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Quest Means Business
Anger Grows in Iran After Government Admits to Shooting Down Plane; Oscar Nominations Criticized for Lack of Diversity; Cory Booker Suspends Campaign for U.S. Presidency. Aired 3-4p ET
Aired January 13, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:17]
RICHARD QUEST, CNN INTERNATIONAL HOST, QUEST MEANS BUSINESS: An hour away from the closing bell. Records all around as you can see. The NASDAQ, the
S&P and the Dow strong gains on the Dow, it is up some 60 points. I say strong gains, but the market just keeps rallying.
We haven't seen 29,000. We did on Friday, and it's not been seen again. Those are the markets.
This is what's been happening today. A shake up for the Royal Family. The Queen announces a period of transition as Harry and Meghan step down from
this senior Royal roles.
Protests on the streets of Iran. The government admits it shot down a passenger plane.
And a new CEO takes the controls of Boeing. Some says, the hardest job in corporate America.
We are live in the world's financial capital, New York City, cloudy sort of day. But it doesn't matter. It is Monday, it is January 13th. I'm Richard
Quest and of course, I mean business.
Good evening. The Queen released a statement earlier today that's unprecedented in her 67-year reign. And it, Her Majesty, reveals she and
senior Royals did not get their way in today's Family Crisis Summit, and that Prince Harry and his wife, Meghan will get their wish to step back
from senior roles.
Her Majesty says she is entirely supportive of Harry and Meghan's desire to create a new life as a young family and that there will be a period of
transition in which the Sussex's will spend time in Canada and the U.K.
Our Royal correspondent is Max Foster. He is outside the Queen's estate at Sandringham. This was interesting, first of all, do you now know -- I mean,
was the Queen actively engaged in these discussions? She is in her early 90s.
MAX FOSTER, CNN ROYAL CORRESPONDENT: Yes, well, she was chairing the roundtable as it were with William and Charles there as well and the
Duchess dialing in from Canada. We haven't been given anything beyond that statement because they're leaving it at that.
Obviously, it's a very positive statement. It's got some good spin on it. And I think that's because the Queen is very keen to show a united front
and to try to get through this as quickly as possible.
But as you say, the Sussex's didn't back down in any way from what they wanted. So she has agreed to this period of transition, and she wants a
decision in the coming days and what she is referring to do too there is the complexity of actually what they're asking.
QUEST: But that's another -- of all the statement, I mean, there was nothing about in which they say we're sorry that they did and all of that
sort of stuff.
But it's this bit -- right at the end, I want decisions within a matter of days. So even though they may still be working out the ramifications and
logistics of it, she wants a clear cut way forward. Is that going to be possible?
FOSTER: Well, I think it's interesting because the top of the statement sounds so resounding, and as you point out, at the end, it's -- I don't
want a decision -- the top implies there has been a decision. Actually, there hasn't been a decision.
So where is the lack of decision? Is it on the Sussex side? Or is it Cambridge and Charles' side? I think that that's going to be the
interesting thing in the next few days. They're going to have to work through the nitty-gritty of what the Sussex's want.
I suspect they probably agree to the Sussex's said what they want. They said, okay, let's try and work it through the coming days. But then you're
going to have all of that really sensitive points about funding, about who does what within the family, and how it's all carved up?
There's loads of things that could potentially cause a big rift here because the Sussex's on their statements -- initial statement last week --
are talking about continuing that funding from Prince Charles. But why would he continue to fund them when they can have a private income as well?
So those things will have to be resolved. It's not as easy as it sounds at the top, I don't think.
QUEST: Max, finally, the way it's -- is this a crisis? I mean, at the end of the day, there's no constitutional implications in the sense of the
lineage of the throne. There's no -- it doesn't have anything to do with -- it has matters to do with money, but not really, you know -- they've
necessarily -- they can always renounce their right to be in succession. Is it a real crisis?
FOSTER: I think it's definitely a family crisis. I don't think it's an institutional crisis because actually, probably, if you look at what's
played out, it's the opposite of that because you've had the direct line of succession coming together.
William, Charles, and the Queen. Absolutely in one unit and sharing a strategy before they went into this meeting just as they did with the
Prince Andrew scandal as well.
[15:05:09]
FOSTER: So actually they're showing that core backbone of the monarchy has shown its strength in the last couple of months more than anything else. I
think it is, probably arguably stronger.
QUEST: Max Foster who's at Sandringham, thank you. Now, there's a reason why Royal insiders refer to it as a firm. Come over here, because it's very
different to a traditional corporate structure.
In a corporate structure, you've got the CEO, who of course, may at some point actually be thrown out or he may actually or she may be thrown out.
You've got the Vice Presidents who may leave for any one of a thousand reasons.
You've got a whole load of different Directors all of whom play their individual roles.
But when you then move to the Royal structure, which of course it is refusing to do, if you move to the Royal stretch, you do see something very
different.
You see a line of succession that really relies purely and simply -- there you are -- on the Queen, which goes out linearly to the rest of them. And
then down here, once this person comes along, it comes down here and then out there.
So overall by blood, this runs as opposed to the corporate structure, which runs in a different way. Let's talk about it with Victoria Arbiter who is
with me. Good to see you.
VICTORIA ARBITER, CNN ROYAL COMMENTATOR: Good to see you, Richard
QUEST: Happy New Year.
ARBITER: Happy New Year to you.
QUEST: I just want to talk about this. Max says it's not a crisis. But to some extent, they've made their demands, the Sussex's, the succession, for
want of a better word, the leadership of the firm, the Queen, the Duke, and then the Prince say, okay, we'll work with you. Where do we go now?
ARBITER: I think where it's going to become very difficult, really, Richard is when we look to the reign of King Charles III. Now, Charles has
made no secret of his desire for a slim down monarchy.
I think everyone is in agreement with that. The Queen's cousins that have been supporting her are all very elderly anyway. So slimmed down monarchy
of the future is a positive thing. But that included Harry and Meghan.
And now when we look to the future of the monarchy, we've got Charles and Camilla, King and Queen consort, and then William and Kate, the Cambridge
children aren't going to be working for a good 20 to 25 years. So that is a very small monarchy given the breadth of the Commonwealth, the 16
Commonwealth realms for which Charles will be head of state, not to mention all of the patronages.
QUEST: Isn't this a failure to some extent of Charles, both as a parent and as the next sovereign? I mean, his son has essentially launched an
extra set of missile at the thing, at everything that hold dear and he ignored the Queen or disregarded the Queen.
He is wanting to go in a completely different way. The Queen had to call this meeting and say, I want this sorted out in days. And meanwhile,
Charles is wringing his hands and seemingly nowhere to be seen.
ARBITER: I think this never should have got this far. Obviously, the press has played their part. But there's been rumblings as well about how the
British monarchy has not done enough to publicly support Harry and Meghan.
Now, we know the monarchy very rarely comes out and publicly supports anybody, but this has become a rolling barrage of trouble.
QUEST: But what do they want? What do they want, Meghan and Harry? He is part of one of the most famous families in the world. She has married into
it. They have an adorable child called Archie. The press loves them. What do they want?
ARBITER: Harry has always struggled. He's been very vocal. I mean, Richard, we can look at pictures of Harry in preschool and he is sticking
his tongue out at the press.
Now, he has always struggled with the constraints of Royal life. Meghan has come in as a fully evolved woman, educated, independently successful. She
has been silenced in her mind to a degree.
QUEST: She knew that's what it was about.
ARBITER: She did, but it's one thing to know. It is a totally different thing to experience it and to be on the inside. Now, I wish what they had
done is not go full nuclear. But perhaps it said, you know what, let's take a six months secondment to Canada. Let's go and dilute Republican
tendencies in a Commonwealth realm. This feels like it kind of all or nothing. They are the same.
QUEST: Let's look at previous number two, so to speak. So you've got, of course, famously, Princess Margaret.
ARBITER: Yes.
QUEST: Princess Margaret, and the difficulties you have. You've had difficulties with the existing number twos here, with Andrew, and all the
others. And now you've got difficulties with this number two.
ARBITER: It's a notoriously difficult position because number one is being raised -- the Queen obviously, when she was 13.
QUEST: But we are looking at the Duke and Duchess of Windsor. I mean, they became number zero.
ARBITER: Yes, and we can go back and number two has been a problem going way back in history. And I think number two only struggles to find a role.
What was so great with Prince Harry was the Queen having learned the lessons of the past. She gave him this Commonwealth Youth Ambassador role.
How he created roles for himself with Invictus with Sentebale. He has done tremendous work on behalf of those organizations.
So I'm surprised that we find ourselves here, but Harry and Meghan, at the end of last year were very vocal of the struggles they had during 2019.
[15:10:06]
QUEST: What do they become? Have they become this curious oddity we just saw the Duke and Duchess of Windsor living out their lives in some sort of
semi Royal, but not official and not brought out on the big state occasions. Is that what they end up as?
ARBITER: Well, it's never worked before where you have one foot in a civilian camp and one foot in a Royal camp. So what do they become as we
look ahead to the future? I think more civilian and less Royal.
QUEST: Thank you.
ARBITER: Thank you.
QUEST: A new leader with the same old problems. David Calhoun begins his tenure in charge of Boeing, and of course, it's the 737 MAX, the major
crisis.
And in Iran, riot police are firing teargas at protesters as public fury escalates over the shooting down of the plane. Demonstrators demanding the
Supreme Leader no less to step down.
(COMMERCIAL BREAK)
QUEST: David Calhoun is in the middle of his first day and what some are calling the hardest job in corporate America.
Boeing's new CEO has laid out his priorities in a letter to employees. After all, when he arrived at the start of his first day, there was an
inbox that's overflowing, but of course top priority getting the MAX 737 back in the air and he says he will get it done right and get production
back up to speed.
But he has to do so much more. He has to rebuild trust with suppliers, customers, passengers, regulators. That won't happen overnight.
Well, these are the day-to-day stuff of projects now, but Boeing is a space and defense and an innovator. So you can't stop preparing for the future
with the Starliner, the MAX 10, the 777X, the new initiatives.
David Calhoun has his work cut out for him as Sebastian explains, the critics now question why the Boeing insider is the best person to fix this
mess.
(BEGIN VIDEOTAPE)
DAVID CALHOUN, CEO, BOEING: Just keep burying yourself in difficult, tough situations.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT (voice over): In a guest lecture at Yale School of Management some years ago, this was David
Calhoun's advice to students. He is now burying himself in one of the toughest situations in corporate America.
(BEGIN VIDEO CLIP)
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Boeing backlash. President Trump grounds the 737 MAX fleet.
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: We are going to be issuing an emergency order of prohibition.
(END VIDEO CLIP)
[15:15:10]
SEBASTIAN (voice over): Ten months since global regulators grounded its fastest selling plane ever, Boeing is still working to get a software fix
approved. Even once that happens, returning the plane to service could take months.
In a major turnaround, the company said this month it would recommend simulator as well as computer based training for all MAX pilots.
(BEGIN VIDEO CLIP)
DAVID SOUCIE, CNN AVIATION SAFETY ANALYST: I believe that June and July for this return to service is even a little optimistic at this point.
(END VIDEO CLIP)
SEBASTIAN (voice over): Fixing the plane is just part of the challenge for Calhoun, an experienced executive who began his career at General Electric
and led the company's aviation unit during 9/11.
(BEGIN VIDEO CLIP)
DENNIS MUILENBURG, FORMER CEO, BOEING: We want a culture where people can bring up concerns --
(END VIDEO CLIP)
SEBASTIAN (voice over): Former CEO Dennis Muilenburg faced accusations of a broken culture within Boeing where profits were put a head of safety and
whistleblower complaints were stifled. He rejected those accusations.
But new internal documents released just days before Calhoun takes over show employees questioning the safety of 737 MAX simulators and even the
plane itself.
One message saying, "This airplane is designed by clowns who are in turn supervised by monkeys."
(BEGIN VIDEO CLIP)
SOUCIE: It will be a safe airplane. It really comes down to how quickly people accept what it is that Boeing has to say about how they've fix this
problem.
(END VIDEO CLIP)
SEBASTIAN (voice over): Calhoun must also fix a key relationship with the Federal Aviation Administration.
(BEGIN VIDEO CLIP)
STEPHEN DICKSON, ADMINISTRATOR OF THE FEDERAL AVIATION ADMINISTRATION: I'm not going to sign off on this airplane until I fly it myself.
(END VIDEO CLIP)
SEBASTIAN (voice over): The day he was named CEO, Calhoun personally called the F.A.A. administrator, a clear example, friends say of his
leadership style.
(BEGIN VIDEO CLIP)
KEVIN SHARER, FRIEND OF INCOMING BOEING CEO: He is direct or you don't have to wonder what he is saying. But he is pragmatic. He understands what
the issues are and wants to solve them.
(END VIDEO CLIP)
SEBASTIAN (voice over): Calhoun has been on the Boeing Board for a decade. He must now prove to employees, airlines and the flying public that this is
a new chapter.
(END VIDEOTAPE)
QUEST: Okay, so Calhoun -- Clare Sebastian is with me -- Calhoun has done lots of top jobs. Difficult ones requiring restructuring, but he's been on
the Boeing board for a number of years.
SEBASTIAN: A decade.
QUEST: And there's an argument that will say he was part of a board that presided over the culture slip. That was allowed to take place.
SEBASTIAN: Absolutely. I think that's why many people question the decision to put him in the job as CEO. He is tainted in many ways by this
crisis.
He was there when the planes crashed. He was there when they, you know, worked with the F.A.A. through the course of this past year, but others
will say that he has a deep history and experience in the aviation industry.
He led GE's Aviation unit. He knows Boeing over the course of the past decade. And perhaps given that it's better to have someone who knows the
business than to bring in a pure outsider, but I think that's why you see in his letter today, letter to staff, so many suggestions of how he wants
to change things, to sort of open a new chapter and to kind of refresh this whole crisis management.
QUEST: Even once the 737 MAX is back in the air, there's a variety of major challenges. The next after that I assume is the 777 X that is to have
its first flight and certified.
SEBASTIAN: The 777 X. There's also the Starliner, which just failed to get to the International Space Station. But Richard, the other issue with the
737 MAX is that even once it's flying again, things aren't just going to go back to the way they wore. Trust has been shaken in this plane.
Some customers might choose not to fly it again. Southwest, the biggest customer has publicly said that it might rethink its exclusive Boeing
relationship.
So I think he has to grapple with that as well. Is he going to be able to restore trust to where it was before? Or are things going to be changed
forever?
QUEST: But you can't -- you can't change the design of the 737 MAX without making -- I mean, you're basically scrapping the thing?
SEBASTIAN: No, exactly, but I think they have and they will have to take some big and complicated decisions. One of them has already been taken just
this month, Richard, in terms of Boeing making a big turn around and recommending simulator training to pilots.
QUEST: That was huge, wasn't it?
SEBASTIAN: That's a really big deal. We see just in the e-mails that got released last week how much they tried to avoid that.
QUEST: And that's going to be costly, because they're going to have to reimburse existing and future customers.
SEBASTIAN: Costly and extremely time consuming. It will mean that return to service takes even longer.
QUEST: Good to see you. Thank you so much. Now, Boeing shares are up slightly. They are still a quarter percent lower than just before the
crisis.
Joining me now is the aviation expert Richard Aboulafia. He is Vice President of Analysis at the Teal Group. So what do you make of it? I was
reading your thoughts and commentary. Calhoun has a lot on his plate. He's certainly up to the job. But can Boeing be turned around in that way?
RICHARD ABOULAFIA, PRESIDENT OF ANALYSIS, TEAL GROUP: Yes, I mean, I think he's basically got two tasks. You know, one is the short term business and
stabilizing all the relationships you just mentioned and more. You know, I mean, there's an awful lot that needs to be done to restore trust and to
get the plane back in service.
But there's also the long term cultural change and then perhaps biggest of all, to come up with a new product to respond to Airbus's enormous traction
in the middle of the market, the 200 to 250-seat medium haul part of the business that Airbus has been doing great with.
[15:20:12]
QUEST: Okay, now, let's talk about that because we can pontificate and go backwards and forwards on you know, will Calhoun or won't Calhoun or
whatever, but the aircraft that they have.
So the two was the NMA, the middle of the range, middle range aircraft and they don't really have a satisfactory replacement for the 757 which was
being used over the short haul Mid-Atlantic. They don't really have a full 767 replacement. I mean, the Dreamliner is very expensive. So what are they
missing? For example, the Airbus 320 ULR is now taking over.
ABOULAFIA: Yes, that's exactly where they need to focus because you know, the 321 Neo XLR and its various other forms have been doing amazingly well.
You know, they sold 3,200 plus. That's three times the number of total 757 sales over 25 years that they've sold in about five or six years. That's
incredible. The market really wants a machine in this class.
I would argue for a single haul jet, rather than the twin-haul configuration that was proposed with the new midsized airplane they've been
working on, but either way, they really need to do something and they need to do it with a different corporate culture, one that prioritizes
engineering and aerospace over financial management.
QUEST: When did this obsession with financial management come in? Because the number one complaint used to be that Boeing was a company, a boring
company run by engineers who built unsexy but brilliant planes.
ABOULAFIA: Yes, you know, you can make an argument that the road again with the McDonnell-Douglas merger in 1988, but really didn't get going
until the 2010s when Jim McNerney really began cranking up pure holder returns to the point that by a couple years into this process around 2015,
they were giving back 90 percent of cash flow to investors.
QUEST: Hello? Are you all right?
ABOULAFIA: Yes, fine. Thank you.
QUEST: Sorry, I thought --
ABOULAFIA: No, they were giving back 90 percent of cash flow in the forms of dividends and buybacks.
QUEST: Right. Well, it's a good moment for us to go to the glassed board room and we'll say, thank you, sir. I know it's a bit -- it's a little bit
about I'm feeling very chesty myself today.
In fact, it looks like I've got cup of tea here to help me through. Thank you sir. We'll talk more about it as the developments continue. Appreciate
it very much.
Now the markets, oh dear, once you start, you can't stop. Intraday highs for the NASDAQ, the S&P 500 -- the U.S. has removed China from the list of
currency manipulators. There's also the Phase 1 trade deal signing on Wednesday.
Cristina Alesci hopefully is not about to start coughing as well is with me. Let's talk about this currency manipulating thing. The designation of
China as a currency manipulator in these recent circumstances was always considered to be inappropriate.
CRISTINA ALESCI, CNN BUSINESS POLITICS AND BUSINESS CORRESPONDENT: That's correct. This is typical Trump. He creates a lot of bluster, you know,
demands policy initiative, demands a policy change with questionable legal basis, gets everybody up in arms and then ends up not being able to follow
through.
And in this case, to your point, Treasury puts out a press release in August that labels China a currency manipulator, but then the
administration never informs Congress because it actually doesn't have the proof that China is in fact doing that.
And in fact, China didn't meet the criteria under a U.S. 2015 law that would have enabled it to cleanly labeled China -- label China as a currency
manipulator. So they had to use this much broader definition from a much older law. And that's why, to your point, you know, many economists were
debating whether or not this label was really enforceable, whether it had teeth to begin with.
QUEST: So to remove it means what? Nothing?
ALESCI: I mean, it gives China a win, in a sense, because there is a feeling in China that, you know, maybe perhaps China gave up too early.
This allows China to go to its people and market it as a win that China got the U.S. to remove this designation that never really happened in the first
place.
QUEST: But they didn't have to do anything to get it.
ALESCI: We didn't really get -- you know, the U.S. didn't really get anything in exchange for it and to your point, for a person like Donald
Trump who has marketed himself as a dealmaker, art of the deal and whatnot, to give away something like this --
QUEST: But he might say, hang on a second. He might well say, well, we did get something I mean, we got Phase 1 of the trade deal.
ALESCI: But what is Phase 1? Phase 1 does not address any of the real issues like China subsidizing its domestic industries and giving it an
unfair competitive advantage.
[15:25:12]
ALESCI: It doesn't really address the fundamental problems. It almost addresses the low-hanging fruit, the easy stuff, right? And if you go into
a situation where all of the easy stuff is off the table, in the next phase, you only have the hard stuff to deal with.
QUEST: Right. But we always knew that the hard stuff was going to be maybe currency manipulation, but also the theft of -- the protections of third-
party rights and information -- proprietary information protections and those sorts of things.
ALESCI: Correct. We got a little bit of that in Phase 1.
QUEST: And the joint ventures, the abolition of having to do joint ventures.
ALESCI: Exactly. So we got a little bit of that in Phase 1, but structurally is it going to create the jobs and the economic promise that
Trump promised the American people? That is still a big question mark. And based on what we know now, the answer seems to be no.
QUEST: The signing phase, well, I believe on Wednesday, what's going to be the toughest -- what's the toughest thing that still has to be negotiated?
ALESCI: One of the biggest things that still has to be negotiated is whether or not China will continue to unfairly subsidize their domestic
industries. And in addition to that, even if they commit to doing it, how does the U.S. make sure that it happens? Thank you, Richard. Feel better.
QUEST: Thank you. Yes, there's a couple of cough drops is a priority and I will be fine. Anti-government protests are heating up in Iran.
Demonstrators are furious that the military leader killed their own people when they shot down an airliner by mistake. They want the leaders out.
This is QUEST MEANS BUSINESS. We are back live in New York.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment.
We'll take a look at grand calls for change in Iran after the government admitted to shooting down the Ukrainian plane.
[15:30:00]
The Academy unveiled the Oscars this morning. The nominees and it's under fire, accused of lack of diversity. And we'll talk about that and other
things. As we continue though, but before we go any further, this is CNN, and on this network, the facts must always come first.
The queen has agreed to a period of transition for Harry and Meghan after the couple announced last week they'll be stepping back as senior members
of the royal family. The queen's statement came after top members of the family met on Monday to discuss the Sussexes' future. Harry and Meghan will
split time between the U.K. and Canada while more details of their life are being hammered out.
Officials in the Philippines are warning that a possible explosive eruption from the Taal volcano hours or days from now. They're urging total
evacuation of nearly half a million people near Manila. We've been seeing terrifying images, at least of lightning that's created by the massive
plumes of ash.
New Jersey says Cory Booker is the latest casualty in the crowded field of various Democratic presidential candidates. His exit marks another
departure of a high-profile minority candidate. The Rhodes scholar and former mayor of Newark says he'll work for other Democrats up and down the
ticket.
Pope Emeritus Benedict; the 16th is speaking out in favor of priestly celibacy. In a new book, the retired pontiff calls it a true essential. His
successor, Pope Francis is considering allowing some married men to serve as priests. Benedict, Francis book released this week. English edition
comes out next month.
Nominations for this year's Academy Awards have been announced and "Joker" is leading the pack with 11 nominations. The Academy is once again
receiving criticism for the lack of diversity, nominating only men for best director. And despite promises in recent years to be more inclusive.
Thousands of Iranians are protesting against -- for a third day, calling for their leaders to quit. Now, there is video footage from Iran showing
security forces using tear gas to disperse the crowds. The governments denying reports that the police fired live ammunition. Iran's military of
course, has admitted to shooting down a Ukrainian airliner by mistake.
The White House is imposing new sanctions on Iran and eight senior figures after attacks on U.S. forces in Iraq. Nic Robertson is live in Abu Dhabi.
So, Nic, if we take the way this has gone so far, at some -- we're talking about the protests in a second. But at some point, Iran is going to have to
put someone on trial. They're going to have to fire -- there's going to have to be the ritual sacrificial lamb in here just to keep people happy.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: And who is going to be the lamb? And that's the real question here. And it's certainly not going
to be the shepherd, the supreme leader, the Ayatollah Ali Khamenei. And that's what the crowds on the streets are calling for. They're calling for
him to be overthrown.
We've had various military leaders come on television in Iran and say terribly sorry, it was a mistake. This is the sorriest day of my life. I
wish it was me that was on that plane. But you know, this is a regime. It essentially works as one. And while politicians and military leaders may
sound contrite, they're not acting contrite on the streets at the moment.
So, I'm -- you know, when we talk about a sacrificial lamb, I am not sure we're going see one of those offered up any time soon because it seems that
the government is trying to head off the sort of pressure that would make them do that, Richard.
QUEST: But then, what's the ability of protesters to effect any form of real change against this regime? I mean, there have been protests in the
past on economic grounds. There have been -- but you know, the supreme leader is not going anywhere. One suspects the president is not going
anywhere. So, what is the mechanism by which the protesters get anything?
ROBERTSON: There isn't one. There's not a democracy, Richard. They're not allowed to protest. It's illegal. This is a pretty sort of black and white
scenario here, certainly that's how it's seen domestically by the Iranians. It's not how the international community sees it. You know, we've heard
from, you know, various government, ministers around the world -- I think one of the most recent, the German Foreign Minister Heiko Maas saying today
that the protesters have a right --
QUEST: Right --
ROBERTSON: Legitimate right to protest and should be allowed to protest. In Iran, they don't. And that's the rob. If you don't have a right to
protest, you can't overthrow the leadership.
QUEST: So, point out the error in my thinking here, Nic, from my -- from what I read and what I see and what I hear, the Iranians are making all the
right noises.
[15:35:00]
They are discussing compensation, discussing Canada being informed. We've had numerous messages of contrition and diplomatic apologies. What am I
missing? They say -- I mean, if you accept that mistakes happen and they're awful and terrible and dreadful and horrible, but they do happen, they seem
to be playing the next part of this by the book.
ROBERTSON: I don't think you're missing anything, Richard. But the Iranian people have read this book so many times. And the way it reads to them is,
this is a leadership that doesn't care about them. It cares far more about their place in the world, far more about the theocracy, far more about the
Islamic revolution.
And you know, there's -- it just seemed this evening as if Iran actually is going off the book a little bit at the moment. You know, over the weekend,
we had the British ambassador arrested when according to Iranians, he was at one of the protests. So the Iranians then called him --
QUEST: Right --
ROBERTSON: Into the Iranian Foreign Ministry over the weekend for addressing them. But then, the British called in the Iranian ambassador in
London for an apology. Then the Iranians said, don't make any mistakes to Britain. And in the last sort of 10 minutes, the Iranian Foreign Minister
has upped the diplomatic ante here by telling Britain that it's just parroting the U.S. line and abetting United States terrorism and
eventualism in the region.
So, you know, if Iran is playing by the book in one area on the downing of this airliner, I don't think they're really making a big change of course
at the moment, Richard.
QUEST: Nic Robertson, always glad to have you onto the program tonight. Thank you sir. Now the Iranian protesters have a supporter in President
Trump. In a tweet, he said his National Security adviser suggests the sanctions on protests have choked off Iran, so they will negotiate. He said
he couldn't care less if Iran's leaders want to negotiate, and told them "don't kill your protesters."
Karim Sadjadpour is an Iran expert and senior fellow at the Carnegie Endowment for International Peace. He joins me now. And let's go further on
what you'll have heard. We're talking about -- with Nic Robertson. Do these protesters have any hope of affecting any real change?
KARIM SADJADPOUR, SENIOR FELLOW, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: Well, a couple of points. First, I think Nic's analysis was spot
on. I'd say first of all, the popular outrage in Iran somewhat constrains the Iranian regime's ability to retaliate, to avenge the assassination of
Qasem Soleimani because people are really -- have been profoundly affected by the shoot-down of this airplane and the death of 176 innocents.
Because they realize that they stand to pay --
QUEST: Right --
SADJADPOUR: The price for further escalation between the United States and Iran.
QUEST: And what about this idea that the firing of the missiles was only ever just a momentary smoke screen, the firing of the Iranian missiles at
the Iraqi base, a smoke screen, that the real retribution and retaliation for Soleimani's death will come in some form of proxy action three or six
months down the road. Do you buy that?
SADJADPOUR: Yes, I suspect that they are going to continue to try to make President Trump pay a price. And they have a whole menu of different
options, whether that's proxy warfare, drone warfare, cyber attacks. I also suspect that they will try to do something to humiliate President Trump
just before the 2020 --
QUEST: Right --
SADJADPOUR: Presidential election.
QUEST: How far will Iran go in using force against its own people?
SADJADPOUR: They will go all the way because this is a regime which doesn't have a plan B. They believe that if they don't kill and do
everything they can to stay in power, they have nowhere else to go. And so, you have a regime which is heavily armed --
QUEST: Right --
SADJADPOUR: Heavily organized and willing to kill, and a society which is none of those things.
QUEST: Do you subscribe to the view that there was a cruel calculation in leaving the air space open, and you know, designed to prevent attacks?
SADJADPOUR: I do believe that the regime essentially didn't ground the airplanes because they believed that if there were commercial flights
flying over Iran, the United States would be less willing to retaliate against the Iranian attacks on the Iraqi airbase. That's -- there's a long
history of the Iranian regime essentially using its own citizens as shields.
QUEST: So what happens next? I mean, the Iranians clearly are -- I've said they're sort of working with the Canadians. The Canadians may get much more
access to the investigation than anybody else. But we know what happened. I mean, you know, the civil aviation geeks and reporters like me need to know
more because we need to know how to prevent it happening again, and what happens to the aircraft in those situations. But otherwise, I assume, you
know, does anybody manage to gain leverage in this from the other countries?
[15:40:00]
SADJADPOUR: Listen, I think that the regime tried to -- first, they denied that it was the missile. They tried to lie about it. And so popular anger
in Iran is only going to dissipate -- it's only -- the protests are only going to be coiled by violence. And I think that this is a moment which is
going to stay for Iranians for many years to come because when people look at the passengers on that plane, they identify with a lot of them in a way
that they don't identify with Qasem Soleimani.
These were young Iranians who had bright futures, not Revolutionary Guard commanders wielding violence throughout the Middle East. So, I think, this
is a blow which the regime is not going to recover from -- that's not to say that they can't kill their way out of it.
QUEST: Now, that's just finally -- let's just take that last thing that you've said. That they're not going to recover from -- that's not to say
they're not going to kill their way out of it. You know, what does that mean in practical terms in the next three to six months?
SADJADPOUR: In practical terms in the next three to six months, I don't think you're going to see a political change within Iran because the regime
has firmly committed to staying in power. But if you're looking at this from the vantage point of the United States, that may be that the regime is
more constrained than they were before to retaliate because they no longer have a popular --
QUEST: Right --
SADJADPOUR: Mandate to do so.
QUEST: We're very glad you came on tonight, sir, to help us understand it, we appreciate it, thank you. Now --
SADJADPOUR: Thank you --
QUEST: There are two paths to tackling climate concerns that we've been hearing about today. Jeff Bezos makes a donation to fighting bush fires in
Australia. Our New York works amid skyscrapers, more efficient, energy efficient, all that and more, it is QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: Jeff Bezos says Amazon will commit $1 million Australian to bush fire relief in Australia. Now, when you put that into U.S. dollars, it's
only -- well, I say only $690,000. The scale of his donation is drawing some criticism online. Bezos is thought to be worth $116 billion, that's a
"Forbes" estimate. So, based on that, his donation represents 0.0006 percent of his wealth.
[15:45:00]
Here in New York City, companies are looking skywards towards new frontiers in the fight against climate change. John Defterios now reports on how
building owners are championing energy efficiency. It is GLOBAL ENERGY CHALLENGE.
(BEGIN VIDEOTAPE)
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR (voice-over): This iconic New York City's skyline is set to change over the next 10 years under 2019's
city Climate Mobilization Act, buildings larger than 25,000 square feet must slash emissions by 40 percent.
(on camera): For over a century, success in New York was defined by how high you could build or design. But in this modern age, value will be
increasingly linked to energy efficiency in the buildings.
(voice-over): Once crowned the tallest skyscraper in the world, today the Empire State building's green credentials are making headlines.
DANA SCHNEIDER, SENIOR VICE PRESIDENT DIRECTOR, ENERGY & SUSTAINABILITY, EMPIRE REAL STATE TRUST: We did a huge deep energy retrofit in this
building, starting in 2009, and we publicized all the work that we did. We shared everything in the hopes that we would not only succeed in the Empire
State building, that we would motivate others to replicate what we had done.
DEFTERIOS (on camera): Extraordinary that people didn't think of buildings before as part of the energy transition.
SCHNEIDER: But buildings are a huge part of the solution.
DEFTERIOS: The building's trust spent $550 million on initial energy upgrades.
SCHNEIDER: There's a lot that you can do with the building envelope, which is basically the exterior of a building, the walls, the glass, the windows,
the roof. Things like insulation, infiltration, there is so much that can be done there to control energy usage.
DEFTERIOS (voice-over): More than 6,000 windows were changed, insulated and optimized for natural light within three years. Energy efficiencies has
reached 40 percent, annual cash savings hit $4.4 million. In light of the new act, it will have to do even more. For those in real estate without the
capital to fund the mandated changes, NYCEEC; a non-profit financial solutions company was created to bridge the gap.
Developers, Urban Green Fit borrowed $4.5 million to upgrade Roosevelt landings, a mixed income complex.
(on camera): Does the city need case studies that they can present to owners and say let's get going?
FRED LEE, CO-CEO, NYCEEC: There are so many different buildings, many different sectors, so you really need to show a variety of different types
of owners, the value proposition of doing energy efficiency.
DEFTERIOS (voice-over): Implementing heat, power and hot water cogeneration systems and given each unit a simple thermostat control led to
a $1 million saving per year.
LEE: Seventy percent of emissions in New York City come from buildings. So, it's the low-hanging fruit of, you know, emissions reduction.
DEFTERIOS: Going forward is up to the city, developers and occupants to meet the challenge of energy efficiency. The Big Apple hopes to create a
blueprint for others to follow. John Defterios, CNN, New York.
(END VIDEOTAPE)
QUEST: The Oscar nominations came out this morning. "Joker" has got 11, Netflix though may get the last laugh. QUEST MEANS "SHOW" Business when we
return.
(COMMERCIAL BREAK)
[15:50:00]
QUEST: Yes, indeed, light up the lights. It is time to roll out the red carpet. The nominees for this year's Academy Awards have been announced on
Monday. And "Joker" leads the pack with 11 nominations including best picture and best director. Netflix though nabs 24 nominations more than any
other studio or distributor. For the second year in a row, though, there are no females nominated as best director.
And amongst actors and actresses, only two of color have been nominated. CNN's Frank Pallotta is with me to discuss this and talk about it more.
FRANK PALLOTTA, CNN MEDIA WRITER: Hello, that was a nice catwalk you had there.
QUEST: Everyone have got their own right, good to see you, sir --
PALLOTTA: Good to see you, sir.
QUEST: Good to see you. So the nominations, first of all, what do you make of the range?
PALLOTTA: I think it's interesting, the best picture range is actually about the haves and have-nots. You look at the best picture, you had many
different types of movies. You had "Joker", what you said, 11 nominations, but also made a little bit more than a billion dollars. You also had the
streamers with "Marriage Story" and "The Irishman". And you also had Disney Ba v. Fox(ph) with Jojo Rabbit and "Ford v Ferrari". And then you had a
foreign film with "Parasite" that was all over the place. Then you look at something like the directors, it's all white guys.
QUEST: OK, what can be done about that? It's because it's the same about the BAFTAS, where they said they were disappointed --
PALLOTTA: Yes --
QUEST: And dispirited. But what can you do about it? If that's what they are -- if that's what the Academy believes is the best that there was, then
what can you do about it?
PALLOTTA: You have to change the academy. And that's what the Academy has been trying to do. It's been trying to be younger and more diverse.
QUEST: OK, but the --
PALLOTTA: Yes, go ahead --
QUEST: Existing members of the Academy, know that's what --
PALLOTTA: Yes --
QUEST: People think about them.
PALLOTTA: Right --
QUEST: So, they're clearly not of a mind to change themselves.
PALLOTTA: That's true. But as we -- as you go on, the initiatives become more and more. Maybe we don't get a movie like "Parasite" as best picture,
those pictures aren't in. Maybe people aren't even chatting about category(ph), who I thought was incredibly deserving of best picture
nomination to even get there.
So, it does take time. Should it be moving faster? In my opinion, yes. But as of right now, it's still moving forward I think, maybe a little bit.
It's looking global, but it needs to work more on the diversity and more on getting people of different colors and sexes nominated.
QUEST: Netflix?
PALLOTTA: Yes.
QUEST: Twenty four nominations.
PALLOTTA: Wild, isn't it? It's a streaming company. The DVD company is now going to potentially maybe win best picture. I don't think it will. I think
maybe "1917" has a better shot. I think "Once Upon a Time in Hollywood" has a better shot.
QUEST: But how -- they're doing it -- I mean, they almost have to skirt -- obviously they do, they skirt the rules in the sense of you have to put into some theatrical --
PALLOTTA: They follow the rules. You know, they follow the rules in order to get nominated. They don't necessarily share their Box Office. They don't
follow by the rules of the theaters, they have things in the window --
QUEST: No, but this was always designed for movies from the cinema.
PALLOTTA: It's true.
QUEST: That was not designed for movies that were shown in the cinema for the minimal amount of time before being shown --
PALLOTTA: Yes --
QUEST: Somewhere else.
PALLOTTA: That's -- all right, you make that point, but I would also make the argument that there's probably a lot more people who have watched
"Marriage Story" and "The Irishman" than maybe "1917" which won -- which brought in nearly $40 million this weekend. Netflix is giving movies to the
world on a global scale.
Does that mean that they're playing exactly by the rules that everyone else is? Not necessarily, but for them, they're able to skirt by that and be
able to create cinema in a different way.
QUEST: Right, so at the end of the day and the sheer amount of stuff they make --
PALLOTTA: Yes --
QUEST: Dwarfs most Hollywood studios.
PALLOTTA: Yes, it's --
QUEST: All of them. I mean --
PALLOTTA: Yes --
QUEST: The sheer numbers of movies, its television series, docu-series that Netflix produces --
PALLOTTA: Yes, it's comparing apples to a basket of oranges. It's not even the same, it's not even the same ball field now.
QUEST: Good see you.
PALLOTTA: Good to see you.
QUEST: I -- we'll take your views on who you think is going to win more.
PALLOTTA: "Nineteen-Seventeen", who do you prefer?
QUEST: Oh, stop --
PALLOTTA: There you go. Well, what is British?
QUEST: You give away everything too quickly.
[15:55:00]
PALLOTTA: Fair enough.
QUEST: Let me give you the markets. We have records. The Nasdaq is at a record, the S&P is at a record, this is not over 29,000, but it still put
on a bit of weight, a bit of a choppy sort of session, not hugely. I mean, it looks worse than it does. It looks like the Himalayas or the Alps, but
then you see, it's only 75 points involved, and it all becomes a little more significant.
If you look at the shares that are involved, if you look at the Dow 30, you sort of can break it out, and you see there are just a couple of stocks
that are moving it. Finally, though, interesting to see the Nasdaq at a record, showing the best 1 percent of the day, Apple is one of the reasons
it's up 2 percent. United Healthcare is at the downside down 3 percent. We will have our profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. So David Calhoun takes over at Boeing. Immediately his supporters say he has the right experience, he knows the
company, and he has a good background in the industry. His detractors say he was on the board for 10 years of Boeing, so he saw the culture change.
And clearly, he was not part of any movement to actually reverse any of that. The truth is probably somewhere in the middle, it doesn't matter,
it's there now. And now he's got to do with the job. Obviously, number one, get the Boeing Max back into the air. But once that's done, you've got to
change the culture. And that will be much more difficult.
Does it need to go back to a more engineering-based culture, that Boeing was always famous, where engineers set the agenda, the standards, the
dignity, instead of financial management? Probably yes. Because you've still got the 777X which hasn't flown and needs to be sorted. You've got
the star fighter, you've got the defense contracts, you've got the space work and you've got a new midsized aircraft in commercial aviation.
Boeing has fallen back against Airbus, few will doubt. But can it pull itself up again? Of course it can. These people who talk about whether
Boeing -- I don't know where they get this nonsense from. Boeing just needs just, Boeing needs to put itself back together again, move forward with the
same purpose and vigor that made it the best aerospace company in the world.
Calhoun is the man for the job. And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York. Whatever you're up to in the hours
ahead, I hope it is profitable.
(BELL RINGING)
The day is done. The market is up. There are records around.
END
