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Quest Means Business

Russia Cuts Off Nord Stream 1 As G7 Plans Oil Price Cap; IAEA: Zaporizhzhia Situation Complex And Challenging; Grand Centra Vital To New York City's Development; Markets Erase Morning Gains, August U.S. Jobs Numbers Out; Financial Group Slams Lonely WFH Culture; How The Subway Shaped New York Itself. Aired 3-4p ET

Aired September 02, 2022 - 15:00:00   ET

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

[15:00:25]

RICHARD QUEST, CNN INTERNATIONAL HOST: It is the last of the "Summer Fridays" and tonight, we are here at Grand Central, but whether it's

Terminal Station or Madison, we'll talk about that over the course of the hour.

The markets, have a look at how they are trading. The markets are lower. They are on track. Yes, I think there will be a lot of train puns before

we're finished tonight. They're on track for the third weekly loss.

The main events of the day, and they are the sort of events that are leading the market. Russia announced today it is cutting off Nord Stream 1.

It is extending the maintenance shutdown. Russia says it's an oil leak. We'll see what others say.

Slowing US jobs growth spurs hopes that maybe inflation is contained, and since we're all about trains and Grand Central tonight, the head of New

York's public transport system on why he needs more funding.

(BEGIN VIDEO CLIP)

JANNO LIEBER, CEO, METROPOLITAN TRANSPORTATION AUTHORITY: For New York, transit is like air and water, it is essential.

QUEST: Live from Grand Central in New York City, the very heart of New York City. It is Friday, it's September 2nd, the start of a long holiday

weekend, here in the United States, a "Summer Friday." I'm Richard Quest, and I mean business.

Good evening.

It is the unofficial end of the summer, the long bank holiday weekend that will be here in the United States, from Memorial Day to Labor Day, it is

the long weekend that now comes along. And with it, of course, the end of our "Summer Fridays."

So we thought, where better to be than in Grand Central Terminal. I'll explain.

Now, this magnificent building, an architectural marvel, a tourist attraction, we're going to show you not only what's here, but what is going

to be here, and what they are about to open. You're going to get a tour and you'll hear from the man responsible for that.

So, the terminal here has the rail, it has the subway, it has Metro North, and it's going to have Long Island Railroad. It's the largest passenger

railroad in North America, and of course, it's a key economic link for New York City connecting with -- there you go, you see the different ways in

which it all connects.

We start with travel and transportation of a very different kind. The transportation of oil and gas.

Russia has indefinitely shut down Nord Stream 1, the source of Europe's -- the main source of Europe's natural gas supply. You'll remember that it was

shut down originally for maintenance. Now, it says due to dangerous leaks like this one that they posted on social media.

The pipeline was due to open on Saturday. What is interesting is that Anna Stewart is with me. I mean, that's interesting in its own right, but Anna

Stewart, what's interesting is that they shut it down pretty much contemporaneously or they announced it with the G-7 announcing the price

cap on Russia oil.

ANNA STEWART, CNN REPORTER: Exactly, the timing of all of this certainly going to raise some eyebrows, Richard. Yes, this -- the gas from Nord

Stream 1 will not be switched back on tomorrow morning. It's not the news Europe wanted on a Friday night. There were concerns this would happen.

But you're right. It came mere hours after the G-7 confirmed that they would introduce an oil price cap for Russian oil, and you know what that

announcement actually came after Russia already said it would retaliate if the announcement was made.

So, we've had a whole day really of news from Russia regarding both oil and gas. And at the end of the day, what this looks like is a reduced supply of

gas, at least for now for Europe and potentially for oil as well, because if that price cap is introduced, Russia's Deputy Prime Minister says that

it simply won't export oil either to any country that tries to introduce it.

QUEST: Anna, we are going to talk about this in detail elsewhere, but I just want the perspective. How much gas has -- I mean, it has only been

doing 20 percent in recent weeks. So, this is a -- arguably, as one colleague put it to me, what Russia has done is pulled a Band-Aid off.

Europe is going to have to learn and find elsewhere.

[15:05:00]

STEWART: It is going to have to. It has been trying to reduce its reliance on Russian gas as much as it possibly can and actually in terms of filling

up storage facilities, Europe has done really well. It is actually two months ahead of target. Storage facilities are 80 percent full.

The problem is, it uses far more gas that it can possibly store through a winter and although it has tried to get gas from elsewhere, LNG from Qatar,

from the US, more gas from its European producers, it simply doesn't really have enough.

And at this stage, it really needs to commit to reducing its consumption, and really hope that this winter is mild to get through it. If, of course,

this pipeline isn't switched back on.

QUEST: So what happens? What happens next?

I mean, they -- well let's give Russia -- let's give Gazprom the benefit of the doubt. They have put pictures out showing that there is an oil leak in

various -- or gas leak in various places. I guess, I'm sort of asking, does anyone believe them?

STEWART: Well, here we go. We've got a photo, Richard. This is an oil leak at a compressor station used for Nord Stream 1.

Now this pipeline underwent already a 10-day scheduled annual maintenance only in July. So, it was already unusual that we're going to do a three day

maintenance right now.

Looking at that photo, looking at the statement, Russia says Gazprom says that this is an oil leak. They haven't given a timeline as to when it could

be fixed, and I find that quite unusual as well, that at the moment, this shutdown is indefinite.

QUEST: Anna Stewart, thank you for joining us.

Now, Nord Stream -- so Nord Stream pipelines -- Nord Stream 2 of course, was abandoned a long time ago, at the start of the war, at least, and it

may never actually get finished, but Nord Stream 1 has been the backbone of Europe's gas, carrying 35 percent of the continents gas from Russia from

last year.

But the continent, Europe, has been preparing for exactly this, a possible shutdown.

Overall, around 80 percent of European stockpiles are filled. Germany says the situation is tense, but supplies remains secure.

Michael Bradshaw is Professor of Global Energy at the University of Warwick. Professor is on the line now.

As we're looking at this, I mean, what do you make -- first of all, do you believe the Russians when they say -- or Gazprom, when they say that this

is a leak, and therefore it's an in definite delay in opening?

MICHAEL BRADSHAW, PROFESSOR OF GLOBAL ENERGY, UNIVERSITY OF WARWICK: Well, I think it's difficult to know, isn't it, as you've already discussed. I

mean, this is part of a series of interruptions, which have been, one might say dreamt up at various times.

We had the planned maintenance, but before that, remember, we had the issue of the compressor that got returned to Canada for servicing and couldn't

come back and so forth. Siemens has said that there is no reason for sanctions actually stopping them from going to help with the repair of this

particular compressor station. And Russia is trying to say that, no, it's the sanctions, otherwise, we will be meeting our obligations.

But all the time, it's really engaged in a form of sort of economic warfare with Europe constantly turning up the temperature in terms of how little

gas it is prepared to supply.

QUEST: So, there are two distinct sides to this. There is the Russia, what it all means for their economy, we'll discuss that elsewhere, but there is

also what it means for the energy market.

Has the energy market -- I mean, we know Germany, for example, is already getting Kazakhstan, LNG from the United States, expensively by ship, has

the market picked up the slack for Europe already?

BRADSHAW: Well, we've seen a prolonged period of much, much higher prices, and around those higher prices in intense volatility.

So in fact, over the last week, the gas price spiked, and then it fell by 20 percent. It is on a knife edge and the market is basically spooked.

Anything that suggests there is going to be a curtailment of supply drives up the price because effectively, yes, Europe is looking for alternative

supplies of liquefied natural gas, most of that has come from the US and from Qatar, but the reality is, there is a limited amount of gas there to

be had. Buyers are engaged in a bidding war, and there is simply not enough to compensate for the wholesale reduction of Russian gas this winter.

QUEST: What's your best estimation for when Europe can stick two fingers up at Russian -- Russia natural gas?

BRADSHAW: Well, not for a few years, yes. I mean, if you think about the fact that it was 155 Bcm --

QUEST: Really?

BRADSHAW: Yes, because it's 155 Bcm of gas, 40 percent of European imports. The International Energy Agency estimates that from that 40

percent last year; this year, if we're lucky, it may be 25 percent. But the problem is that there are so many moving parts here and actually the global

supply of LNG is pretty flat. And so looking for alternative sources of supply are difficult.

So, on the one hand you can do something on demand. Europe has ambitions to reduce gas demand by 15 percent through the winter. Germany has rented five

floating LNG import ships for the winter, that's only going to increase competition for buyers for LNG, so, the reality is, it's going to take

time.

QUEST: And you know, you raise this valid point. I mean, it's very appropriate where we are. You can't see us, unfortunately. But today, we

are in Grand Central Terminal, which also has beneath me, Grand Central Station, and all other things, a major consumer of energy for public

transportation.

And if we look at this and extrapolate this elsewhere, as we go into a winter, along with domestic demand, I think -- well, you tell me, how bad

is it going to get in Europe?

BRADSHAW: Well, I mean, a lot of things have to go right for us to avoid a very serious energy crunch. You know, I think previously, one of your

colleagues mentioned the weather. The weather is a clear factor because of the role of gas in heating.

What happens elsewhere in the world, because we're in this competition for global LNG supplies. One of the things in Europe's favor over the last few

months is the fact that Chinese demand for LNG is about 10 percent lower than last year, because of the state of its economy. But if its economy

picks up and/or they have a difficult winter, then Asian buyers are going to be competing as well.

So, there is weather, it is what happens in Asia. There may be some maintenance problems. You know, all of the systems in Europe are working at

capacity, and when things work at capacity, there is a likelihood that they may go wrong.

So I think everyone has various scenarios and contingency plans, you know, from a best to a worst case. The reality is probably, it is not going to be

the worst case, but it's not going to be the best case.

You know, major industrial consumers are having to deal with record high prices. That's pushing down demand, but they may have physical shortages.

QUEST: You elegantly and we're grateful that you pointed out the moving cogs that will make this such a difficult conundrum over the winter.

Thank you, sir.

In the last hour, the IAEA, the head has updated on the Zaporizhzhia Nuclear Plant and what is happening.

Rafael Grossi has said that the physical integrity of the Ukrainian plant has been compromised, and he said, that was unacceptable.

(BEGIN VIDEO CLIP)

RAFAEL GROSSI, INTERNATIONAL ATOMIC ENERGY AGENCY DIRECTOR GENERAL: We believe and I continue to believe that the situation is extremely complex,

extremely challenging, and it will continue to require the permanent -- the permanent support and the monitoring that we are trying to provide now that

we are there.

(END VIDEO CLIP)

QUEST: Sam Kiley is with me.

When we spoke yesterday, I mean, you know the holes are there. Both sides still blaming each other? What does happen next, Sam?

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, according to Mr. Grossi, the head of that UN delegation, he has left behind six inspectors,

Richard. They may go down to two permanent inspectors, some of them coming out perhaps at the end of the weekend, when their first preliminary report

on this visit will be submitted to the Board of the IAEA effectively to the UN.

But going forward, the issue will be that there will, in the words of Mr. Grossi, be a difference between light and day having people on the ground

who are independent observers, charged with monitoring the integrity of a nuclear power station on the frontline of a war and it is that location

obviously, which is causing everybody so much consternation.

But also, he was very specific about where the threats lay. He wasn't so much worried about some kind of military missile or something hitting an

actual reactor; he was more worried about other things. Take a listen.

(BEGIN VIDEO CLIP)

GROSSI: It is clear that those who have these aims, these military aims know very well that the way to cripple or to do more damage is not to look

into the reactors, which are enormously sturdy and robust, but to -- you know, hit where it hurts, so the plant becomes, you know, very, very

problematic.

So, my concern would be, you know, the physical integrity would be the power supply and of course, the staff.

(END VIDEO CLIP)

KILEY: Now, it is the power supplies we've reported over the last couple of weeks that are so absolutely critical to the cooling systems that keep

the reactor from melting down. They have external power supplies. That is the main source. They have been cut twice. The second time only yesterday

during the UN visit or at least over that period, that is today, then reconnected.

[15:15:05]

In the interim, in both occasions diesel generators take over the cooling role in a nuclear power station. That is such a terrifying kind of link

between the old world and the new where atoms are being split. They'd have been dependent on fossil fuels that need to be trucked in to good old-

fashioned diesel generators in the middle of a war. It is that that is really causing serious consternation, the possibility of a permanent cut in

power to those nuclear power stations -- Richard.

QUEST: Sam Kiley, I cannot -- you know, one has to pinch oneself that we're talking in these terms. But unfortunately, we are and thank you. This

evening, when there is more to report, please do come back to us.

As we continue tonight, "Summer Fridays," we are at Grand Central Station - - no, Grand Central Terminal.

Well, the differences I will explain between the two, but the majesty and the mechanics, and anybody who thinks that New York is living on bygone

eras, after the break, we'll show you what $11 billion buys you at Grand Central.

(COMMERCIAL BREAK)

QUEST: If your heart doesn't rise and your spirits with it at the sight of that magnificent, then I don't know what will. That is Grand Central

Terminal, the home of the Metro North or part of the MTA.

Now, there are fewer people coming through here than there were before the pandemic, about thirty to forty percent fewer, so far seems to be the

suggestion.

Metro North which is the northern commuter rail carries around 125,000 people a day, down 50 percent. A lot of that has to do with working from

home.

Beneath me, of course, there is the subway and we know those numbers there.

Grand Central has seen difficult times before, but still not only has it survived, it survived in all its glory

(BEGIN VIDEOTAPE)

QUEST (voice over): It is the prized pony in the stable that is New York's public transport network -- Grand Central Terminal.

Opened in 1913 during the Golden Age of the railroad, and financed by Vanderbilt family money.

It is a marvel of Beaux Arts Architecture. That marbled concourse and the famed Opal clock and eyes up, that celestial ceiling.

But do not be fooled. This is not style over substance.

Here there are 67 tracks, which serve more than 100,000 commuters passing through Grand Central, on the way to Midtown Manhattan offices, or joining

the New York City Subway.

(on camera): A Cathedral to public transport, a monument to vision, ideas, and foresight. That's what Grand Central Station is because right in the

heart of New York -- north, south, east, west of Manhattan, and it all meets here.

No wonder, it is such an icon.

(voice over): An icon that nearly vanished.

In the 1960s and 70s, developers tried multiple times to demolish it. It led the former first lady Jackie Kennedy Onassis and the architect, Philip

Johnson, to start a Committee to save Grand Central.

Ultimately, it was the US Supreme Court that saved this building, when it ruled the city could legally protect the station as a landmark.

Protecting Grand Central didn't stop decades of neglect, until a $200 million renovation finally returned this masterpiece to its original glory

in 1998.

Now, Grand Central is on the brink of another historic transition, an entirely new terminal within a terminal set to open below the historic

building.

It will allow commuters from Long Island to come directly to the East Side of Manhattan. The price tag for the project, a whopping $11 billion.

(on camera): I'm now about 150 feet beneath the street level and this is one of the tracks and major concourses.

And so I asked the builders, well what was here before all this was built? Solid bedrock. They literally blasted the whole thing to create this.

(voice over): Grand Central Madison is set to open by the end of the year. It will cement the terminal's makes as the core of the Big Apple.

(END VIDEOTAPE)

QUEST: Now, so I promise you, Grand Central Terminal is this bit. Grand Central Station is the bit down there.

The subways, Grand Central Madison is the new bit, which is also down there.

I think it's easier just to call it Grand Central and hope somebody knows what you're talking about.

Janno Lieber is the head of the MTA that runs this very large organization that's responsible for New York's transportation.

He took over at a time of crisis, but he reinforces mass transit is essential to pandemic recovery.

(BEGIN VIDEOTAPE)

LIEBER: What we're showing is that mass transit is going to be part of New York's revival. We are contributing to the sense that New York is coming

back to normal and we're getting people back to their normal life pre- COVID.

QUEST: But okay, so let's look at pre and post COVID. Post COVID, ridership is still quite heavily down on the major arteries that you look

after.

LIEBER: Yes, and we're about 60 percent of what we were pre-COVID, but that's more than 10 percent up from a year ago. We're starting to see

people coming back more and more, and we're encouraging it with a lot of fair options, a lot of discounts, and hopefully great service that people

want to use.

QUEST: Right. But do you think there's an irreducible minimum that's gone?

LIEBER: I mean, there's definitely been some changes. Work from home is here to stay. It's not clear exactly how much, but I believe that New York

is not at risk because of hybrid work.

If you're a young person tapping away in your home a couple of days a week, you want New York more than ever, and we're here to serve you whenever

you're going somewhere.

QUEST: All right now, on this point, you've got all the various bits. Ridership is down thirty to forty percent.

LIEBER: Yes.

QUEST: But you rely quite heavily on fare revenue to make your -- to beat the books, don't you?

LIEBER: Yes, that's a good point.

Unlike most of the mass transit systems in America, we take half of our operating budget from the farebox. It's time to re-examine that funding

model.

QUEST: Do you believe that governments -- city, state, federal needs to pay more for the cost of New York's mass transit?

[15:25:06]

LIEBER: I do and part of this is recognizing that we are the antidote to climate change. We are essential to fuel the economy of New York City and

the region, which is a huge piece of the national economy, and the fact that we don't rely on cars means that we can get a whole lot more done

economically. It is time to invest in mass transit, not to disinvest.

QUEST: Tell me about this place.

LIEBER: This is, I think, one of the palaces of New York. It was in, obviously, early 20th century. It was built with private capital when the

railroads were still a private business. But not only is this just an ennobling spirit raising place to be, but it also made possible all of Park

Avenue, because Park Avenue is a bridge with all these trains going underneath.

So this is the centerpiece, but there is -- New York up to the 50s is created by this project.

QUEST: When people talk about this, I mean, magnificent ceiling, which at Christmas is just wonderful. People talk about all of this, but it nearly

didn't happen and it took a great deal of oomph.

LIEBER: Well, it was in the days of the robber barons. Remember somebody named Vanderbilt made this whole project happen. They owned the railroads

that New York Central Railroad and other railroads that came in here.

But the bottom line was the core idea, which is so important to New York, is that public spaces should be spirit raising, and be great spaces for

everybody.

QUEST: Let's talk about the projects that you've got underway that we're going to see one here. There is the Second Avenue line that's now up and

running. There is the Seven out to Hudson Yards, which is up and going. You've now got the Long Island Railroad coming into this building.

LIEBER: Yes. I mean, the Second Avenue subway, which opened a couple of years ago, the day it opened, it carried more people than almost every

other mass transit line in the United States. Investing in big projects in New York really benefits us.

Hudson Yards, the extension of the Seven Line created a whole new neighborhood. Now, in this building, right under Grand Central, we have a

brand new Long Island Railroad terminal, which is going to be a huge benefit for Long Islanders in Queens, people who will save 40 minutes a day

on their commutes. That's transformational.

QUEST: Right. And at the same time, though, you have to maintain the existing network.

LIEBER: Yes.

QUEST: Overseas people when they come here, as they say, it works, but it looks dilapidated. It works, but the paint is peeling. You've heard every

criticism.

LIEBER: Listen, we've heard every criticism. I grew up in New York in the 70s. The system was so much worse there, I think the system works pretty

well right now.

We have a long way to go, but we are investing and the great thing, Richard is, we kept building right through COVID. We figured out how to work safely

even in the middle of the pandemic, and we got a lot of work done.

QUEST: Is mass transit, inevitably going to be punctuated by big, beautiful projects that succeed like LIRR, Seventh Avenue, the redoing of

the escalators on the tube in London. But the real -- it is going to be a real grunge and grunt and strain and "uh" to the system.

LIEBER: I don't think so and there is why. Eighty percent of our capital program, which is over $50 billion for five years in state of good repair.

It's rebuilding the signals. It's rebuilding the insides of the system. It's rebuilding the structure. We're investing and making the system a

better one for everyday users.

(END VIDEOTAPE)

QUEST: Well, we will have more from Grand Central in just a moment. As we continue tonight, after the break and the news headlines. I'm going to be

joined by Chief US economist of Bank of America who is going to talk us through the latest job numbers.

They're not bad, they're not good, and you hopefully sir, will put them in context.

MICHAEL GAPEN, CHIEF US ECONOMIST, BANK OF AMERICA: I'll do my best.

QUEST: That's after the break.

(COMMERCIAL BREAK)

[15:32:01]

QUEST: Hello, I'm Richard Quest. We have a lot more QUEST MEANS BUSINESS for you this Friday from Grand Central. We'll also have U.S. jobs report.

And -- I mean, was it good? Was it bad? The suggestions one way or the other? We'll talk about it in a second.

And a visit to the Transit Museum. All right. Anoraks and #traingeeks. You'll love this bit. I loved it. I freely joined you. But the only comes

after the news headlines. Because -- I beg your pardon. Not news headlines. We continue of course with CNN tonight. U.S. markets are lower. Investors

are digesting the jobs numbers. And we have the news from Gazprom concerning the cutting off of Nord Stream 1.

The morning gains were wiped out. And NASDAQ is down their heaviest, it's up 1-1/3 percent. The Dow and the S&P also down. And the reason the jobs

numbers 315,000 jobs were added last month in line with expectations. A drop compared to July. There was a revision downwards elsewhere. And office

jobs are leading the gains and employment rate ticked up too. Still near the lowest levels of a half century.

Michael Gapen is the chief U.S. economist with Bank of America is with me now. Good to see

you, sir.

MICHAEL GAPEN, CHIEF U.S. ECONOMIST, BANK OF AMERICA: Good to see you.

QUEST: Very glad you came into me.

GAPEN: Happy to be here

QUEST: All right. Now, what do you make of this jobs number? What actually does it tell us?

GAPEN: I think what it tells us is the labor market is still robust. It's probably the best labor market of my lifetime. We're talking multiple

decades strength and labor markets. The other important thing was labor supply. We saw a rise in the participation rate which meant more workers

came back to the workforce. And that's really important because one of the reasons we've had a lot of inflation in the past year or two has been the

reluctance of workers to come back to work. And strong labor demand against soft labor supply has led to increased labor costs.

QUEST: So if there is an increase in workforce and an increase in -- then will that be sufficient to pick up the slack necessary to bring down

inflation? Because that only allows for inflation on the supply side aspect of it, not the demand side or indeed the energy and Ukraine aspect?

GAPEN: It helps but I would say no. It's probably not enough to remove all the inflationary pressures. Probably doesn't change where monetary policy

is going and how high interest rates may go. So it's helpful, but I don't think it changes the overall picture.

QUEST: What's your restrictive rate?

GAPEN: We're moving into it now. So I would say anywhere above 2-1/2, 2- 3/4. You start to get into territory that's likely restrictive.

QUEST: And you think what -- do you have -- have you gotten a forecast on why you think it's going to end?

GAPEN: We think it will end up around 375 by the end of this year. So another 125, 150 basis points of hikes by the Fed this year.

QUEST: Are you impressed with the way they've hiked?

[15:35:02]

I know it's always difficult to ask somebody has to deal with the fed on a regular basis but are you impressed with the way they've actually executed

monetary policy? Having made a shambles of it over the last few months?

GAPEN: I think in terms of when they decided to confront the problem. My response would be yes, they've lifted rates very quickly to what they think

is neutral. So they didn't waste time and getting to neutral. Now policy is going to start to get tighter, it's easier to get neutral. It's a lot

harder to get tighter. So, so far, I would say, yes, the urgency is there. Now we'll see how far they can go and whether they can engineer a soft

landing.

QUEST: You just --

GAPEN: That was a leading answer.

QUEST: It was. It was leading a soft landing.

GAPEN: A soft (INAUDIBLE) landing.

QUEST: What is the soft landing? It's just soft landing near recession because we're going to get in recession. You agree?

GAPEN: A soft landing would be considered no recession, a very mild rise in the unemployment rate, if any, my view is that will be very hard to

achieve. The labor market is historically strong. Whenever -- when the Fed has raised interest rates in the past, more often than not, it's ended up

in a recession.

QUN: The phrase I hear again and again, which is not, it's an elegant phrase. The U.S. --when global economics the U.S. is the cleanest dirty

shirt in the laundry. Is that true?

GAPEN: Yes. So -- and in situations like this, actually, the worst is in the rest of the world. Meaning that the more concerned you are about growth

outside the U.S., the more it actually helps us.

QUEST: But then do you have a concern on dollar strength or are we so not worrying about that now, because we've got bigger issues?

GAPEN: We do. That's part of the tightening and financial conditions. So higher interest rates, wider corporate spreads, or higher corporate

borrowing rates, higher mortgage interest rates, and a stronger dollar. All of that should combine to slow down the U.S. economy.

QUEST: Michael, you pointed out a little bit of, we'll show you the picture later. But there's a bit of a tidbit because in the last report, we talked

about how bad the ceiling was.

GAPEN: That's right.

QUEST: And you're telling me?

GAPEN: It was a lot worse.

QUEST: And there's a little part, isn't it?

GAPEN: There's a part of the -- so they clean the entire ceiling of Grand Central several decades ago, all the constellations that you see on the

ceiling, nobody could see. They cleaned it all off, but they left a dirt spot just so you can see how bad it was.

QUEST: If we can show everyone in the program we will. Thank you, sir.

GAPEN: Thank you.

QUEST: Michael Gapen of Bank of America joining us. Now, when we come back after the break. The Transit Museum, all in all.

(COMMERCIAL BREAK)

[15:40:17]

QUEST: Grand Central Station, no, Grand Central Terminal on a beautiful Friday afternoon, Start of a long holiday weekend. The end of the summer.

So it's going to -- it's getting extremely busy here and the last day of our summer Fridays because next week back to work. Well, fall, autumn,

winter, Halloween and on we go. Which is why when Jefferies Financial Group sent out its latest e-mail to employees urging them back to the office.

It says let's all appreciate that together rather than in lonely home silos. We can do our best to close out the in the right way. That's a

polite way of setting. Get your butt back on the seat in the office. Many New York banking on a return to the office and workers. The Edelman Trust

Barometer, 69 percent of employees believe office gives them a sense of community, not employees, not just employers and 66 percent not willing to

sacrifice well being for career advancement.

Edelman's chief executive Richard Edelman is with me. Now, hang on, are you saying that the 66 then they won't well being more than career advancement?

RICHARD EDELMAN, PRESIDENT AND CEO, EDELMAN: Richard, the truth is they want it all. They want career advancement, they certainly want societal

issues brought up. And they also want personal well being. So, companies are going to have to juggle and Edelman for instance is coming back hybrid

three days a week in the office two days out. And that's our best version of ourselves.

QUEST: How --the debate obviously, that you had within, do you worry about losing talent to those companies like the social medias and the Facebooks,

et cetera, who say work from home forever?

EDELMAN: I think actually that the basic theory is community matters. And I can have more civil conversations with my coworkers than I can actually

with my neighbors. And then people want to discuss societal issues. They want to be in a group. And I think people are willing to come back three

days a week.

QUEST: Three days seems to -- and provided not everybody takes the Monday and the Friday but then we're getting into the logistics, aren't we? Of how

it works. I think what I'm really trying to say here, do you get the feeling that bosses have understood people want to work from home, they

want the flexibility?

EDELMAN: I think what bosses maybe have underplayed is they have a special position right now. My employer is the most trusted institution. My CEO is

far more trusted than average CEOs. My company's newsletter is much more trusted than mainstream media. But you can't overplay your hand. People

have been shocked in the last two years by the pandemic, they've changed patterns of life, patterns of being. And so therefore, I think a transition

is necessary.

But you take the Trust Barometer, and you take the pandemic, and now you extrapolate into it. The recession that's coming that you heard, Michael

Gape and talking about, you're familiar with. Ever economic times get harder, what happens then?

EDELMAN: I still think that the workers are saying, we want a new deal. We definitely --

QUEST: What is that deal?

EDELMAN: The deal is give me three days in, two days out. I'm prepared to change some, but I'm not going to go back to the way it was because I

really value work, life, balance, but I also want to be sure that my family is good.

QUEST: As a CEO of a large company, how much of responsibility do you feel to make sure employees have work life balance? And the reason I asked that

is the big banks, the Goldmans, the Morgans, the BOAs, whatever. They'll have the right policies. But there's an -- a subculture underneath that

says, your work, you know, it's the old line, remember, look left, look right, half of you won't be here this time next year.

EDELMAN: I just think that kind of top down management is past. I think that we have to recognize that employees want to voice, employees want to

feel as if their ideas are being heard. They want companies to speak up on sustainability and on race and diversity and now on geopolitics. And again,

this idea of it's the civil place, it's the place we can come together and actually talk about these issues really matters.

QUEST: Summer Fridays. I'm so glad you came and you were telling me that your father used to work here at Grand Central?

[15:45:07]

EDELMAN: He worked for CBS Radio up where those windows are for Arthur Godfrey. And his real job was to get Arthur Godfrey out of bed in the

morning, and slap them into the chair at 7:00 a.m. and hand him the news.

QUEST: Right?

EDELMAN: Yes.

QUEST: So --

EDELMAN: 1946.

QUEST: So what is interesting -- what's interesting is, everybody's got the Grand Central story.

EDELMAN: That's absolutely true, including my own when I came here when I was six years old, and looked up here and thought I'd come to heaven.

QUEST: Thank you very much indeed. Good to see you. Richard Edelman --

EDELMAN: See you my friend.

QUEST: -- joining me. Thank you. I'm very glad you came down here today. Currently, what we are -- one of the nerve centers of New York City. Now

the full extent is invisible from where I'm standing at the moment because down there, beneath me, is the subway. Grand Central's busiest hub behind

only Times Square. The subway was built 118 years ago. The first line ran from City Hall to where else? Grand Central. More than 1000 kilometers of

Main Line track. So -- but everybody who loves trains and transport, there is a museum and it is indeed the Transit Museum.

(BEGIN VIDEOTAPE)

QUEST (voice over): If you want to understand New York's history, look at the subway map. This ever changing network of railways, crisscrossing

through the five boroughs of the city. And the 100-year history is told here. New York Transit Museum.

QUEST (on camera): It will come as that little surprise that if you're visiting the New York Transit Museum, you enter the subway station.

QUEST (voice over): The museum's director Concetta Bencivenga is my guide for this journey.

CONCETTA BENCIVENGA, DIRECTOR, NEW YORK TRANSIT MUSEUM: This is what we like to say to people at the Transit Museum. The reason why the Transit

Museum exists. You experience New York the way you do because of mass transit. You just don't know it.

QUEST: As the subway expanded, so the city grew. A chicken and egg. New rail links gave remote locations, high speed access to the city's

commercial centers. Entire neighborhood sprouted up around new subway stations.

BENCIVENGA: If you look at some pictures that we have of Queens, if you look at what's now, city field, right? The Willets Point, it's farm until

the seventh train comes out there. Similarly, the Bronx is the Bronx as you know it today because those farmsteads were kind of hacked up. Certainly

the island of Manhattan exists the way it does because of the IRT, because of the original subway line.

QUEST: Subway cars from every era chronicle the city's ups and downs throughout the 20th century. The triumphs of the World Fair in the 1960s.

BENCIVENGA: I am partial to this cart. This is called a Bluebird.

QUEST: It's huge.

BENCIVENGA: It's huge. These were the trains that would take you to the world's fair ground out in Queens.

QUEST: And the tougher times the financial crisis of the 1970s.

QUEST (on camera): We have to just stop here.

BENCIVENGA: OK.

QUEST: This is so famous as a headline. President Ford to New York during the bankruptcy, drop dead, he'll veto any bailout. And that's where we get

this extraordinary graffiti that was on the trains in the 1970s.

QUEST (voice over): Navigating the subway system requires a little bit of New York mouse, you have to stay on your toes, even for seasoned travelers.

QUEST: (on camera): The number of times I have got on a train without realizing it's going to do a nasty right. Instead of go straight up.

BENCIVENGA: Well, not all of us can benefit as they do in London from a singular map system that is over a century old. But I will tell you this.

QUEST: It's a very complicated system.

BENCIVENGA: Well, it's a very large system. It's one of the largest systems in the world.

QUEST (voice over): In 2020, the COVID pandemic transformed New York's bustle into an eerie quiet.

QUEST (on camera): So this is Time Square. Normally, it would be packed with commuters. But as you can see, at this major interchange, there is

virtually no one here.

QUEST (voice over): Now the Transit Museum is preparing to open a new chapter in its history.

BENCIVENGA: We're not ready to tell the story of New York and the pandemic but we absolutely are cognizant of the fact that we were living through a

historic time. And so, we were collecting all of the sort of artifacts and ephemera that were indicative of this time.

QUEST: A hundred years after its inception. The New York City subway remains as vital as ever.

[15:50:02]

BENCIVENGA: Pick your metaphor, it is the lifeblood, it is the artery, it is the oxygen that we need to get by.

QUEST (on camera): I love the New York subway I take it every day. And even if it's not the most efficient or the cleanest in the world, it works. And

the old moral is so true. As goes the New York subway, so go means New York City.

(END VIDEOTAPE)

QUEST: Earlier in the program, Richard -- sorry, Michael Gapen told us about that little square that is on the roof that shows you what it looks

like. Well, we've managed to turn the cameras around and if I crane my head up. You see, that is what the roof used to look like. The whole roof. Can

you imagine before the renovation? Magnificent what they've done. All right. QUEST MEANS BUSINESS live from Grand Central. It brings to an end

our summer Fridays bittersweet. We'll look back after the break.

(COMMERCIAL BREAK)

QUEST: Welcome back. So this weekend is Labor Day in the United States. After Labor Day, you can't wear white shoes in the Hamptons. Not that

you're going to anyway. But the more important point is it's the end of the summer. And with that, the bittersweet the end of our summer Fridays. We've

loved bringing you. We've been from museums to great views up down and all about. Let's remind ourselves how good a summer Friday can be.

(BEGIN VIDEOTAPE)

QUEST (on camera): We've had a horrible pandemic. There's inflation all around. And yet companies continue their -- own company Warner Brothers,

Discovery continually say take it easy on a Friday. Don't host any meetings. Don't have meetings on Fridays. Make sure people have room to

breathe, to think, to enjoy. And so we decided for the next month or two, every Friday the program will come from somewhere different, somewhere

enjoyable.

Tonight we are suspended on the edge. 1200, 1100 feet above Manhattan. We are on the edge literally, figuratively. It's a spectacular, spectacular

Friday afternoon in New York City.

[15:55:09]

Tonight, we are at Little Island which is out on the western side of Manhattan.

Nick, when you see people here what do you think? What happened inside (INAUDIBLE)

UNIDENTIFIED MALE: Honestly, I just enjoy happiness.

QUEST: Good evening from JFK. And the TWA hotel is summer Fridays. We are here because it's an icon of aviation pass. It as a hotel for today but it

reminisces somewhat gloriously about the beacons of the past and looks forward to the future.

UNIDENTIFIED MALE: It's sad dark for 20 years the opportunity to bring it back to life was a once in a lifetime opportunity.

QUEST: Well live tonight from the Metropolitan Museum of Art here in the heart of New York.

This is a blockbuster.

UNIDENTIFIED MALE: This is one of our most famous paintings. It isn't necessarily one of the greatest but it's famous.

(END VIDEOTAPE)

QUEST: From Grand Central -- sorry from the net last night to Grand Central tonight. A profitable moment after the break. QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: Tonight's profitable moment from Grand Central. The end of our summer Fridays. But there's one thing we've learned over this. Maybe just

not because of the pandemic per se. But we've reminded ourselves as Richard Edelman did. The importance of getting out. The importance of getting away.

The importance of just decompressing and that's what the summer Fridays have been all about.

A chance for us to get out of the studio to go and talk to different people, see different things. And oh, take off the tie and relax. Well,

Fridays and summers are coming to an end now. But we will make sure that we maintain that spirit. And let me ask you a question. Here's your test. What

are you going to change differently? How are you going to make more room for yourself? Remember, beginning of this summer, I took a month off

because of long service leave.

Everyone thought I'd never do it but I did. My French is a much better (INAUDIBLE) but at least I made the change. And that's what I'm urging

tonight. Summer Fridays may be coming to an end, but we certainly are not. It's been brilliant. And now let's plan for Christmas.

[16:00:00]

And that's QUEST MEANS BUSINESS for this summer Friday at Grand Central Station. Grand Central Terminal. Grand Central Madison. Whatever you're up

to in the hours ahead, I hope it's profitable. I'll see you next week.

END