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Quest Means Business
Search for Flight MH370; Sanctions Against Russia; Ukrainian Response; US Sanctions; Dow Has Strong Gains; European Markets Up; Russia's Market Shows Gains; Economic Fallout; GM's Admission
Aired March 17, 2014 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: Diageo, the makers of Guinness, celebrate St. Patrick's Day at the New York Stock Exchange. They're not at the New York parade. We'll find out why they broke a 20-year sponsorship of the parade. He's hitting the gavel hard, he may have been at his own drink. Today is Monday, it's the 17th of March.
Our lead story, Russia recognizes Crimea as a nation. The US and Europe reject criticisms that sanctions are toothless. We'll talk about that in a moment.
Also, of course, the search for Flight 370 gets wider and wider and more information starts to come out.
And a new recall and an admission of failure. General Motors' new chief exec apologizes on video again.
I'm Richard Quest, the start of a new week, and of course I mean business.
Good evening. Tonight, we focus on the global fallout from the Crimea referendum, and we'll get to that in just a second. But we do need to update you on the search for Malaysia Flight 370.
Ten days since the plane disappeared, and still no sign of it. Search crews from 26 countries are now scouring an ever-growing part of the sea and part land. Australia will lead the search efforts in the Indian Ocean. The US is scaling back its manpower in the region.
On Monday, a Malaysian newspaper report says the plane could have flown low to escape detection. It was "The New Straits Times" that said it. They didn't say where the information came from, and it's being discounted by others.
The chief exec of Malaysia Airlines says he believes it was the copilot who said the final words from -- to air traffic control, "All right, good night." So, we'll update you with the search and what's happening as the program moves on.
There have been developments in today's other big story. The West has acted swiftly after Crimean authorities said Sunday's referendum produced an overwhelming vote to split from Ukraine. The US and EU are now placing sanctions on more than two dozen Russian officials and pro-Russian agitators from Ukraine.
The president of the United States, Barack Obama, said the sanctions targeted specific officials for undermining Ukraine's sovereignty. The list includes, incidentally, the ousted Ukrainian president Viktor Yanukovych and two top advisors to Vladimir Putin. Mr. Obama said there will be more sanctions if the Russians continue to interfere.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We'll continue to make clear to Russia that further provocations will achieve nothing except to further isolate Russia and diminish its place in the world.
The international community will continue to stand together to oppose any violations of Ukrainian sovereignty and territorial integrity. And continued Russian military intervention in Ukraine will only deepen Russia's diplomatic isolation and exact a greater toll on the Russian economy.
Going forward, we can calibrate our response based on whether Russia chooses to escalate or to deescalate the situation.
(END VIDEO CLIP)
QUEST: The European Union also took action, hitting 21 Russian and Crimean officials with separate sanctions. The EU is standing by the United States in calling Crimea's referendum illegal. Nina Dos Santos has the details from London.
(BEGIN VIDEOTAPE)
NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT (voice-over): The results may not have been a surprise, but Crimea's decision to join Russia still spurred Europe into action. In Brussels, foreign ministers announced targeted sanctions for 21 individuals deemed key to Russia's incursion into Ukraine's breakaway peninsula.
FRANK-WALTER STEINMEIER, GERMAN FOREIGN MINISTER (through translator): On this list, people are going to stand that carry very different kinds of responsibilities. There will be eight top politicians of the Crimea itself, ten people from Russia, Duma members
And members of the Federation's council, and it will be three military personnel: the commander of the Black Sea Fleet and two military personnel who carry responsibility for the southern and western military area.
DOS SANTOS: The US went further, naming both the Ukraine's deposed president, Viktor Yanukovych, and Crimea's own prime minister among those liable to face asset freezes and travel restrictions.
(MAN SHOUTING IN RUSSIAN)
DOS SANTOS: Penalties for people, but no widespread sanctions for the states themselves, leaving analysts to brand the measures toothless.
DOS SANTOS (on camera): With $500 billion worth of trade on the table, there's a lot at stake for both sides. Russia relies on EU-bound exports for some 15 percent of its GDP, while on the other hand, Europe gets a quarter of its gas from Russia. Meaning that untangling both parties' web of shared interest would have significant ramifications all around.
DOS SANTOS (voice-over): The threat of financial punishment hasn't deterred Crimea from pursuing a new future under Russian domain. After adopting Russia's local time zone, it'll switch to the ruble before phasing out Ukraine's hryvnia by 2016.
The battle lines may have been drawn, but the financial fight is by no means over. The EU has left itself room to reinforce its initial move, with the bloc's heads of state meeting on the matter at the end of the week.
WILLIAM HAGUE, BRITISH FOREIGN SECRETARY: It is possible to add to these measures, of course. This is not a list that is set in stone for the future. It is possible to add other figures in the future, depending on how Russia reacts to the referendum in Crimea, which has been a mockery of any real democracy.
DOS SANTOS: In the meantime, Crimea and Russia have four more days to reflect upon the true cost of the weekend referendum.
Nina Dos Santos, CNN, London.
(END VIDEOTAPE)
QUEST: Hungary's foreign minister was in Brussels for that meeting that Nina was talking about. Hungary shares a border with Ukraine and is dependent -- heavily dependent on Russian gas imports. I spoke to Janos Martonyi and asked him if Budapest would back tougher sanctions on the Russians if the current ones didn't succeed.
(BEGIN VIDEOTAPE)
JANOS MARTONYI, HUNGARIAN FOREIGN MINISTER: We hope that there will be no need for that, because also this morning, we repeated and underlined again that diplomatic and political solutions should be found through negotiations between the parties.
If it comes to the so-called third stage, of course, that is a completely different situation. What we have to do now, I believe, is that we have to make a very thorough impact assessment. We have to evaluate clearly what might be the consequences.
And at the same time, of course, we have to show solidarity among ourselves, given the fact that different member states might be affected differently. So, that's why I think that the principle of solidarity and the burden sharing will have to prevail.
QUEST: That's really important, Minister, because it seems likely that it will have to go to the next stage, and that means that individual countries, Hungary for example, you get gas from Russia over the Ukraine pipeline, that could be in jeopardy.
The UK, obviously, has a vast financial sector. That could be hurt by sanctions against Russia. So, how detailed are you now getting those discussions as to who's going to suffer what?
MARTONYI: Well, never be pessimistic, but always prepare for the worst. And that's what we are exactly doing now. As you say very correctly, the situation of different member states are different.
Some are almost entirely dependent upon oil and gas supply. Some are running huge financial services serving a large part of Russian economy and also private citizens. Some are selling arms. Some are having billions and billions of dollars or rubles or investments.
But all in all, yes that's true, some may be more severely affected than some others. And I would also agree that Hungary is certainly among those countries, given also the size and the geography position, that would be among the more affected countries.
QUEST: Cynics will say that when push comes to shove, individual countries will put their own interests before a collective response, and that eventually, everybody will just fray off into the distance. What's your view on that, in terms of the meetings you've held, that beggar-they- neighbor policies will eventually come through?
MARTONYI: It wouldn't work in the European Union because you shouldn't forget we are highly dependent upon one another. We have a single market. We have, for instance, as far as Hungary is concerned, 75 percent of our exports going to the European Union.
So, OK, for the time being it may be that one or the other is more seriously affected, but at the end of the day, we would all be in the same ship. And if there is a problem with the ship, we would all suffer. So, I think solidarity and, as I said, burden-sharing will prevail.
QUEST: Minister, finally, ultimately, the strongest message needs to be sent. The president says that, the president of the -- the US president, the president of the Commission says that. But I look at these stage one and stage two, and I can't help feeling, Moscow's just laughing. Oh, big deal, they're going to offer a few sanctions. Get the troops over.
MARTONYI: Well, I don't think it's -- they are laughing. But even if this was the case, I don't think that this is a longterm laugh. So, if you look at the economic figures and the economic strengths of all the participants in this game, sooner or later, everybody will realize who will be on the winning and who will be on the losing side.
QUEST: And are you prepared to lose the Russian gas in Hungary?
MARTONYI: Well, we wouldn't like it at all, but this is the reason why I believe we now have to speed up the establishment of the single market, we have to speed up the work on our own interconnections.
And yes, indeed, we would like to have much more access to outside sources, inter-area shale gas or LNG from the United States. That's why we should have four countries' ambassadors address the latter to the United States Congress so that the exportation of gas be liberalized as soon as possible. This is just one factor which could be helpful in an emergency.
(END VIDEOTAPE)
QUEST: That's the foreign minister of Hungary talking to me earlier. Our senior international correspondent Ivan Watson sat down with Ukraine's prime minister, Arseniy Yatsenyuk, and asked the PM what Kiev's next move should be.
(BEGIN VIDEOTAPE)
ARSENIY YATSENYUK, PRIME MINISTER OF UKRAINE: This is the question that has no easy answer. Because you know, we need to find out how to respond on these acts that Russia is making and how to find, then, appropriate solution of the crisis like we have.
That's what -- was you who indicated, the most difficult existential crisis, not only within the borders of Ukraine, but in the entire Europe. So, if they move military, can we do like that? Is it an appropriate response? Not sure. We don't need another third World War.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Are we on the verge of a new war in Europe?
YATSENYUK: We are on the brink of the disaster, but brink is not the disaster. We still have a chance for the peaceful and diplomatic solution. So, I would say that military power on the Russian side, and on the other side, on the side of the European Union, on the side of the US, it has to be strength and wisdom.
We need to take -- to undertake all tools and to use all tools and measures in order to stop Russia from violating international law and stop Russia from the military intervention into my country. So, we welcome everything that can fix this crisis.
(END VIDEOTAPE)
QUEST: To Washington, now, where our senior White House correspondent, Jim Acosta, is with us. Jim, the White House has come out with these sanctions, and they say there's more to come. What -- from your reading of the situation, how determined is the administration on this one?
JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, I think they are determined, Richard. And really, they have no other posture but that at this point. This is a real low point in US-Russia relations, really one of the lowest points since the Cold War, and this could get worse.
As you know, today President Obama warned Russia these sanctions from the US, along with those announced by the European Union, can be ratcheted up over the coming days, depending on Russia's next steps.
The White House fired off the first round of sanctions this morning, targeting aids to Vladimir Putin and top Russian officials, as well as former Ukrainian president Yanukovych and the acting leaders of Crimea.
As for that referendum over the weekend -- and this just gives you a sense as to the rhetoric that's being ratcheted up over here at the White House -- senior administration officials are all but calling it a fraud, Richard, pointing to pre-marked ballots that the US says came into various polling stations during the voting.
But despite all of that tough talk, White House press secretary Jay Carney says Vladimir Putin still has a way out of this crisis if only he takes it.
(BEGIN VIDEO CLIP)
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The more Russia does to violate Ukraine's territorial integrity, to unlawfully seize Ukrainian assets, to ignore Ukraine's sovereignty, the higher the price will be to Russia and the higher the -- and more intense the isolation that Russia will suffer as a result.
(END VIDEO CLIP)
ACOSTA: Now, how did Putin respond to all of that? As you know, Richard, the Russian leader signed a decree recognizing Crimea as an independent republic. That could be the next step to annexation. That is something that White House officials are anticipating, but they're saying they will not recognize.
And for as who might be next on the sanctions list, Richard, White House officials are not ruling out anything. They're not ruling out sanctions against Vladimir Putin himself and perhaps, more importantly, they're not ruling out military aid to Ukraine. So this could get ratcheted up in a hurry, Richard.
QUEST: Jim Acosta, who will be at the White House following that for us. Jim, we thank you.
Crimea is moving closer to Russia politically and economically. It's adopting the ruble. There are costs involved in leaving Ukraine. And that's what we're going to look at next.
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(COMMERCIAL BREAK)
QUEST: Well, to look at the markets, you wouldn't really know there was a crisis in Ukraine. The market opened the day and it almost ended up at the best of the day. There were worries that a trade war would hit global economies.
Today, the numbers in the US and Russia show there's not much concern about what's happening. In New York, strong gains. The Dow Jones was up just over 1 percent at 181 points after falling for most of the week.
It was a similar story in Europe. The major indices did pretty well. They all were -- they were all higher by the look of it. The Xetra DAX, which actually would be the market you would think would fall the furthest because of the relationships with Germany and Russia, it was up the highest of the big four.
As for what happened in Moscow, the MICEX index, well, take a look and see how that market performed. And it was up -- it was over -- this is over the course of the year. The shares jumped, actually, if you take a look at how they performed just on today. Well, there was a gain in that market as well.
Let's pull all the strands together in the way it's been moved forward. Jens Nordvig is with me and joins me. Jens, good to see you.
JENS NORDVIG, HEAD OF GLOBAL FOREIGN EXCHANGE STRATEGY, NOMURA: Thank you.
QUEST: Thank you for coming in. The situation at the moment, I've read the various pieces of research that have come from Nomura, when we look at the options, the economic options, these sanctions seem like small beer.
NORDVIG: Yes. I think that the problem is that the main Russian export that could be a very powerful sanction is the energy exports. And Europe needs that energy. So, it's not some kind of luxury good where we can just impose some sanction, we don't really need it.
It's crucial for Europe to have that energy, and therefore, going to very severe forms of sanctions is a very, very difficult step for the European Union to take.
QUEST: So, what do they do? They've sanctioned several people. All right, you can sanction some more people. But fundamentally, you're going to have to do something that's got teeth. What is that something?
NORDVIG: Well, I think today we've seen a first stage, and this stage I'd describe was sort of a very severe stage of good being involved. In between, there's sanctions on bank transfers.
And I think you can actually see it in the currency markets today that big banks are already worried about are they going to be able to transfer money in and out of Russia, and therefore the currency markets are becoming very liquid already.
QUEST: Right. Crimean lawmakers say the Russia's ruble is now the official currency in the region. You can use the Ukrainian currency as well, though they say that the central bank there will be set up as a regional bank, a regional central bank of the Russian central bank. This is all but done.
NORDVIG: Well, so, obviously in that part of the world, we have circulation of different currencies already, so there's also dollar circulating in that region. So a transition toward ruble is certainly not unthinkable.
QUEST: No, but it's happening. It's happening in front of our eyes. The ruble is becoming the currency, the central bank is being absorbed into Russia. The economy, I assume in the fullness of time, will become ruble - - well, it will be ruble-dominated. So, this is all over, bother shouting. What can be done?
NORDVIG: I think we've seen that the military control of the area, there was no doubt about that, several days ago. I don't think it's a big surprise that -- in terms of what currency they're going to use. That's also going to change. I think the big question is, is this going to move beyond the borders of Crimea.
QUEST: The Russian stock market was up 4 percent. The MICEX index gained 3.9 percent. This -- if -- and the Dow's up 1.1 percent. And the European board -- you heard me say this. This is perverse. If we're supposedly looking at some form of sanctions and Cold War back to the 1960s, this doesn't -- this isn't reflected in the markets.
NORDVIG: It's always very tricky, because the market is forward- looking. So, we had a lot of the bad news priced already, and now we have a little bit of relief because we know some of the pieces in the puzzle.
But we don't know what is ahead. If there is a step towards further military escalation, I don't think there's any doubt that the market would trade negatively again.
QUEST: If it does go further.
NORDVIG: Yes.
QUEST: But at the moment, it's smooth. It doesn't seem to be.
NORDVIG: At the moment, we're in a very strange, uncomforting equilibrium.
QUEST: Thank you for coming in and talking to us.
NORDVIG: Thank you.
QUEST: We'll follow it closely. Thank you very much, indeed.
The problem that took General Motors ten years to fix, and it cost at least a dozen people their lives. Now, the chief exec of the company says GM's very top people are finally on the case. This is QUEST MEANS BUSINESS. Good evening.
(COMMERCIAL BREAK)
QUEST: The quote really says it all: "Terrible things happened." Mary Barra, the new chief exec of General Motors, says the company messed up when a defect emerged with some of its cars, and people died as a result.
The ignition switch fault can lead to the engine turning off while the car is still running. Barra's latest video message for GM employees has been released to the public.
(BEGIN VIDEO CLIP)
MARY BARRA, CEO, GENERAL MOTORS: These are serious developments that shouldn't surprise anyone. After all, something went wrong with our process in this instance and terrible things happened.
As a member of the GM family and as a mom with a family of my own, this really hits home for me. We have apologized, but that is just one step in the journey to resolve this.
(END VIDEO CLIP)
QUEST: What do you make of it? CNN Money's Peter Valdes-Dapena is with me. What do you make of that?
PETER VALDES-DAPENA, CNN MONEY CORRESPONDENT: Well, it's certainly good that she's saying that things are going to change, and they should. And I would hope that a lot of the changes she's talking about should have already been in place for a while.
Because if you look at the processes leading up to this recall, a lot went wrong. There was just a lot of miscommunication, mismanagement, people -- the problem itself was actually fixed in 2007, but nobody inside GM knew that it had been fixed. So they had engineers were spending months and months and years investigating to try to figure out the problem. It had been solved already.
QUEST: So, boil it down for me. What is actually the issue here? Is it --
VALDES-DAPENA: Sure.
QUEST: -- the original fault? Is it the recall? Is it the post- recall behavior? What actually is the issue here?
VALDES-DAPENA: OK. Well, in the simplest term, the issue is you've got a defective part in the car, right?
QUEST: Right. That happens.
VALDES-DAPENA: That happens from time to time, sure. Cars are complicated. The problem is, first of all, I think GM didn't recognize right away that this was a safety problem. They dealt with it as sort of an inconvenience. So, your car shuts off while you're driving it. OK, you can still steer, you can still brake.
But hello, your airbags aren't going to work in a crash. They didn't deal with it as a safety problem, and then later on, they spent years trying to figure out what was causing this problem. They knew that cars were crashing with the ignition turned off, but why? It took them years to figure it out.
QUEST: And why has this suddenly raised itself again? The federal government is basically -- or one of the departments has come out and slammed GM, and now Mary Barra is making this statement.
VALDES-DAPENA: Well, the reason it's come out now is that finally, at long last, after -- ten years after the problem first surfaced, GM recalled the cars this year. That brings this out in the limelight and also raised the question, rightfully, what took so long?
QUEST: Does the statement by Barra -- it's interesting in the sense that it says something. She's new in the job, you rarely get CEOs coming out making mea culpa statements, and certainly not sort of saying I'm a mum as well. Does it ring true?
VALDES-DAPENA: Well, certainly I think GM has learned a big lesson here. GM is taking a big black eye in public perception. Yes it rings true. I think they definitely are going to start making changes, or they said I hope some of these changes are already in the works even before now, because there clearly were issues. Yes, I believe that they're going to change things on account of this.
QUEST: In a word, because we're out of time, in a word, does Mary Barra look like she is now GM's new secret weapon in the way she's handling these things?
VALDES-DAPENA: You mean the reference to "I'm a mom, and I can relate to you"?
QUEST: Just generally. Just generally. She is not a chief exec -- basically, crudely, a middle-aged white man hiding away in a C Suite office.
VALDES-DAPENA: Yes. And I think having her out there absolutely is going to make a big change at a time when GM needs its public image to change. She's the right person to have out there to change that public image.
QUEST: Good to see you. Thank you very much, indeed, for joining us.
Now, when we come back, there's so much more. A new theory on the Malaysia jet. It may have flow to evade detection and flown low as it did it. The limited scope of radar.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more "Quest Means Business" in just a moment. This is CNN, and on this network the news always comes first. The U.S. and the European Union have announced asset freezes and travel bans for 28 Ukrainian and Russian officials on Monday. The U.S. list includes the former Ukrainian President Viktor Yanukovych and aides to the Russian President Vladimir Putin amongst others accused of undermining democratic efforts in Ukraine. So far the sanctions stopped short of going after influential business leaders in the region.
In the search for Malaysia Airlines flight 370, theories and speculation are multiplying as the search area grows wider. Airline officials are struggling to establish a clear timeline of contact with the plain. As Malaysian newspapers reported, the plane may even have flown deliberately low to avoid radar detection.
The fashion designer L'Wren Scott has been found dead at her apartment in New York. She was the long-time girlfriend of the Rolling Stone Mick Jagger. Police officials said it may have been a suicide. There's no official cause of death. A spokesman for Nick Jagger said the singer was shocked and devastated by the news.
U.S. Navy Seals are taking control of a Libyan oil tanker that had been seized by three armed Libyans this month. The Pentagon said no one was hurt in an operation carried out during Sunday night. Libya says it asked the U.S. to intervene and thanked Washington for sending help.
The number of countries is growing. Kyrgyzstan says it's willing to join the search for the Malaysia Airlines plane. The President's office says it's possible MH370 passed through their airspace. Now all of this would be quite incredible, but you've seen the map often enough. Just let me show you and remind you what we're talking about. They are now searching an arc from Central Asia -- that's way up there, to Northern Thailand and then the southern arc goes from south -- from Indonesia right the way down into the southern Indian Ocean. Most of the air space over Indian, and India and Pakistan over here is tightly controlled. So that is unlikely -- in fact India has said it's already searched the Bay of Bengal and India's believed to have in the sensitive areas quite strong radar although not all over, Pakistan similarly. U.S. authorities thinks the plane is more likely to have crashed beyond the reach of radar -- south of India -- which would put it into this are. The Malaysians took a more diplomatic line at a briefing on Monday.
(BEGIN VIDEOCLIP)
HISHAMMUDDIN BIN HUSSEIN, ACTING MALAYSIAN MINISTER OF TRANSPORTATION: Over the past two days, we have been recalibrating the search for MH370. It remains a significant diplomatic, technical and logistical challenge. Malaysia is encouraged by the progress made during such a short period of time, and we are grateful for the response by the heads of government have spoken -- that we have spoken to, all of whom have expressed a commitment of assistance.
(END VIDEOCLIP)
QUEST: See just the sheer size and scale. For the latest on the search. We need to be in Kuala Lumpur and that's where Andrew Stevens is standing by. Good evening -- good morning to you. It is half past five in the morning for you. So, as you start Tuesday in KL, what do we need to find out? What we are hoping is the next stage we find out from KL.
ANDREW STEVENS, ANCHOR AND CORRESPONDENT AND CO-HOST OF "CNN NEWSROOM, LIVE FROM HONG KONG": Well, we need in a mystery that is surrounded more by theory and unsubstantiated stories than actual, Richard, we need more facts on the ground obviously. We need to get further into the investigations of the crew and the passengers on the ground here in Kuala Lumpur. We need to get to -- some understanding -- of what was what was on that flight simulator and we now know from yesterday that it was the co- pilot who signed off the 'all right good night,' at least that's what authorities here say. So, background checks continuing on him. We are no further forward in background checks of any of the 239 passengers and crew plus the ground crew. In the search itself, it's just a matter now of elimination. There is as you point out a vast amount -- millions of square miles of potential areas which the plane could have gone down in. The Australians have taken over the southern end of the search. They will be searching --
QUEST: Right.
STEVENS: -- using aircraft mainly. So we wait to see what they bring back. But at this stage, we're just waiting for more facts -- anything really to give some more direction to this, Richard.
QUEST: Andrew Stevens, who is in KL. More direction and more facts. Andre, we thank you. What Andrew is talking about of course is where in this vast arch the plane is likely to be. And before we even get to why we need to know where, Mary Schiavo is with us. Mary, as you look at this sort of situation that we now find ourselves in -- good to see you, Mary.
MARY SCHIAVO, FORMER INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION: Good to see you.
QUEST: I mean, what do you make of the current situation?
SCHIAVO: Well the current situation says that we don't have any data. We don't have a lot of facts, we don't have a lot of hard things to go on. That big arc was really the result of a few radar hits.
QUEST: Right.
SCHIAVO: And we haven't moved from that arc in several days. That's a little discouraging for me -- we haven't gotten additional information. We were hoping we'd get more data from other countries.
QUEST: So, I'm going to quickly go through some of the -- I'm almost embarrassed to do this, but those theories are out there. So you feel free to be as blunt and brutal as you like. The first theory -- that it flew up 5,000 feet up towards the Kazakhstan/Kyrgyzstan borders over India.
SCHIAVO: You'd have to be an incredibly good pilot. In fact, you might have to be a cruise missile which hugs the earth to, you know, just flies the earth to avoid radar. That is so incredibly difficult. You would have burned off your fuel, you wouldn't have enough fuel left to go over the mountains, and we already know they didn't take on additional fuel. I don't think it could make it.
QUEST: The second theory that's -- not theory -- rumor -- that the plane shadowed another aircraft, that it flew behind a Singapore Airlines flight that was going to Barcelona. Look, I'll be quite blunt here -- we're just literally going through theories -- not theory -- rumors. What do you make of that one?
SCHIAVO: I've gotten many e-mails about that today. The theory on that is that they just flew just kind of behind them so when they got a radar hit, it would have been the Singapore flight and not this flight. Again, you'd have to be an -- if you're not assuming it's the pilot of this plane -- the Malaysian pilot -- you'd have to be an incredibly good pilot, and how are you navigating? By visual? Because if you turn on your electronics equipment, then you're going to have a signature. You know, as soon as you turn on any kind of equipment or presumably you're going to have a handheld GPS, but you're bouncing signals off those satellites. So, again, an amazing pilot and you got to hope you don't hit a fog bank.
QUEST: And as you look at the -- we're dealing with satellite -- we're not even dealing with satellite blips. We're not even dealing with satellite tracks here. We're dealing with basically -- the analogy I'm using, it's a bad one but it's a simple one.
SCHIAVO: OK.
QUEST: It's basically Bluetooth (ph) in the sense that the plane is discoverable and the satellite has discovered it, but nothing else is happening.
SCHIAVO: Right, and that's it. That's what we're dealing with other than now because we have nothing else, we have to look at the people. Of course we're supposed to look at the people right out of the box -- that's what the FBI did in the immediate aftermath of September 11, 2001. So now there are lots of theories about the pilot, but so far -- and who knows what they know that they aren't sharing, but we have heard no evidence.
QUEST: Mary, I'm going to do the -- is it still a case of if they find the plane, not when? Or when the find the plane? Because when you start looking at the south Indian Ocean and the depths of that ocean and all the land mass.
SCHIAVO: Yes, well my hopes were -- and they're kind of getting dashed. My hopes were on the U.S. Navy to storm out there and find it, because I think it's very, very important because if it is not some kind of a sabotage situation, if it is a mechanical, it is vital that we find out what happened. But my hopes are dimming as the day goes by. By I have to tell you, I mean, I worked on Air France 447 for some families, and I didn't think they'd find those and they found them two years later, so I really think it's important for them to find the plane and find what happened. I don't think they're going to find it up in the Stans.
QUEST: We thank you. Good to have your common sense and your perspective. Thank you very much. Now, more "Quest Means Business" back in a moment.
(COMMERCIAL BREAK)
QUEST: Three of the biggest beer brands in the United States have refused to go on sponsoring St. Patrick Days' parades in the U.S. Guinness, Heineken and Sam Adams all dropped out. They say it's because the parade in New York and Boston ban gay and lesbian groups from openly advertising their sexuality. Now, Guinness said this about it -- "We were hopeful that the policy of exclusion would be reversed for this year's parade. As this has not come to pass, Guinness has withdrawn its participation." Guinness is owned by Diageo, and Diageo says it hopes its stance will bring changes in future parades. Larry Schwartz is Diageo's head in the United States. He joined me from the stock exchange. You saw hi ringing the closing bell at the beginning of the program, so, from the stock exchange, I asked him first of all -- before we got to the issue of why they'd withdrawn sponsorship -- why St. Patrick's Day is so important to Guinness' results.
(BEGIN VIDEOCLIP)
LARRY SCHWARTZ, DIAGEO PRESIDENT FOR NORTH AMERICA: We do a disproportionate amount of our sales during St. Patrick's Day. Actually, between February and March when we start promoting St. Patrick's Day, we do about 25 percent of our business.
QUEST: Wow.
SCHWARTZ: Yes.
QUEST: That is significant -
SCHWARTZ: That's right.
QUEST: -- I thought you were going to say -- I thought you were going to say you wouldn't even notice the difference. But you're saying a quarter of the business is done pretty much around St. Patrick's Day.
SCHWARTZ: Around St. Patrick's Day, that's correct.
QUEST: Which makes your decision not to sponsor the St. Patrick's Day parade in New York -- I suppose one might be determine to say -- a courageous one in some ways.
SCHWARTZ: Well, we try to influence from being part of it. When we couldn't get the result that we were looking for, we made the decision to exit. We have a great relationship with the committee. We hope to be back next year. We hope to effect change. But it was a big decision for us to make.
QUEST: Why did you make it? Why did you take it?
SCHWARTZ: Because we're about inclusivity. That's what Diageo stands for. We have a great rating with the Human Rights Campaign, and we felt it was the right thing to do based upon the values of Diageo and how our people feel about our company who work here.
QUEST: It does take corporations into areas that -- controversial areas -- where previously they didn't go into before. So, sir, as president of North America, what determine factors when you decide to get involved, get your hands dirty?
SCHWARTZ: When it's clear cut that it's not what we stand for. This was clear cut that this was not what we stand for -- not having everybody invited to celebrate is not what Diageo stands for, so, again, a big decision but we feel it was the right decision.
QUEST: And you obviously get pressure left, right and center on a variety of issues -- environmental, political, --
SCHWARTZ: Definitely.
QUEST: -- cultural, sexual, all issues. So a company has to pick and choose the moment when it's going to take a stand -- that's right, isn't it?
SCHWARTZ: That's absolutely right, and we agonize over when to get involved, when not to get involved, and we have a group of people who do nothing but monitor the situations and help us make these decisions going forward.
QUEST: Larry Schwartz with a very honest approach -- "we agonize over what to get involved and what not to get involved." You don't often hear presidents and chief executives talking quite so frankly on such issues. Well, with it being s St. Patrick's Day -- with it being St. Patrick's Day, we decided to catch up with Ireland's economic progress. The government in Dublin says 2013 was a good year. GDP, though, shrank as the country emerged from the straitjacket of an E.U./ECB bailout. Unemployment is now finally falling. I asked Leo Varadkar, the minister of transport and tourism if Ireland's recovery was sustainable.
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LEO VARADKAR, IRISH MINISTER OF TRANSPORT, TOURISM, SPORT: I think it's definitely the case that there is a real recovery underway, and probably the most convincing numbers that you can look at are employment statistics. Unemployment is falling every month now for nearly two years and we've had employment growth of over 3 percent last year. When it comes to GDP and GNP, Ireland is a little bit unusual in the sense that there's a big gap between our GNP and our GDP because the GDP includes the profits of multi-nationals in particular, many of which are repatriated. So, if you take last year as a whole, we had very strong GNP growth of nearly 3 and a 1/2 percent. But actually GDP contracted slightly, but very small things can affect that. Things, for example, certain drugs coming off patent or even aviation leasing transactions can throw those figures quite dramatically. So if you put all that aside really and look at what's happening in the real economy -
QUEST: Right.
SCHWARTZ: -- what we're seeing is consumer confidence at a seven-year high, a strong employment growth and as well that real estate prices are recovering.
QUEST: And by all accounts Ireland remains the poster child, if you like, for the E.U.'s bailout programs. It's a horrible phrase but that's the only one I can think of tonight -- the E.U. programs. What does Ireland now need to do to entrench the recovery and, if you like, put itself firmly back on the path?
SCHWARTZ: Well, I think it's fair to say we don't really like to be considered to be a poster child because Irish people had to make a very big sacrifices to get to where we are. But as far as the government's concerned, the first thing of course is to keep getting the budget deficit down -- it'll be under 5 percent this year. We'll get it down to 3 percent next year. Our national debt is starting to fall as a percentage of GDP, now we need to make sure that continues to happen. We also need to make sure that we stay competitive. We've had a major adjustment in competitiveness in the last couple of years -
QUEST: Right.
SCHWARTZ: -- particularly when it comes to labor market costs and so on. We need to make sure that's the same and that we have both good inward investments and good domestic growth as well.
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QUEST: That's the Irish transport and tourism minister. Now, the Irish Taoiseach -- of course will be the prime minister -- will be in Washington to give the crystal bowl with shamrocks to the President. Well, I bet he wasn't quite expecting to see this sort of weather. And when we talked to Jim Acosta earlier, it was downright unpleasant. Tom Slate is at the World Weather Center. When I spoke to Jim Acosta earlier and I saw snow on the ground -
TOM SATER, METEOROLOGIST FOR CNN INTERNATIONAL: Yes.
QUEST: -- snow on the ground on St. Patrick's Day.
SATER: You know, it's the third highest snowfall in Washington, D.C. for the month of March. The last time they had one greater, Richard, was 1946, before that it was 1891. But let's go to the West Coast of the U.S. first where a lot of shaking going on. At 6:25 in the morning we had a 4.4 magnitude quake -- 26 kilometers just northwest of downtown L.A. Five million people felt either some light or moderate shaking, a good 150,000 felt strong shaking that included the Hollywood area, so of course they were awakened to that. Twenty degrees currently, 15 in Dallas, Washington, D.C.'s at zero -- big goose egg -- and 1 in New York City.
But the snowfall was the big story because when is spring going to occur? It's occurring in Florida -- tornado watch, of course that's more like spring weather down in the southeast. But when you get into the Washington, D.C. area, which also includes Dulles International Airport -- 25 centimeters there -- that's 10 inches of snow. They had 20 centimeters in downtown Washington. So as mentioned, this is the third greatest snowfall for the month of March, and those records go back to 1888. It's just amazing. Spring in the air. Yes, they cannot wait.
All right, here's what we're looking at. With that said, they've still been able to hit the flights fine out of D.C., out of Reagan National, out of Dulles. Down to the south in Florida is where we have the possible rough weather with severe thunderstorms and the tornado watch.
Let's go into Europe where really no major players as far as severe weather, no major delays expected. Smog and high air quality -- excessive air quality numbers in Paris. Mainly because high pressure. It's been trapping the air. It got pretty high over the weekend. Currently London's 10, Parish is at 6 degrees, Vienna 13. Look at the high temperatures. Sunday was a little bit warmer, I mean, they were up to 25 in Madrid, 24 today, London was up to 20 Sunday, 17 today, but Paris on Friday -- your numbers, your air quality -- got to 180 to 200. That's almost very unhealthy. Odd-numbered license plates not allowed to drive in Paris today. Free transportation for the last three days after five consecutive exceedingly high days of the air quality. Currently I Paris 75. It should improve as the winds pick up. High pressure's going to dive down to the South. Low pressure's going to move right over toward Moscow and that's going to create this wind gradient -- 51 kilometer per hour winds. That'll blow the smog out of the area, and I think the winds are really going to pick up in the U.K., Richard, in the next 48 hours. But at least we're not going to have the heavy, flooding rains that we've seen since the beginning of December there.
QUEST: Wow, what a busy time. Tom Slater at the World Weather Center. We thank you for that, Tom. After the break on "Quest Means Business," police in New York investigating the death of L'Wren Scott, the fashion designer and companion of Michael Jackson. I beg your pardon, Michael -- Mick Jagger. I do beg your pardon.
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QUEST: The fashion designer L'Wren Scott, the long-time girlfriend of the Rolling Stone, Mick Jagger, has been found dead at her home in New York. Police official says it appears to be suicide. There is no official cause of death at the moment. And the pictures here of L'Wren Scott. CNN's Alexandra Field joins me now. What do we know?
ALEXANDRA FIELD, CNN CORRESPONDENT: Well, Richard, the medical examiner will make the final determination here, but police in New York City are investigating this as an apparent suicide. L'Wren Scott 49 years old, a noted fashion designer, well respected in the fashion world, was found in her own New York City apartment by her assistant. Law enforcement -- a law enforcement force says that she was hanging. Now, police have been investigating. They tell us there were no signs of foul play. At the same time they say that there was not a suicide note. We know that s L'Wren Scott along with her contributions to the fashion world was the long-time girlfriend of Mick Jagger. Jagger is in Australia on the Rolling Stones -
QUEST: What does he say, what's he say?
FIELD: -- a 50th anniversary tour. And he's speaking out through his spokesperson right now who says that he's simply completely shocked, devastated by the news. Certainly you can imagine at this point. They've been together more than a decade.
QUEST: I mean extraordinary and extremely sad. Tell me about L'Wren Scott and her career.
FIELD: Obviously she is known as the girlfriend of Mick Jagger, but really an accomplished woman in her own right. She's from Utah originally, started her career in fashion at the age of 17. She became a model working in Paris, from there moved to L.A. to be a stylist. She designed costumes for movies, after that she started her own label in 2006 -- L'Wren Scott. Highly celebrated. She was dressing everyone from Madonna to Michelle Obama -
QUEST: What sort --
FIELD: -- a force in the fashion world.
QUEST: -- what sort of style? What was her --
FIELD: She was known for a dress called the headmistress dress. Madonna had worn it, just about everyone had worn it. And she said that she actually thought a lot about men when she did her designs. She wanted a silhouette that was appealing to men, she really emphasized a woman's waist, she did sort of a classic design, but she wanted to do a shape that was flattering to the female body. And really, you know, she had worked as a stylist, so she'd seen what the stars liked and she was able to translate that into her own line.
QUEST: Thank you very much indeed. Alexandra Field. Thank you very much, appreciate it. Indeed, so thank you. We'll have more after the break.
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QUEST: Tonight's "Profitable Moment." So, I learned a fact today and so did you. Guinness makes 25 percent of its money in the United States in this February/March period around St. Patrick's Day. What an extraordinary large of money in a short period of time. Twenty-five percent, which makes their decision to stand up on a matter of principle and withdraw sponsorship of the St. Patrick's Day parade in New York even more remarkable, because they say of course it's in opposition to the fact that gays and lesbians can't march in the parade. Twenty-five percent of revenues, and this company decides to take a stand on principle. Which just goes to show, occasionally companies do seem to do the right things for whatever reason they want. And that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. I'll see you tomorrow.
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