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Quest Means Business
Alibaba Shares End First Day of Trade; Alibaba Valued at $229 Billion; Alibaba Shares Close at $93; iPhone 6 Launches; Scotland Rejects Independence; Sierra Leone Not in Lockdown Over Ebola; UN on Fighting Ebola; Human Trial Offers Hope for Ebola Vaccine
Aired September 19, 2014 - 16:00 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)
POPPY HARLOW, HOST: Open Sesame at the closing bell. Alibaba is a smash hit on Wall Street on its first day of trading, which just came to an
end. It is Friday, September the 19th.
Tonight, it is Ma, Ma, Ma. Alibaba soars on its stock market debut. We will be live at the New York Stock Exchange with all the details on
that.
And this headline: down and out. Scotland's first minister quits after failing to win independence.
Also, fighting Ebola in Freetown. The UN's top Ebola doctor tells me there is no lockdown in Sierra Leone.
I'm Poppy Harlow, and this is QUEST MEANS BUSINESS.
Good evening, welcome to the program. First tonight, trading has just finished on the New York Stock Exchange, and Alibaba has smashed even the
most ambitious of expectations. Shares are up almost 40 percent after the open this morning. It is the biggest IPO in Wall Street history.
The numbers are still settling. We will bring you the final numbers as soon as we get them. But I want to show you a live picture. You're
looking at the board there, and the live picture outside the New York Stock Exchange, closing at $93 after debuting at $68 this morning
(BEGIN VIDEO CLIP)
(NEW YORK STOCK EXCHANGE OPENING BELL)
(CROWD CHEERS)
(END VIDEO CLIP)
HARLOW: That is the sound of history on the New York Stock Exchange. The opening bell, rung by Alibaba customers. And there was no shortage of
hype at the corner of Wall and Broad Streets, that is for sure. The global press gathered em masse outside. The Grecian pillars of the Exchange
facade were decked out in Alibaba's colors.
Inside, people crowded around that Alibaba trading post, where Jack Ma, the founder and the company's chief executive, watched the stock debut
in person. Investors were showing a lot of interest.
Alibaba's stock popped 36 percent when trading began. The shares were priced at $68, opened at a whopping $92.70. Alison Kosik is at the New
York Stock Exchange, she was there throughout all of it. What a day!
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: What a day, and what a closing. You can see the price there on the board, up 38 percent, Poppy,
closing at $93.89. What a day. And Jack Ma, you can see it all over his face, I was here watching this stock go public.
And the moment he walked on the floor, the guy didn't stop smiling. And how can you blame him? He's a wealthy guy today. But he was quite the
rock star today, with his entourage.
You mention those hundreds of reporters and his entourage outside the New York Stock Exchange this morning. I talked with one trader who told me
that Jack Ma actually got here around 6:00, 6:30 AM. That's really, really early, not usually a time when the big wig of a company would arrive for
his IPO.
But he was here early, he was out front actually taking a selfie of himself with the global press behind him. You have to remember, this once
long ago was an English teacher. Looks like he hasn't forgotten his roots, Poppy.
HARLOW: And I know you had a chance to really briefly talk to him. What did he say?
KOSIK: You know what? I want you to listen. Actually, we took some quick video of the moment right after the stock priced at $92.70. I want
you to listen to this.
(BEGIN VIDEO CLIP)
(APPLAUSE)
KOSIK: I'm Alison with CNN. How's it feel?
JACK MA, FOUNDER AND CEO, ALIBABA: Honored. Humble. Honored.
(END VIDEO CLIP)
KOSIK: If you didn't understand, he said, "It's an honor, I'm humbled." Once again, this is a guy who really seems down-to-earth
considering what his financial status is at the moment, Poppy.
HARLOW: Yes, I know. He's made many, many, many millions today alone. Quickly, Alison. It seems like everything really went off without
a hitch. Some folks were talking about the bungled Facebook IPO, would that set a precedent for this. Really not at all.
KOSIK: Yes, this for all intents and purposes was a smooth IPO. And to talk more about that, I want to bring in David Ethridge, he's the head
of IPOs here at the New York Stock Exchange. How do you think it went?
DAVID ETHRIDGE, SENIOR VP AND HEAD OF CAPITAL MARKETS, NYSE: Oh, textbook. I mean, it really was a terrific opening debut of this company.
The best thing we can do is create a good first impression with this new set of stakeholders. Because no stock trades on valuation when they start
their trading. Likely trade on sentiment.
And so, the way it was handled today went really well. Nice debut, well above where they went public, so closing at nearly $94, up about 38
percent is terrific.
KOSIK: Now, it took about two and a half hours for the stock to actually get out of the gate.
ETHRIDGE: Right.
KOSIK: There was some talk that there was a delay. Why was this?
ETHRIDGE: No delay at all, actually. It's what we expected. We told the media earlier, particularly the media that had come over from China,
there were like 130 people from China alone, that you shouldn't expect this to open right away.
And that's what differentiates this process versus every other exchange in the world. You've go the human judgment there with all the
best systems in the world to look at all the supply and demand and say OK, where's this thing going to level out?
And use their judgment to say what's the right price and what's the right time to get it started in a way that creates a good positive
sentiment amongst this new set of stakeholders. And we were able to achieve that today.
KOSIK: Two big IPOs under the NYSE belt, Twitter and Alibaba. What's next? Who's next?
ETHRIDGE: It's great that you say that, because it's not just those two deals. This year, we've had a tremendous IPO market, and right now,
we've got another 12 IPOs that are queued up for the next two weeks.
As I look into October, last year was a record -- October was a record month for us. We had 19 deals last October raising just around $10
billion. This year, I see that we've got 15 to 20 already in queue for October, and when I look at it, it's really robust. It's every sector,
it's every company size, and it's from companies around the world.
KOSIK: OK, thanks for joining us. There you have it, I'm going to throw it back to you, Poppy.
HARLOW: Alison, great interview, congrats on the smooth liftoff for the stock today. Of course, we're going to continue to watch it very, very
closely when trading resumes on Monday. Thank you both, we appreciate it.
Alibaba's valuation, which is huge, makes its status as a new player all the more apparent. When the Alibaba stock popped at its open, it gave
the company a valuation of -- get this, just digest this number -- $229 billion. That is on par with behemoth's like Walmart and JPMorgan.
Among its competitors, it is clear that Alibaba must immediately be included with iconic names like Google. It is already nearly halfway there
in terms of its market value. It's larger than Facebook and Amazon, and it dwarfs Yahoo! and Twitter.
Our Samuel Burke spoke with Jack Ma. He joins us now today. You got to talk to the man himself --
SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: That's right.
HARLOW: -- that everyone is fascinated by. What did he say?
BURKE: Well, the main thing that he told me was that he has too many offers on his table. We wanted to know what is he going to do with all
this cash, and he says his big problem is everybody is coming to him with ideas, now.
But I spoke to some of the initial investors in the company. Imagine the nice dinner they're going to have tonight, Poppy.
(LAUGHTER)
BURKE: And what it really seemed like to me is that they're going to be focused on other markets that they can conquer, maybe some low-hanging
fruit, some of those emerging markets in Southeast Asia.
HARLOW: I really want to talk about a comment that Jack Ma made to some of the media today. He talked about the possibility of a partnership
with Amazon.
BURKE: I'm not surprised at all. You know that you and I have been talking over the past few days, and I keep on making the point that for the
most part, outside of China, Alibaba is an M to M company, merchant to merchant. Here in the United States, Amazon has that consumer level.
HARLOW: Totally.
BURKE: So maybe that's what they could partner with. They're focused more on the merchant side, Amazon more on the customer side. So actually,
not that surprised. And I think he may have been serious. I don't think he's actually in negotiations --
HARLOW: Right.
BURKE: -- by any stretch of the imagination. But I don't think he's the type of guy that just puts something out there without some thought in
it.
HARLOW: Amazon hasn't said anything about that comment yet, right?
BURKE: We've asked them for a comment, we haven't heard anything back. And I bet you we don't for a very long time
HARLOW: Yes. So, Yahoo! makes a lot of money off of selling some of the shares in this company. And so now they have -- they're going to have
a lot more cash on hand. Marissa Mayer has talked about the fact that she is going to buy some shares back. But also, there's a little bit of
chatter about whether or not they will use this cash to possibly make a bid for AOL.
BURKE: Well, it's interesting, because I was just checking. Yahoo! stock has been down as much as 3 percent --
HARLOW: Today.
BURKE: -- today. They have a $40 billion market cap. That erases a lot of what they won today in their incredible investment in Alibaba. Yes,
they could go after AOL. Some people have said they could go after Yelp. But it is very difficult to see what the path going forward for them is.
But Alibaba will be the gift that keeps on giving.
But even with that cash, app -- mobile apps these days go for billions of dollars. So they could only get a couple of apps at most.
HARLOW: Do you think that it is problematic at all that Alibaba does not have the kind of name recognition it might like in the West?
BURKE: Absolutely. And some of the investors said one of the places that they could go and really create some traction with this money that
they just got is somewhere like Brazil. They say they already have a footprint there, and maybe that could be their inroads into the West.
They also talked about the mobile messaging, which you and I have talked about. They don't have their own mobile messenger.
HARLOW: Right.
BURKE: They do see WeChat as a threat, but maybe not as much of a threat as some other people would like to think.
HARLOW: Brazil's interesting. They've had so much demand from Brazil because of the price competitiveness they carry with all the inflation
we've seen. In Brazil, they even have a lot of their site and things offered in Portuguese, so that would be really interesting to see.
BURKE: And I think they want to hit that consumer level, something that they haven't --
HARLOW: Right.
BURKE: -- been able to hit on this side of the world.
HARLOW: Samuel Burke, thank you. We appreciate it.
Let's head over to the wall. Alibaba is, as you know, not the only technology launch creating a frenzy today. Have you heard of Apple? Heard
of the iPhone 6? It launched around the world today. Lines were quite literally -- look at all these people! Just crazed for it. Lines were
quite literally around the corner.
What we're looking at here, Hong Kong, Japan, New York, people waiting even in the rain all night long. Apple CEO Tim Cook even stopped by the
Palo Alto store as the doors opened there.
All the commotion was too much for one first iPhone 6 owner in Australia. He couldn't hold his excitement, and he actually --
(LAUGHTER)
HARLOW: -- we'll get to the video in just a moment, but he actually couldn't hold onto his new phone.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This is just a normal iPhone 6, yes. I didn't want to --
UNIDENTIFIED FEMALE: OK.
UNIDENTIFIED MALE: -- get a lot.
UNIDENTIFIED FEMALE: All right. We're doing the reveal --
UNIDENTIFIED MAKE: Ooh!
UNIDENTIFIED FEMALE: -- with Jack.
UNIDENTIFIED MALE: Whoa!
CROWD: Oh!
UNIDENTIFIED MALE: It's all good.
(END VIDEO CLIP)
HARLOW: But the screen didn't crack, which is a very, very good thing. But wow, he dropped it before the -- he dropped it, but as I said,
the screen was not cracked, showing that it is, indeed, tough.
All right. Coming up this hour, they came close to breaking the United Kingdom apart, but in the end. Scotland said no. We will talk about
where the country's political future is headed.
(COMMERCIAL BREAK)
HARLOW: Our other top story this evening, the United Kingdom remains undivided after Scotland voted no in an independence referendum. "No"
supporters celebrated Friday after a tense vote count the night before. They "Yes" camp loss, though, did get 45 percent of the vote.
Scotland's first minister and leader of the independence movement, Alex Salmond, also announced his resignation.
(BEGIN VIDEO CLIP)
ALEX SALMOND, FIRST MINISTER OF SCOTLAND: I believe that this is a new, exciting situation that's redolent with possibility. But in that
situation, I think that party, parliament, and country would benefit from new leadership.
(END VIDEO CLIP)
HARLOW: This vote has kept investors and executives on edge all month, especially as the numbers came closer and closer in the polls. The
mood on the market after Friday's result is one of cautious relief.
The British pound is slightly down against the US dollar after an initial surge following confirmation of the no vote. The pound has
recovered after a pretty sharp decline at the start of the month when the yes vote did make gains in the polls.
European markets were fairly flat at the end of the week. The London FTSE 100 gained a bit of ground, buoyed by the results of the vote.
Looking at the corporate picture, a largely positive response. Banks RBS and Lloyds say it is, quote, "business as usual." Oil giant Shell also
welcomed the choice. Insurer Standard Life was pleased but says it is still considering options. Many firms had made contingency plans to move
their registered offices out of Scotland in case of a yes vote.
All right, let's go to Scotland now. Hala Gorani joins us, now, from Edinburgh. What is the reaction there from the people that you've been
talking to?
HALA GORANI, CNN INTERNATIONAL CORRESPONDENT: Well, it was much wider margin than many polls had predicted, 55/45 in favor of no. So, even
though 45 percent of voters voted for independence, you still have a very decisive victory for those opposed to Scotland breaking away from the
union.
There is some relief from those who opposed independence that the economy, for instance, is not going to enter a phase of uncertainty, that
the British pound has rebounded. It was flirting with the 1.60 mark against the dollar, and though it softened a bit today, it's closer now at
about 1.64, so closer to the level that it was trading at before a poll a couple of weeks ago showed that the yeses had an edge.
I want to, Poppy, bring in Amanda Harvie. She's the former CEO of Scottish Financial Enterprise. Vehemently opposed to Scottish
independence. So today, you are -- what?
AMANDA HARVIE, FORMER CEO, SCOTTISH FINANCIAL ENTERPRISE: I'm exhausted after nearly two and a half years of campaigning.
GORANI: Yes.
HARVIE: But enormously relieved. And today, businesses had removed from it, as has Scotland, a question mark over our future. We now know we
are a United Kingdom. Our single market of 64 million people is entire, and our focus now is getting on with business, reassuring our shareholders,
our customers, and our employees.
GORANI: Because what would a separate Scotland, an independent Scotland have done to business confidence? To foreign direct investment as
well in the Scottish economy?
HARVIE: Well, as far as business confidence is concerned, you saw what happened in the markets over the last two weeks when it looked as
though we might lose our United Kingdom. The sterling fell significantly against major currencies, and investors de-invested from companies with
Scottish exposure. So, that uncertainty has been removed.
For business, the case for independence wasn't proven. Uncertainty and risks surrounded enormously important areas. You've mentioned
currency. Regulation and tax were also key. Support for our investments around the world and EU membership on the terms that the UK currently
enjoys.
GORANI: Well, pro-independence voters accused those companies of fear mongering, especially Royal Bank of Scotland, saying that a few days before
the vote saying that they would have to move their headquarters to London, for instance, that this is a way -- was a way of scaring voters into
casting a no ballot.
HARVIE: Well, all of your viewers to this business program will fully understand that companies have first priority and responsibility to their
shareholders, their investors, and their staff. And the risk was significant, and we had to be honest about that.
And of course, we have thousands of employees in Scotland, particularly those in financial services, and shipbuilding for the defense
sector that today woke up relieved that their jobs are safe. This was not scare mongering, it was factual. And we in business have been very angry
that the Scottish government and the "Yes" campaign hasn't been honest about the economy.
GORANI: Last question. If Scotland -- if the "Yes" campaign had come up with a good plan, a good currency plan, if the businesses that said they
would move their headquarters to London had said we would stay in Edinburgh and Glasgow and elsewhere in Scotland, would you have been able to support
a yes vote?
HARVIE: We would have looked carefully at the arguments, but the reality is, it makes no sense to put a barrier between us and Scotland and
our main market, which is the rest of the United Kingdom. The business case would not have been proven. I don't think we could have supported it.
GORANI: Amanda Harvie, former CEO of Scottish Financial Enterprise. Thanks so much for joining us.
HARVIE: Thank you.
GORANI: So, there you have it. The view from at least one business community leader here, Amanda Harvie, in Edinburgh, extremely relieved that
the no vote won out on this day. Poppy, back to you.
HARLOW: And extremely exhausted. I think she speaks for everyone there. Hala, appreciate it. We appreciate the interview. Thank you.
Still to come here on QUEST MEANS BUSINESS, one of the top UN doctors says Ebola is spreading exponentially. Next, he tells me why they need $1
billion to fight the virus effectively.
(COMMERCIAL BREAK)
HARLOW: All right, we've just gotten the final closing price of Alibaba. The final closing price, $93.89 on its first day of public
trading here in New York, up some 38 percent in under one day of trading. It didn't start trading until around noontime here in New York City.
Meantime, the doctor in charge of the UN response to the Ebola crisis says Sierra Leone is not in lockdown, despite claims by the country and
many headlines in papers this morning. We heard reports of a three-day nationwide lockdown in the West African nation. It's said to be the latest
dramatic effort to try to stop the exponential spread of this deadly virus.
The plan calls for everyone to stay at home while volunteers go door- to-door with more information on the disease. Aid groups say the approach is unlikely, though, to slow the virus.
The UN says it is going to now take $1 billion to effectively tackle Ebola. It's a tenfold jump from the estimate they gave just last month.
Dr. David Nabarro is the man responsible for making sure that countries get the funding they need. He believes the world will come up with that money.
(BEGIN VIDEOTAPE)
DAVID NABARRO, DOCTOR, UN SYSTEM COORDINATOR FOR EBOLA: I'm sure the amounts will rise. Let me explain why they grew so quickly during the
month of August and into September.
We found that this outbreak is actually now increasing exponentially, which means it's doubling about every three weeks. And that made us
realize that to get on top of it, we need a massive surge in the response, probably 20 times where we are at the moment, over the next two to three
months.
In order to get that surge, we've appealed for a significant amount of funding, plus we've also asked countries to come in with human resources,
logistical capacity, and every other requirement to get the very, very large increase in response necessary to get on top of it.
I'm confident that we will do it this time, but I'm afraid if we fail, then the bill will get even higher, because the outbreak will accelerate
away from us, and that, really, we want to avoid if we possibly can.
HARLOW: Sierra Leone has just begun a three-day countrywide lockdown to try to stem the tide of this epidemic. Some medical experts, though,
have said that is not he solution, that is not the right thing to do, and it could actually worsen the problem, with not everyone abiding by that
lockdown. What is your opinion?
NABARRO: Well, last week, I spoke with the president of Sierra Leone, and he explained to me very clearly what is his strategy. He wants
communities throughout the country to get a better understanding of the disease, to understand its causes.
And also to understand how it's transmitted so that they can start to take ownership and take action themselves to reduce the spread, and also to
ensure that when people are infected or suspected of infection, that they can be taken to places where they can receive care.
Unfortunately, it was described as a lockdown, I think by accident, in the first description, and that term has stayed there. But it's absolutely
not a lockdown. It's a sensitization, horse-to-house, as they call it, which is used quite often for other issues. It's not unusual, and it's the
right way, in my view, to address the issue.
Once communities take ownership, and we've seen it in other places, then it's more likely that the disease will under control. If, on the
other hand, communities remained frightened and don't know what the issues are and can't respond to their full effect, then, I'm afraid, it's much,
much harder to get it under control and also to enable people to feel that they are the center of the operation rather than somehow the objects.
HARLOW: Let's talk about experimental drugs, because they have been used effectively on a handful of Americans who've contracted Ebola. What
is the latest information on experimental drugs being used to treat Ebola? What is your position on that at this point, given that there really is not
a foolproof cure?
NABARRO: It's really unfortunate that there are no -- at moment no cures for this particular viral disease. Perhaps the reason is that the
demand isn't that great, and so the manufacturers of the drugs have not had a huge incentive to move quickly with production.
However, with the current outbreak, there's now a huge amount of encouragement to the manufacturers to take their experimental drugs through
the necessary clinical trials so that they can be approved for widespread use.
I have to say that they're at the moment at the very earliest stage of trialing. There's very small amounts of the material available, and it
would be, in our view, inappropriate to try to tell people that there's going to be new treatments available until they're actually on the market.
(END VIDEOTAPE)
HARLOW: Our thanks to the doctor for that interview today. Ultimately, of course, the one thing with the greatest chance of working is
possibly a vaccine. A select few patients have recovered after getting an experimental Ebola serum, but now, as our Nima Elbagir reports, there is
reason for everyone to hope.
(BEGIN VIDEOTAPE)
NIMA ELBAGIR, CNN INTERNATIONAL CORRESPONDENT: The shores of West Africa may feel a million miles from here, but what's happening at the
University of Oxford's Jenner Institute is a matter of life of death for desperate millions there.
Professor Adrian Hill and his team are at the front lines of the fight against Ebola. Joining them today is their first-ever human volunteer, a
perfectly healthy British woman willing to take a risk to make a difference. She's about to be injected with a potential Ebola vaccine.
This trial is part of a series of safety tests for potential drugs being worked on together in the UK and the US, funded by the Welcome Trust,
a health charity.
ADRIAN HILL, PROFESSOR, OXFORD UNIVERSITY JENNER INSTITUTE: We desperately need a vaccine because over 2,500 people have died. The
mortality rate is increasing. We don't know when this epidemic is going to end. And at the moment, we have no drugs and no vaccines to use.
But that's not the only challenge. As well as doing the trials, the vaccine has to be made in large amounts. We only have enough to do a few
trials at the moment. What's happening is that at the same time, 10,000 doses of this vaccine are being manufactured.
ELBAGIR: The urgency is almost overwhelming
HILL: There have been over 40 outbreaks, mainly in Central Africa, over the last 40 years. All of those died out without vaccination, they
were small outbreaks, the mortality was important, but limited.
Everybody thought the same would happen with this outbreak, even though it was in West Africa. The difference was it happened in cities,
probably higher densities of population, and it has spread, and it's spreading.
ELBAGIR: It could be two to three months before any vaccine is ready to deploy. And to complicate things even further, many in the affected
regions are already taking matters into their own hands.
The World Health Organization says people are buying the blood of those lucky enough to survive the virus on the black market for illicit
transfusions. The antibodies found in the donor blood could help the recipient fight the virus, but it's a huge risk, and it's unproven.
HILL: The main lesson that comes out of this huge outbreak to us is that there could have been a vaccine available if we as a global community
had decided that we were going to make a vaccine for Ebola and make it available in the affected regions.
ELBAGIR: As millions in West Africa fight to survive the deadly outbreak, at least now there could be hope in their future.
Nima Elbagir, CNN, London.
(END VIDEOTAPE)
HARLOW: Nima, thank you for that fascinating report. Still to come here on the program, David Cameron says the question of Scottish
independence is settled for the next generation. In Catalonia, the separatists are just getting started. The Catalan parliament took a key
step today. We will explain right after this.
(COMMERCIAL BREAK)
HARLOW: Welcome back. I'm Poppy Harlow in New York. This is CNN and on this network, the news always comes first. Here are your headlines.
Scotland's First Minister Alex Salmond is to step down after the country voted against independence from the United Kingdom. There's been a
sometimes tense standoff this evening between rival yes and no voters in Glasgow's George Square. The Queen has made a statement, saying she hopes
emotions will be tempered.
France has carried out its first airstrikes against radical militants in Iraq. The French defense minister released these photos of a jet - a
fleet of jets, rather - attacking an ISIS logistics warehouse. French officials say there will be more strikes in the coming days.
Meanwhile, French - former French - president Nicolas Sarkozy says he will make a return to politics. Sarkozy announced the comeback via
Facebook posting that he would seek the leadership of France's central right political block, the UMP ahead of the 2017 general elections.
Alibaba stocking 30 percent in its first day of trading. The shares closed at $93.89 - a big jump from the IPO price. The gives the company a
valuation of nearly $230 billion - about $30 billion more than even Facebook.
London's Wembley Stadium will host a final of the 2020 European Football Championship for the first time. The tournament is being played
in cities across Europe rather than in one host nation. Wembley will host the two semi-finals. The quarter finals will be held in Rome, Munich, St.
Petersburg and Baku in Azerbaijan.
HARLOW: British Prime Minister David Cameron is calling for a new era of local governance in Britain following the Scottish referendum. In the
final days before the vote, the British political leader promised to give the Scottish Parliament more power over issues of tax, spending and social
welfare. Today David Cameron said that England, Wales and Northern Ireland could soon get greater autonomy as well.
(BEGIN VIDEOCLIP)
DAVID CAMERON, U.K. PRIME MINISTER: A great opportunity to change the way the British people are governed and change it for the better.
Political leaders on all sides of the debate now bear a heavy responsibility to come together and work constructively to advance the
interests of people in Scotland as well as those in England, Wales and Northern Ireland for each and every citizen of our United Kingdom.
(END VIDEOCLIP)
HARLOW: Joining me now from London, Keith Raffan. He is a former member of the Scottish Parliament. Thank you for being here this evening,
sir, we appreciate it.
KEITH RAFFAN, FORMER MEMBER, SCOTTISH PARLIAMENT: Thank you very much, Poppy.
HARLOW: Do you believe that this is going to be the 'see change' for politics in the U.K. that David Cameron is promising it will be, that we
will indeed see this transfer of power, increased powers going to the Scottish and Parliament because Alex Salmond seemed to question that a bit
today.
RAFFAN: Well I think he was right to do so. I was actually a member of the Scottish Parliament and also at Westminster, so --
HARLOW: Right.
RAFFAN: -- I've experienced both. And you know there's a sharp contrast between this quite extraordinary display of democracy in Scotland
yesterday and some parts of the constituency I once represented was over 90 percent. You know, quite extraordinary. And yet we have the Prime
Minister shortly after breakfast this morning without consulting his cabinet, without consulting his back benches, bypassing Parliament
(LAUGHTER), making this announcement which is, I think, quite extraordinary, without saying how it would be carried through other than
behind closed doors at Westminster. And, you know, I'm not against (ph) Alex Salmond's party. But I have a huge respect for him, and the Prime
Minister is actually a thoroughly undemocratic way in sharp contrast to the way the Scots did yesterday. It's a mess. That's what we - or as we say
in Scotland - a stramash.
HARLOW: Let -
RAFFAN: So we are going to see it - we're going to see a situation I believe where it will have to be inclusive of all the other parties.
HARLOW: Let's talk about the political gamble that David Cameron made here. He chose to have this vote be very simple - yes or no. More options
could have been included, right? Such as more power -
RAFFAN: Well -
HARLOW: -- I'd like you to respond to this - what you make of the political gamble ahead of the general elections due to take place next May?
Was it a smart move? Because in the end, he won out.
RAFFAN: Well the problem is that if you put an issue like devo max on the ballot paper, nobody won't - knows - what it means. It means different
things to different political parties. It also confuses the yes/no. I think that he is taking a huge gamble. The dissolution of Parliament is
barely six months away. Parliament doesn't have time to legislate and rewrite the Constitution. Some of our academic or leading
constitutionalists are absolutely outraged by this sort of a short-term fix. And also the fact that he's not including the other parties.
The Prime Minister's skin was saved by the former Prime Minister Gordon Brown getting the labor vote out in Scotland. So we're in a rather
bizarre situation. How it will - it's fast-moving and I don't know how it will develop. I'm very sorry Alex Salmond stood down. I've crossed swords
with him in the past but he's a highly-respected figure and very able politician. Scotland and Britain needs him at the moment.
HARLOW: Well some have said it's very important that we don't see a situation like Kovac where there was so much uncertainty in the - for
investors, etc., and you saw a decline in growth for a long time between 1980 and 1995, in terms of the independence votes and that it's very
important that people see a clear vote ahead. Do you think that that is the case? Do you think that - that in terms of growth being harmed by
this, that we are not facing that because there was a rather wide margin in the vote?
RAFFAN: Well, it's not that wide. I mean, it's quite extraordinary that independence should get 45 percent. Two of our major cities in
Scotland - the biggest, Glasgow and Dundee - they voted for independence. I mean, this is unheard of. I mean, their highest estimates for
independence before was 33 percent ten years ago. So this is an extraordinary result, and it's up to the government at Westminster - the
'metropolitan elite' as we call them - to respond and respond effectively. And not to try and kick this into the long grass - if they don't respond to
this, Scotland will react in a very, I think, a very highly-charged way. I hope the yes movement in Scotland will now transform itself into a movement
to try and ensure that the Westminster parties and the Prime Minister carry out the promises/the vow they gave.
HARLOW: And as Alex Salmond today said, we shall know by mid-November who is going to lead after him the SNP. We will be watching closely.
Appreciate your time.
RAFFAN: I think we -
HARLOW: Go ahead.
RAFFAN: -- know that now. I think we know that now. It'll be his deputy Nicola Sturgeon - again, not a political ally of mine, but someone
for whom I have the greatest respect. We have a phrase in Scotland. Somebody's a bonnie fechter - a good fighter. She's the bonniest-fechter
of them all, she's extraordinarily able, she's - she will - in fact, I think, be a first-class leader of the SNP and First Minister of Scotland
and I hope very much that the SNP will have the very good sense to select her and the Scottish Parliament to elect her.
HARLOW: We shall see what happens, we will be watching. Keith Raffan, thank you for your time this Friday evening, sir. An enjoyable
conversation indeed. Thank you. Meantime, the Scottish referendum has energized separatist movements across Europe in Sardinia, Flanders and of
course in Catalonia. Our Isa Soares has a report from Barcelona.
(BEGIN VIDEOCLIP)
ISA SOARES, REPORTER AT CNN INTERNATIONAL: Hours after the Scots voted against independence, a defiant Catalan government approved a new
resolution allowing referendums to take place in their region. And outside Parliament, a loud reminder to politicians of the strength of the
separatist movement. People here singing the Catalonian anthem and calling, really, for a vote saying "votarem" - we shall vote.
They're hoping that Catalan President Artur Mas will formally call a referendum on independence from Spain on November 9th. Earlier he sent
this message to Madrid.
ARTUR MAS, CATALAN PRESIDENT: If in Madrid they think that only using the legal frameworks, they can stop the political will of the majority of
the Catalan people, they are wrong. It's a big mistake.
SOARES: But Artur Mas faces an uphill battle, and that's because the Spanish government in Madrid opposing any move towards independence, saying
it is unconstitutional and is expected to block it. Still, many Catalan politicians here seem unfazed.
ORIOL AMOROS, MP, REPUBLICAN LEFT: Maybe next week or the other week, we have the choice to be loyal to the political providence - the agenda we
have voted for. And we as a membership of Parliament, we have to follow what people has elected us to do.
SOARES: Calls for a referendum on independence from Spain have increased in recent weeks, with hundreds of thousands taking to the
streets, asking simply for the opportunity to cast their votes. A message I heard time and time again in the streets of Barcelona.
Male: I think it's democratic for people to express their opinions, and if a no wins, it must be accepted the same as if a yes wins.
SOARES: But it seems Prime Minister Rajoy is not budging. And in the same breath that he congratulated Scots, he passed on a message to the
Catalans, telling them,
MARIANO RAJOY, SPANISH PRIME MINISTER, TRANSLATED BY SOARES: "We are stronger, more stable and more secure together."
SOARES: Isa Soares, CNN Barcelona.
HARLOW: Isa, thank you for that report. Meantime, there has been some stormy weather across Europe heading into the weekend. Jenny Harrison
is at the CNN International Weather Center. You just can't bring us the sun.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: I know. Well, you know what, Poppy, it's that time of year - it's September. We've had
some nice sunshine, and in fact we have actually had some pretty good temperatures on this Friday. But you're right, there's kind of the stormy
weather - in particular, northern areas of Italy. I'll come back to that in just a moment because also we've have more very heavy rain pushing in
across the southwest through Portugal and on into Spain.
But this is what has been happening this Friday in Florence particularly in Italy. There has been hail, not particularly big hail, but
have a look at this because this hail lasted for about ten or 15 minutes, but it was just coming down so widespread. Look at it - it looks of course
like snow. It actually was a big storm that came through. There were reports of trees down, cars were damaged, as many as 50 people actually
injured. Thankfully no fatalities, particularly with those trees coming down. But it really did paralyze the city for quite a while. Obviously
afterwards, there was all that hail to be cleared up, and of course, let's be honest, people just weren't prepared for this. So it would also cause
very cold with the sudden drop in temperatures. So, that is what came through.
Now hopefully there's no more signs of any storms like that, but there is as you can see some fairly heavy rain across pretty much all of mainland
Europe as we go into the weekend. In fact, one of the best spots is the northwest across the U.K. I think I mentioned that rain in the southwest -
160 millimeters, 167. So this is Wednesday, Thursday and Friday. And also in Southern France, a wind gust there of over 100 kilometers an hour.
But it's not all bad, there's been some good temperatures. Look at this - Paris is the second day running 27 Celsius, this is 6 above average.
London was 5 above average with a high of 25. It's fairly short-lived, so enjoy Saturday because by Sunday, it really does get a lot cooler.
Amsterdam you can see is down into the teens and then Paris - look at that - 27 on Saturday and just 19 on Sunday. So that would actually feel pretty
cold, I'm sure.
Warnings in place as well as you go through the weekend. All of that region in Central Europe is under threat from thunderstorms, heavy rain,
and maybe some strong winds as well. But there is some nice weather out there. You have yourself a nice weekend, Poppy.
HARLOW: You have a nice weekend as well. Those pictures were just incredible of the hail. I feel bad for the folks there. Appreciate it,
Jenny. Thank you. That will do it. That is "Quest Means Business for this Friday. I'm Poppy Harlow. Thank you so much for joining us.
"Marketplace Africa" is next.
(END QUEST SHOW)
(COMMERCIALS)
(BEGIN MARKETPLACE AFRICA)
ROBYN CURNOW, ANCHOR AND INTERNATIONAL CORRESPONDENT FOR CNN, BASED IN JOHANNESBURG, SOUTH AFRICA: You're watching "Marketplace Africa," I'm
Robyn Curnow. Port Elizabeth, a South African coastal city, is a city of contrasts. It's situated at the end of the picturesque Garden Route, but
it's also home to G.E., Volkswagen and a Ford plant, making it the Detroit of Africa. But to avoid a bankrupt Detroit-like scenario, Port Elizabeth
knows contrast is the key.
(BEGIN VIDEOCLIP)
MONWABISI BOKWE (ph), PRODUCTION OPERATOR, VOLKSWAGEN SOUTH AFRICA: It's not easy working in this industry. It's got its challenges, but it's
quite rewarding, especially if you go out of town. But I frequently go to the Western Cape, and when you see a VW car go down the road and you
proudly tell your friend or whatever that you are part of the process that puts the car together. And they - it's almost unbelievable for them, you
know. And that shows you have pride. And so it actually means - it means something to you as an employee, you know, just to be part of this.
CURNOW: Bokwe has been working with Volkswagen cars for the last decade. He's a production operator at the factory in Uitenhage in the
Eastern Cape province of South Africa, a province well known for its auto sector and the jobs it creates.
BOKWE: If you look at the Eastern Cape, it's one of your poorest provinces in the country. We got about nine provinces in South Africa, and
your most economically viable provinces would be Gauteng in the Western Cape. And having these factories, my understanding is we've got about
three car factories in the Eastern Cape. And I cannot imagine what kind of problems we would have, had those factories not been in the Eastern Cape.
CURNOW: David Powels comes from this region and he's the managing director at the company.
DAVID POWELS, MANAGING DIRECTOR, VOLKSWAGEN GROUP SOUTH AFRICA: One thing I want us to understand with the auto industry, an auto company is a
catalyst for growth. Because an auto company whilst we employ 4,000 people, we create a multiplying effect through the economy.
CURNOW: This multiplying effect can be seen in the number of global automotive component manufacturers that have set up shop in this region.
According to the Eastern Cape Development Corporation, the auto sectors accounts for more than 40,000 jobs in the region with 30,000 of those
created by supplier companies.
In 2013, the Volkswagen Group globally produced and sold close to 10 million cars. Volkswagen is dominant in South Africa with more than 20
percent market share in the passenger car market. It's not the only company pumping out cars, though. The Eastern Cape is also home to other
automotive giants such as Mercedes Benz, Ford and General Motors. The region manufactures half of the country's passenger vehicles according to
the Eastern Cape Development Corporation, and provides more than half of all South Africa's vehicle exports - exports to Europe, the U.S. and other
African nations.
Brian Olson, the vice president of Sales, Service and Marketing at General Motors points out the growing sales numbers within Africa is a
driving force of growth.
BRIAN OLSON, SALES AND MARKETING VP, GENERAL MOTORS: In Africa, it's a young continent, and with a rapidly-growing middle class. Yes, you know,
it's interesting if you look at 2012 versus 2013 sales, it's relatively flat volume. Looking forward to 2014, we see, again, relatively flat -
about 1.7 million new vehicles will be sold. But just 5/6 years from now, we see that number growing to 2 and 1/2 million. So, a lot of opportunity
going forward.
CURNOW: The auto sector accounts for about 7 percent of South Africa's economic output - crucial to the economy, with this region a key
driver of the country's vehicle exports - some say it could be compared to America's Motor City, Detroit.
POWELS: Yes, I think 20/30 years ago, Port Elizabeth, Uitenhage was seen as the Detroit of South Africa in the sense that most of the majority
of auto production was concentrated here. In the meanwhile, we have about 40 percent of auto production is in this metro together with East London,
we have Mercedes there (ph). So we have Mercedes, GM, Ford and Volkswagen all with auto production in the Eastern Cape Province. So it is to some
extent we could fairly - most fairly say that we are the Detroit, but with that comes quite a responsibility, you know.
One of the problems of Detroit, if you look at the history of Detroit, is it's gone into decline because of the overdependence on the auto sector
and the number of companies in the auto sector that went through the very difficult times. And one can see if they track the history of Detroit, the
impact that that had on Detroit. So we have to be very careful in this metro and also in the Province.
We are an anchor tenant so as to speak in - the auto sector is an anchor tenant in the Providence, we are an important drive of growth, but
we have to recognize that that brings risks and also chances. The risk is that if we're over dependent on that sector and we don't diversify, the
industrial base in the Province have been meeting for long term (ph), there are risks in being over dependent on one anchor tenant.
CURNOW: Indeed there've been challenges. Last year saw a strike that cut production and crippled the country's auto industry. The union
representing autoworkers agreed to a new pay deal, and it was back to work - back to focusing on the road ahead. And so for many workers and their
families here in the Eastern Cape, the road to a better life often runs through a car factory.
BOKWE: If we understand the term 'ghost town,' and we will not become a ghost town, we'll become a ghost province. I mean, if the Eastern Cape
is to close down all its factories.
(END VIDEOCLIP)
CURNOW: Shifting gears, after the break we go from automobiles to locomotives and beyond and speak to the man who runs G.E. in Africa.
(COMMERCIAL BREAK)
CURNOW: Welcome back. General Electric opened up one of their first businesses outside North America here in Johannesburg back in 1898. And
the company says they still have a strong presence on the African continent. Jay Ireland is the president and CEO of G.E. Africa, and he's
based in Nairobi, Kenya.
(BEGIN VIDEOCLIP)
JAY IRELAND, PRESIDENT AND CEO, G.E. AFRICA: I think if you look at Africa from a standpoint if investment opportunities, there's a tremendous
amount of opportunity for sure. We're an infrastructure company and so a lot of the stuff that we sell is all infrastructure, which is what Africa
needs. But on the other hand, they also need skills development, they need capacity built, they need more manufacturing and assembly businesses. So
from our perspective, we're going to continue to work on not just selling our products but also trying to build out the economy. So we invest in
Nigeria, Angola, South Africa and Kenya in assembly and manufacturing facilities, we're going to bring along our supply chain, we want to invest
in small and medium enterprise businesses and we want to really grow the overall economic impact of what we do in Africa - in any one of these
countries in Africa. So, as we look at that, if that doesn't growth - if that growth doesn't happen - we're not going to continue to be able to
sell. We need that continued growth as well. So, for us, we look at it as a viewpoint of, you know, obviously doing well but doing good which is
somewhat of an old cliche, but in reality it's something that we can both grow together - both G.E. and the economies.
I think our business model in Africa is different, not just from a competitive standpoint, but also within G.E. So for us, selling in another
part of the world is not the same as selling in Africa. So we need to do in Africa is really develop a project, we've got to be at the ground - at
ground zero - working with potential financiers, potential partners, engineering companies, etc. and really bring the project to fruition.
And so that's really a different sell for us than what we see in the rest of the world - from a competitive standpoint. You know, the real
thing for us is we think we bring a lot of value, not just from a standpoint of what our equipment can do, but also what we bring from a
standpoint of supply chain, you know, skills-building, etc. So we think that also is an added capability that we bring versus our competition.
When we build capacity, we look at capacity from a hardware standpoint as well as a software standpoint. So the hardware standpoint is building
facilities that will employ more people. And it could be assemblies - it can be assembling sub-C equipment for oil and gas customers, it could be
assembling locomotives that we're doing in South Africa. The sub-C Christmas trees we're going to do in Angola, we're going to do in Nigeria.
We're going to do power generation equipment in Nigeria, also in Angola. We're looking at Kenya to do some potential rail manufacturing and then in
Ethiopia we're looking at some healthcare.
So all of those are the typical facilities where you would assemble or manufacturing things. But for us to succeed, we need to have the software
side. And the software side is having people that have the technical background, the engineering background. So, typically schools are going to
graduate engineers with typically theoretical experience, and then we need to train them to get more practical applications.
The infrastructure deficit is huge. However, the economy is still growing. But at some point in time, that infrastructure deficit is going
to start diminishing the impact of the economic growth of all of the, you know, the population, the middle class growth, etc. So you're going to see
that start to wane if the infrastructure needs aren't fixed. Thirty-five percent electrification rate, and if you do electrify, a lot of it may be
at a high cost because it's temporary power or diesel power, where - logistics where - it costs twice as much to get a container from Guangzhou,
China to Mombasa - or it's twice as much as it takes to get that container from Guangzhou to Mombasa as Mombasa to Kampala, Uganda and twice as long.
That's unsustainable on building an economy that's going to be a global player. So those things have got to be fixed.
We've got to have more air travel between - and better airports. All of those infrastructures are going to have to happen for the demographic
dividends of Africa to continue to supply that dividend and not get hung up because of logistical and/or infrastructure challenges.
CURNOW: The head of G.E. Africa, Jay Ireland there. Well don't forget you can always find us online at cnn.com/marketplaceafrica. I'm
Robyn Curnow. Thanks for watching.
END
