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Quest Means Business
KCTMO CEO: We Did Not Cut Corners; Trump Unveils Trade Restrictions on Cuba; Amazon Buying Whole Foods for $13.7 Billion; Protests Across London in Wake of Fire. Aired 4-5p ET
Aired June 16, 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. Dow Jones Industrials and making small moves on the day. And a worthy
group of people there, there we go. That's what you call a really good gavel, as trading comes to a close. It is Friday. It is June the 16th.
Grief gives way to anger in London. The head of the group responsible for managing the towering inferno tells me they didn't cut corners.
President Trump rolls back the Obama administration's Cuba policy and he's left the door open to a new deal.
Amazon goes shopping at Whole Foods and comes back with the whole chain.
I'm Richard Quest live in London where I mean business.
Good evening. Tonight, there's anger and it is growing in London as the number of people who died at the Grenfell Tower fire continues to rise.
This evening, protests have been taking place across central London. The public are expressing their fury at the government and the response to the
disaster.
The Prime Minister, Theresa May, pledge 5 million pounds, that's $6.4 million, to support the survivors. She also visited survivors in hospital
while the Queen and Prince William met volunteers, survivors and local residents. And the police now confirm 30 people have perished in the
horrific blaze and an unknown number of people are still missing. And they say some of those do eventually if the bodies are found, they'll never be
properly identified.
(BEGIN VIDEO CLIP)
COMMANDER STUART CUNDY, METROPOLITAN POLICE: it is going to take a considerable period of time to fully work through Grenfell Tower over the
coming weeks to ensure that we complete our investigation here within the building itself. It's an absolute priority, what we are all doing is as
quickly and with as much dignity as we can recovering those that are still inside. And sadly, we do not expect there to be any survivors.
(END VIDEO CLIP)
QUEST: Now, you heard that from the police. The priority is the recovery of the victims. Fred Pleitgen joins us from London. Over the course of
the day I've seen a variety of numbers. The police say some may never be identified. One officer said yesterday he hoped it wouldn't go into triple
digits the number of dead. And now there's this number circulating around 70 to 76. Is there any basis for that number?
FRED PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I think right now, Richard, what they're doing is they're trying to put all the lists
together of the missing and see who's ever still missing at this point in time. They believe that the hope is very slim of still finding those
people alive by some miracle. Them may be being in a hospital or something. But I also want to show you, Richard, one of the reasons why
they're saying they don't believe they're going to find any more survivors.
Because we have this new vantage point now here, where were actually overlooking Grenfell Tower and from this point you can really see just how
devastating that fire was on that building. We've actually been managing to zoom all the way into some of the apartments where you can see that it's
all completely burned out. There was one that we saw that actually had a burned out washing machine that you can still see there. So, you can tell
just how devastating the fire was on that building and why the police believe that anybody who was inside that building and who might still be
missing, or would've been trapped inside, would have had a very little chance of survival, Richard.
QUEST: OK. So, Fred, the building itself, I know that they are shoring it up, ensuring that the core doesn't collapse and that the structure is safe.
But to hear the police talk, this could be weeks before any final numbers are put together.
PLEITGEN: Yes, I think you're absolutely right. And if you look at the building right now you can see there's no one inside the building. We
haven't seen anybody go in or out of the building. If we actually look to the side you can see there is sort of an emergency response truck that's
parked there. So, there are authorities out there. There's personnel out there. But they aren't able to go into the building. And especially
shoring it up is something that could take a considerable amount of time.
You can also see that around the building, access is quite difficult. Because there is actually a lot of debris around the building as well. But
one interesting thing that we've been seeing, Richard, is you know how people kept saying, that the fire started around the fourth floor. And you
can see that cladding that we've been talking about so much and so many people believe may have been responsible for accelerating the blaze.
[16:05:00] Around the lower floors, especially on the fourth floor, you can see it is still pretty much intact. There's those white and gray fields,
but as you go up the building you can see the damage from the fire gets worse and worse the higher you get. We are not experts on this, but it
certainly does appear as though something allowed the fire or made the fire go up the building and really wreak havoc, especially on those top floors,
Richard.
QUEST: Fred Pleitgen, thank you, Fred.
Now the former chairman of the Grenfell Tower Residents Association told CNN their warnings about fire risks fell on deaf ears. David Collins said,
the firm which manages the building, simply ignored their concerns.
(BEGIN VIDEO CLIP)
DAVID COLLINS, FORMER CHAIRMAN, GRENFELL TOWER RESIDENTS ASSOCIATION: We told them something like this might happen.
OREN LIEBERMANN, CNN CORRESPONDENT: Why specifically? Why did you have that concerned? There was refurbishing going on, the building itself was
built in the 70s.
COLLINS: Because the management and the organization who look after the building, the tenant management organization, Royal Borough of Kensington
and Chelsea. Is just there are series of ineptitudes and not responding to residents' concerns. I should probably give you some examples. They were
putting in new boilers, they were meant to go in the kitchen, then they put them in the hallways, in the doorways, right next to these doors. So, if
there is a fire with the heating equipment people wouldn't be able to get in and out of their doors.
(END VIDEO CLIP)
QUEST: You here the accusation there being made against the Royal Borough of Kensington and Chelsea tenant management organization, the KCTMO. The
chief executive of that very organization was with me earlier. He denied allegations that they'd cut corners during the refurbishment of the tower.
The KCTMO, or just the TMO for short, which manages the building has come under heavy criticism from the tenants. I spoke to Roger Black who joined
me in the studio. And I wanted to start off by at least agreeing that perhaps we can all agree, something went deadly and drastically wrong.
(BEGIN VIDEOTAPE)
ROGER BLACK, CEO, KENSINGTON & CHELSEA TENANT MANAGEMENT ORGANIZATION: First of all, we have said that we were completely devastated by what's
happened. And I think that's really important to say. I was there at 3:30 in the morning to be on the ground to help organize it. And I think for
us, it was unbelievable what's happened. So, I think it's beyond us. We can't work out, don't know what's happened. That's what makes it so
difficult when people are asking questions. What's happened? What's going on? Because we don't know.
QUEST: The reaction from tenants has been one of, we warned about fire risk, we were worried about fire risk. One resident told us, the
management not responding to residents' concerns. New boilers that were meant to going to kitchens were put in hallways. Gas pipes were over
doorways. There seems to have been plenty of warnings that something wasn't right.
BLACK: I don't know if I see it that way. What I see is that I'm tenant management organization. That means I'm based on the tenants, I've got
5000 members. I've got eight residents on my board. So, I say, we are programmed to listen to residents. Residents can say and it's all about
delivering for our residents. That's the nature of our company.
QUEST: The residents say they've been ignored.
BLACK: Well, I think at the moment the difficulty I've got, people are saying I've been ignored, I've been ignored, when we have actually
addressed most of the issues you said. But I can't really go into them at the moment. We do not accept that we've ignored people or not address
things. People have different views about certain things. But that doesn't mean we've ignored them. And I believe when we go through this
process, we will show that we have addressed all of the issues you have raised there. I find it's quite difficult to get into the detail with you.
QUEST: On this question of the renovation, obviously, your involved in that. But experts were brought in to -- were you the contracting party on
the renovation?
BLACK: What we are is we procured the contractor. So, the channel was giving the money by council from Chelsea and then we procured it through a
process. And then that was checked on criteria, which is usually quality and value for money. And that is sort of a basic similar across the
sector.
QUEST: And the idea of not installing a sprinkler system. I understand it's pretty difficult in a 1970s building, if not impossible, to suddenly
put a second staircase in. But not installing a sprinkler system, which experts say would have doused the fire. We'll never know.
BLACK: Of course, we'll never know. And first of all, I would say, this is part of the thing that has come out is a bigger picture. There's --
QUEST: But did you consider a sprinkler system in the building?
BLACK: The vast majority of the buildings in London high-rise do not have sprinkler systems.
[16:10:00] And that is because a number of reasons. Didn't did we look at the beginning, I can't remember, because it started in 2013, 2014. So, one
of the things as we go through these investigations and questions, we'll be able to say that we learned. But the reality is actually the vast
majority, local authority, had this conversation, don't have sprinkler systems. Experts may say it works, but actually very few old ones have
them.
QUEST: Was a renovation done on the cheap?
BLACK: We spent 10.5 million pounds on regenerating that property. There was nothing -- our RBKC, the Royal Borough of Kensington and Chelsea isn't
designed doing thing cheap. They get a sum of money once we worked out what we want. We went to the market. There is no cutting of corners. The
whole principle of the Council is about quality, excellence in creating great neighborhoods.
QUEST: 10.5 million is not -- $15 million -- on a renovation of a 24-story building is not a vast amount of money.
BLACK: For us there is no low par at any stage where corners where cut in terms of when you were looking, what you don't. That is what the market --
when we went to the market with the design, that is what the market came back with. And then they redesigned it to make it fit. So, from my
perspective we have no interest in trying to do anything cheap. We want to create a great building.
QUEST: If the investigation finds TMO to be at fault, to be negligent, to have done things wrong, I assume you'll go. You'll resign.
BLACK: That's a really difficult question to answer. Because at this stage and working with the Council, working with our residents, dealing
with a disaster that's quite -- I was going to say overwhelming. But I can't use that word.
QUEST: It is overwhelming.
BLACK: What I'm trying to do in the borough is trying to do is actually make sure we respond to those issues. And we will respond to all the
inquiries, because there's not just one, they'll be several. And we will work through those inquiries to show that we have done everything we could.
QUEST: But as the head, your responsibility is what?
BLACK: my responsibility is to deliver the services and deliver them in the proper way.
(END VIDEOTAPE)
QUEST: Chris Miers is a forensic architect and joins me now. Again, I'll start with you as I started with Mr. Black. We could agree that something
went drastically wrong, dramatically, deadly wrong.
CHRIS MIERS, FORENSIC ARCHITECT: Absolutely. The fire has clearly been tragic and devastating. And personally, I'm shocked to see how widely it
destroyed the building.
QUEST: But how do you make a 1970s building with one staircase and no sprinkler system -- you can't make it up to the standards of a building
that would be put up today, can you?
MIERS: It will be different but it can be safe. I mean, the building under the refurbishment, there's no reason why at the end of that process
it can't be a safe building to occupy as it is upgraded to meet better thermal standards for example.
QUEST: Right. So, you're talking about putting in a sprinkler system. You're talking about the extra fire barrier doors. All those.
MIERS: These are options. The truth is at the moment, we don't know everything about why it has been such a catastrophe. We don't know.
QUEST: but you see, here's the problem though. Even if it was a bit of cladding that set on fire, or one fire barrier that fell. Or one breach in
the walls that fell. It shouldn't have then been able to escalate up the building. Should it have? In such a way.
MIERS: Well, this is one of extraordinary things. I mean, one of my jobs is to look forensically at exactly how was built and why this happened.
And it's true, that normally I would expect to see the fire kept under a smaller area. Brought under control more quickly to allow people to escape
safely.
QUEST: So, from what you seen, what does it lead you to initially think? Because again, as we see the tower -- well, we can see it there. There was
the fire outside and the fire inside. In a concrete building that's unusual I'm told that the fire should be able to come out on all sides of
the building. And secondly, from what I've been told as well, it is the ferocity of that fire.
MIERS: Yes, you're absolutely right. In fact, from my perspective it was shocking to see not only was the building ablaze on the outside, but inside
almost every single floor level it was burning at the same time. That's highly unusual. A fire normally works its way up a building and confines
itself to a limited area. So, in the investigation we will need to look at not only the design, but the construction inside and outside. Because even
if a fire is burning outside, people should still be able to either stay put safely or to escape down the fire escape staircase.
QUEST: This principle of stay put. Now, I've lived in high-rise buildings in 20/30 stories in New York most of my adult life. And that is the
orthodox view. Isn't it?
[16:15:00] MIERS: Yes.
QUEST: Stay put. And it has to be the orthodox view, because you can't evacuate a 30-story building that easily.
MIERS: You can't do it all at the same time. And in addition, not everybody is that able to go down 24/30 stories of staircases as well.
QUEST: This question of cladding. I'm just throwing issues at you in the sense of -- apparently it was banned -- it was not ban, but it was not
thought to be suitable for use in residential buildings in the United States.
MIERS: I think what we're going to need to look at, Richard, when we go into the investigation is exactly what materials were used in the whole of
the outside. If the aluminum panels are one issue to look at, but also behind it we've got other materials in there all of which we can see from
there may have played a role in the fire.
QUEST: What would you say to anybody tonight watching who lives in a high- rise building, works in a high-rise building and thinks if this could happen in a well-regulated city like London, one of the most advanced
sophisticated cities in the world, what is it mean? What should we do?
MIERS: I think there are two levels. There is the immediate function, which is people must know they have safe means of escape. And they've got
a manage building which looks after their means of evacuation. So, they need to know for example, that the corridors are not cluttered up. The
staircases are free. You got whatever fire alarm system there is maintained. But then in addition, then they may need to look at the
longer-term to say, have we got a building which meets the best regulations.
QUEST: Can I just ask you finally, how much of fire prevention -- just listening to you know -- we all do fire drills. We all ignore them. We
all pretend it's never going to happen to us. We all leave stuff cluttered. How much of this has to be, we all have to take it more
seriously.
MIERS: We definitely do. If we look internationally, some fires are caused, for example, by people having a barbecue on the balcony. People
need to be aware that they are raising risks. And this comes partly to building management. When we look at the design and construction we
mustn't forget about the operation of the building. How is it being looked after? How are people living in it? As you say, they can easily affect
safety by perhaps things they don't realize are having that impact.
QUEST: Good to see you, sir.
MIERS: Very great pleasure. Thank you very much.
QUEST: Thank you very much indeed.
Fitting name for Whole Foods it's "whole paycheck." The food chain is famous for its high prices. Now Amazon's buying the whole chain in the
prices nearly $14 billion. Why would an Internet sales organization want a bricks and mortar grocery store?
(COMMERCIAL BREAK)
[16:20:00] QUEST: The shopping mall or at least the shopping mall as perceived by Amazon. Amazon is adding a touch of organic to its bricks and
mortar strategy with its biggest ever acquisitions. Step inside the Amazon mall. Now, let me see, where am I? I'm over here at the moment. So, at
the front of the house you have the physical stores. You've got Whole Foods, which it's just buying, the organic grocer. $14 billion is going
for Whole Foods in this mall. And Amazon says it's going to keep the name. Now also, we've got in the shopping mall, we've got Amazon books, opened
its first store in New York, 3000 book titles cheaper if you are an Amazon Prime member.
Now, the important thing about Amazon books, of course, is Amazon started selling books online and has now gone into the bricks and mortar business
for the very same thing it started. So there the two biggies in terms of our bricks and mortar.
Then you've got the warehouse tech company that they have been buying as well. You've got Zappos, which is the online shoes, bought into 2009. And
you've got twitch in the mall. A streaming platform for video games bought in 2014. I might try that, that and that. I'm not sure about that.
And then finally you've got Elemental which is a technology software company it picked up just two years ago. So, there you have the mall. Dan
Frommer is editor-in-chief of Recode. He joins me from New York. Now sir, Dan, you've got to admit when they announced Whole Foods, even your eyebrow
must have raised.
DAN FROMMER, EDITOR-IN-CHIEF, RECODE: It was actually, quite surprising. And it's actually fun to be here from the CNN center in New York where
you're in the mall with the Amazon bookstore and the Whole Foods.
QUEST: So, why have they done it? Is there a logic? I can understand the logic. If you've already got a background of books and you know people do
like to buy books. But surely Whole Foods is a step backwards first store like Amazon.
FROMMER: You know, Amazon's been trying to nail the grocery market for about a decade. They tried a lot of stuff. They've tried Amazon fresh.
Basically, ordering groceries online. They tried picking up groceries in Seattle. They're even trying a convenience store there where there is no
human employees. But Amazon just has not really broken through and this is a chance with one check to own arguably the most prestigious grocery brand
in the world.
QUEST: Well, I think others may argue and some like Marks and Spencer in the U.K. might challenge that. But let's not get into a nice debate over
that. Look, the reality is Whole Foods has had its problems. So, do you think they've bought the right chain?
FROMMER: I think there are a lot of opportunities for Jeff Bezos to kind of Amazon-ify the Whole Foods experience and make it better and ideally
more profitable. But we have to look at this as not only being about the grocery industry, but also being about Amazon. Ever since Amazon got over
the idea of charging sales tax, it's now in the business of trying to deliver all kinds of stuff as quickly as possible. And that means having
distribution centers everywhere. So, with 400+ stores in really great neighborhoods all across the U.S. and in other places, to me that's an
obvious part of that strategy.
QUEST: Let's finish on this question of Jeff Bezos, if we may. Because if we look at -- I mean, he bought the Washington Post and there's no question
he's turned into a more aggressive true journalistic -- it was always journalistic -- but a much more aggressive journalistic organ of record.
And now is buying Whole Foods. You've got to admire the man. In the sense of what he's doing and the way he's doing it. It's brazen bordering on
chutzpah.
FROMMER: It really is and these are great brands that a lot of people love and spend a lot of money with. Whole Foods is not going to save journalism
or maybe our country, but if the idea is to get healthier food to more people, that sounds like a good plan to me.
QUEST: Excellent. Dan, next time or when I'm back in New York let's go shopping in Amazon Whole Foods.
FROMMER: Thank you.
QUEST: To see how far a $10 bill actually goes. I'd offer to buy you lunch but would both be broke before we finish. Thank you, sir.
FROMMER: Of course.
QUEST: Amazon foray into food is hurting retail stocks. The U.S. chains are tumbling. The international stocks are also falling. Ahold the Dutch
retailer is down. The Irish supermarket chain Supervalu is down. And yet Whole Foods is up 29 percent. Look at that. Whole Foods and Amazon both
gaining. Everybody else's down. Pau La Monica has been tracking the numbers. Whenever I see this I just wish I'd seen today's headlines
yesterday.
[16:25:00] When I see a 13 percent -- I'm still naive enough to say that sort of thing.
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: And bad news for rival Kroger.
QUEST: Even better. So, it plunges. It recovers. Why are the other food retailers down when Whole Foods is up?
LA MONICA: Whole Foods is obviously up because Amazon is valuing it at a pretty nice premium. And now the concern is that, oh no, we knew already
that Amazon was hurting so many other retailers. Companies like Macy's and Kohl's, now all of a sudden, the supermarket chains are also vulnerable.
What's interesting, Richard, you don't have it on the chart there, but many of the big food makers also, Hershey, Kraft Heinz, Conagra, their stocks
fell today too. And I think that the sense there is that investors are worried that Amazon may try and negotiate with them for even lower prices.
Whole Foods is known, as you mentioned, the whole paycheck joke, that could be a thing of the past. Because Amazon clearly is not a company that
charges a lot of money. Their whole mantra has been cheaper products and that's why they been able to thrive for so many years.
QUEST: Right. But I think again, coming back to this idea of Amazon doing something that we didn't think we knew we wanted and making themselves the
household name doing it. How do you do that with something like Whole Foods? Which at the end of the day is a supermarket selling groceries?
LA MONICA: Right, the big challenge I think for Amazon will be whether or not they want to go in and make major changes to Whole Foods. Are they
going to replace a lot of the flush and blood workers with kiosks and have fewer actual humans which is bad for all the employees at Whole Foods? But
might actually lead to a better customer experience. The other thing, again, I mentioned the lower prices. Is that going to be coming to Whole
Foods anytime soon as well? And can they make Whole Foods distribution centers for other Amazon products?
QUEST: Interesting questions. You and I shall go for lunch in Whole Foods. I'm buying.
LA MONICA: Yes, you'll need more than a 10. I think will need at least an Andrew Jackson if not a Benjamin Franklin.
QUEST: Remind me, a Benjamin Franklin. I've never seen one of those.
LA MONICA: That's $100 bill, Richard.
QUEST: I shall leave it to you. Thank you, sir. Paul La Monica, see you back in New York.
Donald Trump stood at a podium in Florida's Little Havana and began to chip away at one of Barack Obama's signature achievements. He said he's
canceling America's deal with Cuba. Companies doing business on the island tell us that they are getting nervous. It's QUEST MEANS BUSINESS live from
London.
(COMMERCIAL BREAK)
[16:30:04] QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. When President Trump rolls back his
predecessor's policies on Cuba. We will have reaction from Havana and from U.S. business.
And in London there is angry calls for accountability, you're going to hear from the protesters. This is CNN and on this network the news always comes
first.
In the United Kingdom demonstrators converged on the local town hall in West London and then stormed the building demanding justice.
They are angry over the tower block fire that killed at least 30 people. Officials fear that the death toll could rise much higher. The government
has announced a $6 million fund to help those who have been affected by the blaze.
A White House official says that Donald Trump is ready for a political fight over an investigation that he considers a witch hunt. Mr. Trump
lashed out on Twitter publicly stating that he is under investigation for firing the FBI director James Comey. Sources are telling CNN that the
president was simply referencing news reports not confirming them.
Russia says it may have killed ISIS leader Abu Bakr Al Baghdadi last month and one of its airstrikes in Syria. The United States has confirmed that
Russian airstrikes took Place near Raqqa on May 28, it is working to determine their precise
location and who may have been there.
Germany is mourning the death of Helmut Kohl one of the longest serving German Chancellors in history, he passed away at the age of 87. The
statesman left a lasting legacy as the architect of German reunification after the Cold War. The current Chancellor Angela Merkel gave a moving
tribute to the predecessor saying he had changed her life decisively.
Donald Trump is dumping a bucket of ice onto America's relationship with Cuba. During his run for the White House, the candidate Trump threatened
to close the U.S. Embassy in Havana and completely cut off ties. At least for now he is not going that far, at a speech in Miami's Little Havana, the
president outlined his plan to reverse Barack Obama's diplomatic thaw.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT: We will very strongly restrict American dollars flowing to the military, security and intelligence services that
are the core of the Castro regime. They will be restricted. We will enforce the ban on tourism. We will enforce the embargo. We will take
concrete steps to ensure that investments flow directly to the people so that they can open private businesses and begin to build their country's
great, great future, a country of great potential.
(END VIDEO CLIP)
QUEST: The president then called on the Cuban government to end abuses and open themselves to political and economic freedoms. In true Trump fashion,
he said he's willing to hammer out a better deal. Patrick Altman is in Havana, the details are subtle of the changes, such for example not to do
business, those that are owned by the Cuban military which encompasses many of the new hotels. I heard you talking about that earlier. But will these
Trump changes have any effect?
PATRICK OPPMANN, CNN CORRESPONDENT: That is the million-dollar question, Richard, and it was a very tough speech, a very vintage Cold War. He gave
it in a theater in Miami full of anti-Castro Cuban exiles, a theater name for a participant in the failed Bay of Pigs invasion. But his policy is
not nearly as tough as his words. The policy is going to keep a lot of the Obama era changes in effect. And that has been something of a surprise,
Cuban officials, we expect them to respond perhaps later on this evening. So far have not been particularly cowed by this policy, they say there were
60 years of sanctions, they frankly expected tougher measures by the Trump administration.
He was advised by the people in the State Department, his own administration not to cut back some of the Obama changes that are working
including one of them which is the importation of rum and cigars.
[16:35:00] That remains legal Richard. It will be a little bit tougher, the American government will now be in the business of trying to figure out
which hotel you stayed in, if you came to Cuba. But for the most part things will remain the same.
QUEST: How workable is all of this? You have just alluded to that very point about checking on which hotel you stayed in and all that sort of
thing. But the reality, let's talk about the reality, because I've got 2 friends who have just been to Cuba. They sign the necessary forms, they
booked their ticket, and they flew there. This is from U.S. people going to Cuba, they were tourists in everything but name only.
OPPMANN: Absolutely. And they are the same number of those people have come to Cuba, Americans coming to Cuba as tourists, up until now has went
to Cuba all of last year. It is just about doubled according to Cuban officials. There is a lot of interest for this forbidden market, Richard.
And that will continue. And I have to believe, Richard, the people will find ways around these new regulations as they always have.
QUEST: Patrick, nobody is even fooled for a second by this no tourist nonsense.
OPPMANN: No. I talked to tourists on the street today in Havana, American tourists, and the first thing they said to me is do I have to leave the
country immediately? Let us fact check a little bit. President Trump said that this policy goes into effect immediately, it doesn't. They have 90
days to figure out what the new policy really means, until then you can travel to Cuba as you have up until now. And if you buy your ticket now,
Richard, you can use that ticket as long as you can show that it was bought before the new policy went into effect.
QUEST: And if you ask I'm sure Patrick will pay for the ticket as well. Businesses rushed into the Cuban market after the Obama lifted those 50-
year-old restrictions. Norwegian Cruises says they were very concerned about any changes by the Trump administration, after the announcement they
confirm their current operations are complying with the new rules.
Marriott has one hotel open on the island and is working on a second. The hotel chain says that American businesses should be in Cuba to lead by
example in the post-Castro era.
And Airbnb launched in Cuba two years ago, they say the travel from the U.S. to encourage people to people diplomacy.
John Kavulich is president of the U.S.- Cuba Trade and Economic Council and joins me from New York. How restrictive do you believe these new
regulations are going to prove or will they be easily circumvented?
JOHN KAVULICH, PRESIDENT, U.S.- CUBA TRADE AND ECONOMIC COUNCIL: As Patrick pointed out, you have an announcement and then you have 90 days
within which the regulations are going to be promulgated. Basically, what Trump did today was he fired the starting pistol on a 90-day race. And
during the next 90 days U.S. companies are going to try to make the regulations as expansive, meaning as flexible as possible.
The question though that U.S. companies are going to have to grapple with is how the Trump administration is going to define certain terms. Today,
the Treasury Department came out with a guidance and they said, anything that is already in place will be permitted. And so, what companies are
going to try to do is try to get as much done in the next 90 days in Cuba. But now this puts pressure on Cuba because basically Donald Trump said in
classic Trump fashion, OK, I am giving you an opportunity, you have got 90 days to use it or you lose it.
And we are going to see what the Cubans do.
QUEST: This is basically, there is a grandfather clause as it is, if you already have your contract, you can carry on.
KAVULICH: That's correct. Starwood manages one property in Cuba, the Four Points Sheraton Havana, they can continue. Carnival, Norwegian, Royal
Caribbean, they can continue. All of the airlines, they can continue. The question is going to be in the details in terms of how the Trump
administration defines an entity that is controlled by the Cuban military.
QUEST: Within this area, and bearing in mind you're talking about U.S.- Cuba business, how much has the Obama relaxing of the restrictions, how
much has it been a real bonanza for U.S. business? I know many of the initial flights have now been canceled, there has not been as many
visitors, there are not as many passengers. But if you take the bigger business, obviously, banking is still covered by sanctions, but if you take
bigger business, telcos, the things that were relaxed. Has there been much new business?
KAVULICH: There are approximately 49 U.S. companies that have a presence in Cuba whether they are telephone companies with roaming agreements, one
hotel company, almost all of them are focused on hospitality. The Cuban government during the final two years of the Obama administration basically
said, if it is going to bring us money, we will welcome it. If it is going to cost us money or cost us control, then we are going to take it under
advisement.
[16:40:00] There is an irony here and a tragedy at the same time, and that is to President Trump went to Miami today, and the only two reasons he just
didn't go there to play golf was the weather and this Cuba speech. And had the Obama administration and the Cuban government during the last two years
focused on an election outcome last November that did not include President-elect Hillary Clinton, then much of all of this, the Trump
administration would not have been able to do anything. Because the US businesses would've had such a landscape, such roots in Cuba. But neither
the Cuban government nor the Obama administration did everything they could, and that is why we are in this position.
QUEST: Very good to have you on the program, please, do come back in future. Certainly, after the 90 day we will need your help to fathom
exactly what is actually happening, good to see you.
As we continue, it is a small achievement for the president who struggled to get his agenda through, chief executives give him a failing grade for
his first 130 days in office.
(COMMERCIAL BREAK)
QUEST: A new Cuba policy can be considered a small victory for Trump who has yet to sign any major legislation. Earlier in Miami, the president did
insist his administration is sticking to its word.
(BEGIN VIDEO CLIP)
TRUMP: I keep my promises. Sometimes in politics they take a little bit longer but we get there, we get there. Don't we get there? You better
believe it, Mike, we get there.
(END VIDEO CLIP)
QUEST: Now look at the Yale Chief Executive Summit Survey which gives the president a failing grade. Only 1 percent said that they would give the
president an A, 50 percent said they would give him an F. And the survey's conclusion was stop tweeting in the middle of the night, and focus on the
agenda.
Jeffrey Sonnenfeld is a professor who led the survey, he joins me from Connecticut. First remind us, who will have filled in the survey?
[16:45:00] JEFFERY SONNENFELD, PROFESSOR, YALE SCHOOL OF MANAGEMENT: These are chief executives for many of the nation's largest firms. We had
roughly 140 of them, and there were also in attendance some mayors from around the nation. But I should caution you, Richard, in full disclosure,
I was among the very first, if not immodestly the very first to suggest a path to victory for Trump in publications in August 2015. So, this is not
motivated with any hostility, in fact, many of the CEOs were --
QUEST: No, no. I'm not suggesting, I wouldn't suggest that you have somehow gerrymandered for personal political gain. No, more interesting
though let us just take an example of the travel ban or indeed the H1B visas. These are issues where business is firmly against the president and
his policies, but for a president who says he is a CEO, that is a contradiction in terms.
SONNENFELD: You are exactly right. For the first commander-in-chief that was a CEO, a private sector CEO, there is some significant daylight between
himself and certainly CEOs of major corporations such as the travel ban, the visa issue, but also some of the histrionics behind NAFTA, which at
least most parties agreed need some renegotiations, and TPP. But on so many fronts that the initial hostile --
QUEST: Forgive me, the satellite delay means that I start my question before you necessarily finish. What is it, I mean, what is the president's
claim to be the CEO president?
SONNENFELD: Here's what the CEOs do like, where they are on the same wavelength. He is the first CEO to really sit down and listen to them. I
do know Bill Clinton well, I know Trump pretty well, and I knew Bush 41, is they had a way of coming before business communities and doing hit and run
speeches. Not really engaging with them, talking at them in generics. But Trump does sit down with them, he listens to them, and when he wants to be
he can be unbelievably charming and engaging.
But when we see on climate change for example, roughly 70 percent of the think it was just terrible to basically alienate the rest of the world on
something where some argue it may not have large consequence if we had renewed and signed on and things. But certainly, to pull out it was just
sticking a finger in the eye for no reasons, you could just let it fade away.
This is the kind of thing where the business leaders are frustrated. We create these brush fires at 3 AM tweets that gets them off the regulatory
message. There are many of these business leaders especially in manufacturing people are excited about a legitimate Trump bump. Some argue
as you have said before there are great earnings returns that are independent of the Trump election. But nonetheless it seems to be renewing
but what could puncture this bubble is if we start approaching the midterm elections and haven't made progress on all of these other regulatory and
tax and trade fronts.
QUEST: Professor, we will need your help in the future as we interpret the president who is the CEO, however, you may have supported or otherwise.
Thank you, sir.
As we continue our conversation tonight, sorrow has turned to anger here in London where protesters have taken to the streets after the deadly tower
block fire in the city.
[16:50:00] (COMMERCIAL BREAK)
QUEST: There have been noisy protests in central London this evening as anger is spilling out in the wake of the Grenfell tower fire.
Demonstrators have been chanting, justice for Grenfell.
They are making their way from Oxford Circus to Regent Street which is just a stone's throw from where our studios are. And then down to Piccadilly
Circus. Over in Kensington there was a separate protest. Oren Lieberman is there for us tonight.
OREN LIEBERMAN, CNN CORRESPONDENT: The tension has eased a little bit, and anger has eased just a little bit from the protest, but that could be very,
very temporary because of what caused all of it, and what fueled it. Which is the lack of answers and that problem still remains. Instead this is one
of many growing memorials here behind me at the Notting Hill Methodist Church. And you can see how many people have gathered here, lit candles
and placed flowers as fear grows that so many missing are now feared dead. And this is the beginning of what could be a very long mourning process.
And yet the anger very much remains.
Anger boils over as the city grieves. Residents, friends and family protesting over they say their concerns were ignored, over how they say
they're being treated after this tragedy.
Near Grenfell tower the feeling is similar.
(BEGIN VIDEOTAPE)
STEIN, NORTH KENSINGTON RESIDENT: This is classic profit over people.
LIEBERMAN: Pictures of the missing, each one an unanswered question. The lack of answers fueling the frustration.
AMANI, NORTH KENSINGTON RESIDENT: People on the top floor, elderly, had no chance, not one percent chance of surviving.
LIEBERMAN: The fire has become far bigger than one community, it has resonated around the city because of grief and anger growing louder.
MINA AGYETONG, NORTH KENSINGTON RESIDENT: Why wasn't enough done to prevent this? Gentrification, making this building look pretty and so that
all the other sort of new builds, and those that invest in the capitol can feel happier but at the cost of human life it is unacceptable. And someone
needs to be held accountable.
LIEBERMAN: This is one of the wealthiest neighborhoods in London, we are just a short distance away from multimillion dollar homes and Porsches.
Residence at Grenfell Towers a short distance behind me say they live in a different world ignored, invisible they say to the officials who are
supposed to represent them. They say that fire would never have happened right here.
JOE DELANEY, NORTH KENSINGTON RESIDENT: I love to know how much of that 10 million actually went on making the outside look nice.
LIEBERMAN: Joe Delaney lives next to Grenfell tower, he watched from the very beginning, in many ways he speaks for the community.
DELANEY: I tell you what, it may have been an eyesore but it certainly would have not killed anyone.
LIEBERMAN: There is a tremendous amount of gratitude here. But it is for the volunteers who packed supply vans with donations. And for the
firefighters. The government has ordered a public inquiry and a criminal investigation has been launched. Still the anger is evident. And
residents are shouting for accountability.
PROTESTOR: We want justice, we want justice.
(END VIDEOTAPE)
QUEST: Oren, this downright contradiction between the anger and yet the support for the fire fighters, this emotional roller coaster that the
people are on at the moment.
LIEBERMAN: And we have seen that, it is part of the confusion that has followed this fire. We have seen it for example on sign both calling for a
change in government, as well, as calling for thanks to the community for reaching out so much. It's part of, and you said it perfectly the
emotional roller coaster that the communities going through without answers. And it will continue. It is not going away tonight. There are
still about a few dozen protesters off to my left that are here. And it is exactly simply a mixture of all that emotion, anger, grief, gratitude it
has to be said for all who have helped. All of that together here still.
[16:55:00] QUEST: All right, the authorities are obviously very concerned, you could see the high police presence in central London as a walled off
the area around the BBC, not far from us here. It is going to be a hot day tomorrow. They will obviously be concerned that without wanting to suggest
it might, but you could, there could be a repeat which could get out of hand.
LIEBERMAN: Certainly, I imagine the police are very well aware of that because the anger, and they would very much be aware of this, the anger
hasn't gone away. There are protesters here right now. We have heard some reports that there may be more protesters, perhaps the group that Phil was
following earlier today. They may be on their way here.
More protest I would say are certain to come. And it is because of that anger that remains here. And could it boil over again? Yes, it could very
much boil over. And we will see in the days ahead how much of that anger dissipates and how much is only inflamed.
QUEST: Oren Lieberman outside Grenfell tower, thank you, Oren.
We will be back in just a moment.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment. On Monday, a formal break as it negotiations begin in Brussels. Until now there have been technical talks
but they actually meet for the first time. And the rights of EU citizens and U.K. citizens will be at the top of the agenda followed by Northern
Ireland and then there is the Brexit bill.
But let us be clear about this, it has been three months since article 50 was invoked, and the talks have only got two years to run. We are well and
truly down on time already, there is no time to be messing about. Otherwise, Hofstadt's forecast of a brutal Brexit could become a reality.
Yes, everything is possible. The question is what is probable and what is likely.
And with the U.K. having a weakened government and a Prime Minister who may be on the ropes, in a country that is in some economic difficulty, well.
Who knows how this is going to play out? But whatever the reality it all starts next week on Monday.
And that is QUEST MEANS BUSINESS for tonight. I am Richard Quest in London. Whenever you are up to in the hours ahead, I hope it is
profitable. I am on assignment next week, I will see you in 10 days.
END
