TV in Egypt reporting that following these riots, 40 people have died, and the figure really is rising every minute, so we're trying to keep on top of this for you. We're going to speak to a reporter on the ground in the coming moments, so do stay tuned.
This was a football match in Port Said, and after the match completed, everyone, as you can see, went onto the pitch and started rioting. But this was early in the process.
We understand that actually the stadium's currently on fire and all sorts of missiles are being thrown around, rocks and sticks, we're told, but we're going to get the latest from a reporter on the ground for you as soon as we can get in touch with him.
Sony, meanwhile, is getting a new boss as it tries to turn its back on years of losses. Kazu Hirai, Sony's executive deputy president, will become president and CEO. He'll take over from Howard Stringer, who moves to the board.
The announcement comes a day before Sony reports earnings. It had -- it has already said it expects to make a full year loss. That would be its fourth in a row. CNN's Kyung Lah shows us why the new chief faces a daunting challenge.
(BEGIN VIDEOTAPE)
(APPLAUSE)
KYUNG LAH, CNN INTERNATIONAL CORRESPONDENT (voice-over): Holding up the new PlayStation, facing public scrutiny about Sony network security lapses, Kazu Hirai was the face of Sony management long before the announcement, but it is now official.
The Japanese native is moving up from executive deputy president to chief executive, taking over the reins from Welsh-born Howard Stringer.
BEN COLLETT, HEAD OF JAPANESE EQUITIES, LOUIS CAPITAL MARKETS: It's been a very unsuccessful tenure. I think the ingrained culture in Sony is such that he has been unable to make the changes that he needed to make, and I don't think he's got the energy for it anymore. So, I think a try and a fail is probably the way we'd describe it.
LAH: Stringer arrived with high hopes in 2005, with a belief that a Western leader would turn around an aging Japanese company. But the challenges were massive, and his tenure exhausting.
Sony is losing the battle with Samsung in the TV business, now eight years in the red. In gaming, despite its success with PlayStation, Sony continued to lag behind Nintendo. But perhaps most troubling, it failed to do what Apple managed with ease, create innovative products consumers love.
Then last year's tsunami and soaring yen plunged Sony into a fourth consecutive year of losses. Analysts widely say Sony doesn't just need to restructure, it must be completely torn apart and rebuilt, and there's little hope a new leader will manage to get that tough job done.
COLLETT: The question is, will he be able to effect change at -- at the aging dinosaur that Sony is, a once very proud symbol of Japanese innovation, and now, really, a struggling shadow of its former self.
LAH (on camera): Hirai's background is in music and gaming, not in the TV and gadgets, where Sony needs the most help. So even before he steps into his new job in April, analysts already fear he may be in over his head.
Kyung Lah, CNN, Tokyo.
(END VIDEOTAPE)
FOSTER: We're hearing now from Reuters that 50 people are dead following soccer riots in Egypt. We're going to join Mohamed Fahmy, he joins us on the line from Cairo. What more can you tell us? What on Earth has happened?
MOHAMED FAHMY, JOURNALIST (via telephone): Well, it's -- it's breaking news, and the fact that two soccer matches going on today between Al-Ahly, which is a leading football team, and Port Said in Port Said stadium, and what we're seeing is an unprecedented situation where thousands of fans just stormed onto the field, and there has been clashes between the two sides.
We spoke to the Ministry of Health, and we know that in Port Said and Al-Ahly, there's 25 people who have died and hundreds injured, and the injuries are because of concussions and deep cuts. And it seems that the situation is unfolding, this is the information we have so far.
At the same time, there is also another situation in Cairo Stadium between Al-Zamalek club and Al-Ismailiya, where there's a huge fire as we speak, now, and it seems that more people have died. The total of these is -- so far is 50, according to the Health Ministry. Max?
FOSTER: In terms of the two separate matches, so you're saying that one stadium's on fire, but the pictures we're looking at now are at a different match, Port Said, early pictures of everyone getting on the pitch. But obviously, then it turned to riots, yes?
FAHMY: Yes. What we're hearing, and it's not confirmed yet, is that the crowd -- the gate that's separating the crowds from the stadium was somehow opened or maybe it has been because there are so many fans have stormed onto the field, and yes, what we're looking at is Port Said and Al- Ahly.
There is presence of police, but it seems that there was not as much interference from the police. Of course, we know now on the political scene happening in Cairo, there has been a sort of a security vacuum lately, with several armed robberies happening in the past two days.
And the situation is a shocking situation to the public to see two soccer matches at the same time. It's -- it's a situation that's unfolding as we speak, Max.
FOSTER: A security official apparently told the Associated Press that the home team, Al-Masry, swarmed the field after they won 3-1. It's a very rare win, so it seems as though it started off as excitement and turned into something else.
FAHMY: Well, sir, we are not very clear if they stormed in due to excitement, but what we know so far is that yes, the team did win 3-1, the home team in Port Said, and with the situation is unfolding, as we see how it happened, we're trying to find out from the minister of interior what the situation -- what started all of this, that's the question. We are trying to get to see where this is going at the moment.
But it's also very suspicious that at the same time, there's also another situation unfolding in Cairo in another soccer game where the clashes are ongoing right now.
FOSTER: Yes, tell us what you can about that. How many injured or killed, or what figures have you got on that one, the Cairo match, not the match that we're watching on TV right now.
FAHMY: Well, the Cairo match, it's Cairo Stadium, it's the biggest stadium in Egypt, it's close -- the situation is unfolding. There's a fire ongoing there. The total of people injured or killed in that match is not specifically the information that I have right now, but we'll definitely be coming to you with more information the next bulletin.
FOSTER: That was a similar picture to what we're seeing right now, as in fans storming the pitch?
FAHMY: Yes, sir, it's similar, but not to that extent. What I'm seeing and hearing is the fire in the background, but I do have better information, but yes, there is some sort of riot, clashes at that -- there, over there at that match, too, sir.
FOSTER: OK, Mohamed, thank you very much, indeed, for that. We can also speak to James Montague. He's author of "When Friday Comes," James Montague, a book about soccer in the Middle East.
I mean, is there -- what's the context here to the sort of sense, the feeling in these stadiums? What can you tell us?
JAMES MONTAGUE, CNN CONTRIBUTOR (via telephone): Well, Max, the problem of violence in Egyptian soccer has really risen since the revolution. You have to remember that a lot of the soccer ultras, the groups that organize themselves and sing at the football grounds, and they're very good at anti-government.
And there'll be large clashes between the fans and the police, and also between sets of fans, especially within Cairo, where you have Al-Ahly, one of the teams involved today, pretty much the biggest team in Africa, against Al-Zamalek. And outside, there'd be a lot of violence.
I mean, nothing seen before on this scale, but when these football ultras are on the front lines fighting against Mubarak and against the regime --
FOSTER: But which stadium? There are two --
MONTAGUE: -- are stage four. It was kind of a security vacuum in a lot of the -- in the football stadiums, and there was a huge rise in violence, clashes between teams and clashes with the police, as well, and you'll see, it's pointed at these groups and how they were creating trouble and division within society.
And obviously, now, what's happened is the security vacuum is such that they say, well, we don't know what this is. When we look at Al-Masry and Al-Ahly's a particularly fierce start compared to Zamalek or Al-Ahly, the reason it's maybe another soccer team within Egypt.
So, very much the context here is a rising violence within soccer, so the authorities really couldn't -- haven't been able to get a grip on it.
FOSTER: I'm slightly -- we've got two different stadiums involved in the story tonight, James. There's one in Cairo, where we're told there's a fire --
MONTAGUE: Yes.
FOSTER: -- so I'm assuming that's what we're seeing right now. And then, there's the other one in Port Said. And Mohamed -- yes, these are the -- I can confirm that these are the pictures from Cairo, the stadium that's alight.
And Mohamed is suggesting there's some sort of suspicion that two similar events that have happened at the same time on the same night. I mean, what could be linking them?
MONTAGUE: Well, there is obviously -- there has been a lot of organized soccer violence against the state and against the institutions of state over the past -- really, since 2007. So, it's too early to say whether that is part of this, whether groups have got together.
We saw the ultra groups of Al-Zamalek and Al-Ahly, for instance, coming together during the revolution and protesting to sit together on Tahrir Square. One of the ultras told me, "We taught the rest of the people of Tahrir Square how to throw bricks."
They were very much -- they're very well organized, very articulate, very political. But also, they would use violence to -- if it felt to further their own political ends.
So, it's not unheard of to have organized violence between football clubs, but something on this scale has never been seen before. There has been deaths in Egyptian football in the past. Tensions and passions run higher here than almost anywhere else in the world when it comes to soccer and the interjection between soccer and football.
So -- but like I said, nothing has been seen like this before.
FOSTER: And in terms of the Port Said match, as we understand it, the home team had a surprising win, and they're the ones, according to some witnesses on the ground, that stormed the pitch in the first place. So, it could simply have been excitement gone wrong, right?
MONTAGUE: It -- it could have been, it could well have been that. You've got to remember, Al-Ahly have been one of the most successful clubs ever in African football. Much of the national team have come from them. But also, they were closely linked to the regime. Mubarak was apparently a huge Al-Ahly fan.
So, they rarely lose the title, they rarely lose matches, they once held the world record for the longest-run number of unbeaten games in a row. So, it would be a cause, a huge cause for celebration for a smaller team to beat Al-Ahly.
So, this could just be a terrible, terrible tragedy that's befallen Egyptian football, much like Hillsborough, England in the 1990s -- in 1989. So, it could just be a tragic accident.
FOSTER: Absolutely. You refer to UK matches, 80s perhaps early 90s, and often violence associated with those. But how often do we see violence on African pitches?
MONTAGUE: Well, certainly in terms of the Egyptian context, it has been -- it has been something that's been rising over the past year, and there have been deaths in Egyptian football.
And you've got to remember, you only have to look back to 2009, some of the things that you saw when Egypt played Algeria in a very heated World Cup qualifier, when there were riots outside the grounds.
And I was there personally to see that -- a week of the kind of nationalism, the rhetoric being ratcheted up in the press, and then coming out in this huge anti-Algerian riot and protests and violence. And even the team itself was attacked when the team bus arrived.
So, there is this undercurrent, partially due to the police being heavy-handed with the fans in the first place. And now, kind of in the -- in the vacuum that's come after the revolution -- and there may be a feeling of payback, but that's something that's certainly been happening over the past 12 months.
But like I said, this -- we don't know whether it's just a coincidence it's happening at two places at the same time, but when there's no information and it's -- you can't --
FOSTER: Yes. I can give you one bit of extra information we've had from Reuters whilst you've been speaking. According to Egyptian television, they've been showing these -- if we can bring them up -- the pictures of the fire at the Cairo Stadium, which is separate from the Port Said ones we've got there. But we'll show you those pictures -- oh, we can't bring them right now, but there's a separate stadium fire.
Apparently, James, there was -- the referee canceled a match between the teams Zamalek and Ismailiya. So --
MONTAGUE: Yes.
FOSTER: Does that add anything to the picture?
MONTAGUE: Well, they're certainly two of the -- two of the other big sides in Egyptian football, and there's always heated -- the three big teams in Egypt, Al-Ahly, Zamalek, Ismailiya, and when they play each other, the stadiums are full, the tensions are high, and there's always -- there's always --
And each has very different principle identity and each has fans that are extremely passionate and well organized. So, normally when you'd see sides at grounds or players being thrown, it's not unheard of, even, some matches to be canceled in Egypt because of crowd violence. So, that isn't that much of a surprise to see.
Whether it's a coincidence, of course, or whether it's organized, then that takes it into a different level.
FOSTER: James, the latest figure we've just got from Reuters, 73 people killed in Egyptian football violence. I mean, this is on a whole new level, now, right?
MONTAGUE: Yes. I mean, actually -- that's unbelievable. That's -- many of these guys I've met and known over the past year, so I'm going to have to make some phone calls and see if they're OK, but that's -- that's awful.
FOSTER: Yes, we wish them well, but in terms of this sort of stadium security, I mean, we've had situations in Hillsborough that you've referred to, and there were problems with the pitch, weren't there? When things did kick off, as it were, they couldn't get out and it sort of concentrated the problem. Is that potential on these sorts of stadiums?
Because it does seem as though they're freely wandering around the pitch, which would at least sort of relieve the pressure on the crowd.
MONTAGUE: Yes, these are old stadiums. Everybody stands during football matches. You buy a ticket, and usually there's another 30,000 people than the capacity allows. So, we're not talking about European levels of soccer safety, here. We're talking very much developing world soccer stadiums, as it would have been in England in the 50s or 60s.
Crowd numbers hugely, vastly overrate, especially for the big matches, and especially for a match which may lead -- it would be absolutely huge. They have tensions often. And extremely heavy-handed security, as well.
In the past, the games I've been to have had almost more security officers than fans there. But like I said, after the revolution, there has been this -- a security vacuum, and in that vacuum, that's when a lot more pitch invasions, a lot more riots, a lot more fights between fans and fights with whatever authorities have been policing it, have been taking place.
FOSTER: An accident waiting to happen?
MONTAGUE: I wouldn't go that far, but I -- certainly you can see that the violence was rising every month, and -- it's very difficult, since there's a lack of trust between, obviously, the police coming back after the revolution and coming back to police these sort of matches, and the fans who see them very much as the same -- the same police force from before Mubarak. Obviously with just different badges on.
So, it was a problem the people were discussing, that whether -- there was already an Olympic tournament had been -- for qualification for the Olympics in 2012 which was canceled, it was supposed to be held in Egypt. They were talking about canceling the league last season because of the football violence. One team got heavily fined because of a big pitch invasion in the African Champions League.
So, these -- I think you could never predict an event where 78 people would die, but certainly this was a huge cause for concern with Egyptian football. The authorities are trying to get a handle of it, and it was certainly something that was rising month by month.
FOSTER: OK, James, thank you very much indeed, for that recap. Basically we've got -- we're getting escalating figures on the number killed in riots. There's some confusion here, simply because there seems to be two different incidents.
The pictures you're looking at now, from Port Said, when a riot broke out after the end of the match. The home team did well and apparently went on to the match, on to the pitch first, and that turned into riots. We understand from Reuters, 73 people killed, but that figure's going up all the time, and more than 100 injured.
There's a separate incident at a stadium in Cairo, where there's a fire, and there also seem to be injuries, but there's a lot less information coming out from there. But a major incident unfolding in Egyptian football tonight. We'll bring you more in a moment.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
FOSTER: We're taking you to Egypt. We've got some breaking news. After a football match in Port Said, the home team and presumed other home team fans and other fans entered the pitch, and there have been riots there, and our sources tell us 53 people were killed there. Other agencies are reporting more, but the figures are going up all the time.
The last half hour, going up every minute, so major incident unfolding at Port Said, where fans stormed the pitch and riots unfolded. We've got a parallel incident at a stadium in Cairo, where a fire has broken out, but we have much less information on that.
The information we're getting mainly is from Port Said, a major incident unfolding after a football match. And it was after the end of the football match, and the home team did particularly well in that. And some suggestion that they got over excited, hit in the pitch (ph) and riots followed. We're going to keep you updated on this as soon as fresh information comes in.
Meanwhile, American Airlines says it plans to cut 13,000 jobs, 15 percent of its workforce. Its parent group, AMR, which filed bankruptcy protection in November, says it needs a more competitive labor structure.
James Little is president of the Transport Workers International Union of America. He joins us on the phone from Dallas in Texas.
Thank you so much for joining us. I know you've been involved with -- in talks in the last couple of hours with the company. What's come out of them?
JAMES LITTLE, PRESIDENT, TRANSPORT WORKERS INTERNATIONAL UNION OF AMERICA: Well, we -- right now we're just finished having a business meeting with admin, which they laid out portions of their business plan. And as you directly said, we've -- we're -- they're looking at losing between at least 13,000 to 15,000 jobs within our groups.
You know, we represent -- that's about two-thirds of our workforce. In the next hour or so, we're supposed to meet with them again, where they're going to break it down with our seven contract groups, and we'll hear specifically what they're looking for.
One of the main items that they're -- they tell them is that they're going to terminate the pension plans, which, you know, that's a major problem for a lot of people. I mean, obviously, it's an obligation going to affect real people with real lives.
FOSTER: Initially, we thought it was 10,000 jobs, but you're saying it could be up to 15,000, so that figure's gone up in the last couple of hours.
LITTLE: No, it's actually between 13,000 and 15,000. We're going to get the actual numbers later on this afternoon, as I said, right now the only thing we've seen so far is their business plan and what they're looking to do to go forward. And that part of that plan calls for a major restructuring of our contracts and their pension obligations.
One of the biggest problems I have with their cutting the jobs is the safety aspects of it, because we represent a large number.
We do 90 percent of our aircraft maintenance in house, and you know, we have a lot of efficiencies in place, and I'm not quite sure how that's all going to shake out and to how -- what degree that's going to impact the workforce. And also the areas where we have large groups of people. I mean, it's going to affect the community as well. It's not just our members (inaudible) that that --
FOSTER: Yes, they really are immense figures. So what are you going to advise your members to do?
LITTLE: Well, right now what we've said is that let's get the -- let's get information. Let's find out what the entire -- look for a $1.25 billion in savings, and going to have to spend some time analyzing what that is, and we're certainly going to have to spend a little time navigating through American's figures to make sure that we agree with the numbers that are -- that are coming forward.
And we're supposed to do that over the next two days with some of our investment bankers and some of our economists and -- who we have on hand and retain. So that's a series of events that's going to place over the next couple of days.
But this is -- this is part of a pretrial process that we're -- they're hoping that we can reach consensual agreements. But the ask (ph) is very deep, as you -- as you -- as you just heard, 15,000 potential employees hitting the street, and that's an -- also impacting their families as well. So with that, and -- I lost him (ph).
FOSTER: OK. We'll leave it there. James Little, president of the Transport Workers International Union of America, has been in meetings with American Airlines. Thank you very much for joining us, and it could be up to 15,000 jobs we're hearing now, going there. It was initially 10,000, but between 13,000 and 15,000.
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FOSTER: The U.S. Republican presidential hopefuls are taking their campaign to Nevada today. Mitt Romney and Newt Gingrich will be drumming up support in the state ahead of its caucus on Saturday. Romney won a solid victory in Florida on Tuesday, bolstering his status as front-runner for the Republican presidential nomination from Tampa, Florida. Sandra Endo (ph) looks at what to expect next.
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SANDRA ENDO, NATIONAL CORRESPONDENT, CNN NEWSOURCE (voice-over): Mitt Romney believes his decisive victory Tuesday night in Florida, a state hit hard by the recession, is evidence he's the candidate to best address the country's top concern this election season.
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FORMER GOV. MITT ROMNEY, R-MASS., PRESIDENTIAL CANDIDATE: People care about the economy, and they understand that that's been my background. They really don't think that people who spent their entire life working in Washington are prepared to take on the problem of getting our economy strong again.
ENDO (voice-over): In an interview with CNN, Romney said he's focused on the middle class, not the very rich or the very poor.
ROMNEY: We have food stamps, we have Medicaid, we have housing vouchers, we have programs to help the poor. But the middle income Americans, they're the folks that are really struggling right now.
ENDO (voice-over): Despite his second place finish in Florida, Newt Gingrich showed no sign of backing down Tuesday night. He didn't call Romney to congratulate him, and insisted he will take his fight for the nomination to the Republican Convention in August.
FORMER REP. NEWT GINGRICH, R-GA., PRESIDENTIAL CANDIDATE: We're going to have people power defeat money power in the next six months.
ENDO (voice-over): Ron Paul and Rick Santorum are also staying in, but Romney is expected to do well in the major contest ahead. So his opponents could be facing an uphill battle.
ENDO: Romney will be campaigning in Minnesota later this afternoon, and will finish the night up with a rally in Las Vegas. Gingrich will also be stumping in Nevada. Reporting from Tampa, I'm Sandra Endo.
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FOSTER: We're getting reports of at least 68 people have died in riots over a football match in Egypt. That's from Egypt's health ministry. Our figure, 68, is going up all the time. Egypt state TV says hundreds of people have also been injured in a pitch invasion in the city of Port Said. We'll keep looking across (ph) this for you.
Also, when we come back, as Britain's top naval destroyer prepares to set sail for the Falklands, Prince William comes in for some stick, 30 years after the Falklands War, the war of words is heating up.
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FOSTER: At least 68 people die in riots following this pitch storming in Egypt. That's from the Egyptian health ministry, that figure. This are pictures from Port Said. We're also hearing Egypt football federation, not surprisingly, really, indefinitely delaying premier league matches following soccer violence. That's according to state TV. But 68 people have been confirmed dead.
There have been dozens and dozens of injuries as well, so we do expect that figure to rise, but we're bringing you the accurate figure as it comes in. Reuters reporting the figure's already higher; in fact, more than 70, but we're bringing you the confirmed figures from the health ministry to you. We're going to bring you more on this as we get it.
For your information, there's another bizarrely stadium incident in Cairo, also in Egypt, of course, where there's a fire following a canceled match, but we're not sure about the violence there just yet. The main violence appears to be in Port Said.
Now a new source of tension is sending a ripple through the waters of the Falkland Islands, or Las Malvinas. Britain is set to boost its naval presence in the region with the arrival of its most powerful warship and the deployment of one of its most visible royals, the Duke of Cambridge.
Now Royal Navy says it's a routine deployment. The ship (ph) believes Argentina is slamming the mission, dubbing Prince William, "William the Conqueror." We asked the U.K.'s foreign office minister for Latin America, Jeremy Browne, what he thinks of Argentina's reaction.
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JEREMY BROWNE, BRITISH FOREIGN OFFICE: Well, I think they're putting that in very emotive terms. Let me put it in less emotive terms, is that in addition to being the second in line to the throne of the United Kingdom, he's also a serving person in the -- in the -- in the search and rescue team in the forces. So he wears the same uniform as other people. He performs the same duties as other people.
That, if you like, is his day-to-day job. And he is doing his day-to- day job. We are not making a particular point of sending him to one part of the world rather than another part of the world. He is being treated in the same way that another person in that job would be treating, working alongside the other people he works alongside in a entirely routine matter.
And he will be in the Falkland Islands, doing routine jobs, in line with his core task of being a search and rescue pilot, rather than being there because he is second in line to the throne.
FOSTER: But you talk about the Argentinean rhetoric, and now David Cameron is accusing them of colonialism. So they're saying it's entirely the other way around. They're feeling that David Cameron's being provocative.
BROWNE: Well, I think he was replying to a -- to a charge which is leveled often by the Argentinians, which is that Britain is behaving in a colonial manner. I don't think we're doing anything of the sort. What we are saying is that the Falkland Islanders have the right to self- determination, just as we believe other people, including actually here within the United Kingdom.
I mean, there is a debate going on at the moment about a referendum in Scotland, where the people who live in Scotland will have the right to self-determine themselves, about whether they remain within the United Kingdom. That's completely consensus, all the political parties in Britain are in favor of that referendum taking place in Scotland. So there we go.
I mean, the idea that Britain is in some way keen to keep people against their will, to enforce a destiny upon people that they don't wish to have, is clearly ridiculous. And the people in the Falkland Islands can decide for themselves their own future and how they live. And they are experiencing a lot of pressure from the Argentinians.
The Argentinians are attempting to enforce an economic blockade on the Falkland Islands. And you've got to look at it for what it is. I mean, here you have Argentina, is a country with 40 million people. It's a G-20 country. It's a big, powerful country.
And there's the Falkland Islands, with 21/2 thousand people. And the big country with 40 million people is trying to gang up with other countries to try and -- to try and enforce an economic blockade on 21/2 thousand people, who just want to live their own lives on these islands, and in some cases, have lived there up to nine generations.
So the point I think the prime minister was making is that if you look at it for what it is, you've got 21/2 thousand Falkland Islanders, who want to have the right to self-determination, just as other people, right around the world.
They want to live their lives free from interference and you have a very big, powerful country in Argentina, which is enforcing an economic blockade as best as they can against them. And in those terms, I think the context of his remarks can be understood.
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FOSTER: Foreign Office minister, there, Jeremy Browne, speaking to me earlier.
We're getting reports of at least 73 people dying in riots over a football match in Egypt. The figures are going up all the time. And that's the figure from the health ministry, and they've been coming up with new figures over the hour. So we expect it go up. There have been injuries, many injuries as we understand it.
Port Said is the location of the stadium you see right now. After the game, fans stormed the pitch, some out of excitement for a great result for them, but it obviously turned into something much more serious. And the figures are going up all the time. Premier league matches in the country have all been canceled for the foreseeable future.
And we also understand there will be an emergency parliamentary session now in Egypt tomorrow, but the focus right now is on calming things down and getting those injured help. And we're getting you the figures as we get them, but 73 -- it's gone up to 73 from about 25 within half an hour. So that gives you a sense of how this story is developing. More as it comes through to us.
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FOSTER: Football match ended, and this is what ensued. This is the early stages of a riot, a riot which has already claimed 73 lives, and those figures are going up, many, many more people have been injured, and the authorities are trying to do what they can. Security officials apparently were in the number of those killed.
There's also a parallel incident in Cairo, a fire at a stadium that seems less serious in terms of injuries. There's the fire. That was -- that was sparked after a match was canceled. So whether these two incidents are linked, time will tell. But for the moment, it seems like a coincidence that two stadium have been caught up in mayhem tonight.
But in Port Said, certainly the picture where you see the crowds, this is Cairo. But in Port Said, certainly a major incident unfolding tonight. We'll bring you the information as we get it from the health ministry.
Car giant Renault and Nissan sees further growth in the emerging markets. CEO Carlos Ghosn told Richard, "You go where the growth is," in our special series of interviews from Davos, all this week, called "Davos Plus." Mr. Ghosn had plenty to tell us about compensation, transparency (inaudible). But before all of that, Richard asked him just how grim he thinks 2012 could be, especially for the fragile Eurozone.
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CARLOS GHOSN, CEO, NISSAN-RENAULT: Europe is going to be in contraction in 2012. You know, I would say not a severe contraction, -3 percent, particularly in the car market. But the rest of the world is going to be doing fine. U.S. going to be up, diverging markets going to be doing well. Even Japan's going to be doing well, because 2011 has been such a terrible year for Japan, it can only do better.
So I think 2012, at the end of the day, is not going to be such a bad year.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: You're an optimist.
GHOSN: I am very realistic. I am very realistic. I'm very realistic, Richard. I'm looking at the trends already in January. I'm looking at all the facts and all the announcements which have been made. I think 2012 is going to be surprisingly better than what we think.
QUEST: They've been trying it for three years and haven't done it.
GHOSN: Yes.
QUEST: Why are you optimistic that they can do it in 2012?
GHOSN: Well, you know, I was -- I'm not optimistic that they're going to do in 2012, but I want them to remove the uncertainty, you know, of even if we know that things are going to be mediocre, it's better that (inaudible) what's going to happen.
QUEST: All right. Let's talk about your company and what you -- and you're seeing. You are making a huge bet, aren't you, into emerging markets?
GHOSN: Yes.
QUEST: You're not -- you're not ignoring developed world, but you're shifting production and resources.
GHOSN: True. We are -- we are because this is where the growth is taking place. You know, it's very simple. When you take the forecast of the global car market in 2012 compared to 2011, we'll be adding 3 million more cars, 75 million moving to 78 million.
Where the 3 million's coming from? One million additional in the United States, 1 million in China and 1 million from emerging market. So you have to go where the growth is. So we investing more in China. We're investing more into the emerging markets.
QUEST: Are you investing more in those bases at the expense -- ?
GHOSN: Not at all. It's additional capacity that we are adding, because we're increasing our market share and we want to really contribute to the growth of these markets.
QUEST: OK. In those markets, there is a growing middle class, there is a growing ability to buy, but what we are seeing globally is a growing inequality. You -- the one and 99. You must be concerned about that.
GHOSN: Yes. Well, you know, I'm concerned like anybody who is in a leadership position, that everything which is divisive at the level of society is not good.
So we need to, you know, first take this in consideration, explain more -- everything which is around the compensation (inaudible), because this about compensation policy, because from one side, you have to attract balance. From the other side, you have to make sure that you don't give the impression you are disconnected from the feeling of people.
QUEST: So when you select bonuses for yourself -- well, you don't, but I mean, the compensation committee does -- and your top executives, is your principle easy does it, not too much, don't fill your boats?
GHOSN: Well, you know, no, the principle is how are you going to explain it? I mean, I mean, first you're going to have to asses the performance of the company. You have to be fair to people bringing the contribution and making the performance of the company. But that's number one.
And second, whatever you're think you're being fair is how are you going to explain? How are you going to make it transparent, understood and accepted by the people inside the company and outside the company?
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FOSTER: We're getting reports of at least 68 people dying in riots over a football match in Egypt. It actually sparked in Port Said, just outside Port Said, just after the match. So after the match ended, fans raided the pitch and it turned into violence. And it's turning into some sort of major incident, it seems.
I've got a quote here from the Dempsey (ph) health minister describing it as the biggest disaster in Egypt's soccer history. And it certainly is turning into a big disaster in soccer history around the world right now, because the figures are going up all the time. We also have a parallel incident at a stadium in Cairo, where we can speak to Ben Wedeman.
Hi, Ben. What can you tell us about that incident?
BEN WEDEMAN, CNN REPORTER: Well, we understand that this is in the Nasser City neighborhood of Cairo, where apparently there was some sort of fire in a stadium. Now according to state radio, that fire has been put under control, and we don't have any information about casualties or fatalities in the case of the fire in Cairo at the stadium.
But certainly, there's no question about it, that what happened in Port Said this evening, when these Port Said football fans invaded the pitch, is no question, the worst case of football violence in Egyptian history.
And it is indicative of the security vacuum that has existed in Egypt since the revolution a year ago, that happened. Since then, you've just not -- you haven't had the kind of security presence anywhere in Egypt, as was the case before the revolution.
And therefore when you have situations like this, a large crowd of very enthusiastic young men, packed into a stadium, as occurred in Port Said, that it's not surprising that it can go out of control, as clearly it has, and this horrendous death toll at this football match -- Max?
FOSTER: In terms of the history of violence in football matches, is this something that has happened before, but not on this scale? Or is this completely out of the blue?
WEDEMAN: There's often been scuffles at football matches in Egypt. The Egyptians take their football very seriously. Everybody seems to identify themselves with one football team or another, and there are organized groups of fans known here as the Ultras, who oftentimes scuffle with opposing fans. But certainly not on this scale.
Usually, in the past, there was a fairly heavy security presence at these football matches to prevent this sort of violence from happening. But what has happened in the last year, Max, is that people have increasingly had less and less respect for the police, given the decade of police brutality here.
And so there's a very antagonistic attitude among many Egyptians, and certainly among young Egyptians, towards the police, to the extent that oftentimes the police will simply pull away because they know they are the focus of so much resentment and anger -- Max?
FOSTER: Ben, we've just got the latest figure from the health ministry -- 73. We can assume that's going to rise, because we've got these injuries as well, more than 100, according to Reuters.
WEDEMAN: Then that's certainly -- I'm sure that number will increase as well. Oftentimes when this sort of incident happens, when there's violence and disorder and chaos, it takes a very long time for the Egyptian authorities to often get the situation under control. So I'm afraid that we can expect the death toll and the number of injured to increase further as the evening wears on -- Max.
FOSTER: An emergency session of parliament being called tomorrow. I guess they'll decide what to discuss, once the, you know, the picture of this has unfolded.
WEDEMAN: Well, this would -- and that would be the third session that parliament has held since the opening last week, and but the question is, what can parliament do? Really, at the end of the day, the power in this country rests in the hands of the Supreme Council of the Armed Forces, the military who took over after Hosni Mubarak resigned on the 11th of February, 2011.
And certainly one hears increasing criticism about the military's ability to run this country of 85 million people. And we'll probably hear more criticism from parliament when it meets tomorrow in this emergency session -- Max.
FOSTER: And, Ben, just very quickly, if you can, give us an update about what we know about what happened in Egypt tonight.
WEDEMAN: Well, we understand that after the team from Port Said played the Al Ahly team, which is a Cairo team, a team that many people here in Cairo are wildly enthusiastic about, what happened was that the play, the fans of the Port Said team went into the pitch after the game was over, after Port Said beat the Al Ahly team, and soon thereafter, the precise details are still unclear, fighting broke out between the two sides. And here we have it, 73 dead, according to the deputy health minister, more than 180 injured.
In addition to that --
(CROSSTALK)
WEDEMAN: -- as I mentioned, there was this incident in Nasser City, which is a suburb of Cairo, where there was a fire in a stadium, and there have been --
FOSTER: Could I have a pen?
WEDEMAN: -- reportedly between fans there as well.
FOSTER: Ben Wedeman, thank you very much indeed. A major incident unfolding in Egypt tonight. We are going to continue with this coverage for you. Jim is going to join you after the break with the very latest on the tragedy in Egypt.
END
