Return to Transcripts main page
Quest Means Business
U.K. Government Publishes "Operation Yellow Hammer" Documents; President Trump Shortlists Five Potential People to Replace John Bolton; Robert Mugabe's Body Brought Back to Zimbabwe. Aired 3-4p ET
Aired September 11, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:12]
RICHARD QUEST, CNN INTERNATIONAL HOST, QUEST MEANS BUSINESS: An hour to the close of business and a strong performance across the market throughout
the day. Look at that. The market has gone up. We're almost at the best of the day. Not quite, just off the top, but there is a definite momentum.
And that's something we need to explore tonight.
The markets are happy. These are the reasons why. Hong Kong Stock Exchange has set its sights on the U.K. expecting a surprise bid for the
London Exchange. The legislatures in California are passing a bill that could upend Uber's business model. We will talk about the gig economy.
And the Trump administration proposes a crackdown on flavored e-cigarettes after a sixth person dies from vaping-related illnesses.
We are tonight, live from London on Wednesday, September the 11th. I Richard Quest, and yes, of course, I mean business.
Good evening, we begin in Frankfurt, where executives are meeting at the world's largest auto show. And there's plenty for them to digest. The
global trade war, Brexit and the slowdown in Germany. Anna Stewart is with me.
The problems facing the industry are many, and they are they are crystallized by what is happening with trade.
ANNA STEWART, CNN REPORTER: Yes, they're being pummeled in all directions, Richard, and the numbers are pretty scary. Looking at German car exports
for the first half of the year, they fell 15 percent, which is fairly extraordinary. And given how important the car industry is to the overall
economy. You know, it's no surprise that we're seeing such gloomy predictions. And almost certainly, Germany has fallen into recession this
quarter. That is the warning from the Central Bank. It was the warning today from the Keele Institute.
And speaking to the German automakers, it's not just the U.S.-China trade tensions, it's also the issue over CO2 emissions, huge regulatory targets
that they have to hit, and also Brexit.
And speaking to the head of the German automakers, I asked, "Well, what are you doing about it? You know, at the end of next month, you could have a
no-deal hard Brexit. He says they are lobbying the German government.
(BEGIN VIDEO CLIP)
BERNHARD MATTES, PRESIDENT, GERMAN ASSOCIATION OF THE AUTOMOTIVE INDUSTRY: We have a clear position and we have made this very clear to the Chancellor
and the whole government here in Germany. Clearly, we do want to have a Brexit, the orderly Brexit based on a deal with good framework for our
trade and for business on one hand.
On the other hand, we need to have the 27 remain as a market and unified because at the end, if we invite others to also leave the E.U., that will
be even worse for us.
(END VIDEO CLIP)
QUEST: So, Ann Stewart, the German economy is slowing down, and as it slows, so obviously Europe slows with it. What effect is that having on
the industry? And how is that reflected from what you've seen there today?
STEWART: Well, today there was all sorts of glitz and glamour and everyone is putting their best foot forward in unveiling their newest amazing cars,
aren't they? And many of them, of course are electric.
But the real story behind it is huge concerns about U.S.-China trade tensions, that is something that I got the feeling today that automakers
don't feel will be resolved anytime soon.
Brexit on the other hand is a near-term concern because they worry that the Prime Minister will get what he wants, which is leaving the E.U. by the end
of October -- October 31st -- and that could well mean of course, with no deal or a hard Brexit and that has huge ramifications for this industry.
Just today, we actually had a new report from the Keele Institute, and they said that they think that, you know, that the Germany GDP could actually
fall from 0.5 percent, which they now predict to zero percent -- no growth at all -- if there is a hard or no-deal Brexit.
QUEST: Anna Stewart. Thank you. Two cities, two stock exchanges and one global ambition. The Hong Kong Stock Exchange has made an unsolicited $37
billion offer for its London counterpart. Both are looking to dig deep international roots while the politics at home have rarely been more
uncertain.
Hong Kong has established itself as the main entryway into Chinese trading with connections to Shanghai and Shenzhen. In 2012, it purchased the
London Metal Exchange and the surprise bid is the boldest move yet.
The London Stock Exchange of course is centuries old. Germany's Deutsche Borse and the NASDAQ in the U.S. have each failed twice to buy London. A
merger with Toronto fell apart in 2012. In an era of cross border consolidation, London has remained an elusive takeover target.
Rana is with me, the Associate Editor at "The Financial Times" and CNN's global economic analyst. Why does Shanghai want -- why does Hong Kong want
London?
[15:05:13]
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Well, London is a huge prize, but this also represents the rise of China, the rise of Asia. You know, we
are in a world now where most of the growth is coming from Asia, and in some ways, most of the cash is in Asia, and it makes sense now.
Chinese have been going out for some time buying foreign brands, buying some of the luxury brands, high end brands in both the U.K. and the U.S.
and many other Western countries. Now, to buy an exchange seems like the natural thing, although it's a very, very interesting time, Richard coming
with all of this political turmoil in Hong Kong and a sense of, is Hong Kong really a separate system?
You know, we've always had the idea of China's one country with two systems. Well, now there's a big question about whether or not Hong Kong
is going to be allowed to have the freedom that it has in the past. So making an acquisition of one of the world's oldest and most prestigious
Western-based stock exchanges at this time -- very contentious.
QUEST: All right. Rana Foorohar, thank you. Lyft says it is ready to fight a new law, which could bring radical changes to its business model.
California is passing legislation that would transform ride-sharing drivers from independent contractors to fulltime employees. The concern is that
other states will follow. The shares are up as California Governor Gavin Newsom says he's still in talks with Uber and Lyft.
As you take a look at the markets in how they are trading at the moment, the Dow is up -- it's almost the best of the session. And in fact, it
could well be the best of the session. The major indices are stronger across the board.
And similarly in Europe, there was a good session, too. We will come back with more in just about a moment. This is QUEST MEANS BUSINESS and we've
live from London.
(COMMERCIAL BREAK)
QUEST: Welcome back. Now, Breaking News this evening, the U.K. government has just published documents relating to Brexit and its no-deal planning.
These are documents that were demanded or at least instructed by a motion in the House of Commons.
Nic Robertson is with me. What do they say? This is Operation Yellowhammer, which was the government's planning for a no-deal Brexit.
[15:10:02]
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: It doesn't make happy reading, I have to say. There's a lot to go through, but there's some of
the headlines are for you up to three months delays crossing over between Britain and France along the channel. That's the choke point, if you will.
This could affect medicine supplies at that point.
Now three quarters of the medicines that they use in the U.K. come in across that crossing. This is what the document says, and many of those
medicines are perishable by time. So of course this means that it's a critical choke point for absolutely needed life-supporting medicines in
some cases for people on mainland U.K. that they would be -- it seems to imply there would be shortages of those and it goes on to say the same for
food. There are certain perishable foods that they would be clearly wouldn't be getting across the channel.
QUEST: The government, when the Yellowhammer story came out a couple of -- two weeks ago, whenever it was -- Michael Gove, the Minister responsible
dealing with no Brexit said, "This is a worst case scenario." And I remember him specifically saying, "There will not be a problem with
medicines." Was he lying? Or was this just the worst case scenario?
ROBERTSON: Michael Gove must have had an alternate plan. Otherwise, his words wouldn't stand up to the scrutiny of Yellowhammer. One would have to
take from what Michael Gove said that there will not be a shortage of medicines and that he had found a workaround.
But what Yellowhammer points to is a very significant problem. The government's planning to have alternate ways that get ferries across the
channel, we know their first planning collapse. We don't know what their second planning is.
So Michael Gove is alluding to something that parliamentarians right now cannot get scrutiny on because they cannot ask these questions in
Parliament. You know, he also said that there would be -- his precise words eludes me -- but there would be enough food he did allude to the fact
that there would be shortage of some types of food.
We haven't broken it down into what food types, but imagine all of those perishable items that people take for granted being on the shelves.
QUEST: Is this, to use the Time Warner phrase, are these documents the smoking gun that -- to completely nail the metaphors -- puts the nail in
the coffin?
ROBERTSON: No, I don't think they're going to be because the government is going to be able to say, "We're working on this. This was a point in time
and we are now beyond that point in time when we have contingencies."
Again, I go back to the point that normally, you would be able to -- MPs will be able to say, "So what are the plans? What are you doing? Tell us
how you're getting around that?"
QUEST: I know we're going to talk more about this later elsewhere, but just on this point, because tonight, the situation is courts in Scotland,
the highest court in Scotland has ruled that the Prime Minister acted illegally, because he lied when he gave advice to the Queen about why she
should suspend Parliament.
Courts in England have said, "No, we can't look at this." The U.K. Supreme Court is going to rule for the nation.
ROBERTSON: It is and then there's another issue that's going to pile up here because along with Operation: Yellowhammer, the other documents the
government was supposed to provide this evening were the communications that went on leading up to proroguing Parliament.
And thus far, the government has released this evening, a couple of hours ahead of the deadline, a letter to Dominic Grieve, one of their former
senior members, a former Attorney General and Hillary Benn from the opposition, both saying, it is well known established procedure that we do
not release Cabinet level communications and minutes or details from sub- Cabinet Committee meetings. So they're saying those documents, at the moment, you're not going to get them.
QUEST: Right. And that's the old 25-year rule or whatever it is, 20-year rule. Where can we see these documents?
ROBERTSON: They --
QUEST: Are they all over the website? Have they put them everywhere?
ROBERTSON: They will be -- they will have permeated. They permeate very quickly. But the government, on the government's own website, dot gov, it
is there.
QUEST: Right. Nic, thank you. Please attend your duties. And come back and tell us when there's more to talk about on this because there will be
more developments. Thank you very much.
Now returning to the story that we told you about at the top, California has passed legislation transforming rideshare drivers from independent
contractors to fulltime employees.
It is still have got to pass one of the Houses of the California legislature. The concern is other states follow. Gilda Valdez is the
Chief of Staff for the SEIU Local 721. It is the largest public sector union in Southern California, joins me now. Thank you for joining me.
Gilda Valdez, we know the arguments here. The companies Lyft and Uber, both say if these drivers become employees with all the attendant benefits,
then their model, their working model becomes unviable.
[15:15:09]
GILDA VALDEZ, CHIEF OF STAFF, SEIU LOCAL 721: Well, that all depends from which lens you look at it. We believe that we can make things work, and if
they're going to be the innovative company that they claim that they are, then they have to deal with the workers because an innovative company is
not going to be a company that exploits their workers, and right now, that's what's happening.
QUEST: Do you accept that there are those drivers, as Uber says that are quite happy to be independent contractors; that they like the fact that
they can work their own hours, and they have the freedom to work for other companies, too.
VALDEZ: The reality is, is that that is the narrative of the company. The majority of workers, many of them are working anywhere from 14 to 18 hours
a day, and that's not by choice. That's in order to be able to put food on the table want to be able to pay their bills. So I'm sure there's some
small percentage, but the vast majority of workers are working an average of 14 to 18 hours a day.
QUEST: So if it does get to the point, bearing in mind that both of these companies are losing a shedload of money as they grow to actually get
there, if it gets to the point where they do become employees with benefits -- health benefits, and everything else that goes with it, paid time off,
and all of that, and they say, "Well, I'm sorry, we just can't keep as many of you on. Goodbye."
VALDEZ: So, right now, this workforce is a transit workforce. And the reality is, is that there is a way to work this out. We are very confident
that we are going to have cooperation from Uber and Lyft to be able to work through a contract for the workers, because at the end of the day, you
know, the reality is this company can say today, "We're going to pay you this," but if they don't have a union contract, they don't have anything,
because they can change it at any time they want.
QUEST: Right. So this is also not only about getting them on staff. It's also about getting them unionized, which I'm not saying as a pejorative,
but that is a large part of that what you're talking about.
VALDEZ: It is exactly where we're headed because without a union contract, it just not going to mean very much. We have to make sure that workers are
protected, that they have rights, that every everything that they have been not allowed to have up to now because of the fact that they have been
misclassified, not only Uber and Lyft workers are going to benefit, the entire state is going to benefit from all the misclassification.
QUEST: Do you see this as a spearhead for reforming the gig economy? You know, we know how it's grown. It's grown ad hoc. It's grown topsy-turvy.
And, you know, nobody sat and planned it.
Are you now saying it's time to reform the gig economy and to make it look more like the traditional economy, even if it means it's less innovative in
the process?
VALDEZ: I love those words that I just heard you said, because that's absolutely correct. We have to -- this is absolutely a spearhead to change
what's happening in the gig economy. We want the gig economy to prosper. But we also want the workers to prosper, we want families to prosper.
And so absolutely, it is the spearhead. If the gig economy is going to survive, if they're going to be able to be part of this country in a way
that is the American way, then they need to be able to accept that workers want to organize. Workers are standing up, because they want to have heard
their voices -- their voices to be heard.
They want to make sure that they have benefits for their families. They don't even have access to healthcare. They have no -- if they call in sick
one day, there's no access. They don't even have a minimum wage right now for these workers.
So that is not the American way. That is a way of exploitation. And we know that we can do better. And I know these companies know that they can
do better. So yes, this is the spearhead for the gig economy. And we're going to lead it, we're going to lead it out of SEIU. We're going to lead
it right here out of Los Angeles in California.
QUEST: Good to see you, Gilda. We'll talk more about this. Thank you for taking time in your busy day to come and talk to us. I appreciate it.
VALDEZ: Absolutely. Thank you.
QUEST: Now, the Federal Trade Commission is reportedly probing Amazon's selling practices. Bloomberg says in reports that investigators are
interviewing merchants about how much revenue they make through Amazon versus other sites like Walmart and eBay.
Ryan Fung joins us now from Washington. What is the accusation here? Because as I understand it, most of Amazon and most of the antitrust action
has been elsewhere.
BRIAN FUNG, CNN TECH REPORTER: That's right. Most of the scrutiny surrounding tech companies so far has really involved Facebook and Google
and their advertising practices, less so on Amazon.
[15:20:00]
FUNG: The real focus on Amazon that we've heard so far has come from Capitol Hill, mainly where, you know, certain hearings have really zeroed
in on Amazon's relationship to its third party sellers.
Bloomberg's story kind of expands on that a little saying that, you know, the FTC is now asking third party sellers to provide accounts of their
relationship with Amazon. And that's certainly consistent with reporting that I've collected, speaking to Federal Trade Commission officials myself,
in fact, a senior official at the FTC told me recently that the agency's Tech Task Force, which is looking into these tech investigations here, is
actually moving into a new phase, it has shifted gears a little bit, and is spending most of its time and energy on conducting actual investigations,
as opposed to looking for things to investigate.
And what that means is, you know, potentially sending out, you know, compulsory request for information, interviews with companies who are
potentially being affected by these large technology platforms, potentially getting to the point where the regulators may be interested in compelling
testimony from some of these firms.
So, you know, really, what the Bloomberg report suggests is, again, increasing scrutiny of the online e-commerce marketplace.
QUEST: And within that, what's the risk for Amazon here? Where's their downside? I mean, obviously, you know, so far, there's lots of talk within
the D.O.J. and within the States Attorneys General, and they've had minor wins, but nobody has landed the big punch.
FUNG: Right. I mean, I think it's really important to point out here that this is still a very early stage of these investigations here. You know,
you've got States Attorneys General, just the other day on Monday announcing that they're investigating Google, other states on Friday,
announced that they were looking into Facebook.
And then, you know, the Justice Department last week said, according to Google, has sent, you know, request for information to Google about some of
its prior dealings with antitrust officials.
So again, we're in a very early stage of these investigations, and a lot of the officials who are investigating these companies say, we're just going
to have to wait and see where the facts lead.
QUEST: Brian, thank you. Brian Fung joining us from Washington on that one. We speak about the power of the penny on this program all the time,
after all, "Just a penny." But it's created a new European tech giant.
It all began in 2001. Now then, you have a South African media company called Naspers. And it bought a 31 percent stake in Tencent for just $32
million.
Today, it is worth $130 billion dollars. Naspers has put that stake in its spin off firm, Prosus, which just went public in Amsterdam. The share
surged 26 percent in its first day of trade, boosting its market value to $132 billion. Prosus is now the second largest tech firm in Europe.
Eleni is with us, from Johannesburg. So how -- why did they buy this Tencent in the first place? Because earlier, you were reminding me -- that
even back in 2001, it was a small company that nobody had heard of and was by no means guaranteed a success.
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: Exactly. Exactly. I mean, Richard, what a good question. And this is, of course, what -- you
know, this is the big risk and the big bet that Naspers took in it actually came from the Chairman, Koos Bekker back in 2001, and he said, you know, he
tried to get into China a few times, and he failed. And then he had this fantastic opportunity.
And he said, "Let's take a bet," putting in $32 million. A lot of people saying, "Look, you're crazy." But a few years later, it started pay off
and in fact, it started to skew the size of Naspers on the Johannesburg Stock Exchange.
And of course now, Naspers accounts to 25 percent of the JSC becoming far too big for investors to handle because if you're invested in any index in
South Africa, then you suddenly have too much exposure to a single stock, so people had to start drawing down. If Naspers made a small move on the
JSC that would affect everyone.
So it's pretty crazy to think that Naspers became far too big for the Johannesburg Stock Exchange, essentially and of course, investors globally
couldn't get access and exposure to Tencent through Naspers.
QUEST: Okay, so they decided to spin it off into some other vehicle, a process, which has other assets and it was well that they have spun off,
but doesn't Prosus now have the same problem?
GIOKOS: Well, no, it doesn't because what they have done is they have taken Tencent and they have bundled all of the international tech consumer
companies, so from Brazil and India and Europe and even the likes of Russia put it all together and now listed that in Amsterdam.
And you're talking about a market cap right now with the share price increase today, sitting at around $130 billion. It's a huge consumer tech
company now in Europe.
[15:25:09]
GIOKOS: And remember, Europe has been lagging behind the U.S. and other jurisdictions in terms of listed tech companies. So this is going to be a
game changer. And of course, the guys that own Naspers here in South Africa is still going to have exposure to Prosus because Naspers still owns
70 percent of Prosus.
And it's pretty complex in terms of the structure, but essentially, it opens up opportunities where international investors can finally get access
to these companies through other indices. Naspers, you couldn't get exposure anywhere else other than the JSC.
So it now opens up a totally different ball game. And of course, the other thing is that Tencent with Naspers was of course trading at a discount
versus what you saw in Hong Kong, so they are hoping to close that gap.
QUEST: Eleni, a fascinating story. I wouldn't mind having a few of those shares myself back in 2001. But I'm not sure I had been prepared to take
the risk that they did. All right, thank you. Good to see you.
We will continue tonight, you and I. On our European markets, have a look, the major indices closed higher across the board. Investors now looking at
ECB which is widely expected to cut interest rates on Thursday as part of its new stimulus package. Interesting to see what else they might cut as
well.
Eurocontrol said that the summer of 2019 would be a tarred and awful for air traffic delays. The head of Eurocontrol after the break. With the
summer that has now finished, just about, how well did they perform? In a moment.
(COMMERCIAL BREAK)
QUEST: Hello, I am Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. When the so-called "summer of hell" is coming to an end,
the Director of Eurocontrol will be with me after the break or in just a moment to talk about that and more.
[15:30:00]
And the legendary old T. Boone Pickens has passed away, the legacy he leaves -- as we continue, this is CNN, and here the facts come first.
U.K. government has just published the Operation Yellow Hammer documents relating to its no-deal Brexit planning. They outline worst-case
assumptions based on the U.K. crashing out of the EU without a deal. And among them, traffic across the English Channel could be cut by 40 percent
to 60 percent within one day after leaving without a deal. Supplies of fresh foods and medicines could be affected.
President Trump says he's considering five people as possible replacements for John Bolton, describing them all as very qualified and great people.
The president says he'll announce a new National Security adviser next week. He added that Bolton made some very big mistakes.
A military honor guard in Zimbabwe greeted the casket of Robert Mugabe as his body was returned home to Harare today. The former President died at
the age 95 in Singapore at a hospital there last week. He will be given a state funeral this weekend in Harare, his final resting place is not known.
Americans today paused to remember one of the country's darkest hours. President Donald Trump laid a wreath at the Pentagon, one of the targets of
the September 11th 2001 attacks. Around 3,000 people were killed when the planes crashed into the World Trade Center, the Pentagon, and in
Pennsylvania.
British Airways says 90 percent of its services are now running as normal. It follows two days of strikes by pilots, the first in the airlines
history. Nearly all BA flights were forced to be canceled. Another strike is planned for the end of the month.
The pilots and the airlines are locked in a bitter dispute over salary increases with each side blaming the other. Ahead of Europe, Eamonn
Brennan will be with us in a moment to talk about the Summer of hell forecast. Now, listen to what he told me in March when at a conference, we
had a chat and he predicted Europe would have a transportation Summer of hell.
(BEGIN VIDEO CLIP)
EAMONN BRENNAN, DIRECTOR GENERAL, EUROCONTROL: My message to the travelers this Summer is it's going to be more misery, we're going to have increased
delays. I mean, to give you an idea, 33 percent of flights had a delay last Summer and the average delay was 49 minutes. It's going to be worse
this Summer and I think 2020 is going to be difficult.
(END VIDEO CLIP)
QUEST: The Summer of hell, Eamonn Brennan who joins me now from Brussels. Was it as bad as you feared?
BRENNAN: Hi, Richard, well, it didn't turn out to be quite as bad as we predicted earlier. We still had a considerable amount of delays, but
effectively, we were 10 percent better than we forecast. And this was brought about by a number of reasons.
Primarily, the traffic growth was not as intense as we thought. We predicted a 2 percent growth and with the Boeing Max and with softening of
the market and increased competition, we didn't get the intensity of growth from the carriers, and we're seeing this all through the market at the
moment.
Like the rate of growth each month is down to 0.5 --
QUEST: Right --
BRENNAN: Percent, so we're seeing a real change. I think we're seeing softening.
QUEST: All right, but that is, if you like, an extraneous event to your --
BRENNAN: Yes --
QUEST: Advantage. But in terms, Eamonn of the core issues that center in France, that center in Germany, did they improve? Were they better?
BRENNAN: Well, the network overall functioned a little bit better, Richard, to be honest, and it was mainly because we diverted about 1,100
flights every day away from the core areas of Germany. So, everybody working together, we improved it.
But maybe if I could just share with you, last year at this time --
QUEST: Yes --
BRENNAN: The average airline said 20 percent, 33 percent of flights were delayed by 45 minutes, this year, it's down to 23 percent flights, the
average delay have been 23 minutes. So, we've improved it considerably. But still, there's fundamentally issues in the network, and we're facing
problems.
And tonight in Europe, we're having a conference of the Single European Sky to address these issues. But we really need to change the way we're
organized in Europe with a better network management setup. It's core to the key issues.
QUEST: You've been asking for that for a long time. The air traffic control industry has -- I often wonder if you're any closer getting it.
BRENNAN: Yes, for the first time in a long time, Richard, I believe we're close. There's a number of factors that have come together, we have a new
commission which will start in November and I think that's going to be real top on our priorities. Because also creeping into this is the
environmental debate because the network --
QUEST: Right --
BRENNAN: Is so poor in Europe and it's organized so badly, we're running up considerably CO2 emissions and NO2 that we shouldn't be doing. Longer
routes, flying aircrafts lower. So, the whole thing for us is really to organize --
QUEST: Right --
BRENNAN: A network better. But when we work together like we did this Summer, it works well.
[15:35:00]
QUEST: Eamonn, you have to agree, it's somewhat extraordinary when the head of Eurocontrol, the chief air traffic man in Europe describes the air
traffic system as poor and needs to be better.
BRENNAN: Yes, I mean, it's not something that we're proud of. But the reality is that, you know, we have over 41 member states in Eurocontrol, 41
different countries, you know, many different --
QUEST: Right --
BRENNAN: Languages, so, our job in Eurocontrol is to kind of pull the patchwork together and act as the network manager.
QUEST: Right --
BRENNAN: Considering the issues that we have with fragmentation, I think we actually do an extraordinary job, but we don't work as well as the
United States where they've got one jurisdiction.
QUEST: And Eamonn, the thing that I'm most impressed by is that you had that reduction in delays, but you did it by skirting the problems. You
worked twice as hard to stand still. You re-directed air traffic around France and around the German Problem Traffic Control Center.
Isn't it time to get those two centers that are causing so many difficulties working properly so you don't have to run twice as hard --
BRENNAN: Yes --
QUEST: To stand still?
BRENNAN: That's a very good analysis, but we're on it, we're working very closely and we have a program in place with the German authorities and with
the French authorities, and we believe that by 2022, we should have resolved the problems --
QUEST: Right --
BRENNAN: In those two areas. But we're faced with a kind of a patch, having to get from now to 2022. And the best way is to move traffic,
sometimes the problem is though, aircraft fly longer and aircraft fly lower.
But I had a very good conversation last week with the CEO of EasyJet, and the thing that they're placed with is that it's more predictable.
QUEST: Right --
BRENNAN: Yes, we're dishing out delays, but we're 10 minutes, 15 minutes, not 90 minutes and 200 minutes like last year. So, we make the network --
QUEST: All right --
BRENNAN: More predictable, and that's better for airlines and it's better for passengers.
QUEST: Finally, are the right piece of the jigsaw in place so that if there was a hard Brexit or that for some reason the U.K. crashes out of the
EU, that air traffic control continues unimpeded?
BRENNAN: Yes. The commission have issued revised guidelines, updated guidelines just within the last number of days. So, we're ready for a hard
Brexit or a soft Brexit. Whatever happens, the basic connectivity will be maintained, and we will work with the British over the number of months to
make sure of this. But the basics will continue.
I have no worries about that. So, if there's a Brexit, air traffic will continue. The issue really will be whether growth will be permitted,
whether new routes --
QUEST: Right --
BRENNAN: Will happen, and these are things that have to be negotiated in the months ahead.
QUEST: Eamonn, you are refreshing, you are a top European official who speaks in plain English and always manages to tell us exactly what the
situation is, sir. Good to see you as always tonight, thank you.
BRENNAN: Thanks, Richard, take care.
QUEST: Now, you'll have heard this report last night on a campaign to ban flavored e-cigarettes. President Trump was listening or at least somebody
was. After the break, the measures being taken in the United States.
(COMMERCIAL BREAK)
[15:40:00]
QUEST: The Trump administration says it will crack down on e-flavored e- cigarettes as it was reported on this program last night, a mysterious lung disease has sickened hundreds and killed at least six people. Now, this is
despite warnings that vaping is on the rise among America's youth. Earlier, the White House, the U.S. Health Secretary Alex Azar was adamant
about protecting young people from the dangers of vaping.
(BEGIN VIDEO CLIP)
ALEX AZAR, SECRETARY OF HEALTH & HUMAN SERVICES, UNITED STATES: No child should ever use a vaping or e-cigarette products. It is that simple.
These products should not be available in establishments where children can easily get them. It is dangerous for a child to use a nicotine delivery
device. They should not be using them.
And we are taking steps today to get rid of the attractiveness and the availability of these products for kids.
(END VIDEO CLIP)
QUEST: The president of the campaign for Tobacco Free Kids called the move necessary and long overdue. Tom Foreman is in Washington. And we had on
our program last night, Tom, a representative, the head of marketing for British American Tobacco. He made the point, look, we don't want anybody
vaping who doesn't already smoke.
But vaping is the safer alternative that we would ask people to go to instead of smoking.
TOM FOREMAN, CNN CORRESPONDENT: Well, he may make that point, I think there are a lot of health officials here who would say that's not a very
good point. Because that doesn't mean it is a safe alternative in their eyes. It is simply a different alternative.
And as for the Trump administration saying they're going to do something about it, Richard, as you know, this president says a lot of things, and
then industries starts talking to them and often those things change. So, we'll have to see if they actually take meaningful steps. In the meantime,
what is happening has alarmed a lot of people.
(BEGIN VIDEOTAPE)
DAVID PERSEE, HEALTH DEPARTMENT, HOUSTON: It needs to be thought out as an injury to the lungs caused by something in the vaping and it is very
severe.
FOREMAN (voice-over): In Houston, doctors are sounding the alarm as three people are hospitalized after using e-cigarettes. In New York, the
Bloomberg Charity is giving $160 million to fight what's being called an epidemic of vaping.
MICHAEL BLOOMBERG, CHIEF EXECUTIVE OFFICER, BLOOMBERG L.P.: Kids are dying, people are dying now and getting addicted. The timeline is
yesterday, not tomorrow.
FOREMAN: And in Washington, the first lady herself has tweeted, "I am deeply concerned." Why is the worry exploding now? In just the past few
days, the Centers for Disease Control reported a huge jump in the number of people developing mysterious lung illnesses after vaping, to over 450.
At least, a half dozen are believed to have died. The American Medical Association has now come out urging people to avoid the use of all e-
cigarette products and the Food and Drug Administration has warned Juul labs, the leading manufacturer about misleading advertising and statements
especially to school kids where vaping is growing exponentially.
UNIDENTIFIED MALE: Did the presenter call Juul quote-unquote, "totally safe" more than once?
UNIDENTIFIED MALE: Yes.
FOREMAN: JUUL says that school outreach program was ended in 2018, and the company will fully cooperate with probes into their marketing and products.
JAMES MONSEES, CO-FOUNDER, JUUL LABS: We never wanted any non-nicotine user, and certainly, nobody under age to ever use Juul products.
FOREMAN: But that's not enough for the governor of New York, who is launching a state investigation, complete with subpoenas.
GOV. ANDREW CUOMO (D-NY): This is a frightening public health phenomenon.
FOREMAN: Even as reports of more serious problems keep rolling in.
UNIDENTIFIED FEMALE: He passed out and he would not wake up. Fifteen, sixteen years old, you don't want to start doing that.
(END VIDEOTAPE)
QUEST: And Tom Foreman, is it the feeling by health officials that there is an epidemic of issues and health problems out there waiting to just
happen? But, you know, as more people vape, as they've been vaping for longer, we're going to see an explosion of this?
FOREMAN: Yes, there are health officials who basically see here a repeat of the cigarette pattern, which is young people getting hooked early on, on
nicotine and this habit, and they see ahead of them lifelong health consequences.
[15:45:00]
That's why they're so concerned about this. And what adds to the problem, Richard, is the mystery. They don't really know yet what the link is or
indeed, if there is a link between these lung illnesses and these deaths and vaping. And is it connected to vaping as such or to some additive
that's coming into the process here? They don't know yet, but that's why they're saying, look, everyone, put it down --
QUEST: Right --
FOREMAN: Let's step aside and figure it out.
QUEST: But the -- again, the industry says that they cannot be responsible for less reputable products --
FOREMAN: Sure --
QUEST: That are put on the market, but the major manufacturers, and I'm sure we can go to them all and they'd say exactly the same thing is that
there are the additives, there are the cancerous additives that you get with burning, and that it is pure nicotine.
FOREMAN: Right, and yet the doctors are not saying this is good for you. The doctors are saying, this is a different -- there isn't a doctor out
there who is saying, you should take this up because it will be good for you. What they're saying is there are a lot of unknowns in this, and they
believe that given a choice, you shouldn't do it.
No, you shouldn't smoke, but even if this were slightly better than smoking or if that could be proven, does that make it good for you? The doctors
say, no, and especially not now with these new concerns.
QUEST: I think we've both been around long enough, Tom, to have that sort of gut feeling, it's sort of somewhere deep below that you're just feeling
you've seen this before.
FOREMAN: Oh, this has that feeling, you know, yes, I think you're right. And this isn't to damn the industry, the industry can do what it needs to
do, I suppose. But it does -- when somebody sits in front of Congress and says, you know, we don't want to get anybody involved who is not already
addicted to nicotine, doesn't that statement in and of itself tell you something about these products?
QUEST: Tom Foreman, thank you, I have to, of course, hold my hand up and say, you know, I am a reformed smoker, I think I was 40 a day by the time I
finally quit --
FOREMAN: Oh, that's an awful lot there. Well, I'm an unreformed marathoner, so I have nothing to do with that, I wish you well in staying
reformed.
QUEST: Good to see you as always, Tom, thank you.
FOREMAN: Good to see you.
QUEST: A moment left to trade, and investors are reacting to Beijing's decision to exempt some American products from tariffs. Apple is up after
yesterday's product reveals and everybody seems to be rather jolly today. We are at the best of the session, maybe just off the tops, but it's still
a really jolly very sort of session, not roaring ahead, but steady as she goes. Only in a moment.
T. Boone Pickens has died at the age of 91, an oil legend, a great friend of this program. We remember his legacy after the break.
(COMMERCIAL BREAK)
[15:50:00]
QUEST: T. Boone Pickens is the oil man known for his quick wit and his distinct Texas charm. He's passed away at the age of 91. A family
spokesman says he was surrounded by friends and family, and he died of natural causes. He'll be remembered as a guru of the energy market. In
2008, he laid out the Pickens plan and warned that the U.S. must start a shift away from OPEC oil and towards sustainable power like wind and
natural gas, and he was a guest on this program many times.
Just a few years ago, 2013, I had the pleasure of joining him on his ranch outside of Dallas.
(BEGIN VIDEOTAPE)
QUEST (on camera): The wall of fame, some might say.
THOMAS BOONE PICKENS, CHAIRMAN, BP CAPITAL MANAGEMENT: Well, you know, there are some good ones up there.
QUEST (voice-over): In the 1980s, T. Boone Pickens made headlines as a corporate radar. Today, they're called shareholder activist. He's the
author of "The Pickens Plan", its goal is energy independence for North America.
PICKENS: You have a North American energy alliance. You bring together Canada, Mexico, United States. We're the market for their oil, that's the
case today. Our biggest supply of oil outside of the United States is Canada. Put them together, we're their market and it's -- we're energy
independent with North America. We don't need anything from any place else.
QUEST (on camera): The answer is in your own backyard.
PICKENS: Oh, yes --
QUEST: In your own production. Is that what you're saying?
PICKENS: Exactly.
QUEST: Oh, these are the cartoons.
(voice-over): Even though Pickens has been lampooned in the press over the years --
PICKENS: This was signed by Ronald Reagan.
QUEST: He has always been taken seriously by those in the seats of power.
(on camera): This is what we always think of, isn't it?
PICKENS: Yes --
QUEST (voice-over): After all, for a man who has made such a fortune out of oil and gas, he knows the value of what comes out of the ground.
(END VIDEOTAPE)
QUEST: Now, Paul La Monica joins me in New York. He was an extraordinary man, but in the oil industry, he was a legend. And I'm thinking,
particularly, Paul La Monica of how he led the charge against OPEC.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, he led the charge against OPEC, he was a pioneer in trying to get the U.S. to lessen its dependence
on foreign oil, build up renewable sources of energy like wind, power, even though he has talked about or he had talked about how he didn't really
make much money in that particular area of the market.
But I think that he clearly is a maverick of the oil industry. Also, you know, a leading shareholder rights activist, obviously, corporate raiders
sometimes get a bad reputation for going in and trying to make big changes at large companies. But Pickens, his stance always was that he was doing
this for shareholders, of course, he was one of the shareholders that would benefit.
But you know, he had -- you know, a net worth at one point of over a billion dollars that whittled away as his, you know -- as his years
advanced, but he is to his credit giving away a lot of his fortune to charity. He is a member of the giving pledge that was set up by Bill and
Melinda Gates and Warren Buffett.
QUEST: I guess they just don't make them like him anymore. I mean, he was irascible when you interviewed him, very but charming with it, had a wicked
sense of humor, and he was still active and well across detail, well into his '80s.
LA MONICA: Exactly, I mean, I think one of the things that's really telling is how the rapper Drake, who had a tweet a couple of years ago
about how it's hard to make the first million, and he responded to that by saying, it was difficult to make his first billion. And I think a lot of
people thought, wow, this is a great tweet by someone who -- you know, let's be honest, I'm not so sure if T. Boone Pickens ever heard "God's
Plan" or not, but he obviously saw Drake's tweet.
QUEST: And Texas, love Texas. Texas --
LA MONICA: Yes --
QUEST: Was his heart, Texas was his -- and he was a pioneer as well. I didn't realize this, he was a pioneer in fracking. In the development of
the non-traditional methods and he was absolutely delighted when it looked like -- when it became obvious that the U.S. was going to become the
world's largest producer of oil and gas.
LA MONICA: Yes, I think American oil companies owe a debt of gratitude to T. Boone Pickens for his career and what he did to champion the U.S. oil
industry. And obviously, we're now at a point where the U.S. oil industry is maybe not pushing around the Saudis and OPEC, but clearly, they have a
lot more clout than they did in the '70s, '80s, and even early part of the '90s.
[15:55:00]
QUEST: Paul La Monica, thank you, T. Boone Pickens was 91, we'll be back in just a moment.
(COMMERCIAL BREAK)
QUEST: Today's profitable moment. Now, you'll have to forgive me if I'm a little more reflective or perhaps even emotional this evening as I consider
the events of the day, and how they've affected with Brexit. Now, you've got to remember I'm British, born and brought up in this country.
And to be in the U.K. in London at the moment is an instruction indeed. Think about what happened today, the highest court in Scotland ruled that
the U.K. Prime Minister lied in giving advice to her majesty, the queen, that suspended parliament for the sole purpose or one of the purposes of
stymieing a debate.
And on top of that in the last hour, we're talking about Operation Yellow Hammer, where we're hearing about documents that reveal just how bad the
situation could be. Medicines is delayed a day and a half to get across the Channel, food shortages, none of which of course is being revealed by
the government, far from it.
So, this is the situation, and each day, parliament is suspended, we get more reports on what it's likely to be, there's no evidence of what comes
next. And worst of all, there's no certainty at all about what happens with Brexit. All we know is that a no-deal Brexit might or might not be
off the table. This is no way to run a government, it's no way to run a country.
And it's hardly surprising that people in business are saying, we don't know, we're worried and it's time to sort it out. What a way, what a day.
And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in London, whatever you're up to in the hours ahead, I hope it's profitable.
(BELL RINGING)
The Dow is up, it's a good day, the day is done.
END
END
