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Quest Means Business
NVIDIA Shares Soar on Expected Revenue Boom; Fitch Places US Credit on Rating Watch Negative; DeSantis Presidential Bid Launch Hit by Twitter Glitch; Germany in Recession; Schneider Electric CEO Stepping Down; Call to Earth: Mauritius. Aired 3-4p ET
Aired May 25, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: There is an hour to go before the closing bell will ring on Wall Street, and as you can see, it is tech
stocks, particularly one stock, which we'll get to in just a moment that is propelling the market higher because the broader market isn't that much
off, but it is NVIDIA, we will explain why in just a moment.
The markets are bullish on the main events of the day, which is extraordinary. NVIDIA shares are surging on strong demand with generative
AI chips.
At the same time, the other side of the coin, Fitch is threatening to downgrade the US credit rating over the debt ceiling drama.
And the launch of a new QMB tradition: We are inviting you to Read to Succeed. We delve into the world of self-help books, and we sort the wheat
from the chaff, the nonsense from the good, and hopefully make some sense for you along the way.
Live from New York, Thursday, May the 25th. I am Richard Quest, and yes, I mean business.
Good evening.
NVIDIA says the tech sector is on the cusp of an AI boom and demand for it is soaring for its high-powered chips. NVIDIA shares jumped, 25 percent to
an all-time high. Remember that stock split two years ago on a four for one basis. The company is now worth nearly a trillion dollars.
The latest guidance is lifting other chip makers. AMD is at 10 percent, TSMC up 12 percent, which is all because in the video expects $11 billion
in revenue this quarter, 50 percent more than the average on the estimates.
Clare Duffy is here.
Now look, Clare, hang on a second. Let's have a bit of commonsense here. Nothing has really changed. I mean, NVIDIA has been making these chips. AI
has been coming on stream, so what did change? Who woke up?
CLARE DUFFY, CNN BUSINESS WRITER: Right, Richard. NVIDIA AI chips necessary to make this kind of technology. I think what's really changed here is this
real sort of surge in generative AI technology, and the demand for this kind of generative AI. These kinds of technology tools rely on these
massive -- they're called large language models, and it relies on these massive troves of data. It relies on advanced computing to sort of sort
through those massive troves of data in order to get this sort of very interactive, consumer friendly thing where I can type in a question and the
computer will pop out an answer.
All of that relies on many, many of these little, tiny, but very powerful chips that NVIDIA has really been the leader in making.
QUEST: Let's factor the geopolitics into it because NVIDIA has also had problems with China. We now know, of course, the US and China relationship
when it comes to chips. But at the same time, the US has had its chip protection policy, the CHIP Act of a few years ago, so that in itself
propels these new chips.
DUFFY: That's right. I mean, the US really has been sort of supporting this industry, making sure that onshore production of many of these advanced
technologies is more and more possible and so all of that is really a boon to this company, on top of the fact that we are really sort of in the early
stages of this AI revolution.
One analyst called NVIDIA, the heart and lungs of the AI revolution, and so you really get a sense of what the potential is here for this company.
QUEST: And what about this idea from the ChatGPT owner that they would pull out of Europe if the regulation becomes too difficult. I mean, you and I
have already spoken about the difficulty of siloing in a global market. They would be shooting themselves in both feet if they did try to do that.
DUFFY: They would I think, but it is a real significant threat, right? Because the Europe also doesn't want to miss out on all of the innovation
that would come from these companies interacting with the EU.
So I think it is a big threat, although Thierry Breton, the EU commissioner doesn't appear particularly concerned about this. He tweeted in response to
the story about OpenAI CEO, Sam Altman's response. Here, I think we've got it on the screen for you. He said: "There is no point in attempting
blackmail," and added that, "The EU really wants to help companies comply with these new rules."
QUEST: I mean, that's the point. You can't really blackmail arguably the largest single market in the world.
DUFFY: That's right. I mean a lot of these AI leaders are really trying to influence what this AI regulation is going to look like and so perhaps this
is sort of a strong way of attempting to do that.
[15:05:08]
But it's interesting, I mean that US leaders seem to really be eager to engage with Sam Altman. They were interested in what he had to say in
Congress a few weeks ago, and so this does seem to be sort of a divergence for him, sort of bringing on this fight with the EU, but we'll see what
happens.
QUEST: Good to see you, Clare, as always. Thank you.
NVIDIA's surge is almost single handedly pulling the NASDAQ higher. It is up as you can see, the best part of 1.6 percent. Elsewhere, of course, it's
just more worries about the debt ceiling.
There are positive signs. Let's not overstate them though that they may be getting closer to a deal and it pushed the Dow briefly into the green, see
that little smidgen around two o'clock, it didn't last long and now negative again.
The negotiations are dragging on and Fitch, one of the three big rating agencies, put the US credit on a negative watch. The standoff also comes as
a delicate time for the economy and GDP revised slightly higher. The annual rate is 1.3 percent.
Rahel Solomon is with me. Rahel, first of all, this idea of Fitch's A to AA, at the same time, of course, Standard & Poor's some years ago 2010-2011
actually cut the US, so it wouldn't be out of the question if Fitch did so.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: It has happened before, Richard, but I definitely think it would be unusual considering that it has only
happened once, right, 2011, as you rightly pointed out, but you have to remember Richard, when the credit rating for the US was downgraded, it set
off a global selloff, the worst day for Wall Street, I believe, since the 2008 financial crisis.
So it certainly would be remarkable if in fact, we see it. But one thing that has not gotten as much attention, Richard, about that Fitch ratings
watch look -- negative ratings watch look, is that Fitch's base case is actually that a deal gets done, right?
So essentially, what you have here is saying, the rating agency is saying is that we still think that a deal will get done, but there will be a lot
of noise between now and then whenever that date is, and there is a possibility that it may not get done.
QUEST: Right. Yes, but you see, if I remember rightly, with the S&P downgrade back then, one of the reasons was the forward-looking outlook for
the debt sustainability, which frankly, to be honest, S&P has been proven right.
So Fitch could -- as Fitch is saying, yes, you could still do a deal, and we could still downgrade you because your debt sustainability is
deteriorating?
SOLOMON: Yes. I think that's a fair point. I think there are a few scenarios here, right? One is that lawmakers get a deal done, but at the
very last minute, because remember, even if the US Congress was able to reach a deal, the President was able to reach a deal today, remember, it
still takes 72 hours. You have to give lawmakers 72 hours to review the plan. It has to get through both chambers, and the president has to sign
it.
So yes, there is a chance that it gets done. There's a chance that however, we get to June 1st and the Treasury Department prioritizes interest,
prioritizes other payments, but doesn't pay other payments. That would not likely qualify as a default. Right? And then there is of course, the
catastrophic scenario.
So the scenario is still there, but the reality is, Richard, is that there are a few different scenarios that could play out and if we can get to June
15th, the Treasury Department gets another infusion of cash from second quarter tax payments here in the US, that probably buys it another month.
So we may be talking about this maybe just for another week or so, or Richard, you and I may be talking about this for the rest of the summer.
QUEST: No. I think the problem is in the plumbing, if you want my opinion, well, you're going to get my opinion whether you want it not.
The problem is in the plumbing, that somewhere deep in the plumbing -- the financial plumbing -- something that relies on Treasury rates or money
market rates or some form of derivative falls apart, very similar to what we saw with Liz Truss and the insurance companies. That's where the problem
comes. That's where it will originate. That's where you're going to see it initially. It'll explode very fast with great brutality.
SOLOMON: Well, I certainly hope not, but I mean, we shall see.
QUEST: All right, we will, and you'll be watching and will I. Thank you.
The outgoing World Bank President says the entire concept of a debt limit is flawed. David Malpass said US lawmakers need to take a different
approach to budgeting. He told Julia Chatterley the country won't default.
(BEGIN VIDEO CLIP)
DAVID MALPASS, OUTGOING WORLD BANK PRESIDENT: I've advocated -- at some point, people take a deep breath and rewrite the law so that what it does
is actually gives a limit on spending before you spend the money.
I've been pleased to see you know, the House of Representatives passed a bill to increase the debt limit. So at least there's one thing on the table
and then they've engaged in the negotiation. This is what happens almost every few years, they go into this cycle.
So, I'm hopeful that they can get to an agreement that will raise the debt limit.
[15:10:10]
All we are talking about is paying for money that has already been spent, and then also find a way to have more restraint on spending going forward.
That's the age old question.
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, "FIRST MOVE": Yes, and that sort of leads us on to the next discussion. But just very quickly, can I
ask if the World Bank is making any preparations -- because you have great responsibilities all around the world -- for a potential default and what
kind of repercussions that might bring? Do you have some kind of war room working on it, for example?
MALPASS: I don't expect a default, and as far as the issuance of the bank, they look at technical steps working with Wall Street and the whole
community so there is not a special war room or no expectation of a default.
(END VIDEO CLIP)
QUEST: The outgoing president of the World Bank.
QUEST MEANS BUSINESS tonight.
Ron DeSantis announced he is running for president. He did it on Twitter Spaces. Well, we know about the technical errors. The question is how
damaging it is both to him and of course, indeed to Twitter, that they couldn't get that bit right -- in a moment.
(COMMERCIAL BREAK)
QUEST: So Ron DeSantis, the presidential campaign, that was hardly an auspicious start when it got underway on Wednesday.
It was on Twitter Spaces and it crashed as hundreds of thousands of users logged on. I was one of them trying to log on.
Most people saw a window that said "preparing to launch." I managed to get on eventually, and then it broke off and then it came back again.
Anyway the event moved from Elon Musk's account to the moderator, David Sack's account. Over half the original listeners eventually joined.
Musk and DeSantis trying to take a positive view of the situation.
(BEGIN AUDIO CLIP)
GOV. RON DESANTIS (R-FL): It just keeps crashing, huh?
ELON MUSK, OWNER, TWITTER: Yes, I think we've got just a massive number of people online so it's -- servers are straining somewhat.
MODERATOR: All right, sorry about that. We've got so many people here that I think we are -- we are kind of melting the servers, which is a good sign.
(END AUDIO CLIP)
QUEST: Stephen Collinson is in Washington. I've got mixed on this. On the one hand, I can sort of see you want -- from DeSantis' point of view, he
could be duly pissed because he wants a great launch, but they were trying something different.
If anything, the blame goes to Twitter Spaces not Ron DeSantis, that they didn't have it and I mean I sort of wonder whether they were making too
much of the failure. I don't know. What do you think?
[15:15:09]
STEPHEN COLLINSON, CNN POLITICS SENIOR REPORTER: I think you're right on both counts. First of all, it's pretty embarrassing. Ron DeSantis had been
waiting for months to launch this campaign, but the idea that his political fate is going to be decided by a glitchy Twitter feed seems pretty
farfetched. I'm not sure how many voters in Iowa and New Hampshire in eight months are going to care about that.
But you know, Richard, you've covered a lot of campaigns, sometimes campaigns do turn on the most trivial and unexpected events. The question
here is, does this mess become a metaphor for the candidate?
On the one hand, it gave Donald Trump, the frontrunner in the Republican campaign an opportunity to get in there and say, look, Ron DeSantis might
be great in Florida, but he is not ready for the national stage. And at the same time, it undermined the core argument of DeSantis' bid for the White
House and that is that with Donald Trump, you've got chaos, you've got a mess.
He says, he is focused, he is disciplined, and he would be much better at implementing a hardline right-wing agenda in the White House than Trump
was.
So you can understand why the whole Trump campaign thought this was hilarious and see it as a big opening. I think the question is, does
DeSantis manage to recover from this and you know, ensure that it doesn't define the early months of his campaign?
QUEST: No, but as I understand, and you're the expert, the more candidates that jump in, the better this is for Donald Trump.
COLLINSON: Definitely. And now we've got seven or eight. The big question - - there two big questions, I think in his campaign for Ron DeSantis, who is the second ranking candidate. He is clearly the biggest threat to Trump. He
won Florida and his re-election as governor by 20 points last year, are how does he take on Trump? And can he clear the rest of the field?
Can he be a formidable enough candidate, that all those candidates like Nikki Haley, or Tim Scott, the South Carolina Senator, who are polling in
the single digits today decide we're going to get out before the voting starts, because we don't think we can win. If DeSantis can convince all
those people to leave, that means the anti-Trump vote will probably go all to him.
Back in 2016, the reason Trump won was because he only had 30 to 35 percent in most of the primaries, but he got all the delegates to the nominating
race, because there was lots of candidates and the anti-Trump vote was split.
If we see the same thing now in 2024, I think the result will probably be the same.
QUEST: And we are a long way off, I know, and you will rightly caveat me not to sort of get ahead of myself, but if there was a straightforward vote
today between Ron DeSantis and Donald Trump, Trump wins, is that right?
COLLINSON: Yes, I think so, and that is perhaps a different answer than it might have been three months ago. I think the indictment of Trump in that
case up in New York has actually helped the former president and for all of his extreme rhetoric on the campaign trail, he has actually run quite a
smart campaign in trying to define an attack DeSantis before he gets in.
But as you say, there are eight months to go. Trump is facing multiple legal investigations. We don't know how that's going to play out. It could
turn out that DeSantis turns out to be a very strong candidate, and some of those wavering Republicans who are worried about Trump's behavior, and are
looking for someone else might decide to jump on his campaign wagon.
But right now, if you talk to Republican voters, most of them still want Trump, even if there are questions about whether he could appeal to a
national electorate and might lose the general election yet again.
QUEST: Stephen, we have a long way to go. Thank you, sir.
COLLINSON: Thanks.
QUEST: The billionaire, Elon Musk, of course, is not shy about making his opinions known on divisive social issues. And so his decision to host Ron
DeSantis and the presidential launch on Twitter may help position him as a challenger to the right-wing media mogul, Rupert Murdoch.
CNN's Miguel Marquez reports.
(BEGIN VIDEOTAPE)
MUSK: I'll say what I want to say and if the consequence of that is losing money, so be it.
MIGUEL MARQUEZ, CNN SENIOR NATIONAL CORRESPONDENT (voice over): Elon Musk, opinionated, sometimes libertarian, contrarian, serial controversialist, at
times sounding conspiratorial, his wealth measured in the hundreds of billions among the richest in the world, now injecting himself into public
debate like never before.
MUSK: I wish we could have just a normal human being as president, that's what I want.
MARQUEZ (voice over): Mask on CNBC last week talking everything from Tesla to SpaceX, to Twitter.
MUSK: My overall kind of vision for X or Twitter is to be a cybernetic collective mind for humanity.
MARQUEZ (voice over): Musk even addressing some of his more controversial takes on current events via his Twitter platform.
[15:20:10]
He tweeted then deleted about the attack last October on then House Speaker Nancy Pelosi's husband, Paul, in their San Francisco home. The tweet helped
the spread of disinformation about the attack.
He cast doubt on whether the shooter who killed eight and wounded seven at a Dallas area mall earlier this month held White supremacist beliefs,
despite the Texas Department of Public Safety saying the shooter had Nazi patches, tattoos, and a long history of supporting White supremacist views.
He tweeted his dislike for the billionaire and Democratic megadonor George Soros, helping drive anti-Semitic views about the Holocaust survivor.
MUSK: I said he reminds me of Magneto. He is like calm down, people. Let's just not make a metaphorical case out of him.
UNIDENTIFIED MALE: Well, you said he wants to erode the very fabric of civilization and Soros hates humanity, like when you do something like
that, do you think about --
MUSK: Yes, I think that's true. That's my opinion.
MARQUEZ (voice over): On politics, Musk opaque at best. He supported Obama, says he did not like Trump; voted for Bidenm, and is now disappointed with
his performance and has indicated many times he'd support Florida Governor Ron DeSantis, putting his choice for the next president this way to "The
Wall Street Journal."
MUSK: I think someone that is representative of the moderate views that I think most of the country holds in reality.
MARQUEZ (voice over): Musk's own views often seem controversial for the sake of controversy. On COVID, Musk says he was vaccinated, but late last
year he tweeted, "My pronouns are Prosecute/Fauci." Hardcore conservatives celebrated it. The medical community and many on the left were horrified.
Miguel Marquez, CNN, New York.
(END VIDEOTAPE)
QUEST: Now, a new airline and you know, we are always fond of airlines, a new airline is launching this summer. It's an old business class carrier,
it's called BeOnd and note the spelling of it.
The model, of course of an all business carrier or premium carrier is not new. It has been tried several times with very limited success. Now BeOnd
has been granted the status of national carrier for the Maldives and it is primarily leisure travelers who it is aiming itself at as you can look at
the routes from Mali out there.
The trick is getting the price right. So we checked for flights from Paris and to Mali for one week in November, and as you can see, Qatar, three
thousand -- all around $4,000.00 at the moment.
So you have to really be able to beat, if you're like dominant carriers.
Tero Taskila is the CEO, he joins me from Dublin. Sir, you're very familiar of course with the economics of an old business class or a premium or
premium cost carrier. You don't have the yield management that others have, but you've got, in a sense, captive leisure routes with the Seychelles --
sorry, with Mali.
TERO TASKILA, CEO, BEOND: That's correct. And we are the world's first leisure premium airline. So as you said, we are based in Maldives operating
260 destinations out of Maldives. It is not only the price which matters, it also matters for the premium passengers, the convenience. So we don't
have these three-hour layovers as the other players might have through the Middle East. We are flying nonstop. That's what the national carrier status
gives us.
QUEST: Okay. The question always becomes and we have looked at this on QUEST MEANS BUSINESS many times. The question becomes one of reliability,
you have a limited number of aircraft, so your reliability.
Secondly, your pricing your ability to price, when you bear in mind that the Emirates and Qatars can yield manage to take away your profit just by
reducing or increasing the number of seats -- premium seats they're prepared to sell at a discount.
TASKILA: Yes, we also have to remember that our cost base is extremely low. We are operating a narrow body aircraft on the long-haul routes, and they
are up to 80 percent more cheaper to operate than the wide-body aircraft operated by the other airlines on the same distances.
So our unique configuration with 68 seats with the aircraft which typically carries 220 seats allows us to fly further and more efficiently than any
other airline in the world.
QUEST: When do you expect to launch your first flight?
TASKILA: The first flight will be launched in the fall and we will get the first the aircraft delivered in July.
[15:25:03]
QUEST: And so now I noticed that you're going for the 321LR or XLR, I presume the XLR gives you more range when it finally comes on route.
TASKILA: That's correct. So we are using the 320 family. It is ranging from 44 to 68 seats. Like you rightly mentioned, the XLR will enable us to fly
up to 13 hours and that allows us to fly to Sydney from Maldives, something which have never been done before.
QUEST: I mean, you have a very strong chance of success here, because essentially, the premium prices charged by the legacy and traditional
carriers has been very high for the Maldives, and I'm guessing if you price right and it is a leisure market, you will stand to do very well, providing
you've got a deep enough pocket that can withstand probably a few seasons of losses as the other carriers take you on.
TASKILA: Well, that's correct, and the markets to Maldives, the premium demand is huge. The premium travel is one of the fastest growing market
segments in the world and the other analysts are already reporting full cabins for the premium seats, and they also have business class passengers,
those are lesser customers.
So we do see that there is a lot of market space for us to introduce our aircraft and we will also be able to yield manage it properly.
One of the unique things, what we bring to the market is the distribution advantages. So the traditional airlines typically sell only 360 days ahead,
they don't have the technology which enables them to sell further.
But as you may know, most of the premium resorts, they sell out 13 months, 15 months ahead of time. So people are booking for Christmas 2024 as we
speak, and we are the only airline who can sell tickets for that time period as well.
QUEST: Okay, ultimately, this -- I mean, you've been granted sort of national carrier status by the Maldives. I mean, what does that give you in
effect? Does that enable you to enjoy better treaty relationships? Do you come under -- because of that, the Maldives Bilateral Treaties?
TASKILA: We come under the bilateral treaties, as a national carrier status, we can act with bilateral stops at 80 countries around the world,
and that way we can grow and introduce new services where we have a monopoly position.
Obviously, those bilateral allow them the competing airlines to operate from the other end to the Maldives, but we don't see that happening or if
it happens, then they will not be able to match our product.
QUEST: We look forward to trying it out, sir. QUEST MEANS BUSINESS, as always, we like to be at the forefront of these things, so hopefully the
next time you and I will speak, we will be on your aircraft and hopefully heading somewhere nice.
TASKILA: Yes, I would love that.
QUEST: We will do it. Thank you, sir.
TASKILA: Thank you.
QUEST: QUEST MEANS BUSINESS tonight, Europe's largest economy has slipped into a recession, not even a calming in energy prices can save Germany from
the economic ills.
In a moment, it is a cake that's baked in Germany, in a moment.
[15:30:00]
(MUSIC PLAYING)
QUEST: Hello, I'm Richard Quest. A lot more QUEST MEANS BUSINESS in just a moment. Europe's largest economy has officially slipped into recession. Now
how long and deep will that slump be and what will be the contagion to the rest of Europe.
And then "Burn the Boats," the self help author Matt Higgins about why you should not have a plan B. You will find out, as we continue. This is CNN
and all of that is after the news. On this network, the news always comes first.
(MUSIC PLAYING)
QUEST (voice-over): In Ukraine the head of the Russian mercenary group Wagner says his troops are withdrawing from Bakhmut. Yevgeny Prigozhin says
they'll leave by June 1st. Ukraine (INAUDIBLE) has completely captured the town. Ukrainian officials do confirm Russia is swapping Wagner troops with
regular units there.
The London police have arrested a man whose car hit the front gates of Downing Street today. Of course, it's the home of the British prime
minister and his officer, Rishi Sunak. We do not believe the instance is terror related. There were no injuries reported. (INAUDIBLE) criminal
damage and dangerous driving.
Three people have been killed in a rare act of gun violence in Japan. The police there are responding to reports of a stabbing in Nakano City in
central Japan. That's when they say a man fired at the officers and killed two of them. A female stabbing victim was later pronounced dead at the
hospital.
Microsoft has warned Chinese hackers are likely pursuing cyber capabilities that could disrupt critical communications between the U.S. and Asian
allies in the event of a future U.S.-Chinese crisis. The tech giant says it's part of a spying and information gathering operation.
Beijing is denying the allegations and calls it a disinformation campaign.
A boat carrying around 500 people is still missing in the Mediterranean, more than two days after it first called for help. One of the passengers
was born on the voyage, according to an aid group. The search operation continues. Officials say over 46,000 migrants arrived by boat to Italy this
year, fleeing difficult situations in their home (INAUDIBLE).
(MUSIC PLAYING)
QUEST: Now that Europe's largest economy has slipped into a recession, Germany's latest GDP revision shows the economy shrank last quarter by 0.75
percent. That follows the decline of 0.5 percent during the year's Q4. The DAX fell around 0.3 percent. Most markets were closed lower today.
You can see that the FTSE was the worst of the day.
If it is a recession and it is at the moment, how long and deep?
CNN's Anna Stewart reports.
(BEGIN VIDEOTAPE)
ANNA STEWART, CNN CORRESPONDENT: We had a hint of bad news for Germany's economy early this month, with data from March showing a significant drop
in German industrial production and a fall in retail sales.
IMF reports it already projected that the economy would shrink this year, albeit only by 0.1 percent. Now some economists, Catholic economics,
Commerce Bank, they think this recession could actually deepen further. The main cause of the contraction is the impact inflation is having on
spending.
Germany inflation has fallen from its peak but it is still running hot, coming in over 7 percent --
[15:35:00]
STEWART: -- in April and food prices increasing by 17 percent from a year ago. So perhaps it isn't surprising that household spending decreased by
1.2 percent in the first quarter and you can see in the data today that people are spending less on all sorts of things, food and beverages,
clothing and footwear, home furnishings and cars.
Now car manufacturing, which is, of course, a huge industry in Germany, has also taken a hit due to Germany phasing out plants and subsidies for hybrid
and electric vehicles. Meanwhile the European Central Bank has raised rates to their highest level since the 2008 financial crisis.
And that is further squeezing those households with mortgages and debts to pay. The bank's president Christine Lagarde has hinted there are further
hikes to come.
(END VIDEOTAPE)
QUEST: Anna Stewart with those details.
The recession, despite easing inflation and energy, prices just rose 0.2 percent in April after rising over 30 percent last year. Companies and
households are trying to reduce consumption. And they are turning to companies like Schneider Electric to help manage their use, particularly on
a large scale.
Jean Pascal Tricoire is the chair of Schneider, just having stepped down as chief executive.
Sir, it is good to see you. Let's get an overview before we dig deep into it.
As the economies have slowed down and as recession has arrived, how obvious has that have been to you that there has to be a rethink?
JEAN PASCAL TRICOIRE, OUTGOING CEO, SCHNEIDER ELECTRIC: Look. In the sector we are covering, which are technologies for sustainability, energy
efficiency and energy transition to electrification, we don't see at all a recession.
And truly we see an exhilaration (ph). We are a very global company. Europe is one quarter of our service (ph). Our largest market is the U.S. We have
a very balanced presence around the world.
And what you see around the world is very different. You see many companies engaging in -- drawn in to sustainability and we are the partner of 40
percent of the Fortune 500 companies on the journey.
You see digital being used for efficiency on the shop floor in smart building, in smart homes, in smart cities everywhere.
And finally, electrification, which is a center point of Schneider, is going to grow in everything we do. Today it is 20 percent of what we do in
the world. And it will double or triple in the next 20-30 years.
(CROSSTALK)
QUEST: In the deployment of capital, so, for example, I was reading some notes on your expansion or the expansion you put forward for India and
places like that.
In the deployment of where you put capital, now and in the future, where does that shift continue?
TRICOIRE: That we don't shift. We are pushing on all geographies. You have emerging countries like India, which has become our third largest country
in the world, where we employ 35,000 people.
Then you have got North America, which is our largest market, where we have been investing $300 million over the past five years in manufacturing
capabilities, for more capacities.
You see requests to retrofit the existing infrastructures. That is the purpose of the IRA, to make it greener or more sustainable. And at the same
time, when you go to countries like India or Africa, it is about supplying energy to the 800 million people who don't have access to electricity, all
supporting the huge frame of urbanization and industrialization and digitization, which is taking place. So it's that demon that we see, that
is (INAUDIBLE) global.
QUEST: So if we shift away from the hard economics and business and just look at the role of the CEO, you were there for many years and you saw how
CEOs' roles changed.
We often say on QUEST MEANS BUSINESS, the CEO now has to become the moral barometer in many cases, picking up the slack where governments or other
organizations don't.
How did you adapt, where you had to take positions?
You had to take moral positions in certain cases and make certain decisions?
TRICOIRE: Richard, I had the privilege to be 20 years CEO of Schneider Electric. And I've been through several crises and several changes of the
world environment. Where I see the role of CEOs that has changed dramatically, is that it's not only economic anymore. It is about taking
care of all the stakeholders.
It is about the stakeholder economy, it is about taking care of all the dimensions of environmental, social and government. We have been in that
space, Schneider Electric, very much at the forefront of the revolution. And we have taken more to the communities around us --
[15:40:00]
TRICOIRE: -- to the use in the countries or in the places where we operate. We have been proactive in the field of environment, to a point that now we
are a major partner of our customers in that field. And taking care of diversity and inclusion also.
(CROSSTALK)
TRICOIRE: The role of the CEO has expanded into all of those directions.
QUEST: It has and most CEOs or many CEOs fail or at least find it very difficult when they have to get into the political area or they have to --
whether it be LGBTQ, whether it be women's rights, whether it be all of these issues, some CEOs are finding --
Did you ever find it difficult?
TRICOIRE: It is difficult. The world is complex. The world is made of contradictions. A company is, has a role to play in making the world
better. So the reason why I went into business, it's a place where you can have an impact.
You can have an impact, because we have capabilities. We have project managers. We have talent around the world. We have the financial
capability, the technologies to change things.
Now in some cases, your decisions are compromised between different directions. But what's important is to align your purpose, your strategy,
your values to become consistent with them and to explain why you are taking the position.
You have also traditions of companies that do it better. We are one of the early members of the United Nations global compact. That is a community of
like-minded companies that work to go beyond economics, work into all the dimensions of energy.
So that has helped us to work within the company and with our larger ecosystem.
QUEST: Thank you, sir, I'm very grateful. Thank you. I appreciate it. Thank you.
Now after the break, here's a book for you, "Burn the Boats," that's by Matt Higgins. "Reading for Succeeding." We will start talking about the
books you might want to consider reading. And Matt Higgins has a view that, in life, there's no room for plan B.
(BEGIN VIDEO CLIP)
MATT HIGGINS, AUTHOR: The idea of plan A incorporates figuring out what's the worst-case scenario.
(END VIDEO CLIP)
(MUSIC PLAYING)
(COMMERCIAL BREAK)
[15:45:00]
(MUSIC PLAYING)
QUEST: British explorer Robert Swan once said the greatest threat to our planet is the belief that someone else will save. It. Today on Call to
Earth, a team of conservationists we meet who take that message to heart, getting their hands dirty and frankly doing whatever it takes to restore
the native forests that once covered their tropical island paradise.
(BEGIN VIDEOTAPE)
(MUSIC PLAYING)
UNIDENTIFIED FEMALE (voice-over): Some 12,000 miles up the southeastern coast of Africa, in the middle of the Indian Ocean, lies the island where
the iconic dodo bird once roamed.
Centuries after its extinction, the flightless bird is still inextricably linked with the African nation of Mauritius. You can find it on banknotes,
coins and the country's coat of arms. Today, Dr. Nicolas Zuel and his team of conservationists are working hard to ensure other endemic species don't
go the way of the dodo.
DR. NICOLAS ZUEL, CONSERVATION MANAGER, EBONY FOREST (voice-over): Before human beings came to Mauritius, the forests would look like what you see
around us.
UNIDENTIFIED FEMALE (voice-over): Less than 2 percent of native forest remains on the island due in part to poaching, pollution and logging.
Historically, one of the most sought after resources, the ebony tree, is coveted for its durable black hardwood, which is used to build furniture,
cabinets, kanakees (ph) and more.
Now the global trade of ebony wood is controlled and most species have been protected to prevent extinction.
ZUEL (voice-over): The history of Mauritius is closely linked to ebony trees, because, when the Dutch colonized the island, one of the main
reasons we wanted to colonize the island is to be able to exploit ebony trees.
UNIDENTIFIED FEMALE (voice-over): The journey to restore this patch of forest, located on the southwest part of the island, began in 2006. The
work started with weeding, planting and growing native plant species.
It also involved the reintroduction of locally extinct species, like the pink pigeon and the echo parakeet, both considered vulnerable and globally
threatened.
ZUEL (voice-over): It is important to have birds because, forest conservation and the animal (INAUDIBLE) goes hand in hand. So we will see
these birds entering the (INAUDIBLE), the forest will not survive.
So yes, we are linked to extinction of species with the dodo but we are also an example of what can be done to save our bird species.
UNIDENTIFIED FEMALE (voice-over): After 11 years of restoration initiatives, the Ebony Forest Park officially opened to the public in 2017.
Visitors can bird-watch, hike or volunteer and contribute to the conservation efforts on this tropical island paradise.
ZUEL (voice-over): So it is really important to us at Ebony Forest to raise awareness about species, about conservation. (INAUDIBLE) really important
for us to just work together with (INAUDIBLE) shared and a legend and also learn from others.
UNIDENTIFIED FEMALE (voice-over): Today, the conservationists say they planted more than 140,000 endemic plants, while also weeding and planting
16 additional hectares of forest. With the dodo's legacy in mind, the ultimate goal is to safeguard the island's national glory for generations
to come.
ZUEL (voice-over): Endemically, as Mauritius has let up endemic species, it's in every case that's for the whole world what we are presenting here.
(END VIDEOTAPE)
QUEST: Would you let us know what you are doing to answer the call?
#CallToEarth.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
[15:50:00]
(MUSIC PLAYING)
QUEST: We all want to be better than we were. If there is one lasting aspect of the pandemic, it is this thirst for change. And so, collectively,
we are turning to self help books like never before. They have always been around.
But now, everyone is looking for the next idea that is going to push them forward.
(BEGIN VIDEOTAPE)
(MUSIC PLAYING)
QUEST (voice-over): The humble self help book dates back in some form or other to ancient Egypt. Today, in modern times, self help was brought into
a new era with work like Dale Carnegie's "How to Win Friends and Influence People."
The personal growth industry has had no shortage of success. It is worth more than $10 billion in the U.S. alone in 2020.
We all know books like "Rich Dad, Poor Dad," "The Seven Habits of Highly Effective People," "Think and Grow Rich," and self-help has created its own
celebrities -- Tony Robbins, Deepak Chopra, Eckhart Tolle. The insight that they offer is greatly valued by many.
But there is also a view that says it's all simply nonsense. And that's what we are going to find out.
QUEST: So with this in mind on QUEST MEANS BUSINESS, we will give you some pointers, some suggestions. Our new series, "Reading for Succeeding." We
will start with "Burn the Boats." It is a book by Matt Higgins and it has an interesting theory to help you get on.
It basically says, we are all too tied to plan B. So he says, don't have a second backup plan.
QUEST (voice-over): Higgins' core thesis is that too much choice renders us paralyzed. He believes having a plan B merely distracts you, preventing
from pushing on and argues it is critical to know why you are striving toward a goal, because that's what will make it worthwhile.
If all of this sounds like too much, ask yourself, what's the worst that can happen?
Once you put these philosophies into practice, Matt Higgins says, that's when success begins.
HIGGINS: If you go all the way back to 207 BC in China, every country, every century has a fabled journey of a military strategist outnumbered 100
to 1 and the way they succeed is by eliminating their escape route.
They burned the boats and destroy their food provisions. But yet we reject that in our everyday life. We reflexively grab the tape toward undermining
our own plan A and by having a plan B. And that's why I decided to write this book.
QUEST: This idea of no plan B goes counter to everything we've been taught because if your plan A fails, you're screwed.
HIGGINS: So it's actually not true, number one. The idea of plan A incorporates figuring out what's the worst-case scenario. I'm arguing that
where people go wrong is that they are afraid to ask the what if questions at the beginning of the journey.
So while they are pursuing their plan A, they're constantly looking over their shoulder, figuring out, what if this doesn't work out?
I can't pay my bills. And that very act is what undermines the likelihood that you are ever going to succeed.
QUEST: Now if we have a situation where one is hesitant to do this, how do you get somebody to the point where they can do it?
HIGGINS: It is all about synthesizing risk. Number one, what's the worst case that can happen if I don't succeed?
Number two, what's the probability that that worst case is likely to materialize?
[15:55:00]
HIGGINS: Number three, what is the upside?
What am I after, what would I be willing to do to deal with it?
And if it doesn't materialize, how will I mitigate it?
If you go through that risk mitigation process at the beginning, then OK --
QUEST: No, no. I'm not letting you get away with it.
(CROSSTALK)
QUEST: Because if you go through -- and this is why we are coming to the bedrock. Whether or not risktakers are born or can be made.
Is it nature or nurture?
Because if you go through that risk process that you've just talked about and you are naturally risk averse, you are going to give yourself the
answers that will take you away from this.
HIGGINS: I don't believe that at all. Actually, this book is written for the angst ridden. It is written for people who suffer from anxiety. It is
actually not written for those who are totally comfortable with risk.
It's written for the 48 percent of people, when you ask them, do you have a plan B, they say yes. Statistically studies will show. It is written for
those people to figure out, how do you manage your anxiety?
Because usually that's what's holding you back from going all in.
QUEST: I was reading the book on a plane and I became jittery and uncomfortable when I read your story.
HIGGINS: My circumstances were extreme. I accept that. Why I offer up my crazy story of dropping out of high school at 16 and going all in on my
plan A is to demonstrate that, when we are in a crisis, we have clarity of decision-making because we have fewer choices.
The purpose of the book is to replicate crisis decision-making, when everything is fine and the way to go through that is to go through this
process.
QUEST: You talk about CEOs and how CEOs don't delegate or they delegate too much.
What is the biggest mistake they make?
HIGGINS: The CEOs?
QUEST: Yes.
HIGGINS: Self awareness. They are afraid to audit themselves, audit their decision-making. They are afraid to look within because they are afraid of
what they might find. And that is the greatest arbitrage, entirely within our control, is the way you can improve yourself and your decision making.
I find the CEOs that are most help resistant are the ones that are most likely to fail.
QUEST: One piece of advice that you would give?
HIGGINS: Don't be afraid to look within. It is true. We don't spend enough time talking about self awareness. Self awareness is the single greatest
arbitrage available to you.
(END VIDEOTAPE)
QUEST: Good grief. Profitable Moment in a moment.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST: Tonight's Profitable Moment, I love Max Higgins' fundamental thesis that having a plan B distracts you from actually fully being committed to
your plan A. The problem is for somebody like myself, and I am quite risk- averse, I just can't get to that point.
I can't get to the point where I am prepared to burn the boats. Maybe it's the lawyer in me that says on the one hand but on the other and then on the
third -- and by the time I have got so many hands, well, you have a pair of gloves.
I think it's an interesting thing that we will continue to look at on QUEST MEANS BUSINESS, this idea of reading for succeeding. We will take the best
and the worst of the self-help books that are coming out and we will put them to the test. And then you can read them and let us know if you agree
with what we think.
And that is 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
will be at the Cheese Grater.
END
