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Quest Means Business
A boost for the Trump Economy, a massive new auto plant in the state of Alabama . Aired 4-5p ET
Aired January 10, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN QUEST MEANS BUSINESS ANCHOR: Some mention of green earlier in this section, but it dwindled all the way towards the afternoon,
but very small losses as you'll see when we show you the numbers.
And -- ooh, oh dear, that is a very winky little gavel where trading is finished around the world on Wednesday, January the 10th. A boost for the
Trump Economy, a massive new auto plant in the state of Alabama. The chief executive responsible and the governor of the state will join me live on
Quest Means Business this hour.
A blow to a -- a boost or a blow to the Trump Economy, tourist numbers are falling, the head of the U.S. Travel Association talks about how he hopes
to turn around the dwindling numbers.
And a question mark for Brexit, Theresa May's ministers are split on whether a deal with the EU is even necessary. The British Consul General
will be live tonight in our C-Suite. I'm Richard Quest, live in the world's financial capital, New York City, where, yes, I mean business.
Good evening, tonight, Donald Trump has bemoaned the impact of Russia investigation on his government, only hours after hailing his
administration's economic record. The U.S. president was speaking after talks with Norway's prime minister which he said focused mainly on trade.
It was the president's first full news conference as such of the year. And while President Trump would not be drawn on whether he would sit down with
Special Consul Robert Mueller, he reiterated that his campaign had not colluded with Russia and admitted the probe was hurting his ability to
govern.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I've been in office now for 11 months, for 11 months they've had this phony cloud over this
administration, over our government and it has hurt our government, it does hurt our government.
It's a Democrat hoax that was brought up as an excuse for losing an election that frankly the Democrats should have won because they have such
a tremendous advantage in the electoral college, so it was brought up for that reason. But it has been determined that there is no collusion and by
virtually everybody, so we'll see what happens.
(END VIDEO CLIP)
QUEST: Chris Cillizza joins me in Washington. This admission that it's hurting the government, why would he make that now?
CHRIS CILLIZZA, CNN POLITICS EDITOR-AT-LARGE: Well Richard, I think what you should do when you hear him say this is hurting our country and our
government, sub in Donald Trump rather for government or country because the truth of the matter is, the country is doing quite well as you document
through the economy.
This is -- this bothers Donald Trump personally. All you need to do is look at his body language when answering those questions and saying, no
collusion. He said no collusion seven times in one answer when he was asked whether he would be willing to testify with Special Consul Bob
Mueller.
Look at his body language, he's like this, I don't know if you can see me. He -- it annoys him, he uses this very similar language as Democratic hoax.
I always remind people this is a Trump Justice Department that appointed a special counsel, the special counsel is Bob Mueller, a Republican who was
appointed FBI Director by George W. Bush.
QUEST: Now, if we take a look though, listen, because what Donald Trump is often doing is negating his own successes in a way whether it be -- with a
-- have a listen to what he said on deregulation and regulation.
(BEGIN VIDEO CLIP)
TRUMP: We've set a new record on reducing regulation and all forms of stopping growth and stopping jobs that were crippling America's economy.
Again, the records that we set, 22 to 1, nobody's ever come close and the amount of regulations that we've cut is a record also in our country's
history.
(END VIDEO CLIP)
QUEST: Chris, one of the -- one of the un -- perhaps stealth ways this administration is changing the U.S. economy is by deregulation and we'll be
looking at this a lot more closely in next week's Quest Means Business. But it's deeper and greater than perhaps most people realize.
CILLIZZA: And I think one of the reasons for that Richard is he is his own worst enemy politically speaking. Look, here's the big difference, the
clip you just showed, he is reading from notes, right?
He looks down, he's got some talking points there to talk from when he's talking about the economy, regulation, both of which are quite good issues
for him. Now, go to the event just now, just concluded with the Norwegian prime minister, he is speaking off the cuff.
Obviously he's getting questions, so he has to sort of respond to them, but when he does that, he does tend to veer way, way off track. Most
politicians sort of bend the questions even if it's about the Special Consul.
So you know what, the American people aren't focused on that, they're focused on our economy, they find ways to get back to what they want to
talk about. He struggles with that, he goes down this road where he's really just -- he's saying things including it's been determined there's no
collusion. Now, we -- I don't know that it's false but it's certainly not true. These investigations are not overwith whether in Congress or with
the Special Consul.
QUEST: Chris, good to see you. Thank you, sir, regards to Washington.
CILLIZZA: Thank you sir.
QUEST: Thank you. The U.S. travel industry is warning of a drop in tourism to the United States, the number of people visiting in the first
half of 2017 dropped four percent from a year earlier.
Now, the U.S. travel industry is launching a coalition with other industries, it's called "Visit Us" or "Visit U.S." Roger Dow who is the
Chief Executive of the U.S. Travel Association joins me from Washington.
I'm looking at the numbers, the change -- total change down -- from July, down 9.3 percent, down 6.4 percent year-on-year. These are worrying
numbers, and Roger, I know you don't want to get too political, but how much can this be drawn to be put at the door of people saying, "I don't
want to go to the U.S., it's no longer a welcoming place."
ROGER DOW, CHIEF EXECUTIVE, U.S. TRAVEL ASSOCIATION: Well I think Richard, if you look at it, it represents $4.6 billion or 40,000 jobs. So if this
keeps up, it's going to give a real challenge to the Trump administration to hit their numbers.
We want to be a constructive partner. They do have a bit of a role and the role they do have is to let people know that we're welcome to legitimate
travelers and closed to terrorism.
QUEST: Okay. I mean, you -- that was very elegantly put, Roger, in that sense. But is there evidence that you are seeing that this fall off is
because people are deciding the U.S. is either unfriendly, they don't want to do the border, that they want the immigration hassles. Is there a
correlation between this lower number and the perception of the United States?
DOW: It's complex, it's due to the strong dollar, weak economies, and as I said, there is a role to play. If we keep this up, if we don't get a
greater balance between security and welcoming legitimate travelers, it could be a longer term problem.
It's definitely a problem when it comes to Middle East, other countries, other countries, we see Canada is actually going up. So, there's a huge
opportunity for us to partner with the administration and turn these numbers around and let people see what makes America great.
QUEST: How do you do that? How do you -- I mean, you can have all the campaigns in the world, I mean visit us, or we are nice, or whatever you
want to call -- whatever campaign, Roger. But at the end of the day, if people don't feel welcome, if there are long lines of immigration, if
there's a feeling that, well, I could go to the Caribbean, or I could go to South America -- how do you counter that?
DOW: I think it goes to some of the things you just mentioned, it's making sure you have the right number of people, it causes some border progression
when they hit the country.
Making sure you're staffed, making sure the visa waiver countries that we have enough people to interview people, making sure enough there's enough
people in China to interview and process visas.
All those things are things you can do and they have nothing to do with making people feel unwelcome, it's a matter of process. At the same time,
I think the Trump administration working with us, we can get the rhetoric out, we want you to travel to U.S., we want legitimate travelers, we don't
want bad folks.
QUEST: And as we look at the country overall, I mean, there is no question it is the most phenomenal vacation whether you choose the coasts or you
choose the Midwest, it gives a unique experience. And we saw that, didn't we, Roger with the argument put by the Florida state governor against
offshore drilling that basically said, "If you drill off Florida, you risk destroying our tourism industry."
DOW: Yes. And I think any of that has to be safe and controlled and we have to keep our resources. People come here to see the beaches, the
mountains, the cowboys, the Indians, the shopping, Las Vegas, we've got it all. And just a matter of getting people to want to come here, they do
want to come here but it's a matter of putting the processes in place.
QUEST: Roger, promise me you'll come back when you've got the next set of numbers, it couldn't be far off because this down 6.4 in a month in an
industry that's growing by 10 to 15 percent a year in some parts. This is something we need to watch and you need to come back and talk more about
that.
DOW: Will be back, thank you.
QUEST: Roger, good to see you, thank you. As we continue now, Alabama in the Southeast of the United States will be the home of a major new car
plant owned by Toyota and Mazda. It's a major coup for the Trump White House.
The president said, right back on the campaign trail, he would bring jobs to the United States. We'll hear from the chief executives of both the
carmakers and the governor of Alabama later in the program when we will take you there so you can see it.
Now, the last time Mazda had a U.S. plant, it was when it had a joint venture with Ford. Today, Mazda builds cars in Mexico and in Asia and
exports them to the United States, you can see the various Ford plants.
Compare this with Ford which relies on NAFTA, the free trade pact that unites U.S., Canada, and Mexico and let's see, the companies ferry cars and
parts between all three countries, in the second part of our exclusive interview with the Chief Executive of Ford, Jim Hackett tells Samuel Burke
NAFTA needs an overhaul.
(BEGIN VIDEO TAPE)
JIM HACKETT, CHIEF EXECUTIVE, FORD: The government's agenda around taxes and NAFTA, both are exemplary of initiatives that had really run their
course and needed to be redesigned.
I mean, the early premise of NAFTA was really special and the right thing, but now as we can see how trade has evolved, it needs modernization. The
tax system as well really represented an era before the global economy had shaped the way it is.
SAMUEL BURKE, CNNMONEY BUSINESS AND TECHNOLOGY CORRESPONDENT: So you're in favor of reworking them clearly.
HACKETT: Yes, I think it's really important that they be reworked because it gets us to what I call a new state of equilibrium. CEOs really expect
change, what they can't really deal with is unexpected change. So equilibrium in tax and trade is a really big advantage as that's
negotiated.
BURKE: What do you think would affect Ford more this year, more deregulation from the government or a huge change in NAFTA?
HACKETT: I think the government's got the right approach to trying to do what's best for our economy, for workers. So everything that's come out of
Ford in this last year is about creating jobs. We've created more jobs in America than we had five years ago. And these policies that are being
negotiated only make that better. So we're in a really good position to benefit from some of the things that you're reading about.
BURKE: And are you trying to give input on that? Do you ever contact the White House and just trying to say, "Let's try and get the best deal here"?
HACKETT: Yes. The government's been really great about reaching out and involving people about how does this really work. I mean, this is the
thing I'm most proud of actually is that -- is kind of the businesses aren't sitting there controlling any of these. But just explaining what is
it like to compete so that you can appreciate what does it take for us to win business and keep people working and that's finding its way into the
negotiations.
BURKE: When you finish eventually as CEO one day, how do you want to leave Ford? How do you see this company in 10 years time let's say?
HACKETT: When Bill Ford came to me and asked me if I wanted to do this job, originally I was hesitant because first of all, I thought there's
better people than I, and secondly, I think that I ran the company for 20 years but now that I've been in it, I'm so enthused about the opportunity
to take this capability that we're talking about here at the show and create kind of a new world, a new civic freedom.
And then marry that with the passion that people have for the vehicles. So when I leave, I just -- I want that sense of, "Boy, you were able to help
us turn a corner to a modern view of the company."
BURKE: But do you think it will live more like a tech company or more like a car company?
HACKETT: Well the interesting thing about technology, if you read Kevin Kelly's book, What Technology Wants, eventually, we don't think of it as
adjacent, it just is. So I think Ford is just is a company that embraces technology and the products that it's making.
(END VIDEO TAPE)
QUEST: Ford share price was down just around half a percent or so on the market. Looking at the markets and you really see a fascinating day. The
undercurrents that bubbled up were quite remarkable here at the Quest Means Business trading post.
No records on the Dow, the Nasdaq, or the S&P500. Each of them at various points during the day did go positive and did go into, to become records.
But I really think -- I think what we do need to focus on, never so much mind that the fact that they are down red by the way.
Red, it's a day of red because all three of them are lower and what you can see is just off a fraction, just off a little smidgeon, just down a tad or
so. So, a red day on the markets, except in London where we did get over a record, London, the FTSE did have a record and that's now four records for
the U.K. market so far.
There was a selloff in the bond market as well which was interesting, and we'll talk about that in a second with Paul La Monica. Fear and greed
holds the same roughly at 74 in the green, so just on the upper end but it's by no means in the extreme area.
Paul La Monica is with me. Good morning La Monica, it's really good to see you sir.
PAUL LA MONICA, CNNMONEY DIGITAL CORRESPONDENT: Thank you.
QUEST: The market -- the undercurrents today were really fascinating. You start very sharply lower on the Dow, on the broad markets, they rally back
up again and they close just a tad off, again, these are very small losses.
LA MONICA: Yes, these are not extremely big losses at all. I think this is a market that still wants to go higher, there are investors who are very
confident about the upcoming earnings season because all the big companies have already said how much of an impact they are likely to get from
corporate tax reform, not just probably obviously for the first quarter of this year or even though they're going to be reporting their fourth quarter
numbers, but all of 2018.
QUEST: Okay. Now, this bond market movement --
LA MONICA: Yes.
QUEST: But look, bonds are notoriously difficult to understand and to explain, I'm not quite sure I always understand what the machinations were.
But today we saw a selloff and a rise in the yield to something as high as we haven't seen for nearly a year, why?
LA MONICA: Yes. And I think these are going to be something that investors have to watch, the possible red flag for the market, because the
10-year yield is starting to creep a little bit higher to 3 percent, it's around 2.5 percent, 2.6 percent right now.
If that get -- 3 percent level gets breached, that could be a sign that people are expecting higher interest rates around the world from Central
Banks, more inflation. And when you look at why the bond market I think did what it did today, there were a couple of things, one, there's concerns
that China might slow their pace of buying Treasuries and China's been a big backer of U.S.debt and two bond gurus, when you call me the guru. Jeff
Gundlach and Bill Gross are real gurus that run actual money instead of just talking about it and they both said that they think bond yields are
going to go higher too. This bond bull run might finally be over, it's been long run.
QUEST: Yes. But it's inevitable that the bond yield will rise if short- term rates are going up because the Fed's already raising rates and you've got low unemployment.
LA MONICA: Exactly.
QUEST: You've got low unemployment, low inflation, and you've got a growing economy.
LA MONICA: Here's the thing though, the Fed raising interest rates, that is expected, we know that's going to continue. The fear that is out there
is that the global economy, you've talked about it.
Synchronized growth is what we have right now. If China continues to grow, if Europe continues to grow, and Japan, you might have rate hikes from the
ECB, from the Bank of Japan, from the Bank of England, if maybe not early this year but late 2018 and that I don't think is priced into the market
just yet.
QUEST: Good to see you, sir.
LA MONICA: Thank you.
QUEST: Thank you. The European markets mostly follow the early negative lead from the U.S. As I mentioned and showed you on the charts, the London
FTSE recovered to close at a record high, a quarter of a percent, it boosted by oil and bank stocks. Other major indices, they were down.
Again, with the exception of maybe the (SMI) which is also at a record in those areas.
The U.K.'s top economic team is Germany tonight, they've got a warning for the rest of Europe, don't bash British banks after Brexit. And we continue
after the break. The Consul General, the British Consul General, come and join me sir as we talk Brexit, Britain, and trade with the United States.
We'll do all of that after the break.
(COMMERCIAL BREAK)
QUEST: Two of Britain's top ministers are in Germany and they're warning that both countries stand to lose out if banks are left out of a post-
Brexit trade deal, the Brexit minister for leaving the EU and the Chancellor of the Exchequer. Now the Chancellor Phillip Hammond and David
Davis say financial stability would be at risk if the banking sector isn't part of the talks. Services in other words, not just trades in goods.
Meanwhile, it's still no clear on where things stand on the potential trade deal between the United Kingdom and the United States.
In July, Donald Trump said it would happen very, very quickly. A few months later, the Commerce Secretary Wilbur Ross said it might be held up
if Britain stuck to EU rules after Brexit in the transition period.
Joining me now is Antony Phillipson, the new British Consul General in New York City, good to see you sir. Thank you for coming and talking this out.
Now, let us begin first with this latest goings on, you've got the two ministers in Germany, you've got obviously the great repeal bill and you
now got a new Brexit minister who basically says, "Well, no deal would be a good deal as much as anything else."
ANTONY PHILLIPSON, BRITISH CONSUL GENERAL, NEW YORK: Well Richard, thank you very much for having me on. I mean, let's take these in order, first
of all, I think what we saw at the backend of last year was a very important moment where we reached agreement on the phase one issues and
agreed to move in to the second phase of the negotiations.
Those, now started, the first priority would be to agree in the next few months the implantation period between the U.K. and the EU and then we will
start talking about the future partnership. In the context of that future partnership, we have made clear that our ambition is to have a
comprehensive economic and security relationship between the U.K. and EU that covers the whole of the economy, goods, and services.
In terms of the makeup of the government and the reshuffle, well, all the big ministers that are still in the same job say that the commitment is
still there, the agenda is still there, and we intend to make a success of the negotiations.
QUEST: I want to focus particularly on the U.S. side which is your area, and the significance of negotiations with the U.S. on a trade deal, trade
and services if possible, how -- where do you stand on that at the moment, because you can't actually have the talk but you can have talks about
talks.
PHILLIPSON: Exactly right. So the prime minister and the president when they met in January last year, when the prime minister was the first
visitor to the White House after the inauguration, agreed we should move quickly to deepen and strengthen the U.K.-U.S. trading relationship
including when the time was appropriate for a free trade agreement.
QUEST: When do you believe that time is appropriate? Now come on, let's get down to it, is it during -- I mean, is it your understanding, is it
HMG's understanding that you can negotiate a trade deal during the transitional period to implement afterwards?
PHILLIPSON: What we can do and we've actually started already when Liam Fox, the Secretary State for International Trade was in Washington in July
last year launched something called the trade and investment working group with his opposite number.
And it included a number of work streams, including crucially starting to talk about what a free trade agreement between the U.K. and the U.S. would
look like. We can start talking about that now. We are talking about that now.
It will then accelerate through the period as we leave. To your point about the implementation period, A, it depends on the terms of that
implementation period, but we do believe that we can do a lot to bring this agreement closer to fruition with that -- while being very conscious of our
obligations not to cut across our obligations as an EU member.
So we can't bring an agreement into force while we're a member but we can do an awful lot to lead up to it.
QUEST: Right. But at the moment, trade between the U.K. and the U.S. is - - does not come under any free trade agreement.
PHILLIPSON: Well, it comes under a number of agreements actually because one of the other crucial things that --
QUEST: Right. But there's no -- there's no overall --
PHILLIPSON: There's none. No.
QUEST: There's no overarching feature agreement such as there is between Canada and the EU or now Japan and the EU
PHILLIPSON: That's exactly right. And the U.K. was a very powerful proponent of the previous attempt to join up the EU and the U.S. though the
trade -- Transatlantic Trade and Investment Partnership.
QUEST: Yes. But that policy is gone.
PHILLIPSON: Well, it's still -- I wouldn't say it's completely gone but the key thing now is --
QUEST: It won't happen in my lifetime.
PHILLIPSON: -- we're looking at a U.K.-U.S. arrangement and --
QUEST: Right. But why do you need that? Because if you are already -- the amount of bilateral trade is vast, the second largest or the third
largest.
PHILLIPSON: We're each -- well, the U.S. is our biggest export market --
QUEST: With the exception of the EU.
PHILLIPSON: -- in terms of single countries, there's the biggest investors in each other's countries, a trillion dollars of investment.
QUEST: Right. But if you can do all of that under the existing rubric, why do you need the free trade agreement with all the problems that's going
to come with that to negotiate it? You've already got those benefits.
PHILLIPSON: I think the key point is that once we have left the EU and are able to bring such an agreement into force, we will be able to design the
future relationship between the U.K. and the U.S. in a way that suits our specific interest, whether it's in financial services, we're both huge -
well, I would argue the London and New York are the two only global financial centers, so we can look to deepen that relationship in areas like
FinTech and RegTech, life sciences, automotive, advanced manufacturing. These are all areas where we can look to deepen and strengthen what is
already absolutely as you say a very important relationship.
QUEST: Except you have a mercurial president, my words, not yours, you have a mercurial president that at some point -- I mean, keeping on the
right side to get an agreement sooner rather than later and putting it crudely not pissing off the administration on the way. How difficult is
that going to be?
PHILLIPSON: I think the key point there is we define the importance and imperative of this agreement in way that suits the U.K. and the U.S.
economy. Both of us will want to do deals that suit our national interest.
The president -- I think it's very important actually that the president has signaled that he is very personally committed to this, so have key
members of Congress, we have business communities that talk to each other all the time. So it's -- I think the president's view on this is very,
very important, but we still need to show why we need to this agreement and then do the hard yards.
QUEST: Now, obviously there's a large team in Washington at the embassy, but I do know that your job as CG in New York, trade and investment is a
vast part of your portfolio, correct?
PHILLIPSON: Yes.
QUEST: You're going to spend the next two or three years basically convincing Americans that Britain is still open for business and isn't
cutting itself off because it's leaving the EU
PHILLIPSON: I think, by the way, one point of detail, just not get too semantic about it, I mean my responsibility is CG New York but I also head
up the overseas operations of the Department for International Trade in the U.S. and Canada. So, yes, I think trade and investment is going to
dominate my life.
In terms of what's that's going to involve, I think it's going to involve making the case wherever and whenever we can about the already incredible
relationship between the U.K. and U.S. business communities, where we can strengthen it, where we can deepen it, creating jobs, generating wealth
creation, generating revenues in public services, et cetera, et cetera. That is the job and I think it's usually exciting and there's a wonderful
opportunity in front of us.
QUEST: Come back and bring us regular updates if you would, please.
PHILLIPSON: I would love to.
QUEST: Good to see you, sir.
PHILLIPSON: Very much indeed.
QUEST: Thank you very much. Now, as we continue on Quest Means Business live in New York, the chief execs of Toyota and Mazda and chief exec of
America are on the program. They announced plans for a plant in Alabama. We'll have the two CEOs and the state governor too, it's a very busy day on
Quest Means Business.
(COMMERCIAL BREAK)
QUEST: Hello, Richard Quest. There's more Quest Means Business in just a moment and President Trump gets his wish, a major new auto plant in the
United States, next half hour I'll be talking to chief executives and the governor responsible.
And Kodak's cryptocurrency moment, shares skyrocket after the camera company announces KodakCoin as we continue tonight, this is in CNN and on
this network, the facts, they always come first.
President Trump touted America's economic relationship with Norway at a joint press conference with the country's prime minister. President Trump
also answered reporters' questions including one regarding his promise of a border wall. He said any immigration deal must include the wall.
The Israeli Prime Minister Benjamin Netanyahu's defending his son after an Israeli television documentary aired a secretly recorded tape from 2015.
On the recording, Yair Netanyahu, now a 26-year-old is heard demanding money from the son of an Israeli gas tycoon so that he can pay a
prostitute.
Referring to a natural gas deal he says, "My father sorted your father over $20 billion." Prime Minister's office says his son was only joking and
denies any wrongdoing by the prime minister and says the prime minister only met the gas mogul once and that was 10 years ago.
Another tragedy, migrant tragedy off the Libyan Coast with 100 migrants missing and feared dead after their small boat capsized in the
Mediterranean. The Libyan Navy rescued 300 including children who had been clinging to the wreckage for hours. Survivors are receiving medical
attention at a naval base in Tripoli.
And rescue workers in Southern California are working to reach hundreds of people who have been cut off by mudslides. Heavy rains in the Santa
Barbara area triggered the slides early on Tuesday. Authorities said at least 15 people are dead, 24 people are missing.
And French police are in hot pursuit of two jewel thieves. The suspects were able to make off with an estimated $5.4 million in jewels stolen from
a store inside the Ritz Hotel in Central Paris. The thieves entered the store on Wednesday armed with axes. The police are telling CNN they
arrested three people at the scene and no was injured in the robbery.
Now, there is a particular stock that if you held on to it through the very worst of times, today was truly a Kodak moment. Kodak filed for bankruptcy
in 2012, said yesterday it was getting into the cryptocurrency and blockchain business and the shared price literally tripled in two days.
Now, admittedly it was down in about -- well you'll see, look at it, it was only down at $3.05, now it's up $10.00 and it had been as high as $11.00.
A 60 percent gain today after 120 percent gain on Tuesday.
Clare Sebastian is here. Clare --
CLARE SEBASTIAN, CNNMONEY CORRESPONDENT: Yes.
QUEST: What -- they're promising to get into block chain and cryptocurrencies related to photography.
SEBASTIAN: Yes.
QUEST: But the market is seeing something extraordinary.
SEBASTIAN: Well, I think they're seeing some potential there and it's more than $3.00 as it was before. So they're doing two things essentially,
they're launching a blockchain platform called Kodak1 which is especially for photographers and a cryptocurrency called KodakCoin.
And the ideas is that this removes some of the friction from the issues that photographers have when it comes to their intellectual property
online. So, the blockchain will help them track and license their photographs and KodakCoin is how they set payment. The company showed me
that they will be able to change Kodak Coin back into fiat currency.
QUEST: Right. This is -- I mean, why would you want the KodakCoin and just not use Paypal, Venmo, or one of the other versions?
SEBASTIAN: Well, I think it's an excellent question. They say that this is native to the Kodak1 blockchain and you'll be able to exchange it on
that platform for other things, like hardware and software and various others things on that platform. The detail -- the devil really is in the
detail here, Richard, but --
QUEST: But in the outlook, I know -- we were joking at the stock exchange today, somebody sort of said call it Quest means blockchain or blockchain
Quest and the stock goes up for five, ten percent.
And I can see that argument but this is different because Kodak does have a history of scientific development and innovation. And although this Kodak
isn't the Kodak of yesteryear, they have got something brewing.
SEBASTIAN: But this is the point, Kodak is still -- many of us might have forgotten about it, the stock price certainly would suggest that, but it is
still a recognized name in photography circles, it's still managed to kind of reinvent itself as a company that focuses on digital photography and
printing.
And the issue is Richard, yes, we've seen a lot of companies just say the word blockchain and reap the stock rewards from it. But this, they're
tackling a real problem that photographers face. This is something real, it's how to police their intellectual property online. The company tells
me that their system will simply troll through the internet for infringements and collect payment.
QUEST: You know, remember film in cameras?
SEBASTIAN: Barely.
QUEST: Yes, yes. Thank you. As we continue, after the break on Quest Means Business, the chief executives of Toyota and Mazda live as they
announced plans for a plant in Alabama and the state governor too joins us.
(COMMERCIAL BREAK)
QUEST: A major manufacturing victory for the Trump Administration, a new auto plant is in the works, it's a joint venture between Mazda and Toyota.
And the plan is to build 300,000 vehicles a year, evenly split between the two brands.
It's a $1.6 billion investment, it should create 4,000 jobs with production starting in 2021. So, very pleased, honored to be joined tonight by Jim
Lentz, Chief Executive of Toyota. Governor Kay Ivy, the governor of Alabama. Governor, lovely to have you with us this evening. And Masahiro
Moro, who's the President of Mazda North American Operations, all joining us from Montgomery, Alabama.
Governor, starting with you, this was -- this is a major achievement for the state to have captured this, how much did politics play in all of this,
governor, to actually entice a deal which is going to be so beneficial?
GOV. KAY IVY, GOVERNOR OF ALABAMA: Well, the people of Alabama are hardworking and our workforce is absolutely respected around the globe.
And as global CEOs have told me that the reason their firms are so successful in Alabama is because of the outstanding workforce and an
outstanding workforce training program.
So having a first -- two first class manufacturing firms like Toyota and Mazda coming to Alabama with 4,000 jobs is a huge opportunity for all
Alabamians and we're just delighted to welcome Toyota and Mazda to our great state.
QUEST: Jim Lentz of Toyota, and the way in which this has been done, I mean, how much did current politics play in the decision to open in
Alabama? Obviously, the president has said he wants more plants, automobile plants in the domestic U.S.
JIM LENTZ, CHIEF EXECUTIVE OFFICER, TOYOTA NORTH AMERICA: Yes, he has. But the reality is when we make a plant investment, I mean, we're each
spending about $800 million on this, you have to have the need for that plant.
And the fact of the matter is, as we expanded production for small SUVs in Canada, we needed to find another place to build Corollas, still a very
important car in the U.S. When the opportunity came about to partner with Mazda, it made the most sense to us, we did an extensive site search and
here we are in Alabama which we think is the best place to be.
QUEST: Masahiro Moro, the issue, of course, will be how much does this plant rely on the survival of NAFTA? I mean, I know you don't start until
2021, so there's plenty of time to sort things out. But I assume the intention is to export the vehicle from this plant to Canada and Mexico and
elsewhere.
MASAHIRO MORO, PRESIDENT OF MAZDA, NORTH AMERICA OPERATIONS: Well, I think this big investment is mainly for growth in the USA and for North America.
Unlike our plant in Mexico, this investment is majority is for increasing our sales and the business in the USA and we are very looking forward to
our - for the big challenges.
QUEST: And Governor, how worried are you that the national policies on -- national policies on protectionism, on investment, the sort of things
coming from the administration are at variance with exactly the sort of need for states like yours to have inward investment of companies?
IVY: Say your question again?
QUEST: Well, basically what I'm asking you is, there is a view that the United States has become more protectionist, how concerned are you in
places like Alabama?
IVY: We in Alabama certainly believe in manufacturing and we do it quite well and have a good reputation for it and we're proven with success and
we've got a lot of folks employed and the great investments being made into the state, so we want to keep all of our auto manufacturing alive, well and
there's room for Toyota and Mazda and their distinguished companies and we are proud to have them.
QUEST: Jim Lentz, if NAFTA goes down the drain, you're in trouble with this plant to some extent aren't you, and indeed other plants that you've
got within the United States?
LENTZ: Well, if NAFTA goes down the drain, it's not a Toyota problem. If NAFTA goes down the drain, it's a North American automotive problem because
the fact of the matter is, NAFTA is the glue that allows us to compete with vehicles coming out the production hub of Asia and their production hub of
Europe.
So this is not a Toyota problem, this is all manufacturers, all of our global manufacturers that are manufacturing here in North America would
have a challenge. So this is a great industry, it employs a lot of people, but we have to have NAFTA to be able to allow us to compete with vehicles
being produced in Asia and vehicles being produced in Europe.
QUEST: Masahiro Moro, to you, do you think we fully -- do you think the argument has been fully made about the importance of NAFTA and the
automobile industry? I was listening to just what Jim was saying and it's put in very simplistic terms, but you know sir how many times a vehicle or
its parts crosses the border backwards and forwards in the manufacturing process, many, many times those parts, correct?
MORO: Well I think on NAFTA, I completely echo what Jim's talking about, I think that this is the great, great free trade agreement and the framework
which put U.S. in strength and we continue to support a free trade and that is the source of strength right now. And we're closely monitoring further
developing of this agenda.
QUEST: Final question to you Governor if we may Governor, I want to come and visit Alabama. Now, when we come to -- when we bring this program to
Alabama, hopefully you will be there and you'll show me around and you'll show me some of the good things in Alabama, do we have an agreement?
IVY: If you want to come to Alabama, we'll be proud to show you everything we have in this great state that makes it so wonderful to live and work and
raise a family.
QUEST: Now, you can't get better than that. Jim will show me the plant, Masahiro will show me the plant, and the governor will show me exactly what
goes on in Alabama. Actually, I have been to Alabama many times, it's a wonderful state. Thank you to all three of you for joining us.
As we continue now on Quest Means Business, for some entrepreneurs, it's a light bulb moment that gives birth to their business idea. For Caroline
Weaver, the future was always written quite neatly in pencil. She turned her love of stationery into multinational experience and enterprise. It's
the latest in our series of traders, the traders who are reshaping global commerce.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This is a story of how one young woman transformed her passion for pencils into a global business turning over $700,000 a year.
This is Caroline and she is crazy about pencils. She's collected them since childhood and even has one tattooed on her arm. In 2014 she set up
an online store which now stocks around 200 different types.
CAROLINE WEAVER, OWNER, C.W. PENCIL ENTERPRISE: I fell in love with pencils a long time ago. I love the history behind them. I love that
every manufacturer has its own unique history and that they're tactile objects, they smell like something, they feel like something, they sound
like something. They're really physical things to work with, much more so than most other writing instruments.
UNIDENTIFIED MALE: For Caroline pencils are more than just the components of graphite, wood, clay and glue. Each one has its own personal story.
WEAVER: I would say that our most interesting pencils are the Viking Election pencil which was commissioned specifically for voting, the general
test scoring pencil which was developed in the '30s for IBM for electronic test scoring. There's the Palomino Black Wing 602 which was notoriously
John Steinbeck's favorite pencil. And we have one made by a company called Nataraj in India. They make nine million pencils a day.
UNIDENTIFIED MALE: You will like think it sounds niche but it turns out it's big business. Following the success of her online store she opened a
shop in New York's Chinatown district, while China itself along with Morocco and Germany are among the 55 countries around the world with whom
she trades.
WEAVER: E-commerce means everything to our business. And it's wonderful because it exposes us to a wider audience and it can make our business
truly global.
UNIDENTIFIED MALE: The pencil was invented in the mid-16th century when graphite was first discovered in England. Germany began mass production in
the 17th century and today more than 14 billion pencils are reportedly made every year. That's enough to circle the globe 62 times. A single pencil is
said to hold enough graphite to write 45,000 words, around half the length of the average novel.
So, Caroline, what's your favorite pencil?
WEAVER: 1950s era (inaudible).
UNIDENTIFIED MALE: The most unusual pencil you stock?
WEAVER: It's a processed carbon pencil that is super black and you can take water to it, it's really inky.
UNIDENTIFIED MALE: How many countries do you import pencils from?
WEAVER: Thirteen.
UNIDENTIFIED MALE: What is your dream?
WEAVER: My dream is to have Tom Hanks come in the store. The thing that we're selling almost more than pencils is nostalgia. People come in and
they comment on the smell of the shop and it reminds them of school or it reminds of their childhood. That inspires nostalgia and it inspires
creativity and it inspires freedom that you get from writing with a pencil.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
QUEST: Donald Trump said that his Administration has achieved more than its first year in office than any government in U.S. history.
Joining me now from CES in Las Vegas is the US Transportation Secretary, Elaine Chao.
Madam Secretary, thank you. We appreciate it very much you joining us. And you are at CES?
ELAINE CHAO, U.S. SECRETARY OF TRANSPORTATION: Well thanks for having me.
QUEST: You're at CES and...
CHAO: It's pretty exciting here.
QUEST: Well the talk is all about autonomous vehicles and I know that you are discussing the innovation agenda. So what do you see as the U.S.
government's role in promoting autonomous vehicles, but deregulating and the safety question, balancing it at the same time?
CHAO: Well, you know, we are in fact very concerned about emerging technologies that will impact the way we work and live. And certainly,
self-driving technology is a phenomenon that's going to be with us very soon, probably not as quick as some people would think, but not as slow as
others would think as well.
And so, we now have 94 percent for example of accidents occurring because of human error.
QUEST: Right.
CHAO: Now if we were able to use self-driving technology we would be able to introduce greater safety onto our roads and that will be wonderful. And
therefore also people who are elderly and also people with disabilities, they will be given so much more freedom by having access to self-driving
technologies. And yet, 71 percent of Americans are still a bit reluctant or a bit anxious what this self-driving technology means.
And so -- and so, from the department's point of view our concern is safety is number one. We want to make sure that the innovation that is occurring
in this field is doing so in a responsible way, that the government is not hampering it because obviously America's preeminence in the high-tech
sector is one of our premier competitiveness features overseas.
So in this administration we want to foster innovation, but of course we want to balance that with safety, security and privacy.
QUEST: The other issue of course is one of infrastructure. I know the administration is looking at an infrastructure package. I think you would
be the first perhaps to agree that roads, airports all need to upgraded in that respect. We saw that with Kennedy Airport over the weekend which I'm
sure you must have been very concerned about.
CHAO: Well, you know, La Guardia Airport is the largest construction site I think in all of New York. So we are -- the New York City, New York State
is upgrading that airport as well. So what we are seeing in this administration is that the government is not the fountain of all wisdom.
This administration is not going to be top-down, and we will not be involved with command and control, we want to foster innovation in the
private sector.
We will be tech neutral but once again the role of the government is to create the environment in which innovation can flourish, because innovation
is such a hallmark of American uniqueness in the worldwide economy.
QUEST: How do you balance that? I mean you put your finger on it, Madam Secretary, innovation everybody wants, how do you balance it with proper
regulation at a time when many say this administration is recklessly deregulating?
CHAO: I don't think that's true at all. In fact we came out on September 26th, 2017 with a guidebook on guidelines for state legislatures throughout
the country on what they should consider when they're regulating this new emerging technology, because the federal government's role is being careful
and is being -- you know, we have to monitor and we have to be careful as to what is happening in the states. So the statewide patchwork, state by
state patchwork of regulations is going to create a problem.
So we are issuing voluntary guidelines and we want to work with the states to ensure that whatever regulations they are thinking about, it will be
responsible, it will promote safety, it will be careful about cyber, you know, security and of course the privacy concerns as well. So it's
important, all these issues.
While we are here today, the one millionth drone will be registered. So the growth of drones and how to integrate drones into our national airspace
is a very large issue, and also today as of 8:45, the Department of Transportation has posted on its website www.dot.gov four new requests for
proposal, requests for information, requests for comments for people to -- stakeholders and the public to comment on what regulations are hampering
the growth of this new technology that can offer so many benefits to our country and society.
QUEST: Madam Secretary, thank you for joining us. Now I've just got to learn how to fly a drone.
CHAO: Thank you.
QUEST: Every time I've tried to it so far it has not ended well. Good to see you, Madam Secretary. Thank you for joining us.
CHAO: It's done so much to help in terms of hurricanes and other places.
QUEST: Thank you. We will take a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, on tonight's show we had the Ford CEO, the governor of Alabama, the CEO of Mazda and Toyota, the British Consul
General and the U.S. Transportation Secretary, can you imagine if had missed Quest Means Business tonight? Absolutely unthinkable. And that is
Quest Means Business for tonight. I'm Richard Quest in New York, whatever you are up to in the hours ahead, I hope it's profitable. Please let's get
together tomorrow.
END
