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Quest Means Business

Report: Crisis Hitting Young Workers "Harder & Faster"; French P.M.: Public Spending Needed To Save Companies, Jobs; Nissan Cutting Production 20 Percent After Biggest Loss In 20 Years; IMAX CEO On The Future Of Moviegoing; Travel Companies Urge U.K. to Drop Quarantine Plan; Trump To Announce Executive Order Against Social Media Companies; Diplomatic Backlash To China's National Security Law In Hong Kong; Major Airlines Preparing For Massive Layoffs. Aired 3-4p ET

Aired May 28, 2020 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:43]

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: An hour until the closing bell on this Thursday. Sixty of minutes of trading still to go,

and the Dow is on a winning streak and that winning streak continues, 25,000 of course has been and gone and now I guess, we're looking at when

will it be 26,000 as the market marches on?

Those are the markets. Some of the things that affected them today, Donald Trump is preparing that Executive Order that targets social media sites and

the work with China.

Thousands of planes are parked with nowhere to go -- tens of thousands globally -- and airlines are laying off tens of thousands of more workers.

Brazil is shedding millions of jobs. The coronavirus is ravaging the Brazilian economy.

Live from New York, it is Thursday, it is May the 28th. Delighted you're with me. I'm Richard Quest, and as always, in the living room, as

elsewhere, I mean business.

It may seem somewhat extraordinary that in the middle of a pandemic where the milestone of 100,000 deaths has just been reached, President Trump has

turned his attention and his fire power to social media, especially Twitter, which of course, as you'll remember, has put a mark against some

of his tweets, a fact-checking mark against his tweets.

The U.S. President is to announce an Executive Order within a couple of hours against social media. It says -- he says they curb free speech and

have an anti-conservative bias. Big day for social media and fairness has been his tweets.

Also bringing his fight with China to the table in this draft. Facebook is accused of profiting from Chinese advertising, and the draft order says

Google helps China's government with surveillance of its citizens. Twitter is accused of spreading Chinese propaganda.

Days ago, Twitter flagged two of his tweets as potentially misleading, requiring fact-checking.

Boris Sanchez is in Washington. Donie O'Sullivan joins me from Connecticut.

Donie will do the technology and social media, Boris will do the politics. I'm going to start with Donie, because do we know the exact wording or

breadth and range of this Executive Order? What will it do?

DONIE O'SULLIVAN, CNN BUSINESS REPORTER: We don't know the precise wording, Richard. You mentioned some of the draft which we have seen there.

It seems, though, that the President's objective here is to clamp down on what he describes as anti-conservative bias that in some way Twitter and

Facebook is stifling his speech and the speech of conservatives.

The way he might try to get at that is that Section 230 of the Communications Decency Act here in the United States, which basically gives

social media platforms a pass. They are not liable legally for what is posted on their platforms.

QUEST: Boris, the politics. It might be cynical, but it might also be true to say the President wishes to divert attention from the fact that the

100,000 death number has been reached and passed and beyond.

He did put out a statement late last night, in fact, which he talked about -- this morning, I beg your pardon -- in which he talked about that. But

why is he, Boris Sanchez, why is he going hell for leather on this one?

BORIS SANCHEZ, CNN WHITE HOUSE CORRESPONDENT: Well, Richard, as you well know, the President is a genius when it comes to exploiting rifts in

American culture and here, he is taking advantage of negative energy that's pent up in the conservative atmosphere.

Conservatives have long alleged that all media has a liberal bias, specifically social media as well, and the President is wanting to seem

aggressive, going after these companies and defending conservative values in a way that is largely symbolic because this Executive Order really may

have a tough time standing up in court.

And officials in the White House have acknowledged that to us privately at CNN that this is about his political agenda. That's largely the reason that

he has also included China in this Executive Order.

As you said, suggesting that Facebook, Google and Twitter have close ties to the Chinese Communist Party and that they ultimately profit off of human

rights abuses.

[15:05:28]

SANCHEZ: The President is doing that in large part because there is ire toward China in the United States right now and advisers have told him that

he stands to gain a lot of ground against Joe Biden if he appears to be tougher on China than Biden.

Not a coincidence that the President is combining these two things and essentially trying to kill two birds with one stone.

QUEST: But Donie, it's a loser legally. It's good politically, and now, how are the social media companies themselves navigating it? Twitter is

engaged, Facebook less so. Google protecting itself.

O'SULLIVAN: Yes, no word from google. We often forget about Google and YouTube in all of this and I think they're very happy with that.

Facebook and Twitter are not standing together despite this unprecedented attack from the White House. Twitter slapped that label, and by the way, it

is a tiny label on this piece of misinformation, the claim the President made.

Facebook did nothing with it. In fact, Mark Zuckerberg went on Fox News last night and criticized Twitter for fact-checking the President.

So, there is a rift even within Silicon Valley as they come up against the Trump administration.

QUEST: Donie, thank you, and Boris, thank you. We'll move on. It just shows what a busy day it has been. You not only have social media, but of

course, you have the events going on in Hong Kong, as China passes the new security law.

The U.S., the U.K., Canada, and Australia are now criticizing China's Hong Kong law. The U.S. has already said, of course, that it regards it as

disastrous. Now, this joint statement says it undermines the one country, two systems framework. It has potential economic fallout.

CNN's Kristie Lu Stout is in Hong Kong on exactly who suffers if there is retaliatory action from the United States.

(BEGIN VIDEOTAPE)

KRISTIE LU STOUT, CNN CORRESPONDENT (voice over): No longer autonomous from China. That's how U.S. Secretary of State Mike Pompeo has branded Hong

Kong as Beijing moves to tighten its grip on the territory.

This declaration is more than words. It opens the door to significant U.S. action, including the possibility of revoking Hong Kong's special trade

status.

LU STOUT (on camera): So what would it mean for Hong Kong? It would mean that the United States would treat Hong Kong the same as China for trade

and other purposes.

It would jeopardize billions of dollars' worth of trade between the U.S. and Hong Kong. It would also dissuade people from investing here.

LU STOUT (voice over): It could also hurt China, the territory is a valuable East-West conduit for international trade and finance and the

world.

(BEGIN VIDEO CLIP)

ROBERT KOEPP, FOUNDER AND PRINCIPAL, GEOECONOMIX: The U.S. has enough power economically and politically to make its regulations towards Hong

Kong really impact the whole world.

Like a German company could have an operation in Hong Kong that helps funnel goods and services through that city to the U.S., and suddenly that

becomes impacted.

So in that sense, it's a bigger ripple effect than simply two countries' relations.

(END VIDEO CLIP)

LU STOUT (voice over): Pro-democracy protest leaders in the city welcome the move.

(BEGIN VIDEO CLIP)

JOSHUA WONG, HONG KONG PRO-DEMOCRACY ACTIVIST: According to the report by Secretary Pompeo, would just imply how the international committee and the

western countries realize how Hong Kong is the city without autonomy under the hardline rule of Beijing.

LU STOUT (on camera): Would revoking Hong Kong's trade status actually help in the battle for Hong Kong's autonomy?

KOEPP: The National Security law takes away the last vestige of guaranteed protections. So, to not do anything would be, you could argue, far worse.

And I think that is why the protest leaders support the move even though they must know that it is going to create quite a lot of pain for the

people of Hong Kong.

(END VIDEO CLIP)

LU STOUT (voice over): Meanwhile, U.S. businesses in China are taking a wait-and-see approach with the President of the American Chamber of

Commerce in Hong Kong saying, "American companies have already been evaluating the situation in Hong Kong due to the protests last year and

other indicators."

One thing is for certain, the declaration from Pompeo further strains the already fraught relationship between the U.S. and China, a relationship

fractured by the trade war, the pandemic, and now the fate and future of this special administrative region.

Kristie Lu Stout, CNN, Hong Kong.

(END VIDEOTAPE)

QUEST: We will also have another look today at just how the world's airlines are going to handle the recovery and the reopening, and it makes

for grim reading.

[15:10:09]

Some of the world's largest airlines announced, for example, American Airlines said it plans to lay off 30 percent of its staff, it's mainly

managerial and executive staff at the moment, the voluntary exits and lay- offs. Delta plans something similar.

In the U.K., EasyJet is also cutting 30 percent of its staff and it says it hopes to start flying in June.

The drastic decline in air travel resulted, the number of planes in long- term storage -- these pictures are quite dramatic. I've been to airline graveyards before where you see planes that will never fly again.

Now, out in Tucson, Arizona, these are modern planes that will be expected -- some will go off to the graveyard, but some will go back again and this

is where they had to park their planes.

Robin Hayes is the Chief Executive of JetBlue. He joins me now. Robin, thank you. Sketch out for me, if you will, how you view JetBlue reopening

and rebuilding to the point where by the end of the year you'll be 30 percent, 35 percent of your capacity, usual capacity.

ROBIN HAYES, CHIEF EXECUTIVE, JETBLUE: Hi, Richard. Thanks for having me on the show. Hope you're keeping safe and well.

Okay, I think it's too early for us to know that. I mean, what I do know is that when I look at our geography, we are 70 percent U.S. domestic, and

when I look at the international travel that we have, it's very close to U.S., and we are predominantly leisure than business.

All of those things lead me to believe that we may recover more quickly than most. Having said that, there's no doubt we're going to be a smaller

airline than we were as we go into the last quarter of this year.

QUEST: And what about the September deadline in the CARES Act? There is a feeling that until September, no compulsory layoffs. There's a whole range

of restrictions within that that you can't do before September, which does beg the question, whether at JetBlue or industry wide, do you think that

when the gloves come off in September, there will be wholesale lay-offs, compulsory layoffs?

HAYES: Well, I think the good thing -- the CARES Act has been so terrific for the U.S. airline industry. We're extremely lucky and really, it was a

great example of the administration working with Congress to give the U.S. industry some breathing room.

As you said, we can't do any involuntary furloughs until the end of September and I think the good thing about that, it buys us time, first of

all, to get a better handle on what we think is going to happen to demand.

And secondly, to see how many of our crew members are interested in voluntary programs. I mean, to give you a sense of the size, at JetBlue,

we've had about 60 percent of our crew members interested, who have taken some form of voluntary time off over the summer.

And so, we continue to believe that there is going to be quite a bit of interest once we get to October for many of our people to kind of take

voluntary -- continue to take voluntary time off.

QUEST: Robin, I just want to try and give our viewers a real feel for just what the airline industry in the U.S. is like at the moment.

How much is it costing? How much are you losing per day at the moment, would you estimate?

HAYES: It's a good question. We actually updated on our last earnings call, which was at the end of April, we shared that our cash burn at the

moment is about $10 million a month.

So, we came into this with the second best balance sheet in the U.S. We had a lot of cash. But no business can survive that amount of cash burn

indefinitely.

And so, we've been working very hard to bring the cash burn down. We think we're on a trajectory to bring that down further as we go into Q3.

But it's still a significant amount of additional debt that we are taking on over time.

QUEST: Fortuitously, you are sitting in front of a poster that says London.

HAYES: I am.

QUEST: I'm not surprised -- I'm not surprised that you have put your London launch -- well, would you say it's on the back burner or it's back

in the cupboard?

HAYES: No, you know, we still plan to start going to London in 2021, Richard. You know better than most how extortionate the fares can be to fly

between the U.K. and U.S., so we think we can have a hugely positive impact in bringing down the fares.

We're probably going to time it now to be later in '21, rather than earlier, because we think that's going to coincide better with where we

think we're going to start seeing some recovery in the transatlantic market.

So, we're still coming and we look forward to bringing you and everyone else much lower fares.

[15:15:10]

QUEST: All right, if you'll be on the inaugural flight, then so will I.

HAYES: Let's do it.

QUEST: I look forward to being on that flight. Robin, these are difficult times. Oh, yes, I can see. Middle seat near the back, I can feel like

coming on already.

But don't worry, I'll be on it, and hopefully, obviously, you will be, too. Robin Hayes, good to have you with us. Thank you.

HAYES: Thank you, Richard.

QUEST: Robin Hayes of JetBue. As QUEST MEANS BUSINESS continues tonight, an $800 billion plan to rescue Europe's economy. Not all members are behind

it. The Frugal Four are highly unhappy. The E.U. Commission's Executive Vice President, Valdis Dombrovskis is next after the break. It's CNN.

Hello.

(COMMERCIAL BREAK)

QUEST: As the coronavirus hits and bites very hard in Latin America's largest economy, Brazil, we're starting to get the real numbers. It lost

five million jobs in the first quarter of the year, according to new government statistics.

Shasta Darlington now reports on just how the Brazilian economy is being hit as the death toll gets higher and the situation gets ever more dire.

(BEGIN VIDEOTAPE)

SHASTA DARLINGTON, CNN INTERNATIONAL CORRESPONDENT (voice over): Normally bustling streets ground to a halt in Brazil's business capital. All but

essential business shuttered as the country has issued isolation guidelines. Some sales moving online. Shop keeper, Abelardo Javier says he

has had to let people go.

"The situation is critical. Sales are practically zero," he says. "Almost nothing is sold through WhatsApp. It's not enough to pay employees."

A grim sign of what's coming as retail collapses, manufacturing halts and unemployment rises under the shadow of COVID-19.

First quarter GDP expected to contract more than one percent. The I.M.F. sees it shrinking a full 5.3 percent by the end of the year. And the

currency has dropped more than 30 percent against the dollar this year.

Brazil now a global hot spot with the second highest number of infections after the United States, and still spreading.

For Brazilian President Jair Bolsonaro, the bigger problem is the economic fallout. He has contradicted the experts, insisting Brazilians should go

back to work or unemployment and hunger will kill more than the virus.

[15:20:09]

DARLINGTON (voice over): "The consequences of the treatment cannot be worse than the disease," he says. While a majority of Brazilians support

social isolation measures, Bolsonaro's message resonates in a country where many work in the informal sector.

Shoe shiner, Arli da Silva is still at work in the center of Sao Paulo. "The situation here is bad. There are days when I make a few reals, 10

reals. Other days, I don't make anything," he says.

More than 50 million Brazilians have signed up for an unemployment benefit worth about $100.00 a month, waiting in long lines around the country for a

bit of financial relief.

But it's done little to alleviate the uncertainty. The pandemic is far from peaking in Brazil and Bolsonaro's mishandling of the crisis has likely

further spooked investors.

The Brazilian real is already the worst performing currency in the world this year and foreign investment has fled. Reviving the economy is getting

harder by the day.

Shasta Darlington, CNN, Brazil.

(END VIDEOTAPE)

QUEST: $800 billion, around 750 billion euros is the package being put forth by the European Commission as part of the recovery fund we have been

talking about.

The Executive Vice President says delaying this is not an option. On last night's QUEST MEANS BUSINESS, the Italian Finance Minister said he plans to

back it and thinks it should be even more ambitious.

(BEGIN VIDEO CLIP)

ROBERT GUALTIERI, ITALIAN FINANCE MINISTER: It is essential that we will not water it down, because this is really fundamental for our common

future. So, we will of course support this proposal, try to make it more ambitious, and resist any attempt to water it down.

(END VIDEO CLIP)

QUEST: Joining me is the European Commission Executive Vice President Valdis Dombrovski who is with me. Good to have you, sir. Thank you. There

is a bit of a delay between me in New York, and you there, so, I apologize because of that.

As we look at this, the Frugal Four have allowed this to sort of get this far, but the balance between grants and loans is still highly contentious

between the various countries, isn't it?

VALDIS DOMBROVSKI, EUROPEAN COMMISSION EXECUTIVE VICE PRESIDENT: Well, first of all, I would like to outline that what we are putting forward now,

the 750 billion euros recovery package, or as we call it Next Generation E.U., this is not the first measure we are taking. Because already now,

E.U. and its member states have collectively mobilized some 3.4 trillion euros, and that is besides what the European Central Bank is doing.

And the European Central Bank is also coming with sizable packages, for example, the most significant one is the Pandemic Emergency Purchase

Program, also worth 750 billion euros.

So here with our recovery package, we are actually saying that we are not so much focusing on immediate crisis, because we already have mobilized

substantial resources to the crisis.

Here, we're already concentrating on the recovery part, on how to kick start the European economy once again. And I would say, yes, we expect

discussions among E.U. member states, but all member states understand that we are in crisis, that we need to react together in a coordinated way and

in a spirit of European Solidarity. And that is the way how we're going to approach it.

QUEST: So the existential crisis that people spoke of at the beginning when essentially Italy was just about left on its own, do you think that

that sense of existential -- we could all fall apart -- has that gone in your view?

DOMBROVSKI: Well, first of all, it's not the first crisis Europe is facing, so from that point of view, it is indeed -- it's a major crisis.

It's a public health emergency. It's a major economic crisis.

We expect 7.4 percent recession in the E.U. this year. But then we expect the economy to rebound quite strongly next year, with 6.1 percent growth.

So, definitely we are not talking about existential crisis as you said for the E.U.

E.U. is working together to overcome this crisis and actually to come out stronger and also use this moment to modernize the economy, to accelerate

the green and digital transitions of our economies.

[15:25:16]

QUEST: Now, this is really significant, because if you look back at the great financial crisis of 2008, 2009, 2010 and 2011, unemployment rose very

highly in the Union and it never really fell all the way back.

The danger in Europe is that unemployment goes up into the teens, but it doesn't come back. The recovery is rarely as robust in the E.U. as, say,

for example, the U.K. or the United States. How can you change that this time around?

DOMBROVSKI: Well, first of all, if you look at unemployment, since global financial and economic crisis, unemployment has fallen down to the lowest

levels in a decade.

And the level of employment, so number of people at work in the E.U., was at historically highest levels before this COVID-19 crisis came.

So, actually unemployment was going down very substantially in post-crisis years in the E.U. Of course, it is worth noting that indeed, unemployment

in Europe is going up also, slower, because there is much more social safety nets accompanying the labor market.

So, from that point of view, yes, it takes somewhat longer to hire people. But it also takes longer to fire people and there are social safety nets to

actually accommodate this.

And right now we're also financing major schemes, for example, for short- term work so that people do not have to lay off people, so that companies can also survive this period and we preserve the productive capacity of

Europe's economy and then come back stronger.

QUEST: Good to see you, sir. I appreciate it. Thank you.

When we come back in just a moment, the jobs crisis and how it is being affected. We'll hear from France's Finance Minister on what France is

prepared to do.

And also, ahead of the ILO, the International Labor Organization, the number of jobs that have gone and where they will be found afterwards, in a

moment.

(COMMERCIAL BREAK)

[15:30:00]

RICHARD QUEST, CNN INTERNATIONAL HOST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. One in four Americans are out

of work. The numbers just seem to get worse. We have the latest numbers obviously, over the last couple of days. It's now 40 million people out of

work. The movie theaters, they're starting to reopen. It's all about hit and miss. We'll have the IMAX CEO joining me in a moment or two. The

reopening is part of the problem. But don't forget, you also need content to show, and arguably, when does the production process starts to -- start

to reopen again? All of that is still to come. But don't go anywhere. Because this is CNN, and on this network, the news always comes first.

Protesters in Minneapolis are demanding justice after the death of an unarmed black man in police custody on Monday. The widely circulated video

show George Floyd alerting officers he couldn't breathe with one officer's knee on his neck. Demonstrations there have been -- have been turned

destructive, with dozens of fires reported overnight. Restaurants and bars are to be opened across France next Tuesday with some restrictions. Museums

and monuments are also reopened to visitors, provided these visitors are wearing masks. Britain is also preparing to ease its lockdown next week,

allowing outdoor markets to begin and more children to return to schools. Two of the world's top football leagues will resume their seasons in June.

English Premier League is to be back on June the 17th. And Italy's Serie A will return on June the 20th. As expected, fans will not be allowed to

attend. Both league's halted play in March as the pandemic swept across Europe.

The Dow Jones is up more than 1,000 points this week. And it's having a bit of a breather now. Well, that might be well understandable, and quite

forgivable, despite brutal economic numbers, and the U.S. jobless claim is now topping 40 million. We have gone negative. The reasons for this

believed to be because of President Trump saying he's going to speak publicly tomorrow on China. The fair there is, of course, it could be

further tariffs or sanctions. So, that's why the market has turned turtle today, just in the late afternoon. I want to concentrate at the moment on

the jobless data.

Guy Ryder is the Director General of the ILO, the International Labour Organization. He joins me from Geneva in Switzerland. Your latest survey

that was out overnight, one in five youth out of work because of COVID-19. The -- I mean, as we understand that, the truly -- the important thing is

what is the long-term unemployed going to be? How many jobs won't come back?

GUY RYDER, DIRECTOR GENERAL, INTERNATIONAL LABOUR ORGANIZATION (via Skype): Yes, that is a great question to which nobody has, I think, an absolute

answer right now. But just start from where we are today, the calculations we have is that worldwide and we base our calculations on the reduction of

hours actually being worked in the world. In the second quarter, we've lost 305 million jobs around the world. Just think of that 305 million. 2008,

2009 the figure is around 22 million.

The question is, how many of these have been permanently lost? How many of these will come back as economies and companies unlocked? And how many a

permanent damage? And I don't think we really yet know the answer to that question. But I think we can be sure that there is going to be very

substantial, permanent damage. We're going to come out into a world with higher unemployment, higher inequality, higher debt, higher poverty, and

probably higher levels of political frustration and anger.

QUEST: OK. So, accepting that as the premise, the number of job creations or job retention schemes that have been put in place, and I realize I'm

talking now primarily about the developed economies, I accept that. But I presume you would call upon the -- those the U.K. front. I mean, you're

going to hear in a minute from the French Finance Minister who will talk about the measures they take -- they took. I presume that the risk now from

your point of view is that these schemes come to an end June, July or August.

[15:35:17]

RYDER: Well, that's right. But, I mean, they're not supposed to be permanent. They're supposed to tie people over because they cost a lot of

money. They're supposed to keep people in touch with their employer. You know, they're not working, but they're still employed. And when the

unlocking moment comes, and hopefully people can go back to work as they were, and that's going to be the moment of truth. And a lot is going to

depend when the unlocking comes and the end of these furlough, job retention, short-time work schemes comes, what trajectory are labor markets

going to take? And I think one of the key questions is, what are policymakers going to do when they realize the levels of debt that have

been contracted? Are we going to put on the brakes 2010 style austerity? Because if we do, I think we can expect the damage to be all the greater,

and it could be an extremely bumpy ride going forward.

QUEST: Right. But I take -- I see where you're going and I take your argument. But if we have just had eight months to a year of, frankly,

extraordinary spend, which has taken debt to GDP's well over 100 percent. At some point, there'll have to be a retrenchment. You can't tax your way

out of it, you're going to have to cut spending. I don't know what you would prefer to happen.

RYDER: Well, I certainly wouldn't prefer to see a rerun of 2010, where I think my pretty general consent, we got it wrong. We put the brakes on too

quickly. And the recovery from the financial crisis is all the slower. If we repeat and I accept what you're saying, you know, we can't live with

eternally excessively high real levels of debt. There is a question of calibration of the speed at which we put the brakes on. And I think we need

to be erring on the side of keep -- of being expensive. You know, when people talk about doing whatever is necessary, I think we have to take them

at their word at this point.

QUEST: Guy Ryder, we'll talk more. Thank you, as always, sir, taking time to speak to us. It is a pleasure to have you on the program. The French

Finance Minister Bruno Le Maire has told me that they -- he will support Renault and he's currently negotiating a $5-1/2 billion-dollar loan.

(INAUDIBLE) says France will spare no expense to prevent bankruptcies, save jobs, restore growth.

(BEGIN VIDEO CLIP)

BRUNO LE MAIRE, FINANCE MINISTER, FRANCE: Now, it's time to spend public money to support our economies. And we are doing the same both in the E.U.

and in the U.S. It's time to spend public money, and I'm the French Finance Minister. Usually, I'm explaining that we have to spare our money. No, I'm

explaining that we have, and we do not have any other choice, but to spend public money to support our private companies and to protect our jobs.

Then, there will be a time where we will have to look at the public debt and to think about the possibility of reimbursing those public debts. Of

course, but it's not time to think about that. The best way of reimbursing the public debt is to have growth, and I really do my best effort to have

growth coming back in France and in the E.U. should those recovery plants.

(END VIDEO CLIP)

QUEST: More of Bruno Le Maire. It was a wide-ranging discussion that we had, and you'll hear it all tomorrow night here on QUEST MEANS BUSINESS.

Staying with the issue of the car industry in France, and the anger and distress (INAUDIBLE) Renault's ally, Nissan, is closing its factory in

Spain this time. Hundreds of factory workers reacted. They burnt ties in front of Barcelona's plant and chanted war. Jobs at the plants have been

guaranteed by the Spanish government. However, that wasn't enough. Bearing in mind the changes that are taking place at Nissan. Kaori Enjoji,

journalist discussed the move with a top Nissen executive, and now reports from Tokyo.

(BEGIN VIDEOTAPE)

KAORI ENJOJI, JOURNALIST: Nissan is shuttering its Barcelona plant and leaving the South Korean market, as it retrenches into survival mode after

posting its biggest net loss in 20 years. It's cutting capacity by 20 percent and shaving billions of dollars in cost. And the architect of the

turnaround plan COO Ashwani Gupta tells me, ears of global expansion were a mistake.

ASHWANI GUPTA, CHIEF OPERATING OFFICER, NISSAN MOTOR: Number one, excessive fixed cost. Number two, the Coronavirus -- sorry, COVID impact. And number

three, the financial impairment. And that's why we have these net loses.

[15:40:02]

ENJOJI: Nissan's profits plunged after the arrest of Carlos Ghosn in 2018. And the entire industry was plunged into uncertainty after COVID-19. The

world's biggest car markets, China, the U.S. and Japan are all starting to slowly reopen. But Nissan says global demand in the near term could be off

by 20 percent.

GUPTA: When we look at United States, we anticipate that the United States (INAUDIBLE) will be 12 million, which is 4 to 5 million less than last

year.

ENJOJI: More job cuts and plant closures could be on the cards when its alliance partner Renault announces its restructuring measures on Friday.

From Tokyo, I'm Kaori Enjoji.

(END VIDEOTAPE)

QUEST: Grab your popcorn and your mask. After the break, the IMAX CEO will tell us, well, frankly, who wants to go to the movies, IMAX or traditional?

And we're in the year of COVID and how you're going to seat people? And the number of problems. Anyway, it's all after the break.

(COMMERCIAL BREAK)

QUEST: IMAX has a presence in 80-plus countries. Now, of course, the movie theaters have been closed. Now, you've got to reopen them. How you do that

safely, the CEO will tell us in a moment. And you've got to get production back, again, special production design for IMAX. Richard Gelfond is the

CEO, he joins me from Long Island. Always good to see you, Richard, you're looking well. And that's -- and that's good to see you, too. And all right,

you're opening these movie theaters at different paces in different countries. Give us an idea of what you've learned so far about the

reopening process.

RICHARD GELFOND, CEO, IMAX CORPORATION (via Skype): Good to see you, as well, Richard, hopefully in person sooner rather than later. The reopening

process has different elements in different territories, but it has some common factors. And they're basically social distancing, where employees

wearing a mask, hand sanitizer, ways to make people feel safe. But it's actually a little bit more complicated than other industries because it's -

- there's really three phases. Phase One is open the physical theaters, phase two is new films being released in theaters, and then, phase three is

audiences coming back. Where it started to happen, there are some -- I heard your intro and I heard some of your -- you know, you're questioning

whether they're going to come back.

[15:45:05]

But we've seen surprising early demand. So, in places like Korea, we've had very good results with some older movies and the nether ones. We sold out

for 10 days in a row with some older Chris Nolan movies, in a capacity constrained way. So, I think people will come back.

QUEST: Right. OK. But can you -- can you make movies in -- while still doing social distancing? I mean, you know, you can't have a kiss scene in a

movie. While you're, I mean, never mind whether you're wearing masks or not. Do you have to test everybody almost on a daily basis to make sure?

How do you reopen making movies?

GELFOND: So, the first part, Richard, is that most of the movies that are coming out this year through 2020, are already in the can. So, they've been

made, they've been through post production, and they are pretty much ready to go. In terms of restarting production, in the U.K. production has

restarted. In some places in L.A., it's going to start on a more limited way. And there are other countries where it started.

And you're quite right. There are definitely challenges on a blockbuster. The crew and the cast is going to have to take over a hotel. I think

certain kinds of scenes you did with lots of people, you might have to have to use computer graphics, like other things in the world. It may not be

exactly the same as it was, but people are resilient. And there's some time to do that because the backlog in the camp.

QUEST: Richard, can you make money with movie theaters that are maybe only 30 or 40 percent full because of the social distancing requirements and the

capacity constraints, and secondly, the extra costs of making the movies will be much more expensive than previously. Can you make money?

GELFOND: So, Richard, I'm really glad you asked that question, because sometimes people confuse industries. So, you -- I'm sure you've talked a

lot about restaurants where it's difficult to make money at 50 percent capacity. But on movie theaters, are very successful multiplex, has about

20 percent of capacity. A not so successful one is about 15 percent capacity. So, you don't have -- you don't -- you breakeven, is not high

like in a Broadway theater, or in a restaurant, it's relatively low.

The challenge is, moving people away from Friday and Saturday nights into other periods. But I think that's going to happen organically, because

frankly, I'm older than our typical movie goer, our typical movie goer, a millennial, will go on Saturday night, but I'm going to go on Wednesday

night because my job is going to look different. So, as the whole society looks different, I think you can make money because it'll spread itself out

more.

In terms of movies costing more money, given the examples I use to before, I think they'll just be written a little bit differently. And by the way, I

don't think this is going to last for, you know, such a long time that productions won't return to normal, you know, in the next number of months.

So, yes, I think studios can make money and I think exhibitors can make money.

QUEST: That's fascinating. I never realized that the breakeven point was like that. Thank you (INAUDIBLE) always good to see you, keep well, sir. I

appreciate it. After the break, a 14-day quarantine period for those arriving in the United Kingdom, is the kiss of death.

They say you look good; I don't mean obvious -- I mean, of course, financially for those industries that rely on tourism, in a moment. A

letter is being written saying to the British government, stop the 14-day quarantine period, after the break.

(COMMERCIAL BREAK)

[15:50:00]

(COMMERCIAL BREAK)

QUEST: The British travel industry has launched a broadside against the government for its 14-day quarantine for all arrivals from June the 8th.

They are saying that via letter to the government, it's been backed by more than 70 companies. It says the people of this country do not wish to be

prevented from traveling. Quite simply, it is time to switch the emphasis from protection to economic recovery before it is too late.

One of the signatories is the CEO of the Luxury Tour operator at Red Savannah, George Morgan-Grenville is in Cirencester, joins me now. I read

the letter, there's a certain, sort of, desperation to it, bearing in mind what the government's proposing. But look, the British government knows the

situation. They knew what they were doing. So, I'm sorry to say, but I don't think you're going to get very far.

GEORGE MORGAN-GRENVILLE, FOUNDER & CEO, RED SAVANNAH (via Skype): Well, good evening, Richard. I'm sorry. I don't share your pessimism on this

point. I think the British government's decision to impose quarantine is nothing short of madness. And I guess the big question we're all asking is,

why was quarantine not implemented back in March when it could have made a real difference, possibly even saved hundreds of lives? And why have they

left it until the 8th of June?

What is it about the 8th of June that is so critical that -- it was so critical that the date in the fight against COVID-19, the quarantine must

be implemented then, if it's that critical, why haven't they done it right now?

QUEST: Well, I suppose because a lot of it is banned travel to start with. And then I mean, this is an idea that when travel begins again, that you

try to ensure there's no second wave. And I wonder, if you don't have this quarantine period and you do open up, which of course the WHO doesn't want

a full ban, what's to stop there being an increase, an imported increase?

MORGAN-GRENVILLE: Well, look, I think, you know, nobody is going to be glib about the dangers of coronavirus. We've all seen it firsthand what it's

capable of. And we all take it very seriously. But that said, we are (INAUDIBLE) 1550 03:58 the wider needs of the economy. The travel industry

in the U.K. contributes about 200 billion to the economy. That's about nine percent of GDP. Also, accounted for about 4 million jobs, that's about 11

percent of the entire workforce of the country.

This is not an industry that we can allow to fall. And I can tell you right now --

QUEST: OK.

MORGAN-GRENVILLE: -- you're right. It's -- the letter should have turned a measure of desperation. It is a -- it's a very, very serious -- we're in a

very serious state at the moment. Most people have had no business since March.

QUEST: George, finally, before we finish, before we go, quickly, this -- the big issue is, for many people, myself included, is refunds. It calls

into question the whole point of a travel agent. You bait the booking with them and they turn around afterwards and say, the airline, the result,

whatever, hasn't authorized the refund. This refund is an absolute business as a mess.

[15:55:09]

MORGAN-GRENVILLE: Yes, I would agree with that. And I think that, you know, the legislation that underpins the whole travel industry was never designed

for a pandemic. And I think the whole supply chain from beginning to end needs to be re-evaluated. It's one of the things I mean, not many things,

good thing COVID-19 will do. But one of them is to completely reject the supply chain in the travel industry.

QUEST: Very easy. We'll talk more about that. It's an important point that affects millions of travelers around the world. Thank you, sir. I

appreciate you giving me time tonight. Before we take a break, I do want you to look at the markets because whilst we've been talking, they have

sort of taken a rather serious turtle turn. We've had good gains, 1,000 points remember this week, give or take, far less now.

But look at the Dow and you see the triple stock, we're now off over 115 points, still holding 25,000. The S&P will probably hold 3,000. And it's

interesting what happened the way the market suddenly felt a little bit more sour than it had before. All of which is reasons for us to take a look

and say our profitable moment after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's profitable moment, you've heard two voices about what's happening with the travel industry. Robin Hayes, CEO of JetBlue, slowly but

surely, the airlines are being put back in the air and the aircraft will come back. But nobody can say just how many passengers will want to fly or

where they want to fly to. And then you add the United Kingdom's 14-day travel quarantine upon arrival, and you start to wonder, well, what are

they thinking of?

Yes, domestic travel within the U.K. staycations, people going around Britain will be great. But nobody else is going to go to Britain, if it

means they have to have a 14-day vacation. The reality is, of all industries, travel, tourism, airlines, hospitality, has been the one that's

been most hit as we go forward into the future, in terms of the recovery, and how and why government policies which are fighting against each other.

And it's really easy to understand that unless they get their act together, you're looking at months if not several more years of a travel industry in

deep trouble. 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'm off tomorrow. Here's the closing bell.

END