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Quest Means Business
Jack Dorsey Named Permanent Twitter CEO; Unprecedented Trans-Pacific Trade Pact Agreed; Protesters Tear Shirts from Air France Executives; World Bank Cuts Asian Growth Forecast; U.S. Stocks Rally; UNIQLO Planning 100 New Stores in China; Interview with Interbrand Head. Aired 4-4:30p ET
Aired October 05, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00]
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MAGGIE LAKE, CNN HOST: Markets celebrate a second straight session of big gains on Wall Street. It's Monday, the 5th of October.
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LAKE (voice-over): Tonight, two jobs are better than one. Jack Dorsey officially takes over at Twitter.
One of the biggest trade deals in history gets the go-ahead. I'll ask the White House's top economist if it's good news for you and me.
And angry Air France workers get shirty with their bosses. I'm Maggie Lake. And this is QUEST MEANS BUSINESS.
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LAKE: Good evening. It's #official. Twitter has named Jack Dorsey as its permanent CEO, ending months of uncertainty. Dorsey co-founded Twitter in
2006. He took over as interim CEO in July after Dick Costello stepped down.
Twitter shares have closed about 7 percent higher, it's a sign of investor confidence at a crucial time for the company. When Twitter launched, it
rode a wave of social media interest. It's now struggling to get users interested in a product that hasn't changed much in a decade.
The tweets are still 140 characters. The list of problems that Dorsey is facing, much longer.
(BEGIN VIDEOTAPE)
LAKE (voice-over): Jack Dorsey made the announcement appropriately enough on Twitter, tweeting, "Hello, we have some news to share."
JACK DORSEY, CEO, TWITTER: Hello, I am Jack Dorsey.
LAKE (voice-over): After being kicked out of the company in 2008, this is Dorsey's big shot at a comeback. His to-do list is great.
MAX WOLFF, MANHATTAN VENTURE PARTNERS: He's going to have a short honeymoon and he's going to have a lot of people watching him with no
presumption of innocence, returning the site to popularity, retelling the story a little better. It's going to be tough and the odds are not going
to be particularly in your favor on day one.
LAKE (voice-over): Dorsey celebrated when Twitter went public two years ago, but the stock has floundered and he returned to Twitter as interim CEO
in the spring. He's already begun his overhaul, expanding buy button features that gives Twitter a footprint in e-commerce and is reportedly
considering tweets longer than 140 characters.
But his big goal is to make Twitter more user friendly and to boost user growth. He tweeted Monday, "Our work forward is to make Twitter easy to
understand by anyone in the world and give more utility to the people who love to use it daily."
WOLFF: They just have to figure out a fun way to take new users and keep them because Twitter actually is attracting a lot of new users. It's a
little bit of a misnomer (sic) that they don't. The problem is, they alienate and get rid of them pretty darn quick, because it isn't easy
enough or intuitive enough to get comfortable with it.
LAKE (voice-over): Dorsey also needs to address other key problems. Revenues are growing but losses are widening and Twitter shares are
sagging. This year alone its stock is down 25 percent, at one point below its IPO price. But Dorsey has hit the ground running, announced a chief
operating officer and a board shakeup. Many are hopeful.
UNIDENTIFIED MALE: It became clearer and clearer to me that Dorsey was going to be the one, because they probably just couldn't find anybody else
who knows the product as well, as intuitively and maybe believes in it the way that Dorsey does.
DORSEY: We started Twitter with a very simple idea.
LAKE (voice-over): Dorsey helped found Twitter but he always saw it as a service that was evolving, as he told me back in 2010.
DORSEY: I knew personally that the concept was always very large, because it's something I've seen in all of my work. For it to be used in this way
and to be redefined constantly by our users and organizations and companies and governments, each one of them brings something new to us.
LAKE (voice-over): Now Dorsey himself needs to bring something new to Twitter and convince investors the site has staying power.
(END VIDEOTAPE)
LAKE: Now, interestingly, Dorsey is also keeping his CEO job at Square. He founded the mobile payments company back in 2009. Today, Square's
reportedly planning an IPO. The company has been valued at $6 billion, around a third of Twitter's $18 billion market cap.
And Square is on a hiring spree. It recently opened its fourth U.S. office in St. Louis and plans to hire 200 employees there in the next five years.
That's on top of the more than 600 people who already work for the company. It still has some catching up to do, though. Twitter has 4,100 employees.
To find out what's next for Twitter and Jack Dorsey, we turned to our business correspondent, Samuel Burke, who has been following this story
with me all day.
Samuel, I want to start what that comment that the analyst said in the piece, that it's not intuitive; it's not easy. It's not fun. We've heard
this over and over again.
What do they mean and what does Twitter have to do to make it more approachable to people?
SAMUEL BURKE, CNN CORRESPONDENT: We've heard that over and over again, not just from the analysts but even from Jack Dorsey. I counted three times on
the call today where he admitted that Twitter is just not easy enough to use. So one thing that you mentioned, the 140 characters, when you talk
about an evolution --
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BURKE: -- that's a holdover from the past when everybody was using text messaging to send their tweets and the limit on text messages is 140
characters. So a lot of people, including Twitter now, it seems, agree that has to go.
Also, curated content: yes, it has great content. But people say it's hard to find. So what Twitter is looking at doing is launching a new tool
very soon that when there's big breaking news, maybe that CNN video of an airplane landing in a river, maybe that will go to the top of Twitter. So
maybe humans actually curating content.
And then maybe more of a Facebook-like timeline. This is something that Jack Dorsey talked to me about at the end of last year, saying that he
didn't want to make it just like Facebook but wanted to find a happy medium. Instead of tweets going chronologically, maybe the tweet that's
most important to Maggie Lake, the algorithm will figure that out and have that up top on your Twitter timeline -- Maggie.
LAKE: It's interesting. I know -- maybe they got to work some of the -- a lot of people don't know some of the functionality, too, with retweeting
and some of those mechanics, maybe have to be a little bit more --
(CROSSTALK)
LAKE: -- yes, exactly, important because I know I've had trouble with that in the past.
Samuel, interesting that he's keeping the job at both companies. This is at a time when Square is going to do an IPO road show. That would take the
concentration of even seasoned CEOs.
Do people think he can pull this off?
BURKE: And the board said publicly when they were looking to hire someone, we want somebody full time. So many people said, well, there's no way Jack
Dorsey is going to get this job. But I think for a long time he's been using Square as part of his way to plot a comeback.
A lot of people talk about the success he's had and the great teams that he's formed over at Square.
Today, we heard the new COO, Adam Bane of Twitter, saying that he had formed these great teams in the three months that he's already been at
Twitter.
So I think Jack Dorsey is trying to say, yes, I was kicked out of Twitter before but in that time I've created a very successful company with a
reported $6 billion valuation. So I think he's trying to use that to his advantage.
And he said to me, that, hey, look, these companies are right next door to each other so it's very easy to go back and forth. But going back and
forth when you're CEO is just another level of difficulty. But some people think that that Square expertise that he has is going to help him make this
company stronger --
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LAKE: Listen, the plan is obviously he's the visionary and he's going to build a very deep bench to execute. Actually, doing that is another story.
A lot of people pointing out Steve Jobs, one of the only other people who's really been able to pull something like that off. So those are some big
shoes to try to follow.
BURKE: Yes, but Maggie, you did two shows today.
(LAUGHTER)
LAKE: Yes, exactly.
It's sort of the same thing, right?
All right, Sam, it's going to be interesting to watch. Thanks so much, Samuel Burke for us.
And we want to give you a quick check of the markets, which have just closed on Wall Street. Take a look at these numbers. The Dow closed up
300 points after a 200-point rise on Friday. Very nice back-to-back. Investors are betting the Fed will hold off on interest rate rises after a
disappointing jobs report.
The big winner on Monday, you guessed it, Twitter with a 7 percent rise.
After eight years of negotiations and a few all-nighters, there is finally a deal to make the largest trade agreement in history. Ian Bremmer knows
the pros and cons. He will join us next.
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LAKE: It took nearly eight years, it involves 12 nations and will impact 40 percent of the global economy. It's the Trans-Pacific Partnership, an
unprecedented trade agreement finally reached between the United States, Japan and other countries around the Pacific Rim.
While the deal promises to pry open new markets, its authors also hope it might become a model for free trade pacts going forward. Michael Froman,
the trade representative from the United States, laid out a laundry list of benefits the TPP could bring.
(BEGIN VIDEO CLIP)
MICHAEL FROMAN, U.S. TRADE REPRESENTATIVE: We expect this historic agreement to promote economic growth; support higher paying jobs; enhance
innovation, productivity and competitiveness; raise living standards; reduce poverty in our countries and to promote transparency, good
governance and strong labor and environmental protections.
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LAKE: The TPP affects trade in everything from butter to biotech. Apart from the obvious benefits to exports, the pact creates some clear winners
and losers. It remains controversial, especially in the U.S.
Some pros: it strengthens diplomatic ties between Asia and the United States. Also, the White House says tougher anti-corruption rules will now
apply to more countries.
On the other hand, critics are worried about new powers that will be expanded to corporations.
Under the TPP, companies would have a greater ability to challenge foreign laws they don't like. It also opens up trade routes to some countries like
Vietnam and Malaysia, which stand accused of violating human rights.
Ian Bremmer is here. He's president and founder of Eurasia Group.
Ian, if we listen to the trade rep, a long list of benefits; this is going to raise living standards, eliminate poverty, help the global economy.
Is that true?
IAN BREMMER, EURASIA GROUP: I'm with the trade rep on this. I haven't always been in favor of everything Obama's done on foreign policy. But
I'll tell you, in eight years of two Obama administrations, this will end up being the single most important positive foreign policy legacy that he's
had.
LAKE: Wow. I rarely hear you that unequivocally optimistic.
Why do you think this is so powerful?
BREMMER: Look, there are definite negatives. But the fact is, we're not living in a free market isolated box. You've got a country like China,
which is the world's second largest economy. And they're building up their own trade agreements that are opaque, that use -- that are oriented towards
Chinese standards.
China's a state capitalist economy. It's an authoritarian government. We do not want the alternative. If the U.S. does not engage in fostering
deeper trade integration with our allies, even when some of them do have human rights issues and the rest, the alternative is not going to be the
way it used to be. The alternative will be people will be -- countries will be more oriented towards China.
LAKE: Their standards, not just the economic ties.
So you do believe this is a counterbalance to the Chinese?
BREMMER: It's better than a counterbalance. It actually means that, over time, the Chinese will themselves lose out in terms of trade and capital
flows if they don't align their economy with the economies of the TPP.
It will improve Chinese standards itself over the long term. We will be leading by example.
There are negatives for this deal.
(CROSSTALK)
LAKE: A lot of people say it'll give to investors and business and corporations and the workers are the ones that are left out.
BREMMER: And I think that's right. I think corporations do better in this deal and there will be a lot of American corporations that will find it
easier to manufacture in Asia and other countries and send those goods into the U.S. So U.S. manufacture jobs are going to -- they're going to go
away. They have been going away --
LAKE: Anyway.
BREMNER: Yes.
LAKE: And that's what the Obama administration said, this was happening anyway. This just helps give us a hand in the game.
BREMMER: It is true that this is going to speed up the process.
On the other hand, America will get more agricultural capacity export, because tariffs for countries like Japan will go down. So our farmers will
do better. We'll get some jobs there.
The reality is that those jobs -- technology has been taking jobs out of both of those sectors. So globalization, that ship has kind of sailed.
But over the next 10 years, the American economy will grow faster because of a trade deal like the Trans-Pacific Partnership.
LAKE: Do you think it will get through Congress?
And what will this ultimately mean for Obama's legacy?
BREMMER: It will absolutely get through Congress. This is --
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BREMMER: -- one where the base of both the Democrat and the Republican Party, having already passed fast-track authority for trade promotion for
Obama, are not going to suddenly try to actually scuttle this deal. There's enormous amount of effort that's gone through for the Americans.
The biggest challenge right now are Canadian elections coming up because if Stephen Harper does not win, the Canadian Left is going to raise a lot of
red flags and that could slow implementation. But this deal is happening. It's the most significant multilateral trade deal that's been done in
decades.
LAKE: And you know, it's amazing. It's been the longest time we talked about trade, everything was just stagnant. It was really hard to make
progress. So perhaps this is the beginning of the new chapter on trade. We'll have to see.
BREMMER: At the end of the day, the pivot to Asia is -- this is where American security interests are. It's where American economic interests
are. The Americans should not only be proselytizing diplomacy by sending carrier groups. We should also be using the dollar and our markets;
finally, we're doing that.
LAKE: And on that very good point, Ian, we'll leave it there.
Ian Bremmer, always great to see you, thank you so much.
Later on in the program, I'll speak to President Obama's top White House economist, Jason Fuhrman, about what this trade deal means for the United
States and the rest of the world.
The furious protestors ripped the shirts off Air France executives Monday after the company revealed plans to cut nearly 3,000 jobs during a meeting
near Paris.
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LAKE (voice-over): Several executives, as you can see, fled the crowds with the help from security staff.
However, we should point out the majority of the demonstrations were peaceful. A union representative slammed the company's leaders and their
decision.
UNIDENTIFIED FEMALE (through translator): I think what is happening is unacceptable. If you compare this to what happens in sports, when a team
performs poorly, the coach gets kicked out. So if they at the management board should see that, if it is not capable of making sure Air France has a
future, then Air France future should be without it.
(END VIDEO CLIP)
LAKE: The slowdown in China's economy has investors and economists worried.
Excuse me.
But where they see risk, they see -- a clothing store uniquely sees opportunity.
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LAKE: The World Bank says Asian economies will grow more slowly in 2015 and 2016 than previously expected. It's certainly a slowdown for East Asia
made in China. As Max Foster explains, when China slows, investors around the --
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LAKE: -- world will feel the pinch.
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MAX FOSTER, CNN HOST (voice-over): China is the world's second largest economy and the biggest importer. But 40 years ago, it was a poor, largely
rural nation, with at least 30 percent of its population living in poverty.
That started to change in 1978, when China launched major economic reforms.
The first were agricultural. Farmers were allowed to sell their surplus crops on the open market. Success in agriculture and more open trade led
to the privatization of other state-owned enterprises.
In 1980, China became a member of the World Bank and International Monetary Fund. That's the same year it created four special economic zones to
encourage foreign direct investment.
As the economy opened up to the outside world, companies flooded into China to build factories and take advantage of cheap labor.
Stock markets in Shanghai and Shenzhen opened in 1990. Economic growth boomed the following decade, averaging 10 percent a year.
More than 500 million people have been lifted out of poverty since China's economic reforms began. It's been called an economic miracle and one that
the global economy has come to depend on.
(END VIDEOTAPE)
LAKE: Stocks in the U.S. rose sharply on Monday. The Dow closed up more than 300 points.
CNNMoney's Paul La Monica is with me now.
Paul, this seemed to be a bit of a surprise.
What's changed that we're getting this back-to-back gains?
(CROSSTALK)
PAUL LA MONICA, CNNMONEY DIGITAL CORRESPONDENT: Well, it's back-to-back- to-back-to-back -- five days in a row now we've had been a rally that comes after five days of losses for the S&P 500.
I think two key things that people I spoke to are looking at. One, the reversal on Friday, the jobs numbers were not good. Stocks went down. But
then by the end of the day, investors, for whatever reason -- and maybe it's the Fed won't raise rates until 2016; maybe it's let's not take one
jobs number and declare a recession off of that -- investors were more heartened by the end of the day.
But also last week we got really close to those August 24th lows when the market plunged 1,000 points and we bounced off it. So people are saying
that's a good sign that maybe the worst is over.
LAKE: And in this kind of environment, people do watch those levels.
LA MONICA: Yes.
(CROSSTALK)
LAKE: They do matter at points like this in the market.
I want to ask about American Apparel. It's a story that we're watching here during the session. This has been a retailer that's been struggling
for a long time. It looks like they finally are looking for bankruptcy protection.
LA MONICA: Yes, this is, I think, inevitable; was inevitable because of the massive debt load that the company had for a company that isn't that
big to begin with. Sales have been plunging. They have been reporting losses. They really lost their way.
Then you throw in the Dov Charney antics for lack of a better word and it just compounded things for them. They really had a negative image and they
just weren't making the types of apparel that younger people wanted to buy. It's something we've seen with Abercrombie & Fitch and a lot of other teen
and youth-oriented retailers as well.
LAKE: It's a tough environment. We'll see if this restructuring gives them the ability to kind of redefine themselves, I guess.
Paul, great to catch up with you. Thanks so much. What a day.
Well, while American Apparel has struggled to find a business model that works, its rival, UNIQLO, is booming. UNIQLO's CEO says clothing companies
like his can survive any economic downturn and he's proving it by expanding in China, even as economic growth there slows.
(BEGIN VIDEOTAPE)
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UNIDENTIFIED FEMALE: (Speaking foreign language).
SAIMA MOHSIN, CNN CORRESPONDENT (voice-over): This is the world's first and only Magic For All store in Shanghai, a collaboration between clothing
giant UNIQLO and Disney.
TADASHI YANAI, CEO, UNIQLO: What a wonderful world of color.
MOHSIN (voice-over): And Japan's richest man, Tadashi Yanai, is behind it. Despite the crashing stocks and rocky economy which has spooked global
investors, he plans to open 100 more stores this year in Greater China, to add to 380 already doing business.
TADASHI (through translator): I have absolutely no concern whatsoever about the economic situation, even with a downturn or upturn of the
economy. Clothing is what everyone needs. No one is walking naked on this street. China is a more life- and consumer-centric market because
increasing numbers of people will be joining the middle class.
MOHSIN (voice-over): There are fears the economic slowdown in China will have an impact on consumer spending. Luxury goods are already feeling the
pinch as manufacturing and exports decline. It's the Chinese shopper the country is depending on for economic growth.
[16:25:00]
UNIDENTIFIED MALE: he last quarter of this year, obviously, we're saving money, OK? But maybe in the future, next, the first quarter of the next
year, I'll be watching. Maybe I will spend some of the money.
UNIDENTIFIED MALE: For me, not really. I mean, I like his suit the same. It doesn't have a big impact, that's all.
UNIDENTIFIED FEMALE (through translator): I'm concerned. I feel the economy is bad now, so I'll spend less money. For instance, I'll be dining
out less.
MOHSIN (voice-over): UNIQLO's been slow to move from the shop floor to online sales. But Tadashi Yanai says he aspires to be one of the most
digitally advanced companies in the world within three years.
China's rapidly changing economy means companies have to adapt their strategies to ensure the footfall continues through their doors, like this
Disney-UNIQLO project.
MOHSIN: Some people might say this is just a gimmick.
TADASHI (through translator): Well, some dubious people may look at it as just a gimmick. But look at the product. Look into the quality.
MOHSIN (voice-over): Tadashi Yanai says the economic slowdown means people still spend. But are more discerning on where and how they spend. They
want better value for money as people develop a good eye for a good buy.
International brands like his continue to come to China to tap into the huge volume of potential customers. Even the slowing-down market here
outpaces many others in Europe and the U.S. -- Saima Mohsin, CNN, Shanghai.
(END VIDEOTAPE)
LAKE: A victory for austerity in Portugal. We take a look at what the election results will mean for the country's economy.
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LAKE: Hello. I'm Maggie Lake.
[16:30:00] Coming up on the next half hour of QUEST MEANS BUSINESS, the head of the International Labor Organization tells us how Europe can tackle
its migrant crisis.
And not all of FIFA's sponsors are calling for Sepp Blatter's head. I'll speak to the global CEO of Interbrand.
First though these are the top news headlines we are following for you this hour.
Russia has released new video of its airstrikes in Syria. It comes as Turkey says it intercepted a Russian jet that violated its airspace over
the weekend. Russia says that violation was accidental and won't be repeated.
NATO's Secretary General said Moscow's recent actions were unacceptable and that Russian military moves had reached a more dangerous level.
(BEGIN VIDEOCLIP)
JENS STOLTENBERG, NATO SECRETARY GENERAL: I've just met with the foreign minister of Turkey to discuss the recent military actions of the Russian
Federation in and around Syria including the unacceptable violations of Turkish airspace by Russian combat aircraft.
I made clear that NATO remains strongly committed to Turkey's security.
(END VIDEOCLIP)
LAKE: Doctors without Borders says the United States remains responsible for a deadly airstrike on its hospital in Kunduz, Afghanistan and is trying
to pass responsibility to the Afghan government.
At least 22 people were killed in Saturday's attack which the aid group is calling a war crime. The commander of U.S. forces in Afghanistan says
Afghan forces called for air support from the U.S. military.
(BEGIN VIDEOCLIP)
GENERAL JOHN CAMPBELL, U.S. ARMY: We have now learned that on October 3rd, Afghan forces advised that they were taking fire from enemy positions and
asked for air support from the U.S. forces.
And airstrike was then called to eliminate the Taliban threat and several civilians were accidentally struck. This is different from initial reports
which indicated that U.S. forces were threatened and that the airstrike was called on their behalf.
(END VIDEOCLIP)
LAKE: Residents of Columbia, South Carolina have been ordered to evacuate their homes after a dam breach. Authorities are still working to determine
how serious the breach is. Flood waters have hit South Carolina hard. At least nine people have died in weather-related incidents and hundreds of
roads and bridges remain closed.
U.S. Coast Guard says it believes a missing cargo ship has sunk near the Bahamas. Rescuers are continuing to search for survivors. One body has
been found along with debris from the vessel including a life boat. Thirty-three crew members were onboard the El Faro when it lost contact on
Thursday in the midst of Hurricane Joachin.
An American Airlines flight to Boston has landed safely after the plane's pilot died during the flight. The flight was en route from Arizona when
the pilot died. It was diverted to Syracuse in New York where it was safely landed by the co-pilot.
An airline official says an illness was the cause of death but did not give any further details.
Portuguese voters have signed up for another four years of austerity. Portugal's ruling center-right coalition has won the country's election but
lost its majority.
Prime Minister Pedro Passos Coelho was reelected. It means Portugal is the first Eurozone country to reelect a government which enforced international
bailout terms.
Portugal's economy returned to growth last year. The prime minister says a pro-European coalition is needed to keep up momentum.
(BEGIN VIDEOCLIP)
PEDRO PASSOS COELHO, PORTUGUESE PRIME MINISTER, VIA INTERPRETER: More than 70 percent of Parliament has a perspective affiliated with Europe and of
belonging to the single currency whose rules must be followed if the country want's continue growing and if the Portuguese are to recover their
income.
(END VIDEOCLIP)
LAKE: Joining me now is the Portuguese Secretary of State for European Affairs from Manchester, Bruno Macaes. Thank you very much for being with
us today, sir. Congratulations on -
BRUNO MACAES, PORTUGUESE SECRETARY OF STATE FOR EUROPEAN AFFAIRS: It's a pleasure, Maggie.
LAKE: -- the election win, but it is going to be tough without the majority. Do you think the government can continue to push through the
reforms needed?
MACAES: Yes, and we have been pushing for a large consensus in Portuguese society and in Portuguese politics precisely to continue doing these
reforms. The result yesterday is very clear, the Portuguese people think these reforms are necessary and they returned us to power.
It's a very significant result because there's this idea very widespread in Europe and other places that you cannot implement structural reform,
fundamental economic reform and be reelected.
Well, we showed yesterday that it is possible.
LAKE: It is possible. Without the majority that would have been more helpful and the opposition is saying, "The government has to understand
things are different now" - that's a quote.
How are things going to change? How are you going to build a coalition?
[16:35:00] MACAES: Well actually we have calling on the opposition to join us in this reform effort and this reform process for two or three years,
more intensely.
And this was part of the election result because the Portuguese people saw where the - where the will to have a national consensus was.
So I think we just have to keep doing this and hope that the opposition took the same conclusion from yesterday's result that we took - that the
Portuguese people want us to together.
LAKE: The Portuguese economy is improving. A lot of people look at it as a success story, but there is also great worry that that recovery is very
fragile. How is the government going to shore up and increase that growth?
MACAES: Yes, the early stages are always fragile. I think we've been showing some very impressive results, but we have to keep going and
consolidate and solidify some of these results in terms of exports, in terms of reorienting our economy to exports.
We also need the Eurozone as a whole to do better. For a few quarters now we have been growing faster than the Eurozone average so we need also
economic reform at the E.U. (ph) level.
So I think we've showed yesterday it works, that we can have the public with us, so we need it now also at the E.U. (ph) level.
LAKE: You've been implementing those very strict bailout conditions that were put on your country. Is now the time for Europe as a whole to take a
look at tweaking some of that policy, allowing for some more spending and some fiscal - something coming from the fiscal side to try to boost growth?
MACAES: There's the idea that austerity is a deliberate choice that governments make. That is not true. In certain conditions, in our case of
financial emergency, you are forced to do it. And then you have of course to move to a different stage where the emphasis is on growth while keeping
the necessary focus on fiscal discipline so that you don't have to go through the same.
The message I think is as simple as that and this is what we tried to communicate during the campaign. So it also applies to other countries in
Europe.
LAKE: Sir, we appreciate you being with us today and good luck with the continued -
MACAES: My pleasure.
LAKE: -- difficult work that's ahead of you.
MACAES: Thank you.
LAKE: European stocks rose sharply Monday. Weak data in Europe increased expectations of continued easy monetary policy.
Glencore gave the mining sector a boost after its selloff last week.
If Europe's debt crisis has faded from view, the migrant crisis continues to escalate. Germany now estimates 1 and 1/2 million refugees will enter
the country in 2015 according to bills (ph) citing unique government figures. That's nearly 2 percent of its current population.
Richard spoke last week with the head of the International Labour Organization, Guy Ryder, about Europe's refugee crisis. As some leaders
call for tightening border controls, he asked him what Europe can do.
(BEGIN VIDEOCLIP)
GUY RYDER, DIRECTOR-GENERAL, INTERNATIONAL LABOUR ORGANIZATION: I think Europe's in a really very difficult place right now and the only way Europe
is going to be able to find ways forward is by getting to some type of united European position around this problem.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: But they can't do that.
RYDER: And at the moment the political - well you've seen them, I mean - there's the physical fences are there in every sense. I don't think that
Europe is going to be able to cope with this on a country-by-country basis.
Europe is going to have, in my view, to adopt a common position around this.
QUEST: And what would you want that position to be?
RYDER: Well I think that there's two elements that's not there. There are humanitarian responsibilities. I'm hearing politicians in Europe say
you've got to rewrite the Geneva Conventions because we can't cope with this any longer.
Now I actually think Europe has got to accept its humanitarian responsibilities along with other countries. They've also got to look at
the labor market part of this because whether you like it or not, when people come as refugees, as migrants, it comes down to work.
In the end these people need to work to make a living. So you've got to work at that level.
QUEST: Right. Now, you've put your finger beautifully on it because if we look at the responses, Europe needs a workforce. These migrants, refugees
potentially could be that. And Germany in many ways has been the one that spotted it.
RYDER: Well, I was speaking with the German labor minister in the G20 a couple of weeks back ready to take one million people. We need them. It's
going to cause us trouble in the short term, our unemployment figures will go up, our public finances will take a hit.
In 10/15 years' time, Germany will be a winner from this. But the trouble is politicians don't generally operate on the 10-15 year policy horizon.
QUEST: You have another problem though. Because what you need to protect is that this workforce, this migrant workforce, doesn't push down wages and
change the equation on working conditions and standards, which of course is exactly the race to the bottom that you and I have talked about before.
RYDER: But, Richard, it doesn't have to be like that.
QUEST: But it inevitably will be.
RYDER: One can never (inaudible). If this is done properly, if people are registered, if they're legally in the country.
As you know German's just introduced a minimum wage that will be applicable to migrants, it should be to local workers.
QUEST: Isn't the risk - isn't the risk though - that these workers, these migrants, these refugees, end up in the informal economy as we politely
call it nowadays - slave labor, whatever you want to call it, trafficked labor - whatever you want to call it.
[16:40:14] RYDER: That's absolutely the danger, absolutely the danger. And so far as countries continue to say 'We put up walls, we reject these
people,' they will get in - they will get in - but they'll get in exactly as you're saying - without documents, without status and vulnerable to the
type of exploitation which as you said, you know, sometimes takes an absolutely horrific proportions.
I think we all have an interest in stopping that from happening.
(END VIDEOCLIP)
LAKE: The rhetoric from many FIFA sponsors is growing stronger. They want Sepp Blatter gone now. As for Mr. Blatter, he respectfully disagrees.
We'll survey the damage with the global CEO of Interbrand.
(COMMERCIAL BREAK)
LAKE: Hublot, the Swiss watchmaker won't join the list of FIFA sponsors calling for President Sepp Blatter's head. The company's chief executive
said Hublot doesn't believe it's up to the sponsors to interfere in the politics of FIFA.
So far Coca-Cola, Visa, McDonalds and Anheuser-Busch have all called for Blatter's immediate resignation. Blatter, who's now embroiled in a Swiss
criminal investigation stemming from corruption allegations is defiant as always and said through a spokesman that he won't leave office.
Joining me now in the C Suite is Jez Frampton, the global CEO of Interbrand. He rang the opening bell at the New York Stock Exchange this
morning to launch their list of the world's best global brands.
And we're going to get to those in a second. Some of those very brands are involved in -
JEZ FRAMPTON, GLOBAL CEO, INTERBRAND: Indeed, the vast majority of the sponsors are.
LAKE: -- FIFA's, I mean, - so they call for Blatter's immediate resignation and he says thanks very much but no I'm not going.
I mean, he's in essence called their bluff. What do they do now?
FRAMPTON: He has. Well of course they're acting in accordance with their own integrity because they've got their own brands to protect.
The four that you mentioned according to our latest list we released this morning, around about $140 billion worth of brand value amongst them.
They've got a lot to protect.
LAKE: Yes. So do you expect they will get their way in the end? This is a - they've got a lot of money at stake and these are powerful companies.
FRAMPTON: They are. And it's inevitable that he will go - they've already talked about that. It's a question of when. But I think they have a point
frankly which is that all the time whilst he's still there, it's very difficult to get on with the future.
LAKE: Yes.
FRAMPTON: And it's quite -
LAKE: They still want to give that relationship up, do they? I mean, that's what he's betting on though. Although they're barking loudly that
they've got too much involvement.
[16:45:07] FRAMPTON: It's a great property to have, you know? And it fits very well with all of these brands. They're all very big global companies,
it's a great connection, very good in terms of the audiences and everything else. Of course they want to keep it.
But there will be a point whereby, you know, one or a number of them say 'enough.'
LAKE: It's unacceptable.
FRAMPTON: Yes.
LAKE: Yes. Do you think this will have them more engaged in the calls for reform once he eventually does go and we start to see a new chapter turn
over at FIFA.?
FRAMPTON: I mean, it's difficult to say what's going on in the background, but I'm sure they've all got individual and perhaps even joint ideas of
what they'd like to see.
At the end of the day, you know, the game is not at threat, but it's the integrity of the organization that's actually running it.
This goes to the very heart of FIFA's authenticity as a brand, and all the time while, you know, this is unresolved, it's not doing FIFA any good or
indeed any of the sponsors.
LAKE: No, absolutely not. And of course it's not just involving one man. It's quite deep which is another problem for the sponsors as well.
I do want to talk about the global brands. You do the list every year -
FRAMPTON: Yes.
LAKE: Looking down some of the names on the list, technology seems to be so dominant.
FRAMPTON: It is actually. I mean, if you take a look at the list, there's 15 automotive brands on there and there's 13 technology brands. But the 13
-
LAKE: Times have changed.
FRAMPTON: -- but the 13 technology brands make up 1/3rd of the entire value of the list, which is about $7.1 trillion. I mean, it's a quite
significant amount here.
LAKE: And is it just because it interacts with our lives so much? Is that how - or are they being very smart about how they might manage their brand?
FRAMPTON: Well they are very smart about how they manage their brands, there's no doubt about that. That's why many of them are at the top of our
list.
But they interact with our lives. We - many of them are platforms upon which we do many different things. If you consider, you know, a brand like
Apple for instance, you know, which is number one on our list.
You know, there's music, there's video, there's our phones, there's increasingly financial services. A whole raft of different things that
they provide to us.
Google's the same, Facebook's the same.
LAKE: Right. And the great messaging. It's all about improving your life and making the world a better place which helps.
I want to mention Lenova though, --
FRAMPTON: Yes.
LAKE: -- a Chinese company making their way on the list as well. So it's not limited to those big American Silicon Valley giants, is it?
FRAMPTON: It's not. They're the second Chinese brand. Huawei came on last year and Lenova I've entered at number 100. And I'm sure those are
just the first two of many.
LAKE: Yes. Volkswagen is also on the list. We have to mention that. Are they going to remain on the list is the big question I suppose?
FRAMPTON: They are still on the list. Obviously it's the early days for us to really be absolutely sure what the long-term effects will be.
So in the model that we've used, we've taken into account certainly the near term - the next year or two and we've looked at what happened to
people like Nike historically and more recently Toyota and BP to draw some analogies to work out.
But it's quite interesting, going back to the FIFA point, when you - when you - look at how Volkswagen have handled that situation. Very honest,
very transparent, very quick compared to what FIFA are doing.
Maybe a little bit that could be learned.
LAKE: They're going to be put to the test though because they're going have to testify in front of Congress.
FRAMPTON: Yes.
LAKE: That may be very heated and that's going to be crucial.
FRAMPTON: It's going to drag on.
LAKE: The customers are going to be watching now.
FRAMPTON: Yes, I mean, again, when you look at the early sales information, it's a bit difficult to tell whether it's really affecting
them that much, and they have actually been very, very straightforward.
They're going to fix the 11 million cars involved, you know, they've been straightforward.
But you're right, this is going to drag on because it's going to end up --
(CROSS TALK)
LAKE: It is going to be interesting though. Consumers have shown they're very forgiving when it comes especially to automotive brands if they can
set the course right after a mistake.
So we'll see if that plays out for Volkswagen.
FRAMPTON: Brands are after all a risk reduction mechanism. They enable you to weather the storm -
LAKE: Yes.
FRAMPTON: -- and this is exactly what Volvo - Volkswagen - are benefitting from right now.
LAKE: That's right, if you've built them well. Jez, it's lovely to catch up with you in person. Thank you so much -
FRAMPTON: Pleasure (LAUGHTER).
LAKE: -- for coming by.
FRAMPTON: Thanks, Maggie.
LAKE: Well one of the biggest trade deals in history gets the go-ahead, but President Obama must still get Congress onboard.
(COMMERCIAL BREAK)
[16:51:36] LAKE: U.S. President Barack Obama says the Trans-Pacific trade deal reached Monday will boost demand abroad for U.S. goods and services.
The challenge now for the President will be to get Congress to approve. Jason Furman is the chairman of the White House Council of Economic
Advisors and he joins me now.
Jason, so nice to see you again. I am sure as you have to pitch this to Congress a lot of people sitting in a lot of voting districts are going to
say, 'Why is this a good thing for me?'
JASON FURMAN, CHAIRMAN, WHITE HOUSE COUNCIL OF ECONOMIC ADVISORS: There are so many reasons this is good for Americans. In fact, there are at
least 18,000 reasons it's good for America.
And that is how many tariffs or taxes on American exports are being cut by this agreement. It's in services, it's in agricultural, it's in
manufacturing in addition to labor standards, environment standards, addressing state-owned enterprises, open internet, greater transparency -
you know, there's something in this for everyone.
LAKE: Well critics of course, as you know, are already saying there's something it from everyone, but those people are mostly the investors in
the companies who greatly benefit for this, and the average worker is once again going to see jobs shipped abroad.
FURMAN: Absolutely not. The point of this agreement is an unprecedented set of commitments on labor standards, agreeing in areas like minimum wage
and organizing, an unprecedented set of agreements on the environment. These are - you know - in terms of how you deal with your fisheries and
trade and wildlife and a range of other things.
This is about leveling the playing field up so that America can compete in a better way. This is good for our workers, it helps address all of those
concerns.
LAKE: Some people have said that one of the reasons the Administration pushed so hard for this because it was a needed counterbalance to China's
influence. Will it achieve that?
FURMAN: You know, we welcome a strong China that is playing by the rules and is part of the international system, and the goal of this agreement is
to make sure that the international system is being designed in a way that's been successful and worked for the United States and for countries
around the world for decades.
So take something like state-owned enterprises. That this is the first trade agreement to have something that addresses what this is going to do
for labor unions in a country like Vietnam.
This shows the way in which we're trying to define the global economy, and it's a global economy that's a level playing field.
LAKE: Jason, do you think that Congress is going to go along with this? A lot of people feel like there is bipartisan support, but we are nearing a
fight over the deficit, we are entering election politics and we know how that works in Washington.
Are you confident this will get through?
FURMAN: You know, we're going to be working to earn the support of Congress, we're going to be, you know, the agreement's going to be public
for 60 days before the President signs it.
People will be able to read the agreement, they're going to have a lot of questions. They should have a lot of questions. And we're going to be
working hard to earn that support and we're confident that we should get that support.
LAKE: Jason, it's not very often that you see all of these different countries come together and form an agreement. I think a lot of people are
holding out hope that you are right - that it brings all these economic benefits.
[16:55:06] Thank you so much for coming on today and helping us understand a little bit better. Jason Furman, Chairman of the Council of Economic
Advisors.
FURMAN: Thank you.
LAKE: Now when we come back, he founded Alibaba, made billions of dollars and now Jack Ma is turning his hand to painting. We'll show you the
results next.
(COMMERCIAL BREAK)
LAKE: He's an entrepreneur, a philanthropist and apparently an artist as well. Alibaba's co-founder Jack Ma has sold his first painting and made
millions in the process.
This is an oil canvass titled "Paradise" painted by Jack Ma himself. It's his first-ever painting. And on Sunday night it sold for almost $5 and a
half million at Sotheby's. That's more than 17 times what it was expected to get.
He did have a little help. He was working with the popular Chinese artist Zeng Fanzhi.
As for that $5 and a half million, the proceeds won't go towards Alibaba. Ma says he's going to donate the money to an environmental charity that
he's backing.
Before we go, a final check of the markets. And it was a nice looking picture today. The Dow closed up 304 points. That is on top of a 200-
point rise on Friday.
Investors are betting the Feds will hold up on interest rate rises after a disappointing jobs report.
The big winner on Monday - Twitter with a 7 percent rise. That came after the company's board named Twitter co-founder Jack Dorsey as its permanent
CEO.
Twitter shares are still down more than 20 percent this year.
And that is "Quest Means Business." I'm Maggie Lake. Thanks so much for watching. The news continues here on CNN.
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