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Quest Means Business
British Airways Restructuring Plan Could Lay Off 12,000 Staff; Round Two Of Paycheck Protection Program Plagued By Glitches; Protester Killed In Lebanon As Demonstrations Turn Violent. Aired 3-4p ET
Aired April 28, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:03]
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: Sixty minutes worth of trading still to go on Wall Street. Final hour of the day on the
markets -- and the market has been relatively calm, very small gains, but you see, they've been bouncing around.
I think this is a case of looking for direction, waiting for the next piece of news that will determine the forward direction or otherwise of the
market.
The news that's been around today and it is big. British Airways says it could lay off up to 12,000 workers.
The U.S. fund for small businesses is called an abject failure by the Democrats. We're going to hear from President Trump during this hour when
he speaks about the Small Business Administration and the PPP.
And a deadly day in Lebanon as economic despair has turned into violence.
Live from New York on Tuesday, April the 28th. I'm Richard Quest. And yes, I mean business.
Good evening we start today with airlines and aviation and British Airways. There is no normal and there is no government bailout, says BA as it tells
its staff and warns its unions that there could be -- will be layoffs ahead and it could be as many as 12,000 members of staff.
It's a restructuring plan that's underway, 12,000 could go, 22,000 of the staff are already on temporary furlough in the U.K., their wages being paid
effectively by the British government. For the group overall, for IAG, the revenues were down 13 percent and there are warnings that Q2, the loss will
be much worse, only March was really affected in the Q1 numbers.
In March, Willie Walsh had told me that the government bailout wasn't coming.
(BEGIN VIDEO CLIP)
WILLIE WALSH, CEO, INTERNATIONAL AVIATION GROUP: Well, the only thing we've been talking to governments about is the schemes that various
governments have set up to assist our employees. And right across Europe, we're seeing broadly similar schemes where governments are indicating that
they will pay a percentage of the salary of the employees who have been furloughed as a result of this.
We have not had any discussions, nor are we intending to have any discussions with governments at the time on those issues at the moment.
(END VIDEO CLIP)
QUEST: Anna Stewart is with me. Anna, there are a couple of things that I noticed about these results. Let's talk first of all about the job losses.
They say up to 12,000 and one of the reasons I hear from sources is that basically, even if things get going again, they will -- there simply won't
be a need for that number of employees for the foreseeable future.
ANNA STEWART, CNN REPORTER: And I think this was actually in the letter that the CEO sent out to start. He said, these measures are not just to
address the immediate COVID-19 pandemic, but also to withstand any longer term reductions in customer demand.
This is what we were talking yesterday Richard. When we are speaking about the aircraft makers, the airlines, the airports, it's not just a few
months, there's no V-shaped recovery here.
When lockdown is lifted, we don't expect to see any return to sort of normal aviation's. We saw it last year. Frankly, there just won't be as
many planes in the sky for the foreseeable and that means any kind of bailout only helps so far.
QUEST: But when we look at what the other airlines are getting from their governments, Air France up to eight billion euros, Lufthansa is talking to
various governments in the different countries and you're left with -- even Virgin is believed to be seeking a bailout along with Norwegian and
EasyJet.
Why is BA not seeking a bailout from the British government?
STEWART: It is interesting, particularly in context of so many airlines asking and a few of them will get bailout, plenty won't.
With British Airways, I think there are two things to consider here. First of all, the IAG boss who you spoke to in that interview, who's is clearly
very anti the idea of state aid generally.
When British Airline Flybe was about to go bust, there was talks about a potential government bailout, IAG actually made a complaint to the E.U.
saying that would be a breach of state aid.
Secondly, it goes to this point of how much use would a bailout be at this stage? They need to strengthen their balance sheet for new normal that will
be for the next few years.
It's very hard to look ahead and see what it looks like. But really, we are talking about not as many planes in the sky. Any kind of major cash
injection won't really fix that. So British Airways here really trying to just strengthen their balance sheet as much as they can.
You mentioned there's 23,000 workers currently on the furlough scheme. Now, the majority of their wages are being paid by the U.K. government, but that
will not last forever.
So, this is really looking further ahead. We're looking at years not months here -- Richard.
[15:05:14]
QUEST: Anna Stewart. Anna, thank you. Now, to Southwest Airlines here in the United States, which announced its first loss in some 11 years. Now,
the stock is up three percent on the day, however, like all the others, it's down 45 percent for the year so far.
The revenue is down at least 90 percent in April and revenues crashing down is 90 percent -- for April of May, it is going to be similarly down, and
only six percent of seats were sold this month.
Gary Kelly is the CEO of Southwest. He joins me from Dallas, in Texas. Gary, good to see you. I mean, the situation, obviously, I mean, the last
quarter really doesn't reflect the full story. It's the next quarter and the second quarter and there, do you have any insight or any visibility on
how bad it's going to be?
GARY KELLY, CEO, SOUTHWEST AIRLINES: No, and, Richard, I think you've described it very well. January and February were actually very strong
months for us, and so things began to unravel in March.
So, the first quarter doesn't really provide a great deal of an example of what to expect next.
The whole month of April is going to be very bad. So we, you know, revenues all month longer down in that 90 to 95 percent range, and our best guess is
that May will be something similar.
There are bookings in place for June. There are bookings in place for July. What we don't know of course, is whether the bookings will stick and
whether we'll continue to add, if we have cancellations for June-July travel like we have had here for April-May, then we'll have four months
ahead.
So, short answer is no. On the other hand, you know, in the United States here, we're beginning to see states and cities open back up again. So, one
would think that people will also want to begin traveling again and we're hopeful that that will happen.
QUEST: I realize, obviously, the airlines are different in nature, structure, route, networks, passenger focus, and all of that. But if you
just think about what BA has announced today, based on the idea that there won't be what -- under any scenario, the same requirement for staffing at
these levels in the future.
Now, you alluded to this in your statement today, that in the future, unless there's a recovery that you will also be looking at some form of
permanent reduction in workforce.
KELLY: Yes, so we're in a little bit different situation than BA as of course, because we have a commitment to have no furloughs through the end
of September, because we did have the CARES Act and the Payroll Support Program. That Payroll Support Program covers probably 75 percent to 80
percent of our salary and benefits cost through September the 30th. So, that gives us time to see if things will begin to recover during this six-
month time period.
But just like BA, you know, if we get to the point where we're in the fall of 2020, and things are still as poor as they are, there's no choice.
We have 60,000 employees, and we're going to work really hard to preserve jobs, preserve pay and preserve benefits, but we'll lose $900 million in
cash in the month of April, and obviously that's just not sustainable.
So, if that is the new reality, we'll have to radically restructure.
QUEST: Can I just ask you about fuel hedging? And your position there bearing in mind you're not flying, and there's no requirement for fuel? Are
you expecting a hit on that?
KELLY: No, we are flying. So, our schedule is -- it will be reduced by not the 90 percent in terms of, you know, in relation to our revenues, but our
flying will be reduced by at least 60 percent here in the second quarter.
So, we do have a hedging program, but it's all in the form of call options. So, as prices have dropped, we're paying market prices.
So, there's no real exposure there. We have more hedges in place now than we are burning fuel. But there's really -- well, all you do is pay the
premium and that's the most that we would be out in terms of cost.
QUEST: Gary, I just wanted to get your feelings and your thoughts. You know none of us ever came into our industry to see the decimation and
destruction through no fault of anybody's arguably.
But when you look at airlines, can you see a time when you get back to anything approaching normality, however you choose to define that?
[15:10:29]
KELLY: Absolutely, I can, and I firmly believe that we will. But we are going to be a difficult recovery. And I think on top of just the health
concerns, and sheltering in place and lockdowns and all of the things that we're dealing with there. There's also a recession. And, you know, do
people have the means if they're -- they may not be willing to travel, but do they even have the means to travel if there are unemployed? Businesses
are cutting travel, which is very typical in a recessionary environment.
However, again, we will defeat this virus. And presumably, this is a once in a long period of time, I don't know if it's once in a century, but it's
an unusual pandemic, hopefully the world and our country will be much better prepared the next time this comes around.
But we'll get past this. I just use the Spanish Flu of 1918 as an example, and you had the roaring 20s shortly after that. So, there's every reason to
believe that we'll get past this.
But, you know, companies and individuals are going to feel some pain in getting through this crisis. There's no question about it.
QUEST: Can I just ask you, finally, the difficulty that you have, I mean, running any company at a time like this is nigh on impossible, running a
major airline at a time like this beggars belief as to the complexity, how are you managing?
KELLY: Well, we're a family here at Southwest. We have very deep leadership. We were extremely well prepared, and that's one of the hallmark
strengths of Southwest Airlines over 49 years.
We had the lowest level of debt to total capital in our history, coming into 2020. We had surplus levels of liquidity and cash on hand. We have a
very low-cost structure.
Our product is loved by our customers. I mean, they're real fans of the company. So, there's so many things that we have to build on. We've got the
strongest route network in the United States, 96 percent of our capacity is deployed domestically. So, there's all these things to build on.
And our people are resilient. They're battle hardened, if you will. So, there will need to be a shared sacrifice. We'll all need to work together.
We'll do the best job we can to preserve jobs, preserve pay, but we just don't know what the future holds here, and if we need to make some
temporary sacrifices, I think our people will do it. And I think it will be well worth it.
People will travel. There's no question about that. People will travel. It's just how many people will travel and how many companies will win in
that environment versus how many will lose because as we always know, I mean, in every recession, there's winners and losers. We just want to make
sure that we position Southwest to be on the winning side.
QUEST: Good to talk to you, Gary. Always great to have you on the program. Thank you, sir, for taking time.
KELLY: Thank you.
QUEST: We will talk on your circumstances. I appreciate it. Thank you.
KELLY: Appreciate it.
QUEST: Now, the President is due to speak at any moment. Thank you. He is going to be talking about PPP. He's going to be and the -- that's the
Payroll Protection Plan. You can see the round two is underway, but there have been numerous problems.
As soon as -- we'll monitor the President when he does start.
Meanwhile, the White House economic adviser is warning that the stakes are high. Kevin Hassett says that unemployment could hit 20 percent.
(BEGIN VIDEO CLIP)
KEVIN HASSETT, WHITE HOUSE ECONOMIC ADVISER: I think by June, you know, I think that we're looking at numbers between 16 and 20 percent. The
unemployment rate at that point will be something that's about as high as something that we haven't seen since, you know, the 1930s.
I think GDP growth, the second quarter is going to be a big negative number. And, you know, the President and the whole team have been fully
briefed on all of that.
(END VIDEO CLIP)
QUEST: Now, the banks and the Small Business program has been highly controversial and frustrated in the way it's been actually implemented. The
government is balancing the perfection of getting it right with the absolute necessity of getting it out.
So, it used the first come first serve system with limited funds and there are three roadblocks. The E-TRAN system. The SBA said it has tried to make
the system fairer, but users are still getting errors.
The lenders. Now, the question about how lenders prioritize which they put in, for instance, they made greater numerical commissions on those that
were borrowing more.
And third eligibility is still very broad. The criteria is still the same in round one, which means many will be left out, and large businesses may
get it.
[15:15:35]
QUEST: Maria Contreras-Sweet is the former Administrator of the U.S. Small Business Administration. And Maria, good to see you. I have tried to be as
charitable as possible, recognizing the gargantuan nature of throwing this together in a matter of weeks, getting the banks in to change their
software and getting the money out of the door.
But even with charity, one has to say this hasn't been well-handled.
MARIA CONTRERAS-SWEET, FORMER ADMINISTRATOR OF THE U.S. SMALL BUSINESS ADMINISTRATION: Well, first of all, let me just thank you for bringing
attention to the Small Business program.
So oftentimes, we're so focused on the corporate and put small businesses on the side. So, I'm delighted that at least everybody is talking about
small businesses, and the SBA because it gives us an opportunity to shout out all the other programs that the SBA has and people can partake of.
So, I hope that people will go to learn more about the consulting and as well as the contracting programs that are made available.
But to your question, Richard, I think it's a really important question. It's difficult to be on the outside looking in and to be judgmental, as you
said, so we do want to be charitable.
But I will say that as I thought about the way that we took care of individuals, where we sent a check to their account directly to their
banking account, I'm wondering, the question has to be there, could we have done that for the small business community?
Why make it a first come first served basis, so that there are winners and losers in all of this. And I think that if we had said, you know, I think
it's like 80 percent, no, I think it's -- of the 30 million small businesses in our country, 23 million of them are sole proprietors and of
sole proprietors, women, by and large, are sole proprietors. Eighty percent of them are sole proprietors.
So, when you think about going through a process that requires you to go to your CPA, to establish a relationship with your bank, to ask them to
somehow prioritize you, as you said, the Commission is a little -- is not incenting for the small.
It's a lot to navigate while you're still trying to provide for your family. You're trying to run your household, you're trying to stay safe and
healthy, and you're trying to manage your liquidity.
So, I'm wondering if we couldn't have just sent a check directly to small businesses instead of having them apply.
QUEST: Do you -- do you fear, and do you have any numbers that you can give on the number of small businesses that may not make it?
CONTRERAS-SWEET: Well, we know that in 30 days of being down, 25 percent of those businesses usually do not come back online. After 90 days of being
down, we know that 50 percent of them likely don't come back online. Those are really high numbers. So, this intervention is key for them -- very key.
QUEST: What would you now do to repair the damage so that help is given? Accepting the frailties of the system that you've now got, is there
anything that could be done by way of emergency action that would repair it?
CONTRERAS-SWEET: Well, I think that's a really important question because we set up the design to accommodate certain amount of throughput. And so
when you ask people to fight for their first come first served basis position, everybody is going to come in and slam the system at the front
end.
And so I think what we could have done -- another way of doing it is to say, you know, regionally across the country, let's start with the
community banks. Let's start with the credit unions, where to put the technology players in this? Where are the large banks? And scheduled across
the country so that there'd be an even distribution across the country. That would be another way.
I mean, I think that the first suggestion I made might have been a little easier, but as you said, that's sort of water under the bridge. But for
now, what we could say is, you know, let's just back off a little bit, there is so much money. Let's stop and let's allocate across the country to
each individual institution, and it doesn't all have to happen right at once. Let's schedule it.
Let's say, so this is your 20 minutes, this is your 20 minutes. That E-TRAN system was not designed to take on every credit union, every depository
institution and technological lenders all at once.
[15:20:10]
QUEST: Maria, thank you for joining us. I appreciate it. Thank you.
CONTRERAS-SWEET: Keep the conversation --
QUEST: In just a moment, economic endurance has now given way to violence in Lebanon. We'll report on what's happening there, in a moment.
(COMMERCIAL BREAK)
QUEST: A protester has been killed in Lebanon as demonstrations turned violent. It was live fire that killed the protester, violent clashes with
military in Tripoli, the second largest city.
There is similar unrest in the capital Beirut. Economic conditions driving demonstrations and the rapid currency devaluation has taken place, it has
dramatically hit the country that was already on the edge. The protesters now say they are afraid.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (through translator): I am afraid, but what is the solution? I'm afraid of coronavirus, afraid of hunger. I'm afraid for my
parents, for my friends. I don't know what to be afraid of first anymore. I don't know.
(END VIDEO CLIP)
QUEST: Arwa Damon is in Istanbul, joins me now. The situation was pretty awful economically and politically in Lebanon going into this. I mean, is
the whole thing now just on the brink?
ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Some would say, Richard, that it's been on the brink for a while and now it's been pushed
over the edge.
I mean, if you look at the numbers, the Ministry of Social Affairs itself is saying that 75 percent -- that's a huge number -- 75 percent of the
population in Lebanon right now needs aid.
They need money to be able to literally eat, which is why these protesters are repeatedly saying we are hungry. This is why the one protester who was
killed was just 26 years old, is being dubbed the martyr of the hunger protest.
What the coronavirus has done to the country given that the government did impose a lockdown for two months just further exacerbate the economic
downward spiral that it was already going through.
People, if they have money, are struggling to access it, not to mention many people are day laborers inside Lebanon. They've lost all of their
sources of income.
The government was supposed to be distributing food but that's also been caught up in politics as is the standard status quo when it comes to
Lebanon.
And on top of all of this, Richard, it's not just the Lebanese population that's suffering. Remember, Lebanon also hosts a sizable refugee
population, and according to the International Rescue Committee, some 87 percent of Lebanon's refugee population also needs assistance.
[15:25:35]
DAMON: I mean, you have a situation that is untenable to a certain degree with a government right now that is not capable of putting forward any sort
of viable solution and people are taking to the streets, venting their anger, because they feel as if they have no other choice at this stage.
Of course, it's not the first time that we've seen these kinds of protests erupting in Lebanon. They started back in October of 2019, when the economy
really began tanking in earnest.
But as one protester described what's happened over the last 24 hours or so, he said that this was more intense than anything that they've gone
through since those protests first broke out in October.
QUEST: Arwa Damon in Istanbul. Arwa, thank you.
Now, U.S. oil prices is continuing to fall dramatically. Excess supply -- that's the problem. Demand has plummeted. Demand is down by more than 30
percent.
The cuts planned by OPEC and OPEC Plus are only around about 10 percent, so when you just look at the West Texas Intermediate, let's look at the price
of oil at the moment.
West Texas Intermediate, Brent Crude is narrowly up. The BP Chief Executive says the shocks to the industry are on a scale never seen before.
The oil rich state of Texas is to reopen its economy. The largest state so far to ease its restrictions.
Ed Lavandera is with me. So, as part of the easing of restrictions, what are the -- what are the parameters? That's big business. We'll start again
in Texas.
ED LAVANDERA, CNN CORRESPONDENT: Well, this starts on Friday here in the State of Texas, a state of 29 million people, and the governor here is
going to allow the reopening of retail stores, malls, movie theaters, and restaurants, but they'll only be able to operate under a 25 percent
capacity.
There are some questions as to how exactly that's going to be enforced. But as of now, that is the plan. What that does not include is hair salons,
barbershops, nail salons, gyms, where people work out as well as bars. That is not included.
So, there is a great deal of trepidation as to exactly how all of this is going to work out and case in point, we're standing here in the parking lot
of a movie theater that is supposed to be open in three days, or could it be open, but this particular movie theater chain says they're not going to
take any chances.
So, the question here, Richard is, even though some business will be given the chance to reopen, the question is, will they? So, it doesn't look like
everyone's going to take advantage of that just yet. Many people feel like they're not ready. So, a great deal of trepidation with all of this.
QUEST: Right, but there is a trend that is now clearly there towards reopening and that raises the question in somewhere like Texas, whether the
testing, the tracing and the containment strategy is sufficiently developed. So, if there is an uptick, it can -- they can deal with it
quickly.
LAVANDERA: And that is the question. So, and here on top of that, you have the added layer of you have a state government that is mostly -- that is
run exclusively by Republicans in the biggest cities in Texas, Dallas, Houston, San Antonio, Austin, are all run by Democrats, if you will.
So, there is a great deal of kind of push and pull between these two different factions, and if you hear the Democrats in these big cities
talking about their concern about the level of testing just isn't where it needs to be.
The governor here is saying that they will be doing 26,000 tests per day by early May, but they haven't come close to that and we're just a few days
away from that mark. So, that is what the really the concern is here, because they're in anticipation of a flare up and will that slow everything
down once again?
QUEST: Ed Lavandera, thank you. When we come back after the break, I have these headlines for you, and some restaurants are turning themselves into
grocery stores, it's a way of managing to handle this crisis.
And our voice of the crisis tonight is a restaurant that has reopened under difficult circumstances, but we'll hear exactly how you do run a restaurant
while social distancing at the same time.
This is QUEST MEANS BUSINESS. Good evening, to you.
[15:30:07]
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. We're going to hear from the former head of Unilever, about the
issues of supply chains, and the consumer goods and possibly a shortage of consumer goods. And the head of the Tokyo Olympics, says that there'll be
no further postponement next year. If they have to postpone the Olympics next year, then they will be canceled instead. This is CNN. And on this
network, the news always comes first.
The United States now has more than a million confirmed cases of Coronavirus. According to the Johns Hopkins University. That's far more
than any other single nation. Spain and Italy are the only other countries to top 200,000 cases.
French officials are giving you details on their plan to reopen the country. The Prime Minister Edouard Philippe says shops will start to open
their doors on May the 11th. Students can return to school then as well. For restaurants and cafes, will wait until at least June.
Spain's Prime Minister aims to begin a new normal in about eight weeks. Each province will ease restrictions at its own pace, seeing a drop in new
virus cases and deaths of almost 24,000 deaths since the start of the pandemic.
And moments ago, the former U.S. Secretary of State Hillary Clinton, officially back Joe Biden in his bid to become President. Clinton, whose
campaign lost to President Trump in 2016, endorsed Biden during a live video discussion on the impact COVID-19's had on women.
President Trump says he will sign an executive order to keep American meat plants open.
[15:35:07]
Now, the worries are about the food supplies which have been raised in recent days, as fear Coronavirus threatens the whole processing plants
those like Tyson and Smithfield which has already been halted. Donald Trump says this order will shield food companies from liability concerns.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're working with Tyson. We are. We're going to sign an executive order today, I believe, and that will
solve any liability problems where they had certain liability problems and will be a very good shape.
(END VIDEO CLIP)
QUEST: The crisis has revealed the mismatch that exists in U.S. supply chains between producers and retailers and the products they supplied.
CNN's Dianne Gallagher reports.
(BEGIN VIDEOTAPE)
DIANNE GALLAGHER, CNN CORRESPONDENT: The food supply chain is shifting and, in most cases, it's hard to stomach. Farmers dumping crops, meat plants
shutting down, all wall long line snake around food banks and restaurant dining rooms, empty. The Coronavirus is changing how and where we eat.
MATT DEBUSSCHERE, CAFE MANAGER, SUN IN MY BELLY: It is a restaurant. That's what we do. That's what we did. And now, you know, everything is different.
GALLAGHER: Very different. On a spring day like this, Son in My Belly, a popular restaurant in Atlanta's Kirkwood neighborhood, would typically be
busy, even have a waitlist going. But today --
DEBUSSCHERE: We are essentially a neighborhood market now.
GALLAGHER: Matt DeBusschere, who has worked here for a dozen years now, says back on March 13, the restaurant owner decided that they would either
have to close or change.
DEBUSSCHERE: And in one hour, we changed the business model completely. We all got behind his vision and you started pulling everything out all the
produce out of the walk-in, all of the back stock of paper goods and we organize it as quickly as we could into a general store.
GALLAGHER: A toilet paper pyramid, extra wine and produce quickly evolved, products they had on hand to run their business, became goods to sell.
Instead of severing vendor and farm contracts, they're adding more. And now, other local businesses are selling products and plants and what was
once their dining area.
DEBUSSCHERE: It's a beautiful thing because we're staying in business. They're staying in business.
GALLAGHER: At Bread Furst, they're still baking. But --
SCOTT AUSLANDER, DIRECTOR OF SALES, BREAD FURST: Now we're selling -- we're selling almost as much flour as we're using.
GALLAGHER: Shortages on the shelves have created a new type of customer for this Washington, DC bakery.
AUSLANDER: People were calling the phone ringing off the hook. People say how they -- how can we get some flour because the grocery stores were out.
And we've only got it in 50 pounds and 25-pound sacks. So, we would bag it up for customers. And it just, sort of, snowballed sort of an ancient
tradition.
BEN ARNOLD, HEAD BAKER, BREAD FURST: Yes.
AUSLANDER: You know, it's been giving people sustenance for thousands of years and you can take a little bit of flour and a little bit of water and
you can make, you know, a week's worth of sustenance. And I think that's appealing to people right now.
GALLAGHER: The baking boom happening on social media hasn't just kept them in business. It's changing how they plan to go forward.
ARNOLD: I mean, we've always had some grocery section here in the bakery, but now we're going to start having like a -- not really a bakery corner
but like, you know, flours, yeast, sugar, salt, you know, baking powder.
GALLAGHER: The use of online grocery companies like Instacart has skyrocketed. In New York, a Whole Foods closed its doors to the public
indefinitely, open only to shoppers filling orders made on Amazon. But changing the business model comes with a downside. The United Commercial
and Food Workers Union worries about what this will mean for the store workers who are currently risking their lives, once this is all over.
MARC PERRONE, PRESIDENT, UNITED FOOD & COMMERCIAL WORKERS INTERNATIONAL UNION: We are moving people around as rapidly as we possibly can, so that
we make job opportunities available for our membership.
GALLAGHER: Back in Atlanta, Sun in My Belly hopes that they can keep their store going when their restaurants comes back again. Dianne Gallagher, CNN,
Atlanta.
(END VIDEOTAPE)
QUEST: Now, the lockdown has disrupting routines in all sorts of ways right the way down from how often we shower, shave, and all the normal things of
the daily life. Unilever says that personal grooming has taken a hit, a tremendous time for shampoo, deodorants, skincare and products and the
like.
Paul Polman is the former CEO of Unilever. He's also now the chairman of the International Chamber of Commerce. He joins me from Geneva. Good to see
you, sir, as always. The way in which large consumer companies, good companies like Unilever, the owners of the retailers are having to adapt.
How do you understand the change?
PAUL POLMAN, CHAIRMAN, INTERNATIONAL CHAMBER OF COMMERCE: Well, Richard, first of all, good to see you and obviously, safe and well. The most
important thing I think, is although there are many stories of supply chain breakdowns, is to recognize the many people that have worked very hard to
make the supply chains work. The truckers, the people in the supermarkets, the health care workers, we've actually done remarkably well with our
supply chains.
[15:40:13]
Many of the issues and some of them you just said on your program, come actually from the demand side, restaurants that are being closed, stores
are being closed. And supplies have to be redirected, many often online where we've seen increases of 100, or sometimes more percent, and we've
responded to them fairly well. Where the major pressure has come from, is obviously in the health supply chain by healthcare products of what we call
Protective Personnel Equipment or PPE.
And they are the major barriers have been the incredible demand for that equipment, often as a result of slow reactions by governments, who then
aggravated it by putting export barriers in place. Seventy-seven countries put export barriers in place when we have a global problem that needs to be
attacked by coordination. We went all over ourselves instead of a global approach to attacking it. And then to make matters worse, we have the
border complexities.
And we have done the political forces where every country for themselves is trying to grab the material in a very complex supply chain. I think over
time, this change that we will see is moved from a more international supply chain for healthcare, to a certain level of localness, not losing
the interdependency of many of the ingredients that we have, between many of the countries.
We will see a supply chain that is less lean, obviously more higher levels of inventory. We see a more agile supply chain. And the local sourcing
again, will probably, in my opinion, be more driven by the need to create employment coming out of this enormous crisis, than by the supply chains
itself. So, there was a political aspect like many of the CEOs will have to deal with.
QUEST: But Paul, the -- this is requiring companies to think differently about how they will trade in the future. You argue, of course, this is a
time when there's your responsible businesses will rise to the occasion. But I suggest that that's -- there's also a time when saving money and
doing it however you can, will also be a dominant feature.
POLMAN: No question about that, that supply and demand equations will change moving forward. This is the biggest recession that we've seen in the
history of mankind, and many companies will not go back to the same level of hiring. Unemployment could be 20, 25 percent. Also, in the U.S., from a
very, very precarious state, as you have seen, where many people have fallen well below the social safety network.
You had just on the program, the disruptions in the food supply. Fifteen percent of Americans are depending now on food stamps, and many more have
an -- lack of access to nutritious food. In many of your states, one of five kids depend on the school food programs. So, there are major
disruptions that we need to obviously take into account. And we're looking forward ourselves to work with the industry, in this case, the food
industry, to change the supply chain. And in fact, the way of doing business.
And that is the same for the healthcare industry, as we would also expect it to be for the energy industry to ensure that we have a green future. So,
there will be a major different economy coming out. It would be a tragedy, Richard, if we end up spending 5 to $10 trillion to get the economy back on
track, and we end up in a worse place --
QUEST: Paul --
POLMAN: -- than we came from, which caused the problem in the first place.
QUEST: Paul, really, thank you, sir. I appreciate it. Thank you. Paul Polman, joining me from Geneva. When we come back after the break, the
"VOICE OF THE CRISIS" will be at a restaurant that is open in Georgia, after the break.
(COMMERCIAL BREAK)
[15:45:00]
(COMMERCIAL BREAK)
QUEST: On "VOICE OF THE CRISIS," of course, over the last numerous weeks, we've been talking to those businesses that have shut down and how they're
dealing with it. Today, a business that's reopened. We're in Georgia, in the U.S. state where the restaurant is the 1920 Tavern.
And joining me now is, Jenny Aronowitz, who owns the restaurant with her husband. The restaurant has been closed for five, six weeks. But under new
rules, they are now able to open. You've managed to do it. You've managed, Jenny to -- Jenna, to obey the 39 rules and regulations. How do you manage
to run a restaurant with social distancing?
JENNA ARONOWITZ, CO-OWNER, 1920 TAVERN (via Skype): It's a -- it's a very hard thing to do. Because obviously, the point of the restaurant is to be
social. So, you know, with the -- we've been given 39 guidelines and -- to follow. And, you know, I've had six weeks to train my staff to get through
to those guidelines. When we first got shut down, we were given similar guidelines. So, we kind of knew what was coming when it was time to reopen.
It is a challenge but we have risen to the challenge.
QUEST: And you don't -- you managed to keep all your staff on for the whole duration and reemployed them all and get them back up and running again.
That's a real achievement.
ARONOWITZ: Well, we made that decision. Right off the bat, my husband and I made the executive decision to keep everybody on. You know, we figured it
was, at least it was one of us, as opposed to all of them. So, we kept everybody on, we kept them as busy as we could, got a lot of cleaning, and
a lot of maintenance. And when it came time to reopen, we had everybody here and ready to go, because they've been here the entire time.
QUEST: So, tell me about the diners. What do they do? I mean -- I mean, are you busy in the evening? I know it's still early days. But how's it going?
ARONOWITZ: Well, we open for lunch and for dinner. Yesterday, lunch started off soft and slow, which is great because, you know, we're still learning
how to do the new systems. And so, it was a nice ease into the day. It did get more frantic as the day progressed. Dinner was very busy last night.
We're very grateful for that. It was tough on my staff because, you know, doing new systems. The very first day, it's like opening a brand-new
restaurant, even though we've been here for five years.
It was pretty challenging. But we got through it, and we were so elated that we managed to abide by all the 39 rules and make sure that every
single guest was taken care of and was excited and happy. We were -- our guests came in with open arms. We only wish we could hug each other. But
yes, they came in with open arms and had the best night of their lives.
QUEST: Well, we wish you luck and wish you well. I promise. I come to Atlanta obviously quite frequently because of the CNN center, our
headquarters. The mothership is there. So, I'm looking forward to my dinner at the 1920 Tavern. I'm going to come across and have some dinner in your
place and I'll pay the bill. I expect to pay the bill.
[15:50:13]
ARONOWITZ: OK. We would love that. We are -- we're -- the most important part about 1920 is we're about the experience. And being closed for six
weeks, we weren't able to give that experience to our guests. So, we're elated --
QUEST: Good to see you.
ARONOWITZ: -- to be able to do that again.
QUEST: Jenny -- Jenna, I have to interrupt you and say thank you very much. Now, let's rejoin Donald Trump who's answering questions in the East Wing.
TRUMP: More cases. So, we're testing. We're doing more testing than any other country in the world by far, which we, we just discussed over in the
Oval Office. So, we're going to show more cases because we're doing much, much more testing, double, anybody else. Somebody said if you add everybody
else combined, that would be a number, and it will be, at the appropriate time. It will be down to zero like we said.
JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: Weren't the experts at the time, saying that the number of cases would go up, we would have
communities spread.
TRUMP: Well, experts -- yes, yes.
ACOSTA: warning about this.
TRUMP: Also experts, many very good experts, very good people too said that this would never affect the United States. It wouldn't affect Europe. It
wouldn't affect anything outside of China. So, we were listening to experts, and we always will listen to experts. But the experts got it
wrong. A lot of people got it wrong. And a lot of people had no idea it would be this serious. I listened to experts. I'll tell you what, I did
something that the experts thought I shouldn't have done.
I closed down our country and our borders. I did a ban on China from coming in other than U.S. citizens. And we did very strong checks on even our U.S.
citizens. Ron DeSantis was telling me before that when they came in, people were put into quarantine, people were checked. And we're doing that now.
So, yes, I think we did something well ahead of schedule. And we did that at the end of January. People were talking about this wouldn't have an
impact, as you know, even into March.
So, I think we've done a great job in the sense that we were early. I think set -- by banning China -- by banning China and banning people coming in,
who would have been very heavily infected, we probably saved hundreds of thousands of lives. So, on that I'm very proud. Yes, please.
UNIDENTIFIED MALE: Mr. President, and Secretary Mnuchin, as well. What about the idea of another round of stimulus payments to American taxpayers
directly? Democrats, of course, up on the Hill are talking about the idea of guaranteed income, which obviously could go on for months and months and
months.
TRUMP: Yes.
UNIDENTIFIED MALE: What about another round of stimulus --
TRUMP: Well, I like the idea of payroll tax cuts. I've liked that from the beginning. That was the thing that I really would love to see happen. A lot
of economists would agree with me. A lot of people agree with me. And I think frankly, it's simple. It's not the big distribution, and it would
really be an incentive for people to come back to work and for employers to hire the double tax on the company and also on the -- on the person. And
that's what I like. And something like that could happen.
Also, I think you have to look, because a lot of people are talking -- I assume your next question would be about states. And Steve and I talked
about it, and I talked about it with Mitch and with Kevin and with everybody. And the problem with the states is, we're not looking to recover
25 years of bad management and to give them the money that they lost. It's unfair to other states. Now, if it's COVID related, I guess we can talk
about it.
But we'd want certain things also including sanctuary city adjustments, because we have so many people in sanctuary cities, which I don't even
think are popular, even by radical left, folks, because what's happening is people are being protected, that shouldn't be protected. And a lot of bad
things are happening with sanctuary cities, but that's just standing up here, answering this question.
That's one of the things I think about. If we're going to do something for the states, I think they'd probably want a -- something having to do with
sanctuary cities, something having to do with other different points that we can discuss a little bit later on. Yes. Jeff, go ahead, please.
UNIDENTIFIED MALE: Mr. President, you're going to sign an executive order today about the meat packaging plants. It affects liability for them. What
efforts or what measures are you looking at for liability for other industries and other businesses?
TRUMP: Well, we haven't been talked about it. It hasn't been asked on other industries yet, but with the meatpacking and with the transportation, we
have had some difficulty where they're having a liability that's really unfair to them. And we're going to be doing that. I think, Mark, we're
going to be doing that fairly soon. It's getting -- it's getting drawn up. I should be signing that over the next hour or so. Taking the liability
which frees up the entire system, and I fully understand it not their fault. Yes, please go ahead.
UNIDENTIFIED FEMALE: Thank you, Mr. President.
TRUMP: No, over here first.
UNIDENTIFIED MALE: Thank you, Mr. President. I just want to go back to what we discussed a little earlier today. Are you considering asking airlines to
test passengers on international also domestic flights?
TRUMP: Yes, we're looking at doing it on the international flights coming out of areas that are heavily infected. As you know, Brazil is getting to
that category.
[15:55:12]
I think they're going to be OK. I hope they're going to be OK. He's a very good friend of mine. But the President, but I think that we're going to
look at it from the standpoint. I was discussing that with the governor of Florida with Ron, a little while ago. So, we're going to be looking at that
coming in from other countries, frankly. But South America seems to be one that's talked about because they have so much business going into Florida.
With all of that being said, Florida has done incredibly well. And they're starting to open up and open up very rapidly. But we will be looking into
that in the very near future. We're looking at it very strongly.
UNIDENTIFIED MALE: And the airlines would have this responsibility.
TRUMP: Either the airlines or government, one or the other. We're working with the airlines. Maybe it's a combination of both. Kristen, go ahead.
UNIDENTIFIED FEMALE: Thank you, Mr. President. Some health experts say the U.S. needs 5 million tests per day by June, in order to safely reopen. You
unveiled a plan yesterday that will increase testing but not by that much. Why not? And can you get to that benchmark?
TRUMP: Well, we'll increase it and it'll increase it by much more than that in the very near future. We're way ahead of everyone on testing. We haven't
been given the press in terms of, I think, fairness of the press, but that's OK. And that's why I appreciated the statement before by Yahoo. Be -
- we are way ahead on testing. We are the best in the world on testing. We've tested much more than anybody else, times two, or every country
combined. We've tested more than every country combined.
And they keep talking about South Korea. And I'm very friendly, as you know, with President Moon who just had a great victory, a new victory, as
we're very happy about, but he will tell you how well the United States has done on testing and he told me that very strongly. The quality of our tests
is the best and the number is the best. Now, with all of that being said we will be going to an even higher number, and it goes up exponentially.
And I've told you that, we inherited a very broken test, a broken system and a broken test. And within a short period of time, we were setting
records. So, we have set records. We've done more than the entire world combined. We've done more than any other country in the world. So, I think
we've done a really good job. Now, with that being said, not everybody feels as strongly about testing as others. We have some governors that are
very strong on testing.
We have other governors, frankly, that aren't nearly as strong on testing. Their tests is much more modest. And their real test is when people stop
getting sick, and they'll be able to do that too. And I understand both systems very well. But we're going to maximum testing, even though some
people won't even want to use it.
UNIDENTIFIED FEMALE: Are you saying you're confident you can surpass 5 million tests per day? Is that --
TRUMP: Oh, well, we're going to be there very soon. If you look at the numbers, it could be that we're getting very close. I mean, I don't have
the exact numbers. We would have had them if you asked me the same way. question a little while ago because people with the statistics were there.
We're going to be there very soon. We're really -- we're really doing -- I mean, I watched your report on NBC today. And it was an incorrect report,
because we're really doing a great job on testing.
Unfortunately, the administration, the people that work, our government, hasn't been given the kind of credit that it deserves. Last month, it was
about ventilators. Now, we have so many that we're able to give them to Italy, France, Spain, other countries have been asking us, for ventilators.
We're making over 150,000. We've distributed thousands and thousands. New York is in great shape with what we've done, as you know. New Jersey is in
great shape. We spoke just recently. Ivanka just spoke with the governor.
And they're in very good shape with the ventilators. I mean, everybody has -- and most of them have far more than they'll ever need to starting to
send them back. So, nobody went without a ventilator. And yet, if you read the media from a month and a half ago, it was all about ventilators. And
ventilators are tough. That's -- that was a tough thing. But we should be very proud of our country. We took assembly lines, and they converted from
cars and other things into ventilators.
And the job that we've seen has not been seen since World War II. What they have done in terms of the manufacture of very high-grade ventilators is the
basis. So, now we don't hear about that. And I noticed that the testing is starting to die down because we now have the best testing anywhere in the
world, by far, and we have more. And this is a good thing. That's a very good thing. I'm happy about it. We had a call yesterday with governors.
And I will say that -- I'm sure many of you are on that call even though you shouldn't have been, they shouldn't have been, Amy, but they were. I
wonder how that happened. But you heard the governors were thrilled. Now, the following day, if you'll get a Democrat on the call, they'll say you
know, I saw some of them today. They were so thrilled yesterday on a call that they thought it was a close call.
And today, they were good, but they weren't the same as they were yesterday because that's the business. They want to try and win on November 3rd.
END
