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Quest Means Business
President Obama holds a press conference in Greece. Trump's transition team says the President-elect will start renegotiating the North American Free Trade Agreement. Australia's opposition Labor Party says, TPP should be put on hold indefinitely. Russia's economy minister meantime, has been fired after he was charged with bribery.
Aired November 15, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] PAULA NEWTON, CNN ANCHOR: You have come to QUEST MEANS BUSINESS to see if the Trump rally is real? Believe it baby. A new day. A new
record on the Dow. It's Tuesday, November the 15th. Tonight, Barack Obama warns the world to fight back against populism before it is too late. Two
hundred days to stop TPP. We have new details of Donald Trump's plan to overall global trade. And a green light from Ford, the CEO says he's ready
to work with the new President-elect. I'm Paula Newton, and this is QUEST MEANS BUSINESS.
Good evening, cast your mind back, not even way back, but to what the world looked like this very time last week. Voting was almost complete in a very
close election with most polls predicting a narrow victory for Hillary Clinton. Instead, here we are, the whole political and economic play book
has been turned upside down, and tonight you're going to hear from voices from all over the globe on the new economic reality under Donald Trump.
As Barack Obama begins his final foreign trip in Athens, I will be joined by Greece's former Prime Minister, George Papandreou. The CEO of Ford,
meantime, one of Trump's favorite punching bags, tells us American workers could be caught in the middle of a new trade war. And Australia's finance
minister will tell us about the future of the Transpacific Partnership.
And we have been speaking to IMF chief, Christine Lagarde, giving her very first television interview since the election. Tonight, Barack Obama calls
on global leaders to address the economic fears of their citizens. Standing alongside the Greek Prime Minister in Athens, Mr. Obama said,
Donald Trump won the White House by drawing on a troubling strain of rhetoric. He said the President-elect played on American's fears of
globalization and feelings of economic insecurity.
(BEGIN VIDEO CLIP)
BARACK OBAMA, U.S. PRESIDENT: We have to deal with issues like inequality. We have to deal with issues of economic dislocation. We have to deal with
people's fears that their children won't do as well as they have. The more aggressively and effectively we deal with those issues, the less those
fears may channel themselves into counterproductive approaches.
(END VIDEO CLIP)
NEWTON: Now think about it, this trip was supposed to be Obama's victory lap around the world, but now he's at a cross between an apology tour and a
counseling session for America's allies. The president will be in Greece until Wednesday. The ancient birthplace of democracy will be the backdrop
for an address defending open and globalized societies.
Now as that world view looks increasingly under threat, Obama will head to Berlin on Thursday for meetings with Angela Merkel, Francoise Hollande,
Matteo Renzi and Theresa May. And he'll continue the trip in Peru, sitting down with the leaders from around the Pacific region including China's Xi
Jinping. Michelle Kosinski begins, she is our White House correspondent and she is in Athens tonight. I mean, look, there was not much parsing
words there from Barack Obama. He was fairly blunt about what he thinks what this rising tide of populism means.
MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Yes, and he was more introspective, too. This is really the first time he was asked to get into
the heart of what propelled Donald Trump to the presidency. I mean, he was really asked, do you think that your policies played a role in creating the
environment that lead to that? That produced a deeper response than we've heard from him since the election. Keep in mind the first time we have
heard from him about the outcome was just yesterday.
So as the trip progresses, and he has more and more opportunities with the press, he's going to continue to get these difficult questions. And
clearly, he's prepared. He is not shying away from how he really feels about it. Although, he is tempering it while he speaking publicly with a
foreign leader right next to him, but just as we saw yesterday, he tried to express some optimism. At the very least resignation that this is what
America has chosen. Today he was more critical and you know, he hasn't backed away either from the things that he said about Donald Trump while he
was on the trail. Namely that he doesn't feel Donald Trump is fit to even be president at all. And the White House has reiterated that president
Obama meant every word of what he said while Donald Trump was running for president, Paula.
[16:05:00] NEWTON: And when you take all of that and you look at America's position on the globe, what is he saying to these allies? He supposed to
be there trying to make them feel better about this, and yet you can imagine that the allies haven't been particularly put at ease by these
comments.
KOSINSKI: There is shock there for sure, and talking to diplomats and people who are insiders, you know, there is still a stunned feeling to see
this happen in America even though many European countries, I mean, certainly the U.K., have felt that same sentiment that Trump was propelled
by. The Brexit, anti-immigrant sentiment. They know what lead to this. They know this tide of populism and they moved towards the right. But to
see it happen in America, there is still that big shock and that big uncertainty. Because America is such a leader on some these difficult
issues, like the client deal, the Iran nuclear deal, and on and on it goes.
It's not that they're necessarily comforted by what President Obama said. They know that it's time to move forward. This is the way things are going
to be. And right now, leaders that have harshly criticized Donald Trump while he was running for president, I me, Mexico for instance, the
president compared him to Hitler and Mussolini. Now he's one of those who is saying let's look for paths to work towards a greater cooperation.
Because that's really all anyone can do, Paula.
NEWTON: As you said a whole new world that everyone is trying to come to terms with. Michelle Kosinski live in Athens tonight, appreciate it.
There are clear parallels between the rise of Trump and the rise of the Syriza party there in Greece. Both won powers voted opted to rejected
establishment politicians. Both promised economic renewal and vowed to tear up old agreements and replace them with new and better terms. Now
today, Greek Prime Minister, Alexis Tsipras, said, he doesn't know what to make of the U.S. President-elect.
(BEGIN VIDEO CLIP)
ALEXIS TSIPRAS, GREEK PRIME MINISTER (through translator): I know very little of Donald Trump. Some have told me I should have read his book
before going to bargain in Brussels, "The Art of the Deal". I didn't, but I don't think that was decisive to the result.
(END VIDEO CLIP)
NEWTON: George Papandreou, who was prime minister of Greece from 2009 to 2011 joins me now via Skype, live from Athens. I think you for joining us
on what we have already said are tumultuous times. How about it. When you look at the developments in Greece, and you see the new world order, as it
were, I mean, do you think that Donald Trump has hit on something, that wave of populism that will just continue to spread and will impact
relations for years to come?
GEORGE PAPANDREOU, FORMER GREEK PRIME MINISTER: I believe that Greece, for example, has gone through major sacrifices and adjustments and it hurt.
But it also has hurt around Europe, the recession, which came after the 2008 Wall Street debacle and crisis. And this has created deep
inequalities, a sense of injustice. Great uncertainty and insecurity around the world, and the forces of globalization that both have positive
possibilities, but we also have to humanize globalization. Because it has excesses that's created also a marginal part of our societies. And we feel
that quite a bit in Greece.
However, the answer is not to divide. The answer is not to create more hatred. The answer is not xenophobia and racism. The answer is more
cooperation. But we do -- things do need to change. I mean, things need to change in Europe. We need new policies. President Obama mentioned that
we need growth policies in Europe. Well, he's been saying that. I've been saying that since 2009 when I was prime minister. We needed a, I would
say, green growth policy where Europe would become more come competitive through changing its infrastructure, building up its infrastructure.
Building up new technology. A race to the top, not a race to the bottom. And I think the developed world is facing a race to the bottom and that's
hurting large parts of our societies and that is what Trump has tapped into. But I don't think that his policies, as were stated, pre-electorally
at least, I would not agree that they will be the answer.
NEWTON: And yet they're going to have to be the answer for the United States. He is President-elect. He will lead this country for at least
four years. When you look at the allies around the world, specifically Europe and then to Greece, you know, you just mentioned, Barack Obama has
always said, you know, austerity is not a strategy. And yet Donald Trump is looking at you and looking at Europe and saying, I don't care. Do what
you want. Austerity, no austerity, the debt is your problem. What impact do you think that will have on Europe and other parts of the world?
Especially when we look at an United States that might be isolating itself a little bit more?
[16:10:06] PAPANDREOU: I don't think that isolationism is a solution. And certainly, there's a sense of insecurity or an uncertainty in Europe right
now, and around the world about what the new President-elect will bring to America and of course, to the world. So, I think the element of
uncertainty is quite huge. It's big. But secondly, we're in a world which is so interconnected where we need to work together on climate change. We
need to work together on pandemics. We need to revamp the financial system. We need to work together on refugees and conflicts.
We cannot do things alone. So, the idea of returning to an island would be so nice. When you be nice? I sometimes think of a crisis myself and I say
I will go to the Greek Islands and be isolated. We can't do that anymore. Things like Brexit or isolationism in the U.S. will not solve the problems.
But that doesn't mean we have to be complacent and simply let globalization move on its own terms. We need to humanize globalization. I fought
against tax havens. But we can't do it alone. Capital around the world wants to escape its basic obligations to our society and that hurts. So,
there are things we need to do. And we need to do it cooperatively. And I think that's the essence of Europe and that is what Europe would want to
see and of course to continue with the United States.
NEWTON: And we see if that relationship will continue. Thank you for your thoughts and time this evening from Athens. Appreciate it.
Christine Lagarde, meantime, says choking off international trade is not a realistic either for President-elect Donald Trump. In her first interview
on the results of the U.S. election, the managing director of the International Monetary Fund, told me trade must be sustained under the
Trump administration. She says, America's deals can be renegotiated but not purely in favor of America. In her words, "It takes two to tango."
And her advice to Donald Trump, "Focus on ways to deliver inclusive growth. The kind that everyone benefits from." Now, on the campaign trail Donald
Trump said the world -- get the U.S. growing at twice its present rate. Twice. I asked Lagarde if he can deliver.
(BEGIN VIDEOTAPE)
CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: If he wants to do it. Hopefully he would focus on a key matter which is
inclusiveness. It cannot be growth for the benefit of too few and ignoring many. So, it has to be inclusive growth. There is one thing that we have
not paid enough attention to about international trade, about movement of goods and services. It's inclusiveness. It's making sure that people
aren't bored. It's making sure that are trained. It's making sure that people can adjust and benefit from that growth. So, growth, yes by all
means. Please, try those new proposals, you know, investment, infrastructure, supporting the creation of jobs. That is all well, but it
has to be inclusive growth in order to be sustainable.
NEWTON: But Donald Trump's positions on trade specifically, seem to run completely counter to everything the IMF basically endorses around the
world. NAFTA seems like it is headed for some type of renegotiation. Transpacific Partnership seems completely dead. In that context, do you
think it will hurt the world economy?
LAGARDE: Well, if what he says is trade as it is today, no thank you. But trade that would be inclusive. That would benefit people and not the happy
few. Yes, thank you. Let's explore it and let's see how we can renegotiate. I heard that Justin Trudeau, from Canada, is prepared to re-
examine and potentially renegotiate. You know, companies are very, very integrated around the world. You don't just rule out and eliminate trade
by saying, no trade. You can say, at those terms, not profitable to all, let's make it more inclusive, then that's another project.
NEWTON: But I guess what I'm getting at is a lot of those principals about trade, that you know, you've put on the table, people have been talking
about that for years. Donald Trump wants to absolutely turn that model upside down. He's saying, trade only works for the United States as long
as the U.S. is on the winning side every time. On some issues of trade, they cannot be on the winning side every time.
LAGARDE: I was in business, and I've negotiated my deals as well. It takes two to tango, and a deal can't be one sided. If there was
negotiation, if there was continuation of negotiation with any of those draft agreement at the moment, it would have to benefit both sides. Deals
cannot be one-sided.
[16:15:00] NEWTON: What can you say that is very convincing? Not just hopeful. Not just optimistic. What concretely can you say about this
election going forward that will assuage what is a lot of nervousness around the world, in fragile economies who look to the United States to be
an engine of growth and an engine of really of openness in the economy?
LAGARDE: I would say that when the United States, which is the largest economic power in the world, does well because it grows, and if that growth
was inclusive, it would certainly demonstrate that change can drive that economic improvement. I think reality is a very good test of the
determination in terms of policies. And we have to work together. The second thing I would say is that I have huge faith in the American soul and
in this attitude of optimism, hospitality. I came to this country when I was 17, and I will never forget the hospitality and the inclusiveness that
was demonstrated to me. I think that is part of the American soul as described by Mr. de Tocqueville, back in the 19th century.
(END VIDEOTAPE)
NEWTON: Lagarde there trying to wrap up in a positive light. Meantime, Donald Trump plans to start U.S. trade reform on day one of his presidency.
That's a message emerging from his transition team. And we'll be live with Australia's finance minister to talk about all that just after the break.
(COMMERCIAL BREAK)
NEWTON: Republicans in Congress have begun the curtains on President Obama's term in office. According to the House Majority Leader, they're
asking government agencies not work on any new regulations between now and Donald Trump's inauguration. A memo from Trump's transition team says the
President-elect will start renegotiating the North American Free Trade Agreement on day one in the White House and he also hopes to stop the
Transpacific Partnership deal in the first 200 days in office. Australia's opposition Labor Party says, TPP should be put on hold indefinitely.
Australia is one of 12 countries involved in the deal. The finance minister Mathias Cormann, joins me now live from Melbourne. Sir, we talk
about putting it on hold, I mean, is TPP just completely dead at this point?
MATHIAS CORMANN, AUSTRALIAN FINANCE MINISTER: You have to assume it is highly unlikely that it will proceed. Which from the Australian point of
view is a shame, because we do think it is a good agreement that delivers benefits for people across all 12 countries and indeed would be a boost to
global economic growth. But you know, we obviously respect the result of the election in the United States and there is obviously some work to be
done moving forward.
[16:20:05] NEWTON: Australia, obviously, a trading nation. You rely heavily on trade. Do you expect to be caught in the cross fire if a trade
war between China and the U.S. erupts?
CORMANN: We are an open trading economy. We, obviously, the United States and China are two of our most important trading partners. It is always
important to ensure that any trade relationship is very much based on a win, win outlook. And that is certainly the way that we approach our trade
relationships with the United States and with China.
NEWTON: But how are you approaching Trumpanomics? I mean, clearly in your office when you saw the results, everything must have changed. You must
have shifted your paradigm or wouldn't have been responsible not to.
CORMANN: We always respect the fact that the decision of the U.S. election was a matter for the American people. We always said that any Australian
government will work well with whomever the American people choose to be their president. We very much look forward to working closely with the
Trump administration. We have engaged with the Trump transition team. Our Prime Minister said a very warm, a very positive conversation with
President-elect Trump. So, we're very focused on making sure that our very strong relationship continues to strengthen into the future and we're long
standing friends and allies. We have been involved in many global challenges side by side and we very much look forward to working closely
and very, very cooperatively with the Trump administration moving forward.
NEWTON: We've heard a lot of positive comments from leaders like you around the world, but what we have yet to hear is something concrete. If
you're dealing with the transition team, what are you telling them? Because right now the United States is saying, look, we're only in this
trading game for the United States and U.S. interests. So, how will things change?
CORMANN: well, this is very early days. It's a week since the election. Obviously, you know, the Trump team is preparing for the transition, and
president Trump will take office on 20 January. So, there is a bit of work to be done between now and then and that is a matter for them. From our
point of view, we will continue to focus on the very positive contribution to the United States made to this part of the world. To peace, and
stability, and prosperity in this part of the world. And the important of continued engagement for stability and prosperity in the Asia-Pacific. And
there is other sorts of matters that we'll continue to talk to the Trump transition team and indeed in the future the Trump administration about.
NEWTON: One of those other matters is a deal that apparently, the Australian in the United States have to transfer refugees better on Pacific
islands right now to the United States. Do you expect that deal to continue through to a Trump administration?
CORMANN: This is something that has been negotiated with the Obama administration, which of course continues to be in office until the
transition has been completed. You know, certainly again, Australia and the United States have a long history of cooperation on the matters of
mutual interest and you know, we certainly look forward that these sorts of agreements that have been reached will continue into the future.
NEWTON: I will take that as a maybe. Is that OK? It might happen.
CORMANN: We would like to think it's a yes, but where not making any assumptions, but we certainly are working towards ensuring that this
agreement will continue in the same way like other agreements in the past have continued across different administrations.
NEWTON: Got you. Fair enough. And I appreciate your time today from Melbourne. Thank you.
Now on Wall Street, the Dow rose 54 points to close at, yes, you heard it. A record high. It's the fourth record close in a row. The tech heavy
NASDAQ ended the day of 1 percent. Quite a rally there. Tech stocks have fallen sharply since election day.
Now, Russia's economy -- there economy minister meantime, has been fired after he was charged with bribery. Aleksei Ulyukayev allegedly accepted $2
million to help push through a major oil deal. Matthew Chance is live in Moscow with what we hope is the back story. I mean, many people are saying
this is not as it seems. What is going on within the Russian government and why is this so significant?
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, clearly, Paula, there is a huge problem with corruption in this country. The arrest
and the charging of Aleksei Ulyukayev, the economic development minister in Russia, is being cited by Russian state media as an example of how there is
an official crackdown on corruption. And nobody is above the law. Nobody is untouchable, even ministers of the Russian state.
[16:25:00] So in that sense, the message is that if you take money from the state coffers, and remember, billions of dollars go missing every year from
the Russian state coffers. Then you are in danger of being held to account. But of course, the problem of construction in Russia is so
pervasive that inevitably their speculation that this is more political than it is criminal. Mr. Ulyukayev was a prominent voice against the
privatization of this particular small oil company in Russia called Bashneft, that was brought by the big, massive Russian oil monopoly
Rosneft. Paying something like $5 billion for a 50 percent share in that company.
He was opposed to that deal. The deal was overseen by one of the closest allies of Vladimir Putin, who is the head of Rosneft, and the speculation
is that this was some kind of very cruel, very dramatic pay back. It wasn't enough for him to be fired or ostracized or sidelined. He was
actually charged with taking this $2 million bribe. But according to the prosecutors, this was a long running operation. It took several months.
The FSB, the successor organization to the KGB, had surveillance and phone tapping in order to entrap Mr. Ulyukayev, and when they did that, they
finally brought charges to him and he has been put on house arrest.
NEWTON: Very interesting times in Moscow right now as Matthew Chance continues to follow that story. Appreciate it, Matthew.
As a candidate, Donald Trump targeted Ford and time and again over its plans to shift production to Mexico, the CEO of Ford has been speaking to
CNN. He says some of Trump's proposals will harm the United States.
(COMMERCIAL BREAK)
NEWTON: Hello, I'm Paula Newton, coming up on the next half hour of QUEST MEANS BUSINESS, a leaked memo says the British Prime Minister is trying to
do way too much on her own with Brexit. And Christine Lagarde tells me men and women have to work together to smash that glass ceiling. First these
are the top stories here on CNN.
U.S. President, Barack Obama, has issued a warning against a rise quote, "A crude sort of nationalism." That is coming during a news conference in
Athens. In his first stop during his final overseas trip as president. Mr. Obama said President-elect Donald Trump has tapped into what he called
a troubling strain of rhetoric. Meantime, President-elect Donald Trump as received his first presidential daily secure brief since winning the
election.
[16:30:00] That top-secret document read by the president and his inner circle of security advisors covers threats and intelligence developments.
The leader of France's far-right National Front Party is praising Trump's victory saying it "Shows people are taking their future back." And she
suggested French voters do the same. Marine Le Pen is hoping the recent rise in populism will last through French presidential elections in mid-
April and May. She is expected to be a front runner.
German Chancellor Angela Merkel will seek a fourth term. That's according to one of her parties politicians who spoke to CNN. Ms. Merkel is
Germany's first female leader has come under fire for her own open-door refugee policy. She says she made mistakes regarding the controversial
issue. Parliamentary elections will take place in September 2017.
Ford's CEO, Mark Fields, has a warning for President-elect Donald Trump. Tariffs on cars made in Mexico will hurt the U.S. Trump proposes a 35
percent tariff along with a complete renegotiation of NAFTA. That agreement which came into effect 22 years ago, and is responsible for the
shape of the North American auto industry as we know it today. Now the big three companies are American. The cars frequently are not. Ford has five
plants in Mexico and Canada. The company plans to move small car production to Mexico. Meantime, through an outrage from Trump, he promised
if he got to be president he'd put a stop to moves like that. By one estimate is costs $600 less to produce a mid-sized car in Mexico than
United States. About 80 percent of autos made in Mexico are then exported. Most go North.
Now, GM largely escaped Trump's wrath even though it has more plants in Canada and Mexico than Ford. GM is in the middle of a fire-year plan that
will pour about $5 billion into factories in Mexico. Meantime, Chrysler's plans are smaller entailing investments worth about $1 billion. Earlier
this year Chrysler CEO said a Trump win and changes to NAFTA could affect production right across North America. Now, Ford CEO says he's confident
the right policies will prevail. He spoke with Maggie Lake from the Los Angeles auto show.
(BEGIN VIDEOTAPE)
MARK FIELDS, CEO, FORD MOTOR COMPANY: Now that the election is over. Obviously, President-elect Trump as well as the new Congress is going to
focus on governing. And you know, Maggie, I believe that at the end of the day the right policies are going to prevail. Because we all share the same
objective. We want a strong U.S. economy. As we look at something like a 35 percent tariff, I mean clearly, that would impact the entire auto
sector. As well as the U.S. economy. So, I think we'll have to wait and see. But we're going to stay very on engaging positively with the
administration and the new Congress to really talk about the things that really drive economic growth.
MAGGIE LAKE, CNN CORRESPONDENT: It sounds like you're hoping for the pragmatic president Trump, but what if we get candidate Trump? Do you have
contingency plans? Are you talking to the other CEO's in the auto industry about what you will do if faced with that sort of punitive tariff?
FIELDS: We're always looking at the business environment and looking at scenario planning so to speak. And clearly, something like a 35 percent
tariff would impact our business, and importantly, when you look at NAFTA, both our, as well as the rest of the industry, our production, and our
supply chains, are deeply integrated across the three countries. So, anything like that could impact those supply chains, which would impact
ultimately U.S. workers. So, we want to make sure that we engage, as I said, in a very fruitful but fact based discussion to make sure that we end
up doing the right thing for America and U.S. workers and for our company.
LAKE: You know there is also talk about big spending on infrastructure. We know there is going to be a review of fuel efficiency standards,
something that a Trump administration might be more friendly towards here. So, there are areas that could benefit your sector as well.
FIELDS: Yes, absolutely when you look at our policy recommendations, the first one is that we're going to continue to advocate for currency
manipulation rules. We believe in free and fair trade. Secondly, we want to make sure that the fuel economy regulations are aligned with market
realities. And some of the initial things that we're hearing during the campaign trail, may be beneficial to the business on that. At the same
time, we're also going to continue to advocate for comprehensive tax reform, which we think would be good for not only our company, but also the
industry in the economy overall.
[16:35:00] So, we'll be very consistent in some of the policy recommendations and engage with the administration and the policy makers
around that.
(END VIDEOTAPE)
NEWTON: And so, you heard. Mark Fields is going to engage.
Joining me now, Bob Nardelli, who has been the CEO of Chrysler and as well as Home Depot. Earlier this year, he said a Trump presidency would be good
for the United States. I'm going to say Mr. Nardelli, that you continue to hold that opinion. Why? Because even if you look at the auto industry
when you look at what Donald Trump has said about tariffs and trade. He wants to turn the whole system upside down. What are you worried about
when you see that?
BOB NARDELLI, FORMER CEO CHRYSLER: I'm not so worried. Let's talk about what I feel positive about is to have a business person in the White House
after eight years of what I would say is less than a business-friendly environment. If you look at regulations. If you look at what they -- on
medical devices, I have seen small companies go from positive to negative because of the taxes. If you look at some of the labor laws have been put
in place. Have been very restrictive. If you look at some of the healthcare issues that have been put in place, people have not hired. If
you look at a whole host of things that have kind of stifled -- some of the environmental things -- it really stifled the growth of business. What I'm
encouraged about is that hopefully some of these policies -- and I'm happy to talk about them -- will actually get us a GDP of 3.5 percent or better.
Which is what the administration talks about at the beginning of every year and then walks it back to a .9, 1 percent.
NEWTON: Even in a growth scenario like that, like you said it will bring up a lot of people for at a growth scenario that is 3 percent approaching 4
percent. I get that. But when you talk about trying to up end NAFTA, and you talk about trying to put tariffs in place. I mean, you heard Mark
Fields, he might be optimistic, but he says quite clearly, 35 percent tariffs to the car industry? What would that do?
NARDELLI: Well, it depends on -- you know when I was there -- it depends on whether your closing a plant, dislocating employees and their families,
to move it to a lower labor market. My philosophy was I never had an outsourcing philosophy. I had a global competitiveness philosophy. So, if
we lower the tax rate -- the corporate tax rate -- then you can compete more on a global basis. If you reduce the repatriation tax, you're going
to get more jobs back here. If we really reestablish energy independence. The cost of energy in the auto industry is more than the cost of labor.
And if we didn't stifle fracking and the ability to export, to help -- to help it more as a geopolitical tool on a global basis. So, we become
energy independent.
You're going to see more manufacturing jobs here. Certainly, you would see more auto businesses still here. It's interesting, if you produce a car,
at one point when Fiat took over, they moved the small 500 to be produced in Mexico. Because the biggest export was Brazil and there was a lower
tariff shipping out of Mexico to Brazil. So again, I think it is unfair to just paint a broad brush. I think you've got to look at the specifics of
why corporations put plants in certain countries relative to helping the economics of their decisions.
NEWTON: But Donald Trump is saying, he's going to upend that decision- making. He's promised to bring jobs back to the auto industry and the Rust Belt. Is it what you want to see him do? Do at any cost to American
business?
NARDELLI: No, I think again, we have to step back and look at the specifics here. If in fact, we lower the corporate tax rate. If in fact,
we allow for repatriation. If we have energy independence. If we reduce some of the stifling regulations that are put in place. Corporations are
not intentionally trying to hurt the U.S. employment ranks. They're trying to be competitive. We have a global economy now, right? You agree with
that.
NEWTON: Well, I don't know. He is going to up end NAFTA and TPP is dead. Is that the kind of global economy that you think American industry needs?
NARDELLI: I think this is a global economy. Let's face it. We are more connected now than we've ever been. We're knocking to do things -- things
are not going to get put in place that going to have a detrimental effect to the growth of the country, to the reemployment of people. Who
desperately need a higher GDP that's going to pull jobs in. You can talk all you want about creating jobs. If you don't have an economy to pull
people, and get them off the entitlement role, then it won't happen. So, I am encouraged. I'm optimistic that some of the things that he has talked,
President-elect Trump, will put in place early on and let's see the signs of what happens, Paula.
NEWTON: We don't have a lot of time left, but I do want to get to what's happened with interest rates. Most people see inflation again and see
interest rates rising. When you look at the auto sector, something you know well, and Home Depot, the housing industry in general. Do you fear
about a chill coming to both of those industries with these rising interest rates?
NARDELLI: Well, the banks love it, right? They have been clamoring for lower interest rates ever since this thing has been --
NEWTON: That's because they make money.
NARDELLI: -- low and slow, number one. OK, number two, the auto city has already started to tip from 9.6 million SAR, Seasonally Adjusted Rate, to
17.
[16:40:00] We already see people pulling back because we have a saturation in the market place so that is not a result of this election or interest
rates I think it is just where we are in the cycle the auto industry goes through. With housing, from my experience of Home Depot you win on both
sides, with a housing recovery you win. And it if interest rates go up, people now will go from investing -- they will have to do maintenance. And
what they will do is invest in their home because they will get an appreciated value if interest rates go up.
So, when I was there we saw a lot of do it yourselfers going to do remodel. Improving curb appeal. So, if housing stops people are now flipping homes.
It was a positive situation.
NEWTON: We will see, it is definitely a brave new world with Donald Trump. I appreciate your time.
Now while Trump tries to get his transition team in place, a leaked memo in the U.K.
Suggests the government there seems to have no clear plan for Brexit and is not even close to working one out.
(COMMERCIAL BREAK)
NEWTON: A leaked memo claims that the British government is still several months away from a solid Brexit exit plan. The document alleges the U.K.
needs to hire 30,000 officials to put the plan in place. It says Theresa May is trying to settle too many of the issues herself. And warns that
strategy is unlikely to be sustainable. Deloitte who wrote memo said the note was only meant for internal audiences. Theresa May's office in fact
dismissed the report. Valentjin Van Nieuwenhuijzen is head of strategy at NN Investment Partners and he joins me now from London.
The strength with which 10 Downing Street pushed back on this memo seems to indicate that there must be some truth to it. At least that's just my
opinion. How do you view it from London?
VALENTJIN VAN NIEUWENHUIJZEN, HEAD OF STRATEGY, NN INVESTMENT PARTNERS: We're clearly living in an age of political confusion. I don't know
whether this sort of latest at least rumors or leaked memo is any indication of what is happening in the next few months in the U.S. as well.
But it is pretty clear that there is a lot of confidence with politicians to move forward and to dramatically change what is happening in their
country, but the preparation for these dramatic swings and moves in political direction are clearly not all that great. And it is just an
underlining of how difficult this process is, the separation process from Europe and it is going to stay with us for at least another couple of
years.
NEWTON: I know you are not in this business but if you were advising Theresa May, the cabinet, and the U.K. government how to go about it, what
would you say to them?
VAN NIEUWENHUIJZEN: I would at least be more cautious in the promising and running the risk of under delivering.
[16:45:00] It is quite clear that Theresa May has been interpreting the Brexit results very as a -- as a validation of a very broad agenda to
change the policy direction of the U.K. government. Not only with respect to the separation process but actually also with
the role that the government is taking on domestic policy with respect to how they address businesses in the U.K.
And thereby it has a lot to manage at the same time and I think the process and engaging in a constructive manner with Europe is very complicated
matter. And they should focus on that rather really broadening out the overall policy agenda.
NEWTON: That's interesting you say that because Theresa May came out right away and actually as you said made her platform to broaden out that agenda,
and you're saying concentrate on what you can do for now.
I think they would say, look, it's early days. Just a few months. The U.K. economy is growing. There have been discussions about lost
investment. Do you think the shoe has yet to drop on Brexit and they will, because you know what has been happening? Everybody has been saying, look,
the reckoning did not come. It hasn't come yet. And some people say it will never come.
VAN NIEUWENHUIJZEN: You cannot exclude it. All of these things are usually uncertain. I would be quite skeptical on that approach. The big
thing we have gone through in the last couple of months is indeed that in the region as a whole, this has been digested better than we anticipated.
Also, the momentum in the U.K. economy has held up better.
But I think for the next couple years, the U.K. itself in a more separated and isolated position. The rest of the world can deal without the U.K. and
the U.K. economy to some extent much better than we feared. But all of the changes in terms of impacting the setup, specifically the corporate sector
in the U.K. I think will certainly still come home. And that will be painful for the U.K. I will be more slowly moving it will not be a shock to
the system but it will be felt. And that is something that has to be digested over the coming years specifically here in the U.K.
NEWTON: Right, very interesting insights as we continue to cover this very fascinating story. Thank you so much for your time.
Over the last few days, sky watchers have been dazzled by a rare spectacle. It's known as a super moon. It really is spectacular. It is closer to
earth than it has been since 1948. That is breathtaking, isn't it?
Meantime in Luxembourg a galaxy gazing of different kind. The government has a plan to mine precious metals, yes, in space. And Richard found out
more on a special Europe 2020.
(BEGIN VIDEOTAPE)
RICHARD QUEST, CNN CORRESPONDENT AND ANCHOR: This is Luxembourg. Tiny, landlocked and picturesque. Already famous for the muscle of its financial
center. It is a planning to be a global leader in space mining. Leading this surprising change is the deputy prime minister who has put more than
200 million dollars of government money into funding the venture.
ETIENNE SCHNEIDER, DEPUTY PM, LUXEMBOURG: For me it is important to try new ideas and to reinvent the Luxembourg economy.
QUEST: Minister, when you came up with the plan, some thought you were barking mad.
SCHNEIDER: Absolutely. Some still do. You know, I am a politician, I need to have a vision. You need visions to bring your country forward.
QUEST: The plan is to send small aircraft to orbit to harvest asteroids for their potentially highly lucrative minerals. Billions of dollars'
worth of platinum lie untapped while resources on earth are fast depleting. There is only one problem, and it is a big one. The cost of bringing the
stuff back. It is far higher than the value of the materials themselves.
SCHNEIDER: If I gave you an example in the 1970s a computer was $4 million, and now on your smart phone you have more capacity and it only
cost you $400. It shows you that technology will evolve, nowadays it is not really a good business model. But in the long term and with the
development of new technologies it will be feasible and I'm sure it will be done.
QUEST: What role did you see for Luxembourg?
SCHNEIDER: The only country which has legal framework in order do space mining is the United States since December last year and Luxembourg will be
the second. The fact that it is really technological and it will be very complicated is not a reason not to do it. But we want to get started right
now and we want to be in the driver's seat at least in the European Union.
[16:50:00] QUEST: Such large ambitions could be too much for tiny Luxembourg on her own, so they're teaming up with companies in the United
States that will add some space muscle.
FREDERIC BAKER, COO, DEEP SPACE INDUSTRIES, EUROPE: Here we have the first product that is literally the first step in the vision that we have to mine
asteroids. It is essentially a flying steam kettle.
QUEST: They may not look like much but these modest sized creations are the spacecraft in development.
BAKER: We're 100 percent sure of what we will find. Asteroids don't have much gravity. The gravitational forces are next to nothing. The challenge
for us will be to land on the asteroid, not bounce, but land.
QUEST: Despite the tremendous challenges, and of course skepticism about this project, there is one thing that is clear, the determination, the
technological know-how and money that are moving to Luxemburg to build a new sector and fast.
(END VIDEOTAPE)
NEWTON: After the break, Christine Lagarde tells me women and men must continue to hammer against that glass ceiling.
(COMMERCIAL BREAK)
NEWTON: Christine Lagarde was named woman of the year, before she picked up her award I asked her what she learned in her full career fighting for
women.
(BEGIN VIDEOTAPE)
CHRISTINE LAGARDE, MANAGING DIRECTOR, IMF: It has not always been easy, but that is true. There have been various cracks and lessons I learned
along the way. Certainly, one was that when the place is miserable and not hospitable to women you should not necessarily be miserable yourself. And
you should run that is certainly the first think I learned in my professional interview with a big law firm, which indicated that I was
welcome to join, I would be paid a nice salary but I would never make partnership because I was a woman. That was my first leaning on the job.
NEWTON: A tough lesson, and many women I am sure have had the same lesson that you have had. You have used your candor to speak about sexism, but do
you think now in this country at this time with the election of Donald Trump that many women are sitting back and saying look, that glass ceiling,
sometimes, just seems incredibly shatter proof.
[16:55:00] LAGARDE: Well, it is difficult to breakthrough and to constantly prove yourself and prove that you can do it just as well, as
much, and as long as boys or a man can do it. It is just a constant struggle and we just have to go through and do it and be together amongst
women and with men. Because it is something that is not going to change if we're not together in that quest. So, we need to crack that celling
together, men and women together.
NEWTON: And yet there were some uncomfortable things that came out in the election and some argued that this is a repudiation of women by women. And
I know some people think that is a dramatic statement but as Slate said in their headline, white women sold out the sister hood and the world by
voting for Trump. Why do you think white women rejected Hillary Clinton as their president?
LAGARDE: I'm not enough of a political expert to understand that, but what I know based on the economics, and on the focus, we have about women
joining the workplace, having access to finance, being on boards, women being educated. They represent an enormous value that the world cannot
waste and spare. We have to be part of this together.
NEWTON: And yet the election that just happened, do you know -- has it not level many, many women disheartened?
LAGARDE: I certainly hope that the new team will be able to embrace the cause and dignity of women. The space that women need to have. The
contribution they can make to the economy. I was a member of government in my own country. The government was 50 percent men, 50 percent women, that
was a fantastic combination. We could enrich ourselves with our differences and contribute in a really positive fashion.
(END VIDEOTAPE)
NEWTON: That is QUEST MEANS BUSINESS. I'm Paula Newton and I'll see you tomorrow
END
