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Quest Means Business
U.S.-China Trade Tensions Rise Over Computer Chip Access; White House Predicts Vaccine This Year, Experts Skeptical; Sanofi CEO Summoned to Elysee, Says U.S. Gets Vaccine Priority; Trump Formally Announce Operation Warp Speed; COVID-19 Causes 25 Percent Of Deaths In Some U.K. Care Homes; Russia Reports 10,000+ New Cases In 24 Hours. Aired 3-4p ET
Aired May 15, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:00]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR: A record drop for U.S. retail sales as the country looks to get reopening.
And the CEO of French drug maker, Sanofi gets caught in a transatlantic row over access to a vaccine.
Live from the world's financial capital in New York City. It's Friday, May 15th. I'm Julia Chatterley, in for Richard Quest, and this is QUEST MEANS
BUSINESS.
Good evening once again and welcome to the show. Great to be with you tonight.
Even a pandemic can't prevent a flare up in the U.S.-China trade war, the Trump administration moving to restrict Huawei access to chip suppliers.
Huawei has long been a flashpoint in the broader trade war news.
This latest escalation though pushed down stocks earlier in the session. The Dow, as you can see has clawed its way back to unchanged, but companies
like Boeing, Apple and Intel could be hurt if Beijing strikes back and those stocks remain solidly in the red.
A tweet from the editor-in-chief of China's "Global Times" suggest those companies may have reason to worry. He says if the situation escalates
further, China could quote, "activate the unreliable entity list to restrict or investigate U.S. companies such as Qualcomm, Cisco and Apple,
and suspend the purchase of Boeing airplanes."
"The Global Times" has a history of foreshadowing the Chinese government's moves. In the meantime, relations between Washington and Beijing have
deteriorated as the Trump administration pins the blame for the pandemic on China.
Although President Trump's top trade adviser told CNN he is not even thinking about the trade war right now, though he still have plenty of
criticism for Beijing.
(BEGIN VIDEO CLIP)
PETER NAVARRO, DIRECTOR OF THE OFFICE OF TRADE AND MANUFACTURING POLICY: China created that virus and they've inflicted trillions of dollars of
damage on our economy and killed tens of thousands of Americans and now they want to steal our vaccines? I mean, come on.
(END VIDEO CLIP)
CHATTERLEY: Peter Navarro there referring to fresh reports that China is launching cyberattacks to steal coronavirus vaccine and treatment research.
All right, let's get some context on this. Joining us now, Max Baucus is former U.S. senator and former U.S. Ambassador to China. Ambassador,
fantastic to have you with us. What do you make of these latest developments and the rhetoric that we see coming from the White House once
again?
MAX BAUCUS FORMER U.S. AMBASSADOR TO CHINA: Well, there's short term and there's long term consideration here. Short term, obviously, an election
coming up and China is not popular among American people.
In fact, two thirds of Americans have an unfavorable view today of China. Add to that, there is a bit of a contest between President Trump and
probably Vice President Joe Biden, who is tougher on China and these actions the administration is taking, let's say the recent Huawei rule give
Trump a talking point that he is really tough on China thinking that might help him with the election and especially with his base.
Frankly, longer term, I think it foreshadows some difficulties, because we have to remember that China is not going away. China will always be there.
China's population is four times the size of ours. Its economy is going to be larger than ours in not too many years. We have to find a way to work
with China. There's no getting around that.
And so after the election, I hope there's a kind of a reset. We have a pause button that is pushed and we can figure out okay, how can we manage
this relationship?
Now it is true that we, Americans have some concerns about -- and legitimate concerns about our National Security. It's a very, very
difficult issue to resolve that has to be addressed.
CHATTERLEY: So, how should it -- because it's not just Americans that are frustrated and concerned about information sharing in the light of this
virus, you've picked on a number of issues. There is not a level playing field in dealing with China here, even on an economic basis.
How do we level the playing field? And how do we handle China short term and long term because so far, what's been done has not worked?
BAUCUS: Well, and frankly, some of the things -- some actions the United States has taken have worked. I can give you some examples, particularly
actions the United States took in the South China Sea to prevent China from going any farther.
But the bottom line, we have to, as a country, hopefully be the world's leader. We could exercise more power if we do exercise leadership. We, as a
country should sit down and develop a strategic longer-term plan toward China. We don't have one today.
America is very ad hoc, very reactive to what China may do or not do. We need a longer-term strategic plan. How do we deal with China just as China
has with the United States, I might add, and we develop the points, then we should say to China privately, here's what we can live with. Here's what we
cannot live with.
[15:05:10]
BAUCUS: And if you cross the line, you will face immense repercussions, we won't tell you what they are, but it will ruin the day you made those
decisions.
You have to basically get China's respect, that's the only way I know we could do it because China in certain sense is a bully. And you've got to
stand up firmly, confidently, so that you're not speaking down to China, not criticizing China, but just standing up yourself. That's the way you
get respect from China.
CHATTERLEY: It's interesting you say that because the President's treatment of China is almost like you meet one bully by being a bully yourself. Your
idea for a longer-term plan of how to tackle China, I think we both agree is not going to happen between now and a presidential election.
How much worse could this relationship get over the coming months? To your point, there's plenty of frustration.
BAUCUS: It could get to even worse or dangerous point. All of these actions we're taking, well, some of them will push China to be much more self-
sufficient, will push China to say, whoa, why are we staying with United States? But you know, it's not worth it.
Our economies really aren't tied very much and that's very difficult to sever both for United States and for China. But long term, China could very
well think, you know, just fed up with all this rhetoric in the U.S. We don't know what's coming next.
So, let's develop our ties with other countries around the world. Let's see what they could do only in Asia and Africa and South America, but even more
importantly, in Europe.
So it's just that -- those are actions China could well take if we keep pushing them away.
CHATTERLEY: Yes, it's going to be interesting to see how this plays out during the pandemic in particular. It's a global frustration at this
moment. Ambassador, fantastic to have you with us.
Ambassador Max Baucus there.
BAUCUS: You bet, yes.
CHATTERLEY: Stay safe, sir.
BAUCUS: Thank you.
CHATTERLEY: All right, Donald Trump predicting the U.S. will have a coronavirus vaccine by the end of this year. He is calling a renewed
effort, Operation Warp Speed and appointing a former GSK CEO to help lead the charge.
Health experts caution, the President's timeline is highly ambitious. President Trump promised the U.S. would share any vaccine with the rest of
the world.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Whoever gets it is going to be very proud to give it and develop it. They have developed it and we'll
see what happens.
We've got countries that are allies that are -- we have some countries, frankly, that aren't allies, where we're working very closely together.
So, we're working together with many different countries. And again, we have no ego. We have no ego. Whoever gets it, we think it's great. We're
going to work with them. They're going to work with us.
Likewise, if we get it we're going to be working with them.
(END VIDEO CLIP)
CHATTERLEY: Elizabeth Cohen is CNN's senior medical correspondent and joins us now. Elizabeth, great to have with us, because I want to be very precise
about what the President was asked by our own Kaitlan Collins today, and that was whether we'd have a fully approved vaccine by yearend, and the
President said we would.
Talk to me about the probability and the likelihood and the ability of research analysts to get to that point by yearend.
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: So, Julia, let's go back to this past January when Tony Fauci said -- Dr. Anthony Fauci -- at the
NIH said, he hoped that we would have a vaccine within the next year to 18 months.
So, by the end of this year is -- it's on the sooner and obviously -- of that span that Dr. Fauci gave, but it is within that span, and there's very
few people in the world who know more about vaccines than Tony Fauci. So, we're going to put it right there.
Now, that year to 18 months, many other experts have said, possible, but improbable. It just takes a while to do these vaccine trials.
I thought, you know, you have to decide how much weight you're going to put into what President Trump says. He has been wrong about several things
during this pandemic. He thought hydroxychloroquine was a great idea. That didn't turn out so well.
So, let's talk -- let's think about the person who was at that press conference who does know a lot about vaccines and that is Dr. Slaoui. He is
now the head of the vaccine effort and what he said is that he had more confidence than ever that we could deliver several hundred million doses of
the vaccine by the end of the year.
But that is different from having a fully approved, ready to go, let's start vaccinating the American public or the public in the world by then.
That is a different thing saying we'll have the doses ready is different than saying we'll have an approved vaccine ready to go.
CHATTERLEY: Okay, so, yes, to your point, then, you can be vaccinating certain people, perhaps healthcare workers, for example, with a
manufacturing at risk vaccine, but that's very different from having something that you can have the general public using. Is that the key here?
COHEN: Well, well the manufacturing and risk is a separate thing. I mean, you can start manufacturing really pretty much anytime you want.
[15:10:09]
COHEN: You can have a warehouse full of vaccine, that doesn't mean anything. All it means is you have the vaccine. It doesn't mean that it's
been fully researched and fully studied and that we know that it's safe and effective.
But to your point, Julia, about healthcare workers. What I've heard some people talk about is, you know, while we're doing these large scale
clinical trials, which is thousands and thousands of people, maybe we'll invite healthcare workers to come in and get it, too, because they're at
such high risk that maybe they'd be willing to be vaccinated early before the vaccine is proven.
Remember before a vaccine is actually proven to be safe and effective. You don't know that it works, and you don't know that it's safe, but healthcare
workers might be willing to take that risk because they are so close literally, to that virus.
So, there is a difference between doing trials on thousands of people maybe or maybe not including healthcare workers and saying alright America, all
right world, go to your doctor and you can get the vaccine. Those are two different things.
CHATTERLEY: Yes, we are just piling up the hurdles and jumping them all really fast in our efforts to get to a point where we can try and do
something to address this them. There's a lot of hope behind these. I hope we're right.
Elizabeth Cohen in Atlanta, great to have you with us, as always, thank you.
COHEN: Thank you.
CHATTERLEY: Political pressure is mounting in the C-suites of Pharma executives around the world.
The CEO of France's Sanofi has been summoned to a meeting with Emmanuel Macron. In an interview, Paul Hudson appeared to suggest that the firm
would prioritize the United States if it finds a vaccine because the U.S. government provided the initial funding.
Cyril Vanier is in Paris with the details.
(BEGIN VIDEOTAPE)
CYRIL VANIER, CNN CORRESPONDENT: Sanofi tried to deescalate its row with the French government saying it had been misinterpreted.
The row started earlier this week when the CEO of Sanofi, Paul Hudson, was quoted as saying that the United States would be first in line to preorder
any potential coronavirus vaccine that Sanofi might succeed in developing.
As you can imagine, a French pharmaceutical giant saying it will prioritize the U.S. markets caused a furor here in France and President Emmanuel
Macron summoned the Sanofi CEO, Mr. Hudson on Tuesday. They will be meeting at the Elysee Palace.
Mr. Macron said that the coronavirus vaccine should be a common good available to all regardless of financial considerations.
But even though Sanofi has softened its rhetoric, the substance of its argument remains the same. They argue that developing and fast tracking a
coronavirus vaccine is a risky and financially costly endeavor and they want countries to share the financial risks.
Now the U.S. has done that by putting tens of millions of dollars on the table earlier this year to help Sanofi with production costs. Europe and
France for the moment have not.
Cyril Vanier, CNN, Paris.
(END VIDEOTAPE)
CHATTERLEY: All right, we're going to take a quick break here, but U.S. retail sales crushed by coronavirus in April. The sector collapsing at a
historic rate.
The question is what does recovery look like? We'll discuss after this.
(COMMERCIAL BREAK)
[15:15:50]
CHATTERLEY: Welcome back to the show. Obviously, U.S. retail sales plunging at a record rate as I mentioned earlier on in the show. I want to bring in
Randall Kroszner, now who is a former U.S. Federal Reserve governor to talk about what recovery looks like.
Randy, great to have you on the show with us. I just mentioned the historic plunge that we've seen. It reflects an economy that has seen large swathes
in shutdown.
The problem is, emphasizing reopening isn't enough. The world has changed. Consumer behavior has changed clearly in light of the virus. What does
recovery look like?
RANDALL KROSZNER, FORMER U.S. FEDERAL RESERVE GOVERNOR: I think that's a very important point that you just made. The meteor has hit. Some of the
dinosaurs have become extinct. And so it's going to be very difficult to just go back to the world as it was.
I think we have to realize that consumer behavior is going to be different. The way production takes place is going to be different. The way people do
or don't go into the office or go into downtown is going to be different.
And so recovery is going to be challenging because we can't just go back to what things looked like in February or March. There's going to be a lot of
change that will occur.
CHATTERLEY: We have to see policy reflect that reality in some way, too, initially with the trillions of dollars of stimulus, it was about
stabilizing the situation.
But how does it need to adjust for that new reality? Because we do have to accept the world is different.
KROSZNER: Yes, and I think it was important to give the support out at first and a lot of the support was around trying to preserve jobs.
But now I think it has to pivot to providing support to workers as they transition to other types of employment. The waiters, the waitresses, so
many people who were employed before will not be able to be employed there, no matter how much support is provided.
And it would be good to move that transition along as quickly as possible, people retrain, I think that's where we've got to focus on next.
CHATTERLEY: All of these things take time. And to your point, a lot of the efforts that were made were about preserving jobs, and yet we've got 36
million people signing on for first time benefits. How long are you talking about this taking?
KROSZNER: This is not something that's just going to be a few months. I think it is something that will take years to come back down.
Now, the unemployment rate skyrocketed. It will come down, I think significantly, but it will still stay at very high levels for a while.
So I think we're looking at least a year, if not two years before unemployment rate starts to come back to the closer to normal levels.
There's going to be a lot -- there are going to be a lot of bankruptcies. There's going to be a lot of just fundamental change in the structure of
production of the economy. And so I think we have to be prepared for that.
And policy has to think in those terms, rather than just trying to get us back to the world of the dinosaurs and they are no longer with us.
CHATTERLEY: I mean, you're talking about severe challenges some of that, to Jay Powell's point this week, Congress can tackle.
But what about the role, the ongoing role of the Federal Reserve here? They've been very clear that they don't want to see tools used like
negative interest rates, for example, but the conversation is certainly going that way, and that we see the United States follow Europe. What's
your view? How likely is that?
KROSZNER: I think that's exactly why Jay Powell gave that speech saying the fiscal side needs to do more because he doesn't want too much pressure
being put on the monetary policy side.
There's only so much that monetary policy can do and they don't want to be pushed into a negative interest rate situation. I think they hopefully will
be able to avoid that.
But if we get into a deflation situation, it may be that they can't avoid something like that. They're going to try. They're going to hope that on
the fiscal side, providing the support can help to avoid that, but it's going to be very challenging over the next couple of years.
[15:20:05]
CHATTERLEY: How much more money is required, Randy in your mind? We've seen -- what -- $3 trillion of fiscal stimulus, how much more do you think is
required?
KROSZNER: We still don't quite know the extent of the virus because I think that the health impacts, I think it really depends on that and so I would
spend a lot of resources on trying to gather data and test.
We did the lockdown because we didn't know. We were scared and we didn't have a lot of information, so we locked everything down.
If you have a lot of data and more testing, you can then do future interventions that will be much more focused. If we can do that, then we
don't need as many trillions of dollars.
If we don't have the information about where the disease is and how it's building, then we have broader lockdowns and we're going to need trillions.
So, I think it's really valuable to spend a few billion dollars on testing and getting the data is that could save trillions down the line and save a
lot of jobs.
CHATTERLEY: Yes, the best value investment right now, investing in testing and tracing technology. Thank you so much for joining us on the show. Stay
safe, sir. Randy Kroszner there, speaking.
KROSZNER: You, too. Thank you so much.
CHATTERLEY: Thank you. All right let's move on. Now, to a look at how ordinary lives have been upended by the pandemic and the economic
uncertainty that it has created.
Tonight's voice of the crisis is getting people out of the house and onto the roads.
Pearson Cycles in England is considered the oldest bike business in the world. It was founded in 1860. It's been offering free services to N.H.S.
workers and its shop in London and has recently we opened its doors at their store in Sutton.
Guy Pearson is the fifth generation to run the family business and he joins us now from London via Skype.
Guy, great to have you with us. Talk me through what it's been like to continue to operate, but to provide support in terms of bike services to
key workers.
GUY PEARSON, CO-DIRECTOR, PEARSON CYCLES: Yes, well, it has been incredibly busy here. From the very beginning of the lockdown, we have noticed a huge
upturn in sales and servicing that we were providing.
Many of the early ones were the N.H.S. workers, which we were very keen to keep on the road because they had to avoid public transport and other ways
to get into work. So, they were taking to their bikes, and we did a number of free services for N.H.S. workers to get them back on the road.
And we have noticed a massive upturn in sales of bikes just for the normal person who wants to get out and do some exercise.
CHATTERLEY: Do you think that's sustained, Guy because we're in a period now where at least in the U.K., people are getting back to work, but we're
concerned about the safety of public transport. If people -- if everybody tries to take their car, it's going to be gridlock.
This is perhaps a very old form of transport, but it's something that suddenly people realize could be pretty potent and useful at this moment in
time for many reasons.
PEARSON: Well, it is and there's, you know, so many benefits to cycling as a means of transport and a means of exercise, transporting and you can
cycle and socially distance at the same time, and it's safer than going on a tube or a bus or train.
So, why would you not do it? It seems to be the perfect antidote to a crisis like this.
In the past, there's been many crises in this country that have resulted in an upturn in sales to cycling. We had bombings in London a few years ago,
and other difficulties like tube strikes and transport strikes.
And all of those things have produced an upturn in sales and an upturn in interest in the form of cycling, and whether that's just leisure cycling or
as a commuting or as commuting or just for getting kids on bikes, that sort of thing, it has been absolutely incredible here and we've really enjoyed
it. And we've been -- we feel we are very privileged to have been allowed to be open in the first instance.
When we heard the news that there was a lockdown, there were many shops and businesses that had to close immediately.
Bicycle shops were on that list that was included, pharmacies and supermarkets and they're on third or fourth on the list with bike shops and
we felt so privileged to be allowed to open, continue trading, continue helping people get out on their bikes, get fit, get to work if they needed
to, and just to promote the sport and activity of cycling.
CHATTERLEY: What about your workers, Guy, very quickly because you did close the Sutton store. You're now reopening what's happened with your
workers and have you brought them all back?
[15:25:01]
PEARSON: They have partially come back. So, the Sutton store had a few difficulties in that one of the workers was -- he was going to be ill. So
we furloughed, quite a few of the workers down there.
The shop had not been particularly busy even in the lead up to the lockdown. So, we decided to close it. However, we have reopened it. It
opened on Tuesday this week, and it has been very busy since opening.
So, we are very pleased to see that the few staff who have come back have been occupied in just helping people get out on their bikes, fix their
bikes, and just promoting the activity of cycling again.
CHATTERLEY: Fantastic. Guy Pearson, great to hear from you. I've never even heard of the store, actually. So, the next time I'm back in London, fingers
crossed sooner or later, I'll come and look you up. Great to see you and thank you for your help for N.H.S. workers, too.
PEARSON: Thank you.
CHATTERLEY: Guy Pearson there.
PEARSON: Thank you very much.
CHATTERLEY: Thank you. All right, another break.
The Trump administration wants to reduce reliance on overseas production facilities for crucial electronics, so it's working with leading chip
makers to keep more manufacturing in the United States.
I'll speak to the CEO of Intel to understand what it means for them, next.
(COMMERCIAL BREAK)
CHATTERLEY: Hello, I'm Julia Chatterley. There is more QUEST MEANS BUSINESS in a moment when I'll be speaking to the CEO of Intel and his company as it
prepares for life post pandemic.
And Germany's economy falling into recession and the worst is yet to come.
But before that, this is CNN and on this network, the facts always come first.
U.S. President Donald Trump formally announced his initiative to fast track a vaccine for COVID-19 by the end of the year.
The White House is calling it Operation Warp Speed. They've tapped a former GlaxoSmithKline executive and four star Army General to lead the effort.
[15:30:12]
But the President also said whether without a vaccine coronavirus will go away at some point. The British government says COVID-19 has caused more
than a fourth of recent care home deaths in England and Wales. That analysis covers deaths in March and April. In response to U.K. health
minister is pledging to test everyone living and working in English care homes by early June.
Russia is reporting more than 10,000 new cases of COVID-19 in the past 24 hours. It ranked second in the world only behind the United States and the
number of confirmed infections. Moscow began offering free mass antibody testing on Friday.
Returning to our top story now, a new shot fired in the U.S.-China trade war. The Trump administration is moving to block Huawei from global chip
supplies developed with U.S. technology. It's also trying to convince leading chip makers to expand production on American soil. An Intel
Corporation is a big part of that effort. And I'm pleased to say we're joined now by Intel CEO, Bob Swan.
Bob, fantastic to have you with us. You're actually the largest semiconductor manufacturer in the world, you obviously have a huge
manufacturing footprint in the United States, but you also have a huge global supply chain too. What does more manufacturing in the United States
mean to you and will that global footprint shrink as a result?
BOB SWAN, CHIEF EXECUTIVE OFFICER, INTEL CORPORATION: Well, it's wonderful to be with you. First, as you mentioned, Intel today is the largest
semiconductor company in the world. And we also have, by a longshot, the largest manufacturing presence here in the U.S. with significant presence
in Arizona and Oregon and New Mexico. And over the last several years, we've grown quite a bit.
We've added almost $15 billion in revenue to the company over the last four years or so. And as such, we continue to make significant investments here.
As a company, we spend roughly 25 to $30 billion annually on R&D, and putting a global footprint in place to manufacture product in the lion's
share of that R&D, over half of that capital and over half of our employees are here in the U.S. So we have a big presence here now, and we expect that
presence to continue to grow.
CHATTERLEY: But you are and have confirmed that you're talking with the U.S. government, you're -- as you point out perfectly pleased to lead the
effort if we want to see more U.S. manufacturing-based technology -- in chips, technology or microelectronics. Are you prepared to make this kind
of technology for your competitors or would this require some kind of consortium?
SWAN: Well, first, we are prepared to make chips, advanced chips here in the U.S. for other players in the industry. Whether it'd be the U.S.
government or whether it'd be other partners and competitors. We have not done that in the past, we primarily design chips, and make chips here in
the U.S. for our own needs. But given the increasing needs a desire to increase our manufacturing footprint here in the U.S.
And we do believe we're uniquely qualified to meet some of the requirements of the U.S. government and the industry, we are prepared to make the
investments required to build a foundry here in the U.S.
CHATTERLEY: Wow. And do you agree therefore, given all the focus that we've seen particularly in the last several weeks on supply chains that less
reliance on China for these kind of technologies is the right move, is the good move?
SWAN: Well, to a certain extent, we design and build our own technology today. And then we ship that those products across the world, we have very
broad, global footprint. We make money all over the world. And when we make that money still predominantly today, we bring it back here to the U.S. to
again invest in innovation and new products and to invest in fabs to meet the growing demand of our much larger market that we serve today.
So, our presence is predominantly here in terms of R&D and manufacturing. However, our markets are global and we want to be able to continue to meet
the needs of our global customers.
CHATTERLEY: Yes. It's a delicate balancing act. Bob, I want to move on and talk about your corporate social responsibility announcement.
[15:35:02]
CHATTERLEY: you will be making goals for 2030 but I can't pretend that I wasn't wowed by what you've achieved as of 2020 in terms of pay equality or
focus on the environment, on diversity in particular, but I do want to hone in on what you said about 2030 and the fact that you don't want to be
blindsided, caught off guard by what we've seen over the past couple of months in a pandemic and therefore, to leverage the technology that we have
to strengthen our position and our standing going forward. How does that work in practice?
SWAN: It's interesting. Well, as you mentioned, we, we issued our CSR report yesterday and it gave us the opportunity and the change from the
last decade to this decade is one, highlight the accomplishments whether it's 71 percent green energy utilization around the world and 100 percent
here in the U.S. Secondly, our company is 70 percent larger than when we entered the decade, however, we use 38 percent less water.
From a diversity standpoint which has been very important for our company, we have full U.S. representation in our labor force here in the U.S. and
global pay equity. So, in so many ways, we're very proud as a company about the accomplishments we've made. But at the same time when we think about
our purpose, which is create world changing technologies that enrich the lives of every person on earth.
And some of the fundamental societal challenges that we have, we're looking as we set these goals for 2030. How do we bring that purpose to life on
things like carbon neutrality, on things like continuing to move forward on diversity and inclusion and things like how do we use technology for good,
both in terms of the health and welfare of the society in which we operate. So, we're very proud from a CSR standpoint about our accomplishments.
But in so many ways we see this next decade as an opportunity to really work together, with partners, with customers, with competitors, with public
enterprises, with private enterprises, to really accept a shared responsibility to step up the role we play, not just in delivering products
and solutions but in terms of making the world a better place.
CHATTERLEY: Yes. Trust in technology, critically essential at this moment too. Very quickly, Bob, just talk to me about the future of work. We've
gone to a virtual economy in the space of five weeks and perhaps something that would have ordinarily taken years. What does the future of work look
like? And do you think at some point in the future you'll ever have the same quantity of work in the office, perhaps that you had pre pandemic?
SWAN: That's a great question. And I don't pretend to know all the answers, but I know there'll be some commonality in terms of how we operate. And
somewhere to when we came into the pandemic and, you know, we started first and foremost with how do we ensure the safety and welfare of our employees.
And that will always be first and foremost for our company. But secondly, we play a huge role in the technology that's deployed into the global
infrastructure.
And as we've seen, in this pandemic, the essential use of the computer is so important, we've had to not only protect the health and welfare of our
employees, but also our customers are counting on us more than ever, and we don't expect that to change. In third in times of crisis, and in times of
normalcy, if you will, we always play an important role in the communities in which we serve.
So those three things, those three priorities of welfare of our employees, delivering for our customers and contributing to communities, that will
stay the same. How we do it going forward is going to change both in terms of how our products are consumed, but also in how we develop those products
and we'll use our purpose, create world changing technologies to enrich the lives of every person on earth.
And those three fundamental priorities as we come out of this pandemic and going forward. I do believe that in doing that, that we'll have -- we'll be
much more flexible in the rules we use in terms of the opportunity for people to work in the environment that makes the most sense for them, but
also still have in the essential services we provide that we have to have people in our plants to deliver for our customers.
CHATTERLEY: Yes, we've proved it works from a distance. Bob Swan, great to have you with us. Stay safe and a fantastic.
(CROSSTALK)
SWAN: Thank you.
CHATTERLEY: Thank you. The CEO of Intel.
[15:40:05]
SWAN: Have a wonderful weekend.
CHATTERLEY: Thank you. All right. The engine of Europe now in recession. Germany posting its sharpest contraction in a decade, its locked down
restrictions are now slowly being lifted. We'll discuss, next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to QUEST MEANS BUSINESS. Germany has officially fallen into recession after suffering its worst quarter in a decade. The
economy shrank from 2.2 percent during the first three months of the year. The results coming as the country begins to exit lockdown. Frederik
Pleitgen is live in Munich for us. Frederick, and I think the whole world is watching Germany won for the way that they handled the virus.
But to what recovery looks like in an economy that's so vitally important for the rest of the Eurozone?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, exactly. You're absolutely right. And it comes on two levels. Obviously, this
country's economic recovery itself, how is this country's massive industry going to do but then also because it's done so well and because neighboring
Austria have done so well. Also, how are they dealing with these lockdown measures and also opening some of these cross-border measures once again.
We got to look at that today at the border between Germany and Austria, which is slowly beginning to open again. Here's what we saw.
(BEGIN VIDEO TAPE)
PLEITGEN: The weather rainy and dreary, but the mood of a motorists could have been better, as several border crossings between Germany and Austria
have been reopened.
UNIDENTIFIED FEMALE: It took time --
PLEITGEN: It's so important, this woman says. These two villages belong together. We live in this one, but we always go shopping on the other side
of the border.
Austria and Germany plan to entirely reopen their border by June 15th. Part of a larger European effort to bring the free movement of people back and
revive the comatose tourism industry. All while ensuring there isn't another outbreak.
In the near future we plan to open even more border crossings. The spokesman for the Austrian police says. However, all of this has to be in
line with our hygiene laws. And of course, we also appeal to people's own sense of responsibility.
Just a few minutes from the border lies the majestic Salzburg. The birthplace of Wolfgang Amadeus Mozart. Salzburg is normally a magnet for
tourists with people coming not just from all across Europe but from the entire world.
[15:45:03]
PLEITGEN: Now of course, all of that came to an abrupt standstill when the pandemic hit. But now at least there's a glimmer of hope that some visitors
could return in the not too distant future.
For Hannes Bachmann, owner of the famous Braugasthof Krimpelstatter, the future starts now. With restaurants allowed to open since Friday, Bachmann
says he's optimistic business will recover.
HANNES BACHMANN, OWNER, AUGUSTINER BRAUGASTHOF KIMPELSTATTER: The people need, optimistic need, loving need social life and that's what I told them
and I keep them and --
PLEIGTEN: But hotels like the Hotel Zur Blauen Gans will have to wait longer until May 29th. And owner, Andreas Ferreira says he knows the
comeback will be tough.
ANDREAS GFRERER, OWNER, HOTEL ZUR BLAUEN GANS: A hotel when it opens need some market and we don't have the markets yet. We don't have the markets
from abroad, from America and so on but we don't even have the market next to us, especially Germany.
PLEITGEN: Besides book region has seen a tourism boom in recent years. The region's tourism representative says getting visitors back is vital.
LEO BAUMBERGER, CHIEF EXECUTIVE OFFICER, SALZBURGER LAND: We are expecting a loss of revenue for about 25 percent for the whole year, so it's massive.
And of course, we are looking forward to restart again.
PLEITGEN: Germany and Austria have both said they're keen to revive travel and tourism between the two countries but it all depends on whether they
can continue to be back the pandemic.
And of course, also trying to revive the economy as well. It's always interesting to see, Julia, just how important these borders are also to the
economic recovery and when we reported there on some of these border crossings opening but it is still really a very slow trickle as we drove
out of Austria today back into Germany, we could see a giant traffic backlog of trucks on the other side of the border.
So the free flow of goods also just not happening yet the way it was before. Of course, European politicians working on trying to get it going
but again, combating the pandemic of course still takes precedent, Julia.
CHATTERLEY: Absolutely. And those borders more broadly not just between Austria and Germany of, course, but the Italians are very upset about
potential restrictions as well. Now all eyes on Germany, though, for another reason and sports fans I think around the world very excited about
what happens this weekend. The Bundesliga Bundesliga is back. It's a test, a trial period but fingers crossed it, it goes off well but it's going to
look very different.
PLEITGEN: It certainly is going to look very different and the main difference is obviously going to be there's not going to be any fans in the
stadiums. The Germans call that ghosts games. They are going to be on T.V. however, there was quite a bit of criticism actually of that. There were
some fan organizations who said, look, games without fans to us just don't have the same atmosphere.
There are some also who said they believe that football might be coming too elite if it's only playing for T.V. and not playing for actual fans in the
stadium. And then there are others here in Germany also who are saying, look, we're dealing with this coronavirus pandemic right now, we really
don't believe that we should be investing for instance tens of thousands of coronavirus tests into making sports run again.
But of course, there are many football fans also around this country who are very much looking forward to it. And the world, Julia, also looking to
see whether or not this hygiene concept that's been in place will actually work. Julia?
CHATTERLEY: Yes. If the Germans have got something, a concept here that works, everybody else will be eager to see whether they can apply it. What
about the players, though? What are the players saying? Because they're the ones that are going to be interacting and risk as a result of some of what
we're doing here?
PLEITGEN: Yes.
CHATTERLEY: What we're seeing.
PLEITGEN: Yes. The players, the -- yes, the players, the coaches, the rest of the staff as well of course, there have been some players who have come
forward and said that they believe it's not a good idea to start this early with games again, who are obviously quite afraid also of doing a contact
sport where you do inevitably come in contact with other players. The league has said that because of its extensive testing regime, they believe
that they have things under control.
And some of the players that have come forward have actually faced disciplinary action by their teams for coming forward. So the league
believes that it's going to be able to pull this off, the coaches by and large seem to believe that they're going to be able to pull this off. There
are some players who seem to have doubts about all this, but as of right now, it really looks as though this is all going to go forward. But the
league has already said, they believe that they're playing on parole.
That means, if there are infections if things do go bad, it could be that there's a stoppage in play again.
CHATTERLEY: Yes. Just a microcosm of that broader work environment and the challenges we face over the coming months. Fred, great to have you with us.
Fred Pleitgen there in Munich. All right. Another break here on QUEST MEANS BUSINESS. But coming up, Las Vegas casinos is that airily empty for months.
But that's set to change. So the question remains, can gambling now be done safely? Well, CNN went to find out and that's next.
(COMMERCIAL BREAK)
[15:52:33]
CHATTERLEY: Welcome back to the show. America's Sin City opening its casino doors to the public. Las Vegas is one of many cities around the U.S.
looking to ramp up economic activity. Our Kyung Lah went to see how they plan on doing that with the pandemic far from over.
(BEGIN VIDEO TAPE)
TONY RODIO, CHIEF EXECUTIVE OFFICER, CAESARS ENTERTAINMENT: It's really eerie and sad in this place normally would have so much energy and so much
excitement going on.
KYUNG LAH, CNN SENIOR NATIONAL CORRESPONDENT: This is Caesars Palace in the dark because of the coronavirus.
You can hear our voices echoing through the lobby.
RODIO: Yes. You know, hear that echo because it's muffled because of all the bodies and all the sound and the activity.
LAH: There's not a soul here. Something the iconic casino has never experienced in its 54-year history says Tony Rodio, CEO of Caesars
Entertainment.
You're talking about every single day it was operational.
RODIO: Every single day, every single second. There weren't locks to lock the front door. It was really tough in the beginning and there was so much
uncertainty on how long this was going to last. And we're starting to see some movement.
LAH: As Nevada moves to reopen parts of its economy, Caesars is making changes across the casino floor.
RODIO: This is the typical configuration for blackjack-style games and normally there are six seats. In the new world, there will only be three
chairs and nobody will be able to be within six feet of any of the three customer that are playing.
LAH: This looks like it's a little less than six feet. I mean are you -- is that the goal?
RODIO: I think that you're real -- if not at six feet, you're close to six feet and you're certainly not face to face.
LAH: This is a craps table.
RODIO: Correct. In the new world, with social distancing, we're going to limit it to three on a side.
LAH: If a bunch of people come because it's an exciting game, what do you - -
RODIO: Between the dealers, the supervisors, security, we're going to limit it to three on each side and they have to be -- anybody else has to be six
feet away.
We will be deactivating every other slot machine and removing the stool from the game.
A customer can't even stand here and play this game because the game's not even active. And so we will do that throughout the whole floor.
LAH: In addition, a video released to Caesars' workers and the public shows employees will use electronic sprayers. They'll disinfect dice, slot
machines and elevator banks. Workers will be required to wear masks and have their temperature taken, but guests, while encouraged to wear masks,
are not.
Casino workers have already raised concerns about returning to the Vegas Strip.
For people who say, can I be 100 percent sure that I won't get sick coming in here, is that something that you can say to your customers?
[15:55:05]
RODIO: I don't know of anybody in the country that could say that to anybody in any circumstance. And I'm a casino operator, so I don't pretend
to know everything about an infectious disease, especially one as contagious as this. So all I can do and ask of my team is to listen to the
experts.
LAH: Are you ready for people to come back?
RODIO: Oh, my gosh, yes. I'm ready. Our staff's ready. Our team's ready. Our customers are ready.
LAH: This is what it looks like outside Caesars Palace. People would normally be getting out of their taxis, walking up those stairs with their
luggage. All of this would be filled with limos and Ubers and there's nothing. What that's meant for employment is that of their 60,000 worldwide
staffs at Caesars Entertainment, they've had to furlough 90 percent of workers.
Kyung Lah, CNN, Las Vegas.
(END VIDEOTAPE)
CHATTERLEY: Wow, it's unrecognizable. But speaking of that six feet social distancing issue earlier, the CEO of Ford spoke to CNN Poppy Harlow about
how the automaker is utilizing wearable technology to help achieve this.
(BEGIN VIDEO CLIP)
POPPY HARLOW, CNN ANCHOR: You guys are piloting watches by Samsung, did actually beep right or go off if people get within six feet of one another.
Is that right?
JIM HACKETT, CHIEF EXECUTIVE OFFICER, FORD: Yes, this is an early wearable is that as they're called, that will give proximity warning. If you get too
close to someone else who's also emitting this this signal. These are early test. It's our belief that these kinds of capabilities are going to end up
in all kinds of devices around your neck, your cell phone, your wrists, and so we're prototyping them early because we think it's going to be part of
the everyday experience.
(END VIDEO CLIP)
CHATTERLEY: Wow. Look at the future perhaps. There are just moments left to trade on Wall Street this week. We'll have the final numbers and the
closing bell after this.
(COMMERCIAL BREAK)
CHATTERLEY: Just moments left to trading on Wall Street. It's been a choppy day on a week quite frankly. Investors grappling with news of rising trade
tensions with China. Better than expected consumer sentiment numbers and that record fall in monthly retail us sales. A quick look at what we're
seeing for the Dow. Retail stocks have rallied but shares like companies like Apple, Intel and Boeing that could be targeted by China.
As you can see, they're still solidly in the red. And that just about wraps up.
[16:00:02]
CHATTERLEY: QUEST MEANS BUSINESS. I'm Julia Chatterly here in New York. Have a great weekend. Stay safe, please. Jake Tapper is next.
END
