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Quest Means Business
Hopes For Virus Treatment Lift U.S. Stocks; Study Shows COVID-19 Patients On Remdesivir Recovered Sooner; Aerospace Giants Report Dismal Earnings. Aired 3-4p ET
Aired April 29, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:15]
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: Sixty minutes after trading on Wall Street, middle of the week session on a Wednesday and
it's a very strong bullish session across the board.
If you take a look at the market, you'll see up nearly two and a half percent. It is the best part of 600 points. We are now 24,600, only about
6,000 or 5,000 where we were. These are the reasons why.
Anthony Fauci says one of the Gilead drugs could have a significant effect on the future of coronavirus and treating it.
Meanwhile, the Fed Chair, Jerome Powell says an unprecedented drop is coming for the U.S. economy. He is referring to Q2. We've got the Q1
numbers.
And Boeing says it will lay off 16,000 workers.
We are live from New York on April -- Wednesday, April the 29th. I'm Richard Quest, here in New York, of course on a bullish day in the markets,
I definitely mean business.
And a very good afternoon and good evening to you. There are conflicting movements in the markets today on the basis -- first of all -- of good news
as it relates to treatment, but very poor news as it relates to looking in the mirror and seeing how the U.S. economy has been -- how the U.S. economy
has been managing along.
The Fed is pledging to use a full range of tools to support the economy and U.S. stocks are sharply higher as a result.
Gilead says it's aware of positive data in the remdesivir trial, although there's currently no approved treatments for the coronavirus. We'll talk
about that in a second.
However, on the economic front -- and that's the good bit -- on the economic front, GDP for the first quarter came in at negative 4.8 percent
on an annualized basis. It is the worst fall since 2008.
The U.S. Chair of the Fed warned that the U.S. economy will see an unprecedented drop in Q2. It is believed to be up to 40 percent -- minus 40
percent on an annualized basis.
He spoke a moment ago, Jay Powell, and said that more support would be needed.
(BEGIN VIDEO CLIP)
JEROME POWELL, CHAIRMAN, U.S. FEDERAL RESERVE: Both the depth and the duration of the economic downturn are extraordinarily uncertain, and will
depend in large part on how quickly the virus is brought under control.
The severity of the downturn will also depend on the policy actions taken at all levels of government to cushion the blow and to support the recovery
when the public health crisis passes.
(END VIDEO CLIP)
QUEST: With me is Ethan Harris, he joins me now. Head of Global Economics Research at Bank of America. Good to have you. The 4.8 number, we sort of
knew it was going to be grim. How bad as a result of what you've seen there, do you now think the second quarter will be?
ETHAN HARRIS, HEAD OF GLOBAL ECONOMICS RESEARCH, BANK OF AMERICA: Well, this was as expected, unfortunately. We actually thought it might be even
worse than this.
We're looking for a 30 percent drop in the second quarter because remember, the first quarter, we only had a few weeks of partial shutdown in the
economy, whereas in the second quarter, we're going to have a full month of April that's effectively shut down and then the reopening is going to be
extremely slow over the next couple of months.
So, it's going to be the worst quarter in modern history.
QUEST: And when we look at that rebound, obviously, it has a bounce back in Q3. I suppose, you know, almost as sort of the beginning of the V. I
guess it really just depends how far that second leg of the V goes back up towards making up lost ground.
And I'm gathering from what you've said in your first answer, you think it's going to be a very slow uplift.
HARRIS: Yes, and I think that this talk about V is a bit misleading. It's true that in a mechanical sense, if people go back to work with the end of
the stay-at-home orders, those kind of activities are going to pick up quite quickly for a period of time.
But even that pickup is going to be very slow, because remember, what dictates the reopening of the economy is not governors or other
politicians, it's people will have to decide whether to reengage in crowded activities.
And so whatever these governors say, which we're allowed to do, we're all going to be deciding on our own how much we want to reengage.
So, it's going to be a pretty slow reengagement process until there's serious testing and then people in the general population become
comfortable that there's not a hidden disease out there.
The other thing I would say to keep in mind here is that we've got a business cycle. We've just had a massive shock to confidence and so,
there's going to be aftershocks. There's going to be a big weakening in investment, in spending on autos, all the stuff that usually goes down
during a recession is going to weaken a lot in the next couple of quarters.
[15:05:23]
HARRIS: So, unfortunately, even as the social distancing policies ease up a bit, some of those business cycle shocks will start hitting the economy.
QUEST: What then is then, in your view, is the right policy stimulus, once we're in a position of seeing the economy reopening and clearly monetary
policy -- there's nowhere really to go in any meaningful sense. So, you're left with fiscal policy? What's the best stimulus in your view?
HARRIS: I mean, first of all, the best stimulus is to spend money on testing and tracking cases, and I don't know why they're not doing more of
that. But that's number one.
But the other thing is, we just have to be ready to spend a lot because, as I said, it's not like things are going to just go back to normal in the
middle of the summer or something. We're going to have depressed activity for an extended period of time.
We're probably going to need another round of payroll protection money for small businesses. We're going to need significant aid to state local
governments or they're going to have to cut dramatically their services, particularly in areas that have been most impacted.
So, there's really just have got to be more of the same. It's not like there's anything wrong with the monetary or fiscal stimulus packages. I
just think they have to keep being applied.
QUEST: How long do you think before -- if ever -- the US economy makes up all that gets lost? Or are we looking at a fundamental shift to a lower
producing economy?
HARRIS: Well, I think we're going to recover a lot. And we're going to get back to something a little more normal in terms of unemployment and
activity next year.
But there is some permanent loss here. I mean, we've thrown a lot of government resources at the economy. That takes away from the private
sector of the economy.
We've had some damage to sectors that aren't going to come back soon because of the concerns about viruses in the future.
If we get a better treatment and get a vaccine that will help a lot, but there's still going to be some lost activity here.
QUEST: Ethan, great to see you. Thank you, sir. And we will talk more -- many more times as we go through the summer understanding exactly what's
going on. I appreciate it. Hope you and your family are well throughout all of this.
HARRIS: Thank you.
QUEST: Now, the markets have soared today. Just look at that number. It is up nearly three percent, two and a quarter percent, two and a half percent,
over 600 points and one of the main reasons is hopes of a COVID-19 treatment.
Gilead, the biggest antiretroviral manufacturer pharmaceutical says remdesivir shows positive results. Dr. Anthony Fauci is optimistic.
(BEGIN VIDEO CLIP)
DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: Remdesivir has a clear cut significant positive effect in
diminishing the time to recovery. This is really quite important. It is a very important proof of concept. Because what it has proven is that a drug
can block this virus.
(END VIDEO CLIP)
QUEST: Elizabeth Cohen, our senior medical correspondent is with me. Elizabeth, I'm confused. I hear Dr. Fauci say that, but I've also seen
studies that say it did no good, which is it?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Richard, what you heard was talk-about studies and so this is what looks like an actual study.
This is Dr. Fauci looking at an actual study of more than a thousand people in the United States, Europe and other places, and what it found is not --
it's not a cure, but it does seem to help.
So, let's take a look at these actual numbers. What they found when they looked at mortality rate is that the patients who were taking a placebo,
which is a pill that does nothing had an 11 percent mortality rate for the course of the study.
Patients taking remdesivir severe had an eight percent mortality rate. So, a lower mortality rate there.
What they found was when they looked at duration of illness, so how long until the person was well enough to leave the hospital? When you look at
the placebo, it was 15 days, when you look at the drug, it was actually 11 days. Mortality rate was not statistically significant. This one was.
And so for that reason, Dr. Fauci said, you know what, this should be the standard of care. It's not a cure, but this should be the standard of care
because it does seem to help people.
I do want to talk a little bit about side effects. We always want to go over that whenever we talk about a new drug or really any drug. There have
been some studies on this drug for Ebola, as well as for COVID. There has been an indication that there are elevated liver enzymes sometimes
A new drug or really any drug. There have been some studies on this drug for Ebola, as well as for COVID. There has been an indication that there
are elevated liver enzymes, sometimes they need to study that further.
[15:10:12]
QUEST: But just to be clear, and I get very confused with all of this. This isn't a vaccine, is it? This is a treatment for those ones that have
got it.
COHEN: Correct. This is a treatment for people once they've gotten it. It's called an antiviral. So, it is just what it sounds like. It actually
attacks the virus. It's not on the market, like no one is taking it, you know, just as one would take a regular drug.
It was made for Ebola. It didn't really work very well for Ebola. Gilead kept it around. When COVID happened, they said, let's try it for this.
QUEST: Beautifully put. Thank you. Elizabeth Cohen, senior medical correspondent.
Boeing came out with some dreadful numbers today and also warned that it would be shedding up to 16,000 employees. The most significant part of what
Boeing said today that it was reducing production and would cut 10 percent of the workforce, fifteen percent of the workforce, in the case of
commercial aviation or aircraft manufacture.
Airbus says it's burning through cash with $522 million loss and is warning of suppliers going bust and their suppliers, companies like GE, the jet
engine business has been hit. GE is cutting two billion in cost.
Clare Sebastian in New York. I'm not surprised by what any of them say, Clare, but if we look to the future, I think we've got a really good idea
from Boeing, who basically said that nothing will be back to anything like it was anytime soon.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Richard, I think that's the key takeaway from all of this. This is an industry that is essentially
sort of hunkering down for a prolonged downturn, really. This is not going to be a neat V-shaped recovery in any way.
The CEO of Boeing saying, it is going to take two to three years to get back to 2019 levels, but it will take another couple of years beyond that
to actually see a growth trend in this industry.
So, given all of that, it is impossible for these companies, be it Airbus or Boeing, the plane makers or the suppliers like GE to remain at the size
they are. That is why we're seeing job cuts from Boeing.
Today, GE and Airbus have already announced some cuts and furloughs. That's why we're seeing major production cuts from the plane makers.
Airbus has already announced it is cutting production by about a third. We've got news from Boeing today that it is slashing the 787 production in
half. That will go to seven a month in 2021. The 737 MAX production when it resumes, Richard, will only ramp back up to 31 per month next year.
Bear in mind, they had been targeting north of 50 before the coronavirus hit. So, all of this is really beating down revenues. Boeing revenues are
down to 26 percent, Airbus down from 15 percent and as I said, this is for the long haul.
QUEST: Are we seeing -- I mean, at what point, I should really say, will we start to see airlines canceling? Now, they've all said that they've had
discussions with Boeing and Airbus about delays and rescheduling, and bearing in mind that an aircraft is bought for 10 to 15 years, they surely
would be reluctant to cancel for what might be a three-year period.
SEBASTIAN: Yes, Richard, you were cutting out a little bit. But in terms of cancellations, Boeing has already seen some cancellations north of a
hundred ninety 737 MAX jets alone in the first quarter. That is actually not so bad. They still have a backlog for that plane alone of around 4,000.
Airbus so far, not really seeing much in the way of cancellations. And it's interesting, Richard, because this isn't just about smaller companies going
forward. This is going to be about smaller planes. THIS is something that both Boeing and Airbus do agree on. Both of them talked about on their
earnings call.
Airbus interestingly saying that puts it in a stronger position to compete going forward. They say because of the troubles of the 737 MAX and the fact
that they still have a strong demand for their A320 NEO, which is the major competitor to the MAX, they will be in a better position to compete going
forward.
But of course, what affects one part of the aerospace industry affects them all. Airbus has suppliers that are also affected by the MAX, and they are
worried about the ripple effect through their supply chain as well.
QUEST: Clare, thank you. Clare Sebastian.
With me now as Alexandre de Juniac, who is the head of IATA, the association that represents airlines and airlines this week, as you know,
we've heard from BA. We've heard from lots of different carriers all who say they're seeking loans and possible bailouts.
Your latest numbers really, they don't tell the full story because January and February is included and March is the key month.
But the disaster, the catastrophe facing the global airlines. We are not getting a good picture as to how bad it's going to be, aren't we,
Alexandre?
[15:15:10]
ALEXANDRE DE JUNIAC, DIRECTOR GENERAL, IATA: It is a catastrophe, you know, the traffic has dropped on average by 80 percent. So, to me, the
simple, normal passage of flying in our aircraft and almost majority of our aircraft are grounded. So, it's something which is totally unprecedented.
We have -- you know, we think that we will lose $320 billion of revenues, which is something that half of our revenues for 2020. We will burn $61
billion of cash for our second quarter of 2020.
So, we are in a disastrous situation and the reason why we're asking governments to help us.
QUEST: Listen to what Gary Kelly told me last night, the CEO of Southwest Airlines, about his results. Have a listen to what he said and we'll talk
about it in a second.
(BEGIN VIDEO CLIP)
GARY KELLY, CEO, SOUTHWEST AIRLINES: 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.
(END VIDEO CLIP)
QUEST: He talks about the losing of the money, which is what you've just been talking about, but he says we'll have to restructure, which is what
British Airways has put on the table yesterday.
So, Alexandre, are you expecting every major airline to basically downsize and restructure?
DE JUNIAC: It is highly probable that that will happen, because you know - - and it will be also probably a condition that will be imposed by states or by the financing community when they will implement a bailout plan,
because they will ask the companies you know, to be restructured, to restart in an appropriate way.
And then nobody will pay money without, you know, asking for a significant effort from the airlines. So, we will see that probably in many parts of
the world and for many, many of the airlines.
QUEST: It is now turning into a bit of a debate over how you can fly and socially distance. Now you know, we've got everything from keep the middle
seat empty to make passengers wear masks, make the staff wear masks, have temperature guns at boarding.
What do you think the future of flying will look like over the summer, if indeed there will be a summer future of flying?
DE JUNIAC: If there is a summer for flights, and there will be, even if it's a lower -- much lower level than then in 2019.
Social distancing, you know, has two major impacts on our operations, because it will neutralize, let's say the central seat on both sides of the
aircraft, it means that you cannot fly with more than two thirds of the aircraft. Load factor is below 60 percent.
And in these conditions, there is no airline which is able to fly and make money on these flights.
So, it means two things, either we cannot fly or we have to increase the price of the tickets by at least 50 to 100 percent. So, it is the end of
the cheap travel for everyone going everywhere.
The second point that is important is our initial surveys and studies about the contamination onboard, show that there is a very, very little
possibility for and risk for contamination -- really minimal.
But I think the statistic was caution -- with caution. And additionally, if you add some protective equipment such as masks, such as you know, washing
your hands with gel, if you sanitize the aircraft, if you distribute the catering with a big package, you know, a tray, a packaging, frankly, you
reduce the risk to something that we consider really low.
QUEST: Alexandre de Juniac, thank you for joining me. I appreciate it.
After the break, so you've decided you will fly and if you're in Europe or elsewhere, maybe, you've decided Greece is the place you're going to go to
at some point over the summer.
The Greece Tourism Minister is with me after the break to tell me the country is open for tourism, which begs the question that I'll be asking
him. How can you have socially distanced tourism this summer? In a moment.
(COMMERCIAL BREAK)
[15:22:50]
QUEST: Greece is hoping to welcome back tourists this summer. The Greek Tourism Minister says that it's entirely possible to, as the lockdown comes
to an end, the country can start welcoming back various guests and tourists. Some stores to soon reopen.
Now, bearing in mind, tourism makes up nearly 20 percent -- some say 25 percent of the Greek economy. It's an exceptionally important part of the
GDP and revenues because of the number of people it employs and those at the lower end of the economic scale.
Harry Theoharis is the Greek Tourism Minister. He joins me from Athens. Minister, it is good to have you with me.
You're on record as saying you hope to open tourism safely this summer. How do you do that safely?
HARRY THEOHARIS, GREEK TOURISM MINISTER: Well, by showing the kind of responsibility, showing the kind of trust building techniques that we did
during the crisis.
You know very well, Richard that Greece during the crisis showed leadership in the way of dealing both effectively and in a way that conveys the
message of responsibility to the citizens.
The same logic will apply as we gradually open up the economy, and we open up our connectivity with other countries.
QUEST: So, first of all, before we even -- we'll talk before we finish about how you're going to do it, but you're going to need common standards,
aren't you, from all destinations, A, to make sure that nobody breaks out there and there's no break up, but also, so that it is a zero sum. It is a
flat playing field.
Are you hoping Europe is going to provide that leadership for common ground?
THEOHARIS: Well, we're not just hoping, we're pushing to that effect. You know, a few days ago we had the summit of Tourism Ministers and most of the
Tourism Ministers stressed the need for common standards that will allow flying and we have seen various, unfortunately, different kinds of messages
from different countries sometimes in terms of whether it's people should consider vacationing or even flying.
We're hoping that those messages will, again, come back to the common sense, which is that the economists have to restart.
[15:25:31]
THEOHARIS: You know very well that through business is the way to create the wealth that needs to support the health systems that we so need now.
QUEST: But, you know, the first thing is you've got to get people there and that requires aircraft in most cases, and that's a whole raft of issues
you were hearing back before the break, Alexandre de Juniac.
And then once they are there, you've got to have hotels, and you've got to have restaurants.
I mean, is it realistic to expect decent numbers this summer when social distancing and anxiety will be of main concern.
THEOHARIS: Well, of course, this is an inflection point for tourism in general. In the short term, we have to find a different kind of model a
different kind of way of operating during this summer where the risks are actually heightened.
And of course, we are in constant discussion with our medical experts, the ones who have guided us through so thoroughly and so well actually, our
Prime Minister heeding to her warnings and to her suggestions and that's why we have such a flat curve.
So, we will talk to them and we are talking to them to come up with the protocols and the standards, the procedural standards, as well as the
requirements for tests for people to travel. This is the way to do it.
But of course, long term, tourism will change, you know very well, that this is such a shock that will affect people's way of traveling and their
way of vacationing, that's for sure.
QUEST: Right. But let me pick you up on this, if I may, because Greece did very well, as you say, during the crisis in flattening the curve. Largely
many would say, because you knew that you didn't want the health service to be overwhelmed.
Can you show the same determination to enforce social distancing and necessary measures to prevent an outburst when it comes to the holiday
season? Some would say it's not possible, Minister.
THEOHARIS: Well, we beg to differ. If there's something that we gained out of this crisis, Greece, has always been showing us, if you like, the black
sheep of the family. Now, Greece is the good example and this happened not just through the exceptionally good decisions of this government, but also
through this kind of responsibility that the Greek populists have shown during this episode.
And what we can expect is the same kind of responsibility from Greek hoteliers, from Greek professionals will be shown during the summer.
So, we will certainly supply the protocols that needs to be adhered. We will actually do the auditing as well, but certainly, we expect and we will
want the corporation that's required.
QUEST: Minister, we'll talk more. Absolutely, you and I will have more conversations about this as the reopening gets going, as the summer takes
place, and you never know who may end up down your way over the summer.
THEOHARIS: We will be expecting you here.
QUEST: Minister, thanks, as always for joining us. Careful what you wish for, I may end up turning up.
After the break, Lebanon's Central Bank is coming under fire as banks are literally burning.
The issue is how far did the Central Bank's policies contribute to the economic calamity? The Central Bank says they've done nothing wrong. More
from Lebanon in just a moment.
This is QUEST MEANS BUSINESS. You're very welcome.
[15:30:00]
(COMMERCIAL BREAK)
RICHARD QUEST, CNN INTERNATIONAL HOST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS coming up for you in just a moment. We'll hear
from the head of the U.S. Food Workers Union, as the United States faces a crisis in food production, with the possibility of shortage of supply and
meat products. We'll hear exactly what the union say needs to happen for the workers.
And Lebanon's Central Bank governors defending his actions. They've been deadly protests. We'll talk about that, and see exactly what's happening
and whether or not the right policy actions have been taken to stave off, not only economic collapse, but of course, to ensure that people have food
to eat, and all of that after I cut the news headlines. Because this is CNN, and on this network, the news always comes first.
A new study finds the antiretroviral drug Remdesivir shows promise as a COVID-19 treatment. Infectious disease expert Anthony Fauci says, patients
who've got the drug recovered faster than those taking a placebo. The study proves the drug can block the virus.
The British Government has revised its Coronavirus death toll to include almost 4,000 more people whose deaths have been unaccounted. Today, this
figure of 26,000 deaths and assisted care facilities and people who tested positive but were not in hospital when they died. The British Prime
Minister Boris Johnson and his partner, Carrie Symonds, have announced the birth of their baby. The boy was born in London hospital early on
Wednesday, mother and baby are doing well. (INAUDIBLE)
Lebanese Central Bank governor is defending the bank's position in terms of things like the currency peg against the dollar at a time of unrivaled
protests taking place in the cities. The governor says the dollar peg is still viable. However, the government is criticizing the policy and public
protests continue in major cities. Jomana Karadsheh reports.
JOMANA KARADSHEH, CNN INTERNATIONAL CORRESPONDENT: Richard, Lebanon is bracing for more protests this evening. These demonstrations turned into
riots over the country's financial crisis that is impacting the lives of almost the entire population of that country. Now, they're being dubbed the
"hunger protests," and we've seen the anger and the frustration of these protesters being taken out on the country's banks, the central bank and
private bank buildings have been attacked, vandalized in different cities.
[15:35:16]
On Wednesday, we heard from the long-serving central bank governor Riad Salame who have this long one-hour televised address in which he was
responding to accusations and criticism that he has come under in recent days, namely by the country's Prime Minister Hassan Diab. And the Prime
Minister a few days ago accused Salame of what he described as intentional ambiguity, lack of transparency, and saying that the central bank should be
audited, raising questions about $5.11 billion U.S. dollars that he says exited the cash-strapped country.
Now, we heard from Salame today, denying any wrongdoing. And he said that the central bank doesn't take any unilateral decisions. It coordinates with
the government. And he said when it comes to that money, that was $5.9 billion U.S. dollars. And the majority of that was used to cover loans, and
the rest was withdrawn locally. Now, when it comes to the protesters, people that we've spoken to today say they could not care less about what
their country's officials have to say, and that they're determined to stay out on the streets, Richard.
QUEST: Jomana reporting there. A story we'll follow very closely, of course, as it continues. Now, after the break, two sides of the food crisis
that seems to be hitting the United States. On the one side, we'll talk to the unions for the meat workers about what they want to be able to keep the
factories open. But then, you have the CEO of Impossible Foods will be with me to tell me why plant-based proteins and fake meat, so to speak, is doing
so well. All of that after the break.
(COMMERCIAL BREAK)
QUEST: America's largest just meatpacking union is calling upon the White House to ensure worker protections are boosted. It follows the President,
of course, signing an executive order, ordering meat plants to open and to stay open during the pandemic. The mayor of Sioux Falls which has several
meatpacking plants in the area and the district, says, safety is key when opening up.
[15:40:01]
(BEGIN VIDEO CLIP)
PAUL TENHAKEN, MAYOR OF SIOUX FALLS: The question they're going to have to answer is can they, in good conscience, feel like they can, open protect
those employees and keep them safe? You know, for us in Sioux Falls, Smithfield Foods is our fourth largest employer. I mean, they have 3700
employees. My wife is a -- is a daughter of a hog farmer. I understand what's happening, having this plant shut down, what it's doing to the pork
industry. And so, I want them open. But we're still trying to figure out what this means from the President's office yesterday.
(END VIDEO CLIP)
QUEST: Now, Marc Perrone is the President of the United Food and Commercial Workers. He joins me from Washington via Skype. So, if we accept that
nobody wishes to put an employee's at unnecessary risk, what do you want the companies to do? Bearing in mind, the President has now ordered them to
open.
MARC PERRONE, PRESIDENT, UNITED FOOD & COMMERCIAL WORKERS (via Skype): Well, I understand the President ordered them to open, but that may or may
not be possible. The fact of the matter is, is that in one particular plant that we have, 20 percent of the workers are already out and tested
positive. And therefore, they can't be so readily replaced, which means that the plant is not sure when it can reopen, even though the President
may have ordered under the Defense Production Act, that they remain open.
Here's what we need. We need security measures and safety measures that are enforceable to push -- to make sure that the workers have adequate layered
personal protection equipment, that there is testing that takes place on a daily basis, so that you can track the disease inside the plant and make
sure that it maintains its capabilities or remaining open. In addition, we want to make there's full sick leave pay for workers if, in fact, they
contract the virus, and they have to leave. Those are the very minimum things that need to be done. There needs to be uniformity that all and
plants operate under the same principle.
QUEST: Right. OK. The Tyson Foods has come out today with a variety of proposals, detailed proposals, which seems to meet a lot of those criteria,
such as sick pay, and the like. But the fundamental suggestion seems to be from you that the manufacturers until now have put profits and production
before safety. Is that what you're saying?
PERRONE: Well, I think that that's a little bit inaccurate in the following respects. I think initially, because the federal response on personal
protection equipment was lacking. In other words, they did not enforce the Defense Production Act that produce the PPE that was necessary for the
suppliers in the meat industry to provide personal protection for the workers. I think that that was one problem. The second problem was how our
government dealt with testing. And it's still a challenge today. And I think the third issue was, initially, I think that the they didn't think
that it had gotten that deeply into the rural part of the United States. And they reacted a little bit slow.
QUEST: Right. So, is it your view that there will be a -- pardon, you know, the casualness of the phrase, a meat crisis in the United States, a
shortage of meat -- a shortage of meat in the United states if they do not solve this now.
PERRONE: I think because of the way the system is built on efficiencies, there will in fact, be moments in time where we have shortages of certain
cuts of meat, or certain types of protein, just primarily because it is a national business, it has a national market, if ultimately if 10 or 20
percent of the market is closed because of the illness in the plant, and its inability to have workers inside that plant performing their functions,
or if they have to slow the line down in order to -- in order to have enough people to do those cuts. It will, in fact, create somewhat of a meat
shortage at the moment. Is it a total food supply issue? The answer to that is no. It is a -- it is a supply-chain issue because of the efficiencies
that are built into the supply chain.
[15:45:06]
QUEST: Marc, I appreciate your time. Thank you, sir. Busy times for you, and I'm glad you took -- you took time to talk to us today. Thank you. Now,
whilst --
PERRONE: Richard, thank you very --
QUEST: -- real meat might have some difficulties, those prolonged protein- based meats are seeing a great boost in demand. Impossible Foods is in 1,000 grocery stores at the moment and seeing sales skyrocket. David Lee is
the CFO of Impossible. He joins me from San Mateo in California via Skype. And we can't just say that your boost in sales is just because meat is more
difficult or to get hold of, or is that the reason? I mean, what do you attribute a certain boost in sales?
DAVID LEE, CFO, IMPOSSIBLE FOODS (via Skype): Well, 95 percent of the customers of Impossible Foods are self-avowed hardcore meat eaters, so we
certainly share the same end user. But the way we make our product, the benefits to the environment, the benefits to your health vastly differ from
the industry you speak of. And I think meat eaters have long been waiting for craveable delicious meat that doesn't have the same compromises as the
incumbent industry.
QUEST: Well, yes, I get that. But Impossible -- and your arrival beyond were around before this, what do you think has shifted during COVID that
might be -- that might be attributing to increase sales?
LEE: Well, it's interesting, just last fall in September, we began to scratch the surface of retail. And as you recall, we were only in a couple
of hundred locations. We're now at 5x the number of locations, at nearly 1,000 grocers because that's where the meat eater is going today. We have
seen a shift in consumption away from some foods service and towards the home chef, as everyone is now sheltering in place. And we've been trying to
adjust to ensure we meet the unprecedented demand that has been created for our product now in grocery stores.
QUEST: Are you -- are you able to meet that demand? Have you found demand outstripping your ability to supply?
LEE: Well, we've been under this unprecedented demands well before the current crisis, and back in the fall, we began to expand continuously our
capacity, funded by the 500 million we raised in March that was initiated back in Q4 to investing capacity in R&D and new products. So, we've been
preparing for quite a long time for a nationwide presence in retail. We've just sped it up.
QUEST: But how difficult has it been for you during this crisis, to get your own supply chain, your own raw material that makes the plant protein,
so that you can actually continue at these elevated levels?
LEE: To date, we have not seen any interruption in our increased level of supply. Remember, Richard, while we share the end consumer, while 95
percent of our consumers are meat eaters, the way we make our product is incredibly different. The meat industry has to grow an animal, transport
it, slaughter it, process it, turn it into the meat it serves. We bypass the animal, we go straight to the plants, and while we are very concerned
about the current crisis and focus on safety, we have a vastly different way to make our product that frankly is far more efficient for us and far
better for the planet.
QUEST: Good to see you, sir. David Lee --
LEE: Good to see you.
QUEST: -- joining me from California. Thank you, sir. Our "VOICE OF THE CRISIS" after the break, a different one tonight. The band and the artists
and the musicians that are doing online concerts to make up for the gigs that have been canceled. You'll hear them and you'll meet them after the
break. Here they are.
(COMMERCIAL BREAK)
[15:50:00]
QUEST: As you may have seen just before the break, our line to South Africa went a bit funny. And we've not been able to get the musicians back. But we
will have them back tomorrow for our "VOICE OF THE CRISIS" and said finally tonight, colleges and universities around the world are going to have their
own unique problems, convincing students that it's safe to return.
(BEGIN VIDEOTAPE)
JENNY BUYENS, EDUCATIONAL CONSULTANT: It's going to be a bloodbath to see which colleges survives this.
TERRY HARTLE, SENIOR VICE PRESIDENT, THE AMERICAN COUNCIL ON EDUCATION: Colleges and universities are scrambling.
MARK SCHLISSEL, PRESIDENT, UNIVERSITY OF MICHIGAN: The level of disruption to not just one university but all universities.
UNIDENTIFIED MALE: There's a financial crunch coming to college campuses that school presidents like the University of Michigan's Mark Schlissel
have not seen in their lifetimes.
SCHLISSEL: It could be analogized with Pearl Harbor and the start of the Second World War, which came on much more gradually than the COVID-19
pandemic did.
UNIDENTIFIED MALE: The quarantine is leaving school finances decimated.
HARTLE: Every college and university in the country is facing a cash flow crisis. First, it's the need to refund money to students, particularly for
room and board.
UNIDENTIFIED MALE: Most schools in America also heavily rely on non-tuition revenue. Room and board is one stream. But colleges turn campus into a
moneymaker by renting out space, hosting events, and selling tickets to sports games.
HARTLE: That works out to $50 billion a year for colleges and universities. And then has just come to a complete stop.
UNIDENTIFIED MALE: The worst news for school finances hasn't arrived yet.
HARTLE: The big revenue boost for college universities will be in the fall. But what happens if 20 percent of your students don't arrive?
UNIDENTIFIED MALE: A significant number of students are rethinking their plans for next semester. According to surveys conducted by higher education
groups, that could mean tough choices are coming. Some schools have already announced layoffs, pay cuts for employees and potentially canceling big
construction projects. Johns Hopkins University is preparing for losses of more than $100 million this year. Other schools predict bigger losses. The
federal government passed the CARES Act to prop up the country as it reeled from the pandemic. $14 billion went to colleges and universities.
HARTLE: Of that amount, roughly half will go to students. We estimate the total cost of room and board refunds alone at $8 billion. But it is not
going to provide money to save institutions over the long term.
UNIDENTIFIED MALE: There's not really a debate about if colleges will reopen this fall. But a question of how. Like Harvard told students this
week.
HARTLE: College dormitories can be places where infections spread very quickly.
BUYENS: Social distancing is going to be a huge impact on these students, whether it's in the dorm, in the cafeterias, and in sporting event.
[15:55:03]
SCHLISSEL: We can have smaller seminars or teaching labs or smaller groups and larger rooms.
UNIDENTIFIED MALE: Schools have to convince students that they can create a safe environment for them.
UNIDENTIFIED MALE: If a school is like, look, we're going to reopen campus, would you go?
HENRY TIEDER, STUDENT: I think it depends on really, you know what other people are saying like government agencies are saying but, you know, right
now within the next month or two, no, I wouldn't feel safe.
(END VIDEOTAPE)
QUEST: Right, there we go. So, final look at the markets for you tonight, and how they're trading. Good day on the markets overall. We have a gain of
2.22, 2-1/4, slightly just off the top of the day. But we know the reasons why. And we know exactly what's been happening, so the market is up pure
simply on the back of a Coronavirus treatment, and the possibility of an early vaccine, and that's given a boost across the board. Finally, a
"PROFITABLE MOMENT." We don't have too many of those at the moment. But it does seem worthwhile as we head towards that.
We heard tonight from Alexander (INAUDIBLE) about the problems facing airlines. Well, you know, we talk a lot about airlines. But the truth is,
the airlines are going to be in a catastrophic situation for the foreseeable future. And that was borne out by what we heard from Boeing and
Airbus, both of which are not expecting any major increases, and certainly we'll see lots of delivery delays and sales to being canceled. And that's
QUEST MEANS BUSINESS for tonight, I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable. I promise you the
musicians from South Africa tomorrow.
(COMMERCIAL BREAK)
ANNOUNCER: This is CNN Breaking News.
JAKE TAPPER, CNN HOST: Welcome to THE LEAD, I'm Jake Tapper. The nation just now surpassing 60,000 deaths from Coronavirus. A number once projected
the United States would not reach until August. We are still in April. Right now, the number of lives lost in the U.S. from Coronavirus is 60,207
to be precise. The death toll this time a month ago was only 2,425. But we do have a glimmer of good news for you this afternoon.
