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Quest Means Business
Trump Warns GM as Ford Scraps Factory; Britain's EU Ambassador Quits in Surprise Move; Megyn Kelly Leaving Fox for NBC; Cantor Fitzgerald Hires Anshu Jain as President; Trump Adviser: Russia Involved in U.S. Election Hack; Eurasia: World Enters Geopolitical Recession in 2017;
Aired January 03, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN ANCHOR: Now, hang on that's a new bell. Look the markets are 109, but look, we haven't seen that going around,
whizzing like thingamajig gone berserk. But even so, the bell is ringing for the first trading day of the year. And -- oh, please. That was a very
wimpy gavel to start trading on Tuesday. It is the 3rd of January.
Tonight, Donald Trump, the President-elect in the driving seat, sends a warning to GM as Ford scraps a factory in Mexico. Britain's ambassador to
the European Union stages a one-man Brexit of his own. He's off. And the tale of the Fox and the peacock. Megyn Kelly jumps ship to NBC.
I'm Richard Quest. We have a very busy hour together, and I mean business.
Good evening from New York. Tonight, Donald Trump has taken on America's giant car companies in a battle royal. Ford says it is casting a vote of
confidence in the President-elect. It's a vote worth some $700 million. Money that Ford now plans to invest in the United States, as the car
company cancels plans to build a factory in Mexico. You're going to hear Mark Fields, the chief executive, on this program in just a moment.
But there are more cars. Hours earlier, General Motors faced a warning as the CEO, Mary Barra heard from Mr. Trump. That the President-elect would
impose stiff tariffs on Barra's company for cars manufactured in Mexico, south of the border. Whichever way you look at it, the car companies have
felt the wrath of the President-elect. For instance, GM'S Chevy Cruz. Now, it's manufactured at two plants. The hatchback is manufactured in
Mexico. The sedan is manufactured in Ohio. Now, recently, general motors or GM cut 1,200 jobs, just around the time of the election in November.
But Mr. Trump has named GM'S chief exec, Mary Barra, who you saw just then, to a panel on job creation.
Ford, however -- so you've got the GM story here, and this threat that if those cars aren't made there, then they'll face tariffs as they cross the
border. Well, Ford has had similar threats made against it, so now Ford says it's creating 700 jobs in Flat Rock, Michigan, and it is canceling
plans for a plant in San Luis Potosi, Mexico. Poppy Harlow has been speaking to Ford's chief executive. She is at the ford plant and joins me
now.
So, GM is still feeling the wrath. Ford felt the presidential wrath before the election, has felt it since. We're going to hear, in your interview,
but I need to know. How much of this was already a cake baked and Ford's just being clever about it?
POPPY HARLOW, CNN ANCHOR AND CORRESPONDENT: You know, Richard, it's a very good question. And good evening to you. I do not think that this is like
some of the other instances we've seen, where Trump has taken credit for jobs coming to the U.S. that were already planned before his election.
This is a stunning about-face by Ford that was very dedicated to this $1.6 billion plant in Mexico. Just a few months ago, the chief executive, Mark
Fields, told me time and time again, we are a global company. This is a global business. Well, a very different tune from him today when I asked
him, how much of this decision to scrap the plant in Mexico was because of the President-elect?
(BEGIN VIDEOTAPE)
MARK FIELDS, CEO, FORD: Well, we make decisions like this as a company, we look at -- first, we do what's right for our business. This makes sense
for our business, and we look at all factors, including what we view as a more positive U.S. manufacturing business environment, under President-
elect Trump. And it's literally a vote of confidence around some of the pro-growth policies that he has been outlining. And that's why we're
making this decision to invest here in the U.S. and in our plant here in Michigan.
HARLOW: What policies specifically? Because I know you've spoken with the President-elect about this decision today. Did he make promises to Ford?
Things that he will do, that will make it beneficial to your business to stay here and cancel that Mexico plant?
FIELDS: This business decision was done independently, but we did speak to the president and the President-elect and the vice President-elect this
morning.
[16:05:00] And this is really around making sure that as we make these decisions, that it is first right for our business to do this.
HARLOW: So, what will they do to make it right for your business. Because, Mark, you've told me it costs you 40 percent less to build these
cars in Mexico.
FIELDS: We are really encouraged again, by the pro-growth policies that he's outlined, particularly around reforms, around tax policy and
regulatory policy. Those types of things are, I think, are going to generate a very positive business environment investment here in the U.S.
HARLOW: Let's get specific on that. He wants to bring the corporate tax rate down to 15 percent. That helps you. What do you mean, regulatory?
Are you talking about fuel efficiency standards?
FIELDS: Overall, fuel efficiency standards, but just overall regulatory burdens that are on businesses. And he has said very clearly, he wants to
create a very positive business environment for businesses to invest in the U.S. and we'll have to see how that rolls out. But again, this is a vote
of confidence that, you know, we feel very good about that kind of direction and in making these kind of investment decisions.
HARLOW: What did the President-elect say to you this morning? You called him, along with Bill Ford?
FIELDS: Well, we -- I talked to the vice President-elect this morning. He was very happy about the news. And that we were making the investments
here in America, not only good for Ford, but good for the U.S. and American workers. Did not get a chance to talk to President-elect Trump. Bill Ford
did that. He reiterated the same things.
HARLOW: Did he say he's going to stop with the tweets and the attacks against Ford?
FIELDS: I don't think we got to that level. He was just very appreciative for the announcements that we're making. Not only just here in the U.S.,
but the announcement that we're making to reinvest in our business around these seven electrified products to show that we're a leader in this area.
HARLOW: So, let's talk about the jobs, 2800 jobs were slated to be added in Mexico through this $1.6 billion plant that is now canceled. Instead of
that, you're going to create 700 jobs here. Why not as many jobs here as you were going to create in Mexico?
FIELDS: First off, we have to understand the reason we are canceling our plant in Mexico, the main reason is because we're seeing a decline in
demand for small vehicles here in North America. So as a company, we're always looking at our capacity and asking ourselves, where can we fully
utilize it? Therefore, we're going to be producing the Focus at an existing plant in Mexico, so we don't have to build that new one and create
those 2,800 jobs. And that's due to just as we see, demand for that segment of that type of vehicle.
HARLOW: It certainly has something to do with the fact that the President- elect has singled out Ford among automakers. Pretty much, he did tweet about GM today, but this is a trend we've seen. The President-elect calls
out Carrier. He gets jobs to stay here. He calls out Boeing. He gets a cheaper Air Force One. He calls out Lockheed Martin, and they say, we're
going to work with you. There's a concern among some, Mark, that this is, in essence, a form of crony capitalism that is dangerous to American
democracy. That the president can cut deals with companies and then they expect favors from the administration in return.
FIELDS: First off, we didn't cut a deal with the President-elect. We did what's right for our business, first and foremost. That's what drives us
in every business decision that we make. We look at a lot of factors, Poppy. One of the factors that we see is again, this more positive U.S.
environment for manufacturing and investment here. And we take that into account in our investment decisions. Very clearly. And this is the same -
- for any other country around the world.
HARLOW: Does it concern you that he's going after American companies? Not just as the head of Ford, just -- I mean, something we've never seen in an
American president before?
FIELDS: We've always seen lots of opinions, whether it's politicians or others around businesses and the decisions that they take. And you know,
in our job as a business is to make sure we're making the right decision for our business, for our shareholders. But also at the same time, we are
a global, multi-national company. And we're very proud of that. But our home also is here in the United States. And it's really important that
we're strong in the U.S. and that we invest in the U.S. and that's why we are the number one manufacturer of automotive vehicles here in the U.S. and
we employ more hourly automotive workers than any in the U.S. This will help build on that going forward.
HARLOW: You said on CNN this fall, one of the things you would like to see from the administration is, as they review fuel economy standards, that
mean that all the cars have to get more and more miles per gallon, that you would like to see those fuel economy standards more in line with market
realities. More favorable to your business. What about the concern from some who might look at this and say, is this crony capitalism? They might
get more favorable regulation on fuel economy standards, because they're bringing jobs home.
[16:10:00] FIELDS: Well, we have always been consistent on this issue. First and foremost, we are absolutely dedicated to improving the fuel
economy of our vehicles. And we're a leader in many ways on that. And our point was around, when we agreed to the midterm -- the one national
standard back in 2011, that set the fuel economy standards out to 2025. It was an unprecedented agreement. And as part of that agreement, there would
be a midterm review in 2018, and we agreed that we would look at the assumptions back in 2011. A lot of those assumptions have changed, whether
it's the price of a barrel of oil or a gallon of gas. A lot of changes and assumptions on adoption of new technologies. And we just wanted that to be
a fact-based discussion in developing regulations.
HARLOW: So, to those critics you say --
FIELDS: To those critics, we say, first off as a company, we are very dedicated to improving fuel economy. But we just want it to be a fact-
based discussion. And we want to make sure that we preserve vehicle affordability, customer choice, and American jobs.
(END VIDEOTAPE)
HARLOW: Those American jobs, Richard Quest, cheered very loudly behind me here today, when the news was made at this Flat Rock assembly plant here in
Michigan. I will tell you, the Mexican government tonight, not happy at all. Let me read you the statement they just issued. "They regret Ford
Motor Company's decision to cancel the San Luis Potosi investment project and has ascertain that the company will reimburse any expenditure made by
the state government to facilitate this investment." Richard?
QUEST: Poppy, what do you make of this? And, you know, I listened to Mark Fields. He is a CEO in a very difficult position. In the same ways that
the chief exec of Boeing was and of Lockheed Martin, and Mary Barra now is in terms of Mexico.
HARLOW: I think that he is a chief executive, recognizing that this is an entirely new landscape that he and his competitors are operating in. I
think he has decided that it makes business sense not to put $1.5 billion in Mexico to make small cars that aren't selling as well as they were a
year ago. You know, Richard, we've seen a slowdown in auto sales. But I think he also knows that it makes a lot of political sense, given the fact
that we'll likely have huge tax reform, which is going to mean low corporate tax rates for companies like Ford, to put these jobs here. I
think that is the calculus that is made. It is part for the business and it is part political.
QUEST: Poppy Harlow, have a nice flight back to New York. Thank you. And bring that Mustang car, that looks rather nice, behind you. Too bad it's
not in red. Bring one of those back with you. Thanks very much.
HARLOW: I will. I will.
QUEST: The President-elect is also setting the agenda for lawmakers in Washington at the other end of Pennsylvania Avenue. The new Congress was
due to vote on a measure that would curb the powers of an independent ethics watchdog. It was the big story over the last 24 hours. Instead,
the ethics watchdog will be under the control of lawmakers. A vote from the full House was scheduled this hour, but now Republicans have dropped
the proposals during an emergency meeting.
Now, look, you and I do not need to get into the minutia of what this was all about and the ethics and the conflicts and all of that. We can leave
that to others. What we feed to talk about is the turning point, the series of tweets from the President-elect. He tweeted this morning, "With
all that Congress has to work on, do they really have to make the weakening of the Independent Ethics Watchdog, as unfair as it may be, their number
one act and priority. Focus on tax reform, healthcare, and so many other things of far greater importance! #DTS." That stands, of course, for drain
the swamp.
Manu Raju is with me on Capitol Hill. Which bit got the Republicans? Was it the fact he clearly thinks this isn't the necessary thing, the weakening
of the ethics. In other words, he was in favor of leaving things as they are, or was it the mere fact he attacked them anyway?
MANU RAJU, CNN SENIOR POLITICAL REPORTER: I think it was the timing of him making these remarks, saying that he does not agree with the proposal. And
it was the timing of moving forward with this idea to gut this ethics agency, as the first opening act of this new Congress, as they were
planning to do a whole slew of things to implement Donald Trump's agenda. So, Richard, it was not just the pressure that Donald Trump levied by those
tweets. It was also outrage from across the political spectrum. Members were saying they were getting tons of phone calls, flooded and flooded with
angry constituents. They were getting bad headlines. And Donald Trump was essentially the straw that broke the camel's back.
QUEST: Now, I was reading in yesterday's "New York Times" a fascinating article, you will have seen it, that really says the Republicans' biggest
problems are the Republicans in Congress.
[16:15:00] Now they all have the three branches of government. The House, the Senate, and the presidency. I mean, for goodness sake, Manu, they
can't even get it right on day one, in a coordinated measure with the president. This does not bode well for discipline in Republican Congress.
RAJU: You know, the real challenge going forward is going to be to keep Republicans united, not just in the House, but more importantly, in the
Senate. Because in the Senate, in order to get anything done, they're going to need not just Republican support, but Democratic support. And if
Republicans start to fracture, it's going to get a lot -- it's going to be very hard to get the necessary votes to get Donald Trump's agenda through.
That is going to be the hardest thing now going forward. Keeping the Republican Party united. It's going to be, especially when you start
dealing with thorny issues like healthcare, tax reform, things that Donald Trump wants to get done. And they can't get this ethics issue right, it's
going to be much harder on those bigger, weightier issues start coming down the pike in a matter of weeks.
QUEST: All right. So, finally, how on earth does this measure even get out of the starting gate, when the leadership didn't even know about it,
let alone negotiations with the President-elect. Is it -- you know, to the old phrase, was it conspiracy or cock-up?
RAJU: There are two reasons. One, is that lot of members do not believe this ethics body has acted fairly. They believe it has overreached and
they believe it has to be changed. Two, this happened behind closed doors. It happened in a secret ballot. That means members could vote however they
want, privately, and no one will know how they actually voted. But the difference was, today the public vote was going to take place and a lot of
members did not want to be on record after something had caused so much controversy in the last 24 hours.
QUEST: Manu, thank you. Hopefully you have no plans to see your friends or family over the next four years. Because something tells me you'll be
doing duty for long hours. Thank you, sir.
RAJU: Absolutely. Thank you.
QUEST: Now, the newsletter, the QUEST MEANS BUSINESS newsletter, which is just being published at the moment. In it, I give a Profitable Moment on
this very issue of Donald Trump's and his relationship to corporate America. Boeing, Lockheed Martin, what we heard today with Ford and with
General Motors, playing Trump's game for now. Sign up, you go to CNNMoney.com/Quest. It arrives as New York closes and it briefs you for
day ahead.
Talking of the day ahead, U.K.'s Brexit preparations have been dealt what some call a body blow. The country has lost one of its top European
diplomats. The man who was going to head the crucial negotiations. Well, he's decided he's Brexiting himself. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: Britain's ambassador to the European Union has resigned only months before Brexit negotiations are due to begin.
[16:20:00] Ian Rogers seen here with the former Prime Minister, David Cameron, who appointed him to the role, was set to play a leading role in
the U.K.'s exit from the EU. Now, Britain's negotiating position could be seriously weakened. Nina dos Santos is in London for us tonight. Nina,
why is he gone?
NINA DOS SANTOS, CNNMONEY EUROPEAN EDITOR: Reporter: Yes, we don't quite know yet why he's gone. All we know, Richard, is that he decided to inform
staff earlier today. This has been acknowledged by the U.K. government, which thanked him for his work over the last three years in Brussels as the
UK's ambassador to the EU. But he does, nevertheless, as you point out, leave a number of months earlier. Just a couple of months before Theresa
May was planning on activating that Article 50 get-out clause, by which the U.K. could start to withdraw from its membership of the EU.
We do know that Sir Ivan was put in a rather difficult position just a month or so ago, when his private views to the UK government were leaked to
a news organization. Views that showed that he said that it would probably take about ten years to negotiate a proper Brexit deal and proper
replacement of the kind of deals that the U.K. has with this other EU 27 partners. And that had been viewed as rather pessimistic by some pro-euro
skeptic, pro-Brexit members to have the government. I should point out that at the moment, some pro-Brexit papers are currently greeting his
departure with delight. "The Daily Telegraph" saying, they acknowledge the fact that he stayed on for a few months after the Brexit vote, but that he
should be replaced, they say, by somebody who is positive about Brexit. Whether it's positivity or practicality that wins the day, Richard, well
honestly, time will tell.
QUEST: But how serious is it? If you accept that it's going to be a team of people hosting or holding the negotiations. The U.K. is already short
on negotiators for trade and for Brexit. So how serious is it being viewed that they've lost somebody of that stature?
DOS SANTOS: The U.K. is between 300 and 500 people short according to some reports in terms of its negotiating capability, Richard. This is a country
that hasn't actually had to negotiate a free trade deal for the best part about 30 years. That's a whole generation of trade lawyers. And this is
the most senior negotiator that they have that they have just lost. The big question is, who replaces him from here? If pro-Brexit members of the
government, euro sceptic members of the government get their way, it would be somebody who is far more positive about the official stance. By the
way, the U.K.'s official stance of managing to negotiate Brexit is two years, not ten. But really, will that help this country to get a slightly
softer Brexit than the hard Brexit that the markets are worried about. That's the big question this evening.
QUEST: And just bring us up to date, it is the start of the new year. We are awaiting the decision from the Supreme Court in Britain on whether or
not Parliament has to be consulted. Do we know when we're going to get that decision?
DOS SANTOS: We're probably going to get that decision, we think, before those March negotiations are set to begin. Remember, Theresa May has said
that she would like to invoke Article 15 negotiations for the U.K. to exit by March. Probably that decision is likely to come. I believe it's around
a month, if not a couple of weeks before then.
But before then, I should also point out, we have this other interesting situation, Richard, where it's 60 years since the signing of the Treaty of
Rome will be happening amid great fanfare. And if the U.K. hasn't tendered this resignation, if you like, from the EU between now and then, we could
have this ironic paradoxical situation that Theresa May is there among all the other founding members of the EU, but she's the only one leaving, but
they're celebrating the fact that for 60 years, they've managed to create the EU, even if one of those partners is prepared to leave soon.
QUEST: I suspect she'll have to be there anyway as a member, but Nina Dos Santos, good to see you. Thank you.
The Eurasia Group says it's not economic recession that threatens the world in 2017, it's geopolitical recession. The group has released its list of
the top ten risks for the coming year. It sees a g-zero world without a global leader. Risk number one, America under Donald Trump. There are
other countries to watch, Germany and the future of Angela Merkel. That comes in number three. Turkey and the President Erdogan's expanding
powers, number eighth. And number nine is North Korea. We celebrate and we wish a happy new year to Ian Bremmer, the president of the Eurasia
Group. Come on, Ian, obviously, Donald Trump is the biggest geopolitical, you call it risk, I would say a matter of interest in the next 12 months
ahead.
IAN BREMMER, PRESIDENT, EURASIA GROUP: No question. The fact that the U.S. president is driving geopolitical risk is something that five years
ago, ten years ago, you would have thought is inconceivable. But today it's an obvious point. It's not at home. It's that the United States has
renounced the idea of American exceptionalism. Not only are we not going to be the sort of a policeman in the Middle East, which has been decreasing
under the two Obama's terms, but also on global trade and critically on global values. You can work with the Russians, Europeans may not be that
important.
QUEST: You talk about a dependent America in this. And you say, "Trump America's first philosophy builds on the core of American values. It's not
an obvious near-term benefit or of its provisions of the public good or [16:25:00] others writing free, it's not something the U.S. should be
doing." That's how you talk about it. But Donald Trump would say, no, you're wrong, Mr. Bremmer.
BREMMER: How would he say that?
QUEST: He would say it, because if America is strong and America is first, then all the allies would benefit accordingly. It's the weakness in
America that has caused so many problems.
BREMMER: He might say that over the long-term, but it's very clear. Look at the people who wanted Trump to win around the world. Not in U.S., there
were lots of reasons to vote for Trump in the U.S. But internationally, you had Putin, you had Victor Orban, Kim Jong-un. These are not people
that want the United States to be successful. These are people that wanted the U.S. to be diminished. And it's very --
QUEST: No, that is one -- that is a very negative way of looking at it. You could arguably say that those who can't want Trump to win were part of
the swamp in their own establishment era.
BREMMER: You could argue that, absolutely. There's no question that globalization is something that Trump believes is anti-patriotic. And all
of these corporations have said looking at their own profits and not of the interests at home. But the Chinese see Trump's win as a big opportunity.
And the reason they see that, is because Trump's the one that killed the TPP. Because of Trump, American allies in Asia and their leaders say, we
can't count on the U.S., we used to be able to. China sees that as ability to make a lot of for themselves. Not with the U.S., a different model.
QUEST: So, what we have here in all this. You've got China overreacts, the weaker Merkel, the White House versus Silicon Valley. But if we take
China and Russia, neither country has seen Trump's teeth when he perceives their actions are harming the U.S.
BREMMER: Well, Russia and China are very different issues on this. The Russians, of course, see that Trump is a win for them. Get rid of American
exceptionalism. Deny the possibility of Russian hackers.
QUEST: o, no my point is, that Putin hasn't seen Trump turn against him.
BREMMER: That's true. That's true. Putin has seen the exact opposite, right? Where China has seen that the Americans are saying, we'll put a
question on the one China policy. Where now he's tweeting about North Korea and the Chinese aren't doing enough to help. The Chinese are going
to give it back to the Americans. There's no question. Trump does believe that America's negotiating position globally is a lot stronger than it has
been. And he thinks that if by pushing hard, he can get more. I personally believe that while America remains the only super power in the
world, that America's negotiating position internationally is actually a lot weaker, because its allies in Europe are weaker, because its allies in
Asia are hedging, and China is more --
QUEST: You are -- the White House versus Silicon Valley. Why is that a geopolitical recession risk?
BREMMER: It's a risk because unlike companies like Ford and Boeing, who can do a deal easily with Trump, give some more jobs in, and those are
points that both sides can put on the board, with Silicon Valley, that's hard to do. It's hard to do first because they control the new media, and
that's going to be oppositional with what Trump wants to do with it. It's also because Trump's security interests are going to be problematic for
their business interests.
QUEST: I have one question for you.
BREMMER: Go for it.
QUEST: Aren't you just one of those elites that Donald Trump wants to drain from the swamp?
BREMMER: Donald Trump believes that you and I are globalists and by virtue of that, we're anti-patriotic. I happen to believe the only way you can be
patriotic is recognize that the future of 7 billion people is going to be more important than determined by future of 300 million. And that is
something we need to pay a lot more attention to. America first ultimately needs to be much more engaged with the rest of the world than Donald Trump
is prepared to be.
QUEST: I'll see you in Davos.
BREMMER: Yes, you certainly will. We won't be at the inauguration. QUEST: With more elites. There we are, thank you very much.
Now, as we continue our program tonight, Howard Lutnich is with me. You're going to be with me after the break. Come over here, sir. We've got a lot
to talk about. Your new president that you've appointed, and what you expect to happen in the year ahead. Good to see you.
[16:30:00] (COMMERCIAL BREAK)
QUEST: Hello. I'm Richard Quest. Of course, there's more QUEST MEANS BUSINESS in just a moment, when the chief exec of Cantor Fitzgerald tells
me why the bank brought in a big name to be its brand-new president. And I'll speak to the former head of IBM, as Russia once again denies hacking
the U.S. election. Before that this is CNN, and on this network, the news always comes first.
Turkish authorities have now arrested 16 people in connection with the new year terror attack at an Istanbul nightclub. Two of them foreigners were
stopped at the city's main international airport on Tuesday. A massive manhunt is still underway for this man, the alleged shooter, who police say
killed 39 people.
U.S. House Republicans have quickly scrapped their plan to gut an independent ethics panel after facing sharp criticism for U.S. President-
elect Donald Trump. On Monday. the Republicans have proposed to limit the powers of the watchdog group. The only one of its kind set up to
investigate the House lawmakers for their own misconduct.
Mexico's government is regretting Ford's decision to scrap a factory in Mexico and instead put the money into a plant in Michigan. Ford's chief
exec says the decision marks a vote of confidence in the pro-business environment being created by Donald Trump. He told CNN, no special deal
was made with Donald Trump.
Britain's ambassador to the European Union has suddenly resigned. Ivan Rogers was expected to leave Brexit negotiations in March and finish out
his term in October. His early resignation is seen by some as a major blow to the U.K. government, which is seeking a new trade deal with the EU.
And a baggage handler is unharmed after an hour-long flight trapped inside the cargo hold of an aircraft. United Airlines is investigating the
incident on a New Year's Day flight from Charlotte, North Carolina, to Washington, D.C. The plane reportedly reached an altitude of more than
8,000 meters, but it is worth remembering that the baggage hold is pressurized, albeit, not heated.
So, traders returned, it was the first session of the year on Wall Street, and the markets welcomed them back with gains across the board. There's
some very sharp gains in the early part of the session. As you can see, the mounting peaks way up there. They dwindled during lunchtime, but they
rallied back. We were up 119, first triple digit. It's the first day of trading there, therefore, it's the first triple day, triple number digit.
But they didn't manage to make 19,900, which of course once again shows the psychologically difficult area of getting above the 20,000. The S&P 500
and the NASDAQ, they were around about 1 percent higher.
The oil rally, which had seen oil getting as high as $55 a barrel ended with oil closing 2 percent lower.
[16:35:00] Cantor Fitzgerald is starting the new year with a major new hire. Anshu Jain, is the former co-CEO of Deutsche Bank, is joining the
firm as the group president. Now Jain helped build Germany's largest bank into a Wall Street juggernaut, post-crisis rules and probes slashed the
profits, though, and in June 2015, he resigned in the wake of various legal problems for the bank. Now, with his new appointment at Cantor Fitzgerald,
he returns to Wall Street. Howard Lutnick is with me. Howard, happy new year to you, sir. Good to see you. Why did you take Anshu on?
HOWARD LUTNICK, CHAIRMAN AND CEO, CANTOR FITZGERALD: He's probably as good a financial executive as there is. He built sales and trading business of
Deutsche Bank from scratch into one of the great businesses of the world. He knows the market beautifully and perfectly. And it's just not the right
time to be at a bank.
QUEST: OK. So, you weren't put off by what happened at Deutsche, which after he left, the situation got much worse. Last year was a calamitous
one for Deutsche?
LUTNICK: Well, I had the advantage. I'd been friends, personal friends with Anshu for many, many years. We celebrated New Year's Eve together one
year. I know him as a human being, I know his ethics, I know what kind of person he is. I know how he is with his family. He's just a first-class
human being. And you know, the guys who were in charge of banks, people sort of paint them with every brush of the bank, but actually they're just
men in suits. Come on. He's a really good guy. He's built a great business, and he will be a spectacular addition to my company.
QUEST: Right. Now a question for you, sir. How will you share power? Are you good at sharing power?
LUTNICK: I don't know.
QUEST: I mean, come on.
LUTNICK: The truth is, with Bernie Cantor, I was the president of the holding company and he was the chairperson and CEO, and since 1996, I've
had all of those titles. But I've always dreamed of having a partner. And a president of the company with me. And, I mean, can you imagine getting
Anshu Jain, as good as an executive as there is in the world. To be a part -- it's going to be exciting. Today, we've had so many calls and notes.
It's incredible what a good guy he is.
QUEST: What do you make of the latest -- I mean, first of all, Ford has changed its decision on its factory in Mexico. The President-elect decides
to bash away at General Motors now, threatening tariffs, which some would say are illegal. He's already had a go at Boeing, he's had a go at
Lockheed Martin. You know the man. What's he doing? He's not even president yet, and he's turning the apple cart upside-down.
LUTNICK: His view is that the trade agreements made by this country are silly. He says to me, you read it. Go read it cover to cover and you'll
be sick to your stomach. Because we say, go build your plant. Go build your plant in Mexico. Why are we saying that? What's good -- what does
Mexico give us? What are we getting in return? What do we get from China in return? He thinks the deals are bad, literally bad deals that we can
make better deals than that. So, he really isn't picking on General Motors. He's really picking on NAFTA, just calling them by name. That's
all. It's just NAFTA that he doesn't like. Build the plants in America.
QUEST: But it's going against decades of conventional wisdom of free trade. You heard Ian Bremmer, just said from the Eurasia Group, just
before that, rating independent America, America first is the biggest geopolitical risk in 2017.
LUTNICK: I didn't understand your point of the lack of American exceptionalism. The guy had hats that said, make America great again. He
said, I want American exceptionalism. That's just accepting the Obama apologetic model. I think Donald Trump thinks we can make better deals.
He put Wilbur Ross, who I know really well. He's a smart, capable person. He's going to go make these deals.
QUEST: Does he want to be Commerce Secretary? He wants to be Commerce Secretary for the big stuff, but Commerce Secretary is for the nuts and
bolts of tedious regulations and trucking laws and all that sort of stuff.
LUTNICK: But really, what do they say? They say he's going to run trade negotiations. And he'll have a Deputy Secretary who will worry about the
patent office, national oceanic and atmospheric. I mean, all these things. But, look, smart people, you know, Gary Cohen is a really super smart guy.
Steve Mnuchin is really smart.
QUEST: Will you work with anything.
LUTNICK: I'm working here. I'm working. I have Anshu Jain joining me. I mean, these are things for me. I'm going to go and I'm going to root on
this government. I don't think that there is such great risk in this government. I think Ronald Reagan was considered a great president.
That's like electing --
[16:40:00] QUEST: With hindsight, he was.
LUTNICK: But come on, he was Brad Pitt. He did "Bedtime for Bonzo," and people say, with he was the governor of California. Well, so is Arnold
Schwarzenegger and so is Jesse Ventura. Surround yourself with smart people, make reasonable decisions and you can be a good government and a
good president. I think Donald Trump should have the benefit of the doubt. So far, the fact that he called Taiwan. Don't you think that's cool? 40
years, we, what, ignore them? Why is that reasonable? I think it's incredibly foresight to say, you know what, I'm going to take that call.
QUEST: 20,000 on the Dow. It can't do it. I mean, it will do, it, obviously --
LUTNICK: Oh, stop. I will do it by next Friday or something like that. You've got to be kidding me.
QUEST: But what's going on? What I'm trying to understand, what's going on?
LUTNICK: It's going to go higher. It's going to go higher. The stocks are going higher. Last time we talked, we said, stocks are higher. Their
higher. I said the dollar is going to be hugely stronger. It's hugely stronger. Stocks are going to continue to go higher. The dollar is going
to continue to go hugely stronger. The American economy is in reasonably good shape. You'll see the Fed bump like two times, probably. And Fed, a
couple of times, but Europe, nothing. Europe is just -- it just doesn't have its act together. Britain and Brexit is just such a yucky thing.
It's unbelievable.
QUEST: That's a quote on the program.
LUTNICK: It's a yucky thing. How amazing is that that one of the great economies of the world is going to step out. That is just going to weaken
the place. There's nothing they can do about it. I think America is the best economy to invest in in the world, of the invest economies. Asia
next, and Europe third. That's just the world's going to go.
QUEST: Around the world in 30 seconds with Howard Lutnick. Good to see you, sir. I sure hope to see you at Davos this year. You have other
duties to attend to. Will you be there?
LUTNICK: Next year. I'll look forward to it.
QUEST: And you always have a seat available for you sitting opposite of me here.
LUTNICK: Thanks, Richard.
QUEST: Let's continue to talk about Donald Trump. He's continuing to cast doubt on Russia's links to cyberespionage during the U.S. election. Now
one of Trump's top advisers is telling CNN he thinks the Kremlin was directly involved. We'll talk about it after the break.
(COMMERCIAL BREAK)
QUEST: Russia has once again rejected claims they were involved in cyberattacks during the U.S. election. While Donald Trump is set to
explain his understanding of attacks later this week. One of Trump's advisers now tells CNN that he thinks Russia was involved.
(BEGIN VIDEO CLIP)
JAMES WOOLSEY, FORMER CIA DIRECTOR: I'd say it looks to me as if there was some Russian involvement. Whether it was over half or under half or what,
it's like, it's like a bunch of jackals step in Africa tearing apart the carcass of an antelope.
[16:45:00] Who took what bite? It is not something in which one can be real precise about exactly what happened. This -- and I think it's --
there's not much point in trying to be.
(END VIDEO CLIP)
QUEST: Sam Palmisano is the chairman of the Center for Global Enterprise and former chief executive of IBM and joins me now. Good to see you, sir.
SAM PALMISANO, CHAIRMAN, CENTER FOR GLOBAL ENTERPRISE: Good to see you.
QUEST: First of all, do you believe it was the Russians that were involved?
PALMISANO: The only knowledge, I have, Richard, is what I have learned from the intelligence community. And they have concluded, there are signs
of Russian involvement. But like our previous speaker said, it is hard to really know.
QUEST: Right. If we take that particular example and extrapolate it up, is it your view that there is widespread state-sponsored hacking underway?
Whether from China into the U.S. or from Russia? Or other parties?
PALMISANO: Clearly there is no doubt that nation states are involved in cybersecurity hacks. There's no doubt. Which is why this issue now is
more relevant than when we started to work for President Obama on cybersecurity. But there is absolutely nation states that have been at
this for a significant period of time.
QUEST: But then you get questions or comments from people like the President-elect, where he basically says, look, there's no proof, computers
are very difficult, hacking very hard to prove, which we know. And if it's really important, write it with a letter and send it by a courier.
PALMISANO: The first thing is, let's think about it today. This technology touches everything. It's not a computer anymore. It's your
phone, it's your camera, it's your thermostat, it's your alarm system, it's your car. It's everything that's pervasive in all of society. It's
referred to as the Internet of Things. The fact that we talk about a computer is not the issue. It's this technology is pervasive everywhere in
our infrastructure and everything we do in every part of our life. Whether we're driving, whatever. It's just pervasive.
QUEST: So, what are Western economies lacking in this respect? I mean, whether it's from Russia or from a hacker or from malware or blackmailer.
What are we lacking in terms of policy and practice?
PALMISANO: Let's start with what needs to be done to solve the problem, right? To solve the problem, the first thing that the President-elect
should do is convene a collaborative effort. It's the tech community. It's the academic community and government agencies and bring them
together, put somebody in charge and ask them for a plan. Because these problems can be solved technically, but you need an architecture and a
plan. So, we recommend in the report, that's the first step. The first hundred days, he should establish this group to go to work on those issues.
QUEST: But everyone doesn't agree within that community, do they? Both on -- I mean, everybody agrees on the threat, that it's real. But the way
forward is not -- there's no agreement.
PALMISANO: Well, if you solve two things -- you'll never make it perfect. I don't want to mislead the audience that thing goes away, we have the
cure. It's not like, you know, we're going to cure some form of a disease with a vaccination. However, what we could do is make it a heck of a lot
more secure. Two things. Identity management, that's you as the individual and the Internet of Things, the devices now, the access points.
If you talk about your identity and your access points to this networked world, if we solve those two issues, we can solve the problem.
QUEST: Do you -- I mean, short of nuclear war, which I don't think we would find too many people disagreeing with the seriousness of that, would
you say for chief executives, all presidents, cybersecurity is now their single biggest concern?
PALMISANO: I think it should be very high on their list. Why? Because, let's take the economy, the fastest growing portion of the economy is the
digital economy. It's almost 9 to 10 percent of the economy. It's growing double digits. Let's talk about everybody's individual lives. People live
on their cell phones. They rely on all of these technologies to get themselves to work, to mass transit. The critical infrastructure, the
power grid is tiled to these technologies.
QUEST: Terrifying.
PALMISANO: Well, it's terrifying if we don't do something. So, our recommendations -- we can fix this thing. We created the internet back in
the `70s. We can fix it, but we need to do something. We need to act.
QUEST: Thank you, sir and hopefully over the next few years, you'll come in and talk and I'll understand what you're all about.
PALMISANO: I'd love to take you through the details.
QUEST: Thank you very much indeed.
Some news just into CNN, a lawsuit between Donald Trump and a chef, Jeffrey Zakarian, is going to go to court. Settlement talks were added impasse.
Both sides told a judge they're ready to set a date for trial. Zakarian along with another chef, pulled out of an agreement to open a restaurant in
Trump's new Washington hotel. The chef tweeted Trump, basically saying, let's come to a deal to solve this, rather than going to court, but it
seems no deal was offered.
The queen of Fox News has found herself a new palace. Megyn Kelly found national fame during the 2016 campaign. Now she's bringing her star power
to a rival network.
[16:50:00] (COMMERCIAL BREAK)
QUEST: Her name is Megyn Kelly and she is trading in a fox for a peacock. After months of negotiations, the prime-time news host from Fox has
announced she will leave Fox News and join NBC. Megyn Kelly famously challenged Donald Trump over his statements about women. And she's been a
key role in the ouster of the Fox News boss, Roger Ailes. Brian Stelter is with us. He is our CNN money senior media correspondent. Well, this was a
turn for the books. We knew she was negotiating everywhere, but are you surprised that she didn't stay with Fox?
BRIAN STELTER, CNNMONEY SENIOR MEDIA CORRESPONDENT: Well, I am. The Rupert Murdoch and his sons, Lachlan and James, offered her pretty much
everything. Any hour she wanted, essentially, and more than $20 million in order to stay at Fox. But she wanted out of Fox. That's the headline
today. You know, she was the closest thing to a Trump skeptic, you might even say an anti-Trump voice in the age of Donald Trump. She scrutinized
his campaign, asked him tough questions when she could at debates. And of course, he went to war with her, attacking her. Now Trump's President-
elect, Fox is even more pro-Trump, and I think she wanted out.
QUEST: Right, but as she goes to NBC, it's going to be a daytime program and I believe a Sunday evening program. So, clearly, you know, whatever
numbers cable gets, viewership, it's small compared to what the big three CBS, NBC, and ABC get.
STELTER: That's true, and yet, you have more influence, more relevancy, sometimes, here on cable. You know, there's this really interesting
dynamic in the media business where especially in the Obama, now the Trump years in the United States, cable has become a more and more important,
cable news, in particular. Megyn Kelly was right in the thick of it during this campaign. She won't quite be in the thick of it anymore on broadcast.
QUEST: But she's going to have to -- she's a -- her views are relatively conservative. She comes from a conservative network. She's going to have
to temper those views to some extent, because, obviously, she's going mainstream and NBC, you know, would not be seen to be one or the other.
STELTER: Her brand will be changing, yes. As she would say to you, she's fiercely independent. But she's on a conservative cable news channel and
would have a lot of conservative-friendly topics every single night. That would change for her at NBC. She's taking a very big risk by jumping
networks, by going to NBC. We don't see this very often. Fox News stars don't leave Fox very often and big television stars don't change networks
very often. She's probably make $15 to $20 million at NBC. It's a big gamble, obviously, a lot of rewards potentially, as well.
QUEST: What's the ultimate goal? "Nightly News" with Megan Kelly? What is the ultimate -- is she Barbara Walters of the future?
STELTER: You're asking the right question.
QUEST: Diane Sawyer of the future. Is NBC grooming her for that number one role?
STELTER: She has said she wants to be Oprah and Charlie Rose, all kind of combined.
[16:55:00] Can she get there? We will see. Will it be "Nightly News" in ten years? Will it be the "Today" show in ten years? I don't know. One
thing I do know is that television is changing. We're in the middle of a media revolution, and yet -- here, I'm going to reassure you. It's not
changing as quickly as people think. There's still room for the Megyn Kellies and even the Richard Quests. There's still room for these people
that bring you the news, bring you the world. Even though we're all staring at our phones all day, NBC can still pay $20 million for stars.
QUEST: Remind me where we sign up for your newsletter.
STELTER: CNNmoney.com.
CNNmoney.com. The newsletter you really must read. Will have a Profitable Moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment. Donald Trump has forced Ford to change its plans and to no longer build a factory in Mexico. And instead,
move the investment and the jobs back to the United States. He's attacking General Motors, and Mary Barra and threatening taxes and tariffs on their
cars crossing the border from Mexico back to the U.S. Well, the game plan is clear and corporate America, Ford, Boeing, Lockheed Martin, Carrier, all
seem to be playing along. And that makes perfect common sense. You have a new president who's powerful. Who's not playing by the rules. Where it's
not business as usual. Is setting out new stores. And companies have to go along with that until they don't. But I promise you this. Within three
years, when the situation may look very different, then more companies will be saying to the president, absolutely not. It will just take a bit
longer.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, hope it's profitable.
I'll see you tomorrow.
END
