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Quest Means Business
Alitalia Enters Administration; Trump: U.S. Government Needs a "Shutdown"; Apple Earnings Beat Expectations, $256 Billion Cash; India's Infosys to Hire 10,000 U.S. Tech Workers; General Motors Ceases Operations in Venezuela; South Africa Looks to Cloud to Fix Health Care. Aired 4-5p ET
Aired May 02, 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: Closing bell ringing on Wall Street, Procter & Gamble ringing the bell. A small gain for the Dow. It literally
just bounced around throughout the course of the session. The big man, that's a good, strong, firm gavel. Trading is over with a gain of around
33 points on the Dow Jones Industrials. Today is Tuesday, it's May the 2nd.
Italy's flag carrier, tattered and torn. The Italian finance minister tells me Alitalia can survive administration.
Shut it down. Donald Trump threatens Congress with closure.
And Tim Cook's cash pile is around to grow Apple's earnings. Apple's earnings are out any minute now, we'll have the numbers, during this hour.
I'm Richard Quest live in the financial capital of the world, New York, where of course I mean business.
Good evening. We brought out the QUEST MEANS BUSINESS airline seats tonight because our two major stories concern aviation and airlines on both
sides of the Atlantic. Tonight, Italy's flag carrier Alitalia is once again on the brink, after taking billions of euros in public money over the
years and an investment from Etihad. Now Alitalia is going into emergency administration.
The board was left with no choice after employees rejected the company's latest restructuring plan. Alitalia is losing around $1 million a day.
It's running out of options. The government has ruled out a rescue. Etihad, which is a 49 percent stake, has cut off financial support. The
government has lent it money on commercial terms. I asked the Italian finance minister, is this the last gasp for the Italian airline Alitalia?
(BEGIN VIDEOTAPE)
PIER CARLO PADOAN, ITALIAN FINANCE MINISTER: Now this is a new start, I believe. This is what the government has judged, upon the request of the
company, to enter extraordinary administration. The government has appointed three commissioners and at the same time it has granted a loan at
market terms that should assure that for six months, flights will continue. And this time will be used to find suitable industrial solutions.
QUEST: The unions rejected the last deal that was put forward by the previous shareholders. You know, you're surely just putting good money
after bad. And I wonder, what gives you hope that a better solution can be found when the shareholders fail to find one?
PADOAN: Well, I think that the assets owned by Alitalia, both terms of human capital, airplanes, slots, airline routes, are such that they can
provide a very interesting initial start for a new endeavor, possibly with strong partners.
QUEST: If there is no commercial solution, are you prepared to say now that there is no more loans on commercial terms available if nobody else
will want to buy the airline or do a deal with it? In other words, because at the end of the day, you are the guarantor of last resort. So, are you
prepared to pull the plug?
PADOAN: We are not the guarantor of last resort. We are providing liquidity and market conditions, because we believe there is a chance that
needs to be explored for market solution. We are not going to be the buyer of last resort of the company if everything else fails.
QUEST: Yes, but you're lending on market terms when nobody else would. So, de facto, you are the ones that are supporting the airline. It comes
back to the question, if all else fails, as a political question, are you prepared to see the airline fail?
PADOAN: We are not going to nationalize Alitalia, if that's the real question you have in mind. As I said, we have refused publicly any
solution of that kind. If there is a solution, and I think there is one, it will be a market solution. So, the government will step in, is stepping
in as a provider of liquidity for six months. This is the time that's incorporated in the amount of money approved by the government today.
[16:05:00] And this is what Alitalia will receive from the government. Alitalia is a private company. It's not a public company.
QUEST: One other area I must talk to you about, minister. You won't be surprised. Brexit talks. You have seen the fracas and row over what
supposedly happened or who said what to whom at that Number 10 dinner between Theresa May and Jean-Claude Juncker. Jean-Claude Juncker says he's
ten times more skeptical that Brexit can be a success. What do you make of it?
PADOAN: I think we are in for a difficult two-sided talk between the U.K. and the European Union. But I am also ultimately optimistic that we will
find a mutually consistent solution.
QUEST: And do you believe that these negotiations effectively have -- I mean, they can't be held in -- I was going to say secrecy or perjure. They
will leak like an sieve, and we all know that, don't we?
PADOAN: Of Course, they will leak like everything else in politics. I've learned that now. But it's going to be a tough negotiation. The point is
that there will be tough positions on both sides, this is my expectation.
QUEST: Finally, sir, the unity that is shown that was seen at the last European Council, when you approved it, do you think -- Jean-Claude Juncker
says he doubts that unity will remain as solid. What's your feeling on that, as the talks get going?
PADOAN: I am convinced that there will be a unified position. The Commission is working hard on that. Of course, there are different
national preferences across the group of EU member states. As I said, we will find a tough negotiation ahead of us. But then I'm confident that
we'll find a mutually satisfactory solution.
(END VIDEOTAPE)
QUEST: Italian finance minister.
To the U.S., this gentleman, the United Airlines chief executive officer, Oscar Munoz, told Congress that his airline will do better and apologized
again for what happened three weeks ago when Dr. Dao was forcibly removed from a plane. He described it is a horrible failure. He was appearing
before the U.S. Transportation Committee on Capitol Hill, when he testified on the state of air travel for his customers. He was one of several
airline executives at the hearing. It all follows that incident when the passenger was forcibly removed from the United flight from Chicago to
Louisville. You've seen the pictures many times. United Airlines says he takes full responsibility.
(BEGIN VIDEO CLIP)
OSCAR MUNOZ, CEO, UNITED AIRLINES: As CEO, at the end of the day, that is on me. This has to be a turning point for the 87,000 people and
professionals here at United. And it is my mission to make sure that we make the changes need to provide our customers with the highest levels of
service, of course, that you come to respect, reliability but also, a deeper sense of respect and trust and dignity.
(END VIDEO CLIP)
QUEST: Of course, this hearing came to represent much more than just the United Airlines incident. Throughout the hearing, there were pointed
exchanges about the way passengers are treated on aircraft, for instance, overbooking. Various carriers said they will cut back on the practice.
Some said they'll stop it altogether. And then the question is whether that will be enough, given the president is calling for deregulation or
regulation to come back. The committee has raised the possibility of new regulation. And the threats from lawmakers was clear. If the airlines
don't take action on things like charges, overbooking, carriage fees, the price of tickets, then Congress will do it for them.
(BEGIN VIDEO CLIP)
BILL SHUSTER, CHAIRMAN, U.S. HOUSE TRANSPORTATION COMMITTEE: That should be the takeaway from today, is seize this opportunity, because if you
don't, we're going to come, and you're not going to like it.
(END VIDEO CLIP)
QUEST: That threat was clear. And to anyone who has suffered sometimes in the U.S. flying system, you'll understand what it means. I spoke to Peter
DeFazio, a short while ago. Ranking member of the House Transportation Committee, and I ask the Congressman what he made of today's hearings.
(BEGIN VIDEOTAPE)
PETER DEFAZIO, RANKING MEMBER, U.S. HOUSE TRANSPORTATION COMMITTEE: We've got a long way to go. I mean, for instance the airlines made $3 billion
last year, and charging people for changing their itinerary or their tickets. Yet they're still overbooking the planes with the premise that,
gee, people might not show up. Well look, 76 percent of the people are going to lose all their ticket if they don't show up. So, it's an archaic
practice that disadvantages people. That's what brought about the whole United incident, basically overbooking shouldn't happen. In fact,
Southwest Airlines said we will never overbook again. And the same with JetBlue. But United, American, no, that's our business model, we've got to
overbook and bump people.
[16:10:02] QUEST: You talked today about why they charge. I saw a quote from you -- I heard you say about why they charge 2 or $300 for changing
tickets when it doesn't cost them anything to change a ticket. Congressman, you know as well as I do that the economic model requires that
because you are otherwise buying a more expensive ticket. You can't give a cheaper ticket the same benefit as a more expensive one.
DEFAZIO: Well, this practice didn't exist 20 years ago. There's some contradictory things here. They're doing these exorbitant change fees
which sometimes exceed the value of someone's purchased ticket, and they may well be paying more than they would have paid the first day if they had
bought an unrestricted ticket. As the consumer reports guy said, he saw the price of his ticket jump 200 and something dollars overnight because
his charge card didn't work last night. He went with another charge card today and the ticket had gone up 200 bucks.
Who knows? There's very little transparency in fares. There's virtually no transparency in terms of all their extra charges. You see a price, but
then it's, oh, really, you want a seat, you want a bag in the overhead, that costs extra. They're nickel and diming the public to their immense
profitability to themselves.
QUEST: Long and short, do you feel that there's a will amongst you and your colleagues to get your hands dirty and actually do a good job
legislating here?
DEFAZIO: Well, I think you may have heard the chairman, he said his preference was self-help for the airlines. But we'll be watching. So, you
know, we are going to do a Federal Aviation Administration reauthorization this year that would hold some opportunity for some targeted reforms. But
I think the current deregulatory environment of the Trump administration -- I mean, the Trump administration is delaying safety-critical regulations,
like a rule keeping lithium batteries off commercial airliners because they're so incredibly dangerous. They're holding that rule. So, I don't
think they're going to do anything for passenger rights when they're actually not putting in place rules that will save lives.
QUEST: Finally, Congressman, and I ask this, as always, with great respect to you and your colleagues, how much was today about just venting, a chance
to let the airlines know, you know, the status quo is not acceptable, and if they're not careful, something nastier will come down the road towards
them?
DEFAZIO: I think that's where some of my colleagues were at, they're relating personal experiences. I was talking about major policy issues.
Why do you still overbook, especially when you're charging $3 billion in change fees every year? And why should we give more control to you? The
airlines are pushing privatization of the airspace in the United States, taking over air traffic control. And they would set the fees, not
Congress, not elected people.
A private board dominated by the airlines will set the fees. The same airlines that are charging to put your bag in the overhead? I mean, come
on, we're going to give them total control of the system, the same airlines that have had their dispatch and scheduling and ticket systems meltdown,
stranding hundreds of thousands of people? And the national air traffic control system has never gone down in recent years. Why should we trust
them?
(END VIDEOTAPE)
QUEST: Congressman Peter DeFazio talking to me earlier on the question of the U.S. aviation industry.
On today's newsletter, the CNNMoney QUEST MEANS BUSINESS newsletter, we'll be writing about Alitalia, and whether or not it should be allowed to go
broke. You can read it and you can sign up for at CNNMoney.com/Quest.
Coming up, an interview with CNN's Christiane Amanpour, Hillary Clinton says intervening events in the last 10 days of the presidential election
was the reasons she lost.
[16:15:00] (COMMERCIAL BREAK)
QUEST: The U.S. government of course is now founded until September after a last-minute deal between Congress and the White House that agreed to keep
the country funded through until later this year. This morning, in a series of tweets, President Trump called for a government shutdown when the
latest deal expires. Mr. Trump wants a water-tight Republican majority in the Senate.
And this is the tweet. He said, "The reason for the plan negotiated between the Republicans and Democrats is that we need 60 votes in the
Senate which are not there. We either elect more Republican Senators in 2018 or change the rules now to 51 percent."
This is the bit that everybody is focused on. "Our country needs a good shutdown in September to fix the mess." It would appear that President
Trump is taking a page from President Bartlett's book in "The West Wing."
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE, Video clip from "The West Wing": He won't be held responsible for shutting down the federal government.
MARTIN SHEEN, PLAYING THE PRESIDENT: Then shut it down.
(END VIDEO CLIP)
QUEST: "Then shut it down." seems to be what the president wants in September. CNN's Jason Carroll reports from the White House.
(BEGIN VIDEOTAPE)
DONALD TRUMP, U.S. PRESIDENT: This is what winning looks like.
JASON CARROLL, CNN CORRESPONDENT (voice-over): president Trump facing conservative criticism on the budget bill, declared victory today.
TRUMP: After years of partisan bickering and gridlock, this bill is a clear win for the American people.
CARROLL: This despite a pair of tweets this morning where the president said, "Our country needs a good shutdown in September to fix mess."
UNIDENTIFIED MALE: How could a shutdown be good.
MICK MULVANEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET: The president wants to see Washington get better, get fixed, change the way it does
business.
CARROLL: The White House pointing fingers, claiming the Democrats were actually the ones who wanted a shutdown and the President was not happy
with how they were claiming victory in budget negotiations.
MULVANEY: The President is frustrated with the fact that he negotiate in good faith with the Democrats and they went out to try to spike the
football and make him look bad.
CARROLL: Congressional leaders announced late Sunday they had reached a deal to avert a government shutdown until September. The deal did include
money for border security but not specifically for a new border wall, in part because GOP leaders needed Democratic votes to pass the bill. But the
White House saying today, funding will go toward enhancing an existing barrier on the border.
TRUMP: Any member of Congress who opposes our plans on border security, and I know these folks didn't, is only empowering these deadly and
dangerous threats. And we will not put up with it. And the public won't put up with it.
CARROLL: Meanwhile, the President spoke with Russian President, Vladimir Putin, by phone today. The call was the leaders' third since Trump took
office, but the first since Trump's decision for military strikes in Syria following a chemical weapons attack and Trump's comments on the U.S.-
Russian relationship at a joint presser last month.
TRUMP: We maybe at an all-time low in terms of our relationship with Russia.
CARROLL: The White House says the two leaders agreed the suffering in Syria had gone on too long, to also discussing working together to fight
terrorism in the Middle East and the nuclear threat from North Korea.
[16:20:00] Trump's former challenger Hillary Clinton speaking today. Critical of the president's foreign policy, particularly his tweets.
HILLARY CLINTON, FORMER U.S. DEMOCRATIC PRESIDENTIAL CANDIDATE: They have to be part of a broader strategy, not just thrown off on a tweet some
morning, that hey, let's get together and, you know, see if we can't get along, and maybe we can, you know, come up with some sort of a deal. That
doesn't work.
(END VIDEOTAPE)
QUEST: Staying with that interview with Hillary Clinton, she says she would be the 45th president of the United States had it not been for
Russia, WikiLeaks, and the FBI director, James Comey. She was speaking to CNN's Christiane Amanpour when the former secretary of state and senator
and presidential candidate reflected on that campaign. She takes personal responsibility yet believes voters were scared off by intervening events.
(BEGIN VIDEO CLIP)
CLINTON: It wasn't a perfect campaign. There is no such thing. But I was on the way to winning until a combination of Jim Comey's letter on October
28th and Russian WikiLeaks raised doubts in the minds of people who were inclined to vote for me but got scared off. And the evidence for that
intervening event is I think compelling, persuasive, and so we overcame a lot in the campaign. We overcame an enormous barrage of negativity, of
false equivalency and so much else. But as Nate Silver, who, you know, doesn't work for me, he's an independent analyst but one considered to be
very reliable, you know, has concluded if the election had been on October 27th, I would be your president.
(END VIDEO CLIP)
QUEST: CNN's Chris Cillizza is in Washington for us. That really sort of sums it up, doesn't it? If the election had been then, I would be your
president. Did you hear resignation or bitterness in her voice as she said it?
CHRIS CILLIZZA, CNN POLITICS EDITOR-AT-LARGE: Can I take road three, which is I think anger. Some level of bitterness, that she believes, Richard,
she didn't really lose the election. The election was taken from her by external events, one of which was, in her words, a coordination with Russia
as it relates to releasing John Podesta's emails. I was struck by the speech, to be honest. This is a very different Hillary Clinton than we saw
during the campaign. Sarcastic, funny, and very, very honest, not at all sort of the measured political figure that we've seen for years and years
and years publicly.
QUEST: Which actually is what of course people said she's really like, but she was -- now, look, have a listen, to her talking about the difference in
temperament between her and Donald Trump. Have a listen.
(BEGIN VIDEO CLIP)
CLINTON: I was on the way to winning until a combination of Jim Comey's letter on October 28th and Russian WikiLeaks raised doubts in the minds of
people who were inclined to vote for me but got scared off.
(END VIDEO CLIP)
QUEST: Well, the close viewer will have noticed that it was the same clip that we played by accident. In effect, she did say that there was a
difference in temperament between the two of them, which of course -- I mean, it's all academic now, isn't it?
CILLIZZA: I was going to say, to her point of if the election were held on October 27th, she would be president. It wasn't. So, --
QUEST: Oh, you're a hard man, you're a hard man.
CILLIZZA: It was held on November 8th. Yes, I think what she did, Richard, in that speech regarding temperament, essentially what she said
was she was offering detailed, specific plans, and the mainstream media did not question Donald Trump on specifics. I would disagree. The first
question that was asked of both the candidates at the first presidential debate was what specifically will you do to help create jobs. Is there any
doubt that she had more details and more specifics than him? No. No doubt. But the idea that he wasn't asked, pressed repeatedly to offer them
is I think a little bit wrong.
QUEST: Hopefully the Jimmy Kimmel bite, we have that, because last night one of America's top late night talk show hosts made this comment on health
care, talking about his own children and their medical problems. Have a listen. I'll give you my question in advance so that you can pick it up
after you've heard it. The question is this. Bearing in mind the power that these talk show hosts have, how devastating to the Trump plan is it
that someone like Kimmel says this?
[16:25:00] CILLIZZA: Sure.
(BEGIN VIDEO CLIP)
JIMMY KIMMEL, HOST, "JIMMY KIMMEL LIVE": So, this poor kid, this is what he looked like on Monday. But this is what he looked like yesterday
[APPLAUSE]
President Trump last month proposed a $6 billion cut in funding to the National Institutes of Health. Thank god, our Congressmen made a deal last
night to not go along with that, they actually increased funding by $2 billion. And I applaud them for doing that.
If your baby is going to die and it doesn't have to, it shouldn't matter how much money you make. I think that's something, whether you're a
Republican or a Democrat or something else, we all agree on that, right? I mean, we do.
(END VIDEO CLIP)
QUEST: Chris?
CILLIZZA: Very powerful without question, when you see the pictures, when you talk and personalize it, you talk about someone's real life, very
powerful. That said, Jimmy Kimmel will be easily dismissed by many Trump supporters as just another Hollywood liberal out to get Donald Trump. This
is the problem that exists in our country. Everything is first seen not through sort of a humanity lens, which is what Jimmy Kimmel is urging, but
through a partisan lens, and unfortunately that's how this will be seen.
QUEST: Finally, I can't get anybody to explain to me, Chris, this latest health care plan that Congress is talking about. Is it the same one that
they didn't vote on? Or has it been got some knobs on or the same redux?
CILLIZZA: It is different. The one big change essentially, is rather than mandating at the federal level that insurance companies have to cover
preexisting conditions. People who have preexisting conditions must be included in an insurance plan. What this would do is say, we're going to
let states opt out of that. Trump and other Republicans are saying, we'll create a high-risk pool that those people can go into. The problem is high
risk pools would cost a massive amount of money. Insurance companies would charge an a lot of money for someone to get into that because they know
they're going to likely incur a bunch of costs because these people have pre-existing conditions.
Donald Trump has mucked up the water a lot, because he says, oh, no, there's a mandate in there. But unless the bill has changed in the three
minutes I've been on television with you, I think that's not the case.
QUEST: Chris, I think that's the first time we've had you on QUEST MEANS BUSINESS, as such we look forward to it many times more in the future.
Thank you, sir.
CILLIZZA: Thank you, sir.
QUEST: The day on Wall Street, back with the numbers. The NASDAQ continues its storm ahead. The Dow just was down a bit then up a bit. The
movements were very small, within a 50-point range overall, closing up some 36 points for 20,000. So is just holding under 21,000. The Fed's two-day
meeting has now begun. The NASDAQ is at a record high.
European markets all rose on Tuesday, hardly surprising to see what Wall Street has been doing as strong manufacturing data, the Dax is at an all-
time high. And interestingly, look at the Athens general, hopefully you saw it quickly enough -- there we go. Back again. Up 3 percent. It
doesn't go up that much very often. Let's enjoy it while it happens. Greek bank stocks saw double digit gains. The reason was an agreement on
the next tranche for the bailout of the Athens government.
As we continue, Apple fan boys want to see the latest products. Apple's investors want to see the money. $250 billion of it. We're expecting a
report any minute now on its latest. QUEST MEANS BUSINESS.
[16:30:00] (COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. The chief executive of Infosys tells me why he's creating
10,000 new jobs for Americans in the United States. And the Apple results have just come out, we'll have details in a moment, after we've had the
news, because this is CNN, and on this network, the news always comes first.
Hours ago, President Trump spoke to Vladimir Putin by phone in the first call since the U.S. launched missiles on Syria last month. The
conversation is described as a very good one. It was agreed that all parties must do all they can to end the violence in Syria.
The Russian president met face-to-face with Angela Merkel on Tuesday, where they discussed differences over Syria and Ukraine. The chancellor
expressed her concern over reports of a crackdown on gay men in Chechnya.
Hillary Clinton says she takes absolute responsibility for losing the election to Donald Trump. She said she would have been president if the
election was held on October 27th. That's the day before, she says, intervening events cost her the White House. The former secretary of state
went on to criticize Donald Trump's strategy in handling foreign and domestic policy.
I wasn't going to appeal to people's emotions in the same way that my opponent did, which I think is frankly what's getting him into all kinds of
difficulties now in trying to fulfill these promises that he made, because health care is complicated. And so is foreign policy. And other stuff
that lands on a president's desk.
The far right French presidential candidate Marine Le Pen's campaign says she deliberately copied large parts of her speech on Monday to show she's
not sectarian. She's accused of plagiarizing a speech from her defeated rival Francois Fillon. The election happens on Sunday.
News just into CNN, it's the Apple report that investors were waiting for. Earnings in the second quarter beat expectation, $2.10 a share compared to
$2.02. We'll get into more details in just a moment.
As we look at that, these are the results, the numbers have just come out at the moment. They also announced they're increasing their capital
spending program to some $300 billion. The company quoted revenue of $52.9 billion, earnings of 210. It's interesting because these numbers compare,
the $2.10 per share that they're talking about versus 190 a year ago. That's fascinating. International sales, this is another interesting
number that's just come out, international sales, by that it means non-U.S. sales, accounted for 65 percent of the quarter's revenue. And I'm going to
show you why that number of 65 percent of Apple's revenues come from outside the United States, this is how the stock is doing after hours, I'm
going to show you why that number is so significant. Because Apple makes a point of designing the gadgets that are thin and light. And the investors
are looking exactly behind them. You won't find this in any of the stores.
[16:35:00] This is the Apple cash pile pro. The cash pile pro is worth $250 billion. Up with, two, three, four, five, six, seven, eight, nine,
ten. 25 with ten zeroes after it. And as you look into that, Apple has not released the numbers inside the United States, that's $250 billion. 95
percent of it is held outside the United States, held overseas, which is why this morning's details or the announcement that says international
sales account for 65 percent of the quarter's revenue, is so important, because it means that number, that 250, is increasing even more every
quarter that Apple reports. The number is getting bigger and the cash is locked off outside. Now, that could change. If American tax laws are
reformed. Because no Apple announcement is complete without one more thing, the cash pile itself. One more thing. Apple is worth more than all
the market cap of all these component companies, from Coca-Cola so Verizon to caterpillar to chevron to intel to Walmart to IBM, Apple put it all
together, worth more. CNN's Samuel Burke is in London for us tonight. Give me more details on the results.
SAMUEL BURKE, CNN CORRESPONDENT: Well, that number that you just talked about has actually increased in the past few seconds, Richard. We're just
learning that the cash pile is now up to $256.8 billion. To put that in perspective, that is $10.75 billion more than last quarter. A lot of
questions about will it increase even more, especially if they're able to repatriate that cash to the United States, what will they use it for? A
lot of people have said, maybe they can hire more workers. Richard, quite frankly, I don't think they need even more cash, if they could have
invested it, they would have invested it.
QUEST: Hang on. Two things about Apple we know. Firstly, it started to do dividends but doesn't believe in returning cash to shareholders.
Secondly, it doesn't believe in Facebook doing a buying of WhatsApp, a gigantic deal worth tens of billions.
BURKE: Although they've announced their increasing their dividends by 10.5 percent to bring it up to .63 cents per share, adding $35 billion to its
buyback. With Apple, there's only one number that really matters. Apple is the iPhone company. They've missed expectations on the iPhone.
Analysts were expecting them to sell about 51.2 million units. Only 50.8 million. So not too far off but missing expectations. That's going to be
a problem for Apple.
QUEST: OK. So where then is the growth here? I mean, is it -- if the iPhone -- all right, there's going to be a new one later this year. If the
iPhone is not with the growth or just it's churning to some extent, and the MacBook airs are specific expensive, and they're doing OK, and the watch is
OK. This is a company that's living on its laurels. Some would say, Samuel.
BURKE: And when you're talking about the Apple watch, we just had a few companies announce over the past few weeks that they're not going to keep
on servicing apps for the watch, google maps, for instance, eBay, amazon. What I'm going to listening for in the earnings call is how the Apple iPod
have been doing, has Apple been able to keep up with demand?
QUEST: Air pods.
BURKE: Air pods, thank you.
QUEST: What are air pods?
BURKE: Oh. Sorry. They're the headphones that look like toothbrushes that people put in their ears. Those are those wireless headphones. The
other thing I'm going to be listening for on the earnings call is how much, if there's any type of indication that they're making an Amazon Echo
competitor. Some analysts suggest that it's about time Apple got into that market.
QUEST: A look at the share price, it has fallen back, down 1 percent, down to 68 at $144 a share. They still believe this company will be -- that it
is the most valuable heading up towards. It's hovering down around 1 percent. The market post is not giving a good reaction to these results,
even though I accept its knee-jerk reaction.
[16:40:00] BURKE: it's definitely knee-jerk reaction to the iPhone number. That's the top number that all these investors look at. They see it, some
analysts in expecting 52, maybe 53 million. Seeing they only sold 51 million iPhone is a disappointment.
QUEST: Get yourself out of there, Samuel, you've got a conference call to listen to. Anything interesting, please come back immediately and tell us
what they said. Thank you very much. Samuel Burke working on that.
Infosys reportedly receives more H-1B visas than anyone else, allowing them to bring in workers from outside the U.S. Infosys is looking to the state
of the Indiana, between Illinois, Chicago, and Ohio, right bang in the Midwest. It's looking to Indiana and Indianapolis instead of India itself.
Infosys announced plans to hire 8,000 Americans over the next two years. The chief executive joined me from Indianapolis and told me the new
company's plans is much more than protecting itself from the vagaries of the U.S. system.
VIASHAL SIKKA, CHIEF EXECUTIVE, INFOSYS: As technology evolves, we've been rethinking our strategy. I started as the CEO of Infosys about three years
ago. We launched a program back in 2014 to hire 2,000 people in the U.S. that was very successful. Then we started our foundation, the Infosys
foundation in the U.S. two years ago. They have done some amazing, inspirational work in those last two years, bringing computer science
education to more than 135,000 students and thousands of teachers. This is really the next phase of that development, of bringing 10,000 local hires
into our workforce across the United States over the next two years, start here in Indiana, where we are committing to hire 2,000 people by 2021 and
500 by next year.
QUEST: Are these hires in addition to others that you might be bringing in on the so-called h-1b visas, are they replacing some of those that you
would use on H-1B's?
SIKKA: It is a combination of both. You always use visas to bring the right skills and so on. Our thinking over the last few years is we need to
focus more and more on locally developed, locally skilled, local workforce that can work at zero distance, at close proximity with the client.
Obviously, there is always the need to bring some foreign talent and so forth, so we continue to do that. As the policy evolves and the visa
policies change and so forth, we'll obviously work with those. But really this moment is about more than that.
QUEST: Everybody I've spoken to like yourself who basically says all this argument about visas and about people crossing borders and border walls and
migration, the reality is the biggest threat in the future is from automation, which could make -- which could make an entire class of worker
superfluous to requirement. Would you agree that is going to be the challenge of the future?
SIKKA: Richard, that is the heart of the matter. That is precisely the big move that is happening around us, whether it is in my industry, whether
it is in India, whether it is in the United States, across the world, this is the heart of the matter. The visa thing is a short-term thing. The
bigger shift that is happening in the world around us is all the jobs of yesterday are increasingly becoming amenable to automation. We really need
to create a culture of innovation, a culture of entrepreneurship. When I went to school, my the doctorate is AI. One of the fathers of AI, John
McCarthy, said articulating a problem is half the solution. We'll see AI technology in our lifetimes that can increasingly do all that can be
described. Therefore, the human frontier is really going to be problem finding. It is going to be innovation and entrepreneurship.
[16:45:00] That is really what I am focusing on. That's what our initiative is really fundamentally all about. So, you are absolutely
right.
QUEST: All this talk of technology, we mustn't forget standards. I'm grateful to Marlene Holman who emailed me while we were on air. She says,
come on, Richard, you said less people are coming to the U.S. but of course it should have been fewer people are coming to the U.S. absolutely. The
people that are coming are still full size and full range. It's fewer people not less. I'm grateful, Marlene.
Healthy people, healthy economy. Africa is searching for an economic antidote to falling commodity prices, and South Africa is taking on the
challenge.
(COMMERCIAL BREAK)
QUEST: Welcome back. The U.S. struggles to fix its health care system, but south Africa is looking to the cloud and setting an example for nations
up and down the continent. Eleni Giokos reports in our special series, "AFRICA LOOKS FORWARD."
(BEGIN VIDEOTAPE)
ELENI GIOKOS: This man is one of 1,750 health care workers in South Africa going door to door, assisting families and capturing vital data. What was
once done on paper and often lost in the system can now be done on a smartphone and ingested in real-time.
JACQUES DE VOS, MANAGING DIRECTOR, MEZZANINE WARE: We've developed a solution that allows health workers to visit clients in a school setting or
workplace setting.
GIOKOS: The solution is called Aita health. It creates clusters of data across the country.
DE VOS: You have demographic information, age distribution, gender. What is the type of diseases or conditions that is prevalent in that area.
GIOKOS: Providing targeted intervention in areas that need it most.
DE VOS: We find for every patient that is known to the system, there is another person who either are diagnosed but they are not on management or
they have symptoms.
GIOKOS: To take this microlevel approach, it needs to be done at a large scale to make an impact. And that's where one of south Africa's largest
telecom companies comes in.
DE VOS: The platform enables us to access different sources of data and look at them in a meaningful way and distribute them to government
officials.
GIOKOS: With a population of more than 54 million people and with only 480,000 in the system, there's still a long way to go to get everyone
added. But it will help getting people assistance perhaps before they need hospital care.
DE VOS: The more you can deal with people at home, the less they are dependent on the hospital.
[16:50:00] GIOKOS: The public health care system in south Africa is overburdened, riddled with long queues, and lacks resources.
DE VOS: The idea is that in the national health insurance, we will have a community health worker visiting every home in the country. And then we
will have data available at quite a sophisticated level.
GIOKOS: this application has already been launched in Nigeria, Kenya, and now plans are afoot to take it to other African countries. Perhaps this
approach will result in a much healthier society. Eleni Giokos, CNN, South Africa.
(END VIDEOTAPE)
QUEST: General Motors ceases production in Venezuela. We'll be in Caracas, after the break.
(COMMERCIAL BREAK)
QUEST: General Motors is backing out of Venezuela. The company ceased operations after the plant was seized by authorities last month. There are
fresh protests in the country as the Venezuelan president pushes for changes to the constitution. This question over GM has been a right royal
mess, hasn't it, over whether they're already there, whether they've already left, whether they're doing any production anyway. But the
underlying point is true, which is that western companies are pulling out.
STEFANO POZZEBON, FREELANCE JOURNALIST: Yes, absolutely, Richard. The end of the line here is that 2700 families, 2,700 people who used to work for
general motors in Venezuela are not working, they're out of jobs since the end of April, because the company is leaving the country, amid one of the
strongest regulation recessions in the history of the country. General Motors, Pepsi, Coca-Cola, McDonald's, they've struggled to make business in
Venezuela amid rampant inflation, chronic difficulty of getting hold of basic goods. Venezuela is going through a massive scarcity crisis.
QUEST: Is it your feeling that the situation is deteriorating at a very rapid pace? Or is it just basically continuing in a sort of sludge and
trudge?
POZZEBON: Richard, the sludge and trudge in the last few weeks have reached the political stage, with people taking the streets. We haven't
seen any major difference on the economic and social point of view between I would say six months ago and now. Go we're seeing that now the people
are really getting tired of the scarcity, really getting tired of not being able to buy basic goods such as corn flour, milk, and coffee. They're
starting to take the streets. It looks like they're not going to leave the streets, they'll keep protesting as long as somebody isn't able to fix the
massive economic shortages.
QUEST: Thank you for keeping us up to date on what's happening in Venezuela.
We'll have a Profitable Moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment. Is this the end of Alitalia? Perhaps it should be. The airline, having had one restructuring two years ago, is
now back for another in emergency administration. Etihad says it's not providing any more money, hardly surprising. The finance minister says
there could be a commercial solution, but it's hard to see what that could be, since nobody else seems to want to help, having had their fingers well
and truly burnt. Perhaps it's time for Alitalia to leave the stage, I don't say that with any pleasure but an eye toward economic reality. If
they can't make money, it's time to fold their wings. That's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up
to in the hours ahead, I hope it's profitable. We'll do it again tomorrow.
END
